Court of Appeals of Michigan

June 30, 2022, Decided

No. 358507

Reporter

2022 Mich. App. LEXIS 3815 *; 2022 WL 2380704

HARIS ALESEVIC, Plaintiff, v RUSSELL GORDON, CITY OF DETROIT, and WAYNE COUNTY, Defendants, and PROGRESSIVE MICHIGAN INSURANCE COMPANY, Defendant-Appellant, and ACCEPTANCE INDEMNITY INSURANCE COMPANY, Defendant-Appellee.

Notice: THIS IS AN UNPUBLISHED OPINION. IN ACCORDANCE WITH MICHIGAN COURT OF APPEALS RULES, UNPUBLISHED OPINIONS ARE NOT PRECEDENTIALLY BINDING UNDER THE RULES OF STARE DECISIS.

Prior History:  [*1] Wayne Circuit Court. LC No. 19-011275-NI.

Alesevic v. Gordon, 2020 Mich. App. LEXIS 8515 (Mich. Ct. App., Dec. 17, 2020)

Core Terms

coverage, endorsement, benefits, insurance policy, insured, tractor, no-fault, modified, named insured, motorcycle, summary disposition, mandatory coverage, injuries, policies

Counsel: For HARIS ALESEVIC, Plaintiff – Appellee: KEITH M BANKA.

For RUSSELL GORDON, Defendant: KRISTI E SOLON.

For DETROIT CITY OF, Defendant: MARY BETH COBBS.

For WAYNE COUNTY, Defendant: JASON H HARRISON SR.

For PROGRESSIVE MICHIGAN INSURANCE COMPANY, Defendant – Appellant: JEREMIAH L FANSLAU.

Judges: Before: MARKEY, P.J., and SHAPIRO and PATEL, JJ.

Opinion

Per Curiam.

Defendant, Progressive Michigan Insurance Company (Progressive), appeals by right a stipulated order dismissing claims by plaintiff against Progressive. Progressive is challenging the trial court’s earlier order that granted summary disposition in favor of defendant, Acceptance Indemnity Insurance Company (Acceptance). We affirm.

Plaintiff was a passenger in a car being driven by defendant, Russell Gordon. The vehicle either hit a dip in the road, or Gordon attempted to avoid a dip in the road, which caused the car to swerve and ultimately crash through a fence and strike a parking-lot pole. Plaintiff suffered a variety of injuries. At the time of the accident, plaintiff and Gordon had automobile insurance policies through Progressive, and plaintiff owned a 2007 Volvo tractor that could be used to haul semitrailers [*2]  hitched to the tractor. Plaintiff had a non-trucking insurance policy with Acceptance that covered the tractor. Such non-trucking insurance policies are generally known as “bobtail” policies, insuring the tractor and driver of the rig when the tractor is operated absent a semitrailer or cargo. See Besic v Citizens Ins Co of the Midwest, 290 Mich App 19, 22 n 1; 800 NW2d 93 (2010). We discuss in our analysis below the pertinent language in the Acceptance insurance policy.

Plaintiff commenced suit against Progressive and Acceptance for underinsured motorist benefits, uninsured motorist benefits, and personal protection insurance (PIP) benefits related to injuries plaintiff sustained in the motor vehicle accident. Plaintiff also filed various claims against the remaining defendants, none of whom are parties to this appeal. The appeal solely entails Progressive and Acceptance and the payment of PIP benefits. The other claims were ultimately resolved or dismissed. Acceptance moved for summary disposition under MCR 2.116(C)(10), arguing that plaintiff’s insurance policy was a bobtail policy that only applied to accidents involving the Volvo tractor. Acceptance further contended that the PIP endorsement associated with the Acceptance policy was not applicable to plaintiff because there [*3]  was an exclusion to the endorsement that was implicated because plaintiff is a “named insured” on his Progressive policy. The trial court granted Acceptance’s motion for summary disposition and subsequently denied Progressive’s motion for reconsideration.¹ Eventually, plaintiff and Progressive stipulated to the dismissal of plaintiff’s claims against Progressive, and this appeal followed.

This Court reviews de novo a trial court’s ruling on a motion for summary disposition. Hoffner v Lanctoe, 492 Mich 450, 459; 821 NW2d 88 (2012). Additionally, we review de novo issues concerning the proper interpretation of a contract and the legal effect or application of a contract. Rory v Continental Ins Co, 473 Mich. 457, 464; 703 N.W.2d 23 (2005).

In ascertaining the meaning of a contract such as an insurance policy, this Court gives the words used in the contract their plain and ordinary meaning, as would be apparent to a reader of the instrument. Id. A fundamental tenet of Michigan jurisprudence is that an unambiguous contract is not open to judicial construction and must be enforced as written, thereby respecting the freedom of individuals to arrange their affairs by contract. Id. at 468. In Hunt v Drielick, 496 Mich 366, 372-373; 852 NW2d 562 (2014), our Supreme Court observed:

An insurance policy is similar to any other contractual agreement, and, thus, the court’s role is to determine [*4]  what the agreement was and effectuate the intent of the parties. We employ a two-part analysis to determine the parties’ intent. First, it must be determined whether the policy provides coverage to the insured, and, second, the court must ascertain whether that coverage is negated by an exclusion. While it is the insured’s burden to establish that his claim falls within the terms of the policy, the insurer should bear the burden of proving an absence of coverage. Additionally, exclusionary clauses in insurance policies are strictly construed in favor of the insured. . . . However, it is impossible to hold an insurance company liable for a risk it did not assume, and, thus, clear and specific exclusions must be enforced. [Quotation marks, citations, and brackets omitted.]

On appeal, Progressive argues that plaintiff, as an individual, was the named insured under the insurance policy issued by Acceptance. Further, Progressive contends that the PIP endorsement to the Acceptance policy indicated that it would provide PIP benefits to plaintiff consistent with the no-fault act, MCL 500.3101 et seq., if he sustained an injury in an accident that resulted from the use of “an auto” as “an auto,” which language [*5]  would encompass Gordon’s vehicle. Thus, according to Progressive, Acceptance and Progressive are in the same order of priority under MCL 500.3114(1), thereby mandating a pro rata split or equitable division under former MCL 500.3115(2) in regard to the payment of PIP benefits.² Acceptance counters that its policy did not provide coverage under the circumstances presented because the accident did not involve the 2007 Volvo tractor. Acceptance additionally argues that a policy exclusion barred PIP coverage because plaintiff was a “named insured” and could collect PIP benefits under his Progressive policy. Accordingly, because there was no coverage, and because, assuming coverage, an exclusion applied, Progressive alone was responsible for the payment of PIP benefits, and the purported issue of priority, equal or otherwise, was irrelevant.

The certificate of insurance for plaintiff’s policy with Acceptance provided that it was part of the insurance agreement and that PIP coverage, among other coverages, would “apply only to the Specified ‘Auto’ or ‘Autos’ below.” (Emphasis added.) And the only auto listed in the certificate of insurance was the “2007 Volvo Tractor.” This language plainly and unambiguously precluded [*6]  liability by Acceptance to pay PIP benefits in relation to an accident that did not involve the Volvo tractor even though plaintiff may have suffered injuries in the accident. The Acceptance insurance policy, however, also contained a Michigan PIP endorsement, which Progressive contends overrode the certificate of insurance or broadened the PIP coverage. More specifically, the PIP endorsement provided, in part:

We will pay personal injury protection benefits to or for an “insured” who sustains “bodily injury” caused by an “accident” and resulting from the ownership, maintenance or use of an “auto” as an “auto.” These benefits are subject to the provisions of Chapter 31 of the Michigan Insurance Code. . . . [Emphasis added.]

Progressive, relying on this provision, maintains that plaintiff was the “insured” under the Acceptance policy and that the plain language of the endorsement did not limit its application to any particular vehicle.

Acceptance challenges Progressive’s argument regarding the PIP endorsement, asserting, in part, that the endorsement modified the insurance policy but only with respect to a covered automobile, which, again, was solely the 2007 Volvo tractor. Progressive [*7]  argues that Acceptance essentially cherry-picks from the language in the PIP endorsement and does not read the endorsement’s introductory language in its entirety. The PIP endorsement to the Acceptance insurance policy provided, in part:

For a covered “auto” licensed or principally garaged in, or “garage operations” conducted in, Michigan, this endorsement modifies insurance provided under the following:

BUSINESS AUTO COVERAGE FORM

GARAGE COVERAGE FORM

MOTOR CARRIER COVERAGE FORM

TRUCKERS COVERAGE FORM.

With respect to coverage provided by this endorsement, the provisions of the Coverage Form apply unless modified by the endorsement. [Emphasis added.]

Progressive maintains that the coverage form at issue in this case was the “NON-TRUCKING AUTOMOBILE COVERAGE FORM,” and not any of the coverage forms listed in the PIP endorsement. Therefore, according to Progressive, the emphasized language in the above-quoted passage was implicated, and it effectively expanded PIP coverage to encompass injuries incurred by plaintiff in any auto accident.

We do not agree with Progressive’s construction of the introductory language found in the PIP endorsement. The covered “auto” was the Volvo tractor, so the [*8]  PIP endorsement modified insurance in connection with the Volvo tractor, but then only in regard to coverage forms that were not applicable in this case. We note that if one of the coverage forms listed in the PIP endorsement had in fact been applicable, there would perhaps be tension between the “covered auto” language and the “an auto” language in the PIP endorsement. Progressive relies on the sentence in the PIP endorsement that we quoted and emphasized above: “With respect to coverage provided by this endorsement, the provisions of the Coverage Form apply unless modified by the endorsement.” But this language was simply referring to the listed coverage forms, inapplicable here, indicating that their provisions continued to govern unless the endorsement modified them. In sum, there was nothing in the PIP endorsement that negated or broadened the language in the certificate of insurance that plainly and unambiguously limited PIP coverage to injuries arising out of accidents involving the Volvo tractor.

Furthermore, assuming that the PIP endorsement was applicable, the endorsement provided for the following exclusion in section C of the endorsement:

We will not pay personal injury protection [*9]  benefits for “bodily injury”

* * *

6. To anyone entitled to Michigan no-fault benefits as a Named Insured under another policy. This exclusion does not apply to you or anyone “occupying” a motorcycle.

Plaintiff was a named insured in his Progressive policy. Accordingly, the exclusion identified in the PIP endorsement was implicated and needed to be honored assuming general application of the endorsement in the first place.

Progressive argues that the exclusion was unenforceable because the no-fault act statutorily mandates PIP-benefit coverage in automobile insurance policies. Progressive also claims that there was an exclusion within the exclusion as to “you,” which was a reference to plaintiff, maintaining that “you” did not modify “occupying a motorcycle.” Both of these arguments are unavailing.

In Johnson v USA Underwriters, 328 Mich App 223; 936 NW2d 834 (2019), this Court stated:

The no-fault act . . . does not address, let alone bar, an insurer’s ability to sell optional insurance coverages only. In this case, the USA policy did not provide the mandatory no-fault coverages to Vandeinse. Indeed, USA does not offer mandatory coverages to any customers; it only sells collision and comprehensive policies, which, according to Vandeinse’s insurance agent, [*10]  are sometimes bundled with other insurance policies for a reduced cost. Because the no-fault act does not bar this practice, it does not violate Michigan law, and we cannot read into the statute something that is not there.

* * *

The dissent concludes that the no-fault act “implicitly” requires that every insurer provide policies that include the mandatory coverages, and then—and only then—can an insurer “delete” coverages after verification that the insured will not operate the vehicle on a roadway. However, the no-fault act does not state that every insurer must provide mandatory coverages. Instead, MCL 500.3101(1) requires that any insured who intends to drive on a highway must have the mandatory coverages. The no-fault act also allows insurers to delete coverages from policies that have already been issued. The dissent has not identified any statutory provision that requires insurers to provide mandatory coverages when issuing policies to insureds. If that was the Legislature’s intent, it would have included such a provision in the no-fault act.

Accordingly, Acceptance’s non-trucking insurance policy—a bobtail policy³—was not required to provide PIP benefits to plaintiff. And plaintiff had existing [*11]  PIP coverage through Progressive, so he was not without such coverage. Therefore, the exclusion in the PIP endorsement was enforceable.

Finally, we reject Progressive’s interpretation of the exclusion within the exclusion, which provides: “This exclusion does not apply to you or anyone ‘occupying’ a motorcycle.” This language plainly and unambiguously provided an exclusion to the exclusion for a motorcycle occupant, whether it be “you” or “anyone” riding on the motorcycle. “[Y]ou” and “anyone” both modify ” ‘occupying’ a motorcycle.’ ” If the language were construed to exclude “you” in general, it would effectively swallow up the exclusion regarding persons entitled to PIP benefits as a named insured under a different insurance policy.

In sum, we conclude that there is no genuine issue of material fact that Progressive was the only party obligated to provide PIP benefits in relation to plaintiff’s injuries; there was no true priority issue. Therefore, we hold that the trial court did not err by granting Acceptance’s motion for summary disposition.

We affirm. Having fully prevailed on appeal, Acceptance may tax costs under MCR 7.219.

/s/ Jane E. Markey

/s/ Douglas B. Shapiro

/s/ Sima G. Patel

End of Document

---

¹ We note that the trial court provided no analysis, reasoning, or explanation whatsoever in either granting the motion for summary disposition and in denying the motion for reconsideration; the court simply granted and denied the motions without saying anything more.

² MCL 500.3114 and MCL 500.3115 were amended pursuant to 2019 PA 21 after the events in this case. The amendment does not affect our analysis, and current MCL 500.3114(8), comparable to former MCL 500.3115(2), now provides for the equal division of PIP-payment obligations with respect to insurers of equal priority.

³ This Court approved of such policies in Integral Ins Co v Maersk Container Serv Co, Inc, 206 Mich App 325, 330-332; 520 NW2d 656 (1994).

P.I. & I. Motor Express, Inc. v. RLI Ins. Co.

United States Court of Appeals for the Sixth Circuit

December 8, 2021, Argued; July 6, 2022, Decided; July 6, 2022, Filed

File Name: 22a0147p.06

Nos. 21-3412/3442

Reporter

2022 U.S. App. LEXIS 18525 *; 2022 FED App. 0147P (6th Cir.) **; __ F.4th __

P.I. & I. MOTOR EXPRESS, INC., Plaintiff-Appellee/Cross-Appellant, v. RLI INSURANCE COMPANY, Defendant-Appellant/Cross-Appellee.

Prior History:  [*1] Appeal from the United States District Court for the Northern District of Ohio at Youngstown. No. 4:19-cv-01008—Benita Y. Pearson, District Judge.

P.I. & I. Motor Express, Inc. v. RLI Ins. Co., 499 F. Supp. 3d 486, 2020 U.S. Dist. LEXIS 209117, 2020 WL 6565193 (N.D. Ohio, Nov. 9, 2020)

Core Terms

workers’ compensation, Trucking, temporary worker, coverage, ambiguous, temporary-worker, courts, district court, driver, statutory employer, settlement, employees, insured, instructions, common-law, cases, preclusion, parties, leased, tort suit, immunity, plant, burden of proof, short-term, driving, license, pipes, contracts, questions, reimburse

Case Summary

Overview

HOLDINGS: [1]-The district court did not err in concluding that a commercial general liability policy could cover an insured’s claim for indemnification because whether or not the insurer subjectively meant for its commercial general liability policy to cover the claim, the policy’s language objectively covered it; [2]-The policy’s workers’ compensation exclusion did not apply to the insured’s settlement with a truck driver because because the driver brought his suit pursuant to the common law of torts;  [3]-Because the jury found that the driver was a temporary-worker, that finding took him outside the employer exclusion of the policy;  [4]- The district court did not abuse its discretion in refusing to admit pleadings and testimony from the workers’ compensation proceedings under Fed. R. Evid. 403 because the evidence risked confusing the issues and misleading the jury.

Outcome

Judgment affirmed.

LexisNexis® Headnotes

Workers’ Compensation & SSDI > Coverage > Actions Against Employers > Statutory Requirements for Adequate Coverage

HN1  Actions Against Employers, Statutory Requirements for Adequate Coverage

Insurers routinely provide businesses with commercial general liability policies to reimburse them for liabilities resulting from accidents (such as a grocerystore customer slipping on a negligently maintained wet floor).  But these policies are not substitutes for workers’ compensation insurance They thus typically exclude liabilities arising from a workers’ compensation law or from an injury to an employee.

Workers’ Compensation & SSDI > Coverage > Employment Status > Employees

Workers’ Compensation & SSDI > Coverage > Actions Against Employers > Statutory Requirements for Adequate Coverage

Workers’ Compensation & SSDI > Coverage > Employment Status > Employers

HN2  Employment Status, Employees

A statutory employer is a master who is not a contractual or common-law one, but is made one by unique provisions in the statute. Ordinary employers generally must obtain workers’ compensation insurance, and statutory employers must do so if the ordinary employers do not. 77 Pa. Stat. Ann. §§ 461, 501(a)(1).

Business & Corporate Compliance > … > Workers’ Compensation & SSDI > Exclusivity > Employees & Employers

Workers’ Compensation & SSDI > Remedies Under Other Laws > Common Law

Workers’ Compensation & SSDI > Coverage > Actions Against Employers > Statutory Requirements for Adequate Coverage

Workers’ Compensation & SSDI > Defenses > Exclusivity Provisions

Workers’ Compensation & SSDI > Exclusivity > Exceptions

HN3  Workers’ Compensation, Employees & Employers

Typically, employees covered by the Pennsylvania workers’ compensation statute may seek relief only through that statute’s remedial scheme and cannot bring a separate tort suit against their ordinary or statutory employers. 77 Pa. Stat. Ann. § 481(a). If, however, an employer fails to obtain workers’ compensation insurance for an employee, the employer loses this immunity and may be held liable to the employee in a common-law suit. 77 Pa. Stat. Ann. § 501(d).

Insurance Law > … > Policy Interpretation > Ambiguous Terms > Unambiguous Terms

HN4  Ambiguous Terms, Unambiguous Terms

Ohio law directs the courts to interpret the words in a policy according to their ordinary, everyday meaning. If, moreover, the words are unambiguous, the courts must apply the policy as written and cannot resort to outside-the-contract evidence to interpret it.

Contracts Law > Contract Interpretation > Intent

HN5  Contract Interpretation, Intent

When interpreting statutes that include the word “under,” the courts must look to the specific context in which this linguistic chameleon is used to identify its meaning.

Contracts Law > Contract Interpretation > Intent

Governments > Legislation > Interpretation

HN6  Contract Interpretation, Intent

When preposition connects an obligation to a law, the word “under” most naturally conveys that the obligation arises pursuant to or by reason of the authority of the law. That is, the obligation must exist because of the law or, stated the other way, the law must be the source of the obligation. If, for example, someone says that a federal agency enacted a regulatory requirement “under” a statute, the person is conveying that the statute is what gave the agency the authority to enact the requirement. Or if someone says that the plaintiff filed a claim “‘under” 42 U.S.C. § 1983, the person is conveying that § 1983 is what gave the plaintiff the right to bring this claim.

Business & Corporate Compliance > … > Workers’ Compensation & SSDI > Exclusivity > Employees & Employers

Workers’ Compensation & SSDI > Remedies Under Other Laws > Common Law

Workers’ Compensation & SSDI > Defenses > Exclusivity Provisions

Workers’ Compensation & SSDI > Coverage > Actions Against Employers > Statutory Requirements for Adequate Coverage

Workers’ Compensation & SSDI > Exclusivity > Exceptions

HN7  Workers’ Compensation, Employees & Employers

The workers’ compensation statute generally bars employees from filing tort suits against statutory employers that have workers’ compensation insurance. 77 Pa. Stat. Ann. § 481(a).

Civil Rights Law > … > Protection of Disabled Persons > Americans With Disabilities Act > Scope

Labor & Employment Law > … > Disability Discrimination > Defenses > Sovereign Immunity

Torts > Public Entity Liability > Immunities > Sovereign Immunity

Governments > State & Territorial Governments > Claims By & Against

HN8  Protection of Disabled Persons, Americans With Disabilities Act

The U.S. Constitution grants the states sovereign immunity from damages suits, but Congress can sometimes abrogate this immunity. The Americans with Disabilities Act, for instance, permits the disabled to seek damages from a state if it violates the Act’s provisions regulating public services. The Constitution permits this waiver of immunity.

Contracts Law > Contract Interpretation > Ambiguities & Contra Proferentem

HN9[ Contract Interpretation, Ambiguities & Contra Proferentem

When an ambiguous contract term can be read in two ways, one of which will render another term meaningless and the other of which will give it meaning and purpose, Ohio courts prefer the latter interpretation.

Contracts Law > Contract Interpretation > Intent

Evidence > Inferences & Presumptions > Presumptions > Effects

HN10  Contract Interpretation, Intent

Ohio courts generally presume that identical contract language means the same thing across the whole contract.

Contracts Law > Contract Interpretation > Intent

HN11  Contract Interpretation, Intent

The Ohio Supreme Court determines a contract’s meaning by looking to the parties’ intent, not external policy considerations. And when a contract contains clear text, this text conclusively establishes that intent.

Workers’ Compensation & SSDI > Coverage > Employment Status > Contractors

Workers’ Compensation & SSDI > Coverage > Employment Status > Employers

Workers’ Compensation & SSDI > Coverage > Actions Against Employers > Statutory Requirements for Adequate Coverage

Workers’ Compensation & SSDI > Coverage > Employment Status > Employees

HN12 Employment Status, Contractors

The “statutory employer” concept expands the number of entities that qualify as employers beyond the traditional common-law definition. It does so to ensure that an injured worker can receive benefits from a solvent party (typically, a general contractor) if the common-law employer (typically, a subcontractor) lacks workers’ compensation coverage. 77 Pa. Stat. Ann. §§ 461-62.

Civil Procedure > … > Preclusion of Judgments > Estoppel > Collateral Estoppel

HN13  Estoppel, Collateral Estoppel

Issue preclusion generally bars a party from relitigating an issue in a second case that the party has already litigated to a final judgment in an earlier one. But Pennsylvania courts would not allow a first case to preclude an issue in a second one unless both cases involved the same issue and the issue was actually litigated in the first case.

Workers’ Compensation & SSDI > Exclusivity > Exceptions

HN14  Exclusivity, Exceptions

Because temporary workers do not become the employees of the entities to whom they are assigned, the workers’ compensation laws do not immunize the entities from a worker’s tort suit.

Contracts Law > Contract Interpretation > Intent

HN15  Contract Interpretation, Intent

A contract’s meaning hinges on the words that the parties put into the contract.

Civil Procedure > Appeals > Standards of Review > De Novo Review

Civil Procedure > Preliminary Considerations > Federal & State Interrelationships > Erie Doctrine

HN16  Standards of Review, De Novo Review

In a diversity case, a state’s substantive law governs whether a particular instruction misstated the governing legal principles. And the court of appeals reviews the question whether the district court’s instructions accurately conveyed Ohio contract law de novo. At the same time, federal procedural law governs whether a substantive state-law error in an instruction warrants reversal for a new trial. And the court of appeals will reverse a judgment based on a legally mistaken instruction only if the instruction prejudiced a party when considered against the instructions as a whole.

Civil Procedure > … > Standards of Review > Harmless & Invited Errors > Harmless Error Rule

HN17  Harmless & Invited Errors, Harmless Error Rule

Instructing the jury to make a legal conclusion is harmless error.

Civil Procedure > … > Standards of Review > Harmless & Invited Errors > Harmless Error Rule

Civil Procedure > Trials > Jury Trials > Province of Court & Jury

HN18  Harmless & Invited Errors, Harmless Error Rule

An instruction can be harmless when it wrongly tells a jury that the jury itself may decide whether a contract is ambiguous.

Evidence > Burdens of Proof > Allocation

Insurance Law > … > Procedure > Evidence & Trial > Burdens of Proof

Insurance Law > … > Commercial General Liability Insurance > Exclusions > Burdens of Proof

Insurance Law > Claim, Contract & Practice Issues > Claims Made Policies > Exclusions

Insurance Law > Claim, Contract & Practice Issues > Policy Interpretation > Exclusions

HN19  Burdens of Proof, Allocation

The Ohio Supreme Court treats an exclusion to an insurance policy’s coverage as an affirmative defense, so the insurer, not the insured, bears the burden to prove that the exclusion specifically applies.

Insurance Law > … > Commercial General Liability Insurance > Coverage > Accidental Injuries

Insurance Law > … > Commercial General Liability Insurance > Exclusions > Pollution

Insurance Law > Claim, Contract & Practice Issues > Claims Made Policies > Exclusions

Insurance Law > Claim, Contract & Practice Issues > Policy Interpretation > Exclusions

HN20  Coverage, Accidental Injuries

A typical policy “exception” indicates that an exclusion that would otherwise bar coverage does not apply to a given set of facts. So, for example, an exclusion might bar coverage for any “discharge” of “pollutants.” The policy might then go on to say that this exclusion does not apply to otherwise qualifying discharges if they are sudden and accidental.

Civil Procedure > Appeals > Standards of Review > Abuse of Discretion

Evidence > Admissibility > Procedural Matters > Rulings on Evidence

HN21  Standards of Review, Abuse of Discretion

The court of appeals reviews a court’s decision to exclude evidence for an abuse of discretion. And it will not reverse on this ground unless an evidentiary error affected a party’s substantial rights by potentially changing the outcome. Fed. R. Civ. P. 61, Fed. R. Evid. 103(a).

Counsel: ARGUED: Todd S. Schenk, TRESSLER LLP, Chicago, Illinois, for Appellant/Cross-Appellee.

Amanda M. Leffler, BROUSE MCDOWELL LPA, Akron, Ohio, for Appellee/Cross-Appellant.

ON BRIEF: Todd S. Schenk, Thomas D. Donofrio, TRESSLER LLP, Chicago, Illinois, Richard M. Garner, COLLINS ROCHE UTLEY & GARNER LLC, Columbus, Ohio, for Appellant/Cross-Appellee.

Amanda M. Leffler, P. Wesley Lambert, Matthew G. Vansuch, BROUSE MCDOWELL LPA, Akron, Ohio, for Appellee/Cross-Appellant.

Judges: Before: SUHRHEINRICH, STRANCH, and MURPHY, Circuit Judges.

Opinion by: MURPHY

Opinion

 [**1]  MURPHY, Circuit Judge. Insurers routinely provide businesses with commercial general liability policies to reimburse them for liabilities resulting from accidents (such as a grocery store customer slipping on a negligently maintained wet floor). See 9A Steven Plitt et al., Couch  [**2]  on Insurance §§ 129:1-:3 (3d ed.), Westlaw (database updated June 2022). But these policies are not substitutes for workers’ compensation insurance. HN1 They thus typically exclude liabilities arising from a workers’ compensation law or [*2]  from an injury to an employee. See id. § 129:11. The liability at issue in this case sits in the unclear middle between the two types of insurance.

After a truck driver suffered an injury, a state agency found that P.I. & I. Motor Express (“Motor Express”) was the driver’s “statutory” employer (a unique workers’ compensation concept). But Motor Express had not obtained workers’ compensation coverage for this truck driver, so the driver could sue Motor Express in tort. Motor Express settled his tort suit. It then sought to recover most of the settlement amount from RLI Insurance Company, which had issued it a commercial general liability policy. RLI refused to pay on the ground that Motor Express sought workers’ compensation coverage. The district court concluded that the policy could cover Motor Express’s claim, and a jury found for the company. We must decide two questions about the policy’s language: Did the tort settlement arise “under” a workers’ compensation law? And was the driver a Motor Express “employee” within the meaning of the policy? Ultimately, we agree with the district court’s interpretation of the policy and reject RLI’s other challenges to the court’s trial management. We [*3]  thus affirm.

I

On June 27, 2014, Ryan Marshall was seriously injured while working as a truck driver at a plant in Duquesne, Pennsylvania. Marshall had stepped out of his flatbed truck when others were loading large metal pipes onto it. A worker accidentally ran a forklift into the pipes, causing one of them to dislodge and roll off the truck. The pipe crashed into Marshall as it fell. Doctors unfortunately had to amputate both of Marshall’s legs, leaving him totally disabled.

This insurance case stems from a factual dispute over who (if anyone) employed Marshall. Three potential employers exist. The first is Dura-Bond Industries, the owner of the Duquesne plant. At this large facility, Dura-Bond coats pipes with corrosion-resistant materials and stores the finished pipes until its oil-and-gas customers need them in their energy businesses. To transfer pipes between locations within the plant, Dura-Bond relies on flatbed trucks like the  [**3]  one Marshall was driving. Yet Dura-Bond does not own most of the trucks; the company finds it cost-effective to use trucks owned and operated by others.

This trucking operation leads to Marshall’s second potential employer: Motor Express, the plaintiff. [*4]  A family-owned Ohio company founded in 1951, Motor Express has federal licenses to conduct a motor-carrier business between and within many states. It primarily hauls metal building materials for automotive and steel companies. Motor Express must ensure that any truck using its license (listing its name and license number on the door) meets federal safety regulations. It also must ensure that any driver of a licensed truck passes, among other things, a background check and drug test.

Motor Express hauls loads using different business models. For over half of its business, it relies on truckers employed by a corporate affiliate who drive trucks owned by another affiliate. For the rest, Motor Express relies on independent fleet operators or owner-operators. Fleet operators own several trucks, whereas owner-operators drive their own trucks. Motor Express enters into truck-specific contracts with these independent parties, allowing them to use its license and receive its administrative services for each truck in exchange for a percentage of the truck’s revenue.

Motor Express came to do business at the Dura-Bond plant through its affiliation with a fleet operator—Wallace Trucking. Wallace [*5]  Trucking’s owner, Robert Wallace, had long provided trucking services at the plant and continued to do so after contracting with Motor Express. Given the volatile nature of the energy industry, though, Wallace Trucking sometimes could not meet all of Dura-Bond’s trucking needs.

This fact leads to Marshall’s third potential employer: Sam Russell Trucking. Technically, Sam Russell Trucking is not a distinct corporation; it is a trade name for a family business run by Sam Russell and his wife, Mary Russell. Robert Wallace knew Sam Russell and would ask him for help at the Dura-Bond plant when things got too busy. Like Wallace Trucking, Sam Russell Trucking had contracted with Motor Express to use its license. Motor Express would ensure that the drivers of Russell trucks met the basic federal requirements, but the Russells could otherwise retain the drivers they wanted.

 [**4]  That fact brings us back to Marshall, the injured driver. By December 2013, Marshall had spent decades on the road as a long-distance truck driver and wanted to spend more time with his family. He took a job with Dura-Bond loading and unloading pipes at its plant. While working there, Marshall noticed the trucks driving [*6]  around. In April 2014, he approached Sam Russell about driving a truck. Russell told Marshall that he hired through Motor Express and had Marshall fill out a Motor Express application. After Marshall passed a background check, he spent two weeks training with Russell.

In May, Marshall leased a truck from Russell and started driving it under Motor Express’s license. Although he signed a contract stating that he was an independent contractor, Marshall believed that he was an employee of both Motor Express and Sam Russell Trucking. On the night before each potential shift, Marshall would call Mary Russell to see if there would be work for him in the morning. Sam Russell or Dura-Bond employees directed Marshall’s efforts while at the plant.

After Marshall’s June accident, he filed a workers’ compensation claim in Pennsylvania. Sam Russell Trucking, Motor Express, and Dura-Bond all became involved in the agency proceedings. Each party disclaimed an employment relationship with Marshall. For his part, Marshall conceded that he had agreed to obtain his own workers’ compensation insurance and had failed to do so.

An administrative judge nevertheless found that Sam Russell Trucking had been Marshall’s [*7]  “immediate employer.” Pa. Op., R.58-2, PageID 975. The judge also found that Motor Express and Dura-Bond had been Marshall’s “statutory employers” under Pennsylvania’s workers’ compensation statute. Id. HN2 A statutory employer “is a master who is not a contractual or common-law one, but is made one by” unique provisions in the statute. Peck v. Del. County Bd. of Prison Inspectors, 572 Pa. 249, 814 A.2d 185, 187-88 (Pa. 2002) (plurality opinion) (citation omitted). Ordinary employers generally must obtain workers’ compensation insurance, and statutory employers must do so if the ordinary employers do not. See 77 Pa. Stat. & Cons. Stat. Ann. §§ 461, 501(a)(1). Yet neither Motor Express nor Russell had insurance for Marshall. The judge thus ordered Dura-Bond (which had this insurance) to pay Marshall’s benefits and allowed it to  [**5]  seek indemnity from Motor Express and Russell. An agency appeal board affirmed this decision in relevant part. Motor Express later reimbursed Dura-Bond for these benefits.

HN3 Typically, employees covered by the Pennsylvania workers’ compensation statute may seek relief only through that statute’s remedial scheme and cannot bring a separate tort suit against their ordinary or statutory employers. See id. § 481(a). If, however, an employer fails to obtain workers’ compensation insurance for an employee, the employer [*8]  loses this immunity and may be held liable to the employee in a common-law suit. See id. § 501(d); Bowman v. Sunoco, Inc., 620 Pa. 28, 65 A.3d 901, 908 (Pa. 2013). Marshall thus brought tort claims against Motor Express and Russell (among others) in a Pennsylvania state court.

His suit leads to this separate case’s defendant: RLI. RLI had issued Motor Express a commercial general liability policy covering bodily injuries to those harmed by the company’s operations. RLI had not, by contrast, issued Motor Express a workers’ compensation policy that would cover bodily injuries to employees. Motor Express asked RLI to defend it in Marshall’s tort suit. RLI agreed under a reservation of rights. Ultimately, the parties settled that suit for $2.4 million. Motor Express then asked RLI to reimburse it for the settlement. RLI refused.

Motor Express sued RLI seeking indemnification for the settlement up to the insurance policy’s $2-million limit. Motor Express, by contrast, did not request reimbursement for the amounts that it paid Dura-Bond to cover Marshall’s workers’ compensation benefits. RLI moved for summary judgment on the ground that two policy exclusions barred coverage for the tort-suit settlement. RLI first relied on an exclusion for “[a]ny obligation” [*9]  “under a workers’ compensation” “law.” Ins. Pol’y, R.58-6, PageID 1112. The district court held that this provision did not apply. P.I. & I. Motor Express, Inc. v. RLI Ins. Co., 499 F. Supp. 3d 486, 500-01 (N.D. Ohio 2020). RLI next relied on an exclusion for injuries to an “employee”—a word defined to exclude a “temporary worker.” Ins. Pol’y, R.58-6, PageID 1112, 1124. The court found that a dispute of fact existed over whether Marshall qualified as a Motor Express “employee” under the policy. See P.I. & I., 499 F. Supp. 3d at 501-05. And even if Marshall otherwise were an employee, the court also found that a dispute of fact existed over whether he was the type of “temporary worker” that the policy carved out from the “employee” definition. See id.

 [**6]  The case proceeded to trial on these “employee” questions. A jury found that Marshall was a “temporary worker,” leaving the tort-suit settlement covered by the policy. The jury awarded Motor Express $2 million, and the court entered a final judgment for that amount.

II

On appeal, RLI raises two legal arguments about the meaning of its policy. It agreed to reimburse Motor Express for liabilities resulting from a “bodily injury” “caused by an ‘occurrence'”—a word defined to mean “accident.” Ins. Pol’y, R.58-6, PageID 1111, 1125. An accident undisputedly caused Marshall’s [*10]  injuries. But the policy goes on to list many exclusions from otherwise-covered injuries. As in the district court, RLI invokes what we will call the “workers’ compensation” and “employer” exclusions.

A. Workers’ Compensation Exclusion

Under an exclusion entitled “Workers’ Compensation And Similar Laws,” RLI’s policy provides that “[t]his insurance does not apply to”: “Any obligation of the insured under a workers’ compensation, disability benefits or unemployment compensation law or any similar law.” Id., PageID 1112. The parties agree that this text prohibits Motor Express from seeking reimbursement for Marshall’s workers’ compensation benefits. We need only consider whether it covers Motor Express’s separate $2.4-million settlement of Marshall’s tort suit. The parties also agree that the tort settlement qualified as an “obligation” of the “insured.” This case thus turns on the question whether this settlement “obligation” was “under” Pennsylvania’s “workers’ compensation” “law.”

It was not. Both parties cite Ohio cases to interpret RLI’s policy, so we may simply assume that Ohio contract law applies. Cf. Masco Corp. v. Wojcik, 795 F. App’x 424, 427 (6th Cir. 2019). HN4 That law directs us to interpret the words in the policy according to their [*11]  ordinary, everyday meaning. See Wilkerson v. Am. Fam. Ins. Co., 997 F.3d 666, 669 (6th Cir. 2021) (citing Ohio N. Univ. v. Charles Constr. Servs., Inc., 155 Ohio St. 3d 197, 2018- Ohio 4057, 120 N.E.3d 762, 766 (Ohio 2018); Nationwide Mut. Fire Ins. Co. v. Guman Bros. Farm, 73 Ohio St. 3d 107, 1995- Ohio 214, 652 N.E.2d 684, 686 (Ohio 1995)). If, moreover, the words are unambiguous, we must apply the policy as written and cannot resort to outside-the-contract evidence to interpret it. See Guman, 652 N.E.2d at 686.

 [**7]  We thus start by asking how the average policyholder would understand the phrase “obligation . . . under a workers’ compensation . . . law.” Ins. Pol’y, R.58-6, PageID 1112. The key word—under—has nearly a page’s worth of dictionary definitions. See Webster’s New International Dictionary of the English Language 2765-66 (2d ed. 1934). HN5 Thus, as the U.S. Supreme Court has repeatedly recognized when interpreting statutes that include the word, we must look to the specific context in which this linguistic “chameleon” is used to identify its meaning. Kucana v. Holder, 558 U.S. 233, 245, 130 S. Ct. 827, 175 L. Ed. 2d 694 (2010); see, e.g., Pereira v. Sessions, 138 S. Ct. 2105, 2117, 201 L. Ed. 2d 433 (2018); Nat’l Ass’n of Mfrs. v. Dep’t of Def., 138 S. Ct. 617, 630, 199 L. Ed. 2d 501 (2018); Fla. Dep’t of Revenue v. Piccadilly Cafeterias, Inc., 554 U.S. 33, 39-41, 128 S. Ct. 2326, 171 L. Ed. 2d 203 (2008).

In RLI’s policy, this preposition connects an obligation to a law. HN6. When used in this way, the word most naturally conveys that the obligation arises “‘pursuant to’ or ‘by reason of the authority of'” the law. Nat’l Ass’n of Mfrs., 138 S. Ct. at 630 (quoting St. Louis Fuel & Supply Co. v. FERC, 890 F.2d 446, 450, 281 U.S. App. D.C. 329 (D.C. Cir. 1989) (R.B. Ginsburg, J.)); see In re Hechinger Inv. Co. of Del., 335 F.3d 243, 252 (3d Cir. 2003) (Alito, J.). That is, the obligation must exist “because of” the law or, stated the other way, the law must be the source of the obligation. Webster’s, supra, at 2765. If, for example, someone says that a federal [*12]  agency enacted a regulatory requirement “under” a statute, the person is conveying that the statute is what gave the agency the authority to enact the requirement. See Nat’l Ass’n of Mfrs., 138 S. Ct. at 630. Or if someone says that the plaintiff filed a claim “‘under’ 42 U.S.C. § 1983,” the person is conveying that § 1983 is what gave the plaintiff the right to bring this claim. See Hechinger, 335 F.3d at 252.

This reading poses a problem for RLI. The $2.4-million settlement arose from a suit that Marshall brought against Motor Express under Pennsylvania’s common law of torts. So the commonwealth’s judge-made tort law—not its statutory workers’ compensation law—is what gave Marshall the ability to seek this money (and what gave Motor Express the duty to pay it). The workers’ compensation statute, if anything, went a long way toward eliminating this common-law duty. HN7 The statute generally bars employees from filing tort suits against statutory employers that have workers’ compensation insurance. 77 Pa. Stat. & Cons. Stat. Ann. § 481(a); see Fonner v. Shandon, Inc., 555 Pa. 370, 724 A.2d 903, 905-07 (Pa. 1999). And while Motor Express failed  [**8]  to obtain this insurance, its failure merely eliminated what would have otherwise been its statutory immunity from the tort suit. See 77 Pa. Stat. & Cons. Stat. Ann. § 501(d); Bowman, 65 A.3d at 908. But the absence of this immunity does not change the fact that Marshall brought his suit pursuant to [*13]  the common law of torts, not “a workers’ compensation . . . law.” Ins. Pol’y, R.58-6, PageID 1112.

To be sure, the word “under” can also mean “[i]n accordance or conformity with.” Webster’s, supra, at 2765; Pereira, 138 S. Ct. at 2117. And RLI argues that Marshall’s tort suit was “in conformity with” the workers’ compensation statute because the statute permitted Marshall to seek this relief in light of Motor Express’s lack of insurance. But this reading proves too much. For example, it is obvious that the workers’ compensation statute also permits customers (who are not employees) to bring tort suits against businesses for injuries suffered on their premises. Because a customer’s suit would be in “conformity” with the workers’ compensation statute (since the statute would not prohibit the suit), would the suit fall within the workers’ compensation exception too? That view would leave RLI’s policy with nothing to cover.

An analogy reinforces this interpretation. The U.S. Constitution grants the states sovereign immunity from damages suits, but Congress can sometimes abrogate this immunity. Compare Tennessee v. Lane, 541 U.S. 509, 530-34, 124 S. Ct. 1978, 158 L. Ed. 2d 820 (2004), with Kimel v. Fla. Bd. of Regents, 528 U.S. 62, 91-92, 120 S. Ct. 631, 145 L. Ed. 2d 522 (2000). HN8 The Americans with Disabilities Act, for instance, permits the disabled to seek damages from a state if it violates the Act’s provisions [*14]  regulating public services. Lane, 541 U.S. at 516-17. The U.S. Supreme Court has held that the Constitution permits this waiver of immunity. Id. at 530-34. Yet an ordinary person would not describe a disabled individual’s damages suit as “under” the Constitution merely because the suit was in conformity with the Constitution. Rather, the person would say that the individual sued “under” the Act—the suit’s source of authority. In the same way, Marshall’s suit was “under” the common law. The suit was not “under” the workers’ compensation statute merely because the statute permitted the common-law suit.

Nevertheless, we may assume that this exclusion might be ambiguous if read by itself. Ohio law would then require us to ask whether one reading of the exclusion best fits the contract  [**9]  “as a whole” before conclusively finding it ambiguous. See Sauer v. Crews, 140 Ohio St. 3d 314, 2014- Ohio 3655, 18 N.E.3d 410, 413 (Ohio 2014). And here, our narrower reading of “under” makes more sense when the exclusion is read against the entire insurance policy. As the district court persuasively explained, see P.I. & I., 499 F. Supp. 3d at 500-01, a different part of the policy shows that RLI knows how to exclude a tort liability that gets triggered by an insured’s failure to comply with a workers’ compensation law. The policy includes “stop-gap” coverage [*15]  for certain types of Ohio claims. Ins. Pol’y, R.58-6, PageID 1130-33; see generally 3 Pat Magarick & Ken Brownlee, Casualty Insurance Claims § 40:7 (4th ed.), Westlaw (database updated Nov. 2021). This otherwise irrelevant Ohio coverage contains an identical exclusion for an “obligation” “under” a “workers’ compensation” “law.” Ins. Pol’y, R.58-6, PageID 1131. Critically, though, it also contains an additional exclusion entitled “Failure to Comply With ‘Workers’ Compensation Law.'” Id. This separate exclusion disqualifies from coverage an insured’s tort liability if the insured’s “failure to secure [its] obligations or other failure to comply with any ‘workers’ compensation law'” “[d]eprived” the insured of “common law defenses” or subjected the insured to a “penalty[.]” Id.

This separate exclusion has great significance here. If, as RLI claims, the workers’ compensation exclusion already prohibits coverage for a common-law liability that arises from the failure to comply with a workers’ compensation law, the separate exclusion serves no purpose. HN9 But when an ambiguous contract term can be read in two ways, one of which will render another term “meaningless” and the other of which will [*16]  give it “meaning and purpose,” Ohio courts prefer the latter interpretation. Sunoco, Inc. (R & M) v. Toledo Edison Co., 129 Ohio St. 3d 397, 2011- Ohio 2720, 953 N.E.2d 285, 295 (Ohio 2011); Wilkerson, 997 F.3d at 671. This interpretive guidepost means that we should stick with our narrower reading of “under” because it gives both exclusions effect. Notably, moreover, RLI’s policy contains this separate exclusion—the one covering an insured’s failure to comply with a workers’ compensation law—only in the Ohio-specific stop-gap coverage. It thus cannot bar coverage for Motor Express’s failure to comply with Pennsylvania law in this case.

In response, RLI does not rely on the policy’s text; it jumps straight to precedent. We admit that some courts have read similar workers’ compensation exclusions as RLI would have us read its exclusion. As the Kentucky Supreme Court noted, “[e]very jurisdiction that has  [**10]  considered this issue has held that a ‘workers’ compensation‘ exclusion” in this type of policy “precludes coverage when the insured employer is exposed to tort liability solely because of its failure to procure a policy of workers’ compensation insurance.” Brown v. Ind. Ins. Co., 184 S.W.3d 528, 534-35 (Ky. 2005) (collecting cases). RLI identifies four Ohio cases that it suggests follow this rule. See Crum & Forster Indem. Co. v. Ameritemps, Inc., 2012- Ohio 4160, 976 N.E.2d 957, 961-62 (Ohio Ct. App. 2012); Sharp v. Thompson, 2008 Ohio 4990, 2008 WL 4382678, at *3 (Ohio Ct. App. Sept. 25, 2008); Scott v. Levans, 2000 Ohio App. LEXIS 5063, 2000 WL 1643518, at *1-2 (Ohio Ct. App. Nov. 3, 2000); Westfield Ins. Co. v. Malvern Wood Prods., 1994 Ohio App. LEXIS 4029, 1994 WL 501762, at *4 (Ohio Ct. App. Sept. 12, 1994).

But these cases are all distinguishable for a simple reason: none [*17]  of them so much as hinted that the relevant policies included a separate exclusion for tort liabilities arising from an insured’s failure to comply with a workers’ compensation law. So these courts did not have to worry about whether their broader reading would leave another exclusion superfluous. Here, by contrast, we must attempt to avoid this superfluity problem. See Sunoco, 953 N.E.2d at 295. And RLI has only a weak response to it. RLI points out that this separate exclusion applies only to the Ohio stop-gap coverage that is not at issue here. HN10[] Yet Ohio courts generally presume that identical contract language means the same thing across the whole contract. See Wells Fargo Bank, N.A. v. Allstate Ins. Co., 784 F. App’x 401, 404-05 (6th Cir. 2019); see also Penn Traffic Co. v. AIU Ins. Co., 99 Ohio St. 3d 227, 2003- Ohio 3373, 790 N.E.2d 1199, 1204 (Ohio 2003). Because we must interpret the workers’ compensation exclusion narrowly in the stop-gap coverage to give effect to the separate exclusion, we should give the same workers’ compensation exclusion this narrower reading wherever we find it in the policy. For this reason, we need not decide whether we would have disagreed with the cases that RLI cites. None of them considered a contract like the one before us.

The four Ohio cases do not help RLI for an additional reason. The policy in three of the cases contained a broader exclusion. It barred [*18]  coverage for “any obligation for which the ‘insured’ . . . may be held liable under any workers’ compensation . . . law[.]” Ameritemps, 976 N.E.2d at 959 (emphasis added); Scott, 2000 Ohio App. LEXIS 5063, 2000 WL 1643518, at *1; Malvern, 1994 Ohio App. LEXIS 4029, 1994 WL 501762, at *4. One could read this text to reach conduct that may have arisen under a workers’  [**11]  compensation law—even if a worker sued in tort. Here, by contrast, the exclusion covers only obligations that actually arise “under” a workers’ compensation law. Ins. Pol’y, R.58-6, PageID 1112. As for the fourth Ohio case, it did not address the issue that we face. The employer argued only that the injured worker raised an intentional-tort claim, which would have removed the claim from the workers’ compensation exclusion under then-controlling precedent. Sharp, 2008 Ohio 4990, 2008 WL 4382678, at *3-4. Sharp held that the employee’s complaint did not plead such a claim; it said nothing about the coverage that applies if an employer does not buy workers’ compensation insurance. See id.

Lastly, some of RLI’s cited decisions invoke policy concerns. No matter the contract language, they reason, courts should deny coverage in this setting to incentivize employers to buy workers’ compensation insurance and to ensure that employers are not “rewarded” for failing to do so. Brown, 184 S.W.3d at 535 (citation omitted). HN11 But the Ohio Supreme Court [*19]  determines a contract’s meaning by looking to the parties’ intent, not external policy considerations. See Westfield Ins. Co. v. Galatis, 100 Ohio St. 3d 216, 2003-Ohio-5849, 797 N.E.2d 1256, 1261 (Ohio 2003); Hamilton Ins. Servs. v. Nationwide Ins. Cos., 86 Ohio St. 3d 270, 1999- Ohio 162, 714 N.E.2d 898, 900-01 (Ohio 1999). And when a contract contains clear text, this text conclusively establishes that intent. See Galatis, 797 N.E.2d at 1261.

In that respect, perhaps RLI subjectively meant to exclude a claim like Motor Express’s because, as it sees things, its commercial general liability policy is not a workers’ compensation policy and should not cover anything related to workers’ compensation. We must respond to this argument the same way that the Ohio Supreme Court responded when a policyholder asserted that it subjectively meant for coverage to apply: “this is an argument” for RLI’s policy drafters, who need only write a broader exclusion. Ward v. United Foundries, Inc., 129 Ohio St. 3d 292, 2011- Ohio 3176, 951 N.E.2d 770, 774-75 (Ohio 2011). But the exclusion that RLI did write—when read against its policy as a whole—does not cover an obligation whose source is the common law of torts, not a workers’ compensation statute. The exclusion thus does not apply to Motor Express’s tort-suit settlement.

 [**12]  B. Employer Exclusion

Under an exclusion entitled “Employer’s Liability,” RLI’s policy next bars coverage for “‘[b]odily injury’ to: (1) An ’employee’ of the insured arising out of and in the course of: (a) Employment by the [*20]  insured; or (b) Performing duties related to the conduct of the insured’s business[.]” Ins. Pol’y, R.58-6, PageID 1112. The policy indicates that the word “employee” includes a “leased worker” and excludes a “temporary worker.” Id., PageID 1124. But it does not contain a general definition of the word “employee.”

The parties begin by debating the proper meaning of this word. According to RLI, we should define “employee” in the policy to include “statutory” employees under a workers’ compensation scheme like Pennsylvania’s. HN12 The “statutory employer” concept expands the number of entities that qualify as “employers” beyond the traditional “common-law” definition. McDonald v. Levinson Steel Co., 302 Pa. 287, 153 A. 424, 425 (Pa. 1930); see Six L’s Packing Co. v. Workers’ Comp. Appeal Bd. (Williamson), 615 Pa. 615, 44 A.3d 1148, 1150 (Pa. 2012). It does so to ensure that an injured worker can receive benefits from a solvent party (typically, a general contractor) if the common-law employer (typically, a subcontractor) lacks workers’ compensation coverage. Peck, 814 A.2d at 187-88 (plurality opinion) (citation omitted); 77 Pa. Stat. & Cons. Stat. Ann. §§ 461-62. Because the relevant Pennsylvania agency found Motor Express to be Marshall’s “statutory employer,” RLI’s argument goes, Marshall was an employee under the policy. Cf. Amerisure Ins. Co. v. Orange & Blue Constr., Inc., 545 F. App’x 851, 854-55 (11th Cir. 2013).

According to Motor Express, we should define the word “employee” in RLI’s policy to adopt the word’s [*21]  narrower common-law definition—one that asks whether a purported employer has the right to “control” a purported employee’s work. Motor Express notes that the Ohio Supreme Court has already interpreted the undefined word “employee” in another policy to incorporate this common-law control test. See Guman, 652 N.E.2d at 686-87. And because the Pennsylvania agency found that Motor Express was Marshall’s statutory employer (not its regular employer), Motor Express reasons that the exclusion does not apply. Cf. Virginia Elec. & Power Co. v. Northbrook Prop. & Cas. Ins. Co., 252 Va. 265, 270-71, 475 S.E.2d 264 (Va. 1996). Indeed, in a separate cross-appeal, Motor Express suggests that it is entitled to judgment as a matter of law on this issue.

 [**13]  We need not resolve this debate because the jury found that Marshall did not qualify as an employee on a different ground. Even if Marshall might otherwise have been a Motor Express “employee” under the applicable definition, the policy specifically excludes “temporary worker[s]” from this definition. Ins. Pol’y, R.58-6, PageID 1124. It defines “temporary worker” to mean “a person who is furnished to you to substitute for a permanent ’employee’ on leave or to meet seasonal or short-term workload conditions.” Id., PageID 1127. And Motor Express argued that Marshall had been “furnished [*22]  to” it by Sam Russell Trucking to meet Dura-Bond’s “short-term workload” needs when Wallace Trucking could not handle them. Id. The jury agreed. Its temporary-worker finding took Marshall outside the employer exclusion. After the jury’s verdict, moreover, RLI failed to move for judgment as a matter of law under Federal Rule of Civil Procedure 50(b). That failure bars us from considering any challenge to the sufficiency of the evidence underlying the jury’s finding. See Unitherm Food Sys., Inc. v. Swift-Eckrich, Inc., 546 U.S. 394, 400-06, 126 S. Ct. 980, 163 L. Ed. 2d 974 (2006); Ayers v. City of Cleveland, 773 F.3d 161, 168 (6th Cir. 2014).

RLI responds that it raised two “purely legal” claims against the use of this temporary-worker provision at the summary-judgment stage. In re AmTrust Fin. Corp., 694 F.3d 741, 750 (6th Cir. 2012). And our cases permit us to consider these legal claims even though RLI did not renew them in a Rule 50(b) motion. See id. at 750-51 (distinguishing Ortiz v. Jordan, 562 U.S. 180, 188-92, 131 S. Ct. 884, 178 L. Ed. 2d 703 (2011)); cf. Hanover Am. Ins. Co. v. Tattooed Millionaire Ent., LLC, 974 F.3d 767, 785 & n.10 (6th Cir. 2020). RLI makes a preclusion argument (about the effect of the Pennsylvania agency’s decision) and a purpose argument (about the reason for the temporary-worker provision).

Preclusion Argument. RLI first says that the Pennsylvania agency’s finding that Marshall was a “statutory employee” under the Pennsylvania workers’ compensation statute legally precludes a finding that he was a “temporary worker” under its policy. This argument implicates a “bewildering” choice-of-law issue. 18B Charles [*23]  A. Wright et al., Federal Practice and Procedure § 4472, at 349 (3d ed. 2019). Because this case arises under our diversity jurisdiction, should we look to the choice-of-law rules of Ohio (the state in which the district court sits) to identify the specific state’s preclusion law that applies? Cf. Taveras v. Taveraz, 477 F.3d 767, 783 (6th Cir. 2007); 18B Wright, supra, § 4472, at 354. Or should we instead rely on  [**14]  federal choice-of-law rules to identify the governing preclusion law? Cf. Univ. of Tenn. v. Elliott, 478 U.S. 788, 794-99, 106 S. Ct. 3220, 92 L. Ed. 2d 635 (1986); 18B Wright, supra, § 4472, at 354. Thankfully, the parties do not dispute that both choice-of-law sources (Ohio and federal law) point us to the preclusion law of the same jurisdiction: Pennsylvania. Compare Elliott, 478 U.S. at 799; 28 U.S.C. § 1738, with Holzemer v. Urbanski, 86 Ohio St. 3d 129, 1999- Ohio 91, 712 N.E.2d 713, 715-16 (Ohio 1999); U.S. Const. art. IV, § 1. So we will apply that law here.

The parties also do not dispute that Pennsylvania courts would apply the commonwealth’s preclusion rules to a judgment from this workers’ compensation agency even where (as here) no court has reviewed this judgment. We thus may assume that the agency’s decisions are eligible for preclusive effect. Cf. Grant v. GAF Corp., 415 Pa. Super. 137, 608 A.2d 1047, 1054-55 (Pa. Super. Ct. 1992); 18B Wright, supra, § 4471.3, at 319. Still, RLI cannot meet Pennsylvania’s test for issue preclusion. HN13 Issue preclusion generally bars a party from relitigating an issue in a second case that the party [*24]  has already litigated to a final judgment in an earlier one. See, e.g., McNeil v. Owens-Corning Fiberglas Corp., 545 Pa. 209, 680 A.2d 1145, 1147-48 (Pa. 1996). But Pennsylvania courts would not allow a first case to preclude an issue in a second one unless both cases involved the same issue and the issue was “actually litigated” in the first case. Clark v. Troutman, 509 Pa. 336, 502 A.2d 137, 139 (Pa. 1985); see also Muhammad v. Strassburger, McKenna, Messer, Shilobod & Gutnick, 526 Pa. 541, 587 A.2d 1346, 1348 (Pa. 1991); Odgers v. Commonwealth, 514 Pa. 378, 525 A.2d 359, 364-65 (Pa. 1987); Restatement (Second) of Judgments § 27 cmt. e (Am. L. Inst. 1982).

Here, the Pennsylvania agency concluded that Marshall was a statutory employee under the commonwealth’s workers’ compensation statute. But the jury found that Marshall was a temporary worker under RLI’s insurance policy. These two issues are not “identical.” See Odgers, 525 A.2d at 364. The former (workers’ compensation) question required the agency to find that Motor Express was a “contractor” and that Sam Russell Trucking was a “subcontractor” within the statutory definition of those words. See 77 Pa. Stat. & Cons. Stat. Ann. § 461; cf. Six L’s, 44 A.3d at 1159. The latter (contract-law) question required the jury to find that Russell “furnished” Marshall to Motor Express to meet “short-term workload conditions.” Ins. Pol’y, R.58-6, PageID 1127. These questions have little in common. Indeed, the agency’s factual  [**15]  findings might support the conclusion that Marshall was a temporary worker. After all, its appeal board recognized that Dura-Bond used Russell’s services only [*25]  when Wallace could not meet Dura-Bond’s needs—that is, only on a short-term basis. Bd. Op., R.58-3, PageID 1007.

RLI responds that Motor Express could qualify as a “contractor” (and so a statutory employer) under Pennsylvania law only if it contracted with Sam Russell Trucking “to have work performed of a kind which is a regular or recurrent part of the business[.]” 77 Pa. Stat. & Cons. Stat. Ann. § 461 (emphasis added). The agency’s conclusion that this element was met, RLI’s argument goes, conflicts with the temporary-worker requirement that a worker be furnished to meet only “short-term workload conditions.” Ins. Pol’y, R.58-6, PageID 1127 (emphasis added). But we can easily harmonize the two definitions. The work that Sam Russell Trucking performed—trucking operations—was of a “kind” that was a “regular” (indeed, the main) part of Motor Express’s business. But nothing in this conclusion required that Marshall himself be regularly engaged in business for Dura-Bond. The mere fact that Motor Express was in the trucking business says nothing about the possibility that it used temporary workers to drive trucks when its primary subcontractor (Wallace Trucking) could not meet Dura-Bond’s needs.

Purpose Argument. RLI next argues [*26]  that Marshall should not qualify as a temporary worker because that finding would undercut the purpose behind this provision. The workers’ compensation laws in some states distinguish between leased workers (who become employees of the entities to whom they are leased) and temporary workers (who remain the employees of temporary staffing agencies). See Gen. Agents Ins. Co. of Am., Inc. v. Mandrill Corp., 243 F. App’x 961, 967 (6th Cir. 2007) (opinion of Kennedy, J.); Brown, 184 S.W.3d at 537-38. HN14 Because temporary workers do not become the employees of the entities to whom they are assigned, the workers’ compensation laws do not immunize the entities from a worker’s tort suit. Given that the workers’ compensation laws do not apply, the temporary-worker provision allows the liability insurance to kick in. See Mandrill, 243 F. App’x at 967 (opinion of Kennedy, J.). This “coverage gap” purpose has no application here. Pennsylvania’s scheme does not distinguish between leased employees and temporary workers. And Motor Express was Marshall’s “statutory employer,” so Pennsylvania would have granted it tort immunity had it obtained the required insurance. See 77 Pa. Stat. & Cons. Stat. Ann. § 481(a). Because the facts  [**16]  of this case do not implicate any “gap” in coverage, RLI asks us to set aside the temporary-worker provision.

Its purpose argument flouts Ohio contract law. [*27]  HN15 Under well-settled rules, a contract’s meaning hinges on the words that the parties put into the contract. See Galatis, 797 N.E.2d at 1261; see also Sunoco, 953 N.E.2d at 292; Shifrin v. Forest City Enters., Inc., 64 Ohio St. 3d 635, 1992- Ohio 28, 597 N.E.2d 499, 501 (Ohio 1992). And RLI opted to put the temporary-worker definition into this policy—a definition that does not turn on whether a particular state’s laws draw a distinction between leased employees and temporary workers. We have no power to jettison the contract’s expressed definition by looking to RLI’s unexpressed hopes behind it. As with the workers’ compensation exclusion, RLI may change this definition if the provision does not meet RLI’s subjective expectations. See Ward, 951 N.E.2d at 774-75. Until the insurer does so, however, courts must apply the policy language as written. They cannot simply ignore it, as RLI would have us do.

III

Apart from its two legal arguments, RLI challenges the district court’s handling of the trial. It claims that the court improperly instructed the jury. And it contends that the court wrongly excluded evidence. Neither claim has merit.

A. Jury Instructions

RLI initially takes issue with the district court’s jury instructions. HN16 In a diversity case like this one, a state’s substantive law governs whether a particular instruction misstated the governing legal principles. [*28]  See Frye v. CSX Transp., Inc., 933 F.3d 591, 600 (6th Cir. 2019). And we review the question whether the district court’s instructions accurately conveyed Ohio contract law de novo. See Smith v. Joy Techs., Inc., 828 F.3d 391, 397 (6th Cir. 2016). At the same time, federal procedural law governs whether a substantive state-law error in an instruction warrants reversal for a new trial. See Frye, 933 F.3d at 600. And we will reverse a judgment based on a legally mistaken instruction only if the instruction prejudiced a party when considered against the instructions as a whole. See Joy Techs., 828 F.3d at 397. RLI challenges three instructions: an instruction on ambiguity in contracts; an instruction on the burden of proof; and an instruction on the definitions of “employee” and “temporary worker.”

 [**17] Ambiguity. RLI first objects to the district court’s instructions about how to resolve an ambiguity in a contract. The court told the jury that it “may” have to determine the meaning of some of the policy’s terms. Tr., R.165, PageID 7094. It went on to describe Ohio’s rules for interpreting contracts, including, for example, that an interpreter must give contract language its ordinary meaning. Id. The court then noted: “Because insurance companies write the insurance policies, . . . the law requires that any ambiguities in the insurance policies must be construed [*29]  against them, RLI Insurance Company, and in favor of the policyholder, P.I. & I. Motor Express.” Id., PageID 7095. This proposition correctly stated Ohio law, which requires ambiguities in a contract to be resolved against insurers. See, e.g., Galatis, 797 N.E.2d at 1262. But RLI points out that Ohio law requires courts—not juries—to decide whether a contract is ambiguous before allowing a factfinder to resolve any ambiguity. See, e.g., Guman, 652 N.E.2d at 686; Potti v. Duramed Pharms., Inc., 938 F.2d 641, 647 (6th Cir. 1991). And the court’s instructions here did not identify any term that it found ambiguous. RLI thus argues that the court wrongly implied that the jury should resolve whether the policy was ambiguous.

RLI’s implication is a fair one. Yet it is not uncommon for courts to mistakenly give legal questions to juries given the subtle distinctions that sometimes separate legal questions from factual (or mixed) ones. In the context of constitutional claims under 42 U.S.C. § 1983, for example, district courts have sometimes wrongly asked juries to resolve constitutional or qualified-immunity questions that the courts themselves should have decided. See, e.g., Gerics v. Trevino, 974 F.3d 798, 803-06 (6th Cir. 2020); Young v. Bd. of Supervisors of Humphreys Cnty., 927 F.3d 898, 904 (5th Cir. 2019); Gonzales v. Duran, 590 F.3d 855, 859-62 (10th Cir. 2009); Ansley v. Heinrich, 925 F.2d 1339, 1347-48 (11th Cir. 1991). But that does not mean that appellate courts must require a new trial in all these instances. HN17 Rather, courts have often held that instructing [*30]  the jury to make a legal conclusion was “harmless” error. See, e.g., Gonzales, 590 F.3d at 862.

HN18 That is the case here. We have already recognized that an instruction can be harmless when it wrongly tells a jury that the jury itself may decide whether a contract is ambiguous. See Bar’s Prods. Inc. v. Bars Prods. Int’l Inc., 662 F. App’x 400, 407 (6th Cir. 2016); see also Johnston v. Companion Prop. & Cas. Ins. Co., 318 F. App’x 861, 864-65 (11th Cir. 2009). Yet  [**18]  RLI spends all of one sentence on why the instruction prejudiced it. RLI calls the instruction “problematic” because the court read it just before instructing the jury on the employer exclusion’s terms. Appellant’s Br. 27. This is the type of “speculation” that falls short of showing prejudice. Gonzales, 590 F.3d at 862. RLI identifies no way in which this legal error could have made it more likely that the jury found Marshall to be a temporary worker. RLI does not suggest, for example, that the instruction might have led the jury to adopt a legally mistaken interpretation of the temporary-worker definition. Nor does it suggest that the district court’s later instructions implied that this temporary-worker definition was ambiguous. Cf. Johnston, 318 F. App’x at 865. So any error was harmless. See Joy Techs., 828 F.3d at 397.

Burden of Proof. RLI next objects to the court’s instruction describing the parties’ burdens of proof. HN19 The Ohio Supreme Court treats an “exclusion” to an insurance policy’s [*31]  coverage as an affirmative defense, so the insurer—not the insured—bears the burden to prove that the exclusion “specifically applies.” Neal-Pettit v. Lahman, 125 Ohio St. 3d 327, 2010- Ohio 1829, 928 N.E.2d 421, 424 (Ohio 2010) (citing Cont’l Ins. Co. v. Louis Marx & Co., 64 Ohio St. 2d 399, 415 N.E.2d 315, 317 (Ohio 1980)); see also 17A Steven Plitt et al., Couch on Insurance § 254:12 (3d ed.), Westlaw (database updated June 2022). The district court thus instructed the jury: “The burden of proof is on RLI to prove, by a preponderance of the evidence, that the Employer’s Liability exclusion specifically applies.” Tr., R.165, PageID 7093. RLI cannot dispute that this instruction correctly stated Ohio law.

RLI nevertheless asserts that the court wrongly refused to give a follow-on instruction. Some Ohio cases have held that the burden of proof shifts back to the insured if it argues that its request for coverage falls within an “exception” to a policy “exclusion.” See Goodrich Corp. v. Commercial Union Ins. Co., 2008-Ohio-3200, 2008 WL 2581579, at *21 (Ohio Ct. App. 2008); U.S. Indus., Inc. v. Ins. Co. of N. Am., 110 Ohio App. 3d 361, 674 N.E.2d 414, 417 (Ohio Ct. App. 1996) (per curiam); Plasticolors, Inc. v. Cincinnati Ins. Co., 85 Ohio App. 3d 547, 620 N.E.2d 856, 858 (Ohio Ct. App. 1992); cf. 17A Plitt, supra, § 254:13. And RLI claims that the temporary-worker carveout from the definition of employee qualifies as an “exception” to the employer “exclusion.” It says that the court should have told the jury that Motor Express bore the burden to prove that Marshall was a temporary worker.

 [**19]  Even if the Ohio Supreme Court would adopt this burden-shifting framework for [*32]  exceptions to exclusions, that framework would not apply here. HN20 A typical policy “exception” indicates that an exclusion that would otherwise bar coverage does not apply to a given set of facts. So, for example, an exclusion might bar coverage for any “discharge” of “pollutants.” See U.S. Indus., 674 N.E.2d at 415. The policy might then go on to say that this exclusion does not apply to otherwise qualifying discharges if they are sudden and accidental. Id.

The policy provisions at issue here do not fit this structure. All agree that RLI bears the burden to prove that the “employer” exclusion applies, which requires RLI to prove that an “employee” suffered a bodily injury. Ins. Pol’y, R.58-6, PageID 1112. The policy defines “employee” to exclude temporary workers. The temporary-worker limit thus is not an exception to the “employer” exclusion; rather, it is a clarification of the exclusion’s scope.

A hypothetical illustrates the point: Assume that the policy had defined the word “employee” to mean workers who meet the common-law control test. See Guman, 652 N.E.2d at 686-87. This definition would necessarily carve out from the employer exclusion all workers over whom a purported employer lacked sufficient control. Yet nobody would describe this [*33]  lack-of-control limitation on the employee definition as an exception to the employer exclusion. But that is what RLI asks us to do for the temporary-worker limitation. It is mistaken.

Definitions of “Employee” and “Temporary Worker.“ RLI lastly objects to the district court’s instructions about the definitions of “employee” and “temporary worker.” When defining the word “employee,” the district court made several statements about Ohio’s “control” test. Tr., R.165, PageID 7095. We need not decide whether these statements accurately summarized Ohio law for the same reason that we need not decide whether RLI’s policy adopted this “control” test. Even if the instructions misstated Ohio law, RLI has not shown that this error harmed it. See Joy Techs., 828 F.3d at 397. Because the jury found that Marshall was a temporary worker, he would have fallen outside the employer exclusion whether the court defined the word “employee” broadly or narrowly. Its instruction could not have affected the outcome.

 [**20]  The district court’s definition of “temporary worker” began with the policy’s definition: “a person who is furnished to . . . Motor Express to meet short-term workload conditions.” Tr., R.165, PageID 7097. The court then [*34]  clarified the scope of the words “furnished” and “shortterm.” It explained that a temporary worker did not need to be “‘furnished’ by anyone in particular” and that “[s]hort-term working conditions may be indefinite in nature and may exist even when the employer had a regular practice of meeting its fluctuating workload with temporary workers.” Id. RLI complains that these later statements improperly “attempted to rewrite or supplement” the policy language. Appellant’s Br. 29. But it has not even tried to explain why the statements misinterpreted the relevant words, so it has forfeited any claim that they were legally mistaken. See Infinity Cap. LLC v. Francis David Corp., 851 F. App’x 579, 590 (6th Cir. 2021).

B. Exclusion of Evidence

This conclusion leaves RLI’s complaint that the district court wrongly excluded three types of evidence from trial. HN21 We review a court’s decision to exclude evidence for an abuse of discretion. See Burley v. Gagacki, 729 F.3d 610, 620 (6th Cir. 2013). And we will not reverse on this ground unless an evidentiary error affected a party’s “substantial rights” by potentially changing the outcome. See Beck v. Haik, 377 F.3d 624, 634-35 (6th Cir. 2004), overruled on other grounds by Adkins v. Wolever, 554 F.3d 650 (6th Cir. 2009) (en banc); Fed. R. Civ. P. 61; Fed. R. Evid. 103(a).

We need not consider whether the district court properly excluded RLI’s first two pieces of evidence because RLI has not shown that the exclusion [*35]  could have affected the outcome. RLI first sought to admit evidence that the Pennsylvania agency had found that Motor Express was Marshall’s statutory employer under Pennsylvania law. It next sought to admit evidence about the definition of “employee” in a federal regulation, which broadly defines the word for purposes of motor-carrier regulations to include independent-contractor drivers. See 49 C.F.R. § 390.5. The court refused to allow both types of evidence because it read RLI’s policy to adopt a different definition of “employee” tied to Ohio’s “control” test. Yet again, we opt not to decide whether the court was correct on the merits about the meaning of “employee.” The jury’s finding that Marshall was a temporary worker makes the issue unnecessary to resolve. And RLI  [**21]  has failed to show how the exclusion of this employee-definition evidence could have affected the jury’s temporary-worker finding. To the contrary, the jury’s verdict rendered the exclusion “harmless.” See CFE Racing Prods., Inc. v. BMF Wheels, Inc., 793 F.3d 571, 588 (6th Cir. 2015).

The district court next did not abuse its discretion in refusing to admit the third piece of evidence. See Burley, 729 F.3d at 620. RLI sought to introduce pleadings and testimony from the workers’ compensation proceedings to suggest that Motor Express [*36]  had inconsistently argued that Marshall had been a leased employee (rather than a temporary worker). The district court rejected this evidence on the ground that it would be unduly prejudicial. Fed. R. Evid. 403. The court had a reasonable basis for that conclusion because the evidence risked “confusing the issues” and “misleading the jury[.]” Id.; cf. Jones v. Wiseman, 838 F. App’x 942, 950 (6th Cir. 2020). To begin with, this evidence would have complicated the trial because the policy’s leased-worker provision was not a part of it. RLI even conceded that it was not claiming that Marshall had been a “leased worker” under the policy. Haff Dep., R.69-6, PageID 4080. RLI also fails to give us any context for Motor Express’s prior suggestion that Marshall had been a leased employee. As best we can tell, Motor Express raised the issue for an argument about a separate Pennsylvania statute, not the policy’s leased-worker provision. And RLI has not shown that this statute followed the policy’s leased-worker definition, so Motor Express’s arguments may not even have been inconsistent (and any differences between the statute and the policy could have led to jury confusion).

* * *

Whether or not RLI subjectively meant for its commercial general liability policy to [*37]  cover a claim like Motor Express’s in this case, the policy’s language objectively covers it. So we affirm.

End of Document