2023 Ohio 141
Ohio Ct. App.2023Background
- On Feb. 10, 2017 Sullivan-White was injured in an auto collision she attributes to Amanda and Thomas Aukland; she sued the Auklands, State Farm (her insurer), and others in Feb. 2019. Service on the Auklands repeatedly failed; State Farm was served.
- State Farm filed a cross-claim asserting subrogation/indemnity against the Auklands but failed to perfect service on them. The Auklands moved to dismiss for insufficient service and statute-of-limitations grounds.
- The trial court dismissed Sullivan-White’s and State Farm’s claims against the Auklands with prejudice on May 6, 2020 for failure to commence the action within the limitations/Rule 3(A) period. State Farm later served the Auklands and moved for relief from judgment; relief was denied.
- State Farm moved for summary judgment against Sullivan-White, arguing her UM/UIM coverage is conditioned on being “legally entitled to recover” from the tortfeasor and that dismissal with prejudice (and her failure to secure judgment) eliminates that entitlement.
- The trial court initially denied summary judgment (Nov. 2, 2020), then, after inviting further briefing, reconsidered and granted State Farm’s motion (Oct. 12, 2021), holding Sullivan-White breached policy subrogation conditions and was presumptively prejudicial to State Farm. Sullivan-White appealed; State Farm cross-appealed. The appellate court affirmed.
Issues
| Issue | Plaintiff's Argument (Sullivan-White) | Defendant's Argument (State Farm) | Held |
|---|---|---|---|
| 1) Did the trial court abuse discretion by reconsidering its prior summary-judgment denial and considering additional policy provisions? | Reconsideration improperly relied on policy clauses State Farm hadn’t originally argued (Dolman). | Trial court gave notice and an opportunity to be heard on reconsideration; additional policy provisions were relevant. | No abuse of discretion; reconsideration with notice was proper. |
| 2) Does dismissal with prejudice of underlying tort claims mean plaintiff is not “legally entitled to recover” under the UM/UIM policy? | The statute of limitations is a defense, not an element; Sullivan-White had pleaded elements and State Farm’s service failures caused the problem. | “Legally entitled to recover” requires plaintiff be able to prove elements necessary to recover; dismissal with prejudice prevents that. | Held for State Farm: dismissal precludes proving elements; plaintiff is not legally entitled to recover. |
| 3) Did the insured’s failure to secure service/judgment breach subrogation clauses and, if so, was State Farm prejudiced? (Ferrando analysis) | Sullivan-White argues she filed timely and State Farm had its own duties to serve; any failure was State Farm’s. | Policy requires insured not impair subrogation and to secure judgment when required; breach creates presumption of prejudice. | Breach found (insured failed to secure judgment); prejudice presumed and unrebutted on summary judgment; State Farm entitled to judgment. |
| 4) Are State Farm’s assignments of error (relief from judgment; dismissal of cross-claim) meritorious? | N/A (cross-appeal) | State Farm sought relief and argued dismissal of its cross-claim was improper. | Moot: because insured cannot prove tort claims, there is no underlying liability and no right to contribution/indemnity; dismissal of cross-claim stands. |
Key Cases Cited
- Ferrando v. Auto-Owners Mut. Ins. Co., 98 Ohio St.3d 186 (2002) (two-step Ferrando test: breach of subrogation clause, then presumption of prejudice to insurer)
- State v. Snyder, 114 Ohio St.3d 239 (2007) (policy language denying UM coverage where insured not "legally entitled to recover")
- Ohayon v. Safeco Ins. Co. of Illinois, 91 Ohio St.3d 474 (2001) ("legally entitled to recover" requires insured be able to prove elements of claim against tortfeasor)
- Sumwalt v. Allstate Ins. Co., 12 Ohio St.3d 294 (1984) (definition of "legally entitled to recover")
- Grafton v. Ohio Edison Co., 77 Ohio St.3d 102 (1996) (standard of review for summary judgment)
- Dresher v. Burt, 75 Ohio St.3d 280 (1996) (summary-judgment burdens and shifting standard)