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IN THE SUPREME COURT OF OHIO

BETTY BARGER

vs.

Appellant, On Appeal from theTwelfth DistrictCourt of AppealsClermont County, Ohio

V

^LP "'j

ARTISAN & TRUCKERS CASUALTY,COMPANY, et al.

Court Of AppealsAppellees. : Case No. 20 0 CA U 1 004

MEMORANDUM IN SUPPORT OF JURISDICTIONOF DEFENDANT-APPELLANT BETTY BARGER

Ilotvard D. Cade III (0040187)BECKER & CADE526-A Wards Corner RoadLoveland, Ohio 45140(513) 683-22542, ex. 43(513) 683-2257 (fax)cade@, f iise.net

COUNSEL FOR APPELLANT BET`i"Y BARGER

J. Timothy Riker (00115500)115 W. Nintll StreetCincinnati, OH 45202(513) 621-2888j trikerCjtrikerlaw. coin

COUNSEL FOR APPELLEEARTISAN TRUCKER'S CASUALTY COMPANY

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SUE°Ri;ME '.^^O^^R'f OF OH£0

Kevin Connell (oo63817)Freund, Freeze & ArnoldFifth Third Centeri South Main Street, Suite 18ovDayton, OH 45402-2017(937) 222-2424kconneIl offalaw.com

COUNSEL FOR 1NTERVENING APPELLEEERIE INSURArCE COMPANY

Marion Tidwell3923 Ebenezer RoadCincinnati, OH 45248

PRO SE

A & K Barkley Cab Company807o Beechmont AvenueCincinnati, OH 45255

JMK Transportation, LLC807o Beechmont AvenueCincinnati, OH 45255

PRO SE

Adrienne Barkley807o Beechmont AvenueCincinnati, OH 45255

PRO SE PRO SE

TABLE OF CONTENTS

EXPLANATION OF WHY THIS CASE IS A MA'I°TER OF PUBLIC ORGREAT GENERAL INTERST ............................... .................................... ..

Pne

STATEMENT OF CASE AND FACTS .. ....................................................... 2

ARGUMENT IN SUPPORT OF PROPOSITIONS OF LAW ............................ 5

Proposition of Law No. I: This Court's holding in Smith v.Nationwide Mut. Ins. Co. (1988), 37 Ohio St. 3ed 150,524N.E. 2d 364 is not the proper or only method to determineow-ixership of a motor vehicle for insurance coverage purposesin the event of an accident where there has been no sale,no purchase and no intent to transfer. ........................................... 5

CONCLUSION .................................................... ...... ...... ........ 13

CERTIFICATE OF SERVICE . ... ........ . ... . .............................................. 14

APPENDIX Appx. Page

Opinion of the 12th District Court of Appeals, Clermont County8/19/2013 ............... .......................................................................

Judgment Entry of the 12th District Court of Appeals, ClermontCounty8/19`2013 .............. .... ... ... ........ ........................... 12

EXPLANATION OF VVI-IY THIS CASE IS A MATTER OFPUBLIC OR GREAT GENERAL INTEREST

Should the Uniform Commercial Code ("UCC") be the sole method to identify

ovv-nership of a vehicle for purposes of determining insurance coverage in the event of an

accident when there has been no buyer, no seller and no intent to transfer?

The problem illustrated by this case can be neatly summarized: Ohio's Courts of

Appeal have taken this Court's holding in Smith v. Nationwide Mut. Ins. Co. (1988), 37

Ohio St. 3ed 150, 524 N.E. 2d 364, and expanded it to apply to essentially any scenario

involving a motor vehicle accident, which has deprived injured victims of otherwise

available coverage. "[M]otor vehicle ownership rights 1All be determined by the

Uniform Commercial Code.... [t]hus, we hold that criteria found in R.C. 1302.42(B) and

not the Certificate of Title Act, identify the owner of a motor vehicle for purposes of

determining insurance coverage in case of an accident. Id at 153, 524 N.E.2d at . That

holding makes a great deal of sense in the common factual situation (as in Smith)

where there has been an accident and resulting injury, and the tortfeasor's carrier that

would otherwise provide coverage claiins that there is none because title was never

officially transferred into the tortfeasor's name after a sale or transfer.

But what happens when, as here, there was no buyer, no seller and most

importantly no intent to EVER transfer the vehicle? The Courts of Appeal, and

specifically here fihe Court of Appeals for the 12th Appellate District of Ohio, have held

that since there was an accident, the UCC still applies to determine ownership, even if

(as here) applying Ohio's Certificate of Title Act might afford coverage, and even if there

was no buyer, no seller and no intent to transfer: a"distinction between gifts and sales

is an illusory distinction when the reasoning behind Smith is considered." Abney v.

Western Res. Mu.t. Cas. Co., 76 Ohio App. 3d 424, 428 (12tli Dist.1991)....[T]he Supreme

Court has made it clear that, given the purpose of the Certificate of Title Act, unless an

action involves issues of ownership relating to importation of vehicles, rights between

lienholders, rights of bona-fide purchaser, or instruments evidencing title and

ownership, the Certificate of Title Act is not the exclusive method to prove owmership of

a vehicle." Id. See Howard v. HiMmelrick,l.oth Dist. Franklin No. 03AP-1034, 2004-

Ohio-3309,T 8 (noting that Srnith has been applied in non-sale situations.)

The problem lies in applying Smith as a bright-line demarcation: if there is a

motor vehicle accident, as it currently stands Ohio's Courts are going to apply Smith and

use the I7CC, even if there was no buyer, no seller and no transfer, and even if doing so

strips an injured victim of otherwise-available coverage. If that was this Court's intent,

it can affirm the decision of the appellate court by simply refusing to accept jurisdiction.

If on the other hand Smith was not meant to be applied with so broad a brush, it should

accept jurisdiction and clarify that there are circumstances where Smith cannot be

blindly applied. This is a question of great public and general interest because a decision

one way or another will directly impact victim of tortfeasors that are being stripped of

othercti4se-available coverage.

STATE MENT OF THE CASE AND FACTS

Plaintiff -Appellee Artisan & Truckers Casualty Company ("Artisan")

commenced thisaction as a declaratory judgment in the Court of Common Pleas of

Clermont County requesting that the court declare the respective rights and liabilities of

the parties to a contract of insurance between Artisan and its insured Defendant-

Appellee JMK Transportation, LLC ("JMK"). (T.d. 1). Named as co-defendants and also

Appellees were JMK"s predecessor-in-interest, A&K Barkley Cab Company ("A&K");

2

JMK's and A&K's owner, Adrienne Barkley ("Barkley"); JMIK's driver, Marion Tidwell

("Tidwell"); Appellant Betty Barger ("Barger"); and others ("others"). (T.d.l). Barger's

uninsured/underinsured motorist ("UIM") insurance carrier, Plaintiff-Appellee Erie

Iilsurance Company (`'Erie") subsequently filed an intervening complaint for

declaratory judgment, also asking the court to declare the rights and liabilities of the

parties r.ti ith respect to Erie's UIM coverage with Barger. (T.d. 37).

The matter proceeded through discovery and various motions, none of which are

at issue herein, and the action was set for trial. On the trial date, the issues regarding

the "others" parties were resolved and those parties dismissed (T.d. xo1). The remaining

parties: Artisan's, JMK, A&K, Barkley, Tidwell, Barger and Erie, submitted the

declaratory judgment issues to the trial Court for determination based on the record

before the Court and the briefs of the parties (T.d. 103). The trial court issued its

Decision and Entiy on December 2.1, 2012 (Id.), and a timely appeal as of right followed

to the Court of Appeals for the 12th Appellate District. (T.d, 105). On August 19, 2013

that Court entered its Judgment Entry and Opinion affirming the trial court's decision

and entry (Ex. A), and this timely appeal followed.

Barger believes that these are the facts most pertinent to this Court's

determination to accept jurisdiction: Barkley is the sole member of JMK and the sole

shareholder of A&K, JMK's predecessor-in-interest (T.d. 74, p. 9). A&K was formed by

Barkley in approximately 1998 to perform general taxicab services, doing business as

"United. Cab" (Id.). In 2008, Barkley sold off the majority of A&K's assets to an outside

party (Id at p. 7) and in that same year filed articles of organization for JMK; her intent

was for JMK to operate solely as a Medicaid transport company (Id at p. 8). Barlcley

acquir.ed the vehicles for JMK's operations by using the operating vehicles left over from

3

the A&K asset sale, although she never transferred any of the titles of the A&K assets to

JMK (Id. at p. 1r).

One of the cabs owned by A&K was a 2001 Ford Crown Victoria, Nvzth a VIN

ending in 151221 ("151221"). 151221 was originally bought by and registered in A&K's

name in 20o$ (T.d.ioi., Ex. I). It was operated byA&K and identified on A&K's last

insurance policy (-,,6th National Indemnity Insurance) before it ceased formal

operations (T.d. zo1, Ex. K). At some point 151221 suffered a mechanical failure (the

"motor was shot", T.d. 74 at p. 58) and was stored at a lot in Miamito-vrrn, Ohio owned by

Barkley and her son (Id. ); it was not insured while in storage (Td. at 61) although A&K

renetnred its registration in both 2oo9 and 2010 (T.d. 101, Ex. I). It was never used by, or

specifically identified on any insurance policy issued to, JMK (T.d. 74, pp. 20, 34).

Approximately five weeks before the accident v,Thich is the subject of this Complaint

occurred, Barkley decided to get Vehicle 151221 repaired for use by JMK and had it

towed to a local garage by her brother (T.d. 74 at p. 50). She had it repainted with

JMK's logo at the same time (Id. at p. 20). On May 20, 20xo, Tidwell, a JMK sub-

contractor (T.d. 74 at p. 17), drove another JMK cab to the garage for "potential repair"

(i.e. an estimate) and picked up 151221 (T.d. a.o1 at Ex. C), by then repaired and re-

painted tiNith the JMK logo, with the intention to take it back to JMK to be put into use

in JMK's fleet. Within ten minutes of Tidwell's piclcing 151221 up it was involved in the

accident,"ith Barger which led to this litigation (Id. at p. 34).

At the time of the Barger accident 151221 was not one of the vehicles identified on

JMK's insurance policy writh Artisan (T.d. 103) but Barger did have UIM coverage with

Erie (Id.). The trial court determined that 151221 was not a "covered automobile"

4

according to the terms of the Artisan policy, meaning that Barger's UIM coverage was

the only applicable coverage cl.) and entered its Order accordingly.

Barger further believes that certain facts are particularly critical:

1. After being acquired by A&K in 20o8 151221 was never registered in any

name other than A&K, and no attempt was ever made to register that vehicle in the

name of any other entity or transfer the title;

2. Barldey testified that 151221 had "not been used by JMK prior" [to the

accident] (T.d. 74 at p. 2o) and "was just being converted to use by JMK"... "it was

basically a new Vehicle to JMK....... that day" (Id. at p. 34);

3. Barkley further testified that she intended to add 151.221 to the Artisan

policy "When I got it all readv. Which would have been later that day when we picked it

up and went through it and stuff like that, so that I could have double-checked to make

sure it was on there". (Id. at pp. 57-58).

4. 151221 was being picked up after being fixed to replace a JMK vehicle that

was being dropped off for a repair estimate at the same time (T.d. 101 at Ex. C).

ARGUMENT IN SUPPORT OF PROPOSITIONS OF LAW

Pro.position of Law No. 1: This Court's holding in Smith v.Natxona:vade

Mut. Ins. Co. (1988), 37 Ohio St. 3ed 150, 524 N.E. 2d 364 is not the proper

or only method to determine ownership of a motor vehicle for insurance

coverage purposes in the event of an accident -where there has been no sale,

no purchase and no intent to transfer.

S'rnith should be applied only to those cases where there has been a sale or intent

to transfer an automobile which was not followed up by a formal transfer of title, the

question actually posed by the Court at the beginning of the Smith opinion: "In this

5

case, we are asked to determine whether the Ohio Certificate of Title Act (R.C. 4505.01

et seg.) or the Ohio Uniform Commercial Code (R.C. 1302.07 et se.) determines the

issue of whether an alleged seller's insurance policy applies `vith respect to risk of loss

or damage aftr the sale of an autam:olai.le" (emphasis added), Smith, s, ^.upra at

153. While the holding is broader (`°determining insurance coverage in case of an

accident"), the question posed to the Court related to sales only, and while the Sm.ith

analysis has been extended in various non-sale cases, all of those cases have involved

an intent to transfer the vehicle (Abney, supra; Moward v. Ilimmelrick, su ra).

This would appear to be directly contrary to the UCC language which the Sniith

court relied upon in making its decision: "[u]nless othertvise explicitly agreed, title

passes to the buyer at the time and place at which the seller completes his performance

-Mth reference to the physical delivery of the goods, despite any reseivation of a

security interest and even though a document of title is to be delivered at a different

time or place McCarty v. Lynn (1.g9o), 67 Ohio App. 3d 369, 373, 587 N.E. 2d 312,

at 373 quoting R.C. 1302.42(B), UCC 2-401. Here, there was no buyer, no seller and

never an intent to transfer.

An insurance policy is a contract and the relationship between the insurer and

the insured is purely contractual. Nationwide .1VluiualInsurance Co. v. Marsh (19$4),

15 Ohio St. ed 107,109, 472 N.E. 2d io6i. "It is axiomatic that an insurance company is

under no obligation to its insured, or to others harmed by the actions of an insured,

unless the conduct alleged of the insured falls within the coverage of the policy.

Coverage is provided if the conduct falls within the scope of coverage defined in the

policy, and not within an exception tliereto." Morner v. Giuliano (20o6),167 Ohio App.

6

3d 785, 2oo6-Ohio-2943, 857 N.E. 2d 602, ¶19, quoting Gearing v. Nationwide

Insurance Co. (i996), 76 Ohio St. 3d 34, 36, 665 N.E. 2d 115.

Vi.Tords and phrases used in an insurance policy must be given their natural and

conamonly accepted meaning, wherever possible, so that a reasonable interpretation of

the insurance contract consistent with the apparent object and plain intent of the parties

may be determined. Gomolka v. State AutomoTiile Co. (1982), 70 Ohio St. 2d 166, 168.

A court may not read into a policy a meaning not placed there by the parties, Motorists

Insurance Co. U. Tomanski (1970), 27 Ohio St. 2d 222, 271 N.E. 2d 924; may not enlarge

the contract by implication, Stickel v. Excess Ins. Co. (1939), 136 Ohio St. 49 at the

syllabus; nor anake a new contract for the parties where their unequivocal acts

demonstrate an intention to the contrary. Jackson u.1Vletropolitan Ins. Co. (1973), 34

Ohio St. 2d 1.38. However, the Ohio Supreme Court has held that language in an

insurance contract that is "reasonably susceptible to more than one meaning will be

construed liberally in favor of the insured and against the insurer". BuekeyP Union Ins.

Co. v. Price (1974), 39 Ohio St. 2d 95 at syllabus. See also King v.1Vationwide Ins. Co.

(1988), 35 Ohio St. 3d 208, at syllabus; Home fndemnity Co. v. Flymoutli (1954), 1q.6

Ohio St. 96.

The Artisan policy at issue in this case (T.d, lo1 at Ex. G) is quoted in both the

trial and appellate Court's decisions and ^xrill not be repeated here for breAty's sake.

Considering the policy language, the sole issue for the Court's determination was

whether Vehicle '151221 qualified as an "insured auto" under the Artisan policy. If

Vehicle 151221 was an "insured auto" on the date of the accident involving Barger, the

Artisan policy provided coverage for 151221. If 151221 was not an "insured auto", there

would not be coverage under the Artisan policy and Barger would resort to her UIM

7

policy NAth Erie.

The trial court was correct in stating that Vehicle 151221 was not listed on the

Declarations Page of the Artisan policy. Therefore, it qualified as an "insured auto"

under the policy only if it was an "additional auto", "replacement auto", or "temporary

substitute auto" under the terms of the Artisan policy.

"Additional auto"

The Artisan policy provides coverage for an "additional auto" on the date JMK

became the owner if (i) JMK acquired the auto during the policy period shown on the

Declarations Page, (2) Artisan insured all autos oNvned by JMK that were used in it

business, and (3) no other insurance policy provided coverage for that auto. According

to the policy, Artisan vvould provide coverage for the auto on the date JMK became the

owner, and for a period of thirty days thereafter. If the vehicle was not added to the

policy -Mthin the thirty day time frame coverage would lapse. In order for coverage to

exist beyond the thirty days, it would be necessary for Ms. Barkley, on behalf of JMK, to

contact Artisan and request that the vehicle be added to the policy.

The first requirement for Vehicle 151221. to be an "additional auto" is that JMK

"acquired it" during the policy period shown on the Declarations Page. The applicable

policy period is January 30, 2010 through January 30, 2011. "Acquire" means "to get

as one's own." Merriarn-Webster Dictionary, online edition, http: j/w-Vvti1=.merriam-

webster.coin. It also means "to come into possession or control, often by unspecified

means." Id. Therefore, JMK "acquired" Vehicle 151221 when it came into possession or

control of the automobile, and began using it as its own.

8

The trial court determined that JMK took A&K's leftover vehicles to use for its

own purposes when it began doing business in October 2oo8. It went through a

lengthy review of JMK's tax records and A&K's prior insurance records, ultimately

finding that those records and the likelihood for 151221 being used for "spare parts" by

JMK while it was out of service established an "acquisition" by JMK no later than

October 20o8, long prior to the Artisan policy period. Since under that review Vehicle

151221 was acquired outside the policy period, the court found that 151221 did not

qualify as a covered auto under the policy.

The trial court went on to say that even if 151221 was not being used by JMK

during that time period (2oo8), the very latest time period that JMK could have

"acquired" the auto was when it was taken in for repair and repainting approximately

five weeks prior to the accident, finding specifically that "JMK had to have the vehicle

in its possession or its control in order to transport it to the garage" (T.d. 103).

The Trial Court strictly applied a Sxnith analysis to determine ownership. "We

hold that the criteria found in R.C. 1302.42(B) and not the Certificate of Title Act,

idcntify the owner of a motor vehicle for purposes of determining insurance coverage in

case of an accident. Id. While this is a correct recitation of the holding in Smith the

issue is not the holding, but that fact that the holding is much narrower than applied by

the court here: here, there was never an intent to transfer, in fact the opposite: Barkley

never had ANY intention of transferring the title or doing anything else with the A&K

vehicle until it had been repaired and JMK needed it.

Secondly, by its application of Smith, the trial Court ignored the Certificate of

Title Act (which would mandate that JMK could not own 151221 until title had been

transferred into JMK's name). That is en erroneous application; even assuming that the

9

holding in Smitla could be extended to a factual situation where (as here) there was

absolutely no intent to transfer, Smith still specifically recognizes the purpose of R.C.

4505.01: "R.C 4505.04 is irrelevant to all issues of ownership except those

regarding.......instruments evidencing title and ownership". The trial court completely

disregarded the title and repeated registration of 151221 in A&K's name as ANTY evidence

of title or o-,Nmership, and instead solely applied the Uniform Commercial Code, R.C.

1302.01 et se .

The ownership analysis is critical because if JMK did not "oyvn" 151221 prior to

the date it picked it up after repair and painting for preparation to be placed into JMK's

fleet (the date of the accident), it tAJould be an "additional auto" under the terms of the

Artisan policy since it was "acquired during the applicable policy period" and covered

for a period of thirty days after that acquisition. The trial court's rulings in this matter

stripped 151221 and consequently JMK, A&K, Barkley and Barger from any coverage

under the Artisan policy. This is directly contrary to the Ohio Supreme's Court

pronouncement in Buckeye Union, suPra, regularly repeated since: language in an

insurance contract that is "reasonably susceptible to more than one meaning will be

construed liberally in favor of the insured and against the insurer". Here, J111K DID

NOT .MAK.^' ANYDECISION, OR TAKE ANYACT, TO REPAIR 151221, REPALN'T F.L' OR

PREPARE IT FOR SERVICE; ALL OF THOSE DECISIONS WERE MADE BY

BARKLEYAND NO JI'VIKAS'SETS WERE USED TO STORE OR TRANSPORT 151221

UNTIL IT WAS PICKED UP BYA JMKEMMPLOYEE (T7DytTELL) TO BE PLACED

INTO SERVICE ONIVIAY2®, 2010.

"Ternporarrsubstitute auto"

10

The Artisan policy also provided coverage for a teanporary substitute auto on the

date JMK became the owner if the auto was used, `vith the permission of its owner, as a

substitute for an insured auto that has been withdrawn from normal use due to

breakdown, repair, servicing, loss or destruction. There are several conditions to this

provision: (1) the vehicle cannot be owned by or registered to JMK; (2) the vehicle

cannot be leased by JMK under a NwTritten contract for a period of six months or more;

(3) the vehicle cannot be owned by a JMK employee or leased by a JMK employee

under a`^ x•itten contract for a period of six months or more; and (q.) the vehicle cannot

be borrowed from a JMK employee or a member of an employee's household.

Z'here was no dispute that the vehicle which was dropped off at the garage by

Tidwell when he picked up 151221 was an insured auto under the Artisan policy.

Further, there was no dispute that Tidwell was operating 151221 with the permission of

its owner, A&K. Additionally, the covered auto (the one being dropped off) was being

,vvithdrawn from normal use due to repair/servicing. Therefore, 151221 Avould

constitute a"temporazy substitute auto" under the policy unless one of the conditions

wotild exclude it from being characterized as such. The trial court here found that

under its prior analysis 151221 was already "owned" by JMK, and therefore the first

criteria of the "temporary substitute auto" provisions ("the vehicle cannot be owned by

or registered to JMK") had not been met.

Barger disputes that analysis and conclusion and would state, instead, that the

evidence before the Court established exactly the opposite. Without repeating the facts

and legal arguments set forth above, examining the record as a whole the course of

events is readily apparent: 151221 NtiTas used and insured by A&K until A&K went out of

business. It was not used thereafter (repeatedly stated by Barkley in her September 27,

11

2011 deposition) or insured for any reason because it had a blown motor and was sitting

in a lot owned by Barkley and her son. She continued to register it because she did

plan on getting it fixed when she needed it and could use it; by 2010, that time had

arrived. and she had her brother tow it to a garage to have it fixed and painted with

JMK's logo. It tivas not placed into service until Tidwell picl:ed it up, literally minutes

before the Barger accident, and Barkley had every intention of adding 151221 to JMK's

Artisan coverage once she had a chance to inspect the w"ork and verify it was useable

(this is exactly why insurance policies such as Artisan's proNdde an insured a thirty day

window to add a vehicle to coverage). Unfortunately, the accident occurred before she

even saw it.

Considered anotlier way, if Barkley had bought 151221 from Yellow Cab

Coznpany, in either her personal name or A&K's, five weeks prior to this accident, had it

towed, fixed and painted i-vith a JMK logo with the intention to put it into service once it

was repaired and ready for use,,would it have been an insured auto under the Artisan

policy if the Barger accident had happened in the exact same time and fashion? The

ansiver is not only "yes", but an easy "yes". Barger is in effect being deprived of coverage

and the ability to make a claim because the same person, Barkley, owned two individual,

distinct business entities, A&K and JMK.

In these circumstances, considering that insurance policies susceptible to more

than one interpretation are to be liberally constzv.ed in favor of the insured and against

the insurer, the trial court should have found that JMK did not own 151221 until the

time it picked the vehicle up to place it into service, and the Artisan policy should have

been construed in that fashion. If 251221was NOT owned by JMK until the time it

picked it up to place it into service, JMK, A&K, Barkl_ey and Barger t-vill ALL be afforded

12

coverage for a terrible, life-changing accident, one in which bluntly even if the Court

found in Barger's favor the entire proceeds of the Artisan policy would not suffice to

make Barger's injuries whole.

CONCLUSION

This case involves an admittedly unusual factual situation but one which can (and

did) arise. Applying the ,Smith holding as broadly as the Courts of Appeal have interpreted

it can and does deprive tort victims of coverage that would be otherwise available. For all

the foregoing reasons, Appellant Betty Barger respectfully requests that the Court accept

jurisdiction of this discretionary Appeal, reverse the decision of the Court of Appeals for

the Twelfth Appellate District of Ohio, and clarify that the Smzth decision applies only to

those cases where there has been, at the least, a sale or intent to transfer a motor vehicle.

Respectfiilly submitted,

Howar D. ade III (0040187)BECKER & CADE526-A Wards Corner RoadLoveland, OH 45140(513) 683-2252, ext. 143Fax: (513) 683-2257e-mail: cadeCfuse.netAttorney for Defendant-AppellantBetty Barger

13

CERTIFICATE OF SERVICE

I hereby certify that a copy of the foregoiilg cw=as served upon the followingcounsel and parties of record thislhhth day of September, 2013 by regular UnitedStates Mail, postage prepaid.

Timothy J. Riker, Esq.115 W. Ninth StreetCincinnati, OH 45202

Marion `Tidwell3923 Ebenezer RoadCincinnati, OH 45248

Kevin Connell, Esq.Freund, Freeze & Arnold1. South Main StreetSuite 18ooDayton, OH 45402-2017

Adrienne Barkley8070 Beechmont AvenueCincinnati, OH 45255

A&K Barkley Cab Company807o Beechmont AvenueCincinnati, OH 45255

JMK Transportation, LLC8070 Beechmont AvenueCincinnati, OH 45255

Howard D. Cade III (0040187)Attorney for Defendant-Appellant

Betty Barger

14

APPENDIX

IN THE COURT OF APPEALS

TWELFTH APPELLATE DISTRICT OF OHIO

CLERMONT COUNTY

ARTISAN AND TRUCKERS CASUALTYCOMPANY,

Plaintiff-Appellee,CASE NO. CA2013-01-004

OPiNI0 N8/19/2013

-vs-

JMK TRANSPORTATION, LLC,

Defendants-Appellants.

COURT OF APPEAI.Sal., OILED

AUG ' 19 2013

OH

CIVIL APPEAL FROM CLERMONT COUNTY COURT OF COMMON PLEASCase No. 2011 CVH 1096

J. Timothy Riker,1151Afest Ninth Street, Cincinnati, Ohio 45202, for plaihtiff-appeilee, Artisanand Truckers Casualty Company

JMK Transportation, 8070 Beechmont Avenue, Cincinnati, Ohio 45255, appellee, pro se

A&K Barkley Cab Co., 8070 Beechmont Avenue, Cincinnati, Ohio 45255, appellee, pro se

Adrienne Missy Barkley, 8070 Beechmont Avenue, Cincinnati, Ohio 45255, appellee, pro se

Marion Tidwell, 3923 Ebenezer Road, Cincinnati, Ohio 45248, appellee, pro se

Elizabeth Mason, 101 East Main Street, 2nd Floor, Batavia, Ohio 45103, for appellees,Michael McKibben, Brent Anstaett and Clermont County Commissioners

Kevin C. Connell, Fifth Third Centre, 1 South Main Street, Suite 1800, Dayton, Ohio 45402,for appellee, Erie Insurance Company

Howard D. Cade III, 526-A Wards Corner Road, Loveland, Ohio 45140, for defendant-appellant, Betty Barger

Clermont CA2013-01 -004

HENDRICKSON, P.J.

{¶ 11 Defendant-appellant, BettyBarger, appeals a decision of the Ciermont County

Court of Common Pleas granting declaratory judgment in favor of plaintiff-appellee, Artisan &

Truckers Casualty Company (Artisan). For the reasons stated below, we affirm the decision

of the trial court.

{¶ 21 On May 28, 2010, Barger was involved in an automobile accident that involved

her car, another vehicle, and a 2001 Ford Crown Victoria, Vin # 151221 (Crown Victoria).

The Crown Victo(a was operated by Marion Tidwell, who worked for JMK Transportation

(JMK). On the day of the accident, Tidwell was picking up the Crown Victoria from a garage

where it was getting repaired so that the vehicle could be used in JMK's business. Minutes

after picking up the vehicle, a collision occurred where Barger suffered serious injuries.

{¶ 3) At the time of the collision, JMK had an automobile insurance policy with

Artisan. The Crown Victoria was not listed in the declarations page of the policy.

Subsequently, Artisan filed a complaint for daclaratoryludgment to determine its obligations

under the insurance policy. On September 20, 2012, a trial was held which established the

following facts.

{¶ 4) JMK is a Medicaid transportation company owned by Adrienne Barkley. In

November 2008, Barkley incorporated JMK. Prior to the establishment of JMK, Barkley was

the sole shareholder of A&K Barkley Cab Co., Inc. (A&K). A&K was a general purpose cab

company which had operated for several years. In 2007 and 2008, Barkley was looking to

sell the assets of A&K and start a smaller transportation company. During this time, A&K

purchased the Crown Victoria. The Crown Victoria's title and registration listed A&K as the

owner.

t¶ 5) A&K ceased operations and sold most of its assets to another party in July

2008. The asset sale included A&K's goodwill and 30 of AWs vehicles. A 2001 Crown

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Victoria was not included in the sale. After the asset sale, Barkley transferred A&K's leftover

vehicles, including the Crown Victoria, from its lot in Queen City to a new lot located in

Miamitown. Some of the transferred vehicles were d(ven for JMK's business while others

were used for spare parts. Through most of the time JMK was operating its business, the

Crown Victoria suffered from mechanical failure and was left at the Miamitown car lot. The

titles of the leftover vehicles, including the Crown Victoria, remained in A&K's name even

though many of the vehicles were being used in JMK's business.

{¶ 6) In 2008, JMK purchased automobile insurance through National Indemnity.

The Crown Victoria was listed as a covered vehicle under this policy. However, in 2009 JMK

bought insurance through Artisan and the Crown Victoria was not included under this new

policy. Additionally in 2009, Barkley as proprietor of JMK, filed a tax return claiming several

vehicles for tax deduction purposes. The vehicles were not listed by their VIN numbers but a

"2001 Crown Vick (sic) Auto" was claimed as a tax deduction.

{¶ 7) Approximately five weeks before the collision, Barkley"s brother towed the

Crown Victoria to a garage to have its engine repaired and to be painted. The vehicle was to

be in JMK's colors, a gray body with white JMK lettering on the side. On the day of the

accident, TidweCl drove a JMK vehicle to the garage, with the intent of dropping it off for

potential repair and picking up the Crown Victoria, which was to be placed in service. Barkley

testified that on the day of the accident, the vehicle was just being converted to use by JMK

and that it was basically a new vehicle to JMK that day. Fifteen minutes after Tidwell picked

up the Crown Victoria, the collision occurred.

{¶ S} On December 21, 2012, the trial court found the Crown Victoria was not an

insured vehicle under the Artisan policy. The court reasoned that the Crown Victoria was

excluded from the policy because it was not listed on the declarations page, JMK acquired

the vehicle prior to policy period, and JMK was the owner of the vehicle for more than 30

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days priorto the accident, In finding that JMK was the owner of the Crown Victoria, the court

applied the Ohio Uniform Commercial Code (UCC) rather than the Ohio Certificate of Title

Act. Consequently, Artisan owed no coverage under the policy. Bargerappeaied, raising a

sole assignment of error:

{¶ 9} THE TRIAL COURT ERRED IN GRANTING PLAiNTIFF-APPELLEE°S

COMPLAINT FOR DECLARATORY JUDGMENT.

{t 10} Barger argues the trial court erred in finding that the vehicle was not insured

under the Artisan policy. Specifically, Barger argues the court erred in its application of law in

determining that the Ohio UCC rather than the Ohio Certificate of Title Act identifies the

owner of the vehicle for purposes of determining insurance coverage in the case of an

accident. Barger also asserts that three of the court's factual decisions were not supported

by the evidence. These decisions were that (1) JMK acquired the vehicle in 2008, (2) JMK

had possession of the vehicle when it was towed to the garage, and (3) the vehicle was used

for spare parts by JMK.

Insurance Pelicy

{¶ 11} JMK's commercial automobile insurance policy with Artisan provides coverage

for damages an insured becomes legally responsible for because of an accident arising out

of the use of an "insured auto." The sole issue in this case is whether the Crown Victoria

qualified as an °insure' d auto" under the policy.

1112) The Artisan policy provides several definitions for an "insured auto." One

definition includes any auto that is specifically described on the Declarations Page of the

policy. In this case, it is undisputed that the Crown Victoria was not on the Declarations

Page. Therefore, our inquiry turns to the other definitions of "insured auto."

{¶ 131 An "insured auto" also covers an "additional auto" on the date the insured

becomes the owner. The policy specifies that coverage will extend to the "additional auto" if,

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i. You acquire the auto during the policy period shown on theDeclarations Page;ii. We insure a!I autos owned by you that are used in yourbusiness; andiii. No other insurance policy provides coverage for that auto.

The policy goes on to state that it will cover an "additional auto" for a period of 30 days after

the insured becomes the owner of the auto. The coverage will not extend after the 30-day

period unless the insured requests the "additional auto" to be included in the policy.

11141 Another type of "insured auto" under the policy is a "temporary substitute auto."

A "temporary substitute auto" is defined as "any auto used, with the permission of its owner,

as a substitute for an insured auto that has been withdrawn from normal use due to

breakdown, repair, servicing, loss or destruction." A "temporary substitute auto" also is "not

owned by or registered to you* *'`," not owned by your employee or leased for a period of six

months or more by your employee, and "not borrowed from your employees or members of

their households.i1

Legal Argument

f¶ 15} We begin with Barger's first argument, that the court used the incorrect law to

determine whether JMK or A&K owned the vehicle. The issue of ownership is important

because if JMK owned the Crown Victoria for less than 30 days, the "additional auto"

provision that excludes coverage for vehicles owned longer than 30 days would not apply.

Additionally, the determination of ownership is important for coverage under the "temporary

substitute auto" provision because this coverage hinges on finding that JMK never owned the

Crown'Jictoria.

{¶ 16} The Supreme Court recently clarified that once a trial court determines that a

matter is appropriate for declaratory judgment, its holdings regarding questions of law are

1. The policy also provides coverage for a "replacement auto." However, both parties concede that the CrowrlVictoria did not qualify as a"replacernent auto" and therefore we will not address this issue.

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reviewed de novo. South v. Browning, 12th Dist. Warren No, CA2012-09-088, 2013-Ohio-

1491, 1 10, citing Arnott v. Arnott, 132 Ohio St.3d 401, 2012-Ohio-3208, ¶13, 17.

Accordingly, we review the trial court's decision de novo.

11171 The Ohio UCC Section 2-401, codified in R.C. 1302.42(B), provides,

Unless otherwise explicitly agreed, title passes to the buyer atthe time and place at which the seller completes performancewith reference to the physical delivery of the goods, despite anyreservation of a security interest and even though a document oftitle is to be delivered at a different time or place *#*.

{¶ 181 On the other hand, the Ohio Certificate of Motor Vehicle Title Act provides'°no

court shall recognize the right, title, claim, or interest of any person in or to any motor vehicle

sold or disposed of, or mortgaged or encumbered" unless evidenced by a certificate of title,

by admission in the pleadings, by stipulation of the parties, or by an instrument showing a

valid security interest. R.C. 4505.04(B).

{¶ 19) The Supreme Court has held that "[t]he criteria found in R.C.13U2.42(B), and

not the Certificate of Title Act, identify the owner of a motor vehicie for purposes of

determining insurance coverage in an accident," Smith v. Nationwide Mut. Ins. Co., 37 Ohio

St.3d 150 (1988), syllabus. In Smith, the Court was determining the owner of an automobile

when the purchaser of the vehicle received imperfect title from the vehicle's previous owner

and was involved in an accident, Id. at 152. The purchaser had not insured the vehicle while

the previous owner retained coverage on the automobile. Id.

(¶ 20) In finding that the Ohio UCC should apply to identify the owner for purposes of

determining insurance coverage in an accident, the Court reasoned that "[t]he purpose of the

Certificate of Title Act is to prevent the importation of stolen motor vehicles, to protect Ohio

bona-fide purchasers against thieves and wrongdoers, and to create an instrument

evidencing title to, and ownership of, motor vehicles." Id., citing Hughes v. Al Green, Inc., 65

Ohio St.2d 110 (1981). Thus, the Certificate of Title Act "is irrelevant to all issues of

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ownership except those regarding the importation of vehicles, rights as between lienholders,

rights of bona-fide purchasers, and instruments evidencing title and ownership." Smith at

153.

11211 We find that the trial court did not err in looking to R.C. 1302.42(B) to determine

the owner of the Crown Victoria. The issue in this case was whether JMK or A&K was the

owner of the Crown Victoria for purposes of determining insurance coverage in an

automobile accident. The Supreme Court has stated that in this circumstance, courts must

look to the Ohio UCC to determine the ownership of the automobile. As noted in Smith,

application of the Ohio Certificate of Title Act is proper in cases in which there is an issue as

to the rights between lienholders, the rights of bona-fide purchasers, and the instruments

evidencing title and ownership. Further, the court did not err in applying subsection (B) in

determining the ownership of the Crown Victoria because the evidence demonstrated that

the ownership of the Crown Victoria was transferred when it was delivered to the Miamitown

lot.

J¶ 22} Additionally, we disagree with Barger that Smith is limited to cases where there

has been a sale of the vehicle. As this court has previously noted, the distinction between

gifts and sales is an "illusory distinction when the reasoning behind Smith is considered."

Abney v. Vl/estern Res. Mut. Ces. Co,, 76 Ohio App. 3d 424, 428 (12th Dist.1991). Instead,

"the Supreme Court has made it clear that, given the purpose of the Certificate of Title Act,

unless an action involves issues of ownership relating to importation of vehicles, rights

between lienholders, rights of bona-fide purchaser, or instruments evidencing title and

ownership, the Certificate of Title Act is not the exclusive method to prove ownership of a

vehicle." ld. See Howard v. !°timmeiriciC, 10th Dist. Franklin No. 03AP-1034, 2004Ohio-3309,

¶ 8 (noting that Smith has been applied in non-sale situations.)

{^( 231 Consequently, the trial court correctly applied R>C.1302.42(B) to determine the

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ownership of the Crown Victoria.

Factual ,t;irguments

{¶ 241 Barger also challenges the trial court's factual determinations in finding that the

Crown Victoria was not an "additional auto" or a°'temporary substitute auto" under the policy.

Specifically, Barger argues the court's finding that JMK "acquired" the Crown Victoria no later

than October 2008 was against the manifest weight of the evidence. Barger also contends

the court erred in finding that (1) the Crown Victoria was in JMK's possession and control the

day it was towed to the garage, and (2) the Crown Victoria was used for spare parts by JMK

and thus was in JMK's possession.

{¶ 251 When evaluating whether a judgment is against the manifest weight of the

evidence in a civil case, the standard of review is the same as in the criminal context.

Eastley v. Volkman, 132 Ohio St.3d 328, 2012-Ohio-2179, ¶ 7 7. We weigh the evidence and

all reasonable inferences, consider the credibility of witnesses, and determine whether in

resolving conflicts in the evidence, the finder of fact "clearly lost its way and created such a

manifest miscarriage of justice that the audgment] must be reversed and a new trial ordered."

Marinich v. Lumpkin, 12th Dist. Warren No. CA2011-11-124, 2012-Ohio-452fi, ¶ 20, quoting

Eastley at ¶ 20. In weighing the evidence, we are mindful of the presumption in favor of the

finder of fact. East/ey at ¶ 21. °"A reviewing court should not reverse a decision simply

because it holds a different opinion cdncerrsing the credibility of the witnesses and evidence

submitted before the trial court." Seasons Coal Co., Inc. v. Cleveland, 10 Ohio St.3d 77, 81

(1984).

{¶ 261 We begin by discussing the trial court's determination that JMK "acquired" the

Crown Victoria no later than October 2008. On appeal and during the trial, the court and the

parties use "acquire" and "own" interchangeably in determining whether insurance coverage

exists. For coverage under the "additional auto" provision in the policy, the Crown Victoria

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must have been "acquired" during the policy period, which was from January 30, 2010

through January 30, 2011. Additionally, for coverage under the "additional auto" and

"temporary substitute auto" provisions, JMK must not have owned the Crown Victoria for

more than 30 days prior to the accident.

{¶ 27} While "acqulre" is not defined in the policy, the ordinary meaning of'"acquire" is

"to gain possession or control of; to get or obtain." Black's Law Dictionary, (9th ed.2009).

See Morner v. Giuliano, 167 Ohio App.3d 785, 2006-Ohio-2943 (12th Dist.). As described

above, ownership for insurance purposes in an automobile accident hinges on physical

possession of the automobile. Therefore, as these terms both focus on the possession of

the vehicle, they have substantially the same meaning.

{¶ 28} The trial court's finding that JMK acquired or owned the Crown Victoria no later

than October 2008 is not against the manifest weight of the evidence as the evidence shows

the Crown Victoria was transferred from A&K to JMK after the asset sale. In July 2®08, A&K

sold most of its assets and ceased doing business. For a number of years Barkley had been

looking to sell A&K and start a smaller transportation company. The vehicles that were not

sold in the A&K asset sale were moved from A&K's car lot to a Miamitown car lot and were to

be used in the JMK business. The Crown Victoria was not included in the asset sale. A few

months after the asset sale, in October 2008, JMK officially began business operations.

($29) After the asset sale, JMK took several actions that evidenced its ownership and

control of the Crown Victoria. JMK's 2008 automobile insurance policy with National

Indemnity listed the Crown Victoria as a covered automobile. Additionally, a 2009 tax return

shows that JMK took deductions forthe vehicles not sold in the asset sale. The return lists a

"2001 Crown Vick (sic) Auto." The individual who prepared JMK's taxes testified that a

business cannot take a deduction for a vehicle unless the business owns the vehicle. While

this return did not list the VIN numbers of the automobile and therefore is not definitive

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evidence of JMK's ownership of the Crown Victoria, it is of some evidentiary value to our

determination.

{¶ 30) Barger contends that Barkley's testimony that the Crown Victoria was being

converted to use by JMK the day of the accident and the Crown Victoria's title and

registration show that JMK did not acquire the vehicle in 2008. We disagree. While the title

and registration of the Crown Victoria lists A&K as the owner of the vehicle, three of the four

vehicles operated by JMK were still titled and registered to A&K. Barkley explained that she

did not transfer the title of these vehicles to JMK because she did not think it was necessary.

A&K was no longer operating as it had reported zero income since 2009. Therefore, A&K's

name on the title and registration is not definitive evidence of possession in this case.

Additionally, we note that for purposes of determining ownership, this court looks to physical

possession in cases of insurance coverage in an automobile accident and in this case, JMK

had physical possession of the vehicle. Lastly, Barkley's testimony about JMK's ownership of

the Crown Victoria is outweighed by other evidence which shows that JMK owned the Crown

Victoria since 2008.

(131) Therefore, the trial court's finding that JMK acquired and owned the Crown

Victoria no later than October 2008 is not against the manifest of the evidence.

Consequently, because we find that JMK owned the Crown Victoria by October 2008, we

necessarily find that the JMK had possession of the Crown Victoria when it was towed to the

garage and that JMK had possession of the Crown Victoria while it was in the car lot, possibly

being used for spare parts. Thus, the Crown Victoria is excluded from coverage under the

"additional auto" and "temporary substitute auto" provisions.

Conclusion

111321 The trial court did not err in granting declaratory judgment in favor of Artisan.

The court correctly applied the Ohio UCC provision codified in R.C. '! 302.42(B) to determine

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the ownership of the Crown Victoria and the court's determination that JMK acquired and

owned the Crown Victoria no later than October 2008 is not against the manifest weight of

the evidence. Therefore, the Crown Victoria is not a covered automobile under the

"additional auto" or "temporary substitute auto" provision in the policy.

{¶ 33} Barger's sole assignment of error is overruled.

11341 Judgment affirmed.

PIPER and M. POWELL, JJ„ concur.

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IN THE COURT OF APPEALS

TWELFTH APPELLATE DISTRICT OF OHIO

CLERMONT COUNTY

ARTISAN AND TRUCKERS CASUALTYCOMPANY,

Plaintiff-Appellee,

- vs -

JMK TRANSPORTATION,

Defendants-Appellants.

CASE NO. CA2013-01-004

^ COUtiTOF ,APPEAI,S

F'ILED

et alAUG =19 2013

.^Ak'iBARA.A. WiEDEtiRF

JUDGMENT ENTRY

The assignment of error properly before this court having been ruled upon, it isthe order of this court that the judgment or final order appealed from be, and thesame hereby is, affirmed.

It is further ordered that a mandate be sent to the Clermont County Court ofCommon Pleas for execution upon this judgment and that a certified copy of thisJudgment Entry shall constitute the mandate pursuant to App.R. 27.

Costs to be taxed in compliance with App.R. 24.

Robert A. Hen ' son,

Robin N. Piper, Ju m

Mike Powell, Judge

Judge