By Leisa Boley Hellwarth
Once upon a time, there was a Grandma and a Grandpa who retired in Ohio. They owned a farm in Indiana, where their Grandson and another Minor Relative went to ride ATVs. Apparently confusing the agricultural terrain with a demolition derby track, Minor Relative drove her ATV straight at Grandson, failed to turn in time and fractured Grandson’s legs, ankle and skull.
So, Grandson and his parents sued Minor Relative and her mother and stepfather (who were at the farm when the accident occurred). Grandson and his parents also sued Grandma and Grandpa. I assume that holiday gatherings were never the same.
The complaint alleged negligent entrustment regarding Minor Relative’s mother and stepfather. Regarding Grandma and Grandpa, the complaint alleged that they knew of Minor Relative’s “reckless and/or negligent tendencies” and that they had the duty and ability to exercise control over Minor Relative, breached that duty, and as a proximate and foreseeable result of their negligence, Grandson was injured.
Interestingly, the complaint does not include any allegations that a condition on the property contributed to the accident.
This case is all about the insurance. Grandma and Grandpa’s Ohio residence was insured by Westfield Insurance Company. Their homeowner policy provides Grandma and Grandpa with personal liability coverage for damages arising from bodily injury or property damages. It excludes, however, coverage for claims “arising out of” premises owned by an insured that is not an insured location.
Grandma and Grandpa’s Indiana farm was covered by liability insurance from Grinnell Mutual Reinsurance Company.
When Grandson and his parents sought legal advice, one of the most important criteria for the attorney was a pool of money from which to recover damages. Oftentimes, attorneys hire investigators to run asset checks of the potential defendants to assure that there are assets from which to collect. Personal injury attorneys love it when potential defendants have insurance. Here, there were two insurance policies, so the fight began.
Then, the insurance companies began to squabble about who should pay. The issue was to what degree a negligence claim must be connected to the premises in order for the exclusion to be triggered. Westfield claimed that the exclusion clause applied because the accident happened on the farm in Indiana, so Grinnell had to pay. Grinnell and the plaintiffs argued that the negligence didn’t involve the property in Indiana, but the behavior of Grandma and Grandpa, so Westfield was also liable. Three courts heard this argument, as it worked its way through the appeals process. The Ohio Supreme Court decided the law and sent in back to the trial court for proper application.
The Ohio Supreme Court held that the simple fact that Minor Relative’s misconduct took place on land is a matter of the law of gravity, not the law of insurance. So, if the complaint is based on the theory that the Grandparents failed to properly supervise Minor Relative while she was on their property and that failure led to Grandson’s injuries, then the exclusion does not bar coverage. If, however, the complaint of negligent supervision is merely a subterfuge to avoid the “other premises” exclusion because the claims are based on Grandparents’ ownership of the property, then the exclusion is triggered, and coverage from Westfield is not available. So, the trial court was instructed to ascertain the nature and factual basis for the claims against the Grandparents. The court also alerted insurers that exclusions could be drafted to more fully preclude coverage of occurrences like this one.
And there are several morals to this story. It’s always about the money, always. The plaintiffs wanted both insurance companies involved because that meant there was more money available for damages. And even though blood is supposed to be thicker than water, it is still all about the money.
Even if you are adequately insured, you can still be sued and forced to spend inordinate amounts of time in court defending yourself. And this can happen between friends and family. I don’t like spending time in depositions when I’m the one conducting them, so I can only imagine the frustration and anger when days are spent answering questions instead of posing them.
Review your existing policies to verify that you have coverage for all properties you own. And think long and hard about what activities you permit on your property, even if you are present. Is it worth eventually spending years in court? Even if your representation is provided by your policy coverage, you can still be obligated to physically be present for many hours of legal proceedings. And you will not be reimbursed for your time. In these situations, there is no happily ever after.
Leisa Boley Hellwarth is a dairy farmer and an attorney. She represents farmers throughout Ohio from her office near Celina. Her office number is 419-586-1072.