Nilsen v. Nationwide Mut. Ins. Co.

582 N.E.2d 38, 64 Ohio App. 3d 563, 1 Ohio App. Unrep. 59
CourtOhio Court of Appeals
DecidedFebruary 6, 1990
DocketCase 89-CA-24
StatusPublished

This text of 582 N.E.2d 38 (Nilsen v. Nationwide Mut. Ins. Co.) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nilsen v. Nationwide Mut. Ins. Co., 582 N.E.2d 38, 64 Ohio App. 3d 563, 1 Ohio App. Unrep. 59 (Ohio Ct. App. 1990).

Opinion

BROGAN, J.

This is an appeal by Nationwide Mutual Insurance Co., (Nationwide) from a declaratory judgment rendered by the trial court in favor of appellees, Maryellen Gosser Nilsen and her daughter, Aaron Gosser.

Appellees filed this action following the death of Rockey L. Gosser, who was fatally injured in an automobile accident on November 14, 1985.

The case was submitted to the trial court upon pleadings and written stipulations. On January 17,1989, the trial court finds Findings of Fact and Conclusions of Law and rendered judgment in favor of appellees on February 13, 1989. The trial court found that appellees were entitled to $800,000 in underinsured motorist benefits pursuant to two insurance policies issued by Nationwide covering 3 vehicles owned by decedent.

The facts are as follows. Maryellen Gosser Nilsen was married to Rockey Gosser, and the couple had one child, Aaron. On the date of the accident, decedent owned three vehicles which were covered by insurance policies issued by Nationwide. One policy covered two vehicles, a Ford Escort, (in which the accident occurred), and a Volkswagon Van, and the second policy covered a Honda motorcycle. The two policies contained identical coverage listed on their respective declarations pages. At issue are the provisions for uninsured motorist coverage which read: "$100,000 each person, $300,000 each occurrence." Additionally, each of the two declarations pages refers to "Endorsement 1604."

Endorsement 1604, attached to each policy, was entitled Supplementary Uninsured Motorists Coverage (for bodily injury caused by underinsured motorists)," and contains the following provisions:

This endorsement amends your policy's Uninsured Motorists coverage.
1. An uninsured motor vehicle includes an underinsured motor vehicle. This is one for which there are bodily injury liability coverage or bonds in effects. Their total amount, however, is less than the limits of this coverage. These limits are shown in your policy's Declarations.
2. When used, arbitration of either uninsured or underinsured motorists claims is binding on the insured and the company only if the award is within the limits of state financial responsibility laws where your auto is principally garaged. If the award exceeds these limits, the company or the insured may demand a trial. This right must be used within 60 days after the award. Trial will be in a court of competent jurisdiction. Trial will be on all issues of the award including the amount within the financial responsibility limits.
3. The limits of this coverage and or any amounts payable under this coverage will *60 be reduced by any amount paid by or for any liable parties.
No payment will be made until the limits of all other liability insurance and bonds that apply have been exhausted by payments.
This endorsement replaces any other endorsement entitled Supplementary Uninsured Motorists Coverage.
The endorsement is issued by the Nationwide Mutual Insurance Company or Nationwide Mutual Fire Insurance Company, whichever has issued the policy to which it is attached.

Appellees received $12,500 from the tortfeasor apparently responsible for causing the death of Gosser. This amount constituted the limit of the tortfeasor's liability insurance.

Nationwide paid appellees $87,500 pursuant to the underinsured motorists coverage. In return, Maryellen Gosser Nilsen, as administratrix of Gosser's estate, executed a release discharging Nationwide from all claims resulting from the November 14 accident relating to uninsured and underinsured motorist coverage with the following reservation: "the undersigned [Maryellen Gosser Nilsen] reserves the right to pursue a Declaratory Judgment action against Nationwide dealing exclusively with the issue of whether or not the BIUI limits of policies of Rockey Gosser may be stacked. All other policy issues or claims are hereby discharged." The release was attached to the complaint filed by appellees.

Following the adverse judgment of the trial court, Nationwide timely filed this appeal citing the following assignments of error:

1. THE TRIAL COURT ERRED IN DECLARING THAT THE THREE INSURANCE POLICIES, WITH ENDORSEMENTS, OF APPELLANT DID NOT CONTAIN VALID PROVISIONS PRECLUDING THE "STACKING" OF UNDERINSURED MOTORISTS COVERAGE AND THAT, ACCORDINGLY, THE LIMITS OF SUCH COVERAGE TOTALLED $900,000.
2. THE TRIAL COURT ERRED IN DECLARING THAT THE THREE INSURANCE POLICIES, WITH ENDORSEMENTS, OF APPELLANT CONTAINED NO LIMITS OF UNDERINSURED MOTORISTS COVERAGE ON ANY PER PERSON/PER OCCURRENCE BASIS, AND THAT, ACCORDINGLY, THE LIMITS OF SUCH COVERAGE WAS $300,000 AS TO EACH OF THE THREE POLICIES OF APPELLANT.
3. THE TRIAL COURT ERRED IN THAT IT FAILED TO GIVE EFFECT TO A RELEASE WHICH THE APPELLEE EXECUTED AND DELIVERED TO NATIONWIDE IN EXCHANGE FOR THE PAYMENT BY NATIONWIDE OF $87,500.

In support of its first assignment of error, Nationwide argues that the language of Endorsement 1604, which explains underinsured motorist coverage, should be read into the language of the main policy provisions explaining uninsured motorist coverage. Nationwide contends that such a reading of the documents subjects underinsured motorist coverage to all limitations, terms and conditions modifying uninsured motorist coverage which clearly, conspicuously and unambiguously preclude the stacking of underinsured motorist coverage of the three vehicles. 1 The antistacking provision appearing in the body of the main policy is in conformity with R.C. 3937.18 which permits insurance companies to preclude the aggregation of policy coverage.

Prior to our analysis of the subject insurance policies, a review of several rules of insurance contract construction and interpretation is appropriate. As set forth Gomolka v. State Auto Mutl. Ins. Co. (1982), 70 Ohio St. 2d. 166:

[Wlords and phrases used in an insurance policy must be given their natural and commonly accepted meaning ***. The insurer, having prepared the policy, must also be prepared to accept any reasonable interpretation, consistent with the foregoing, in favor of the insured. *** [Wlhere the provisions of an insurance policy are clear and unambiguous courts may not indulge themselves in enlarging the contract by implication in order to embrace an object distinct from that contemplated by the parties. ***
Where, however, it may reasonably be concluded that the language of the policy is ambiguous *** a universally applied axiom *61 of construction becomes appropriate to resolve the ambiguity.
...Policies of insurance, which are in language selected by the insurer and which are reasonably open to different interpretations, will be construed most favorably for the insured.

(Gomokla, supra at 167-168) (citations omitted).

The well-established rules restated by the Gomolka

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Bluebook (online)
582 N.E.2d 38, 64 Ohio App. 3d 563, 1 Ohio App. Unrep. 59, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nilsen-v-nationwide-mut-ins-co-ohioctapp-1990.