2004 Ohio 1911 | Ohio Ct. App. | 2004
{¶ 2} On July 5, 2000, Robert Sarka ("Sarka") was traveling to Toledo with his wife and daughter when their vehicle was struck by a motor home. Sarka and his daughter were killed in the accident. He was employed as a sales representative for Time Warner, Inc. ("Time Warner"), and was on his way to a business meeting in Toledo.1
{¶ 3} After the driver of the motor home offered his liability limits of $25,000, the estate sought underinsured motorist ("UIM") benefits and commenced this suit against Sarka's personal insurance carrier, Lightning Rod Mutual, his employer's primary insurance carrier, Travelers Indemnity Company, and his employer's umbrella insurance carrier, AIU. The estate settled with Lightning Rod Mutual for $6,000 and with Travelers Indemnity for $750,000. The AIU policy provided for $25,000,000 in automobile liability coverage and, after AIU denied any coverage, both the estate and AIU moved for summary judgment.
{¶ 4} In its motion, the estate argued that Sarka was an insured under the policy because he was acting in the course and scope of his employment at the time of the accident.2
Further, the estate contended that because AIU failed to execute a valid written offer/rejection of UIM benefits in accordance with the requirements of Gyori v. Johnston Coca-Cola BottlingGroup, Inc.,
{¶ 5} In granting AIU's motion, the trial court found that New York had the most significant contacts and that, based on the overwhelming number of vehicles garaged in New York, AIU and Time Warner understood New York to be the principal location of the insured risk. By applying New York law, the trial court further held that the estate was barred from recovering UIM benefits from AIU.
{¶ 6} The estate appeals, raising two assignments of error. In its first and second assignments of error, the estate argues that the trial court erred by granting AIU's motion for summary judgment and denying its motion.
{¶ 7} Appellate review of summary judgments is de novo.Grafton v. Ohio Edison Co. (1996),
{¶ 8} The party moving for summary judgment bears the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Dresher v.Burt (1996),
{¶ 10} We initially note that contrary to the estate's contention, Henderson does not render Ohayon and choice-of-law principles inapplicable to the instant case. InHenderson, the Ohio Supreme Court found that R.C.
{¶ 11} Additionally, we find the estate's argument that there is no conflict between Ohio and New York law lacks merit. Absent a valid written offer/rejection of UM/UIM coverage, R.C.
{¶ 12} The Ohio Supreme Court in Ohayon held that an action by an insured against his or her insurance carrier for payment of UM/UIM benefits is a cause of action sounding in contract, rather than tort; thus, questions involving the nature and extent of the parties' rights and duties under an insurance contract's UM/UIM provisions shall be determined by the law of the state selected by applying Sections 187 and 188 of the Restatement of the Law 2d, Conflict of Laws (1971). (1 Restatement of the Law 2d, Conflict of Laws [1971], Section 205, applied.)
{¶ 13} Section 188's choice-of-law methodology focuses on the place of contracting, the place of negotiation, the place of performance, the location of the subject matter, and the domicile of the contracting parties. Id. at 479. These contacts, however, are not equally important for a choice-of-law determination. Rather, "these contacts are to be evaluated according to their relative importance with respect to the particular issue." 1 Restatement of the Law 2d, Conflict of Laws [1971], Section 188.
{¶ 14} In insurance cases, the most significant contact is the location of the subject matter, i.e., location of the insured risk. Specifically, the Ohayon court noted that the rights created by an insurance contract should be determined "by the local law of the state which the parties understood was to be the principal location of the insured risk during the term of the policy, unless with respect to the particular issue, some other state has a more significant relationship * * * to the transaction and the parties." Ohayon, supra, at 479, citing, Restatement at 610, Section 193.
{¶ 15} When addressing this issue, the majority of Ohio courts, including this court, "have primarily focused on whether the insurance policy covers vehicles that are principally garaged in Ohio, finding Ohio law will apply if such vehicles are covered by the policy." Pitsenbarger v. Foos, Miami App. Nos. 2003-CA-22, 2003-CA-26, 2003-CA-27, 2003-Ohio-6534, ¶ 54, citingVohsing v. Federal Ins. Co., Licking App. No. 2002-CA-00101, 2003-Ohio-2511; Glover v. Smith, Hamilton App. Nos. C-020192, and C-020205, 2003-Ohio-1020; Moore v. Kemper Ins. Co., Delaware App. No. 02CAE04018, 2002-Ohio-5930; Edmondson v.Premier Indus. Corp., Cuyahoga App. No. 81132, 2002-Ohio-5573,Amore v. Grange, Richland App. No. 02CA70, 2003-Ohio-3207;Garcia v. Green, Lucas App. L-02-1351, 2003-Ohio-3841. See, also, McDonald v. Williamson, Cuyahoga App. No. 81590, 2003-Ohio-6606; Acree v. CAN Ins. Cos., Hamilton App. No. C-020710, 2003-Ohio-3043.
{¶ 16} Similarly, when the policy was contracted and negotiated in another state and no vehicles were contemplated to be principally garaged in Ohio, courts have refused to apply Ohio law. Pitsenbarger, supra, at ¶ 54, citing Varecka v. Doe, Warren App. No. CA2002-06-053, 2003-Ohio-817; Hofle v. Gen.Motors Corp., Warren App. No. CA2002-06-062, 2002-Ohio-7152;Misseldine v. Progressive Cas. Ins. Co., Cuyahoga App. No. 81770, 2003-Ohio-1359. See, also, Foster v. Motorists Ins. Co., Mercer App. No. 10-03-07, 2004-Ohio-1049 (applying Texas law because policy negotiated and delivered in Texas and the only covered vehicles were principally garaged in Texas).
{¶ 17} However, some courts have refused to find that the location of the insured risk was Ohio even when the policy covered vehicles registered and garaged in Ohio and the vehicle was insured under the policy. See, e.g., Humbert v. United OhioIns. Co.,
{¶ 18} We decline to adopt this approach. Indeed, this court in McDonald, supra, recently explained:
"Where nationwide coverage is provided, the policy'slegitimate expectation is that the site of the insured risk ismore significant than the insurer's residence or the place ofnegotiation. When a large insurer issues a policy designed toapply nationwide, it has no legitimate expectation that the lawof its residence will apply in other states." Id. at ¶ 22.
{¶ 19} Applying this reasoning and Ohayon to the instant case, we find that Ohio law applies. Here, AIU insured 834 vehicles in Ohio. Furthermore, Robert Sarka's vehicle was registered and garaged in Ohio and it was covered under the policy because he was within the course and scope of his employment at the time of the accident. Although the policy was negotiated and delivered in New York, we find the location of the insured risk is more significant especially since there is nothing in the policy's terms indicating that AIU believed New York law would apply.
{¶ 20} Furthermore, while AIU is incorporated in New York, Time Warner is incorporated in Delaware with offices across the country, including Ohio. Moreover, as recognized by this court inMcDonald, the policy's nationwide coverage "defeats" AIU's claim that New York contacts are significant.
{¶ 21} Finally, although the inclusion of an "Ohio Uninsured Motorist Coverage Option Form" is not an enumerated factor for determining choice of law under the Restatement, it is nonetheless relevant as to the parties' intent to be bound by Ohio law. See, e.g., Garcia, supra, at ¶ 24, citing Vohsing, supra, at ¶ 26; Amore, supra, at ¶ 25; Glover, supra, at ¶ 8; and Horston v. Pfannenschmidt, Jefferson App. No. 02-JE-3, 2002-Ohio-7379, at ¶ 13.
{¶ 22} Accordingly, we find that the trial court erred by applying New York law and granting AIU's motion for summary judgment.
{¶ 23} The estate's first assignment of error is sustained.
{¶ 25} As stated above, it is undisputed that Sarka was an insured under the policy because he was in the course and scope of his employment at the time of the accident.4 Moreover, AIU has not challenged that its "Ohio Uninsured Motorists Coverage Option Form" failed to comply with the requirements ofLinko, supra. Thus, applying the relevant version of R.C.
{¶ 26} Accordingly, we find that the estate is entitled to UIM coverage and, thus, the second assignment of error is sustained.
{¶ 27} Judgment reversed and case remanded for further proceedings consistent with this opinion.
Gallagher and Calabrese, Jr., JJ., concur.
It is, therefore, considered that said appellants recover of said appellees the costs herein.
It is ordered that a special mandate be sent to the Cuyahoga County Court of Common Pleas to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure.
