Nationwide Mutual Fire Insurance v. Guman Bros. Farm

[This opinion has been published in Ohio Official Reports at 

73 Ohio St.3d 107

.]




   NATIONWIDE MUTUAL FIRE INSURANCE COMPANY, APPELLEE, v. GUMAN
               BROTHERS FARM ET AL; MERCER ET AL., APPELLANTS.
[Cite as Nationwide Mut. Fire Ins. Co. v. Guman Bros. Farm, 

1995-Ohio-214

.]
Insurance—Liability coverage—Exclusion of farm employees—Student who works
         part of the school day on a farm in Occupational Work Experience program
         through his school qualifies as an "employee" while at work.
        (No. 94-1113—Submitted June 6, 1995—Decided August 16, 1995.)
     APPEAL from the Court of Appeals for Ashtabula County No. 93-A-1787.
                                      __________________
         {¶ 1} The       defendant-appellee,          seventeen-year-old          Donald       Mercer
("Donald") was seriously injured while working in a silo on the Guman Brothers
Farm. Donald's father, Charles Mercer ("Mercer"), filed suit on behalf of himself
and as next friend, against Guman Brothers Farm, Nathan Guman and Gregory
Guman ("the farm"), claiming their negligence caused Donald's injuries. At the
time of the accident, the farm had liability insurance with Nationwide Mutual Fire
Insurance Company ("Nationwide"). Nationwide filed a complaint seeking a
declaratory judgment that its policy with the farm excluded coverage for claims for
Donald's injuries, based on his status as a farm "employee." Mercer took the
position in the declaratory-judgment action that because his son's work on the farm
was part of an Occupational Work Experience ("OWE") program through his high
school, that he was a student and not an "employee."1
         {¶ 2} After the injury, Donald applied for and received workers'
compensation payments, although the farm's workers' compensation coverage had


1 Although the farm participated at the trial court level, it did not submit a brief or participate in
oral argument at either the court of appeals level or in this court.
                             SUPREME COURT OF OHIO




presumably lapsed by reason of nonpayment of premium. Because it was a
noncomplying employer, the farm was not entitled to the immunity accorded to
complying employers by R.C. 4123.74; thus, the insurance coverage through
Nationwide was a potential source of recovery for Donald's injuries.
       {¶ 3} The trial court declared Nationwide contractually obligated to defend
the farm and pay any judgment rendered against it on behalf of Mercer. The court
determined that Donald's participation in the OWE program rendered him a student,
and, therefore, precluded him from qualifying as an "employee" for purposes of
Nationwide's policy exclusion.
       {¶ 4} The court of appeals reviewed the decision de novo as an issue of law,
and reversed the trial court, holding that while Donald had a dual status as both a
student and an employee, his student status was incidental to his primary function
as that of an employee on the farm. Accordingly, Nationwide had no duty to
indemnify or defend the farm.
       {¶ 5} The cause is now before this court pursuant to an allowance of a
discretionary appeal.
                              __________________
       Baker, Hackenberg & Collins Co., L.P.A.,          I. James Hackenberg and
Richard A. Hennig, for appellee.
       Sindell, Lowe & Guidubaldi, Mark L. Wakefield and Daniel M. Sucher, for
appellants.
                              __________________
       COOK, J.
       {¶ 6} This case presents two issues. We first determine that the court of
appeals properly reviewed the trial court decision de novo because the interpretation
of a clear and unambiguous insurance contract is a matter of law. Second, we
conclude that a student who works part of the school day in an OWE program
nevertheless qualifies as an "employee" while at work.




                                         2
                                 January Term, 2024




                                           I
        {¶ 7} In his first proposition of law, Mercer argues that the judgment of the
trial court was a factual determination rather than a legal interpretation, and that the
appellate court's de novo review was therefore erroneous. Mercer contends that
because the insurance contract failed to define "employee," the term is ambiguous
and this ambiguity makes the interpretation one of fact rather than law.
        {¶ 8} The mere absence of a definition in an insurance contract does not
make the meaning of the term ambiguous. "If a contract is clear and unambiguous,
then its interpretation is a matter of law and there is no issue of fact to be
determined." Inland Refuse Transfer Co. v. Browning-Ferris Industries of Ohio,
Inc. (1984), 

15 Ohio St.3d 321, 322

, 15 OBR 448, 449, 

474 N.E.2d 271, 272

. A
court must give undefined words used in an insurance contract their plain and
ordinary meaning. Miller v. Marrocco (1986), 

28 Ohio St.3d 438, 439

, 28 OBR
489, 491, 

504 N.E.2d 67, 69

. Here, the term "employee" is not defined, but does
have a plain and ordinary meaning. It is, therefore, unnecessary and impermissible
for a court to resort to construction of that language. Karabin v. State Auto. Mut.
Ins. Co. (1984), 

10 Ohio St.3d 163, 166-167

, 10 OBR 497, 499, 

462 N.E.2d 403, 406

. Thus, the interpretation of this insurance contract is a matter of law. Unlike
determinations of fact which are given great deference, questions of law are
reviewed by a court de novo. Ohio Bell Tel. Co. v. Pub. Util. Comm. (1992), 

64 Ohio St.3d 145, 147

, 

593 N.E.2d 286, 287

. We conclude that the court of appeals
properly applied a de novo standard of review.
                                           II
        {¶ 9} In his second proposition of law, Mercer contends that because
Donald was a full-time student in the OWE program, the policy exclusion of an
"employee" is inapplicable to him and Nationwide had to indemnify the farm on
this claim. The policy exclusion provides:
        "This insurance does not apply to:




                                           3
                                  SUPREME COURT OF OHIO




         "(n) 'Bodily injury' sustained by:
         "(1) Any employee (other than a 'residence employee') as a result of his or
her employment by the 'insured;'
         "(2) Any 'residence employee' * * *; or
         "(3) The spouse, child, parent, brother or sister of any employee as a
consequence of 'bodily injury' to that 'employee.'
The policy defines "residence employee,"2 but does not define "employee."
Because the insurance contract does not define "employee," this court must
examine the plain and ordinary meaning of that term in conjunction with the facts
to see if the exclusion encompasses Donald.
         {¶ 10} Black's Law Dictionary (6 Ed. 1990) 525, defines "employee" as "[a]
person in the service of another * * *, where the employer has the power or right to
control and direct the employee in the material details of how the work is to be
performed. * * * One who works for an employer; a person working for salary or
wages."
         {¶ 11} The record demonstrates that between the fall of 1988 and summer
of 1989, Donald worked for the farm at the wage rate of three dollars an hour. Then,
in the fall of 1989, Donald's work at the farm qualified for school credit as a part of
the OWE program through his high school. OWE is a program that allows students
who will likely enter the job market, instead of college upon graduation, to gain
work experience. Donald's participation in the program required the approval and
ongoing review of both the school coordinator, Robert Hitchcock, and the farm.
The farm paid Donald the same three dollars per hour wage he had been earning
prior to participation in the OWE program. Hitchcock approved the plan of job
duties as set by the farm. Donald generally went to work on school days after lunch

2. The policy defines "residence employee" as "[a]n insured's employee who performs duties in
connection with the maintenance or use of the 'residence premises,' including household or domestic
services, or who performs duties elsewhere of a similar nature not in connection with the 'business'
of any 'insured.'"




                                                 4
                                 January Term, 2024




and worked on weekends.        The farm controlled the jobs Donald performed and
directed his work, which remained essentially the same as it had prior to his
participation in the OWE program. The farm could fire Donald at any time.
          {¶ 12} Alternatively, the school's participation was minimal. Beyond a
supervisory role that included filling out the initial paperwork, Hitchcock's role
consisted of sporadic visits to the farm to evaluate the working relationship between
Donald and the farm and ensure that Donald's attendance was satisfactory. The
school's only controls consisted of determining whether to accept the farm as an
appropriate employer or to dismiss Mercer from the program. Neither of these
actions would change Donald's status at the farm.
          {¶ 13} Mercer's reasoning that being a student in the OWE program is
mutually exclusive of being an employee lacks merit. Donald's classification as an
OWE student goes to "why" he was allowed to work on the farm for school credit,
rather than "what" activities he did on the farm and who controlled those activities.
These undisputed facts compel a conclusion that despite Donald's dual status as a
student and an employee, his student status was incidental to his primary function
as that of an employee at the farm.    For these reasons, Donald meets the common
understanding of the term "employee" as used in Nationwide's liability insurance
contract, and Nationwide, therefore, is not obliged to indemnify or defend the action
brought by Mercer.
          {¶ 14} Accordingly, we affirm the judgment of the court of appeals.
                                                                Judgment affirmed.
          MOYER, C.J., DOUGLAS, WRIGHT, RESNICK, F.E. SWEENEY and PFEIFER, JJ.,
concur.
                                __________________




                                          5