Hance v. Allstate Ins. Co.Hance v. Allstate Ins. Co.
Benjamin, Yocum & Heather, LLC, Peter J. Georgiton, Charles F. Hollis, III, The American Book Building, 300 Pike Street, Suite 500, Cincinnati, OH 45202-4222, for defendant-appellee
O P I N I O N
POWELL, J.
{¶1} Plaintiff-appellant, Pamela Hance (Hance), appeals the Clermont County Court of Common Pleas’ denial of her motion for prejudgment interest against defendant-appellee Allstate Insurance Company (Allstate). We affirm the trial court‘s decision.
{¶3} “THE TRIAL COURT ERRED IN DENYING PLAINTIFF‘S MOTION FOR PREJUDGMENT INTEREST.”
{¶4} Within her assignment of error regarding the trial cоurt‘s denial of her motion for prejudgment interest, Hance raises two sub-issues. First, Hance asserts that
{¶5} The right to recover interest is governed by
{¶6} Which subsection of
{¶8} In Hofle v. General Motors Corp., Warren App. No. CA2002-06-062, 2002-Ohio-7152, this court stated, “[i]t is well-established that an action by an insured against his or her insurance carrier for payment of [underinsured motorist] benefits is a cause of action sounding in contract, rather than tort, even though it is tortious conduct that triggers applicable contractual provisions.” Id. at ¶8, citing Landis, 82 Ohio St.3d at 341. This is based on the faсt that the underinsured motorist benefit claim arises out of the insurance contract between the parties. Landis at 341.
{¶10} We are mindful that the Supreme Court in Miller, which overruled this court‘s decision to limit prejudgment interest to policy maximums, cited to
{¶11} In this finding, we are in complete agreement with the Second District Court of Appeals when it stated, in reference to an identical argument, that, “[t]he [Miller] majority‘s citation to
{¶12} Therefore, the trial court was entirely correct in relying on
{¶13} Courts of this state have been inconsistent in identifying an appellate court‘s standard of review in cases involving application of
{¶14} In Royal Elec. Constr. Corp. v. Ohio State Univ., 73 Ohio St.3d 110, 1995-
{¶15} Furthermore, the cases we have cited above, which have allowed discretion in whether to allow prejudgment interest, have often cited to cases involving application of
{¶16} Therefore, after careful review of these cases and the language in
{¶17} This does not mean that a trial cоurt is divested of all discretion in a
{¶18} “In Landis, the Ohio Supreme Court expounded on the wide discretion granted to a trial court in determining the ‘due and payable’ date when awarding prejudgment interest under
{¶19} In rendering its decision denying interest, the trial court acknowledged the discretion it had pursuant to Landis in choosing the “event or condition” that determines when interest is “due and payable.” In particular the trial court stated that it “may review the facts of the case and determine the date on when the amount of the judgment became ‘due and payable’ for the purposes of the statute.” In finding the amounts owed by Allstate were not “duе and payable” until after the jury‘s verdict, the trial court relied on the parties’ contractual agreement and Eagle Am. Inc. Co. v. Frencho (1996), 111 Ohio App. 3d 213; and Kellog v. Doe (Feb. 26, 1998), Cuyahoga App. No. 72619, 1998 WL 83204, which both held amounts owed by an insurance company did not become due and payable until after a verdict or judgment was rendered.
{¶20} As noted above, an insurance policy is a contract between the insurer and the insured. Nationwide Mut. Ins. Co. v. Marsh (1984), 15 Ohio St.3d 107, 109. “The words and phrases contained in an insurance policy must be given their plain and ordinary mеaning unless there is something in the contract that would indicate a contrary intention.” McKeehan v. Am. Family Life Assur. Co. of Columbus, 156 Ohio App.3d 254, 2004-Ohio-764, ¶4, citing Olmstead v. Lumbermens Mut. Ins. Co. (1970), 22 Ohio St.2d 212, 216. Courts may not alter the clear and unambiguous language of an insurance policy in order to reach a particular result which was not intended by the parties to the contract. See Gomolka v. State Automobile Mut. Ins. Co. (1982), 70 Ohio St.2d 166, 168.
{¶22} “If we cannot agree with the insured person or additionаl insured person that such person is legally entitled to recover damages from the owner or operator of an uninsured auto or on the amount of damages, then upon the mutual consent of Allstate and the insured person or additional insured person, the disagreement may be settled by arbitration. We and the insured person or additional insured person must mutually agree to arbitrate the disagreements. If we and the insured person or аdditional insured person do not agree to arbitrate, then the disagreement will be resolved in a court of competent jurisdiction.”
{¶23} In reviewing this provision, the trial court found that the language clearly stated that Allstate became bound to pay Hance once a judgment had been rendered against the insurance company. The trial court also noted the similarities in the “if we cannot agree” provision in this case, and the contract provisions contained in the contracts at issue in Eagle Am. and Kellog. In both Eagle Am. and Kellog the contracts required the parties to agree to the amount of damages prior to the insurer paying the claim. After reviewing the evidence, the trial court found that because Hance and Allstate were disputing the extent of Hance‘s injuries and the amount she was due, Hance‘s award only became due and payable upon judgment, so no prejudgment interest was due.
{¶24} Upon review we cannot say the trial court abused its discretion in making this determination that the money owed Hance was “due and payable” upon judgment. The trial court clearly acknowledged its discretion in this matter, analyzed the facts of
{¶25} In Mundy v. Roy, Clark App. No. 2005-CA-28, 2006-Ohio-993, the Second District Court of Appeals found that the jury verdict did not create the contractual obligation by the insurance company to compensate its insured pursuant to an underinsured motorist claim; it merely confirmed the fact that the insurance company had always owed the money to the insured pursuant to their contract. Id. at ¶32. In reaching this decision the Mundy court dealt with an identical contract provision, as the insurer in that case was Allstate. The Second District found the provision was merely a “forum selection clause” which could not “reasonably be construed to relieve Allstate of its obligation to pay prejudgment interest on the jury‘s verdict against it.” Id. The Mundy court further added, “[w]e do not agree that Allstate owed Mundy nothing, for prejudgment interest purposes, merely because the parties disputed the amount of his damages and contractually had agreed to have the dispute resolved through arbitration or litigation.” Id.
{¶26} In Jewett v. Owners Ins. Co., Licking App. No. 01 CA 38, 2002-Ohio-1282, the Fifth District Court of Appeals found, after disagreeing with Eagle Am. and Kellog in light of Landis, “the fact that the amount of money appellees were entitled to was not determined until arbitration, in 1999, does not effect [sic] their right to recover prejudgment interest and does not preclude them from recovering prejudgment interest from any date priоr to the date of arbitration.” Id. at ¶44. The provision at issue in
{¶27} We are not vested with any authority to make a new contract for the parties. Where the terms of the contract are clear, we are merely tasked with applying those terms. Although we are aware there is no reference to interest or judgment within the provision, it is clear that the language statеs that there must be an agreement, arbitration or judgment to establish the insured is legally entitled to an award. In this case, the judgment obligated Allstate to pay Hance and as such, she was not entitled to interest. Therefore, because we may not substitute our judgment for the trial court, and because we find the trial court did not abuse its discretion, we overrule Hance‘s assignment of error.
{¶28} Judgment affirmed.
BRESSLER, P.J., concur.
WALSH, J., concurs in part and dissents in part.
WALSH, J., concurring in part and dissenting in part.
{¶29} Appellant‘s single assignment of error raises two issues. Appellаnt first argues that
{¶30} The majority relies on certain contract terms in Hance‘s underinsured motorist policy to support its decision. Thosе terms appear in Hance‘s Allstate policy in
{¶31} The subject language starts: “If we cannot agree with the insured * * * that such person is legally entitled to recover damages from the owner or operator of an uninsured6 auto or on the amount of damages * * *,” with the remainder of the paragraph identifying the legal forum in which the parties are required to proceed on the failure to agree. (Emphasis added.)
{¶32} The trial court and the majority have inferred from the fact that the policy language says that if the parties cannot agree, as in this case, to the amount of damages, an implication arises that any damages are not “due and payable,” as referred to by
{¶33} The two provisions at the beginning, separated by the disjunctive “or” (whether appellant is legally entitled to damages or the amount of said damages), describe the issues to be decided in the absence of a settlement agreement; they are separate concepts and are the objects of the forum selection clauses. The language used, “the amount of said damages,” does not support a determination that prejudgment interest is not payable until, as in this case, Hance‘s damages are determined.
{¶34} There is no reference to prejudgment interest in the paragraph on which the trial court and the majority rely. In order to reach the conclusion of both the trial
{¶35} The policy language invoked by the facts of this case does not support any such implication or inference. While the policy language is cleverly written, it is referring, in this case, not to whether Allstate owes money to Hance, but how much. There are two subjects in the initial part of the policy language. The first “If we cannot agree with the insured * * * that such person is legally entitled to recover damages * * * ” means Allstate denies contract coverage, and the matter then goes to arbitration or trial on the coverage issue, and if coverage, then damages. The second subject “If we cannot agree with the insured * * * on the amount of damages * * *” means Allstate agrees that it is responsible for coverage under the contract, but disagrees on the damage amount, the matter goes to arbitration or trial for determination of damages.
{¶36} In this case, Allstate insured both the tortfeasor and Hance under separate policies. Allstate settled Hance‘s claim against Perkins and paid Hance $20,000 on a policy with a $25,000 policy limit. This leaves only the issue of the amount of damages to be determined by an arbitrator or court trial under Hance‘s underinsured motorist coverage. The damages issue was submitted to the jury and the jury awarded Hance $170,000.7
{¶37} There is no legal or logical reason to require Hance to wait until the outcome of the damages issue is resolved before becoming entitled to prejudgment
{¶38} Therefore, the trial court and the majority have misapplied the hypallage process by applying the inference from the “legally entitled to recover damages” phrase to the “amount of damages” phrase to arrive at the decision on prejudgment interest.
{¶39} Tort liability having been settled as it has in this case, damages became due and payable on the UIM coverage at some point prior to trial and the only issue left was the amount of damages, which was determined by jury verdict. That is the case for Hance and that is what was in the contemplation of the Ohio Supreme Court in Royal Elec. Constr. Corp. v. Ohio State Univ., 73 Ohio St.3d 110, 1995-Ohio-131.
{¶40} I would reverse the trial сourt‘s decision and remand the matter to the trial court for a decision on prejudgment interest in light of the statute,
Walsh, J., retired, of the Twelfth Appellate District, sitting by assignment of the Chief Justice, pursuant to Section 6(C), Article IV of the Ohio Constitution.