Tyler v. Kelley, A-C

• Decision Date: 07 November 1994
• Docket Number: No. 63163,A-C,63163
• Citation: 98 Ohio App.3d 444,648 N.E.2d 881
• Parties: TYLER, Appellant, v. KELLEY; Reserve Rent-ar, Appellee.
• Court: Ohio Court of Appeals

Page 444

98 Ohio App.3d 444

648 N.E.2d 881

TYLER, Appellant, v. KELLEY; Reserve Rent-A-Car, Appellee.

No. 63163.

Court of Appeals of Ohio, Eighth District, Cuyahoga County.

Decided Nov. 7, 1994.

Levey & Gruhin, Harold L. Levey and Arthur E. Dombek, Cleveland, for appellant.

Keller, Scully, Williams & Curtin Co., L.P.A., Stanley S. Keller and Daniel Hurley, Cleveland, for appellee.

PORTER, Judge.

Plaintiff-appellant Teresa Tyler appeals ¹ from the trial court's granting of summary judgment in favor of defendant-appellee Reserve Rent-A-Car, arising out of a dispute involving uninsured motorist coverage under a car rental agreement. Plaintiff claims such coverage applies under R.C. 3937.18 and the rental agreement. Defendant claims it is a self-insurer and under Ohio law and the agreement it was not required to supply such coverage; but even if it was required, plaintiff declined coverage. We find merit to plaintiff's assignments of error and reverse the summary judgment for Reserve for the reasons discussed below.

On August 30, 1990, plaintiff (then known as Teresa Harris) leased an automobile from Reserve pursuant to a standard form Reserve Rent-A-Car Rental Agreement of the same date. The Rental Agreement was pre-filled out at the time plaintiff picked up the car, and she simply signed and initialed the form at various points without reading the document. On September 20, 1990, plaintiff was involved in an automobile accident with an uninsured motorist, co-defendant Thomas Kelley. Plaintiff claims that Reserve wrongfully refused to provide uninsured motorist coverage to plaintiff pursuant to Ohio law and the rental agreement.

On December 30, 1991, the trial court entered summary judgment for Reserve and denied plaintiff's cross-motion for summary judgment, both without opinion. On January 10, 1991, the court amended its judgment entry to add that there was no just cause for delay under Civ.R. 54(D).

We will treat plaintiff's two assignments of error together, as they involve common questions of law and fact and the rights of the respective parties are determined from a construction of the rental agreement.

"I. The trial court below erred in denying appellant's motion for summary judgment against the defendant Reserve Rent-A-Car, as to finding that the defendant insured the plaintiff for injuries caused by an at-fault, uninsured driver; and, as to finding that the plaintiff did not reject such coverage.

"II. The trial court below erred in granting appellee's motion for summary judgment against the plaintiff, as to finding that the defendant did not insure the plaintiff for injuries caused by an at-fault, uninsured driver; and as to any finding that the plaintiff validly rejected such coverage."

We believe that the outcome of this appeal turns on a construction of the rental agreement and the application of Ohio law thereto. Since our review is strictly a legal one, no special deference need be shown to the trial court's ruling in such instances. "Our summary judgment analysis boils down to a determination of whether either party is entitled to relief as a matter of law." Lorain Cty. Commrs. v. United States Fire Ins. (1992), 81 Ohio App.3d 263, 267, 610 N.E.2d 1061, 1064, citing Temple v. Wean United, Inc. (1977), 50 Ohio St.2d 317, 327, 4 O.O.3d 466, 471, 364 N.E.2d 267, 273. We review the matter de novo.

R.C. 3937.18 states as follows:

"(A) No automobile liability or motor vehicle liability policy of insurance insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance, or use of a motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state unless both of the following are provided:

"(1) Uninsured motorist coverage, which shall be in an amount of coverage equivalent to the automobile liability or motor vehicle liability coverage and shall provide protection for bodily injury or death under provisions approved by the superintendent of insurance, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness, or disease, including death, resulting therefrom;

"(2) Underinsured motorist coverage * * *;

" * * *

"(C) The named insured may only reject or accept both coverages offered under division (A) of this section."

Reserve is a certified self-insurer under R.C. 4509.72 and therefore contends that it is not subject to the mandatory requirements of R.C. 3937.18 to supply uninsured motorist coverage. Reserve is quite right in asserting that a certified self-insurer is not obligated under R.C. 3937.18 to provide uninsured motorist coverage. This is clearly established by the decision in Grange Mut. Cas. Co. v. Refiners Transp. & Terminal Corp. (1986), 21 Ohio St.3d 47, 21 OBR 331, 487 N.E.2d 310, where the Ohio Supreme Court, in a unanimous decision, held in its syllabus as follows: "The uninsured motorist provisions of R.C. 3937.18 do not apply to either self-insurers or financial responsibility bond principals." This decision has been followed by other cases which have given it a broad reading. Robinson v. Yellow Cab Co. (1986), 33 Ohio App.3d 72, 514 N.E.2d 450; Am. States Ins. Co. v. Hertz Corp. (Dec. 31, 1987), Mahoning App. No. 87 C.A. 20, unreported, 1987 WL 32983.

Under these authorities, it seems clear that Reserve, qua self-insurer, was not obligated to supply uninsured motorist coverage to plaintiff under R.C. 3937.18. However, the issue plaintiff presses is whether, under the rental agreement, Reserve contractually undertook to supply such coverage to the driver lessee by offering liability coverage. Plaintiff argues that even though defendant was a certified self-insurer, once it offered and charged plaintiff for liability insurance coverage, which it concededly did, it became bound by the uninsured motorist statute.

We find that the Ohio authorities cited above are distinguishable from, and not dispositive of, the case before us. In Grange Mut. Co. v. Refiners Transp. & Terminal Corp., supra, the Supreme Court held that self-insured employees are not required to provide uninsured motorist coverage for their own employees while operating the employer's vehicles. That case did not address the situation where a self-insured offers liability insurance coverage to the public. Robinson v. Yellow Cab Co., supra, held that a self-insured common carrier (a taxi-cab company) was not required to provide uninsured motorist coverage to its passengers. Again, there is no indication that Yellow Cab offered liability insurance coverage to the passenger. Am. States Ins. Co. v. Hertz Corp., supra, appears to be more analogous to the case herein in that it deals with a rental car company and its customer who was injured by an uninsured motorist. However, the case does not indicate that Hertz offered the injured customer insurance coverage as in this case, nor are the terms of the rental agreement discussed. The plaintiff's argument herein, therefore, appears to present a question of first impression in Ohio and commends itself to a review of the law of sister states in similar cases.

The issue may be framed as follows: Where a self-insured car rental agency offers liability insurance coverage to a rental customer in a state with an uninsured motorist statute, does the act of offering such liability coverage bring the car rental agency within the purview of the uninsured motorist statute?

The recent case of Van Vonno v. Hertz Corp. (1992), 120 Wash.2d 416, 841 P.2d 1244, bears on the formulated issue. In that case, the Washington Supreme Court affirmed summary judgment and held that the self-insurer Hertz was liable for statutory uninsured motorist coverage to its lessee under Oregon law when it undertook, pursuant to its rental agreement, to supply liability coverage. The court stated as follows:

"States confronting cases in which a self-insurer leased a vehicle to a third person almost uniformly require the self-insurer to offer uninsured motorist coverage. E.g., Twyman v. Robinson, 255 Ga. 711, 342 S.E.2d 313 (1986); Trobaugh v. Migliore, 597 So.2d 494 (La.Ct.App.1992); Hartford Ins. Co. v. Hertz Corp., 410 Mass. 279, 572 N.E.2d 1 (1991). Courts imposing a duty on the self-insurer generally view a vehicle rental agreement as a contract containing insurance provisions, thereby constituting a motor vehicle liability policy. E.g., Trobaugh, 597 So.2d at 496. By issuing a liability policy, the rental car company incurs a duty to offer the lessee an opportunity to accept or reject uninsured motorist coverage. E.g., Trobaugh, 597 So.2d at 496; see La.Rev.Stat.Ann. § 22:1406(D) (1978 & Supp.1992)." Id. at 422-423, 841 P.2d at 1248.

After distinguishing a number of cases, including Grange Mut. Cas. Co. v. Refiners Transp. & Terminal Corp. (1986), 21 Ohio St.3d 47, 21 OBR 331, 487 N.E.2d 310, on the grounds that "these cases generally involve vehicles driven by an agent or employee of the self-insurer," the court continued:

"Hertz, however, ignores its ability to be a self-insurer in one context and an insurer in another. When Hertz pays judgments rendered against it for the negligence of an agent or employee, Hertz acts as a self-insurer. On the other hand, Hertz acts as an insurer when it agrees to assume the liabilities of a third person for whose actions Hertz would not otherwise be responsible. See Webster's Third New International Dictionary 1173 (1971) (insurance: 'coverage by contract whereby for a stipulated consideration one party undertakes to indemnify or guarantee another against loss by a specified contingency or peril'); cf. Cincinnati Ins. Co. v. Hertz Corp., 776 F.Supp. 1235, 1240 (S.D.Ohio 1991) ('[B]y offering liability insurance, Hertz has demonstrated a willingness to...