Dominish v. Nationwide Ins. Co.

• Decision Date: 23 August 2011
• Docket Number: No. 2010–1431.,2010–1431.
• Citation: 129 Ohio St.3d 466,2011 -Ohio- 4102,953 N.E.2d 820
• Parties: DOMINISH, Appellee,v.NATIONWIDE INSURANCE COMPANY, Appellant.
• Court: Ohio Supreme Court

129 Ohio St.3d 466

953 N.E.2d 820

2011 -Ohio- 4102

DOMINISH, Appellee,

v.NATIONWIDE INSURANCE COMPANY, Appellant.

No. 2010–1431.

Supreme Court of Ohio.

Submitted June 7, 2011.Decided Aug. 23, 2011.

Svete & McGee Co., L.P.A., and David A. McGee, Chardon, for appellee.Baker, Dublikar, Beck, Wiley & Mathews and Ralph F. Dublikar, North Canton, for appellant.PFEIFER, J.

[Ohio St.3d 466] {¶ 1} The issue in this case is whether Nationwide Insurance Company can enforce the limitation-of-action clause contained in its insurance contract. For the reasons that follow, we conclude that it can.

[Ohio St.3d 467] Factual and Procedural Background

{¶ 2} On July 28, 2006, a storm caused a tree to fall and damage a house owned by appellee, Dennis J. Dominish.¹ Dominish submitted a claim to his insurance company, appellant, Nationwide Insurance Company. Nationwide investigated, assessed the damage, and twice issued a check to Dominish in the amount of $6,741.96. Both times that Dominish received a check, he wrote the word “void” on it and returned it to Nationwide, deeming the amount insufficient to cover the damage to his home.

{¶ 3} On July 25, 2008, almost two years after the tree fell, Dominish filed suit against Nationwide. Nationwide argued that the lawsuit was barred by a clause in the insurance contract that states:

{¶ 4} “Suit Against Us. No action can be brought against us unless there has been full compliance with the policy provisions. Any action must be started within one year after the date of loss or damage.” (Boldface sic.)

{¶ 5} The trial court agreed and granted Nationwide's motion for summary judgment. Dominish appealed, and the court of appeals reversed, concluding that the policy language was ambiguous and that in any event, Nationwide, by its actions, had waived its right to enforce the one-year limitation clause.

{¶ 6} We accepted Nationwide's discretionary appeal. 127 Ohio St.3d 1444, 2010-Ohio-5762, 937 N.E.2d 1035 (Proposition of Law No. I accepted); 127 Ohio St.3d 1480, 2010-Ohio-6370, 938 N.E.2d 1040 (on reconsideration, Proposition of Law No. II also accepted).

Analysis

Ambiguity

{¶ 7} This court has long adhered to the principle that ambiguous language in an insurance contract is construed against the insurance company. See, e.g., Faruque v. Provident Life & Acc. Ins. Co. (1987), 31 Ohio St.3d 34, 31 OBR 83, 508 N.E.2d 949, syllabus (“Language in a contract of insurance reasonably susceptible of more than one meaning will be construed liberally in favor of the insured and strictly against the insurer”). Even though most words in the English language have multiple meanings, ambiguity should not be created where it does not exist.

{¶ 8} In isolation, any word or phrase in the contested policy language may be ambiguous. When considered as a whole, however, the provision is unambiguous. That the word “start” is not commonly used to indicate the commencement of a lawsuit does not mean that it refers to something else when it is used in a provision entitled “Suit Against Us.” Similarly, though the word “action” can [Ohio St.3d 468] refer to virtually anything done by a person, there is no reason to think it refers to anything other than a lawsuit when used as part of a two-sentence provision entitled “Suit Against Us.” The fact that the two sentences could have been written more clearly, and they could have, does not mean that they are ambiguous. “[T]here are limitations in the English language with respect to being both specific and manageably brief, and it seems to us that although the prohibitions may not satisfy those intent on finding fault at any cost, they are set out in terms that the ordinary person exercising ordinary common sense can sufficiently understand and comply with.” United States Civ. Serv. Comm. v. Natl. Assn. of Letter Carriers AFL–CIO (1973), 413 U.S. 548, 578–579, 93 S.Ct. 2880, 37 L.Ed.2d 796 (referring to prohibitions set forth in a federal statute). The policy states in language clear enough to be plainly understood that any lawsuit by an insured against Nationwide must be commenced within one year of the loss or damage sustained. We conclude that the policy language is not ambiguous.

Waiver

{¶ 9} In Hounshell v. Am. States Ins. Co. (1981), 67 Ohio St.2d 427, 21 O.O.3d 267, 424 N.E.2d 311, syllabus, we stated, “An insurance company may be held to have waived a limitation of action clause in a fire insurance policy by acts or declarations which evidence a recognition of liability, or acts or declarations which hold out a reasonable hope of adjustment and which acts or declarations occasion the delay by the insured in filing an action on the insurance contract until after the period of limitation has expired.” This holding is sufficiently clear that we have not had occasion to revisit it in the intervening 30 years. The holding states a two-part test to determine whether an insurance company has waived a contractual limitation-of-action clause. We do not consider the test to be the exclusive way to determine whether an insurance company has waived its right to enforce a limitation-of-action clause, but it is one way.

{¶ 10} To be deemed to have waived its right to enforce a limitation-of-action clause pursuant to our holding in Hounshell, an insurance company must have either recognized liability or held out a reasonable hope of adjustment and by doing so, induced the insured to delay filing a lawsuit until after the contractual period of limitation expired. We conclude that Nationwide did not recognize liability for the disputed portion of the damage or hold out a hope of an adjustment to include compensation for that portion of the damage.

{¶ 11} Nationwide clearly stated that it was not liable beyond the amount of the check that it twice proffered to Dominish. In a letter dated September 6, 2006, Nationwide stated, “You will receive or have received, a partial...