774 N.E.2d 316 | Ohio Ct. App. | 2002
{¶ 2} Facts and procedural history relevant to the issues raised on appeal are as follows. On December 31, 1998, David Shindollar's daughter, Sarah, was seriously injured while a passenger in a motor vehicle. The negligent tortfeasor's insurer, State Farm Insurance, paid Sarah the policy's $100,000 per person liability coverage limit.
{¶ 3} At the time of the accident, Sarah Shindollar was a minor and resided with her parents. The Shindollar family was insured under two policies issued by Erie: a $250,000 per person and $500,000 per accident automobile liability policy with uninsured and underinsured ("UM/UIM") coverage selected at lower limits of $100,000 per person and $300,000 per accident; and a $1,000,000 personal catastrophe policy with a signed UM/UIM rejection form. Appellees submitted UM/UIM claims under the foregoing policies. Erie declined coverage, contending UM/UIM coverage was not available under the personal catastrophe policy and that recovery under the automobile policy was precluded due to the $100,000 Appellees received from the tortfeasor's insurance provider, which was set off from the policy's $100,000 per person coverage limits.
{¶ 4} In January 2001, Appellees filed a declaratory judgment action seeking a determination as to their rights to UM/UIM coverage under the Erie policies. Thereafter, both sides moved for summary judgment. Appellees claimed that they were entitled to additional UM/UIM coverage and compensation under the policies as a matter of law, arguing that the offers and rejections of UM/UIM coverage contained therein were deficient and that UM/UIM coverage should be implied up the liability limits of each policy. Erie argued that the offer and rejections contained therein were adequate and that the rejections were knowing and voluntary, citing the fact that David Shindollar was an insurance agent who understood UM/UIM coverage and had participated in the execution of the automobile policy.
{¶ 5} On November 13, 2001, the trial court granted Appellees' motion, finding that the limited rejection in the automobile policy and the rejection form addressing the personal catastrophe policy were invalid and that UM/UIM coverage would therefore be implied in the amount of the underlying liability limits of each policy. The instant appeal followed, with Erie presenting a single assignment of error for our consideration.
{¶ 6} For its assignment of error, Erie argues that the trial court erred in granting summary judgment "where the insured was an insurance agent and it *540 was discernible from the four corners of the insuring agreements that the insured had knowingly and expressly selected lower UM/UIM coverage on the automobile liability policy and had expressly rejected UM/UIM coverage on an umbrella policy."
{¶ 7} Summary judgment is appropriate when, looking at the evidence as a whole, the record demonstrates: (1) that no genuine issue of material fact remains to be litigated; (2) that the moving party is entitled to judgment as a matter of law, and; (3) that, after construing the evidence most strongly in the nonmovant's favor, reasonable minds can come to but one conclusion, and that conclusion is adverse to the party against whom the motion for summary judgment is made.1 In ruling on a summary judgment motion, the trial court is not permitted to weigh evidence or choose among reasonable inferences; rather, the court must evaluate evidence, taking all permissible inferences and resolving questions of credibility in favor of the nonmovant.2 Appellate review of summary judgment determinations is conducted de novo.3 Accordingly, this Court considers the motion independently and without deference to the trial court's findings.4
{¶ 8} Pursuant to R.C.
{¶ 9} The automobile policy herein was initiated on June 27, 1985. Counting successive two-year policy periods therefrom, the last renewal was June 27, 1997, prior to the September 3, 1997 effective date of the 1997 amendments to *541
R.C.
{¶ 10} "The trial court concluded that in enacting the amendment,the General Assembly intended to reject Gyori except for the portion thatit adopted or modified (rejection must be in writing, but need not beexecuted prior to the effective date of the policy) and, by creating apresumption of a valid offer from a written rejection, eliminate all ofthe Linko requirements.
{¶ 11} "The trial court is correct with respect to Gyori. TheLegislature clearly considered that case and acted to accept that arejection of UM/UIM coverage must be in writing and, tacitly by itscreation of a presumption, that there must be an offer of coverage. TheGeneral Assembly deleted the Gyori requirement that the coverage rejection must come prior to the effective date of the policy.
{¶ 12} "However, the General Assembly could not have intended to directly negate the holding of Linko if for no other reason than that theamendment at issue predates Linko by three years.[3] Consequently, evenafter the 1997 amendment, there is vitality to the Linko requirements.Pillo v. Stricklin (Dec. 31, 2001), Stark App. No. 2001CA00204, unreported.
{¶ 13} [FN3] Additionally, the legislature specifically addressesLinko in a 2001 amendment to R.C.
{¶ 14} Accordingly, we proceed to determine whether Erie made a sufficient offer of UM/UIM coverage.
{¶ 15} In Gyori the Ohio Supreme Court held:
{¶ 16} "1. There can be no rejection pursuant to R.C.
{¶ 17} "2 In order for a rejection of uninsured motorist coverageto be expressly and knowingly made, such rejection must be in writing andmust be received by the insurance company prior to the commencement ofthe policy year"13
{¶ 18} The Court also concluded that "[t]he mandates of R.C.
{¶ 19} Erie argues that, as an insurance agent charged with the duty of understanding and explaining available coverages to his customers,18 David Shindollar should be treated as a special class of insureds and exempted from the mandates of R.C.
{¶ 20} In Gyori, the Johnston Coca-Cola Bottling Group ("Johnston"), a sophisticated commercial buyer, had a policy of rejecting UM/UIM coverage when it was legally possible to do so and actively sought to minimize its insurance costs by making a knowing and express rejection of UM/UIM coverage. Consistent with company policy, John Rains, Risk Manager for Johnston and the person primarily responsible for procuring insurance for the company, enlisted the company's insurance broker to draft specifications and request bids for insurance rejecting or opting for minimally required coverage. In response thereto, National Union Fire Insurance Company prepared a policy, which excluded coverage but did not contain a rejection form. The broker discussed with Rains the coverages available, including UM/UIM, and then compared bids for the best price, eventually selecting the National Union policy. Upon appellate review, the court found that, despite the lack of a written offer or rejection, "[t]he undisputed facts * * * amply demonstrate that Johnston was well aware of the availability of UM coverage, understood it and made an informed and knowledgeable waiver of that coverage."19 Nevertheless, upon further review, the Ohio Supreme Court held that "however express and knowing Johnston's actions were, they could notconstitute a rejection because there was no offer made which Johnstoncould reject."20
{¶ 21} Moreover, when presented with the question of whether a signatory's intent could be established by extrinsic evidence or whether the four corners of the insurance agreement control in determining whether a named insured's waiver was knowingly and expressly made, theLinko court expounded upon Gyori, holding:
{¶ 22} "We conclude that the four corners of the insuranceagreement control in determining whether the waiver was knowingly andexpressly made by each of the named insureds. Again, we cite Gyori, whichrequires a written offer and a written rejection of UM/UIM coverage. InGyori this court made it clear that the issue of whether coverage wasoffered and rejected should be apparent from the contract itself. Thiscourt stated that the requirement of written offers "will preventneedless litigation about whether the insurance company offered UMcoverage." By requiring an offer and rejection to be in writing, thiscourt impliedly held in Gyori that if the rejection is not within thecontract, it is not *544 valid. In doing so, this court greatly simplified the issue of proof inthese types of cases — the offer and rejection are either there orthey are not. Extrinsic evidence is not admissible to prove that awaiver was knowingly and expressly made by each of the namedinsureds."21
{¶ 23} Therefore, David Shindollar's familiarity with or personal understanding of UM/UIM coverage is irrelevant to the determination of whether there has been a sufficient offer or rejection of UM/UIM coverage, and extrinsic evidence of his knowledge and experience is inadmissible for purposes of establishing the adequacy of Erie's offer or that coverage was knowingly and expressly waived. Accordingly, we proceed to examine the contents of the subject insurance agreements.
{¶ 24} The rejection form in Linko read:
{¶ 25} "Ohio Revised Code Section
{¶ 26} "Unless you have previously rejected this coverage, yourpolicy has been issued to include Uninsured/Underinsured MotoristsInsurance coverage at limit(s) equal to the policy bodily injuryliability limit(s)."22
{¶ 27} Reviewing this language, the court found that the "alleged offer is complete only in its incompleteness. It does not describe the coverage, does not list the premium costs of UM/UIM coverage, and does not expressly state the coverage limits."23
{¶ 28} As mentioned previously, the automobile policy herein provides bodily injury liability coverage in the amount of $250,000 per person and $500,000 per accident. However, UM/UIM coverage was selected in the amount of $100,000 per person and $300,000 per accident, which is lower than the limits of liability coverage. The portions of the application relating to UM/UIM coverage provide:
{¶ 29} Uninsured/Underinsured Motorists
{¶ 30} Bodily Injury Per Person/Per Accident
{¶ 31} " $15/30
{¶ 32} _________________________ *545
{¶ 33} See Item 23 on reverse side.
{¶ 34} Item 23 provides:
{¶ 35} REJECTION OF UNINSURED/UNDERINSURED MOTORIST COVERAGEOHIO I (we), the Named Insured, hereby reject insurance againstUninsured/Underinsured Motorists and as provided by Section
{¶ 36} SELECTION OF LOWER LIMITS OF UNINSURED/UNDERINSUREDMOTORIST COVERAGE OHIO I (we), the Named Insured, rejectUninsured/Underinsured Motorists limits equal to my (our) Bodily InjuryLimits.
{¶ 37} "I (we) select instead $ ,000 per person and $ ,000 per accident"
{¶ 38} The personal catastrophe policy rejection form appears as follows:
{¶ 39} "REJECTION OF UNINSURED MOTORIST COVERAGE
{¶ 40} "I (we) the Named Insured, decline insurance protectionagainst Uninsured Motorists, including Underinsured Motorists. I (we)request that you eliminate such coverage from my (our) policy and allfuture renewals."
{¶ 41} The foregoing provisions do not describe the coverage, do not list the premium costs of UM/UIM coverage, and do not expressly state the coverage limits. The automobile application and personal catastrophe rejection form, lacking in required information essential for a valid offer of UM/UIM coverage, cannot be termed a "written offer" that would allow an insured to make an express, knowing rejection of coverage equal to the liability limits of the underlying policies.24 As a result, UM/UIM coverage arises by operation of law in amounts equal to the policies' liability limits.25 Therefore, construing the evidence most favorably to Erie, reasonable minds could come to but one conclusion: Appellees' were entitled to judgment as a matter of law. Accordingly, Erie's assignment of error is overruled.
{¶ 42} Having found no error prejudicial to the appellant herein, in the particulars assigned and argued, the judgment of trial court is hereby affirmed.
Judgment affirmed.
SHAW, P.J., and HADLEY, J., concur.
