Linko v. Indemn. Ins. Co. of N. Am., No. 99-2293.

• Court: United States State Supreme Court of Ohio
• Writing for the Court: PFEIFER, J.
• Citation: 90 Ohio St.3d 445,739 NE 2d 338
• Docket Number: No. 99-2293.
• Decision Date: 27 December 2000
• Parties: LINKO, EXR., v. INDEMNITY INSURANCE COMPANY OF NORTH AMERICA.

90 Ohio St.3d 445
739 NE 2d 338

LINKO, EXR.,
v.
INDEMNITY INSURANCE COMPANY OF NORTH AMERICA

No. 99-2293.

Supreme Court of Ohio.

Submitted June 7, 2000.

Decided December 27, 2000.

90 Ohio St.3d 447

Becker & Mishkind Co., L.P.A., Michael F. Becker and David A. Kulwicki, for petitioner

Elk & Elk Co., L.P.A., and Todd Rosenberg, in support of petitioner for amicus curiae, Ohio Academy of Trial Lawyers.

PFEIFER, J.

Our responses to the questions of the federal court are as follows: (1) Yes. An insured under an automobile liability policy may challenge the authority of a signatory to a UM/UIM coverage rejection form when such signatory's authority is not disputed by the named insureds or insurer; (2) No. To satisfy the offer requirement of R.C. 3937.18, the insurer must inform the insured of the availability of UM/UIM coverage, set forth the premium for

90 Ohio St.3d 448

UM/UIM coverage, include a brief description of the coverage, and expressly state the UM/UIM coverage limits in its offer; (3)(a) Yes. Separately incorporated named insureds must each be listed in a rejection form in order to satisfy the offer requirement of R.C. 3937.18; (3)(b) The four corners of the insurance agreement control in determining whether waiver was knowingly and expressly made by each of the named insureds; (3)(c) The question is moot due to our response to (3)(b); and (3)(d) No. Only with a subsidiary's written authorization may a parent corporation reject UM/UIM coverage on the subsidiary's behalf

The federal court's questions and this court's complete responses are set forth below.

Question 1

"Whether an insured under an automobile liability policy may challenge the authority of a signatory to an uninsured/underinsured motorist coverage rejection form when such signatory's authority is not disputed by the named insureds or insurer."

Our response is in the affirmative. As was the case with the plaintiff in Gyori v. Johnston Coca-Cola Bottling Group, Inc. (1996), 76 Ohio St.3d 565, 669 N.E.2d 824, the plaintiff here was not a named insured but seeks a declaration of whether the employer expressly and knowingly rejected UM/UIM coverage for its employees. The validity of the employer's alleged rejection is at the heart of both cases. The plaintiff in Gyori had standing to bring an action to resolve that issue, as does the plaintiff in this case.

Question 2

"Whether the language of the uninsured/underinsured motorist coverage rejection forms accompanying the subject automobile liability policy satisf[ies] the offer requirements of R.C. 3837.18 [sic, 3937.18]."

We find that the rejection form in this case fails to satisfy the offer requirements of former R.C. 3937.18(C) as it existed during the policy period. See 145 Ohio Laws, Part I, 211. The pertinent portion of the Indemnity policy reads:

"Ohio Revised Code Section 3937.18 requires us to offer you Uninsured/Underinsured Motorists Insurance coverage in an amount equal to the policy bodily injury liability limit(s) with respect to any motor vehicle registered or principally garaged in the State of Ohio, unless you reject such coverage.

"Unless you have previously rejected this coverage, your policy has been issued to include Uninsured/Underinsured Motorists Insurance coverage at limit(s) equal to the policy bodily injury liability limit(s)."

In Gyori, this court held that "[t]here can be no rejection pursuant to R.C. 3937.18(C) absent a written offer of uninsured motorist coverage from the

90 Ohio St.3d 449

insurance provider." Id., 76 Ohio St.3d 565, 669 N.E.2d 824, paragraph one of the syllabus. Gyori stands for the proposition that we cannot know whether an insured has made an express, knowing rejection of UIM coverage unless there is a written offer and written rejection. It only follows that a valid rejection requires a meaningful offer, i.e., an offer that is an offer in substance and not just in name

The above paragraph in the Indemnity contract that purports to be an offer states the law, but does not contain the information necessary to make it a meaningful offer. Since Gyori, Ohio's appellate courts have developed a useful body of law regarding what constitutes a valid offer of UM/UIM coverage. We agree with the following required elements for written offers imposed by Ohio appellate courts: a brief description of the coverage, the premium for that coverage, and an express statement of the UM/UIM coverage limits. See Murray v. Woodard (1997), 120 Ohio App.3d 180, 697 N.E.2d 265 (interpreting the offer requirement of R.C. 3937.181); Gibson v. Westfield Natl. Ins. Co. (July 14, 1998), Monroe App. No. 788, unreported, 1998 WL 404201; Weddle v. Hayes (Sept. 5, 1997), Belmont App. No. 96-BA-44, unreported, 1997 WL 567964.

Indemnity's alleged offer is complete only in its incompleteness. It does not describe the coverage, does not list the premium costs of UM/UIM coverage, and does not expressly state the coverage limits. We find that an offer must include those three elements. The Indemnity rejection form, lacking in that required information, thus could not be termed a written offer that would allow an insured to make an express, knowing rejection of the...