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December 19, 2005.

OHIO FARMERS INSURANCE COMPANY, Plaintiff, Counter-Defendant,
RONALD HOTLER, individually, MICHAEL J. MINER, individually, HAROLD MINER, individually and d/b/a MINER FARMS, JEAN MINER, individually and d/b/a MINER FARMS, and BETTY J. FRIMML, WILLIAM P. GILMORE, JR., individually, and DEUSCHLE-GILMORE INSURANCE AGENCY, INC., Defendants. RONALD HOTLER, individually, MICHAEL J. MINER, individually, HAROLD MINER, individually and d/b/a MINER FARMS, JEAN MINER, individually and d/b/a MINER FARMS, Third Party Plaintiffs, v. WILLIAM P. GILMORE, JR., individually and as agent for DEUSCHLE-GILMORE INSURANCE AGENCY, INC., and DEUSCHLE-GILMORE INSURANCE AGENCY, INC., Third Party Defendants, Counter-Plaintiffs.

The opinion of the court was delivered by: MICHAEL McCUSKEY, District Judge


This matter is before the court on Ohio Farmers Insurance Company's Motion for Summary Judgment on Declaratory Issues (#65). For the reasons that follow, the motion for summary judgment is DENIED.*fn1


  The motion for summary judgment currently pending before this court pertains only to certain declaratory issues in the context of this rather factually complex matter. Therefore, some background facts are necessary for an understanding of the issues currently before the court. Plaintiff, Ohio Farmers Insurance Company, filed this declaratory action in August 2003. In its complaint, Ohio Farmers seeks a judgment that is not required to indemnify or defend Defendants Ronald Hotler, Michael Miner, Harold Miner, Jean Miner, or Miner Farms in an underlying state action filed by Defendant Betty Frimml. Frimml filed the state court complaint as a result of personal injury and property damage sustained after an automobile accident which occurred on October 29, 2002. Frimml's complaint alleges that Hotler negligently drove a truck which collided with Frimml's vehicle. Frimml further alleges that Hotler was employed by Michael Miner, Harold Miner, Jean Miner and Miner Farms at the time of the accident and they are thus liable for Hotler's actions.

  At the time the accident occurred, Ohio Farmers had issued a farm package insurance policy which included commercial general liability insurance, to Miner Farms, Harold Miner, and Jean Miner. The parties dispute whether Michael Miner was also insured under the policy. Ohio Farmers alleges that Hotler was employed by Miner, Inc., a corporation owned by Michael Miner, at the time of the accident rather than by Miner Farms. Ohio Farmers further alleges that the truck driven by Hotler was owned by Iroquois Trucking, a corporation also owned by Michael Miner. Finally, Ohio Farmers alleges that certain irregularities took place during the course of the insurance application process for the coverage at issue in this case which preclude coverage under the terms of the policy.

  On May 17, 2004, Michael Miner, Inc., Harold Miner, Jean Miner, Michael Miner, and Miner Farms filed an Amended Third-Party Complaint (#38) against William P. Gilmore and the Deuschle-Gilmore Insurance Agency ("DGIA"). In their complaint, they allege that Gilmore and DGIA procured the comprehensive farm policy from Ohio Farmers and bring claims for negligence and breach of contract, alleging that Gilmore and DGIA failed to properly obtain insurance from Ohio Farmers. On February 10, 2005, Ohio Farmers also filed an Amended Complaint (#48) against Gilmore and DGIA for negligence, alleging that as a result of this negligence Ohio Farmers was induced to issue a policy without being fully informed as to the risks associated with issuing the policy. Finally, on May 31, 2005, Gilmore and DGIA filed an Amended Counterclaim (#58) against Ohio Farmers alleging Ohio Farmers was negligent in failing to properly and professionally handle the farm policy.

  In its Motion for Summary Judgment, Ohio Farmers seeks a ruling on the following preliminary issues in this case: (1) a finding that DGIA acted as an agent for Defendants by procuring a farm policy package from Ohio Farmers; (2) a declaration that the Defendants made several misrepresentations to Ohio Farmers in procuring the farm package policy, namely with regard to the ownership of the truck driven by Hotler, the intended use of the truck, Hotler's driving record, and that Harold and Jean Miner signed the applications for insurance; and (3) a declaration that these representations were material misrepresentations. This court has carefully reviewed the submissions of all the parties and finds as follows.


  On January 1, 2002, Ohio Farmers entered into an agency agreement with DGIA.*fn3 This agreement contains provisions allowing DGIA to "bind coverage" for Ohio Farmers and refers to DGIA as an "agent." DGIA represents a variety of insurance companies in addition to Ohio Farmers, including Pekin Insurance, Indiana Insurance, Auto Owners Insurance, Progressive, Safeco, and Dairyland. Harold and Jean Miner were customers of DGIA since 1992. From August 1992 to 2002, they had a policy with Safeco/American States. When their policy with Safeco/American States was not renewed in 2002, they assumed that DGIA would obtain insurance which would provide the same coverage. The policy issued by Ohio Farmers lists Harold and Jean Miner and Miner Farms (hereinafter collectively referred to as "the Miners") as insureds. An endorsement to the policy lists Miner, Inc. as an additional insured.

  When the Miners applied for farm package insurance with Ohio Farmers, Gilmore signed Harold Miner's name on the Personal Umbrella Policy Application and a female employee of DGIA signed Jean Miner's name on the document. This application submitted to Ohio Farmers states as follows above the space allotted for the applicants' signatures: "I have read this application and declare to the best of my knowledge and belief all of the foregoing statements are true. As these statements are offered as an inducement to the Company, I request the Company to issue the insurance in reliance thereon." On August 29, 2002, Bonnie Hanzie, an underwriter for Ohio Farmers, informed DGIA that a "completed and signed" application would be needed in order for her to underwrite the risk. In addition to an Acord Business Auto Application, an Acord Umbrella Application, and the Personal Umbrella Application, the Miners also submitted a Farm Application. The Farm Application contains a signature line for the applicant, but no signature is affixed. Rather, the signature line reads, "On File w/ Agency."*fn4

  In the Acord Business Auto Application for the policy issued by Ohio Farmers, the truck driven by Hotler which was involved in the accident with Frimml ("International truck") was listed as a farm vehicle. The application also asked, "With the exception of encumbrances, are any vehicles not solely owned by and registered to the applicant?" The answer indicated on the application is "No." The International truck had been purchased in June 2001 by Iroquois Truck, Inc., a corporation owned solely by Michael Miner. The International truck remained titled to Iroquois Truck until February 6, 2003. However, DGIA has produced an invoice indicating the International truck was sold to Harold Miner by Iroquois Truck on July 12, 2001. Michael Miner testified in his deposition that Harold Miner paid cash for the vehicle. However, Harold Miner does not recall when he purchased the truck, how he paid for the truck, or how much he paid for the truck. When the International truck became titled to Harold Miner on February 6, 2003, the title document was mailed to Michael Miner's address.

  In the Acord Business Auto Application, the Miners listed the International truck and only placed an "X" in the box labeled "Farm" under the heading "Use." The box labeled "Service" also had a hand made checkmark in it. However, the "Commercial" box was not marked. Michael Miner operated a grain vacuuming business through Miner, Inc. In performing this work, Michael Miner would vacuum grain from other farms for transport and used the International truck for such tasks. Hotler worked for Miner, Inc. and would run the grain vacuum. On the date of the accident, Hotler was issued a check for $300 from the account of Miner Farms.

  The policy contained an endorsement for Custom Farming Liability Coverage. This endorsement lists "Plant/Combin/Vac" as the "Types of Custom Farming." The endorsement states that coverage for bodily injury, property damage liability and medical payments is extended to these operations. Hanzie testified that "Vac" refers to the vacuuming of grain bins. The International truck is listed in the policy as being provided coverage under "Covered Auto Symbol" "01." The Business Auto Coverage portion of the policy defines a symbol "01" vehicle as "any auto" without regard to ownership of the vehicle. Furthermore, the International truck is listed under the heading "Schedule of Covered Autos You Own" on the Business Auto Coverage Part of the policy.

  On the portion of the Personal Umbrella Application inquiring whether any listed drivers had been convicted of any traffic violations in the past three years, the Miners' application indicated "No." On the Acord Business Auto Application, the Miners were also asked if any drivers had moving traffic violations, and the Miners indicated, "No." While Hotler was eventually listed as a driver on this application, the names were not added until ...

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