Bentley v. Grange Mut. Cas. Ins. Co.

• Court: Ohio Court of Appeals
• Writing for the Court: LAZARUS; CLOSE; CLOSE
• Citation: Bentley v. Grange Mut. Cas. Ins. Co., 119 Ohio App.3d 93, 694 N.E.2d 526 (Ohio App. 1997)
• Decision Date: 10 April 1997
• Docket Number: No. 96APE07-896,96APE07-896
• Parties: BENTLEY, Admr., et al., Appellees, v. GRANGE MUTUAL CASUALTY INSURANCE COMPANY, Appellant.

Page 93

119 Ohio App.3d 93

694 N.E.2d 526

BENTLEY, Admr., et al., Appellees, v. GRANGE MUTUAL CASUALTY INSURANCE COMPANY, Appellant.

No. 96APE07-896.

Court of Appeals of Ohio Tenth District, Franklin County.

Decided April 10, 1997.

Clark, Perdue, Roberts & Scott, Douglas S. Roberts and Glen R. Pritchard, Columbus, for appellees.

Hamilton, Kramer, Myers & Cheek, Brian J. Bradigan and Thomas J. Conkle, Columbus, for appellant.

LAZARUS, Judge.

Defendant-appellant, Grange Mutual Casualty Insurance Company ("Grange"), appeals from a judgment of the Franklin County Court of Common Pleas declaring that plaintiffs-appellees, Kendall R. Bentley, Herman Keith Bentley, Jr., April M. Beckley, and Tracy L. Myers are entitled to underinsured motorist coverage. We affirm for the reasons that follow.

On March 3, 1988, Millard Scott Bentley died while a passenger in a motor vehicle negligently operated by Todd Tekip. Millard was survived by his father Herman, his mother Darlene, and his four brothers and sisters, the appellees herein. All six survivors originally were plaintiffs in this action. The trial court granted summary judgment against the parents based on the doctrine of res judicata, or claim preclusion, and there has been no appeal from that judgment. The action proceeded to a bench trial on stipulated facts and trial briefs, whereupon the trial court granted judgment in favor of appellees. Grange asserts two assignments of error:

1. "The trial court erred in deciding that the plaintiffs, the siblings of Millard Bentley, are entitled to underinsured motorist coverage under a Grange auto insurance policy issued to Herman Bentley, Millard's father and the executor of Millard's estate. After Herman Bentley, as the personal representative of Millard's estate, settled with the tortfeasor, the brothers and sisters were no longer 'legally entitled to recover,' a condition precedent under the insurance contract to underinsured motorist benefits."

2. "Plaintiffs-appellees' claim for underinsured motorist benefits was adjudicated to a final decision and judgment in the Court of Common Pleas of Cuyahoga County, Herman Bentley v. Grange (1991), case No. 193137. The trial court erred in its determination that the decision was not a bar as to all the beneficiaries of the estate, as the administrator of the estate is the sole person authorized by law to prosecute a wrongful death action. In addition, even though the remaining plaintiffs were not named parties in the earlier suit, they were in privity with the named parties, and they are now collaterally estopped from relitigating."

Decedent's father, Herman Bentley, was appointed administrator of the estate. At the time of the accident, Herman was the named insured on a policy of automobile insurance issued by appellant with uninsured/underinsured motorist ("UM") coverage of $100,000 per person and $300,000 per occurrence. With the consent of appellant, Tekip's insurer, Western Reserve Insurance Company, paid $100,000 as exhaustion of Tekip's policy limits for the settlement of the wrongful death claims against Tekip. As a condition of the settlement, Herman Bentley, in his capacity as the administrator of the estate, released Tekip from liability. Under Ohio's wrongful death statute, specifically R.C. 2125.02(C), the administrator controls all wrongful death claims against the tortfeasor, including those of appellees, the decedent's brothers and sisters. Therefore, the settlement and release by the administrator included release of appellees' wrongful death claims against the tortfeasor Tekip.

On July 10, 1990, an action was filed in the Cuyahoga County Court of Common Pleas against appellant, Bentley v. Grange Mut. Ins. Co., case No. 193137. Because the limits of the policy issued by appellant were the same as the limits of the tortfeasor's policy, the Cuyahoga County Court of Common Pleas, on April 11, 1991, granted judgment in favor of appellant. The court relied on Hill v. Allstate Ins. Co. (1990), 50 Ohio St.3d 243, 553 N.E.2d 658, syllabus, which states:

"Unless otherwise provided by an insurer, underinsured motorist liability insurance coverage is not available to an insured where the limits of liability contained in the insured's policy are identical to the limits of liability set forth in the tortfeasor's liability insurance coverage. (R.C. 3937.18[A], construed and applied; Wood v. Shepard [1988], 38 Ohio St.3d 86, 526 N.E.2d 1089, distinguished and explained.)"

On October 1, 1993, the Supreme Court of Ohio expressly overruled Hill:

"An underinsurance claim must be paid when the individual covered by an uninsured/underinsured policy suffers damages that exceed those monies available to be paid by the tortfeasor's liability carriers. (Hill v. Allstate Ins. Co. [1990], 50 Ohio St.3d 243, 553 N.E.2d 658, overruled.)" Savoie v. Grange Mut. Ins. Co. (1993), 67 Ohio St.3d 500, 620 N.E.2d 809, paragraph three of the syllabus.

On November 23, 1993, appellees sent appellant a demand for $200,000 of underinsured motorist ("UM") benefits, which appellant denied.

On March 17, 1994, an action against appellant, case No. 94CVC-03-1856, was filed in the Franklin County Court of Common Pleas. On October 31, 1994, the trial court issued a decision granting summary judgment in favor of appellant on the ground that under the doctrine of res judicata, appellees' claims were barred by the judgment in the 1991 Cuyahoga County action. Appellees voluntarily dismissed the action prior to judgment being entered upon that decision.

Four days later, on November 4, 1994, the complaint was refiled in the Franklin County Court of Common Pleas under case No. 94CVH-11-7870, the action from which this appeal arises. The plaintiffs were Herman Bentley, decedent's father, individually and as administrator of the estate, decedent's mother Darlene Bentley, and decedent's four brothers and sisters. Appellant again moved for summary judgment on the ground that, under the doctrine of res judicata, appellees' claims were barred by the judgment in the Cuyahoga County action. On August 7, 1995, the trial court sustained appellant's motion as to plaintiffs Herman Bentley individually and Darlene Bentley, but overruled the motion as to the other plaintiffs on the ground that because they were not parties in the Cuyahoga County action, they could not be bound by that judgment.

The action proceeded to trial on stipulated facts and trial briefs. In a June 5, 1996 decision and subsequent judgment entry, ¹ the court declared that appellees are entitled to UM coverage subject to the $100,000 and $300,000 policy limits and that appellant is obligated to submit the issue of liability and damages to binding arbitration pursuant to the terms of the policy.

In the first assignment of error, appellant argues that appellees' rights to UM coverage were terminated by the release of the tortfeasor, which was part of the administrator's settlement with the tortfeasor and the tortfeasor's liability insurer.

In the UM provision of the policy issued by appellant, appellant promises "[t]o pay all sums which the insured or his legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle because of bodily injury, sickness or disease, including death resulting therefrom, hereinafter called 'bodily injury,' sustained by the insured, caused by accident and arising out of the ownership, maintenance or use of such uninsured motor vehicle." (Emphasis added.)

This language mirrors the language of R.C. 3937.18(A)(1), ² which requires UM coverage "for the protection of persons insured * * * who are legally entitled to recover damages from owners or operators of uninsured motor vehicles." Appellant argues that appellees are no longer "legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle" because their legal entitlement to recover damages from the tortfeasor terminated when their wrongful death case against the tortfeasor was settled in 1990. Appellant argues that because appellees no longer have claims against the tortfeasor--that is, they are no longer "legally entitled to recover damages" from him--appellees have no right to UM benefits under the terms of the policy.

Appellant's interpretation of "legally entitled to recover" is too restrictive. Although appellees no longer have claims against the tortfeasor as a result of the settlement, the Supreme Court in McDonald v. Republic-Franklin Ins. Co. (1989), 45 Ohio St.3d 27, 543 N.E.2d 456, paragraph two of the syllabus, held that the right to UM coverage survives the insured's release of the underinsured motorist from tort liability when the UM insurer has failed to reasonably protect its subrogation rights:

"When an insured has given his underinsurance carrier notice of a tentative settlement prior to release, and the insurer has had a reasonable opportunity to protect its subrogation rights by paying the underinsured motorist benefits before the release but does not do so, the release will not preclude recovery of underinsurance benefits." Id.

McDonald supports the proposition that an insured retains the contract right to UM coverage despite the fact that the tort claim against the tortfeasor has been settled, if the UM insurer consented to the settlement. The second paragraph of the McDonald syllabus is equally applicable when the underlying tort is subject to the wrongful death statute. See, e.g., Cincinnati Ins. Co. v. Jarvis (1994), 98 Ohio App.3d 155, 162-164, 648 N.E.2d 30, 34-36; Lanza-Costlow v. State Farm Fire & Cas. Co. (1996), 115 Ohio App.3d 106, 684 N.E.2d 742; Hydel v. Cincinnati Ins. Co. (Jan. 11, 1996), Cuyahoga App. No. 68552, unreported, 1996 WL 11316; Motorists Mut. Ins. Co. v. Cincinnati Ins. Co. (Sept. 10, 1993), Wood App. No. 92WD087, unreported, 1993 WL 342587; Gingerich v. Nationwide Mut. Ins. Co. (Aug. 13, 1990), Tuscarawas App....