WOLFE, APPELLANT, v. WOLFE ET AL.; COLONIAL PENN INSURANCE COMPANY, APPELLEE.
No. 98-2630
Supreme Court of Ohio
March 29, 2000
88 Ohio St.3d 246 | 2000-Ohio-322
Submitted November 3, 1999. APPEAL from the Court of Appeals for Montgomery County, No. 17111.
- Pursuant to
R.C. 3937.31(A) , every automobile liability insurance policy issued in this state must have, at a minimum, a guaranteed two-year policy period during which the policy cannot be altered except by agreement of the parties and in accordance withR.C. 3937.30 to3937.39 . - The commencement of each policy period mandated by
R.C. 3937.31(A) brings into existence a new contract of automobile insurance, whether the policy is categorized as a new policy of insurance or a renewal of an existing policy. - The guarantee period mandated by
R.C. 3937.31(A) is not limited solely to the first two years following the initial institution of coverage.
{¶ 1} The facts of this matter are largely undisputed. Appellant, Marie B. Wolfe, and her husband, George L. Wolfe, were insured under a policy of automobile liability insurance issued through appellee, Colonial Penn Insurance Company. It is undisputed that automobile liability coverage was originally purchased from appellee in 1983. The policy in the case now before us provided liability coverage in the amounts of $100,000 per person and $300,000 per occurrence. The policy under consideration also provided uninsured/underinsured motorist coverage with limits of $15,000 per person and $30,000 per occurrence.
{¶ 3} On January 5, 1998, appellee paid appellant $100,000, the limit of liability coverage provided under the policy at issue, in settlement of appellant‘s claims against her husband. On March 6, 1998, the trial court granted summary judgment in favor of appellee. In rejecting appellant‘s assertion that she was entitled to underinsured motorists benefits, the trial court determined that this matter was governed by the version of
{¶ 5} This matter is now before this court pursuant to the allowance of a discretionary appeal.
Elk & Elk Co., L.P.A., and Todd O. Rosenberg, for appellant.
Ulmer & Berne, L.L.P., and Carl A. Anthony, for appellee.
Sandra J. Rosenthal, urging reversal for amicus curiae, Ohio Academy of Trial Lawyers.
{¶ 6} This court is called upon yet again to resolve issues involving automobile insurance policies and provisions of uninsured and underinsured motorist coverage. In this matter we are asked by the parties to interpret
{¶ 7}
“(A) Every automobile insurance policy shall be issued for a policy period of not less than two years or guaranteed renewable for successive policy periods totaling not less than two years. Where renewal is mandatory, ‘cancellation,’ as used in sections
3937.30 to3937.39 of the Revised Code, includes refusal to renew a policy with at least the coverages, included insureds, and policy limits provided at the end of the next preceding policy period. No insurer may cancel any such policy except pursuant to the terms of the policy, and in accordance with sections3937.30 to3937.39 of the Revised Code * * *.”
{¶ 8} Appellant contends that, as a matter of law, all automobile liability insurance policies issued in this state must have, at a minimum, a guaranteed two-year policy period. Appellant interprets
{¶ 9} Since the statutory provision at issue is subject to varying interpretations, it is fair to say that it is ambiguous. Therefore,
{¶ 10} We conclude initially that the language of the statute does not support appellee‘s position.
{¶ 11} In addition,
{¶ 12} Moreover, the objective sought by the General Assembly in promulgating the statutory scheme involved herein would be defeated should we reach any other conclusion. One of the purposes behind
{¶ 13} It is clear that the public policy of this state, as gleaned from the Acts of the General Assembly, is to ensure that all motorists maintain some form of liability coverage on motor vehicles operated within Ohio.
{¶ 14} Accordingly, we hold that, pursuant to
{¶ 15} Finally, the guarantee period mandated by
{¶ 16} Applying the foregoing to the case at bar, the parties agree that the original issuance date of appellant‘s automobile liability insurance policy was December 12, 1983. Counting successive two-year policy periods from that date, appellant‘s last guaranteed policy period would have run from December 12, 1993 to December 12, 1995. Am.Sub.S.B. No. 20 was enacted on October 20, 1994, approximately fourteen months before the end of appellant‘s two-year guaranteed policy period. Therefore, those provisions of the statute intended to supersede our
{¶ 17} A final contention is made regarding our decision in Ross, supra, and our reliance therein on Benson v. Rosler (1985), 19 Ohio St.3d 41, 19 OBR 35, 482 N.E.2d 599. Appellee contends that our decisions in Benson and Ross resolve this matter in its favor. We disagree.
{¶ 18} In Benson, a majority of this court held that “statutes pertaining to a policy of insurance and its coverage, which are enacted after the policy‘s issuance, are incorporated into any renewal of such policy if the renewal represents a new contract of insurance separate from the initial policy.” (Emphasis added.) Id. at 44, 19 OBR at 37, 482 N.E.2d at 602, citing 12 Appleman, Insurance Law and Practice (1981) 166, Section 7041. A majority of the court in Benson went on to determine, notwithstanding the provisions of
{¶ 19} We now believe that in Benson the majority misconstrued
{¶ 21} Thus, we conclude that certain aspects of the court‘s decision in Benson are contradictory to the language and statutory purpose of
{¶ 22} Accordingly, we reverse the judgment of the court of appeals and remand this matter to the trial court for final determination consistent with this opinion.
Judgment reversed and cause remanded.
MOYER, C.J., RESNICK, F.E. SWEENEY and PFEIFER, JJ., concur.
COOK and LUNDBERG STRATTON, JJ., dissent.
COOK, J., dissenting.
{¶ 23} Because I would adhere to this court‘s decision in Benson v. Rosler (1985), 19 Ohio St.3d 41, 19 OBR 35, 482 N.E.2d 599, I respectfully dissent.
{¶ 24} The majority‘s decision today interprets
{¶ 25} To appreciate the flaw in the majority‘s analysis, it is useful to view it against the background of the law as it existed prior to today. In Benson this court held that even if a renewal occurred within a mandatory two-year coverage period under
{¶ 26} The majority now announces that the Benson court misconstrued this issue and that we are to look only to the beginning of each
{¶ 27} While the majority attempts to undercut the Benson decision based upon its interpretation that
{¶ 28} In fact, by concentrating its analysis upon the number of mandatory coverage periods required under
{¶ 29} Had the majority analyzed this issue, however, it would have found little, if any, support for its elimination of Benson as a valid statement of law on this point. First, it is “a basic tenet of insurance law that each time an insurance contract is renewed, a separate and distinct policy comes into existence.” Hercules Bumpers, Inc. v. First State Ins. Co. (C.A.11, 1989), 863 F.2d 839, 842, citing 13 Appleman, Insurance Law and Practice (Rev.Ed.1976), Section 7648; see, also, Moses v. Am. Home Assur. Co. (Ala.1979), 376 So.2d 656, 658. Based upon that premise and principles of contract law, the Benson court appropriately reasoned that, where a policy is written for a specific term and would expire unless the insured acted upon the renewal offer by paying a premium, the language of the policy should be given effect and the renewal considered a new contract.
{¶ 30} Moreover, as the Benson court understood, the text of
{¶ 31} I also disagree with the majority‘s assertion that Benson‘s continued validity would circumvent the purpose of
{¶ 32} Finally, I disagree with the majority‘s visions of chaos concerning compliance with the uninsured and underinsured offering requirements were we to follow Benson. The majority specifically warns: “Were we to adopt appellee‘s argument, insurance companies would have the unenviable task of complying with
LUNDBERG STRATTON, J., concurs in the foregoing dissenting opinion.
LUNDBERG STRATTON, J., dissenting.
{¶ 34} I respectfully dissent because I believe the majority reads more into
{¶ 35}
{¶ 36} This approach would simplify an insured‘s review of the applicable law when a claim is made. An insured or his or her attorney need only determine the initial term and contract length of the policy. Any renewal of the policy would incorporate current law.
{¶ 38} I agree with the appellee that Benson controls and that a renewal policy may constitute a new contract that simply renews the terms of the prior contract for a subsequent period. The insurance company agrees to provide insurance coverage in exchange for the insured‘s payment of a premium for the coverage.
{¶ 39} There is nothing in the language of
{¶ 40} Insureds must now determine when each two-year policy commenced, a difficult task, especially for those who have maintained a long-term contractual relationship with one insurer. Once again, the majority injects chaos into the insurance field.