Loftus v. Three Palms Crocker Park, L.L.C. , 2023 Ohio 926 ( 2023 )

[Cite as Loftus v. Three Palms Crocker Park, L.L.C., 2023-Ohio-926.]
COURT OF APPEALS OF OHIO
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
GERARD LOFTUS, ET AL., :
Plaintiffs-Appellants, :
No. 111635
v. :
THREE PALMS CROCKER PARK, LLC, :
ET AL.,
:
Defendants-Appellees.
JOURNAL ENTRY AND OPINION
JUDGMENT: AFFIRMED AND REMANDED
RELEASED AND JOURNALIZED: March 23, 2023
Civil Appeal from the Cuyahoga County Court of Common Pleas
Case No. CV-20-932382
Appearances:
Flowers & Grube, Paul W. Flowers, Louis E. Grube, and
Melissa A. Ghrist; Charles V. Longo Co., L.P.A. and
Charles V. Longo, for appellant.
Bailey Cavalieri LLC, Elan Kandel, Sabrina Haurin, and
Elizabeth E. Cary, for appellee State Automobile Mutual
Insurance Company.
Glowacki, Imbrigiotta & Doucette, L.P.A., and Stephen B.
Doucette; Schneider, Smeltz, Spieth, Bell LLP and
Thomas J. Connick, for appellee Three Palms Crocker
Park, LLC.
MICHELLE J. SHEEHAN, P.J.:
This case involves whether an employer and its insurer are liable for
a motor vehicle accident caused by an employee. The issue is whether the employee
was in the course and scope of employment and/or acting in furtherance of the
employer’s business at the time of the accident. Based upon the undisputed material
facts in this case, we affirm the trial court’s order granting summary judgment
because the employee involved in the motor vehicle accident was neither acting
within the scope of his employment nor acting in furtherance of the employer’s
business.1
I. Procedural History and Factual Overview
On March 1, 2019, plaintiff-appellant Gerard Loftus was severely
injured as a passenger in a single-car accident in which defendant-appellant Robert
Sotka was the driver. The accident occurred in Ottawa County, Ohio as Sotka was
driving to Westlake, Ohio.
Sotka was the manager at the Three Palms pizzeria restaurant at
Crocker Park in Westlake, Ohio. Sotka was a social acquaintance and friend of
Loftus, and Loftus was a frequent patron of the restaurant. In fact, both men had an
1 This case is a companion case to Loftus v. Three Palms Crocker Park, LLC, 8th Dist.
Cuyahoga No. 111639, in which Sotka appeals the same judgment entry granting summary
judgment.
apartment near the restaurant in Crocker Park and socialized together multiple
times a week.
Sotka had discussions with Loftus about potentially purchasing a
restaurant with him. One restaurant that was briefly discussed was the Canoe Club
in Catawba Island Township, near one of Loftus’s homes. Another restaurant was
Flip Side Restaurant in Rocky River, Ohio. A letter of intent had been drafted and
was scheduled to be signed by Loftus and Sotka on March 4, 2019, regarding the
purchase of Flip Side.
On Friday, March 1, 2019, Sotka left the restaurant at 5:15 p.m. and
traveled over 60 miles to the Canoe Club to meet Loftus and a group of Loftus’s
friends. While Loftus testified that he was not interested in investing in the Canoe
Club because of the seasonal nature of the business, Sotka wanted to introduce
Loftus to the owner of the Canoe Club that night. When he arrived at the Canoe Club
at 6:20 p.m., Sotka had a tour of the Canoe Club from the owner and joined Loftus
and his friends for a drink. After socializing with everyone at the Canoe Club, Sotka
went to another bar in the area with Loftus and his friends, and later went to back
to one of the friends’ homes.
At around 10:00 p.m., Sotka decided to leave the group and return to
Westlake, Ohio. He stated that he intended to return to the restaurant before
11:00 p.m. to supervise closing. Although the restaurant closed at 10:00 p.m., Sotka
testified that on occasion he kept the restaurant open for customers after the posted
closing time. Loftus, who was scheduled to spend the night at his friend’s house that
night, changed his mind and agreed to ride with Sotka back to Westlake, Ohio.
While Sotka made statements after the accident that he was taking Loftus home that
night, he later supplied an affidavit that he was taking Loftus to the restaurant. He
also testified in deposition that he would have either dropped Loftus off at home or
taken him to the restaurant, depending on what Loftus wanted. That decision was
never made because of the accident, and Loftus had no memory of the events of the
evening.
At around 10:15 p.m., Sotka was driving on State Route 52 in Ottawa
county, exceeding a speed of 120 m.p.h. The car left the road and hit a guardrail,
causing extensive damage. Sotka’s passenger, Loftus, suffered extensive and
permanent injuries. As a result of his driving, Sotka was later convicted in the
Ottawa County Court of Common Pleas of the crimes of Operating a Vehicle under
Impairment while having a blood alcohol content above the legal limit, a
misdemeanor of the first degree, and Vehicular Assault, a felony of the fourth
degree.
On May 6, 2020, Loftus filed a complaint against Sotka and Three
Palms. He alleged that Sotka was liable for his injuries and that Three Palms, as
Sotka’s employer, was vicariously liable because at the time of the accident, Sotka
was acting within the course and scope of his employment or acting as an agent of
Three Palms. State Auto Mutual Insurance Company (“State Auto”), who had issued
Three Palms a business insurance policy, intervened in the lawsuit and sought a
declaratory judgment action that it need not provide a defense or coverage because
the accident that resulted in Loftus’s injuries was not covered by the insurance
policy.
State Auto and Three Palms filed motions for summary judgment.
Three Palms argued that it was not vicariously liable because Sotka was not
conducting or furthering its business when he crashed his car injuring Loftus.
Similarly, State Auto argued that Three Palms’ policy excluded the incident because
Sotka was not using his car in Three Palms’ business.
Sotka filed a summary judgment motion alleging that Three Palms
was liable for the accident as well as asserting the accident was covered by the State
Auto insurance policy. Loftus filed a motion for summary judgment arguing the
same and seeking a determination of liability against Sotka.
The trial court granted summary judgment to both Three Palms and
State Auto, granted Loftus summary judgment in part, and denied Sotka’s motion
for summary judgment.2 In granting Three Palms’ and State Auto’s motions for
summary judgment, the trial court found that there were “no genuine issues of
material fact that Defendant Sotka was not within the course and scope of his
employment with defendant Three Palms Crocker Park, LLC at the time of the
subject accident [and] there is no coverage for the subject accident under State
Auto’s insurance policy.”
2 Loftus’s claims against Sotka remain pending in the trial court.
II. Law and Argument
A. Assignment of Error
Loftus appeals, asserting the following assignment of error:
The trial court erred in granting summary judgment to plaintiff-
appellee State Automobile Mutual Insurance Company on its
intervening complaint for declaratory relief, erred in denying Mr.
Sotka’s cross-motion for summary judgment, and erred in declaring
that there is no insurance coverage for the subject accident under the
business owners’ insurance policy issued to defendant-appellee Three
Palms Crocker Park, LLC. (May 19, 2022 Order. T.d. 265.)
Loftus alleges that the trial court erred by granting summary
judgment because reasonable minds could find Sotka was in the course and scope
of his employment at the time of the accident. He argues that Sotka worked remotely
on the evening of the accident, that Sotka was driving a regular customer to the
restaurant, and that such activity was authorized by Three Palms as part of Sotka’s
duties as manager. Further, Loftus argues that to the extent the trial court relied on
the coming and going rule or defined Sotka as a fixed situs employee, Sotka was not
such an employee.
B. Standards of Review and Applicable Law
1. Summary Judgment
Under Civ. R. 56, summary judgment is appropriate if the record
demonstrates
(1) that there is no genuine issue as to any material fact; (2) that the
moving party is entitled to judgment as a matter of law; and (3) that
reasonable minds can come to but one conclusion, and that
conclusion is adverse to the party against whom the motion for
summary judgment is made, who is entitled to have the evidence
construed most strongly in his [or her] favor.
Harless v. Willis Day Warehousing Co., 54 Ohio St.2d 64, 66, 375 N.E.2d 46 (1978);
Civ.R. 56(C).
Civ.R. 56(C) provides that summary judgment shall be rendered if
“the pleadings, depositions, answers to interrogatories, written admissions,
affidavits, transcripts of evidence, and written stipulations of fact, if any, timely filed
in the action, show that there is no genuine issue as to any material fact and that the
moving party is entitled to judgment as a matter of law.” A trial court’s grant of
summary judgment is reviewed de novo. Grafton v. Ohio Edison Co., 77 Ohio St.3d
102, 105, 671 N.E.2d 241 (1996). If the movant satisfies the initial burden, then the
nonmoving party has the burden to set forth specific facts that there remain genuine
issues of material fact that would preclude summary judgment. Id.
2. Interpretation of the Insurance Policy
An insurance policy is a contract between an insurer and its insured.
E.g., AKC, Inc. v. United Specialty Ins. Co., 166 Ohio St.3d 460, 2021-Ohio-3540,
187 N.E.3d 501, ¶ 8. Thus, determining coverage under an insurance policy is a
matter of contract interpretation. Crum & Forster Indemn. Co. v. Ameritemps, Inc.,
8th Dist. Cuyahoga No. 99610, 2013-Ohio-5419, ¶ 10. The interpretation of
insurance policies is a matter of law. Id. “In insurance policies, as in other contracts,
words and phrases are to be given their plain and ordinary meaning unless there is
something in the contract that would indicate a contrary intention.” Id. at ¶ 11, citing
Olmstead v. Lumbermens Mut. Ins. Co., 22 Ohio St.2d 212, 216, 259 N.E.2d 123(1970); Ohio N. Univ. v Charles Constr. Servs., Inc., 155 Ohio St.3d 197, 2018-Ohio-
4057, 120 N.Ed.3d 762, ¶ 11. “[W]here the provisions of an insurance policy are clear
and unambiguous, courts may not indulge themselves in enlarging the contract by
implication in order to embrace an object distinct from that contemplated by the
parties.” Crum & Forster Indemn. Co. at ¶ 11, citing Gomolka v. State Auto Mut.
Ins. Co., 70 Ohio St.2d 166, 168, 436 N.E.2d 1347 (1982).
3. Employer Liability for Employee’s Actions While Driving
An employer may be subject to respondeat superior liability for an
employee’s accident when the employee is acting within the scope of employment.
Osborne v. Lyles, 63 Ohio St.3d 326, 330, 587 N.E.2d 825 (1992); see Morrison v.
Horseshoe Casino, 2020-Ohio-4131, 157 N.E.3d 406, ¶ 94 (8th Dist.) (“For an
employer * * * to be vicariously liable under the doctrine of respondeat superior, the
tort committed by the employee must be committed within the scope of
employment.”).
“Conduct is within the scope of a servant’s employment if it is of the
kind which he is employed to perform, occurs substantially within the authorized
limits of time and space, and is actuated, at least in part, by a purpose to serve the
master.” Rockwell v. Ullom, 8th Dist. Cuyahoga No. 73961, 1998 Ohio App. LEXIS
4101, 10 (Sept. 3, 1998), citing Martin v. Cent. Ohio Transit Auth., 70 Ohio App.3d
83, 92, 590 N.E.2d 411 (1990). The Ohio Supreme noted that “the act of an agent is
the act of the principal within the course of the employment when the act can fairly
and reasonably be deemed to be an ordinary and natural incident or attribute of the
service to be rendered, or a natural, direct, and logical result of it.” Posin v. A.B.C.
Motor Court Hotel, Inc., 45 Ohio St.2d 271, 278, 344 N.E.2d 334 (1976); Amato v.
Heinika Ltd., 8th Dist. Cuyahoga No. 84479, 2005-Ohio-189, ¶ 10.
Accordingly, the issue of Three Palms’ liability rests on whether
Sotka, at the time of the accident, was as a matter of law acting within the scope of
his employment.
C. Summary Judgment in Favor of State Auto and Three Palms
Was Appropriately Granted in This Case
1. State Auto Policy Coverage of Accidents Caused By a Three
Palms’ Employee While Driving
State Auto’s insurance policy provides liability coverage to Three
Palms pursuant to the Commercial General Liability Coverage (“CGL policy”). The
CGL policy provides coverage for “those sums that the insured becomes legally
obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ to which
this insurance applies.” The parties agree the CGL policy specifically excludes
damages from motor vehicle accidents pursuant to exclusion 2.g but dispute
whether coverage is provided by the “Hired Auto and Non-Owned Auto Liability”
Endorsement (“Auto Endorsement”) to the CGL policy. The Auto Endorsement
provides CGL coverage for damages “arising out of the use of any ‘non-owned auto’
in your business by any person.” A “non-owned auto” is specifically defined in the
Auto Endorsement as
any “auto” you[3] do not own, lease, hire, rent or borrow which is used
in connection with your business. This includes “autos” owned by your
“employees”, your partners or your “executive officers”, or members
of their households, but only while used in your business or your
personal affairs.
The Auto Endorsement further designates the following as “insureds” for purposes
of the Auto Endorsement coverage:
a. [The Named Insured]
b. Any other person using a “hired auto” with [the Named Insured’s]
permission;
c. For a “non-owned auto”:
(1) Any partner or “executive officer” of [the Named Insured];
or
(2) Any “employee” of [the Named Insured] but only while such
“non-owned auto” is being used in [the Named Insured’s]
business.
In interpreting the language of an insurance policy, the Ohio Supreme
Court has noted that “the general intent of a motor vehicle insurance policy issued
to a corporation is to insure the corporation as a legal entity against liability arising
from the use of motor vehicles.” Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216,
2003-Ohio-5849, 797 N.E.2d 1256, ¶ 20, citing King v. Nationwide Ins. Co., 35 Ohio
St.3d at 211, 519 N.E.2d 1380. In Powell v. Nationwide Mut. Ins. Co., 2d Dist. Darke
3 The CGL policy defines “you” and “your” as “the Named Insured shown in the
Declarations and any other person or organization qualifying as a Named Insured”
under the policy. The parties do not dispute that Three Palms is the Named Insured
in the State Auto policy.
No. 1619, 2004-Ohio-1169, ¶ 26, 38, the court found that exclusionary language in a
business insurance policy that restricted coverage to accidents “while used in your
business or personal affairs” could serve to exclude claims where the employee was
not acting within the scope of their employment.
In this case, there is no dispute that Sotka was driving a non-owned
auto as defined by the Auto Endorsement. However, the Auto Endorsement only
provides coverage while the non-owned auto is being used in Three Palms’ business.
Thus, the issue to be determined for the purposes of summary judgment was
whether Sotka used the vehicle in Three Palms’ business when the accident
occurred?
2. There Are No Genuine Issues of Material Fact That at the
Time of the Accident Sotka Was Not Acting in the Course
and Scope of His Employment or in Furtherance of Three
Palms’ Business
The issue of liability on the part of Sotka’s employer, Three Palms, is
dependent upon whether at the time of the accident Sotka was acting within the
scope of his employment. Osborne, supra. Similarly, coverage under the insurance
policy would be found if Sotka was using the car in Three Palms’ business. The trial
court determined that neither condition was present upon the record and
specifically found that “reasonable minds can come to but one conclusion, that there
are no genuine issues of material fact that defendant Sotka was not within the course
and scope of his employment with defendant Three Palms Crocker Park, LLC at the
time of the subject accident.” May 19, 2022 journal entry. We agree.
Both Loftus and Sotka raise similar arguments regarding Three
Palms’ liability and State Auto’s duty to provide coverage in their respective appeals.
They argue that Sotka was acting within the scope of his employment because he
managed the restaurant remotely while in Catawba and was driving Loftus, a
customer, to the restaurant so that Sotka could supervise the closing of the
restaurant.
In considering the circumstances to determine if Sotka was acting
within the scope of his employment on the date of the accident, we note that Sotka
left the restaurant at 5:15 p.m., traveled a distance of over 60 miles, and admits the
purpose of his trip was to meet with his friend and soon to be new business partner,
Loftus. He had drinks and met with another friend and owner of the Canoe Club.
There is no evidence Sotka went to Catawba for any business purpose to benefit
Three Palms. He did not tell any of the Three Palms investors of his trip to Catawba.
This conduct is personal and would not normally be considered to be within the
scope of Sotka’s employment. Traveling 60 miles and socializing to pursue personal
business unrelated to his employer cannot be deemed to be in service of Three Palms
or a “natural incident or attribute of the service” Sotka rendered to Three Palms.
Posin, 45 Ohio St.2d 271, at 278. However, Loftus and Sotka argue that Sotka
performed some acts that could be considered to be within the scope of his
employment or in furtherance of Three Palms’ business during his trip and at the
time of the accident.
Both Three Palms and State Auto moved for summary judgment and
we construe the facts in the record in favor of Loftus. Harless, supra. In reviewing
affidavits or statements however, we may disregard conclusory statements or legal
conclusions that are not supported by sufficient facts. See
Crawford v. Millar Elevator Serv. Co., 8th Dist. Cuyahoga No. 77277, 2000 Ohio
App. LEXIS 2039, at 10 (May 11, 2000) (court not required to consider affidavit that
contained only conclusory statements and legal conclusions without sufficient
operating facts), Davis v. Schindler Elevator Corp., 98 Ohio App.3d 18, 21, 647
N.E.2d 827 (8th Dist.1994) (Trial court could ignore affidavit where it contained
conclusory statements and legal conclusions without stating sufficient supporting
facts.).
As to bringing Sotka’s actions within the scope of his employment the
evening of the accident, both Loftus and Sotka ask us to consider that Sotka testified
in deposition that he “would have been managing the 3 Palms while off site” by
communicating with employees by text and telephone and that Sotka intended to
return to the restaurant to supervise the closing of the restaurant. Further, they note
that Sotka discussed pizza ovens with the owner of the Canoe Club. While the
testimony was not clear whether he actually talked to Three Palms employees that
night, when considering Sotka’s conduct in total, assuming he contacted employees
and spoke with others about the general aspects of the operation of a restaurant,
those actions are merely incidental to the purpose of his evening: socializing with
Loftus and furthering a personal business venture. Moreover, the restaurant
employees present on the evening of the accident closed the restaurant without
Sotka’s direction or input.
In short, our review of the record reflects that Sotka’s purpose in
going to Catawba that evening was to socialize and further his own personal business
opportunities. Although some of Sotka’s conduct was similar to his duties as a
restaurant manager, those actions were merely incidental to the personal nature of
his trip to Catawba. Accordingly, the record, when taken in the light most favorable
to Loftus, does not provide an issue of material fact as to whether Sotka was acting
within the course and scope of his employment.4
In arguing that the accident occurred while Sotka was acting within
the scope of his employment or in furtherance of Three Palms’ business, Loftus and
Sotka both argue that Sotka was bringing Loftus, a customer, back to the restaurant.
Sotka testified that his duties as restaurant manager included supervising all aspects
of the operations of the restaurant which included “bringing in” customers.
Although Sotka testified in his deposition that he would have taken Loftus either to
the restaurant or home depending upon Loftus’s wishes, upon summary judgment,
4 Three Palms and State Auto raise the issue that Sotka was a fixed situs employee
and his excursion from the restaurant was not within the scope of his employment.
Sotka and Loftus both argued that Sotka was authorized to leave the restaurant to
conduct business in the past in order to pick up necessary supplies or conduct other
business. As we find that the record reflects that Sotka was not acting within the
scope of his employment at the time of the accident and was not driving the auto in
Three Palms’ business, whether Sotka was or was not a fixed situs employee is not
determinative in resolving the assignments of error.
we assume Sotka was driving Loftus to the restaurant. And even with that
assumption, in the context of Sotka’s employment with Three Palms, we do not
understand Sotka’s general duty to “bring in customers” to be so literal that Sotka
was expected to bring a single customer to the restaurant from a distance of over 60
miles while driving intoxicated. There was no evidence Sotka had ever personally
taxied customers to the restaurant in a privately owned automobile. Such action,
especially without precedent, would be unusual and beyond the generally
understood meaning of “bringing customers” into a business. More so, Sotka
committed the offenses of operating a vehicle under impairment, and vehicular
assault, a felony. This conduct cannot “fairly and reasonably be deemed to be an
ordinary and natural incident or attribute of the service to be rendered, or a natural,
direct, and logical result of it.” Posin, 45 Ohio St.2d at 278.
The undisputed circumstances surrounding Sotka’s conduct on the
night of the accident militate against a finding that Sotka’s trip was within the scope
of his employment. Sotka was on a personal trip, a large distance from the
restaurant, and was not engaged in conduct that was usual or in conformity with
other trips attendant to his duties such as picking up supplies for the restaurant.
The incidental nature of some of his actions that may have related to his employment
during his personal evening out do not serve to transform his trip into one in which
he was acting at the time of the accident within the scope of his employment or that
can be said were in furtherance of Three Palms’ business. The sole assignment of
error is overruled.
III. Conclusion
Because the record does not reveal genuine issues of material fact that
at the time of the accident Sotka was acting in the course and scope of his
employment or in furtherance of Three Palms’ business, summary judgment was
appropriately granted in favor of Three Palms and State Auto.
Judgment affirmed, and cause remanded to the trial court for further
proceedings.
It is ordered that appellees recover of appellant costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the
common pleas court to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27
of the Rules of Appellate Procedure.
__________________________________
MICHELLE J. SHEEHAN, PRESIDING JUDGE
EILEEN T. GALLAGHER, J., and
SEAN C. GALLAGHER, J., CONCUR