Dairyland Ins. Co. v. Finch

• Decision Date: 16 September 1987
• Docket Number: No. 86-1505,86-1505
• Citation: 32 Ohio St.3d 360,513 N.E.2d 1324
• Parties: DAIRYLAND INSURANCE COMPANY, Appellee, v. FINCH et al., Appellants.
• Court: Ohio Supreme Court

Page 360

32 Ohio St.3d 360

513 N.E.2d 1324

DAIRYLAND INSURANCE COMPANY, Appellee, v. FINCH et al., Appellants.

No. 86-1505.

Supreme Court of Ohio.

Sept. 16, 1987.

Syllabus by the Court

1. A person is not an insured under the liability provisions of an automobile insurance policy unless defined by the terms of the policy as an insured; provided, however, that when the policy has been "certified" under the provisions of R.C. 4509.46 or 4509.47, the definition of who is an "insured" under the policy must conform with R.C. 4509.51 et seq. (Moyer v. Aron [1964], 175 Ohio St. 490, 26 O.O.2d 130, 196 N.E.2d 454, and Bob-Boyd Lincoln Mercury v. Hyatt [1987], 32 Ohio St.3d 300, 513 N.E.2d 331, approved and followed.)

2. Public policy does not prevent the issuance and enforcement of an automobile liability insurance policy containing a reasonable exclusionary clause, within the uninsured motorist provision, prohibiting intrafamilial recovery of damages against the issuer of the policy. (Shearer v. Shearer [1985], 18 Ohio St.3d 94, 18 OBR 129, 480 N.E.2d 388, followed and extended.)

The facts giving rise to this appeal are not in dispute, having been stipulated by the parties below. On December 25, 1981, appellant, Phyllis J. Finch, was a passenger in an automobile being driven by her husband, Edward E. Finch. The automobile was involved in a collision in Marion County, allegedly causing appellant to sustain bodily injuries. Approximately one year later, Edward Finch died of causes unrelated to the accident.

In February 1983, Finch was appointed administratrix of her husband's estate, and thereafter she filed suit against herself as administratrix seeking recovery for the alleged injuries and damages arising from the 1981 automobile accident. Subsequently, in her capacity as administratrix, Finch tendered her defense of her claim against the estate to appellee, Dairyland Insurance Company, contending that, at the time of the accident her husband was a named insured under an automobile liability insurance policy issued by Dairyland. Dairyland then initiated an action for declaratory judgment and injunctive relief in the Court of Common Pleas of Marion County seeking a determination that the policy did not provide coverage for Finch, nor did it require the insurer to provide a defense to her lawsuit. Finding that Finch's claim was explicitly excluded under the policy of insurance, the trial court entered final judgment in Dairyland's favor. On appeal the judgment of the trial court was affirmed.

The cause is now before this court pursuant to the allowance of a motion to certify the record.

Isaac, Brant, Ledman & Becker, Charles E. Brant and J. Stephen Teetor, Columbus, for appellee.

Piacentino & Piacentino Co., L.P.A., and C. Michael Piacentino, Marion, for appellants.

WRIGHT, Justice.

Appellant Finch challenges the holdings of the courts below, arguing: (1) that the family member exclusionary clause under the policy of insurance in question contravenes specific provisions of the Financial Responsibility Act and is therefore void ab initio; (2) that the subject policy did not contain an intrafamilial exclusion within the uninsured motorist provision of the policy and, in the alternative, if such an exclusion did exist, it is void as against public policy; and (3) that intrafamilial exclusions serve no valid public policy purpose where a claim is filed by a surviving spouse against the fiduciary of the insured's estate. For the reasons to follow, we reject appellant's contentions and affirm the judgment of the court of appeals.

I

At the time of the accident, Edward Finch was the named insured under Dairyland's policy, which provided, in pertinent part ¹:

"The liability insurance of this policy doesn't apply to bodily injuries or property damage suffered by the person named on the declarations page, or to anyone who is a member of the family of the person named on the declarations page and who lives with that person." ² (Emphasis added.)

It is appellant's position that the foregoing policy provision is violative of R.C. 4509.51, which is contained within the Financial Responsibility Act. According to appellant, since this section provides that "[e]very owner's [motor-vehicle] policy of liability insurance * * * [s]hall insure the person named therein and any other person, as insured * * *" (emphasis added), Dairyland's liability exclusions for the named insured and household family members contradict the standards imposed under R.C. Chapter 4509, and must therefore be considered void and unenforceable. We conclude that appellant's reliance on R.C. 4509.51 is misplaced.

Although R.C. 4509.51 sets forth requirements to be included within "[e]very owner's policy of liability insurance," an "owner's policy" is defined by R.C. 4509.01(L) as a policy having been " * * * certified as provided in section 4509.46 or 4509.47 of the Revised Code as proof of financial responsibility, and issued, except as provided in section 4509.47 of the Revised Code, by an insurance carrier authorized to do business in this state, to or for the benefit of the person named therein as insured." (Emphasis added.)

Without question, unless the policy of insurance is certified in conjunction with R.C. 4509.46 or 4509.47, the provisions of R.C. 4509.51 do not apply. This is precisely the holding in Moyer v. Aron (1964), 175 Ohio St. 490, 26 O.O.2d 130, 196 N.E.2d 454, wherein the court reasoned that "[n]ot until the policy is 'certified' under Section 4509.46 [or 4509.47] * * * would it result in the modification of the policy to comply with the * * * [Financial Responsibility Act], which, through the application of Section 4509.51, supra, would then result in insurance coverage for all permissive users, even though the user does not fall under the definition of an ' * * * insured' in the policy." Id. at 492, 26 O.O.2d at 131, 196 N.E.2d at 457. See, also, Bob-Boyd Lincoln Mercury v. Hyatt (1987), 32 Ohio St.3d 300, 513 N.E.2d 331; Knapp v. State Farm Mut. Auto. Ins. Co. (1982), 6 Ohio App.3d 53, 6 OBR 217, 453 N.E.2d 1110; Trolio v. McLendon (1965), 4 Ohio App.2d 30, 33 O.O.2d 52, 211 N.E.2d 65.

The General Assembly has not seen fit to include in the Financial Responsibility Act a provision requiring all persons who drive in this state to procure automobile insurance. Instead, when proof of financial responsibility must be demonstrated, it may be with a bond, a certificate of deposit, a certificate of self-insurance or a certified policy of insurance as provided by R.C. 4509.46 and 4509.47. See R.C. 4509.45. In the instant case, appellant is clearly not insured under the language of the policy, and the record is devoid of any evidence that the decedent's policy of insurance was ever "certified" in conjunction with R.C. 4509.46 or 4509.47, so as to trigger the application of R.C. 4509.51. We therefore reiterate the position previously espoused in the second paragraph of the syllabus in Moyer v. Aron, supra, and followed in Bob-Boyd Lincoln Mercury v. Hyatt, supra, that a person is not an insured under the liability provisions of an automobile insurance policy unless defined by the terms of the policy as an insured; provided, however, that when the policy has been "certified" under the provisions of R.C. 4509.46 or 4509.47, the definition of who is an "insured" under the policy must conform with R.C. 4509.51 et seq.

II

Appellant next contends that, assuming the validity of the liability exclusion, she is entitled to make a claim under the uninsured motorist provision of the policy. Continuing, appellant maintains that the policy in effect at the time of the accident did not contain a family member exclusion for purposes of uninsured motorist coverage or, in the event such an exclusion did exist, it is against public policy and is therefore void.

As is pertinent to this portion of appellant's appeal, the policy provided:

"EXCLUDED UNINSURED MOTOR VEHICLES

"A motor vehicle owned by you or furnished for your regular use isn't an uninsured motor vehicle."

The terms "you" and "your" are defined within the policy as " * * * the person named on the declarations page [i.e., Edward Finch] and that person's husband or wife if a resident of the same household."

A

We first consider appellant's argument that the above language does not constitute an exclusion prohibiting her, as the insured's spouse, from making an uninsured motorist claim against Dairyland. We are cognizant of the general rule that where a contract of insurance is ambiguous and therefore susceptible to more than one meaning, the policy language is to be liberally construed in favor of the claimant who seeks coverage. See, e.g., Buckeye Union Ins. Co. v. Price (1974), 39 Ohio St.2d 95, 68 O.O.2d 56, 313 N.E.2d 844; Butche v. Ohio Cas. Ins. Co. (1962), 174 Ohio St. 144, 21 O.O.2d 418, 187 N.E.2d 20. Nevertheless, it is axiomatic that this rule can not be employed "to create ambiguity where there is none." Tyler v. Ins. Co. of North America (D.Ala.1974), 381 F.Supp. 1356, 1359; State Farm Mut. Auto. Ins. Co. v. Ward (Mo.1960), 340 S.W.2d 635, 639.

Under the facts here, this court can not envision a more clear and unambiguous exclusion than that contained within the policy. At the outset, the exclusion was prefaced by large, bold-face type directing the insured's attention that some motor vehicles were being excluded from the uninsured motorist protections. The exclusion itself was clearly worded, and the fact that appellant, as the spouse of the insured residing in the same household, was also excluded from making an uninsured claim against the insured for his negligence was manifestly apparent from the exclusion and the definitional page of the policy.

Appellant, however, directs our attention to Ady v. West American Ins. Co. (1982), 69 Ohio St.2d 593, 23 O.O.3d 495, 433 N.E.2d 547, arguing that any uninsured motorist exclusion must be understood and accepted by the...