Murray v. Woodard

• Citation: 120 Ohio App.3d 180,697 N.E.2d 265
• Decision Date: 16 May 1997
• Docket Number: No. L-96-269,L-96-269
• Parties: MURRAY et al., Appellees, v. WOODARD; Grange Mutual Casualty Company, Appellant.
• Court: United States Court of Appeals (Ohio)

Page 180

120 Ohio App.3d 180

697 N.E.2d 265

MURRAY et al., Appellees, v. WOODARD; Grange Mutual Casualty Company, Appellant.

No. L-96-269.

Court of Appeals of Ohio,

Sixth District, Lucas County.

Decided May 16, 1997.

Charles E. Boyk and Steven L. Crossmock, Toledo, for appellees.

James L. Schuller, Toledo, for appellant.

KNEPPER, Judge.

This is an appeal from a judgment of the Lucas County Court of Common Pleas granting summary judgment in favor of appellees and against Grange Mutual Casualty Company ("Grange"). The issue before the court is whether R.C. 3937.181 requires that uninsured motorist property damage ("UMPD") coverage be provided as a matter of law absent a knowing and express waiver of such coverage. For the reasons that follow, this court reverses the judgment of the trial court.

On or about November 2, 1995, Gwendolyn Murray's car was rear-ended by a car driven by Dennis J. Woodard, an uninsured motorist. Appellees were insured by Grange at the time of the accident. The Declarations Page shows that coverage was provided for uninsured motorist bodily injury ("UMBI") coverage, but not for UMPD coverage.

The parties filed cross-motions for summary judgment regarding whether UMPD coverage had to be provided, pursuant to R.C. 3937.181, even though it was not listed in the Declarations Page. The trial court found that, absent proof that appellees knowingly and expressly rejected the coverage, UMPD coverage would be provided by operation of law. After finding that no such rejection was made, the trial court found that appellees were entitled to coverage for damages to, or the destruction of, the motor vehicle.

In its assignment of error, Grange asserts that the trial court erred in finding that appellees were entitled to judgment as a matter of law. Grange argues that R.C. 3937.181 merely requires that UMPD coverage be "made available." Grange asserts that it complied with this requirement as evidenced by Section A(2) of its uninsured motorist ("UM") policy, which reads:

"A. We will pay damages which an insured is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of:

" * * *

"2. Property damage caused by an accident if the declarations [page] indicates that both Bodily Injury and Property Damage Uninsured Motorists Coverages apply. * * * "

Because appellees did not pay a premium for the available UMPD coverage, Grange asserts that it is not required to provide coverage for damages sustained by appellees' vehicle.

Appellees argue that, because the purpose of uninsured motorist coverage is to prevent an injured party from incurring losses caused by an uninsured motorist, the rights and obligations under R.C. 3937.181, UMPD coverage, and R.C. 3937.18, UMBI coverage, are identical. Therefore, an insurer is required to simultaneously offer both UMPD coverage and UMBI coverage, unless the policy already includes collision coverage. Appellees further argue that, as with UMBI coverage, an insured must make a knowing and express waiver of UMPD coverage in writing, and failure to do so results in UMPD coverage being provided by operation of law.

This court notes at the outset that in reviewing a summary judgment, we must apply the same standard as the trial court. Lorain Natl. Bank v. Saratoga Apts. (1989), 61 Ohio App.3d 127, 129, 572 N.E.2d 198, 199-200. Summary judgment will be granted when there remains no genuine issue of material fact and, when construing the evidence most strongly in favor of the nonmoving party, reasonable minds can only conclude that the moving party is entitled to judgment as a matter of law. Civ.R. 56(C).

Pursuant to R.C. 3937.181, UMPD coverage must be made available with every automobile liability or motor vehicle liability policy delivered or issued in this state, unless the policy contains collision coverage. R.C. 3937.181(A) provides:

"No automobile liability or motor vehicle liability policy of insurance offering uninsured and underinsured motorist coverages under division (A) of section 3937.18 of the Revised Code shall be delivered or issued for delivery unless coverage is also made available for damage to, or the destruction of, any automobile or motor vehicle specifically identified in the policy, for the protection of those persons insured under the policy who are legally entitled to recover for the damage to or destruction of any automobile or motor vehicle specifically identified in the policy from the owner or operator of an uninsured motor vehicle." (Emphasis added.)

Prior to the enactment of R.C. 3937.181, only UMBI coverage had to be offered. R.C. 3937.18(A).

R.C. 3937.18(A) requires that UM coverage must be "provided" with every liability policy issued in this state. ¹ In interpreting this statute, the Ohio Supreme Court held that the language in R.C. 3937.18 was mandatory and, therefore, absent a knowing and express rejection, coverage was provided by operation of law. Abate v. Pioneer Mut. Cas. Co. (1970), 22 Ohio St.2d 161, 165, 51 O.O.2d 229, 231, 258 N.E.2d 429, 432; Ady v. West Am. Ins. Co. (1982), 69 Ohio St.2d 593, 597, 23 O.O.3d 495, 497-498, 433 N.E.2d 547, 549-550. The insurance company bears the burden of showing that a customer knowingly rejected the coverage. Id. at 597, 23 O.O.3d at 497-498, 433 N.E.2d at 549-550; Gyori v. Johnston Coca-Cola Bottling Group, Inc. (1996), 76 Ohio St.3d 565, 567, 669 N.E.2d 824, 826. The court later concluded that the offer, as well as the rejection, must be in writing. Id. at paragraphs one and two of the syllabus.

The stated purpose of UMBI coverage is "to protect persons injured in automobile accidents from losses which, because of the tort-feasor's lack of liability coverage, would otherwise go uncompensated." Abate, supra, at 165, 51 O.O.2d at 231, 258 N.E.2d at 432. Relying on this principle and the case law that developed with regard to R.C. 3937.18, the trial court held that UMPD coverage is also provided by operation of law unless there is an express and knowing rejection of such coverage.

The purpose of statutory construction is to give effect to the legislature's intent. Featzka v. Millcraft Paper Co. (1980), 62 Ohio St.2d 245, 247, 16 O.O.3d 280, 281-282, 405 N.E.2d 264, 265-266. Absent clear contrary legislative intent, words in the statute are to be read in their given context and construed according to their plain and ordinary meaning. Kunkler v. Goodyear Tire & Rubber Co. (1988), 36 Ohio St.3d 135, 137, 522 N.E.2d 477, 479-480. See, also, R.C. 1.42. The term "made available" as it applies to UM coverage is not statutorily defined. In Webster's, "available" means "accessible" or "obtainable." Merriam-Webster's Collegiate Dictionary (1996) 79, whereas "provide" means "to supply something * * *." Id. at 940.

The legislative purpose of R.C. 3937.181 was "to require insurers to offer property damage liability insurance as part of uninsured motorist coverage." 145 Ohio Laws, Part I, 204. Unlike R.C. 3937.18, R.C. 3937.181 does not require that coverage be "provided," only that it be "made available." Had the legislature intended identical results, identical language could have been used--it was not. Because the legislature chose different language, the statutes must require different actions by the insurance companies. The inquiry therefore becomes: how must the carrier prove that UMPD coverage was made available?

This issue is a matter of first impression in Ohio. Other legislatures have handled this issue within the statute itself. See, e.g., Ill.Ann.Stat., Chapter 215, Section 143a. Illinois requires that uninsured and hit-and-run motor vehicle coverage for bodily injury or death be "provided" with every liability policy, ² whereas UMPD coverage need only be "made available." Ill.Ann.Stat., Chapter 215, Section 143a(2). ³ Illinois does not require a written rejection of UMPD coverage. However, the insurance company must "advise applicants of the availability of uninsured motor vehicle property damage coverage, the premium therefor, and provide a brief description of the coverage." Id. Once the applicant or policyholder has been properly informed, "[n]o written rejection shall be required, and the absence of a premium payment for uninsured motor vehicle property damage shall constitute conclusive proof that the applicant or policyholder has elected not to accept uninsured motorist property damage coverage." Id.

In Ohio, an insurer is required to make UMPD coverage available. R.C. 3937.181. This court therefore finds that the insurer has the burden of showing...