[Cite as Chapman v. Am. Family Ins., 2016-Ohio-5906.]
STATE OF OHIO ) IN THE COURT OF APPEALS )ss: NINTH JUDICIAL DISTRICT COUNTY OF SUMMIT )
KELLY CHAPMAN, et al. C.A. No. 27862
Appellant
v. APPEAL FROM JUDGMENT ENTERED IN THE AMERICAN FAMILY INSURANCE COURT OF COMMON PLEAS COMPANY, et al. COUNTY OF SUMMIT, OHIO CASE No. CV 2014-04-2178 Appellees
DECISION AND JOURNAL ENTRY
Dated: September 21, 2016
CARR, Presiding Judge.
{¶1} Appellant, Kelly Chapman, appeals a judgment of the Summit County Court of
Common Pleas that determined that she is not an insured person for purposes of underinsured
motorist coverage. This Court affirms.
I.
{¶2} On November 6, 2012, Charles Sheibelhood turned into the path of an oncoming
car driven by Michael Farmer while attempting to make a left turn. The two cars collided, and
Kelly Chapman, who was a passenger in Mr. Farmer’s vehicle, sustained injuries. Mr.
Sheibelhood, who was cited in connection with the accident, carried an auto insurance policy
issued by State Farm Insurance with limits of $50,000 per person and $100,000 per occurrence.
Ms. Chapman was an insured on an auto insurance policy issued by Progressive Insurance that
provided underinsured motorist coverage with the same policy limits of $50,000 per person and
$100,000 per occurrence. Mr. Farmer was insured by Appellee, American Family Insurance, 2
with underinsured motorist coverage with policy limits of $100,000 per person and $300,000 per
occurrence.
{¶3} Ms. Chapman settled her claim for the policy limit available under Mr.
Sheibelhood’s policy with State Farm. She made a claim under the Progressive policy, but that
claim was denied because Mr. Sheibelhood’s policy limit was the same as Ms. Chapman’s policy
limit under her own underinsured motorist coverage. Ms. Chapman then filed an action seeking
a declaratory judgment that she was entitled to underinsured motorist coverage under the terms
of the American Family policy. The trial court granted summary judgment to American Family,
concluding that Ms. Chapman is not an “insured person” as defined by the relevant provisions in
the policy. Ms. Chapman appealed.
ASSIGNMENT OF ERROR
THE TRIAL COURT ERRED BY GRANTING DEFENDANT-APPELLEE, AMERICAN FAMILY INSURANCE COMPANY’S MOTION FOR SUMMARY JUDGMENT FINDING THAT PLAINTIFFS WERE NOT “INSURED” WITHIN THE POLICY OF INSURANCE APPLICABLE TO THE DRIVERS CAR IN WHICH KELLY CHAPMAN WAS A PASSENGER, SUFFERED SEVERE INJURIES AND THE TORTFEASOR WAS DETERMINED TO BE A[N] “UNDERINSURED MOTORIST.”
{¶4} Ms. Chapman’s assignment of error argues that the trial court erred by concluding
that she is not an insured person under the terms of Mr. Farmer’s underinsured motorist policy
with American Family. Specifically, Ms. Chapman has argued that the definition of “insured
person” must be read in conjunction with the setoff limitations for “other insurance” that apply
when an insured person is entitled to recover under the underinsured motorist policy. In other
words, she maintains that the definition of “insured person” under the American Family policy is 3
ambiguous and must be expanded to include those who are named under another policy of
underinsured motorist insurance, but unable to recover. We disagree.
{¶5} This Court reviews an award of summary judgment de novo. Grafton v. Ohio
Edison Co., 77 Ohio St.3d 102, 105 (1996). According to Civ.R. 56(C), summary judgment is
appropriate when “there is no genuine issue as to any material fact and that the moving party is
entitled to judgment as a matter of law.” In this case, the material facts are not disputed, so our
review is limited to whether American Family is entitled to summary judgment as a matter of
law.
{¶6} Language used in an insurance contract must be given its natural, commonly
accepted meaning so that an interpretation of the contract consistent with the object and
intentions of the parties can be determined. Sauer v. Crews, 140 Ohio St.3d 314, 2014-Ohio-
3655. When determining whether a provision of an insurance contract is ambiguous, Courts
must examine the contract as a whole and pay careful attention to context. Id. at ¶ 13-14. “[A]
court cannot create ambiguity in a contract where there is none.” Lager v. Miller-Gonzalez, 120
Ohio St.3d 47, 2008-Ohio-4838, ¶ 16.
{¶7} The American Family contract at issue in this case provides:
1. We will pay compensatory damages for bodily injury which an insured person is legally entitled to recover from the owner or operator of an underinsured motor vehicle.
2. The bodily injury must:
a. be sustained by an insured person,
b. be caused by an accident; and
c. arise out of the ownership, maintenance, or use of an underinsured motor vehicle. 4
(Emphasis in original.) Defined terms are highlighted using boldface type. The insurance
contract then lists exclusions to coverage, describes the limits of liability for coverage, and
explains the manner in which other insurance policies affect coverage. The latter section
provides, with respect to coverage from sources other than American Family:
If there is other similar insurance on a loss covered by this endorsement, we will pay our share according to this policy’s proportion of the available policy limits of all similar insurance. But, any insurance we provide for use of your insured car by any person other than you will be excess over any other collectible insurance, self insurance, or bond. Any insurance provided under this coverage for a vehicle you do not own, including any vehicle while used as a temporary substitute for your insured car, is excess over any other collectible Underinsured Motorists Coverage. Any recovery for damages under all such policies or provisions of coverage may equal but not exceed the highest applicable limit for any one vehicle under any insurance providing coverage on either a primary or excess basis.
(Emphasis added.) When these provisions are read together and in their context, it is readily
apparent that the provisions related to other insurance are only relevant when there “a loss
covered by this endorsement,” which requires “bodily injury * * * sustained by an insured
person.” If there is no “insured person,” there is no underinsured motorist coverage and, in the
absence of underinsured motorist coverage, the “other insurance” provisions of the contract
never come into play.
{¶8} The definition section of the policy that pertains to underinsured motorist
coverage provides, in relevant part:
Insured person or insured persons means:
(1) you or a relative.
(2) anyone else occupying your insured car who is not:
(a) a named insured for underinsured motorists coverage under another policy, a self-insurance program, or a liability bond[.] 5
(Emphasis in original.) In this respect, we note that the Ohio Supreme Court has held that the
parties to an insurance contract are free to define “insured person” in any way they see fit.
Holliman v. Allstate Ins. Co., 86 Ohio St.3d 414, 416 (1999). The definition of “insured person”
in the American Family contract is clear and unambiguous. The context is also clear: unless
there is an “insured person” for whom coverage exists, the contract provisions related to “other
insurance” never come into play.
{¶9} The Eighth District Court of Appeals reached the same conclusion in Johns v.
Hopkins, 8th Dist. Cuyahoga No. 99218, 2013-Ohio-2099.
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[Cite as Chapman v. Am. Family Ins., 2016-Ohio-5906.]
STATE OF OHIO ) IN THE COURT OF APPEALS )ss: NINTH JUDICIAL DISTRICT COUNTY OF SUMMIT )
KELLY CHAPMAN, et al. C.A. No. 27862
Appellant
v. APPEAL FROM JUDGMENT ENTERED IN THE AMERICAN FAMILY INSURANCE COURT OF COMMON PLEAS COMPANY, et al. COUNTY OF SUMMIT, OHIO CASE No. CV 2014-04-2178 Appellees
DECISION AND JOURNAL ENTRY
Dated: September 21, 2016
CARR, Presiding Judge.
{¶1} Appellant, Kelly Chapman, appeals a judgment of the Summit County Court of
Common Pleas that determined that she is not an insured person for purposes of underinsured
motorist coverage. This Court affirms.
I.
{¶2} On November 6, 2012, Charles Sheibelhood turned into the path of an oncoming
car driven by Michael Farmer while attempting to make a left turn. The two cars collided, and
Kelly Chapman, who was a passenger in Mr. Farmer’s vehicle, sustained injuries. Mr.
Sheibelhood, who was cited in connection with the accident, carried an auto insurance policy
issued by State Farm Insurance with limits of $50,000 per person and $100,000 per occurrence.
Ms. Chapman was an insured on an auto insurance policy issued by Progressive Insurance that
provided underinsured motorist coverage with the same policy limits of $50,000 per person and
$100,000 per occurrence. Mr. Farmer was insured by Appellee, American Family Insurance, 2
with underinsured motorist coverage with policy limits of $100,000 per person and $300,000 per
occurrence.
{¶3} Ms. Chapman settled her claim for the policy limit available under Mr.
Sheibelhood’s policy with State Farm. She made a claim under the Progressive policy, but that
claim was denied because Mr. Sheibelhood’s policy limit was the same as Ms. Chapman’s policy
limit under her own underinsured motorist coverage. Ms. Chapman then filed an action seeking
a declaratory judgment that she was entitled to underinsured motorist coverage under the terms
of the American Family policy. The trial court granted summary judgment to American Family,
concluding that Ms. Chapman is not an “insured person” as defined by the relevant provisions in
the policy. Ms. Chapman appealed.
ASSIGNMENT OF ERROR
THE TRIAL COURT ERRED BY GRANTING DEFENDANT-APPELLEE, AMERICAN FAMILY INSURANCE COMPANY’S MOTION FOR SUMMARY JUDGMENT FINDING THAT PLAINTIFFS WERE NOT “INSURED” WITHIN THE POLICY OF INSURANCE APPLICABLE TO THE DRIVERS CAR IN WHICH KELLY CHAPMAN WAS A PASSENGER, SUFFERED SEVERE INJURIES AND THE TORTFEASOR WAS DETERMINED TO BE A[N] “UNDERINSURED MOTORIST.”
{¶4} Ms. Chapman’s assignment of error argues that the trial court erred by concluding
that she is not an insured person under the terms of Mr. Farmer’s underinsured motorist policy
with American Family. Specifically, Ms. Chapman has argued that the definition of “insured
person” must be read in conjunction with the setoff limitations for “other insurance” that apply
when an insured person is entitled to recover under the underinsured motorist policy. In other
words, she maintains that the definition of “insured person” under the American Family policy is 3
ambiguous and must be expanded to include those who are named under another policy of
underinsured motorist insurance, but unable to recover. We disagree.
{¶5} This Court reviews an award of summary judgment de novo. Grafton v. Ohio
Edison Co., 77 Ohio St.3d 102, 105 (1996). According to Civ.R. 56(C), summary judgment is
appropriate when “there is no genuine issue as to any material fact and that the moving party is
entitled to judgment as a matter of law.” In this case, the material facts are not disputed, so our
review is limited to whether American Family is entitled to summary judgment as a matter of
law.
{¶6} Language used in an insurance contract must be given its natural, commonly
accepted meaning so that an interpretation of the contract consistent with the object and
intentions of the parties can be determined. Sauer v. Crews, 140 Ohio St.3d 314, 2014-Ohio-
3655. When determining whether a provision of an insurance contract is ambiguous, Courts
must examine the contract as a whole and pay careful attention to context. Id. at ¶ 13-14. “[A]
court cannot create ambiguity in a contract where there is none.” Lager v. Miller-Gonzalez, 120
Ohio St.3d 47, 2008-Ohio-4838, ¶ 16.
{¶7} The American Family contract at issue in this case provides:
1. We will pay compensatory damages for bodily injury which an insured person is legally entitled to recover from the owner or operator of an underinsured motor vehicle.
2. The bodily injury must:
a. be sustained by an insured person,
b. be caused by an accident; and
c. arise out of the ownership, maintenance, or use of an underinsured motor vehicle. 4
(Emphasis in original.) Defined terms are highlighted using boldface type. The insurance
contract then lists exclusions to coverage, describes the limits of liability for coverage, and
explains the manner in which other insurance policies affect coverage. The latter section
provides, with respect to coverage from sources other than American Family:
If there is other similar insurance on a loss covered by this endorsement, we will pay our share according to this policy’s proportion of the available policy limits of all similar insurance. But, any insurance we provide for use of your insured car by any person other than you will be excess over any other collectible insurance, self insurance, or bond. Any insurance provided under this coverage for a vehicle you do not own, including any vehicle while used as a temporary substitute for your insured car, is excess over any other collectible Underinsured Motorists Coverage. Any recovery for damages under all such policies or provisions of coverage may equal but not exceed the highest applicable limit for any one vehicle under any insurance providing coverage on either a primary or excess basis.
(Emphasis added.) When these provisions are read together and in their context, it is readily
apparent that the provisions related to other insurance are only relevant when there “a loss
covered by this endorsement,” which requires “bodily injury * * * sustained by an insured
person.” If there is no “insured person,” there is no underinsured motorist coverage and, in the
absence of underinsured motorist coverage, the “other insurance” provisions of the contract
never come into play.
{¶8} The definition section of the policy that pertains to underinsured motorist
coverage provides, in relevant part:
Insured person or insured persons means:
(1) you or a relative.
(2) anyone else occupying your insured car who is not:
(a) a named insured for underinsured motorists coverage under another policy, a self-insurance program, or a liability bond[.] 5
(Emphasis in original.) In this respect, we note that the Ohio Supreme Court has held that the
parties to an insurance contract are free to define “insured person” in any way they see fit.
Holliman v. Allstate Ins. Co., 86 Ohio St.3d 414, 416 (1999). The definition of “insured person”
in the American Family contract is clear and unambiguous. The context is also clear: unless
there is an “insured person” for whom coverage exists, the contract provisions related to “other
insurance” never come into play.
{¶9} The Eighth District Court of Appeals reached the same conclusion in Johns v.
Hopkins, 8th Dist. Cuyahoga No. 99218, 2013-Ohio-2099. In that case, the tortfeasor’s liability
policy limits and the injured party’s underinsured motorist policy limits were the same, and were
considerably lower that the underinsured motorist policy limit that applied to the car that the
injured party was driving at the time of the accident. Id. at ¶ 8. The injured party sued for
coverage, arguing that the offset provisions for other insurance should be applied to the
determination of whether he was “an insured” under the relevant underinsured motorist policy.
Id. at ¶ 19. Analyzing the contract language at issue, the Court noted:
There is nothing written into State Farm’s policy that we can interpret to mean that an individual must actually be able to recover under his or her own UM/UIM policy before State Farm’s definition of “an insured” would apply. State Farm’s definition clearly states that a person occupying the State Farm vehicle does not qualify as an insured under part four if that individual has his or her own policy of insurance that provides for UM/UIM coverage.
Id. at ¶ 33. Accordingly, the Eighth District rejected the injured party’s argument, concluding
that doing so would “expand the definition of ‘an insured’ to include an individual who is unable
to recover from the UM/UIM portion of his or her own insurance policy.” Id. at ¶ 21. See also
Wohl v. Swinney, 118 Ohio St.3d 277, 2008-Ohio-2334, ¶ 23 (concluding that the definition of
“insured” for purposes of uninsured motorist coverage was clear and unambiguous and reflected
the parties’ intention to “narrowly define who is considered an insured under that section.”) 6
{¶10} The definition of “insured person” in the American Family contract at issue in this
case is clear and unambiguous, and the context demonstrates that the parties did not intend the
definition of “insured person” to include those who are named on another policy of underinsured
motorist coverage but unable to recover. Ms. Chapman’s argument is not well-taken, and her
assignment of error is overruled.
III.
{¶11} Ms. Chapman’s assignment of error is overruled. The judgment of the Summit
County Court of Common Pleas is affirmed.
Judgment affirmed.
There were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Court of Common
Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy
of this journal entry shall constitute the mandate, pursuant to App.R. 27.
Immediately upon the filing hereof, this document shall constitute the journal entry of
judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the
period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is
instructed to mail a notice of entry of this judgment to the parties and to make a notation of the
mailing in the docket, pursuant to App.R. 30.
Costs taxed to Appellant.
DONNA J. CARR FOR THE COURT 7
WHITMORE, J. HENSAL, J. CONCUR.
APPEARANCES:
THOMAS A. SKIDMORE, Attorney at Law, for Appellant.
JAY S. HANSON, Attorney at Law, for Appellee.
D. MICHAEL JOHANSON, Attorney at Law, for Appellee.