Midwestern Indemn. Co. v. Craig

• Decision Date: 30 August 1995
• Docket Number: Nos. 1-95-2,1-95-3,s. 1-95-2
• Citation: 106 Ohio App.3d 158,665 N.E.2d 712
• Parties: MIDWESTERN INDEMNITY COMPANY, Appellee and Cross-Appellant, v. CRAIG et al., Appellants and Cross-Appellees. * GORDON et al., Appellants and Cross-Appellees, v. GRE INSURANCE GROUP, d.b.a. Midwestern Indemnity Group, Appellee and Cross-Appellant.
• Court: Ohio Court of Appeals

Page 158

106 Ohio App.3d 158

665 N.E.2d 712

MIDWESTERN INDEMNITY COMPANY, Appellee and Cross-Appellant, v. CRAIG et al., Appellants and Cross-Appellees. ^*

GORDON et al., Appellants and Cross-Appellees, v. GRE INSURANCE GROUP, d.b.a. Midwestern Indemnity Group, Appellee and Cross-Appellant.

Nos. 1-95-2, 1-95-3.

Court of Appeals of Ohio Third District, Allen County.

Decided Aug. 30, 1995.

David K. Frank and David I. Shroyer, Columbus, for appellants and cross-appellees Craigs and Gordon.

Lane, Alton & Horst and Karen K. Rosenberg, Columbus, for appellee and cross-appellant Midwestern Indemnity.

HADLEY, Judge.

This is an appeal from the judgment entries rendered by the Allen County Court of Common Pleas in two declaratory judgment actions pertaining to the availability of underinsured motorist coverage to Jeffrey Gordon ("Gordon") under various insurance policies issued by appellee, GRE Insurance Group, d.b.a. Midwestern Indemnity Company ("GRE").

In case No. 1-95-3, appellants, Gordon and Carol and Gerald Craig, Gordon's mother and stepfather ("appellants"), filed a complaint, seeking declaratory relief, on November 17, 1993. An amended complaint was filed on December 13, 1993. GRE filed an answer on December 27, 1993. In case No. 1-95-2, GRE filed a complaint for declaratory judgment on November 18, 1993. On December 13, 1993, appellants filed an answer. ¹

Both claims arise from an automobile accident on April 21, 1991 in which Gordon, a passenger in a car driven by Scott Beach ("Beach"), was injured. Beach was insured for $100,000 per person by State Farm Mutual Automobile Insurance Company ("State Farm") As settlement of the claim, Gordon accepted $100,000 from State Farm.

Because his injuries exceeded $100,000, however, Gordon applied for underinsured benefits under the various insurance policies which were in effect at the time of the accident. The first GRE policy was a family car policy, number 101473167, in which Gordon was the named insured ("Gordon policy"). The policy limit was $100,000 per person and $300,000 per accident. A second GRE family car policy, number 101432147, was issued to Gerald Craig ("Craig policy") and had the same above-mentioned limits. ² A third GRE policy, number 201147179, consisted of a homeowner's policy ("homeowner's policy") with Gerald Craig as the named insured. Finally, the Craigs had a personal umbrella supplement ("umbrella") with a $1 million coverage limit.

A trial commenced on October 24, 1994. In its judgment entries of December 16, 1994, the trial court made the following declarations:

"(1) Jeffrey Gordon qualifies for underinsured motorist coverage under Policy No. 101473167;

"(2) Jeffrey Gordon is an insured under Policy No. 101432147;

"(3) Jeffrey Gordon does not qualify for underinsured motorist coverage under Policy No. 101432147;

"(4) Jeffrey Gordon does not qualify for coverage under the Homeowner's Policy No. 201147179;

"(5) Jeffrey Gordon does not qualify for coverage under the Personal Umbrella Supplement[.]"

On January 13, 1995, appellants filed their notice of appeal regarding the trial court's third, fourth, and fifth findings. GRE filed a notice of cross-appeal on January 20, 1995 regarding the trial court's first finding. This court, upon motion, ordered consolidation of these cases on January 23, 1995.

Appellants raise the following assignments of error:

Assignment of Error No. 1

"The trial court erred, to the prejudice of the appellants, in holding that appellant Jeffrey Gordon does not qualify for underinsured motorist insurance coverage under the Craig 'Family Car Policy' [Policy No. 101432147] with GRE Insurance Group, dba The Midwestern Indemnity Company, and rendering judgment accordingly, even though he is an insured ³ under that policy."

Appellants specifically maintain that the Craig policy contains no antistacking language and that language that does appear in the endorsement is unenforceable. ⁴ Appellants' other assertions relate to the umbrella and will be discussed in conjunction with the second assignment of error.

R.C. 3937.18(A)(2) mandates the offering of underinsured motorist coverage. R.C. 3937.18(G) provides that "[a]ny automobile liability or motor vehicle liability policy of insurance that includes coverages offered under division (A) of this section may include terms and conditions that preclude stacking of such coverages."

In the case at bar, the underinsured motorist amendment is listed on the declarations of the Craig policy and the amendment itself is labeled as "amendments of policy provisions." ⁵ The amendment states: "There shall be no stacking of the limit(s) of liability shown in the Declarations and that amount is the maximum amount we will pay for all damages for bodily injury from any one accident," without regard to the number of claims, insured persons, or separate premiums charged for coverage of different vehicles. ⁶

These clauses, which are permitted by R.C. 3937.18(G), are unambiguous in communicating the insurer's limits of liability. We reject, therefore, appellants' contention that there is no antistacking language in the policy.

Next we address the enforceability of the antistacking clauses and the trial court's finding that Gordon's claim under the Craig policy constituted intrafamily stacking.

Again, R.C. 3937.18(G) allows an insurance company to include antistacking language in its policies. In Savoie v. Grange Mut. Ins. Co., 67 Ohio St.3d at 500, 620 N.E.2d at 810, paragraph two of the syllabus, the Supreme Court of Ohio found that "[i]nsurers may contractually preclude intrafamily stacking--the stacking of uninsured/underinsured limits of policies and coverages purchased by family members living in the same household." ⁷ The court further stated that intrafamily stacking results "when an individual or an entire family is insured by several separate uninsured/underinsured policies insuring different vehicles. When the individual or a family member is injured by an uninsured or underinsured motorist, he or she will try to combine, or stack, each of the policies' underinsurance limits to compensate the injured individual." Id. at 506, 620 N.E.2d at 814.

In the instant case, the trial court found that Gordon was entitled to recover under his own policy. Thus, it concluded that recovery under the Craig policy would be precluded as intrafamily stacking. We agree that recovery under both policies would be precluded as intrafamily stacking. We do not address, however, as it was not raised, whether Gordon could choose to recover under the Craig policy instead of the Gordon policy.

Appellant's first assignment of error is overruled.

Assignment of Error No. 2

"The trial court erred, to the prejudice of appellants, in holding that 'Jeffrey Gordon does not qualify for coverage under the Personal Umbrella Supplement' and rendering judgment accordingly, even though the court found him to be insured under the 'Family Car Policy' which GRE has admitted is supplemented by the Umbrella."

Appellants set forth several assertions regarding the umbrella. First, they contend that the umbrella applies to both the Craig policy and the homeowner's policy. Appellants next maintain that any antistacking language (if enforceable) in the basic policy has no application to the umbrella. Lastly, appellants assert that the exclusionary language in the umbrella is contrary to R.C. 3937.18.

Interpretation of insurance policies is generally analyzed by applying rules of contract law. Burris v. Grange Mut. Cos., 46 Ohio St.3d at 89, 545 N.E.2d at 88. For example, where sections of a policy are plain and unambiguous, a court may not substitute a different meaning. Id. On the other hand, language which is ambiguous "must * * * be liberally construed in favor of the claimant who seeks coverage." Id.

An umbrella policy is a policy which provides excess coverage beyond an insured's primary policies. 3 Widiss, Uninsured and Underinsured Motorist Insurance (2 Ed.1995) 23, Section 32.5. If such a policy includes automobile liability coverage, it "must [also] comport with R.C. 3937.18." Duriak v. Globe Am. Cas. Co. (1986), 28 Ohio St.3d 70, 72, 28 OBR 168, 170, 502 N.E.2d 620, 622, overruled in part on other grounds, Miller v. Progressive Cas. Ins. Co. (1994), 69 Ohio St.3d 619, 635 N.E.2d 317. See, also, House v. State Auto. Mut. Ins. Co. (1988), 44 Ohio App.3d 12, 14, 540 N.E.2d 738, 740.

Initially, we must ascertain whether the umbrella attaches to the Craig policy and, if so, whether it provides underinsured motorist coverage. The trial court found that the umbrella attached only to the homeowner's policy and since Gordon was ineligible for coverage under that policy, ⁸ he was, in turn, ineligible for coverage under the umbrella. Furthermore, the court found that even if Gordon was eligible, an exclusionary clause in the umbrella barred recovery.

The declarations of the homeowner's policy include the umbrella, and the declarations of the Craig policy list the umbrella as a related policy. The umbrella schedule also lists automobile liability insurance as one of the basic insurance policies. In addition, the claims representative of GRE testified that the umbrella could attach to either policy. More specifically, the claims representative answered in the affirmative to the trial court's question whether the umbrella "provide[d] coverage over and above the limits of the auto policy."

The umbrella policy provides, in pertinent part:

"2. When Uninsured or Underinsured Motorists Coverage is provided by the Automobile Liability Insurance policy included in the Schedule, we will:

"a. provide the same coverage for bodily injury caused by uninsured or underinsured motorists as is included in such basic policy, and

"b. pay an amount up to our limit of liability shown in Item 3 of the Schedule, provided the limit of the basic policy's Uninsured or Underinsured Motorists Coverage is equal to the bodily...