Benson v. Rosler

• Decision Date: 09 August 1985
• Docket Number: No. 84-1677,84-1677
• Citation: Benson v. Rosler, 19 Ohio St.3d 41, 482 N.E.2d 599, 19 OBR 35 (Ohio 1985)
• Parties: , 19 O.B.R. 35 BENSON et al., Appellants, v. ROSLER et al.; Farmers Insurance of Columbus, Inc., Appellee.
• Court: Ohio Supreme Court

Page 41

19 Ohio St.3d 41

482 N.E.2d 599, 19 O.B.R. 35

BENSON et al., Appellants, v.ROSLER et al.; Farmers Insurance of Columbus, Inc., Appellee.

No. 84-1677.

Supreme Court of Ohio.

Aug. 9, 1985.

The facts presented in this case are that on May 6, 1980, appellee, Farmers Insurance of Columbus, Inc.("Farmers"), issued two separate, but substantially identical, automobile insurance policies on two vehicles to appellantRobert L. Benson.AppellantMarcia E. Benson was also an insured under the terms of the policies.Each policy provided the appellants with uninsured/underinsured motorist coverage in the amount of $100,000 per person and $300,000 per occurrence.

A new declaration sheet was placed on one of the policies when the automobile covered by that policy was replaced by a 1978Ford Bronco.The uninsured/underinsured motorist provision within the policies contained the following language:

"Part II--UNINSURED MOTORISTS

"Limits of Liability

"* * *

"The limits of liability shown in the Declarations apply subject to the following:

"* * *

"3.Subject to the law of the state of the occurrence, we will pay no more than these maximums regardless of the number of vehicles insured, insured persons, claims[,]claimants, policies, or vehicles involved in the accident.

"Other Insurance

"* * *

"4.If any applicable insurance other than this policy is issued to you by us or any other member company of the Farmers Insurance Group, the total amount payable among all such policies shall not exceed the limits provided by the single policy with the highest limits of liability.

"* * *

"Part V--CONDITIONS

"* * *

"6.Two or More Cars Insured

"With respect to any accident or occurrence to which this and any other auto policy issued to you by any member company of the Farmers Insurance Group applies, the total limit of liability under all the policies shall not exceed the highest applicable limit of liability under any one policy."

While driving the Bronco, on November 13, 1981, Marcia Benson was struck by an automobile driven by defendant, Mark J. Rosler.Mrs. Benson received extensive injuries as a result of the accident.Appellants thereafter instituted an action against Rosler and Farmers, claiming damages against Rosler in the amount of $650,000.In their complaint, pertaining to Farmers, appellants alleged that the company wrongfully denied their claim submitted under the underinsured motorist provisions of the two policies.Farmers denied liability, and counterclaimed seeking a declaratory judgment construing the underinsured motorist provisions of the policies.

Appellants argued below that at the time these policies were issued, the law of this state as pronounced in Grange Mut. Cas. Co. v. Volkmann(1978), 54 Ohio St.2d 58, 374 N.E.2d 1258[8 O.O.3d 70], prohibited anti-stacking provisions in insurance policies as being contrary to public policy.Further, appellants argued that the later abrogation of the Volkmann opinion by the enactment of former R.C. 3937.181(E), which legislatively declared that anti-stacking provisions in insurance policies were not against public policy, had no effect upon their policies.

The trial court granted summary judgment in favor of appellants, effectively ruling that the policy provisions could be stacked.The Court of Appeals for Stark County reversed the trial court and entered judgment for Farmers.The court of appeals, finding its decision in conflict with the judgment of the Court of Appeals for Medina County in Burkhart v. Motorists Ins. Co. (Nov. 24, 1982), Medina App.No. 1167, unreported, certified the record of the case to this court for review and final determination.

Teodosio, Cherpas & Manos, George T. Manos and Thomas A. Teodosio, Akron, for appellants.

Arter & Hadden, Ed E. Duncan and Victoria L. Vance, Cleveland, for appellee.

PER CURIAM.

The precise question herein is whether anti-stacking provisions contained within insurance policies obtained prior to the effective date of former R.C. 3937.181 are null and void where such policies are renewed thereafter.Stated another way, where anti-stacking provisions were contained within the original policy issued at the time this court had pronounced such provisions to be against public policy, does the later legislative enactment and renewal of the policies with the original provisions remaining revitalize and give legal force to anti-stacking?We hold that such provisions are not void, and are to be given full legal force and effect.

Appellants take the basic position that the anti-stacking language in the policies at the time they procured such policies was void as determined by this court in the Volkmann case, and therefore such language should not be considered as part of the policies.Appellants' argument continues to the effect that if such language was not initially contained within the policies, Farmers would, pursuant to the language of Part V--Conditions, Section 2, Changes, be obligated to issue an endorsement, or a new policy, in order to embrace the legislative pronouncement.This particular language in the policy, under Part V, Conditions, reads:

"2.Changes

"This policy with the Declarations includes all agreements between you and us relating to this insurance.No other change or waiver may be effected in this policy except by endorsement or new policy issued by us. * * *" The sequence of events here, and the law applicable thereto, will not support appellants' contention.The two policies were first obtained on May 6, 1980.At that specific time, it is true that the anti-stacking law as pronounced by this court was in effect.The General Assembly overruled Volkmann by enactment of R.C. 3937.181(E) which became effective June 25, 1980, some six weeks after the policies were issued.Appellants thereafter renewed both policies for subsequent six-month periods on November 6, 1980, May 6, 1981, and November 6, 1981.The accident occurred on November 13, 1981.

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.12 Appleman, Insurance Law and Practice (1981) 166, Section 7041.

The policies issued herein were written for six-month durations and were renewable for additional six-month periods at the limited option of the insuring company as provided by R.C. 3937.31.Although the statute provides that automobile insurance policies 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 * * *," such policies, when written for specific periods, may be considered term policies rather than continuing policies.The specific provisions in these policies relating to the term are found within the declarations:

"The policy shall expire at 12:00 o'clock noon standard time on the expiration date shown.The policy may be renewed for an additional policy term of six months each time the company offers to renew by sending a bill for the required renewal premium, and the insured pays said premium in advance of the respective renewal date. * * *"

Also, the policies expressly provided that the coverage would terminate at the expiration of the six-month period:

"Part V--CONDITIONS

"* * *

"8.Termination or Reduction of Coverage

"* * *

"c.Automatic Termination

"This policy is written for a 6 month period.* * * It will automatically terminate at the end of any one policy period for which you or your representative do not accept our offer to renew it.Your failure to pay the required renewal premium means that you have declined our offer."

We determine the language of these policies to constitute term coverage and, at the expiration of the six-month period with the company's subsequent acceptance of the premiums, there was a new contract of insurance coverage entered into by the parties.Appellants renewed the policies herein three times before the automobile accident occurred on November 13, 1981.

Having been enacted into law and effective as of the date of the renewals of these policies, R.C. 3937.181 became a part of the policies and gave lawful force to the language as contained within the original policies relative to the stacking of insurance.There was no need to issue an endorsement or new policy because, as renewed, the language of the original policy contained the entire agreement between Farmers and these insureds.As stated by the court of appeals, "[i]n our view, the policy language was already in the policy and the renewals subsequent to the effective date of the amended statute operated to bring its original terms within the favor of the amended statute."

Accordingly, we hereby affirm the judgment of the court of appeals which ruled that the policy provisions could not be stacked.

Judgment affirmed.

SWEENEY, LOCHER, HOLMES and WRIGHT, JJ., concur.

CELEBREZZE, C.J., and CLIFFORD F. BROWN and DOUGLAS, JJ., dissent.

CELEBREZZE, Chief Justice, dissenting.

In my opinion the majority's version of the events which transpired does not reflect the true facts of the case and borders on fantasy.Because I cannot agree to such an unsupportable posture, I dissent.

In the present case, the record contains a list of interrogatories from the Bensons' counsel to the insurance company.In answer to question 4(a), Farmers admits both policies were issued May 6, 1980.Question 12 asks: "If the policies were renewed, were any changes or modifications of the original policies included in the renewal?"Answer: "None."QuestionNo. 14: "Were any negotiations had with insured or any of his representatives prior to the issuance of any additional policy?"Answer: "No additional policies were issued subsequent to May 6, 1980."In answer to question 19, Farmers said the policies were in force "May 6, 1980, through the...