STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY ET AL. v. GRACE ET AL.
No. 2009-0122
Supreme Court of Ohio
September 1, 2009-Decided November 17, 2009
123 Ohio St.3d 471, 2009-Ohio-5934
O‘DONNELL, J.
{1} The United States District Court for the Northern District of Ohio, Eastern Division, has certified the following question of state law for our resolution: “Does
{2} We answer in the affirmative and hold that
Facts and Procedural History
{3} We adopt the following factual and procedural history from the certification order submitted by the United States district court.
{4} Laura Grace, Elizabeth Garcia, Ladon Ruffin, Dorian Jones, Angela Webb, and Patricia Schwab (collectively, “the insureds“), allege involvement in
{5} State Farm declined to pay medical expenses under the UM/UIM coverage, asserting that such expenses were already paid or payable under the Med Pay coverage of the same policy. Grace, Garcia, Ruffin, and Jones together filed a putative class action against State Farm, and Webb and Schwab each filed individual putative class actions against State Farm. Each insured sought to represent a class of persons composed of all residents of the state of Ohio who (1) were insured persons under a policy of insurance issued by State Farm that included UM/UIM coverage and Med Pay coverage, for which State Farm charged separate premiums, (2) were insured persons under a policy of insurance comprised of State Farm‘s standard policy form or forms that included a purported “non-duplication” clause, and (3) suffered a bodily injury for which State Farm refused to provide medical payment benefits under both the UM/UIM and Med Pay portions of the policy.
{6} These underlying actions challenge the enforceability of the nonduplication clauses set forth in State Farm automobile insurance policies, which purportedly preclude payment pursuant to the UM/UIM coverage for medical expenses that are paid or payable under the Med Pay coverage purchased in the same policy.
{7} The parties do not dispute that the declarations page of each policy identified separate limits of coverage for UM/UIM and Med Pay coverage, or that State Farm charged separate premiums for each of these coverages. Each of the challenged policies contained an endorsement form 6083VV, or a substantially identical form, containing the following “non-duplication” clause limiting the UM/UIM coverage:
{8} “Non-Duplication
{9} “We will not pay under Uninsured Motor Vehicle Coverage any medical expenses paid or payable under:
{10} “(1) Medical Payments Coverage of this policy, or
{11} “(2) The medical payments coverage, no fault coverage, personal injury protection, or other similar coverage of any other motor vehicle policy.” (Boldface sic.)
{12} Each policy also contained a separate “non-duplication” clause within the Med Pay portion of the policy, stating:
{13} “Non-Duplication
{14} ”No person for whom medical expenses are payable under this coverage shall recover more than once for the same medical expense under this or similar vehicle insurance.” (Boldface and italics sic.)
{15} Confronted with State Farm‘s motions for judgment on the pleadings alleging that the nonduplication clauses contained in the subject insurance policies are valid and enforceable as a matter of law, the United States district court certified the instant question of state law to this court pursuant to Sup.Ct.Prac.R. XVIII. We accepted the certified question and agreed to answer it. Grace v. State Farm Mut. Auto. Ins. Co., 121 Ohio St.3d 1422, 2009-Ohio-1296, 903 N.E.2d 322.
Argument of the Parties
{16} State Farm contends that
{17} The insureds, on the other hand, maintain that this court‘s decisions in Shearer v. Motorists Mut. Ins. Co. (1978), 53 Ohio St.2d 1, 7 O.O.3d 1, 371 N.E.2d 210, Grange Mut. Cas. Co. v. Lindsey (1986), 22 Ohio St.3d 153, 22 OBR 228, 489 N.E.2d 281, and Berrios v. State Farm Ins. Co., 98 Ohio St.3d 109, 2002-Ohio-7115, 781 N.E.2d 149, reflect a common law prohibition against UM/UIM coverage setoff that survives the enactment of S.B. 97. Specifically, they contend that these decisions stand for the proposition that insureds who pay two separate premiums, one for medical payments coverage, and another for uninsured-
{18} We focus then on the narrow issue of whether
Interpretation of R.C. 3937.18 Prior to the Enactment of S.B. 97
{19} Prior to the General Assembly‘s 2001 enactment of S.B. 97,
{20} In Shearer v. Motorists Mut. Ins. Co., 53 Ohio St.2d 1, 7 O.O.3d 1, 371 N.E.2d 210, we confronted a term in an insurance policy that permitted a setoff from UM coverage of medical payments paid under another portion of the policy. Noting that the purpose of
{21} Next, we considered a policy term that provided an insurer a contractual right of subrogation for payments made under the Med Pay portion of an insurance policy. In Grange Mut. Cas. Co. v. Lindsey, 22 Ohio St.3d 153, 22 OBR 228, 489 N.E.2d 281, we recognized that if enforced, a subrogation clause, like the setoff provision at issue in Shearer, would permit an insurer to contractually alter its insurance policy to escape all or part of its statutory obligation to provide UM coverage. Thus, while recognizing that a subrogation clause permits an insurer to pursue the tortfeasor for amounts paid to the insured, we held that to the extent that such clauses purported to permit an insurer to set off payments it made to its insured for Med Pay coverage against amounts due for UM coverage, they were “void as in derogation of the public policy and purpose underlying
{22} Most recently, in Berrios v. State Farm Ins. Co., 98 Ohio St.3d 109, 2002-Ohio-7115, 781 N.E.2d 149, we rejected an insurer‘s efforts to enforce a Med Pay subrogation clause against proceeds its insured received from the tortfeasor. Recognizing the mandatory nature of both UM and UIM coverage under former
Interpretation of R.C. 3937.18 Subsequent to the Enactment of S.B. 97
{23} Subsequent to our decisions in Shearer and Lindsey, in 2001, the General Assembly enacted S.B. 97, effecting comprehensive changes to Ohio‘s UM/UIM law. Notably, the enactment eliminated the mandatory offer requirement for UM/UIM coverage, and, consequently, the possibility that UM/UIM coverage could arise by operation of law. See
{24} Additionally, the bill amended former division (J) of
{25} Our paramount concern in construing statutes is legislative intent. Fisher v. Hasenjager, 116 Ohio St.3d 53, 2007-Ohio-5589, 876 N.E.2d 546, ¶ 20; State ex rel. Russo v. McDonnell, 110 Ohio St.3d 144, 2006-Ohio-3459, 852 N.E.2d 145, ¶ 37; State ex rel. Musial v. N. Olmsted, 106 Ohio St.3d 459, 2005-Ohio-5521, 835 N.E.2d 1243, ¶ 23. We consider the statutory language in context, construing words and phrases in accordance with rules of grammar and common usage. State ex rel. Stoll v. Logan Cty. Bd. of Elections, 117 Ohio St.3d 76, 2008-Ohio-333, 881 N.E.2d 1214, ¶ 34. “When the language of a statute is plain and unambiguous and conveys a clear and definite meaning, there is no need for this court to apply the rules of statutory interpretation.” Symmes Twp. Bd. of Trustees v. Smyth (2000), 87 Ohio St.3d 549, 553, 721 N.E.2d 1057.
{26} While S.B. 97 does not expressly state the General Assembly‘s intent to supersede our holdings in Shearer or Lindsey, it did eliminate the statutory obligation of a carrier to offer UM/UIM coverage, which was the basis of those holdings. Moreover, the legislature broadened the circumstances under which a carrier may preclude coverage for bodily injury or death suffered by an insured, and it expressed its intent to do so by incorporating the phrase “including but not limited to” when referring to the circumstances under which coverage may be precluded.
{27} We have previously recognized that the phrase “including but not limited to” “denotes a nonexclusive list” of examples. Moore v. Lorain Metro. Hous. Auth., 121 Ohio St.3d 455, 2009-Ohio-1250, 905 N.E.2d 606, ¶ 24; Colbert v. Cleveland, 99 Ohio St.3d 215, 2003-Ohio-3319, 790 N.E.2d 781, ¶ 14, citing State v. Thompson (2001), 92 Ohio St.3d 584, 588, 752 N.E.2d 276, and State v. Lozano (2001), 90 Ohio St.3d 560, 562, 740 N.E.2d 273. Thus, the list of circumstances set forth in
{28} This provision is different from the prior version of
{29} The uncodified language of S.B. 97 supports this conclusion. In Section 3(B)(3) of S.B. 97, the General Assembly expressed the public policy of this state not only to eliminate the mandatory offer of UM/UIM coverage, but also to permit insurers to incorporate exclusionary or limiting provisions in their UM/UIM coverages. 149 Ohio Laws, Part I, 788. Thus, based on express legislative intent, insurers may now include terms and conditions in their policies to limit or exclude UM/UIM coverage.
{30} Seven appellate districts that have considered the S.B. 97 version of
{31} One decision of the Fifth District Court of Appeals, however, reached the opposite conclusion. In Wayne Mut. Ins. Co. v. Bradley, Stark App. No. 2005CA00200, 2006-Ohio-1517, 2006 WL 825764, the court held that an insurer cannot set off payments made under the Med Pay coverage from UM coverage if it treats the coverages as separate and charges separate premiums for them. Id. at ¶ 35-36. The dispute in Bradley arose from a 2004 automobile accident and involved an insurance policy governed by the S.B. 97 version of
{33} The General Assembly originally enacted
{34} Expressing its intention to supersede our decision in Savoie, the General Assembly enacted Am.Sub.S.B. No. 20, 145 Ohio Laws, Part I, 204, effective October 20, 1994. See Section 9 of the bill, 145 Ohio Laws, Part I, 238. S.B. 20 amended former
{35} Unlike the situation that obtained when the General Assembly enacted S.B. 20, the facts and circumstances surrounding the enactment of S.B. 97 and the language used by the General Assembly in
{36} Based upon the foregoing, we hold that
{37} Accordingly, we answer the certified question of state law in the affirmative.
Judgment accordingly.
MOYER, C.J., and LUNDBERG STRATTON, O‘CONNOR, LANZINGER, and CUPP, JJ., concur.
PFEIFER, J., concurs separately.
{38} The certified question in this case is: “Does
{39} I write separately to emphasize that Shearer v. Motorists Mut. Ins. Co. (1978), 53 Ohio St.2d 1, 7 O.O.3d 1, 371 N.E.2d 210; Grange Mut. Cas. Co. v. Lindsey (1986), 22 Ohio St.3d 153, 22 OBR 228, 489 N.E.2d 281; and Berrios v. State Farm Ins. Co., 98 Ohio St.3d 109, 2002-Ohio-7115, 781 N.E.2d 149, remain good law, having been neither overturned by this case nor superseded by S.B. 97. Nevertheless, it is quite clear that the General Assembly has abandoned the public policy upon which those three cases were based.
{40} I cannot say with confidence that the State Farm policy in this case is contrary to public policy or goes beyond what the General Assembly intended to allow. Furthermore, based on the policy language in this case, the exclusion does not present a gap in coverage. See Clark v. Scarpelli (2001), 91 Ohio St.3d 271, 276, 744 N.E.2d 719 (the purpose of uninsured-motorist coverage is to eliminate gaps in coverage that could occur because the tortfeasor is uninsured or underinsured). An exclusion that creates a gap in coverage would be contrary to public policy, and nothing in the statutory scheme indicates that by enacting
Baker & Hostetler, L.L.P., Rodger L. Eckelberry, Michael K. Farrell, Mark A. Johnson, and Robert J. Tucker, for petitioners.
Kisling, Nestico & Redick, L.L.C., Gary W. Kisling, Alberto R. Nestico, Robert W. Redick, and Thomas Vasvari; and Feazell & Tighe, L.L.P., and Austin Tighe, for respondent Angela Webb.
Dworken & Bernstein Co., L.P.A., Patrick J. Perotti, and Nicole T. Fiorelli; and Schottenstein Law Offices and Edwin E. Schottenstein, for respondent Patricia Schwab.