Holliman v. Allstate Ins. Co.

• Decision Date: 15 September 1999
• Docket Number: No. 98-1717.,98-1717.
• Citation: 715 NE 2d 532,86 Ohio St.3d 414
• Parties: HOLLIMAN ET AL., APPELLANTS, v. ALLSTATE INSURANCE COMPANY CORPORATION, APPELLEE.
• Court: Ohio Supreme Court

86 Ohio St.3d 414

715 NE 2d 532

HOLLIMAN ET AL., APPELLANTS, v. ALLSTATE INSURANCE COMPANY CORPORATION, APPELLEE.

No. 98-1717.

Supreme Court of Ohio.

Submitted May 25, 1999.

Decided September 15, 1999.

Colley, Shroyer & Abraham Co., L.P.A., David I. Shroyer and David K. Frank, for appellants.

Ulmer & Berne, L.L.P., Harold H. Reader and Brian N. Ramm, for appellee.

The judgment is affirmed for the reasons stated by the court of appeals in its opinion rendered on July 7, 1998, which we adopt and attach as an appendix to this entry.

MOYER, C.J., F.E. SWEENEY, COOK and LUNDBERG STRATTON, JJ., concur.

DOUGLAS, RESNICK and PFEIFER, JJ., dissent.

Appendix

PEGGY BRYANT, Judge.

Plaintiffs-appellants, Paul H. Holliman and Clara C. Parker, individually and as the coadministrators of the estate of Paul Sean Parker, and Gene Olverson, individually and as the administrator of the estate of Lamont K. Olverson, appeal from a judgment of the Franklin County Court of Common Pleas granting the summary judgment motion of defendant-appellee, Allstate Insurance Company. On June 20, 1991, plaintiffs' decedents were killed in an automobile accident. The accident occurred when the 1982 Ford Mustang in which decedents were riding as passengers was rear-ended by another automobile driven by an intoxicated and uninsured motorist. Samuel L. Wright, who was also killed in the accident, was driving the Mustang with the permission of his father, Samuel T. Wright ("Wright"), the vehicle's owner.

At the time of the accident, Wright was insured under an automobile insurance policy issued by Nationwide Insurance Company ("Nationwide") providing liability and uninsured/underinsured motorist benefits in the amount of $100,000 per person and $300,000 per accident. In addition, although Allstate suggested that the policy had been canceled, Wright allegedly also was covered by an umbrella policy Allstate issued providing, as pertinent here, excess uninsured motorist coverage of up to $1 million per accident. Following the accident, plaintiffs each obtained judgments of over $1 million against the uninsured driver who caused the accident. Subsequently, plaintiffs each recovered under Wright's uninsured motorist coverage with Nationwide up to the policy's $100,000-per-person limit. Plaintiffs then sought to recover under Wright's umbrella policy with Allstate. Allstate denied plaintiffs' claims, arguing that plaintiffs' decedents were not insureds under the umbrella policy.

On October 31, 1996, plaintiffs brought an action in the Franklin County Court of Common Pleas, seeking a declaratory judgment that they are entitled to recover under Wright's umbrella policy with Allstate. On June 9, 1997, Allstate moved for summary judgment, ignoring the cancellation issue and premising its motion on the definition of "insured persons" in the umbrella policy. On September 11, 1997, the trial court granted Allstate's motion. Plaintiffs appeal, assigning the following errors:

"Assignment of Error No. 1:

"The trial court erred, to the prejudice of the appellants, in rendering summary judgment in favor of appellee Allstate Insurance Company (`Allstate'), and in dismissing the appellants' action against Allstate.

"Assignment of Error No. 2:

"The trial court erred, to the prejudice of the appellants, in failing to construe the Allstate umbrella policy strictly against Allstate and in failing to construe R.C. 3937.18 liberally in order to effectuate its legislative purpose."

Preliminarily, summary judgment pursuant to Civ.R. 56 is appropriate only where no genuine issues of material fact remain to be litigated, the moving party is entitled to judgment as a matter of law, and, viewing the evidence most strongly in favor of the nonmoving party, reasonable minds can come to but one conclusion, which is adverse to the nonmoving party. Harless v. Willis Day Warehousing Co. (1978), 54 Ohio St.2d 64, 65-66, 8 O.O.3d 73, 74, 375 N.E.2d 46, 47.

Plaintiffs' two assignments of error will be addressed together, as they both challenge the trial court's determination that plaintiffs are not entitled to recover under the Allstate umbrella policy.

Allstate denied coverage to plaintiffs' decedents under Wright's umbrella policy because of the policy's definition of "insured persons." The umbrella policy expressly defines "insured persons" to include only "[y]ou, [and] any resident relative." Plaintiffs' decedents, who were merely friends of the named insured's son, are plainly outside the class of defined insureds. In contrast, however, Wright's primary uninsured motorist policy with Nationwide, under which plaintiffs' decedents were able to recover, defined insured persons to include the named insured, resident relatives of the named insured, and "anyone else * * * who suffers bodily injury while occupying * * * [a] vehicl[e] described in the Declarations." Plaintiffs raise several arguments in an attempt to apply the Nationwide policy's broader definition of an insured person to the Allstate umbrella policy.

Initially, plaintiffs argue that the umbrella policy's narrow definition of "insured persons" eliminates uninsured motorist coverage for plaintiffs' decedents in contravention of the purpose of R.C. 3937.18, and the Ohio Supreme Court's holding in Martin v. Midwestern Group Ins. Co. (1994), 70 Ohio St.3d 478, 639 N.E.2d 438.

In Martin, the Supreme Court held that R.C. 3937.18 mandates uninsured motorist coverage where "(1) the claimant is an insured under a policy which provides uninsured motorist coverage; (2) the claimant was injured by an uninsured motorist; and (3) the claim is recognized by Ohio tort law." Id. at 481, 639 N.E.2d at 441. An exclusion that purports to deny such a claimant uninsured motorist coverage thwarts the purpose of R.C. 3937.18 and is invalid. Id. Further, R.C. 3937.18 is to be liberally construed to effectuate its purpose. Ady v. W Am. Ins. Co. (1982), 69 Ohio St.2d 593, 598, 23 O.O.3d 495, 498, 433 N.E.2d47, 550.

Here, plaintiffs fail the first prong of the Martin test, in that they are not insureds under the Allstate umbrella policy. Although plaintiffs may suggest that the narrow definition of "insured persons" contained in the umbrella policy is simply an attempt to circumvent Martin, the argument is unpersuasive. Unlike the claimant in Martin, plaintiffs are not seeking uninsured motorist coverage under their policies. Rather, they contend that because they were passengers in an automobile driven by an individual who was an insured under an uninsured motorist policy, they are entitled to relief under that policy, even though they are not named as insureds in it. Nothing in R.C. 3937.18 or Martin prohibits the parties to an insurance contract from defining who is an insured person under the policy. Wayne Mut. Ins. Co. v. Mills (1996), 118 Ohio App.3d 146, 154, 692 N.E.2d 213, 218.

Plaintiffs also argue that the definition of "insured persons" in the umbrella policy violates R.C. 3937.18(A)(1). Specifically, plaintiffs assert that R.C. 3937.18(A)(1) requires that uninsured motorist coverage be "`equivalent' to that of the underlying policy," and that the umbrella policy violates that requirement by defining the class of persons covered under the policy more narrowly than Wright's primary policy with Nationwide, which, according to plaintiffs, constitutes the "underlying policy" in the present case.

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