Buckeye Union Ins. Co. v. Price

Decision Date10 July 1974
Docket NumberNo. 73-974,73-974
Citation68 O.O.2d 56,39 Ohio St.2d 95,313 N.E.2d 844
Parties, 68 O.O.2d 56 BUCKEYE UNION INSURANCE COMPANY, Appellee, v. PRICE et al., Appellants.
CourtOhio Supreme Court

On August 12, 1961, Robert F. Price and Lura Price were injured when an automobile operated by Gerald Delno Johnson 1 struck the Price automobile. The Prices' auto was insured by Buckeye Union Insurance Company. The auto driven by Johnson was insured by Old Line Insurance Company of Indiana.

The Prices subsequently obtained default judgments against Johnson totalling $40,000, which remain unsatisfied.

Prior to December 1966, the Prices made demand an Old Line for payment of the judgments rendered against Johnson, but no payment was received.

In December 1966, Old Line became insolvent through liquidation proceedings in Indiana.

In March 1972, the Prices filed a demand for arbitration with the American Arbitration Association. The subject to be arbitrated was the uninsured motorist provision of their Buckeye Union Policy issued May 14, 1961.

On April 20, 1972, Buckeye filed a complaint for a declaratory judgment and obtained an injunction to prevent arbitration until a decision in that case had been reached.

Considering only the stipulations of the parties, the court found that the uninsured motorist coverage did not include the post-accident insolvency of the tortfeasor's insurance company.

The Court of Appeals affirmed.

The Prices filed a motion in the Court of Appeals requesting certification of the record in the case to this court because of a conflict between its judgment and the judgment of the Court of Appeals for Montgomery County in the case of Buckeye Union Ins. Co. v. Steiner (1974), 37 Ohio St.2d 113, 308 N.E.2d 460, which was then pending before this court.

The Court of Appeals, finding that the aforestated conflict did exist, certified the record to this court for review and final determination. 2

Waite, Schindel, Bayless & Schneider and David A. Kohnen, Cincinnati, for appellee.

Keating, Muething & Klekamp and Lanny R. Holbrook, Cincinnati, for appellants.

CELEBREZZE, Justice.

The Buckeye Union policy in effect at the time of the accident provided uninsured motorist protection under its Family Protection Coverage clause. The pertinent language was contained in the following definition:

"uninsured automobile' includes * * *:

'(a) an automobile with respect to the ownership, maintenance or use of which there is no bodily injury liability bond or insurance policy applicable at the time of the accident with respect to any person or organization legally responsible for the use of such automobile * * *.' (Emphasis added.)

The issue before this court is whether that language is ambiguous. If it is, the language will be interpreted in favor of the insured.

Appellants devote part of their argument to the proposition that R.C. 3937.18 3 evinces the express public policy of the state requiring insurance companies to provide their policyholders with protection losses which, because of the tortfeasor's lack of liability coverage, would otherwise go uncompensated. This, they argue, prevents private parties from inserting provisions in, or omitting provisions from, the policy which restrict coverage contrary to that public policy. Among the cases cited in support of that position are Buckeye Union Ins. Co. v. Steiner (1974), 37 Ohio St.2d 113, 308 N.E.2d 460; Bartlett v. Nationwide Mult. Ins. Co. (1973), 33 Ohio St.2d 50, 294 N.E.2d 665; and Abate v. Pioneer Mutual Cas. Co. (1970), 22 Ohio St.2d 161, 258 N.E.2d 429.

However, as the trial court pointed out, the policy in question was issued on May 14, 1961. Ohio's compulsory uninsured motorist coverage law was enacted in 1965, four years later. The cases based upon that law are not controlling; and this court cannot give retroactive effect to that statute. This case must be decided upon a common-law interpretation of the language of the 1961 insurance policy.

Appellee argues that the facts are not in issue. The tortfeasor was insured by Old Line Insurance Co., at the time of the accident. Thus, his sutomobile cannot be an sutomobile with respect to which there is no 'insurance policy applicable at the time of the accident * * *.' It is Buckeye's position that the definition is clear and unambiguous and not subject to construction by the court. Old Line's subsequent insolvency is immaterial, since, on August 12, 1961 (the date of the accident), there was an insurance policy in effect.

Appellants argue that the policy language is ambiguous and, according to well-settled principles of law, the ambiguity must be resolved in favor of the insured. They argue that the layman pays the extra premium for uninsured motorist coverage in order to protect himself from all losses which would otherwise go uncompensated. The effect is the same, whether the tortfeasor has never had insurance, the insurer subsequently denies coverage, or the insurer subsequently becomes insolvent. The layman receives no compensation.

That precise issue has not been determined by this court. The highest courts of Minnesota, North Carolina and Rhode Island have decided that the language is not subject to interpretation, holding for the insurance companies. Baune v. Farmers Ins. Exchange (1969), 283 Minn. 54, 166 N.W.2d 335; Rice v. Aetna Cas. & Surety Co. (1966), 267 N.C. 421, 148 S.E.2d 223; Hardin v. American Mutl. Fire Ins. Co. (1964), 261 N.C. 67, 134 S.E.2d 142; Fagnant v. Pacific Ins. Co. (1970), 107 R.I. 709, 270 A.2d 919. Lower appellate courts in Delaware, Florida, Illinois, Michigan, Missouri and Tennessee have reached the same result.

However, the highest courts in three states have reached the opposite view. Tsapralis v. Public Employees...

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