Hedrick v. Motorists Mut. Ins. Co.

• Decision Date: 05 February 1986
• Docket Number: No. 84-1950,84-1950
• Citation: 22 OBR 63,22 Ohio St.3d 42,488 N.E.2d 840
• Parties: , 22 O.B.R. 63 HEDRICK, Appellee, v. MOTORISTS MUTUAL INSURANCE COMPANY, Appellant, et al.
• Court: Ohio Supreme Court

Page 42

22 Ohio St.3d 42

488 N.E.2d 840, 22 O.B.R. 63

HEDRICK, Appellee, v. MOTORISTS MUTUAL INSURANCE COMPANY, Appellant, et al.

No. 84-1950.

Supreme Court of Ohio.

Feb. 5, 1986.

Syllabus by the Court

An insurance policy provision which denies uninsured motorist coverage, when bodily injury is sustained by any person while occupying a motor vehicle owned by an insured but which vehicle is not specifically insured under the policy, is a valid exclusion.

The facts of this case are not in dispute. Appellee, William G. Hedrick, Jr., was injured in an accident on August 2, 1982, allegedly due to the negligence of an uninsured motorist. At the time of the accident, appellee was riding a motorcycle owned by his father. Midwest Mutual Insurance Company specifically insured the motorcycle and, pursuant to the uninsured motorist provision of its policy, paid to its insured, appellee, its full policy limits of $12,500.

Appellee's father had a policy of insurance with appellant, Motorists Mutual Insurance Company, which covered a 1975 Ford pickup truck and a 1982 Ford station wagon. Appellee sought to recover his uncompensated damages through this policy based on the uninsured motorist provision. Appellant denied the claim relying on the following provision in the policy:

"EXCLUSIONS

"A. We do not provide Uninsured Motorists Coverage for bodily injury sustained by any person:

"l. While occupying, or when struck by, any motor vehicle owned by you or any family member which is not insured for this coverage under this policy. * * * " (Emphasis sic.)

Thereafter, appellee filed a declaratory judgment action seeking a determination as to whether he was covered under his father's policy with appellant. Both parties filed motions for summary judgment. The trial court awarded summary judgment in favor of appellee, finding that appellee was a "person insured" under the policy issued by appellant, and that the exclusion relied upon by the insurance company was unenforceable. The court applied the test set forth in Ady v. West American Ins. Co. (1982), 69 Ohio St.2d 593, 433 N.E.2d 547 , and reasoned that the exclusionary provision was unenforceable herein because it was not conspicuous and because Hedrick, Sr. " * * * was not aware of the specifics of the exclusion." The court also stated that the passage of R.C. 3937.18 does not alter these " * * * procedural requirements of drafting from Ady, but merely indicates that should a policy include * * * [an anti-stacking] provision, it is not invalid per se."

Addressing the precise issue raised by appellant on appeal, the court of appeals found that " * * * the provision [at issue] in the instant case is not an anti-stacking provision." The court then concluded that " * * * Motorists Mutual cannot deny Hedrick's claim on the grounds that he had other insurance which covered this claim." The decision of the trial court was affirmed.

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

Dale S. Economus, for appellee.

Buckingham, Doolittle & Burroughs Co., L.P.A., and Orville L. Reed III, Akron, for appellant.

DOUGLAS, Justice.

Appellant asserts that the issue raised is whether the insurance policy provision in question constitutes a valid anti-stacking provision. After careful review of the policy provision in question, this court cannot concur in appellant's assessment of the issue presented by these facts. Rather, this court finds that the issue presented in the case is whether the policy provision is an exclusionary provision which operates to bar recovery herein. For the reasons that follow, this court holds that the relevant provision is an exclusionary provision and, moreover, by its unambiguous terms, precludes recovery under the facts of this case.

The pertinent policy provision provides as follows:

"EXCLUSIONS

"A. We do not provide Uninsured Motorists Coverage for bodily injury sustained by any person:

"1. While occupying, or when struck by, any motor vehicle owned by you or any family member which is not insured for this coverage under this policy. * * * " (Emphasis sic.)

This provision is clear and unambiguous. It specifically precludes coverage to a person who sustains bodily injury while occupying a motor vehicle which is owned by a family member and which is not insured for coverage under the policy.

In the instant case, appellee, on August 2, 1982, was involved in an automobile accident with an uninsured motorist and thereby sustained bodily injury. At the time of the accident, appellee was driving a 1981 Yamaha motorcycle owned by his father. The motorcycle was not expressly insured under the policy issued by appellant; the policy issued by appellant covered only a 1975 Ford pickup truck and a 1982 Ford station wagon. Plainly, the policy provision precluded any coverage for bodily injury sustained by any person while occupying a motor vehicle owned by an insured but not insured under the policy. Since the motorcycle was owned by an insured and was not a covered vehicle under the policy, appellant properly denied coverage for any injuries sustained by the appellee in this accident.

Moreover, this court finds that this policy provision is a valid, enforceable exclusion. While the trial court in the instant case pursued an analysis similar to that which the court has employed herein, it nonetheless found that this exclusionary provision was not enforceable. The trial court reasoned that the provision was void as against public policy because the procedural requirements of drafting exclusions, as set forth in Ady v. West American Ins. Co. (1982), 69 Ohio St.2d 593, 433 N.E.2d 547 , were not met. More specifically, the trial court refused to give effect to the exclusionary provision because appellants had no documentation regarding appellee's acceptance or rejection of the exclusion, i.e., whether it was voluntarily given. See id. at 599, 433 N.E.2d 547.

This court, however, does not find this language in Ady to be controlling. Ady was a plurality opinion. Only the syllabus received the requisite four votes. Thus, the only law emanating from Ady is contained in the syllabus, which provides as follows: "Any contractual restriction on the coverage mandated by R.C. 3937.18 must comply with the purpose of this statute." The general language contained in the opinion or in the concurrence, however interpreted, is simply not the law of Ohio.

Nor should such language be the law of Ohio. As Justice Holmes noted in his dissent in Ady at 604, 433 N.E.2d 547:

"In construing the mandates of the General Assembly insofar as the offering of uninsured motorist coverage in Ohio is concerned, we must not unduly restrict the free right of contract, and must allow for a certain amount of latitude for the exercise of discretion on the part of the policyholder as to the desirable extent or breadth of coverage for which he is willing, or able, to pay the premiums."

In addition, to require insurers or insurance sellers to explain in detail every sentence of an insurance contract as a prerequisite to its efficacy would be unduly burdensome. As the trial court so aptly noted, " * * * [t]here would doubtlessly be more confusion and disputes over the possibly individualized, disparate explanations given than if the drafters of these documents were required to write them in such a way that only the slightest interpretation would be necessary after the fact, as in a court of law."

More importantly, the exclusion this court recognizes today is in accord with the purpose of R.C. 3937.18. In 1980, R.C. 3937.18 was amended to read as follows:

"(E) Any automobile liability or motor vehicle liability policy of insurance that includes uninsured motorist coverage may include terms and conditions that preclude stacking of uninsured motor vehicle coverages."

The legislature chose not to include a definition of "stacking" in the statute. In addressing this situation, this court, in Karabin v. State Automobile Mut. Ins. Co. (1984), 10 Ohio St.3d 163, 462 N.E.2d 403, first presumed that the legislature adopted the definition of "stacking" previously determined by the court in its decisions to be "the lumping or adding together of payments, or the aggregation of coverage." Id. at 166, 462 N.E.2d 403. A common thread running through those cases determining whether an insured was entitled to stack uninsured motorist coverage was the fact that the insured was seeking payment under more than one policy of insurance. Curran v. State Auto. Mut. Ins. Co. (1971), 25 Ohio St.2d 33, 266 N.E.2d 566 ; Grange Mut. Cas. Co. v. Volkmann (1978), 54 Ohio St.2d 58, 374 N.E.2d 1258 ; Ady, supra; Karabin, supra.

By the 1980 amendment to R.C. 3937.18, the legislature allowed insurance companies to include provisions in their policies to prohibit the stacking of insurance coverage. To construe the statute otherwise would defeat the objectives of the legislature in amending the statute.

In the case at bar, the policy of insurance was issued after the effective date of the amendment to R.C. 3937.18(E), now (G), and the policy did contain an anti-stacking provision. ¹ The injury also occurred after the effective date of the statutory amendment. In addition, this court notes that appellee did recover under the policy issued by Midwest Mutual Insurance Company which specifically insured the motorcycle he was riding at the time of the accident.

Some may argue that uninsured motorist coverage is applicable to persons, not vehicles, and thus an exclusion to coverage as to any vehicle owned by an insured is without effect. To find the exclusion clause ineffective because uninsured motorist coverage is only personal coverage, and thereby exclude vehicle coverage, would permit recovery when the opposite was intended by the precise language in the policy. This interpretation is not only contrary to the manifest intent of the legislature as expressed in R.C. 3937.18(E),...