601 N.E.2d 676


No. A-8910962.Court of Common Pleas, Hamilton County.
Decided May 1, 1992.

[*] Reporter’s Note: No appeal has been taken from the decision of the court.

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Steven Rothstein, for Ace-Doran Hauling and Rigging Company.

Jordan Finegold, for Old Republic Insurance Company.


This matter came before the court for trial on the complaint of Ace-Doran Hauling Rigging Company (“Ace-Doran”) and Argonaut Insurance Company (“Argonaut”) against Old Republic Insurance Company (“Old Republic”). This court has been fully apprised in the premises and has carefully considered the evidence presented together with all applicable law.

This is a dispute concerning insurance coverage. In this action, Ace-Doran and Argonaut seek a declaratory judgment that Old Republic is obligated to provide coverage for the claims arising from an accident and to pay for related expenses. The evidence established that on May 6, 1986, R. Mack Howell (“Howell”) was operating in Florida a tractor-trailer when he caused an accident by striking a vehicle driven by Maria Grimaldo with the tractor-trailer. At the time, the tractor-trailer was under lease to Ace-Doran and was displaying Ace-Doran’s placard listing its Interstate Commerce Commission numbers. The evidence further established that by the time of the accident Howell had delivered the load he was transporting for Ace-Doran. However, pursuant to an agreement with Ace-Doran, he remained in Florida awaiting further directions of Ace-Doran, attempted to pick up additional business for his own benefit, and planned to return to Ohio with or without a return load. Howell had not procured additional delivery work and, at the time of the accident, was returning to his motel from having dinner.

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The evidence also established that Ace-Doran carried two insurance policies, which are involved in the issue here. Co-plaintiff Argonaut was the primary insurer of Ace-Doran. Old Republic also insured Ace-Doran. The issue before the court is whether the Old Republic policy excludes coverage for this accident. The parties have stipulated that Old Republic had issued the policy at issue and that it was paid for by Ace-Doran.

An endorsement to the policy specifically provides:

“LIABILITY INSURANCE for covered auto described in this endorsement is changed as follows:

“A. The following exclusions are added:

“This insurance does not apply to:

“1. A covered auto while used to carry property in any business.

“2. A covered auto while used in the business of anyone to whom the auto is rented.

“3. A covered auto while used at any time during the term of this coverage and trip leasing of the insured vehicle or vehicles.”

The issue then before this court is whether at the time of the accident the vehicle Howell was operating was “[a] covered auto while used in the business of anyone to whom the auto is rented.”

It is undisputed that here the auto/vehicle in question was permanently leased to Ace-Doran. The evidence established that there was an equipment lease agreement between the owner, Howell, and the carrier, Ace-Doran. Under the terms of the lease, Howell agreed to lease the vehicle for Ace-Doran’s “exclusive possession, control, use and complete responsibility for operation.” Also pursuant to the lease, Howell agreed to provide a competent driver for the vehicle, which role he fulfilled.

The lease further provided that the lease would commence and continue, uninterrupted, except for Howell’s sublease, or “trip lease,” interruptions. In this regard the lease specifically provided:

“OWNER acting on his own behalf, and not on behalf of CARRIER, may sublease (aka trip lease) EQUIPMENT when permitted by applicable laws or regulations. OWNER shall be considered as lessor in any such sublease. During any such sublease, CARRIER’S exclusive possession, control, use and complete responsibility under this lease shall be interrupted and completely eliminated and shall remain in that status until reinstated by the completion of the OWNER’S sublease. OWNER’S [sic] shall pay CARRIER 15% of the revenue derived from OWNER’S sublease where CARRIER’S trailer is being pulled by OWNER’S tractor.”

While the lease agreement contained provisions for “trip leasing,” that is, for Howell to use the vehicle for his own purposes in carrying materials, he

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was not so engaged at the time of the accident. The evidence established that, by a preponderance of the evidence, Howell was brought to Florida on the business of Ace-Doran and that it was anticipated, within both the scope of the lease and his relationship with Ace-Doran, that he would and did check with Ace-Doran periodically to determine if it had any load for him to bring from Florida to Ohio and that in the interim he could seek and procure transportation jobs of his own. Consequently, it cannot be said that Howell was acting outside the permanent lease arrangement and his duties with Ace-Doran by remaining for a time in Florida after having delivered the load for Ace-Doran. It is also undisputed that at the time of the accident he was not engaged in any private hauling apart from his obligations under the trucking lease with Ace-Doran. The evidence established by a preponderance of the evidence that at the time of the accident Howell was operating a vehicle which was used in the business of Ace-Doran which had leased the vehicle from Howell.

The accident therefore falls within the exclusion of liability coverage in the Old Republic policy. So finding, it is unnecessary for the court to address issues such as who is the proper named insured and whether the Old Republic or Argonaut policy was the primary insurer.

For the reasons stated above, the court finds that the plaintiff has failed to establish entitlement to declaratory judgment by a preponderance of the evidence. Judgment is therefore entered in favor of defendant Old Republic and against plaintiffs Argonaut and Ace-Doran.

So ordered.