2018 Ohio 2781
Ohio Ct. App.2018Background
- Barbara Pusser lived with Diane Lapaze; Lapaze completed an auto-insurance application naming herself as the only household driver and the application was incorporated into the policy.
- Pusser lacked a valid driver’s license; Lapaze later was diagnosed with dementia.
- In August 2012 Pusser was driving Lapaze’s insured vehicle and struck and killed Robert Boak; the policy was in effect at the time.
- Nationwide sued for a declaratory judgment that it owed no coverage because Lapaze failed to list Pusser as a household driver and lacked capacity to permit Pusser’s use.
- The trial court granted Nationwide summary judgment, holding the policy void ab initio for warranty misstatements; the Estate appealed.
- The appellate court analyzed whether the application statements were warranties that unambiguously warned the insured that misstatements would void the policy ab initio and whether Nationwide properly exercised any right to void.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether applicant’s statement listing household drivers was a warranty that voids the policy ab initio | Nationwide: Application/policy incorporated warranty; misstatement voids policy from inception | Estate: Language is permissive (“may/could”), not an unambiguous promise to void; therefore policy not void ab initio | Held: Not unambiguous; words “may/could” do not satisfy Boggs; policy not void ab initio |
| Whether insurer effectively voided policy by procedure (returning premium) or waived right to void | Nationwide: Policy language permits voiding for incorrect warranties | Estate: Nationwide never declared policy void nor returned premium; moreover, insurer’s continued coverage and failure to return premium waived right | Held: Nationwide never returned premium or declared void; it failed to effect the ab initio voiding required by its policy terms; waiver applied |
Key Cases Cited
- Allstate Ins. Co. v. Boggs, 27 Ohio St.2d 216 (1971) (distinguishes warranties from representations; a warranty will void a policy ab initio only if the insurer’s intent to do so appears clearly and unambiguously in the policy)
- Cole v. Am. Industries & Resources Corp., 128 Ohio App.3d 546 (7th Dist. 1998) (standard of review for summary judgment; de novo review)
- James v. Safeco Ins. Co. of Illinois, 195 Ohio App.3d 265 (8th Dist. 2011) (policy language stating “we may void this policy” is not a clear warning that misstatements will render the policy void)