Savoie v. Grange Mutual Insurance

620 N.E.2d 809, 67 Ohio St. 3d 500

• Court: Ohio Supreme Court
• Decided: October 1, 1993
• Docket: No. 92-952
• Status: Published

Opinions

Pfeifer, J.

Mary Savoie, as administrator, raises three questions of automobile insurance law, which have been the subject of continued redefinition and controversy within this court: What are the effects of “per person” limits in liability policies on multiple wrongful death claimants? When is it permissible to combine or stack uninsured/underinsured motorist policies? To what extent do underinsurance policies provide coverage to their own named insureds facing inadequate compensation from a tortfeasor’s liability insurer?

I

Mary Savoie, administrator, contends that the decedents’ parents and sister are each entitled to recover up to $100,000 under the tortfeasor’s “per person” limitations in his liability policy and are collectively subject to the $300,000 per occurrence limit. Grange argues that the multiple claimants must be merged under the wrongful death statute into a single cause of action brought by the administrator and are, therefore, confined to a single combined “per person” recovery limit.

In a refreshing moment of candor, Motorists’ attorney in oral argument urged this court to:

“ * * * use the statute in a wrongful death [claim] to get to a position where all the insurance companies know that when there is a death claim, no matter what the policy says, we have in fact a full policy exposed. That would reduce so much litigation. It would reduce so much complexity. It would allow us in the insurance industry to at least focus on what the claim is and then we would know. That’s the posture that Motorists Mutual would like to present to the court in this case, and if the court takes that posture, then, certainly Grange Mutual owes $225,000.”

The liability policy issued by Grange provides:

“The limit of liability shown in the Declarations for ‘each person’ for Bodily Injury Liability is our maximum limit of liability for all damages, including damages for care, loss of services or death, arising out of bodily injury sustained by any one person in any one auto accident. Subject to this limit for ‘each person’, the limit of liability shown in the Declarations for ‘each accident’ for Bodily Injury Liability is our maximum limit of liability for all damages for bodily injury resulting from any one accident. * * * This is the most we will pay regardless of the number of

“1. Insureds;

“2. Claims made;

“3. Vehicles or premiums shown in the Declarations; or

“4. Vehicles involved in the accident.”

In an attempt to narrowly interpret its own insurance policy provision, Grange ignores the elevated status of wrongful death claims in Ohio.

To manage the presentment of wrongful death claims the General Assembly enacted R.C. 2125.02, which charges the estate’s administrator with the responsibility of consolidating the wrongful death damages of all claimants into one action. The statute also provides that “the surviving spouse, the children, and the parents of the decedent” all “are rebuttably presumed to have suffered damages” resulting from wrongful death. R.C. 2125.02(A)(1).

Previously, in Wood v. Shepard (1988), 38 Ohio St.3d 86, 526 N.E.2d 1089, this court held that an underinsured motorist policy could not consolidate all the wrongful death claims of those presumed to have suffered damages under R.C. 2125.02 and subject them to a single per person limit in that policy.

The General Assembly and this court have expressed the view that damages for wrongful death claims should not be limited. Even the Ohio Constitution in its Bill of Rights provides:

“The amount of damages recoverable by civil action in the courts for death caused by the wrongful act, neglect, or default of another, shall not be limited by law.” Section 19a, Article I, Constitution of Ohio.

Consistent with this view, each person who is presumed to have been damaged as a result of a wrongful death, to the extent of his or her damages, may collect from the tortfeasor’s liability policy up to its per person limits subject to any per accident limit. Liability policy provisions which purport to consolidate wrongful death damages suffered by individuals are unenforceable because they directly violate the policy expressed by the General Assembly and this court.

Because this court in State Farm Auto. Ins. Co. v. Rose (1991), 61 Ohio St.3d 528, 575 N.E.2d 459, and in paragraphs one and two of the syllabus of Burris v. Grange Mut. Cos. (1989), 46 Ohio St.3d 84, 545 N.E.2d 83, has misinterpreted the legislative status of wrongful death claims in Ohio, these cases are overruled accordingly.

By applying our analysis to the facts in the case before us, we find the mother, father and the sister of the decedent are individually entitled to recover, to the extent they prove damages, a maximum of $100,000 each up to $225,000, which is the balance of the Grange liability policy limits available to the Savoie claimants. On this issue, the holding of the court of appeals is affirmed.

II

The Savoies ask this court to declare that antistacking clauses contained in two separate uninsured/underinsurance policies are both unenforceable. Motorists, the insurer under both of these policies, urges that the clauses be enforced. The antistacking provisions in both policies are identical. They provide:

“OTHER INSURANCE

“If there is other applicable similar insurance available under more than one policy or provision of coverage

■ “1. Any recovery for damages for bodily injury sustained by an insured may equal but not exceed the higher of the applicable limit for any one vehicle under this insurance or any other insurance.

“2. Any insurance we provide with respect to a vehicle you do not own shall be excess over any other collectible insurance.

“3. We will pay only our share of the loss. Our share is the proportion that our limit of liability bears to the total of all applicable limits.”

The Motorists policy also attempts to prohibit the stacking of multiple uninsured/underinsured policy limits which have been purchased by the same family:

“Two or More Auto Policies

“If this policy and any other auto insurance policy issued to you by us apply to the same accident, the maximum limit of our liability under all the policies shall not exceed the highest applicable limit of liability under any one policy.”

This antistacking language in the policies passes the “unambiguous,” “clear” and “conspicuous” test as delineated in Dues v. Hodge (1988), 36 Ohio St.3d 46, 521 N.E.2d 789, paragraph one of the syllabus.

However, we no longer support the analysis of antistacking language used in Dues v. Hodge. Our discomfort is rooted in a concern that liability insurers are collecting multiple premiums for multiple policies, while limiting recovery by antistacking language — the import of which is not known or understood by the insured consumer until tragedy strikes.

Dues v. Hodge and its progeny broadly contravened the line of cases which was developing prior to the enactment of R.C. 3937.18(E), now 3937.18(G), in 1980. In Curran v. State Auto. Mut. Ins. Co. (1971), 25 Ohio St.2d 33, 54 O.O.2d 166, 266 N.E.2d 566, this court in a unanimous decision announced that antistacking provisions were “repugnant” to the purpose of the uninsured/underinsured motorist statute when they are used by an insurer to deny coverage to an insured because other uninsured coverage is available to the insured under a different policy from a different insurer. In Grange Mut Cas. Co. v. Volkmann (1978), 54 Ohio St.2d 58, 8 O.O.3d 70, 374 N.E.2d 1258, this court again unanimously held antistacking provisions in an uninsured policy to be unenforceable when separate coverages were available from separate policies covering different vehicles. Time after time, this court held antistacking provisions to be in contravention of R.C. 3937.18.

The General Assembly responded to this developed line of cases by adding the following provision to the statute:

“Any automobile liability or motor vehicle liability policy of insurance that includes uninsured motorist coverage may include terms and conditions that preclude stacking of uninsured motor vehicle coverages.” 138 Ohio Laws, Part I, 1458, 1459.

This court, in Karabin v. State Auto. Mut. Ins. Co. (1984), 10 Ohio St.3d 163, 10 OBR 497, 462 N.E.2d 403, held that this amendment was “unambiguous,” and expressed the will of the General Assembly to permit insurers to preclude stacking in all circumstances. In later cases the court held that R.C. 3937.18(G) gives insurance companies a license to contractually preclude the stacking of separate uninsured/underinsured coverages, irrespective of the number of policies involved, the number of premiums paid, or the number of vehicles covered, provided that the antistacking language is “unambiguous,” “clear,” and “conspicuous.” Dues v. Hodge, supra.

The current version of the statute provides:

“(G) Any automobile liability or motor vehicle liability policy of insurance that includes coverages offered under division (A) of this' section [uninsured and underinsured coverages] may include terms and conditions that preclude stacking of such coverages.” 139 Ohio Laws, Part II, 2936, 2938.

The present statute permits insurance companies to contractually preclude the stacking of coverages in “any * * * liability policy.” We find this provision to be ambiguous. It is unclear whether R.C. 3937.18(G) is intended to allow the contractual preclusion of intra-family stacking, inter-family stacking, or both.

“Intrafamily” stacking occurs when an individual or an entire family is insured by several separate uninsured/underinsured policies insuring different vehicles. When the individual or a family member is injured by an uninsured or underinsured motorist, he or she will try to combine, or stack, each of the policies’ underinsurance limits to compensate the injured individual.

“Interfamily” stacking occurs when an individual has paid a premium for an uninsured/underinsured motorist policy and is riding in an automobile, which is owned by someone other than a family member living in the same household and is insured by a separate uninsured/underinsured motorist policy. When the individual is injured by an uninsured or underinsured motorist while riding in this automobile, he will seek to recover compensation from the policy insuring the automobile in which he was riding and his own uninsured/underinsured motorist policy for which he has paid a premium.

In light of the disfavor which antistacking provisions have received by this court in cases such as Curran, supra, and Volkmann, supra, we conclude that R.C. 3937.18(G) should be narrowly construed. Insurers may contractually preclude intrafamily stacking — the stacking of uninsured/underinsured limits of policies and coverages purchased by family members in the same household. Insurers may not contractually preclude interfamily stacking — the aggregation of uninsured/underinsured limits of policies purchased by two or more people who are not members of the same household.

In intrafamily stacking situations, insurers can provide reduced premiums for clients who purchase multiple uninsured/underinsured policies for separate vehicles. If the premium has been reduced, it logically follows that benefits can be restricted. However, the injured individual in an interfamily stacking scenario seeks to combine the limits of two policies for which premiums have not been reduced because of their mutual existence. Because insurers are attempting to prevent the full payment of two policy limits resulting from the full, unadjusted premium payment of two unrelated insurance policies, the contractual preclusion of interfamily stacking is unconscionable. We do not believe that the legislature intended to sanction such a practice.

With this reading of R.C. 3937.18’s scope, the cases decided prior to the 1980 enactment of division (E) breathe renewed life to the extent they apply to interfamily stacking. Because Hower v. Motorists Mut. Ins. Co. (1992), 65 Ohio St.3d 442, 605 N.E.2d 15, involves interfamily stacking, it is overruled. The case of Karabin, supra, and paragraph one of the syllabus of Dues v. Hodge, supra, are limited to apply to intrafamily stacking only.

This interpretation of R.C. 3937.18(G) is consistent with the concerted effort of the General Assembly to force all motorists to maintain liability insurance coverage on motor vehicles being operated within the state of Ohio. The Financial Responsibility Act requires that all motorists have the “ability to respond in damages for liability,” and provides severe penalties for failure to comply. R.C. 4509.01(K).

Regrettably, the General Assembly has not succeeded in its effort to force every motorist to maintain liability insurance coverage. While it is impossible to accurately measure the number, the best insurance industry estimate would indicate that fifteen to twenty-five percent of Ohio motorists are driving without any liability insurance coverage. New York Times, September 3, 1990, A-10. The purchase of full uninsured/underinsured coverage is the only possible means for responsible motorists to protect themselves and their families.

By applying the above holding to the facts in this case, we conclude that Mary and Donald, because they are members of the same household, may not stack the limits of their two uninsured/underinsured policies with Motorists. Because Debbie Savoie is only an insured in one of these policies, she does not qualify to stack the limits.

The holding of the court of appeals on the issue of stacking is affirmed.

Ill

Finally, this court considers how the money paid by the tortfeasor’s liability insurer affects the Savoies’ ability to collect from their underinsurance carrier. In Part I of this opinion, we held that the Savoies were entitled to collect up to $225,000 from the tortfeasor’s liability carrier, Grange.

The Savoies are insureds in two uninsured/underinsurance policies with Motorists, each having limits of $100,000 per person, $300,000 per accident limits. As a result of their wrongful death claims, the Savoies seek to recover from these policies.

Motorists argues that it is not liable to the Savoies at all because the $100,000 per person, $300,000 per occurrence limits of its underinsurance policy are identical to the limits of the tortfeasor’s liability policy, and hence the tortfeasor was not underinsured. Hill v. Allstate Ins. Co. (1990), 50 Ohio St.3d 243, 553 N.E.2d 658.

In order to arrive at the proper conclusion in this case, it is critical to review the purpose of R.C. 3937.18, which explains how monies received from a tortfeasor’s liability insurer reduce, or do not reduce, the limits of an underinsurance policy. An individual covered by an underinsurance policy is entitled to receive compensation in an amount no less than what he would receive if he had been injured by an uninsured motorist. James v. Michigan Mut. Ins. Co. (1985), 18 Ohio St.3d 386, 18 OBR 440, 481 N.E.2d 272. Thus, underinsured motorists who suffer from injuries caused by an automobile accident are entitled to collect up to the full limits of their underinsurance policy to the extent that their damages exceed the amounts which the tortfeasor’s insurer has already paid to them. The Savoies may collect up to the limits of their policy with Motorists to the extent that their damages exceed the $225,000 which they are entitled to receive from Grange.

In Hill v. Allstate Ins. Co., supra, a majority of this court held without elaboration that an underinsurance carrier avoids responsibility to its insureds when the limits of its policy are identical to the limits of the tortfeasor’s liability policy. This decision incorrectly construes R.C. 3937.18, and is now expressly overruled.

In Part I of this opinion, we concluded that the claim of each of the Savoies is a separate claim and is entitled to its own per person policy limit under the terms of the tortfeasor’s liability policy. We have not addressed whether each of the Savoies, who are also insureds in an underinsured policy, is entitled to a separate per person limit or whether all claims must be consolidated into one per person policy limit.

This court’s holding in Wood v. Shepard, supra, is completely dispositive of this issue. According to Wood, each insured, who under an underinsured motorist policy has the right to have a wrongful death action brought in his or her name pursuant to R.C. 2125.01, has a separate wrongful death claim subject to a separate per person policy limit. See, also, Motorists Mut. Ins. Co. v. Andrews (1992), 65 Ohio St.3d 362, 604 N.E.2d 142.

Despite previous attempts by this court to restrict the application of Wood, we hold today that it remains good law in Ohio. Each person who is covered by an uninsured/underinsured policy and who is presumed to be damaged pursuant to R.C. 2125.01 has a separate claim subject to a separate per person policy limit.

Two cases, Burris v. Grange Mut. Cos., supra, and State Farm Auto. Ins. Co. v. Rose, supra, narrow the holding in Wood. To the extent they do so, they are overruled. Paragraph two of the syllabus of Dues v. Hodge, supra, is limited to apply only to cases involving a single bodily injury which has not resulted in wrongful death.

By applying the holding in Wood v. Shepard, supra, to the facts in this case, we conclude that Mary, Donald, and Debbie Savoie are each entitled to recover up to the $100,000 “per person” policy limits in the Motorists underinsurance policy, to the extent that each family member’s damages exceed the payments which each has received from Grange; however, in no event should Motorists be obligated to pay more than a total of $300,000. The holding of the court of appeals addressing the extent that underinsured motorist coverage is set off by the tortfeasor’s liability coverage is reversed.

Judgment affirmed in part and reversed in part.

AM. Sweeney, Douglas, Resnick and F.E. Sweeney, JJ., concur. Moyer, C.J., and Wright, J., dissent.