Lake Hosp. Sys., Inc. v. Ohio Ins. Guar. Assn.Lake Hosp. Sys., Inc. v. Ohio Ins. Guar. Assn.
- Reporters:
- , ,
- Before:
- Alice Robie Resnick, Moyer, A.W. Sweeney, Douglas, Wright, F.E. Sweeney, Pfeifer
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Insurance -- Ohio Insurance Guaranty Association -- Powers and duties --
The language of
(Submitted April 19, 1994 -- Decided June 29, 1994.)
Appeal from the Court of Appeals for Cuyahoga County, No. 63755.
During the period of August 1, 1984 to August 1, 1985, Allied Fidelity Insurance Company (“Allied“), a company based in Indiana and licensed to conduct business in Ohio, provided malpractice insurance for plaintiff-appellant, Lake Hospital System, Inc. (“Lake“). Sometime in 1986 or 1987, the Marion (Indiana) Circuit Court (“the liquidating court“) deemed Allied insolvent. Thereafter, the liquidating court established December 1, 1987 as the final date on which creditors would be permitted to file claims against Allied‘s estate. Specifically, the liquidating court ordered:
“The ‘Bar Date’ for the filing of claims against the estate of [Allied] is established as December 1, 1987. Any person or entity wishing to make a claim of any sort against [Allied] shall by the Bar Date timely mail to the Liquidator *** a properly executed Proof of Claim, with supporting documentation, postmarked by not later than the Bar Date.”
On November 22, 1988, Lake was named as a new party defendant in a medical malpractice action that had been pending in the Cuyahoga County Common Pleas Court since November 1986. The malpractice action allegedly arose from medical care provided at Lake Hospital on June 30 and July 2, 1985. In December 1989, Lake contributed $233,950 in final settlement of its liability in
On July 18, 1991, Lake filed a motion to deem the claim of Lake Hospital System, Inc., timely filed with the Indiana liquidating court. That same day, the court granted Lake‘s motion, accepting Lake‘s claim as “timely filed under
In its complaint filed in the Cuyahoga County Court of Common Pleas, appellant alleged that its claim against OIGA constituted a “covered claim” as defined by
Both parties filed motions for summary judgment. In an opinion dated April 30, 1992, the trial court granted OIGA‘s motion and overruled Lake‘s. The court of appeals affirmed.
This cause is now before the court pursuant to the allowance of a motion to certify the record.
Reminger & Reminger Co., L.P.A., and Nicholas D. Satullo, for appellant.
Vorys, Sater, Seymour & Pease and F. James Foley, for appellee.
Alice Robie Resnick, J. In deciding this case, we must once again consider the extent of OIGA‘s liability as defined by
As this court recently stated in PIE Mut. Ins. Co. v. Ohio Ins. Guar. Assn. (1993), 66 Ohio St.3d 209, 611 N.E.2d 313, the General Assembly created the Ohio Insurance Guaranty Association Act (“the Act“) in an effort to protect insureds and third-party claimants from potentially catastrophic losses due to the insolvency of member insurers. When an insurer is deemed insolvent, OIGA steps into the shoes of that insurer, assuming all of the carrier‘s obligations to insureds and third-party claimants.
In the case at bar, appellant challenges OIGA‘s decision to reject the claim Lake presented for payment in 1989. OIGA based its denial upon the filing restrictions imposed by
“(1) Be obligated to the extent of the covered claims existing prior to the determination that an insolvent insurer exists and arising within thirty days after such determination ***. Notwithstanding any other provision of the Revised Code, the association shall not be liable to pay any claim filed with the association after the final date set by a court for filing claims in the liquidation proceedings of the insolvent insurer.” (Emphasis added.)
Appellant contends it complied with the filing deadline set forth in
As a starting point,
OIGA‘s review of a claim, however, does not end with the decision that it would have been covered by the insurance carrier‘s policy. OIGA must further consider whether the insured filed the claim within the prescribed period.
We have stated on numerous occasions that if the meaning of a statute is clear on its face, then it must be applied as it is written. Provident Bank v. Wood (1973), 36 Ohio St.2d 101, 65 O.O.2d 296, 304 N.E.2d 378. “To construe or interpret what is already plain is not interpretation but legislation, which is not the function of the courts.” Thompson Elec., Inc. v. Bank One, Akron, N.A. (1988), 37 Ohio St.3d 259, 264, 525 N.E.2d 761, 767, quoting Iddings v. Bd. of Edn. of Jefferson Cty. School Dist. (1951), 155 Ohio St. 287, 290, 44 O.O. 294, 295, 98 N.E.2d 827, 829. Appellant emphasizes that
Appellant urges this court to acknowledge a connection between the decision of the liquidating court to accept Lake‘s claim as timely filed and OIGA‘s application of
Few Ohio courts have had an opportunity to discuss this issue. One recent case, Lorain Cty. Commrs. v. United States Fire Ins. Co. (1992), 81 Ohio App.3d 263, 610 N.E.2d 1061, involved a fact pattern similar to the one now before us. In Lorain, the plaintiff filed a complaint seeking a determination that OIGA was obligated to reimburse the plaintiff for a claim presented after the bar date established by a New York liquidating court. In upholding OIGA‘s denial of the claim, the court of appeals relied heavily upon the trend in other jurisdictions to preclude recovery for late-filed claims, even for equitable reasons.
“By limiting the period in which claims may be submitted to OIGA to the period during which the liquidation proceedings are still open, the General Assembly has evidently intended to exclude those insureds whose rights to participate in the liquidation have lapsed.” Id. at 268, 610 N.E.2d at 1064, citing favorably Satellite Bowl, Inc. v. Michigan Prop. & Cas. Guar. Assn. (1988), 165 Mich.App. 768, 771, 419 N.W.2d 460, 462.
The Satellite Bowl decision involved a Michigan statute that closely resembled
Other jurisdictions with similar guaranty funds have also adopted the position that an insurance guaranty association need not honor a claim presented after the filing deadline set by a liquidating court. See Florida Ins. Guar. Assn., Inc. v. Garcia (Fla. App. 1993), 614 So.2d 684; Union Gesellschaft Fur Metal Industrie Co. v. Ill. Ins. Guar. Fund (1989), 190 Ill. App. 3d 696, 138 Ill. Dec. 21, 546 N.E.2d 1076; Kinder v. Pacific Pub. Carriers Co-Op, Inc. (1980), 105 Cal.App.3d 657, 164 Cal. Rptr. 567; Jason v. Superintendent of Ins. (1979), 67 App. Div. 2d 850, 413 N.Y.S.2d 17, affirmed (1980), 49 N.Y.2d 716, 425 N.Y.S.2d 804, 402 N.E.2d 143. Each of these decisions acknowledges the importance of placing reasonable limits on an association‘s liability. There must be some degree of finality to the liquidation proceedings. The allowance of delinquent claims would unnecessarily prolong distribution of the insolvent insurer‘s assets to the detriment of other claimants and the guaranty association. See Satellite Bowl, supra, at 772, 419 N.W.2d at 462.
This court realizes Lake could not have filed its claim before the December 1987 bar date since it was not named as a defendant in the malpractice action until 1988. Ignorance of a claim, however, is neither recognized nor forgiven by the terms of the statute. See Union Gesellschaft, supra, at 700, 546 N.E.2d at 1079; Jason, supra, at 851, 413 N.Y.S.2d at 18. The language of
The judgment of the court of appeals is accordingly affirmed.
Judgment affirmed.
Moyer, C.J., A.W. Sweeney, Douglas, Wright and F.E. Sweeney, JJ., concur.
Pfeifer, J., dissents.4
Thus, the General Assembly mandates that we liberally construe
A liberal construction of this phrase reveals that the appellant‘s claim was filed on time with OIGA. Appellant‘s claim filed with the Indiana liquidating court on July 18, 1991, was held by that court to be timely filed. Thus, the Indiana court effectively set the “final date” as July 18, 1991.
Appellant filed its claim with OIGA prior to July 18, 1991 final date. The majority‘s conclusion that the claim was filed after the final date is, therefore, in error.
I respectfully dissent.