COLE ET AL., APPELLEES, v. HOLLAND; NATIONWIDE INSURANCE COMPANY, APPELLANT.
No. 94-2569
Supreme Court of Ohio
Submitted February 21, 1996—Decided August 7, 1996.
76 Ohio St.3d 220 | 1996-Ohio-105
[This opinion has been published in Ohio Official Reports at 76 Ohio St.3d 220.]
Pursuant to former
APPEAL from the Court of Appeals for Summit County, No. 16703.
{¶ 1} On May 29, 1991, plaintiff-appellee Richard W. Cole, while driving alone in his auto, was injured in a motor vehicle accident with another vehicle. Richard Cole (seeking recovery for personal injury) and his wife, appellee Marilou S. Cole (seeking recovery for loss of consortium), filed suit against the other driver, Bryan C. Holland, in the Summit County Court of Common Pleas. The complaint
{¶ 2} The amended complaint also stated that appellees were insured under a policy with appellant, and that this policy provided uninsured/underinsured coverage with limits of $100,000 per person and $300,000 per occurrence. The declaratory judgment portion of appellees’ suit sought to ascertain the rights and obligations pursuant to the underinsurance coverage of this policy.
{¶ 3} Appellant and appellees each moved for summary judgment. At that time, they agreed that the $100,000 per person limit of underinsurance coverage applied. By conceding that the per person limit applied, appellees dropped their argument that the derivative claim of Marilou Cole for loss of consortium constituted a separate claim for purposes of determining the applicable policy limit. However, the parties disagreed as to how the $12,500 that appellees were to receive from the tortfeasor‘s insurer affected appellant‘s obligation under the policy. Appellant argued that it was entitled to set off the $12,500 against the $100,000 policy limit, so that its obligation to pay appellees could not be greater than $87,500. Appellees argued that appellant was not entitled to a setoff against the policy limit, but only against their damages up to the policy limit, so that the full $100,000 of underinsurance coverage remained available to them.
{¶ 4} In its first ruling on these summary judgment motions, the trial court granted appellant‘s motion, and found that appellant could set off the $12,500 payment against the policy limit. The trial court considered the applicability of Savoie v. Grange Mut. Ins. Co. (1993), 67 Ohio St.3d 500, 620 N.E.2d 809, to the setoff issue, and determined that Savoie, because it did not overrule previous decisions of the Supreme Court of Ohio upholding setoffs against policy limits, did not require a contrary result. Appellees filed a motion for reconsideration of the
{¶ 5} The trial court ultimately determined that reconsideration was in order, and vacated its earlier decision that appellant was entitled to a setoff against the policy limit. The trial court decided that a concurring opinion in Hillman v. Hastings Mut. Ins. Co. (1994), 68 Ohio St.3d 238, 239, 626 N.E.2d 73, 74, clarified Savoie on the setoff issue. The trial court granted summary judgment for appellees, finding that the full policy limit of $100,000 in underinsurance coverage was available to them, despite the $12,500 to be received from the tortfeasor‘s insurer.
{¶ 6} The court of appeals affirmed the judgment of the trial court.
{¶ 7} The cause is now before this court upon the allowance of a discretionary appeal.
Patrick J. D‘Andrea, Lee A. Schaffer and Dean A. Young, for appellees.
Robert J. Drexler, for appellant.
Mark W. Ruf, urging affirmance for amicus curiae, Ohio Academy of Trial Lawyers.
Weston, Hurd, Fallon, Paisley & Howley, Timothy D. Johnson, Gregory E. O‘Brien and Daniel A. Richards, urging reversal for amicus curiae, Ohio Association of Civil Trial Attorneys.
Roetzel & Andress Co., L.P.A., Ronald B. Lee and Laura M. Faust, urging reversal for amici curiae, Progressive Insurance Company, Leader National Insurance Company, Ohio Insurance Institute, and State Auto Insurance Company.
ALICE ROBIE RESNICK, J.
{¶ 8} The issue presented is whether a provider of underinsurance coverage may set off money received by its insured from a tortfeasor‘s insurer against the insured party‘s damages, or whether the setoff may be against the relevant policy limit.
{¶ 9} Former
{¶ 10} At this point, we note that if an injured party‘s damages do not exceed the amount of recovery available from the tortfeasor‘s liability insurers, the tortfeasor is not underinsured and underinsurance coverage does not come into play. Likewise, if the injured party‘s damages do exceed the amount available from the tortfeasor‘s liability insurers, but do not exceed the relevant policy limit of the injured party‘s underinsurance coverage, that injured party will recover the full extent of his or her damages, with the underinsurance provider paying those damages not covered by the tortfeasor‘s liability insurers. In that situation, the tortfeasor is underinsured, but the setoff issue does not come into play. The setoff issue arises only when the party seeking to recover pursuant to underinsurance coverage suffers damages that exceed the policy limit of underinsurance coverage
{¶ 11} It is therefore clear that no issue of double recovery arises when considering setoff, because any analysis involving setoff begins at the starting point that the tortfeasor‘s liability insurance is not sufficient to adequately compensate the injured party seeking the underinsurance coverage. Furthermore, in cases of very serious injury when sizable damages are involved, the injured party as a practical matter faces severe undercompensation, even if the setoff question is resolved in the injured party‘s favor, because the limit of the underinsurance policy acts as a cap on the amount of recovery.
{¶ 12} In James v. Michigan Mut. Ins. Co. (1985), 18 Ohio St.3d 386, 18 OBR 440, 481 N.E.2d 272, this court construed a predecessor statute to former
{¶ 13} In In re Nationwide Ins. Co. (1989), 45 Ohio St.3d 11, 543 N.E.2d 89, we held at the syllabus: “A setoff against the limits of underinsured and
{¶ 14} As a result of James and In re Nationwide, it was then settled that former
{¶ 15} However, our decision in Savoie, supra, has affected the way the courts of this state have been resolving the setoff question. Although Savoie did not overrule James and In re Nationwide, and moreover did not specifically find any provision of former
{¶ 16} In Savoie, this court held at paragraph three of the syllabus: “An underinsurance claim must be paid when the individual covered by an uninsured/underinsured policy suffers damages that exceed those monies available to be paid by the tortfeasor‘s liability carriers. (Hill v. Allstate Ins. Co. [1990], 50 Ohio St.3d 243, 553 N.E.2d 658, overruled.)”
{¶ 17} In concurring opinions in two cases summarily decided on the authority of Savoie, members of this court appeared to clarify paragraph three of the syllabus of Savoie to indicate that the insurer‘s setoff applies against the insured‘s damages, not against the policy limit of underinsurance coverage. See Hillman v. Hastings Mut. Ins. Co. (1994), 68 Ohio St.3d 238, 239, 626 N.E.2d 73, 74 (Pfeifer, J., concurring) (”Savoie, in all personal injury cases, eliminates the setoff against underinsurance policy limits“); Newman v. United Ohio Ins. Co. (1994), 69 Ohio St.3d 1204, 1205, 631 N.E.2d 157, 158 (Douglas, J., joined by A.W. Sweeney, Resnick, F.E. Sweeney and Pfeifer, JJ., concurring in denial of motion for reconsideration) (”Savoie [1] requires setoff; [2] requires that any setoff be against the insured‘s damages [not the written limits of underinsured coverage]; and [3] that paragraph three of the syllabus of Savoie applies to ‘*** all personal injury cases ***’ *** and not just to wrongful death cases.“). (Emphasis sic.)
{¶ 18} We note that, effective October 20, 1994,
{¶ 19} After reviewing the text of Sections 7, 8, and 9 of Am.Sub.S.B. No. 20, we recognize that the General Assembly, through the operation of that Act, intended to explicitly supersede various holdings of Savoie. Particularly relevant to our consideration here is Section 8 of Am.Sub.S.B. No. 20, which provides: “It is the intent of the General Assembly in amending division (A)(2) of section 3937.18 of the Revised Code to declare and confirm that the purpose and intent of the 114th General Assembly in enacting division (A)(2) of section 3937.18 in Am.H.B. 489 was, and the intent of the General Assembly in amending section 3937.18 of the Revised Code in this act is, to provide an offset against the limits of the underinsured motorist coverage of those amounts available for payment from the tortfeasor‘s bodily injury liability coverage.”
{¶ 20} Appellant does not specifically argue, and we observe no indication in the text of Am.Sub.S.B. No. 20, that the General Assembly intended amended
{¶ 21} Our view that Am.Sub.S.B. No. 20 does not operate retrospectively is consistent with the way the courts of appeals have been resolving this question. See, e.g., United Servs. Auto. Assn. v. Mack (May 17, 1995), Clark App. No. 94-CA-32, unreported, 1995 WL 301437; Cartwright v. Maryland Ins. Group (1995), 101 Ohio App.3d 439, 443-444, 655 N.E.2d 827, 829-830; Finneran v. Bestor (Nov. 2, 1995), Cuyahoga App. No. 68774, unreported, 1995 WL 643810; Brocwell v. King (Oct. 24, 1995), Richland App. No. 95-25, unreported, 1995 WL 768520, discretionary appeal not allowed (1996), 75 Ohio St.3d 1219, 665 N.E.2d 217.
{¶ 22} The case at bar affords us an opportunity to state in syllabus law what a majority of this court has announced indirectly through the combination of
{¶ 23} We hold that pursuant to former
{¶ 24} Our holding is made for much the same reason set forth by Chief Justice Moyer in his concurrence in Hillman, 68 Ohio St.3d at 239, 626 N.E.2d at 74, wherein he stated, “[Savoie] is the law on the issue in the above-styled case. As I believe all parties should receive equal application of the law announced by this court, *** I concur in the judgment entry.” Since Savoie was decided in 1993, trial and appellate courts across this state have been deciding cases based upon that decision, as clarified by Newman and Hillman and their own independent reasoning reaching the same result. This is not the time to do a turnabout on the setoff question previously addressed and answered by this court. To do such an about-face would certainly not be in the best interests of justice or promote equal justice under the law. Savoie was an attempt to bring some stability and consistency to the state of automobile insurance law in Ohio. The General Assembly has responded to Savoie; we ourselves will not now undermine our own established precedent. The citizens of Ohio must have the ability to rely upon the holdings of this court.
{¶ 25} Given the interplay of Savoie, Am.Sub.S.B. No. 20, and this case on the setoff issue we decide today, we do not specifically overrule James and
{¶ 26} Applying our holding to the facts of this case, appellant may set off the amount appellees received from the tortfeasor‘s liability carrier against appellees’ damages. The maximum underinsurance payment appellant is obligated to make to appellees is $100,000. The judgment of the court of appeals is affirmed.
Judgment affirmed.
DOUGLAS, T. BRYANT, F.E. SWEENEY and PFEIFER, JJ., concur.
MOYER, C.J., and COOK, J., dissent.
THOMAS F. BRYANT, J., of the Third Appellate District, sitting for WRIGHT, J.
DOUGLAS, J., concurring.
{¶ 27} I concur. I do so for three separate reasons.
{¶ 28} First, on the basis of stare decisis, about which we have heard much in the past, it is proper to support the law announced in Savoie v. Grange Mut. Ins. Co. (1993), 67 Ohio St.3d 500, 620 N.E.2d 809. This is especially so since courts all across this state have been relying on that decision to decide cases brought before them.
{¶ 29} Second, as I said in my concurrence in Savoie, a concurrence that appears to have been ignored in the ongoing Savoie debate, “we should recognize * * * that un insured-motorist cases are different from under insured-motorist cases; that multiple-claimant cases are different from single-claimant cases; that cases involving wrongful death are different from those where death is not involved; and that cases where there is a tortfeasor liability policy are different from those where there is no liability policy.” Id. at 510, 620 N.E.2d at 816. In the case at bar, we have a single claimant, an insured tortfeasor, underinsured motorist coverage, and the setoff question. While such a case appears to fit neatly into the statute,
{¶ 30} Third, and maybe most important, none of this can be fully decided until we hear and decide those issues concerning
{¶ 31} Accordingly, for the reasons stated, I concur.
COOK, J., dissenting.
{¶ 32} I respectfully dissent because former
{¶ 33} Whatever the tortuous route the court took in Savoie and its progeny, this case just cannot be legitimately decided upon recent decisional law. To do so ignores clear statutory language.
{¶ 34} In Savoie, the court determined under what circumstances a tortfeasor is underinsured in multiple-claimant situations. Notwithstanding the language of Savoie‘s third syllabus, that case did not make a specific finding that
{¶ 35} Here the court had an opportunity to concede the point that, despite all the jigsawing to this area of the law and overlays applied in the more complex, multiple-claimant cases, the statute itself decides this uncomplicated case. I regret that it did not.
{¶ 36} I would reverse the judgment of the court of appeals.
MOYER, C.J., concurs in the foregoing dissenting opinion.