Globe Am. Cas. Co. v. Goodman
| Citation | 41 Ohio App.2d 231,70 O.O.2d 447,325 N.E.2d 257 |
| Parties | , 70 O.O.2d 447 GLOBE AMERICAN CASUALTY CO., Appellee, v. GOODMAN, Appellant. |
| Decision Date | 12 September 1974 |
| Court | United States Court of Appeals (Ohio) |
Syllabus by the Court
1. R.C. 3937.18 provides for the mandatory offering of uninsured motorist insurance coverage. The purpose of this provision in an insurance contract is to protect an insured motorist, under his own policy, from the effects of personal injury resulting from an accident with another motorist who carries no insurance.
2. Actions by an insured against an insurer based upon an uninsured motorist provision are contractual in nature, even though ultimate recovery depends upon proof of damages due to the tort of an uninsured third party, because the cause of action arises by reason of the written contract.
3. In the absence of a controlling statute to the contrary, a provision in an insurance contract may validly limit the time for bringing an action on such a contract to a period less than that prescribed in a general statute of limitations, provided that the shorter time is a 'reasonable period.'
4. R.C. 3937.18 has no statute of limitation nor does it make reference to any prescribed statute of limitation within which uninsured motorist's actions must be brought. An uninsured motorist provision in an insurance contract providing that any suit, action, or proceeding in arbitration shall be brought against the insurer for the recovery of any claim within twelve months after the date of the accident is a reasonable period of time. Further, such one year limitation of action provision contained in an insurance contract is not against public policy and is independent of and not in conflict with either R.C. 2305.10 or R.C. 2305.06, which contain statutes of limitation of two and fifteen years respectively for bringing actions for bodily injury and on written contracts.
James G. Gowan, Cleveland, for appellee.
Gene F. Manning, Cleveland, for appellant.
Plaintiff, Globe American Casualty Company, an automobile insurance company, filed a petition for declaratory judgment and permanent injunction in the Cuyahoga County Common Pleas Court on June 9, 1970, with defendant being Mark Goodman, a policy holder. Plaintiff will hereinafter be referred to as Globe or Insurer, which terms may be used interchangeably, and the defendant will be referred to as Goodman or the Insured, which terms may also be used interchangeably.
In its petition Globe alleges that it issued a policy of automobile insurance to Goodman, who was involved in an automobile collision on February 26, 1969, and that on May 5, 1970 Goodman filed a demand for arbitration with the American Arbitration Association based on the uninsured motorist provision of the policy. Globe further alleges that the uninsured motorist section of the policy contains the following condition:
'ACTION AGAINST THE COMPANY: No. suit or action whatsoever or any proceeding instituted or processed in arbitration shall be brought against the company for the recovery of any claim under this coverage unless as a condition precedent thereto, the insured or his legal representative has fully complied with all of the terms of the policy and unless same is commenced within twelve months next after the date of the accident.'
Globe alleges that Goodman breached his contract with Globe in failing to comply with the foregoing condition because the demand for arbitration was made more than twelve months after the accident.
Globe is seeking a declaration of the rights and liabilities of the parties under the provisions of the contract and specifically for a judgment declaring and adjudicating whether or not the policy has been breached by Goodman. Globe further prays for an order enjoining Goodman from proceeding with his claim before the American Arbitration Association.
In addition Globe sought a temporary restraining order against Goodman from proceeding with arbitration and it was granted until the final disposition of the case.
Goodman filed his answer in which he alleges that he sustained injuries in an automobile collision that took place on February 26, 1969; and that on March 5, 1970 1, he filed a demand for arbitration based upon the uninsured motorists provision of the policy that was issued to him by Globe. He also admitted that the policy of insurance contained a provision requiring that action be taken within 12 months of the date of the accident but denies that this provision is operative to deny him his right to pursue an uninsured motorist claim under the provisions of the policy. Defendant prayed for a judgment, adjudicating whether or not the policy has been breached by him, and whether he is barred from its provisions.
The parties then stipulated the facts, which in substance state that policies of insurance were issued to Goodman on October 27, 1967 and October 27, 1968. The policies contained uninsured motorist coverage with the provision referred to above that any suit, action or proceeding in arbitration shall be brought against the company within twelve months of the date of the accident. The stipulations confirmed the fact that Mr. Goodman, the defendant, was involved in an automobile accident on February 26, 1969, and that the other motorist was Mr. Sal Catania. On March 8, 1969, the attorney for defendant Goodman notified the Davis Grant Insurance Company of a potential uninsured motorist's claim arising out of the February 26, 1969, accident, and on August 12, 1969, an accident report form was executed by Goodman and directed to Globe. The stipulations further state that on September 8, 1969, an adjuster for Globe contacted Goodman's attorney, and on September 16, 1969 the adjuster took a signed statement from Goodman in the presence of Goodman's attorney. On October 22, 1969 the adjuster contacted the attorney for Mr. Goodman requesting evidence that Mr. Sal Catania was uninsured and the attorney for Mr. Goodman advised that a letter to that effect would be obtained from Mr. Catania's attorney. On December 15, 1970 2 a second contact was made by the adjuster regarding evidence of uninsured motorist coverage. On March 20, 1970 the attorney for the Insured contacted the adjuster and was advised that the file had been closed for the reason that the twelve month period for making the claim had expired. On May 15, 1970, Goodman filed a demand with the American Arbitration Association.
Plaintiff Globe contended that an insurer can place a provision in its policy, restricting the period of time for commencing an action against the insurance company and that time is valid as long as it is reasonable. Globe contends that the parties to a contract of insurance may insert a provision in a contract to limit the time within which a suit may be brought and such a time is valid if it is not an unreasonable period of time. The plaintiff also contends that the two year tort statute of limitations is not applicable and does not govern the time for which arbitration may be brought under an uninsured motorist claim. Globe contends that such a claim is a matter of contract and not tort and the contract may set forth the time for which a claim for arbitration must be made.
The Insured contended that the one year limitation of action provision of the policy is invalid and should be set aside because Ohio law provides for a two year statute of limitation of bodily injury in R.C. 2305.10. Further, the Insured contended that when there is a conflict or an ambiguity in the terms of an insurance policy, it will be construed in favor of the insured.
In effect, the defendant is contending that the insurance company cannot put a provision in its policy limiting the time in which an action can be brought on the uninsured motorist's provision shorter than that provided for in the personal injury section of R.C. 2305.10 and that such a provision is against public policy.
On September 11, 1973 the trial court entered judgment for plaintiff Globe and in its journal entry the trial court found that defendant Goodman was involved in an automobile accident on February 268 1969, and that the proceedings for arbitration were instituted on May 15, 1970. The court found that the limitation in the policy is a valid and enforceable term of the contract and is not in conflict with the statutes or laws of the State of Ohio.
The Court held that since defendant Goodman did not institute proceedings in arbitration under the twelve month provision of the policy, he...
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