727 N.E.2d 171 | Ohio Ct. App. | 1999
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *202
This timely appeal arises from a trial court decision granting Appellee's motion for summary judgment. Appellant argues that the trial court erred in granting the motion because her right to bring a claim did not accrue until after the Ohio Supreme Court decided the case of Girgis v. State FarmInsurance Company (1996),
On December 21, 1991, Appellant was operating her vehicle and proceeding west on Kirk Road near Redgate Lane when an unidentified driver proceeding in the opposite direction lost control of his car and swerved directly toward her. Appellant swerved her car in order to avoid the oncoming car and in doing so drove off of the roadway and struck a tree. Appellant suffered serious injuries requiring hospitalization.
At the time of the accident, Appellant was insured under an automobile insurance policy with Appellee. Neither party disputes the policy and amendatory endorsement in effect at the time of Appellant's accident. In addition to liability coverage, Appellant's policy with Appellee contained uninsured motorist coverage. The policy stated that uninsured motorist coverage would be provided to the insured if she was injured by the driver of an uninsured motor vehicle. An uninsured motor vehicle was described in relevant part as:
"[A] 'hit and run' motor vehicle which causes bodily injury to an insured by physical contact with: (1) such person; or (2) a vehicle the insured is occupying." Nationwide's Century II Auto Policy, page 14, Uninsured Motorist section, Definition provision 1(d).
The policy also contained an arbitration clause which provided that:
"If we and the insured disagree about the right to recover damages, or the amount of such damages* * *"
"* * *"
"5. [a]ny demand for arbitration must be made within two years after the date of the accident." Nationwide's Century II Auto Policy, page 15, Uninsured Motorist section, Arbitration provision 5.
The Amendatory Endorsement provides in relevant part: *203
"Under the Uninsured Motorists coverage, legal action against us must begin within two years or the time limit allowed for bodily injury or death actions in the state where the accident occurred, whichever is greater." General Policy Conditions, section 9.
On September 27, 1993, Appellant's counsel sent Appellee a letter regarding the accident and confirmed the fact that no physical contact occurred. Appellant's counsel indicated that the letter was intended to serve as notice that an uninsured motorist claim may be brought in the future depending upon the Ohio Supreme Court's decision as to the validity of the physical contact requirement. Appellant did nothing further for three years.
On March 6, 1996, the Ohio Supreme Court decided the case ofGirgis v. State Farm Mut. Auto. Ins. Co. (1996),
"(D) For the purpose of this section, a motor vehicle shall be deemed uninsured in either of the following circumstances:
"* * *
"(2) The identity of the owner and operator of the motor vehicle cannot be determined, but independent corroborative evidence exists to prove that the bodily injury, sickness, disease, or death of the insured was proximately caused by the negligence or intentional actions of the unidentified operator of the motor vehicle. For purposes of this division, the testimony of any insured seeking recovery from the insurer shall not constitute independent corroborative evidence, unless the testimony is supported by additional evidence."
On September 23, 1996, Appellant's counsel filed a claim for uninsured motorist coverage with Appellee. On November 6, 1996, Appellee denied the claim finding that Appellant had failed to demand arbitration or file suit against Appellant within the time limit mandated under the insurance policy.
On November 20, 1996, Appellant filed an action for declaratory judgment against Appellee in the Mahoning County Court of Common Pleas. The action described the accident, the insurance policy and the decision handed down by the Ohio Supreme Court in Girgis, supra. Appellant contended that Appellee's denial of the claim based upon the expiration of the two year limitation from the date of *204 the accident was arbitrary, unreasonable and contrary to Ohio law and the recent Girgis decision. Appellant requested that the court find her action timely as she did not have a right to bring an action until the Girgis decision. Appellee filed a timely answer and counterclaim for declaratory judgment asserting that the limitations period provided in the insurance policy barred Appellant's claims as the claim needed to be asserted within two years of the accident.
Both parties submitted motions for summary judgment and on May 9, 1997, the trial court overruled Appellant's motion and granted the motion of Appellee. The court found that Appellant's action began accruing on the date of the accident and that the Girgis case did not create a new period of accrual for those cases in which the accident and injuries occurred and were completed before the announcement of the decision. It is from this action that Appellant appeals.
In her sole assignment of error, Appellant contends:
"THE TRIAL COURT COMMITTED PREJUDICIAL ERROR IN FINDING THAT THE PLAINTIFF WAS REQUIRED TO FILE AN ACTION VERSUS DEFENDANT WITHIN TWO YEARS OF THE ACCIDENT, TO WIT: DECEMBER 21, 1993, EVEN THOUGH PLAINTIFF DID NOT HAVE A CAUSE OF ACTION AGAINST DEFENDANT AT THAT TIME."
Before addressing Appellant's assignment of error, we must question the language in the legal action limitations section of the instant insurance policy. The language under section nine of the General Policy Conditions in the Amendatory Endorsement of Appellee's policy regarding legal action limitations states that: "* * * legal action against us must begin within two years or the time limit allowed for bodily injury or death actions in the state where the accident occurred, whichever is greater." The Ohio Supreme Court has held similar policy language ambiguous and invalid. In Lane v.Grange Mut. Cos., the language of the insurance policy stated that an insured must bring an action against Grange "* * * within the time period allowed by the applicable statute of limitations for bodily injury or death actions in the state where the accident occurred." (1989),
The language of the instant policy appears ambiguous because the two year specification within which to bring legal action fails to state within two years of what event that legal action must occur. Further, the second part of the sentence is similar to that struck down in Lane. A court will interpret ambiguous words and phrases in an insurance contract against the drafter and in favor of the insured. Faruque v. Provident Life Acc.Ins. Co. (1987),
Even if this Court invalidated the legal action limitations language completely, the policy also contains an arbitration clause in the uninsured provision which clearly states that if a dispute exists about a right to recover damages, "[a]ny demand for arbitration must be made within two years after the date of the accident." Nationwide's Century II Auto Policy, page 15, Uninsured Motorist section, Arbitration provision 5. The Ohio Supreme Court has upheld a two-year limitation on bringing suit in an insurance policy. Miller v. ProgressiveCas. Ins. Co. (1994),
We also note that Appellant does not challenge the applicable law in effect at the time of her policy or question whether renewal of her policy constituted a new contract or a continuation of the previous policy. Appellant concedes that the policy and amendatory endorsement before us was in effect, the policy required actual physical contact for uninsured motorist coverage and concedes that the law at that time allowed such a condition precedent in insurance policies. (Appellant's Br. 2-3, 5). Appellant admits that prior to theGirgis decision, she did not have a right to bring a cause of action because the insurance provision regarding physical contact was binding upon her and no such contact existed between her and the uninsured driver.
Appellant contends that after the Ohio Supreme Court's holding in Girgis, supra, she acquired a cause of action because the "physical contact" requirement was held to be against public policy. Appellant submits that the Girgis decision applies to void the insurance policy provision in effect at the time of her accident in 1991 and thus to create a cause of action beginning after the decision in 1996.
In finding as a matter of law that Appellant's cause of action was time-barred, the trial court denied Appellant's motion for summary judgment and granted the summary judgment motion of Appellee. In reviewing summary judgment proceedings, the appellate court reviews the evidence de novo, but in the same manner as the trial court. Koos v. Cent. Ohio Cellular,Inc. (1994),
In asserting its motion for summary judgment. Appellee met the initial burden of showing that no genuine issue of material fact existed on the essential elements of Appellant's claims by providing the policy language containing the two year limitation within which to bring a legal action. Appellee also provided caselaw holding that contractual time limitations are as enforceable as legislatively-enacted statutes of limitations. Appellee concluded that because Appellant filed a cause of action five years after the accident occurred the action was not timely and it was entitled to judgment as a matter of law.
The burden then shifted to Appellant to point to specific facts showing that genuine issues of material fact existed on her claim that her cause of action was not subject to the two year limitation mandated by the insurance policy. However, Appellant failed to meet this burden on Appellee's motion for summary judgment and also failed to meet the initial burden on her own motion for summary judgment. Appellant does not argue that any facts are disputed. She agrees that this issue revolves entirely around the application of the law. Appellant asserted in her motions and asserts on appeal that the 1996Girgis decision should apply to render the physical contact language found in her 1991 insurance policy obsolete and the provision itself void as against public policy. According to Appellant, the issue is whether Girgis applies retroactively to her situation and whether this application causes her limitations period to run from the accrual of her cause of action under Girgis instead of from the date of the accident. Appellant's arguments in this respect are misplaced.
The Ohio Supreme Court, in Girgis, supra, does hold that automobile insurance policies requiring actual physical contact between an unidentified vehicle and the insured in order to recover uninsured motorist benefits violate public policy and are unenforceable.
The legislature subsequently amended R.C.
Appellant does not rely on statutory law but relies instead on caselaw to argue that her cause of action should not be subject to the two year limitation in the policy because she had no right to a cause of action until Girgis created one. Appellant cites Kraly v. Vannewkirk-State Farm Mut. Ins. Co.,
(1994),
In Kraly, the Kralys were injured on June 4, 1988 in an automobile accident between their vehicle and that of an insured tortfeasor. On December 26, 1989, the Kralys filed suit against the tortfeasor who had in effect a policy of automobile liability insurance. The Kralys also had in effect uninsured and underinsured motorist coverage through their own automobile insurer. The Kraly's policy provided that legal action must be brought within two years of the date of the accident. On February 12, 1990, three and one half months before the time limitations period expired, the Kralys learned that the tortfeasor's insurance company had become insolvent. The Kralys thereafter filed a claim with their insurance company for uninsured motorist coverage. The insurance company denied the claim on July 5, 1990, finding it untimely filed. On August 3, 1990, the Kralys tried to amend their original cause of action filed against the tortfeasor to include a claim against their own insurance company for uninsured motorist coverage. The trial court granted summary judgment for the insurer finding that the Kralys failed to bring the uninsured motorist claim within two years of the date of the accident.
In finding the two year limitation in the policy unreasonable, the Ohio Supreme Court held that:
* * *the validity of a contractual period of limitations governing a civil action brought pursuant to the contract is contingent upon the commencement of the limitations period on the date that the right of action arising from the contractual obligation accrues. Where the liability insurer of a tortfeasor has been declared insolvent, a right of action of an insured injured by the tortfeasor against his *208 insurer under the uninsured motorist provision of his automobile insurance contract accrues on the date that the insured receives notice of the insolvency. Accordingly, a provision in a contract of insurance which purports to extinguish a claim for uninsured motorist coverage by establishing a limitations period which expires before or shortly after the accrual of the right of action for such coverage is per se unreasonable and violative of the public policy of the state of Ohio as embodied in R.C.
3937.18 ." Kraly,69 Ohio St.3d at 635 .
In Kuhner, the insureds were injured in an automobile accident in 1987. The tortfeasor carried liability insurance in the amount of $50,000.00. The Kuhners carried their own liability and underinsured motorist coverage with limits of $100,000.00 per person and $300,000.00 per accident. Wanda Kuhner's injuries from the accident caused her condition to deteoriate over the years and her medical expenses increased as well. On December 11, 1991, the insureds sought the consent of their own insurance company to settle their claim with the tortfeasor's insurance company for $48,500.00 so that they could preserve their right to underinsured motorist coverage. The Kuhner's insurance company notified the Kuhners that they could not deny or approve any settlement as the Kuhners failed to timely notify them of an underinsured claim within two years of the accident as required in their policy. The Kuhners accepted the settlement and accepted another $25,000.00 from another driver involved in the accident, receiving a total of almost $75,000.00. The Kuhners filed a declaratory judgment action against their own insurance company for underinsured benefits and the trial court found in their favor.
The court of appeals upheld the trial court and relied onKraly to find the two year time limitation provision unrealistic when the policy also required exhaustion of all other forms of insurance before the insured accrued rights to payment for underinsurance motorist coverage. Kuhner,
We find Kraly and Kuhner distinguishable from the instant case. Not only are the cases factually dissimilar, but they also involve insureds who possessed otherwise viable claims against their insurers but who were unreasonably time barred from asserting the claims because of additional steps the policies required them to take before asserting a right. The circumstances causing these insureds to turn to their uninsured/underinsured motorists benefits were both outside of the control and outside of the immediate knowledge of the insureds. Appellant in the instant case did not possess an otherwise viable claim except to challenge the physical contact requirement of her policy, as Girgis did. Appellant had to undertake no further steps. She could have filed such a challenge within the statutory period as she possessed both control of the claim and the knowledge *209 that she needed to file under her uninsured motorists coverage. Further, while Kraly and Kuhner found two year limitation periods unreasonable, the cases do not overrule Miller and appear limited to policies requiring these mandated additional steps that could not possibly occur within two years of the accidents. Additionally, the Ohio Supreme Court distinguished underinsured from uninsured motorist coverage in Ross, supra at 285 and whileKraly involved a subsequent change in the law as in the instant case, the Ohio Supreme Court limited the case to its unique facts. Ross, supra at 285-286.
Appellant also attempts to assert that the facts ofGirgis are so similar to her own that Girgis should apply to allow her cause of action to accrue beyond the contractual limitations period in her insurance policy with Appellee. In both cases, the insureds were injured in one car accidents without physical contact with the other motorists. The uninsured provisions in both policies contained physical contact requirements as well as time limitations within which to file suit. However, one crucial difference exists betweenGirgis and the instant case. Although the insured's vehicle inGirgis did not have physical contact with the uninsured motorist, a lawsuit was filed within the insurance policy's time limitations to preserve the insured's rights and to challenge the enforceability of the physical contact requirement. Appellant in the instant case chose not to file, not to preserve her rights, and now wants to ride the coattails of the Girgis insureds who did comply with the limitations period within their policy.
Appellant cannot do so. From the language of the policy, Appellant did not have a claim her insurance company would recognize during the contractual limitations period because no "physical contact" existed to render the uninsured provision applicable. However, Appellant had available to her the same vehicle the Girgis insureds used if she believed she had a viable claim to challenge this requirement. Further, the contractual limitations period specifically stated in the arbitration clause that if a dispute over the right to recover damages existed between the insured and the insurer, the insured must demand arbitration and this demand must be made within two years of the accident. Appellant could have and should have preserved her claim to challenge the physical contact requirement under this provision.
The court in Veloski v. State Farm Mut. Auto. Ins. Co. (Sept. 10, 1998), Cuyahoga App. No. 74059, unreported, faced an issue similar to the issue that we face today. In that case, Kathleen Veloski was injured on July 14, 1992 when an unidentified driver ran her car off of the road. No contact occurred between Veloski's vehicle and that of the unidentified driver. Veloski had uninsured motorist coverage which provided that any arbitration or suit against the insurance company would be barred unless it was commenced within two years after the date of the accident. *210 On August 3, 1992, Veloski's attorney sent a letter to the insurance company relating the accident and injuries and acknowledging that no physical contact existed and that no claim would be made. On July 23, 1996, after the Ohio Supreme Court's decision in Girgis, Veloski's attorney wrote the insurance company requesting that her case be reopened. The insurance company denied the request and denied uninsured motorist coverage. After filing suit, the trial court granted the insurance company's motion for summary judgment.
Veloski argued on appeal that the two year limitation in the policy was contrary to public policy and that not tolling the limitations period violated the legislative purpose of uninsured motorist coverage to place an insured in the same position as if the tortfeasor was insured. The court of appeals upheld the granting of summary judgment for the insurance company and found that Veloski's claim was time-barred as it was not filed with the required two year period. Id.
The court found no authority to hold that the two year limitations period violated public policy and cited Miller,supra to find the two year period reasonable. Id. The court also held that the policy behind uninsured motorist coverage was not violated because even though Veloski no longer possessed a contractual claim against her insurance company, she still possessed a viable claim against the tortfeasor. Id.
In Squire v. Castle Ins. Co., the court also found that an insured's failure to preserve a claim within the two year contractual period of limitations in the insurance policy barred her from pursuing the claim when the law changed three years after her accident. (Dec. 13, 1996), Trumbull App. No. 96-T-5399, unreported. Although the issue was not the physical contact requirement at issue in the instant case, we agree with the rationale of the decision. The court found that most Ohio courts hold that a cause of action accrues on the date that the insured suffers an injury or discovers the injury. Id. The court further held that the accrual date will not be affected by the fact that the claim was not recognized under Ohio law on the date of the injury. Id., citing Village of Brady Lake v.City of Kent (Nov. 3, 1995), Portage App. No. 94-P-0047, unreported. The court stated that:
* * *a cause of action accrues when the injury occurs, even if the cause of action has not been recognized under Ohio law at that time. Moreover, if the running of the applicable statute of limitations ends before the cause of action is recognized, the cause of action of the injured party is extinguished and cannot be resurrected even after the cause of action is recognized. Id.
We agree with Veloski, supra, Squire, supra and adopt the holding in Carter v. American Aggregate Corp. (1992),
To allow a cause of action to extend years beyond the contractual time limitation would render contract provisions ineffective and discourage parties from entering into contracts. Further, it would allow insureds to "* * *sit on their claims indefinitely while waiting for the law to change."Veloski, supra. Accepting Appellant's assertions, we would not only have to allow her claim which actually occurred in 1991, five years before Girgis, but we would also have to allow every insured whose insurance policy contained an actual physical contact requirement to bring a claim, despite the many years which may have passed since their injury, despite the language of the policy and the legality of the policy at the time and despite an insured's failure to preserve his or her rights or to otherwise comply with the contractual provisions of the insurance policies. To allow such an occurrence "would eliminate any possibility of finality in old controversies or long-rejected insurance claims, and is simply not comparable to standard application of retroactivity of court decisions in other instances. The tolling of any statute of limitations in this manner, be it statutory or contractual, would in effect leave all unadjudicated controversies open for future lawsuits in the uncertain and even infinite future. This would entirely defeat the purpose of a statute of limitations as a mechanism to prevent fraudulent, stale, or lapsed claims from springing up after long intervals at a time when proper adjudication is no longer feasible." Motz v. Erie Ins. Co. (Mar. 12, 1996), Franklin Co. No. 95APE09-1144, unreported, citing generally,Douglas v. Corry (1889),
Additionally, in the cases that the Ohio Supreme Court has remanded for trial consistent with its Girgis decision, the insureds had filed claims within two year time limitation periods from the date of the accident or injury. See Wilburn v.Allstate Ins. Co. (Dec. 13, 1995), Butler App. No. CA94-06-135, unreported, affirmed and remanded (1996),
In Bobovnik v. Metropolitan Property and Cas. Ins. Co.,
Additionally, the letter from Appellant's counsel to Appellee on September 27, 1993 did not preserve Appellant's claim for uninsured motorist benefits. The letter was not a "legal action" so as to comply with the two year legal action limitations period and was not a demand for arbitration to determine Appellant's right to recover damages. The letter merely acknowledged that no physical contact existed and stated that a claim may be filed in the future. We find this insufficient.
We also find that the Peerless doctrine and our holding inLanza-Costlow v. State Farm Fire Cas. Co. (1996),
For all of the foregoing reasons, we find that the assignment of error advanced by Appellant is without merit. Accordingly, the trial court judgment is hereby affirmed.
Donofrio, J., concurs.
Vukovich, J., concurs.
______________________ CHERYL L. WAITE, JUDGE