West American Ins. Co. v. Hardin

• Decision Date: 13 January 1989
• Docket Number: No. 11112,11112
• Citation: 59 Ohio App.3d 71,571 N.E.2d 449
• Parties: WEST AMERICAN INSURANCE COMPANY, Appellee, v. HARDIN, Exrx., et al., Appellants. *
• Court: Ohio Court of Appeals

Page 71

59 Ohio App.3d 71

571 N.E.2d 449

WEST AMERICAN INSURANCE COMPANY, Appellee, v. HARDIN, Exrx., et al., Appellants. ^*

No. 11112.

Court of Appeals of Ohio, Second District, Montgomery County.

Jan. 13, 1989.

Syllabus by the Court

1. If an insured fails to give timely notice of a possible claim as required by the insurance policy, the insurer is relieved of its obligations under the policy only if the delay prejudices the insurer.

2. Because requirements in insurance policies for notice to the insurer of accidents refer only to accidents which could cause a loss under the policy, delay in giving notice of an accident is excused while legal precedent appears to foreclose any claim.

3. The tolling provisions of R.C. 2305.16 do not apply to the notice requirements of an insurance policy, and therefore do not relieve guardians of an insured minor from their contractual duty to promptly notify the insurer of a potential claim.

Coolridge, Wall, Womsley & Lombard Co., L.P.A., and Robert P. Bartlett, Jr., Dayton, for appellee.

Brannon, Hall & Tucker and Dwight D. Brannon, Dayton, for appellants.

BROGAN, Judge.

Karen Hardin, individually and as parent and guardian of Ginger Hardin, a minor, appeals from the grant of summary judgment to West American Insurance Company by the Common Pleas Court of Montgomery County.

On February 27, 1987, West American filed a complaint seeking a declaratory judgment which would declare its rights and those of the defendants in a certain family automobile insurance policy issued to Thomas Hardin. The policy provided:

"Notice. In the event of an accident, occurrence or loss, written notice containing particulars sufficient to identify the insured and also reasonably obtainable information with respect to the time, place and circumstances thereof, and the names and addresses of the injured and of available witnesses, shall be given by or for the insured to the company or any of its authorized agents as soon as practicable. In the event of theft, the insured shall also promptly notify the police. If claim is made or suit is brought against the insured, he shall immediately forward to the company every demand, notice, summons or other process received by him or his representative." (Emphasis added.)

West American contended in its complaint that on or about December 9, 1986, it was first notified of a potential claim under its policy issued to Thomas Hardin. The company was informed that Thomas Hardin may have operated a motor vehicle which caused personal injury to his daughter, Ginger (then age two), on May 29, 1978 and that a claim may be advanced against plaintiff's insured on behalf of the child. Plaintiff also averred that it had been informed that its insured died on August 26, 1986.

Plaintiff contended that because of the lapse of eight years from the date of the alleged accident, the death of the insured, and the resulting prejudice to the insurance company, it should be relieved of any obligations under the policy because of the breach of the notice provisions of the policy.

The defendants answered the complaint and also filed a counterclaim against West American. Karen Hardin individually and as parent and guardian of Ginger Hardin contended that Thomas Hardin on May 29, 1978 negligently struck his daughter, Ginger, with his automobile while the child was playing in the garage area of their home. As a result, Karen Hardin contended, Ginger suffered a severe laceration on her head requiring three surgical procedures to repair.

Karen Hardin alleged that her daughter suffered severe emotional stress as well as permanent injury as a result of her husband's negligence. She alleged she incurred medical expenses on behalf of her daughter. She alleged she gave notice to West American on December 9, 1986 of a claim under the policy issued to Thomas Hardin and that West American wrongfully denied her claim for medical services under the policy provision which states:

"Part II: Expenses for medical services Division 1(C): "To or for named insured and each relative who sustains bodily injury, sickness, or disease, including death resulting therefrom, hereinafter called "bodily injury" caused by accident (c) through being struck by an automobile or by a trailer of any type.' "

In addition to compensatory damages, Karen Hardin sought on her behalf and for her child punitive damages from West American for its "wrongful, willful, and intentional breach of contract in not allowing the claim for coverage."

In granting summary judgment for West American, the court found that the notice provided by the defendants to the plaintiff was unreasonable as a matter of law. The trial court noted that Karen Hardin's derivative cause of action for the loss of her daughter's services and medical expenses incurred during minority was barred by the four-year statute of limitations at R.C. 2305.09.

The court also found that Karen Hardin's cause of action in her individual capacity and as Ginger's guardian, under the medical payments coverage of the policy, was barred because the defendant did not comply with the "prerequisite notice requirements in the policy."

Since the court found the medical payments provision of the policy did not require a finding of liability in order for the insured or any family member to recover medical expenses, the court rejected the defendants' argument that the delay in giving notice was occasioned by the then-existing defense of parental immunity, which was not abolished by the Ohio Supreme Court until the case of Kirchner v. Crystal (1984), 15 Ohio St.3d 326, 15 OBR 452, 474 N.E.2d 275.

The court further noted that, assuming that the defendants were justified in their delay in notifying the insurance company because there was no viable claim under the liability provisions of the policy until the abolishment of parental immunity in 1984, the court could not excuse the two-year delay in giving notice which ensued after Kirchner.

Lastly, the court found the defendants did not demonstrate the plaintiff had not been prejudiced by their failure to timely give the notice required by the policy. The court noted that prejudice to an insurer is presumed from an unreasonable delay in giving notice under the policy and that the burden rests on the claimant to show an absence of prejudice, citing Zurich Ins. Co. v. Valley Steel Erectors (1968), 13 Ohio App.2d 41, 42 O.O.2d 109, 233 N.E.2d 597.

Appellants raise two assignments of error. In the first, they contend the trial court erred in granting appellee's motion for summary judgment when a genuine issue of fact existed as to whether an unreasonable period of time had passed prior to the notice provided by Karen Hardin. In the second, they contend the trial court erred in not granting appellant's motion for summary judgment when the claim of the minor, Ginger Hardin, would not be barred until two years past her eighteenth birthday.

The purpose of a requirement of notice and proofs of loss is to allow the insurer to form an intelligent estimate of its rights and liabilities, to afford it an opportunity for investigation, and to prevent fraud and imposition upon it. Travelers Ins. Co. v. Myers & Co. (1900), 62 Ohio St. 529, 57 N.E. 458. In that case, the Ohio Supreme Court held that "immediate written notice" means "within a reasonable time under the circumstances of the case." Id. at paragraph four of the syllabus.

The question of whether the notice was timely given is not a matter of law, but is a question for determination by a jury. Employers' Liability Assurance Corp. v. Roehm (1919), 99 Ohio St. 343, 124 N.E. 223.

The traditional view treats proper notice as a condition precedent to coverage. An insured's unexcused delay in satisfying the notice requirement relieves the insurer of its duties to defend or indemnify, regardless of whether the delay prejudiced the insurer. The rule that is emerging in a majority of jurisdictions is that late notice relieves the insurer of its obligations under the policy only if the insurer demonstrates prejudice as a result of the the delay. The latter view is that taken by this court. See Nationwide Mut. Ins. Co. v. Motorists Mut. Ins. Co. (1961), 116 Ohio App. 22, 21 O.O.2d 225, 186 N.E.2d 208; Keith v. Lutzweit (1957), 106 Ohio App. 123, 6 O.O.2d 396, 153 N.E.2d 695.

In Zurich Ins. Co. v. Valley Steel Erectors, supra, the Trumbull County Court of Appeals held that the burden was upon the insured to demonstrate that the insurance company was not prejudiced by a four-month delay in providing notice under a policy requiring notice to be a given "as soon as practicable" after the accident. The court adopted the holding in Security Ins. Co. v. Snyder-Lynch Motor, Inc. (1960), 183 Cal.App.2d 574, 7 Cal.Rptr. 28, that prejudice to the insurer is presumed from unreasonable delay in giving the required notice of loss under the policy, and the burden rests...