Pallay v. Nationwide InsurancePallay v. Nationwide Insurance
{¶ 1} Appellant, Nationwide Mutual Insurance Company, appeals a decision of the Mahoning County Court of Common Pleas to grant summary judgment to appellee, John S. Pallay, in a claim involving underinsured-motorist (“UIM”) insurance benefits.
{¶ 2} The record reflects that appellee was a passenger in a vehicle being driven by his wife. Appellee’s wife caused an accident that resulted in injuries to appellee. Appellee and his wife were covered by an automobile insurance policy issued by Nationwide (the “Policy”). Appellee settled with Nationwide for the $100,000 liability limits of the Policy due to his wife’s liability for the accident. *244 Appellee then filed a complaint to recover $52,894.87 in UIM benefits to compensate him for the amount of a Medicare statutory lien he was obligated to pay out of the proceeds of the settlement.
{¶ 3} The trial court ruled, pursuant to
Littrell v. Wigglesworth
(2001),
PROCEDURAL HISTORY
{¶ 4} This appeal involves what purports to be a review of a summary-judgment motion, but in reality is a review of a decision on a motion to dismiss. Although the trial court did grant summary judgment to appellee, there are no established facts of record in this case. The only “facts” referred to by the parties have been assumed for the sake of argument. Therefore, factual allegations in this matter must be viewed in the light of the aforementioned caveat.
{¶ 5} According to the complaint, appellee was injured in an automobile accident in Colorado on March 6, 1998. His wife, Giselle Pallay, was driving. Appellee was a passenger in the vehicle. Appellee and his wife owned and were the named insureds on a personal automobile liability insurance policy issued by Nationwide. The Policy had bodily injury liability limits of $100,000 per person and $300,000 per occurrence. The Policy also provided $100,000/$300,000 in UIM coverage.
{¶ 6} On December 19, 2002, appellee filed a complaint in the Mahoning County Court of Common Pleas. The complaint stated that appellee had incurred more than $73,000 in medical bills, of which $52,894.87 had been paid by Medicare and was subject to a federal statutory lien. Appellee also alleged that he had received the $100,000 policy liability limit in a settlement with Nationwide, but that he reserved his right to pursue UIM benefits under the Policy. A copy of the “Release and Settlement” of the claim was attached to the complaint.
{¶ 7} On March 4, 2003, Nationwide filed a
{¶ 8} Instead of directly responding to this motion, on March 25, 2003, appellee filed a “Memorandum in Opposition to Summary Judgment.” Appellee requested that the court convert the
{¶ 9} On March 27, 2003, Nationwide filed a “Reply Brief in Support of Motion to Dismiss.” The brief also opposed appellee’s motion for summary judgment. No new arguments were presented.
{¶ 10} On November 13, 2003, the trial court overruled Nationwide’s motion to dismiss.
{¶ 11} On November 13, 2003, in a separate judgment entry, the trial court overruled appellee’s motion for summary judgment.
{¶ 12} On November 24, 2003, Nationwide filed a brief in opposition to appellee’s motion for summary judgment, apparently not realizing.that the court had already ruled on the motion.
{¶ 13} On February 3, 2004, appellee filed a motion for reconsideration of the court’s decision not to grant appellee summary judgment. Appellee simply cited Littrell again and concluded that judgment should be rendered in his favor.
{¶ 14} On February 4, 2004, Nationwide also filed a motion for reconsideration. Nationwide argued that the case could be settled on the matters of law raised in Nationwide’s prior filings.
{¶ 15} On March 2, 2004, the trial court granted the motions for reconsideration. The court then ruled that Littrell governed the outcome of the case, and granted summary judgment to appellee in the amount of $52,894.87.
{¶ 16} Nationwide filed a timely appeal on March 15, 2004.
*246 ASSIGNMENT OF ERROR
{¶ 17} “The trial court erred when it overruled Nationwide’s motion to dismiss and granted Pallay’s motion for summary judgment.”
{¶ 18} Nationwide’s arguments are primarily aimed at reversing the trial court’s decision to overrule its
{¶ 19} When reviewing a judgment on a
{¶ 20} Summary judgment is also reviewed under a de novo standard of review. In accordance with
{¶ 21} If the moving party meets its initial burden of production, the nonmov-ing party bears a reciprocal burden to produce evidence on any issue for which
*247
that party bears the burden of proof at trial.
Dresher, 75
Ohio St.3d at 293,
{¶ 22} Nationwide presents three subissues for our review under its sole assignment of error.
{¶ 23} “1. Pallay cannot recover the full per person limit under the liability and UM/UIM coverage of his own policy.”
{¶ 24} Nationwide argues that the Policy does not contemplate a situation in which an insured may be able to collect the maximum limit of liability coverage and also collect UIM benefits above and beyond that maximum amount, which in this case is $100,000. The Policy contains a “Limits of Payment” section, as part of UM/UIM provisions, that states: “The limits of this coverage will be reduced by any amount paid by or for any liable party.” Nationwide asserts that this unambiguous limitation prevents appellee from using the UIM provisions to collect more than the $100,000 per person limit of the Policy.
{¶ 25} Appellant cites only one case under this subissue. The case is
Viccar-one v. Colonial Penn Ins. Co.
(Feb. 23, 1995), 8th Dist. No. 66822,
{¶ 26} The issue at the heart of this subissue is usually referred to as intrapolicy stacking, which refers to an attempt to obtain multiple coverage from two distinct sections of the same insurance policy. The Savoie case had held that antistacking provisions in an auto insurance policy could not be enforced if the insured paid separate premiums for the separate coverages. According to Savoie, the payment of separate premiums meant that coverages could be stacked, one on top of the other, even if the policy contained antistacking language.
{¶ 27} When the legislature revised
{¶ 28} “Section 9. It is the intent of the General Assembly in amending division (G) of
{¶ 29} The antistacking provision,
{¶ 30} “Any automobile liability or motor vehicle liability policy of insurance that includes coverages offered under division (A) of this section or selected in accordance with division (C) of this section may, without regard to any premiums involved, include terms and conditions that preclude any and all stacking of such coverages, including but not limited to:
{¶ 31} “(1) Interfamily stacking, which is the aggregating of the limits of such coverages by the same person or two or more persons, whether family members or not, who are not members of the same household;
{¶ 32} “(2) Intrafamily stacking, which is the aggregating of the limits of such coverages purchased by the same person or two or more family members of the same household.” (Emphasis added.)
{¶ 33} Although uncodified Section 9 to Am.Sub.S.B. No. 20 does not specifically say that intrapolicy antistacking provisions will be permissible, it is clear from the “including but not limited to” language, and from the legislature’s sharp rejection of the Savoie decision, that intrapolicy antistacking in an auto insurance policy would be permitted under the revised statute.
{¶ 34} Then, in the revisions to
{¶ 35} “(K) As used in this section, ‘uninsured motor vehicle’ and ‘underinsured motor vehicle’ do not include any of the following motor vehicles:
{¶ 36} “(1) A motor vehicle that has applicable liability coverage in the policy under which the uninsured and underinsured motorist coverages are provided.”
{¶ 37} This new provision not only allows for an auto insurance policy to include intrapolicy antistacking, it appears to require such language. Pursuant to the statute, if a policy provides liability coverage for an automobile, it cannot also provide UM7UIM coverage for that same vehicle. The parties appear to agree that the Am.Sub.H.B. No. 261 version of the statute is the one that applies to the instant case.
*249
{¶ 38} Appellee has not presented any case law or theory that would prohibit Nationwide from enforcing its intrapolicy antistacking clause or that would contradict the effect of
{¶ 39} For this reason alone, the trial court judgment must be reversed and judgment entered in favor of Nationwide on its
{¶ 40} “2. Any obligation to reimburse medicare for payments made for medical expenses incurred by Pallay should not be set-off from the $100,000 in determining the amount available for payment.”
{¶ 41} This argument is based on
{¶ 42} “Underinsured motorist coverage, which shall be in an amount of coverage equivalent to the automobile liability or motor vehicle liability coverage and shall provide protection for insureds thereunder against loss for bodily injury, sickness, or disease, including death, suffered by any person insured under the policy, where the limits of coverage available for payment to the insured under all bodily injury liability bonds and insurance policies covering persons liable to the insured are less than the limits for the insured’s uninsured motorist coverage. Underinsured motorist coverage is not and shall not be excess insurance to other applicable liability coverages, and shall be provided only to afford the insured an amount of protection not greater than that which would be available under the insured’s uninsured motorist coverage if the person or persons liable were uninsured at the time of the accident. The policy limits of the underinsured motorist coverage shall be reduced by those amounts available for payment under all applicable bodily injury liability bonds and insurance policies covering persons liable to the insured.” (Emphasis added.) (Am.Sub. H.B. No. 261, effective Sept. 3,1997.)
{¶ 43}
{¶ 44} In
Clark v. Scarpelli
(2001),
*250 {¶ 45} “[W]e construe the ‘amounts available for payment’ language inR.C. 3937.18(A)(2) , as amended by S.B. 20, as requiring a comparison between the amounts that are actually accessible to the injured claimant from the tortfeasor’s automobile liability insurance carrier and the injured claimant’s own underin-sured motorist coverage limits. The phrase ‘amounts available for payment’ means just that. In other words, it means those amounts the insured actually recovers from a tortfeasor whose liability policy is subject to the claim of the insured and also to the claims of other injured persons.” Id. at 276,744 N.E.2d 719 .
{¶ 46} In
Littrell v. Wigglesworth,
{¶ 47} “(in) Subrogation rights
{¶ 48} “The United States shall be subrogated (to the extent of payment made under this subchapter for such an item or service) to any right under this subsection of an individual or any other entity to payment with respect to such item or service under a primary plan.” Section 1395y(b)(2)(B)(iii), Title 42, U.S.Code.
{¶ 49} Littrell held:
{¶ 50} “As a preliminary matter, we hold that expenses and attorney fees are not part of the setoff equation. Such fees are an expense of an insured and should not act, in order to increase underinsured motorist benefits, to reduce the ‘amounts available for payment’ from the tortfeasor’s automobile liability carrier. Conversely, a statutory subrogation lien to Medicare should be considered when determining the amounts available for payment from the tortfeasor. Such a lien is not an expense of an insured.” (Emphasis added.) Id.,91 Ohio St.3d at 434 ,746 N.E.2d 1077 .
{¶ 51} Although this quotation from
Littrell
appears to make a sweeping conclusion about Medicare liens in the context of UIM benefits, there really is very little discussion about the topic in the
Littrell
opinion. It is necessary to examine the context of
Littrell
to understand how the Supreme Court came to its conclusion.
Littrell
actually involved three separate UIM cases, one of which was
*251
Karr v. Borchardt
(2001),
{¶ 52} Three of the survivors attempted to collect UIM benefits from three separate insurance policies. The insurance company attempted to reduce the UIM limits of each policy by $20,000, based on the “amounts available for payment” language of
{¶ 53} The
Littrell
opinion determined that attorney fees incurred in order to obtain UIM benefits were an expense of the insured, and could not be deducted from the “amounts available for payment” calculation.
Littrell
also concluded, without any further comment or analysis, that a Medicare lien was not an expense of the insureds and that each of the three wrongful death UIM claimants could deduct their pro rata share of the Medicare lien from the “amounts available for payment” calculation. Id.,
{¶ 54} The actual holding in
Littrell
was that “a statutory subrogation lien to Medicare should be considered” when interpreting the language of
{¶ 55} This court has recently interpreted
Littrell
to mean that a Medicaid lien (similar to a Medicare lien) would not reduce the “amounts available for payment” calculation if the insurance policy in question is the decedent’s own insurance policy.
Mid-American Fire & Cas. Co. v. Broughton,
{¶ 56} Appellee argues that this court’s Broughton decision was based on the specific facts of the case and that the facts of the instant case are quite different. In Broughton, the victim was considered to be an insured under his mother’s auto insurance policy. The tortfeasor had $20,000 in liability coverage, while the UIM provisions of the victim’s policy provided $300,000 of coverage per accident. The insurance company filed a declaratory-judgment action, claiming that their maximum exposure for UIM coverage was $280,000. The mother and the victim’s sister argued that there was more than $280,000 in coverage because funeral and headstone expenses should have been deducted from the $20,000 “amounts available for payment” calculation. They argued that funeral and headstone expenses were similar to the Medicare lien discussed in Littrell. In a split decision, this court disagreed with the mother and sister and held:
{¶ 57} “The parties base their dispute on the distinction
Littrell
drew between attorney fees and the statutory subrogation lien, arguing that funeral and headstone expenses are either more or less like statutory liens or attorney fees. For instance, appellants argue that the funeral and headstone expenses are more like a statutory subrogation lien because a court ordered that they be paid from the settlement, and appellees contend that those expenses are more like attorney fees because they are incurred after death. But what the parties fail to realize is that there is no real distinction between attorney fees, a statutory lien, or the funeral and headstone expenses when these expenses are considered in the abstract. Each is an expense of an insured. The salient question is which insured? For instance, if the decedent’s estate seeks underinsured motorist benefits, then both a Medicaid lien and the funeral and headstone expenses would be expenses of that particular insured. On the other hand, if the insured is a statutory wrongful death beneficiary insured under a distinct insurance policy, then the expenses of the estate noted above would not be an expense of the separately insured beneficiary. This second situation was the fact pattern in
Littrell.” Broughton,
{¶ 58} Appellee argues that in Broughton we reached our conclusion only because the insurance policy’s UIM provision did not provide a mechanism to *253 divide the UIM benefits between the mother, the sister, and the victim’s estate. The UIM provision in Broughton was “per accident” and not “per person.” Although there is some discussion of this in Broughton, it is not particularly relevant to our conclusion. The fundamental holding in Broughton is that a Medicaid lien should not act to increase the UIM benefits of the person who actually incurred the expenses giving rise to the lien. A Medicaid lien is an expense of the injured party, or as was the case in Broughton, the deceased party, and thus could not be used to reduce the “amounts available for payment” calculation, which reduction would in turn increase the potential maximum UIM benefits. According to Broughton, though, a Medicaid lien is not an expense of a wrongful-death beneficiary making a claim under a separate insurance policy.
{¶ 59} In the instant case, appellee is the policyholder, as well as the victim and the UIM claimant. The medical expenses he incurred were his own, and the Medicare lien that he is liable to pay is based on his own expenses. In our consideration of how appellee’s Medicare lien should be treated in this case, we rely on the reasoning in Littrell and Broughton and conclude that appellee is not permitted to increase his potential UIM benefit by deducting the Medicare lien from the “amounts available for payment” calculation.
{¶ 60} This same conclusion has been reached in other districts.
Mathis v. Am. Commerce Ins. Co.,
8th Dist. No. 83433,
{¶ 61} Based on the reasoning set forth above, appellee is not entitled to set off his Medicare lien from “amounts available for payment” calculation under his own insurance policy for injuries he himself sustained, and, thus, he is not entitled to any UIM benefits.
{¶ 62} “3. Pallay is not an underinsured motorist as the amount for payment from the tortfeasor is $100,000 and Nationwide has identical underinsured motorists limits.”
{¶ 63} Nationwide’s argument here is only a rewording of what appears in the previous subissue, involving the interpretation of the phrase “amounts available for payment” in
{¶ 64} “1. An uninsured motor vehicle is:
{¶ 65} “a) one for which there is no bodily injury liability bond or insurance at the time of the accident.
{¶ 66} “b) one which is underinsured. This is a motor vehicle for which bodily injury liability coverage or bonds are in effect; however, their total amount is less *254 than the limits of this coverage. See the Declarations for those limits.” (Boldface sic.)
{¶ 67} (Policy, p. 14.)
{¶ 68} Even more important, the Policy states:
{¶ 69} “2. We will not consider as an uninsured motor vehicle:
{¶ 70} “ * * *
{¶ 71} “e) any motor vehicle insured under the liability coverage of this policy.”
{¶ 72} Under the Policy, an uninsured vehicle encompasses the definition of underinsured vehicle, and an uninsured vehicle cannot be one that is covered under the liability section of the Policy. Based on this simple analysis, appellee cannot receive UIM benefits, because the automobile in which he sustained his injuries was covered under the liability section of the Policy.
CONCLUSION
{¶ 73} It is clear from the record and the cited case law that appellant has at least three reasons for prevailing in this appeal. First, the Policy contains a valid antistacking clause that reduced UIM coverage by any amount paid out under the liability portion .of the Policy. Second, the Littrell case does not allow the person who incurred the injuries to use a Medicare lien to increase his or her UIM benefits under that person’s own automobile insurance policy. Third, appellee’s vehicle cannot be treated as an underinsured motor vehicle under the definitions contained within the Policy. Therefore, the decision of the Mahoning County Court of Common Pleas is reversed, and judgment is entered in favor of appellant, Nationwide Insurance Company.
Judgment reversed.