Summary
In Dues v. Hodge (1988), 36 Ohio St.3d 46, 49, 521 N.E.2d 789, 793, this court stated that "R.C. 3937.18(A)(1) does not indicate that it was intended to override reasonable limitations on the amount of coverage available for each accident."
Summary of this case from Schaefer v. Allstate Ins. Co.Opinion
Nos. 87-271 and 87-284
Decided April 6, 1988.
Insurance — Uninsured motorist coverage — Stacking of coverages precluded, when — R.C. 3937.18(G) — Limitation of recovery to a single limit of liability valid, when.
O.Jur 3d Insurance §§ 957, 959.
1. An insurance company may, pursuant to R.C. 3937.18(G), preclude the stacking of uninsured motorist coverage. The antistacking provision, however, must be both unambiguous and clear and conspicuous in the automobile insurance contract. ( Karabin v. State Automobile Mut. Ins. Co., 10 Ohio St.3d 163, 10 OBR 497, 462 N.E.2d 403, followed.)
2. An insurance policy provision that limits recovery for all causes of action arising out of bodily injury to one person to a single limit of liability is a valid restriction of uninsured motorist coverage.
APPEAL and CROSS-APPEAL from the Court of Appeals for Franklin County.
On June 5, 1983, seven-year-old Jay T. Dues was struck and severely injured by Cheryl L. Hodge, an uninsured driver of a motor vehicle. Jay's parents, Robert and Joan Dues, on his behalf and on their own behalf, and Jay's brother, Randy, brought suit for damages against Hodge, the city of Columbus, and the Franklin County Commissioners. The Dueses further sought a declaratory judgment against their insurer, State Farm Mutual Automobile Insurance Company (hereinafter "State Farm"), to determine the amount of uninsured motorist coverage available at the time of the accident. Summary judgment was granted in favor of the city and the county but the suit against Hodge is still pending.
The case was bifurcated and the declaratory judgment action was submitted to a referee on stipulated facts and trial briefs. The stipulations were as follows:
"1. On or about June 5, 1983, plaintiff, Jay T. Dues, was injured when he was struck, as a pedestrian, by a vehicle being operated southbound on Sunbury Road in Franklin County, Ohio.
"2. At the time of the June 5, 1983 accident, the vehicle which struck Jay T. Dues was not insured or bonded for bodily injury liability.
"3. On June 5, 1983, State Farm Mutual Automobile Insurance Company had in effect three automobile insurance policies which had been issued to Robert Dues which each contained uninsured motorist coverage. Each of the three policies carried uninsured motorist coverage liability limits which provided $100,000 for all damages due to bodily injury to one person, and $300,000 for all damages due to bodily injury to all parties.
"4. On or about June 5, 1983, defendant, State Farm, had in effect a policy of automobile insurance which was issued to Randy Dues and which contained an uninsured motorist coverage limit of $25,000 for all damages due to bodily injury to one person and $50,000 [for all damages due to bodily injury to all parties].
"5. At the time of the June 5, 1983 accident, Endorsement 6275RR was in effect for all four State Farm policies issued to plaintiffs, a true and accurate policy [ sic] of which is attached herewith.
"6. At the time of the June 5, 1983 accident Randy Dues was a household member, as defined in each of the four policies of automobile insurance issued by State Farm, of Robert Dues.
"7. Plaintiff [ sic] reserves the right to make further stipulations as to additional endorsements which may have been in effect at the time of the June 5, 1983 accident."
The appellants claimed they were entitled to a recovery of $100,000 for Jay Dues under the uninsured motorist provision of each separate policy issued to Robert Dues. They also claimed each parent had a derivative cause of action for negligent infliction of emotional distress. There was also a claim by the parents for loss of services. Appellants further contended each parent was entitled to recover $100,000 under each of the policies issued to Robert Dues as a result of those claims. Appellants further sought to recover an additional $50,000 under Randy Dues' policy.
The referee determined the policies contained valid antistacking provisions. Consequently, appellants were only entitled to $100,000 of total coverage for the direct and derivative actions. The trial court agreed that the antistacking provisions were clear and unambiguous and that Jay Dues was only entitled to $100,000 of coverage, but found Jay's parents' derivative actions entitled them to an additional $100,000. Appellants were thus found to be entitled to total uninsured motorist coverage of up to $200,000.
The court of appeals affirmed the antistacking ruling. The court, however, found available an action for liability by Jay Dues, one derivative action by the parents for loss of services, and one derivative action by Jay's mother, if proven. Accordingly, the appellate court found the appellants were entitled to $100,000 of uninsured motorist coverage for each separate action allowable under the four insurance policies.
The cause is now before this court pursuant to the allowance of a motion and cross-motion to certify the record.
Huffman, Landis, Weaks Lopez, Robert J. Huffman and Jose M. Lopez, for appellants and cross-appellees.
Hamilton, Kramer, Myers Cheek, James R. Gallagher and Emerson Cheek III, for appellee and cross-appellant.
The principal issue before us today is whether the antistacking language in the uninsured motorist provision of the automobile insurance policy before us meets the applicable requirements to prevent stacking of coverage.
R.C. 3937.18(G) provides:
"Any automobile liability or motor vehicle liability policy of insurance that includes coverages offered under division (A) of this section may include terms and conditions that preclude stacking of such coverages."
An insurance company may, pursuant to R.C. 3937.18(G), preclude the stacking of uninsured motorist coverage. The antistacking provision, however, must be both unambiguous and clear and conspicuous in the automobile insurance contract. Karabin v. State Automobile Mut. Ins. Co. (1984), 10 Ohio St.3d 163, 10 OBR 497, 462 N.E.2d 403.
Endorsement 6275RR, stipulated to be in effect for all four policies issued to the appellants at the time of the accident, states, in pertinent part:
"If There Is Other Similar Coverage
"1. If the insured is injured as a pedestrian and other similar coverage applies, or is injured while occupying your car, and your car is described in the declarations page of another policy providing similar coverage:
"a. the total limits of liability under all such coverages shall not exceed that of the coverage with the highest limit of liability; and
"b. We are liable only for our share. Our share is that per cent of the damages that the limit of liability of this coverage bears to the total of all similar coverage applicable to the accident." (Emphasis sic.)
As stated, the antistacking provision must be both unambiguous and clear and conspicuous in the policy. Karabin, supra. We find the above language to be unambiguous. The language "the total limits of liability under all such coverages shall not exceed that of the coverage with the highest limit of liability" can only be interpreted to mean that the insured may not stack coverage. The appellants have not indicated how this language could possibly be construed otherwise.
We also find the language of the antistacking provision to be clear and conspicuous in the policy. The section heading titled, "If There Is Other Similar Coverage," is typed in bold letters. The entire endorsement section is clearly marked as a part of the policy. Therefore, we agree with the trial court and referee that the language is clear and conspicuous within each policy.
Appellants point out that State Farm provided numerous endorsements and policy jackets over a period of years. The stipulations, however, indicate the above language was a part of the policy at the time of the accident. The fact that the policy in question was altered several times over a period of years does not make the language ambiguous.
Accordingly, the referee was correct in forbidding the stacking of uninsured motorist coverage.
The second issue before us today is whether the language in the insurance contract may be interpreted to allow separate uninsured motorist coverage for derivative actions. The appellate court ruled that Jay's mother had a derivative action for negligent infliction of serious emotional distress. While we agree that such a derivative action may be maintained, the issue before us is not whether such an action is available, but rather, whether the insurance policies issued by State Farm allow separate coverage for the derivative actions.
It is well-established that language in an insurance policy must be read strictly in favor of the insured. The policy makes clear that State Farm intended to provide a maximum of $100,000 uninsured motorist coverage for each accident involving bodily injury to one person. A derivative action clearly stems from a single accident or occurrence. Indeed, the derivative actions would not exist but for the primary action. Therefore, we find the language of State Farm's policies limited coverage to $100,000 for all actions arising from a single accident or occurrence involving bodily injury to one person.
In Auto-Owners Mut. Ins. Co. v. Lewis (1984), 10 Ohio St.3d 156, 10 OBR 490, 462 N.E.2d 396, we held at paragraph two of the syllabus that "[w]here separate and independent causes of action arise from injuries caused by an uninsured motorist and such injuries are covered by the uninsured motorist provision of an automobile insurance policy, the policy limits applicable to the uninsured motorist coverage will be available to each cause of action." Auto-Owners was based on Sexton v. State Farm Mut. Auto. Ins. Co. (1982), 69 Ohio St.2d 431, 23 O.O. 3d 385, 433 N.E.2d 555, which was based on former R.C. 3937.18(A), a predecessor to R.C. 3937.18(A)(1). Sexton held that R.C. 3937.18 mandated coverage of derivative claims under uninsured motorist coverage. However, Sexton did not address the issue of extending separate policy limitations to each derivative cause of action. R.C. 3937.18(A)(1) does not indicate that it was intended to override reasonable limitations on the amount of coverage available for each accident. Therefore, we overrule paragraph two of the syllabus of Auto-Owners. An insurance policy provision that limits recovery for all causes of action arising out of bodily injury to one person to a single limit of liability is a valid restriction of uninsured motorist coverage.
Accordingly, we affirm that part of the appellate court's decision which determined the policies contained valid antistacking provisions, but reverse that part of the decision that permits additional coverage for derivative actions.
Judgment affirmed in part and reversed in part.
MOYER, C.J., LOCHER, HOLMES and H. BROWN, JJ., concur.
SWEENEY, J., concurs in part and dissents in part.
DOUGLAS, J., concurs as to paragraph one of the syllabus, but dissents as to paragraph two of the syllabus, the opinion, and the judgment.
I concur in paragraph one of the syllabus and the discussion related thereto. However, I must dissent from the law enunciated in paragraph two of the syllabus that overrules Auto-Owners Mut. Ins. Co. v. Lewis (1984), 10 Ohio St.3d 156, 10 OBR 490, 462 N.E.2d 396, paragraph two of the syllabus. In my view, the proposition of law enunciated in Auto-Owners, supra, is both sound law and sound public policy. In contrast, the limitation of coverage endorsed herein that all causes of action arising out of bodily injury to one person be limited to a single limit of liability is both unsound and potentially unjust. As pointed out in Auto-Owners, such limitations could conceivably place an insured in the position of having less coverage than that for which he paid. In my view, the General Assembly did not intend such potential for inequity to arise when it enacted R.C. 3937.18. Therefore, I would affirm the decision of the court of appeals that each independent derivative action of the parents, if proven, is entitled to coverage up to the policy limitation of $100,000 under the uninsured motorist provision.