Barbee v. Nationwide Mutual Insurance
130 Ohio St. 3d 96
Ohio2011Background
- Barbees were injured in a 2002 auto accident; Nationwide insured the vehicle with uninsured/underinsured motorist (UM/UIM) coverage.
- Policy contains an exhaustion provision: no payment until all other applicable liability insurance has been exhausted.
- Policy contains a compliance/suit provision: no suit against Nationwide until full compliance with policy terms, including subrogation protections, and UM/UIM suit must be filed within three years of the accident.
- Barbees’ counsel gave Nationwide notice of potential UM claims within one year but suit was not filed within three years.
- Barbees filed UM/UIM claim in 2007, more than four years after the accident; Nationwide moved for summary judgment arguing the three-year limit barred the claim.
- Courts below held the provisions were in conflict/ambiguous, reversing on appeal; Ohio Supreme Court reversed and held the three-year limitation is unambiguous and enforceable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When does the three-year limit start? | Barbee: accrual occurs after exhaustion of tortfeasor’s limits. | Nationwide: accrual begins at the date of the accident. | Limitary period begins on the accident date. |
| Do exhaustion, compliance, and limitation provisions create ambiguity when read together? | Barbee: provisions are in pari materia and ambiguous, supporting tolling. | Nationwide: provisions are clear and harmonizable, no ambiguity. | No ambiguity; provisions are unambiguous and compatible. |
| Does Kraly control the accrual rule here? | Barbee: Kraly logic supports tolling until exhaustion in unique insolvency context. | Nationwide: Kraly is distinguishable; standard accrual applies. | Kraly distinguished; accrual starts at accident date per statute. |
Key Cases Cited
- Kraly v. Vannewkirk, 69 Ohio St.3d 627 (1994) (uninsured/underinsured accrual rules; insolvency exception distinguished)
- Ross v. Farmers Ins. Group, of Cos., 82 Ohio St.3d 281 (1998) (exhaustion not determinative of accrual; policy language controls)
- Angel v. Reed, 119 Ohio St.3d 73 (2008) (distinguishes Kraly; standard uninsured-motorist claim accrual)
- Colvin v. Globe Am. Cas. Co., 69 Ohio St.2d 293 (1982) (contractual limitations must be clear and unambiguous)
- Miller v. Progressive Cas. Ins. Co., 69 Ohio St.3d 619 (1994) (validates shorter limitation periods may govern contract actions)
- Neal-Pettit v. Lahman, 125 Ohio St.3d 327 (2010) (interpretation of insurance policy language in favor of insured when ambiguous)