Hindall v. Winterthur International

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 05a0401n.06
Filed: May 16, 2005
No. 04-3289
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
JAMES HINDALL, )
)
Plaintiff-Appellant, )
)
v. ) ON APPEAL FROM THE UNITED
) STATES DISTRICT COURT FOR THE
WINTERTHUR INTERNATIONAL; ) NORTHERN DISTRICT OF OHIO
TRAVELERS PROPERTY CASUALTY )
COMPANY, )
)
Defendants-Appellees. )
Before: KEITH, MOORE, and GIBBONS, Circuit Judges.
JULIA SMITH GIBBONS, Circuit Judge. Plaintiff-appellant James Hindall was in an
automobile accident.1 He settled with the tortfeasor for the limit of her liability policy, but his
damages exceeded this amount. Hindall then sought coverage under his employer’s insurance
policies based upon the Ohio Supreme Court’s decision in Scott-Pontzer v. Liberty Mutual Fire
Insurance Co., 710 N.E.2d 1116 (Ohio 1999). The district court granted summary judgment to the
defendants, because it concluded that Hindall’s employer had validly rejected
uninsured/underinsured motorist coverage under its policies. We reversed the district court, holding
that coverage had arisen by operation of law. Hindall v. Winterthur Int’l, 337 F.3d 680 (6th Cir.
2003). The case was remanded back to the district court. Subsequently, the Ohio Supreme Court
1
This is a diversity case, brought pursuant to 28 U.S.C. § 1332, in which Ohio law controls.
Hindall v. Winterthur International, No. 04-3289
issued its decision in Westfield Insurance Co. v. Galatis, 797 N.E.2d 1256 (Ohio 2003), which
severely limited Scott-Pontzer by holding that a party could only obtain uninsured/underinsured
motorist coverage under an employer’s policies if the party was injured while driving in the course
and scope of employment. Because Hindall conceded that he was not acting within the course and
scope of employment when his accident occurred, the district court dismissed his case based upon
Galatis.
Hindall appeals, arguing that Galatis should not be applied retroactively to his case. Under
Ohio law, “a decision of a court of supreme jurisdiction overruling a former decision is retrospective
in its operation, and the effect is not that the former was bad law, but that it never was the law.”
Peerless Elec. Co. v. Bowers, 129 N.E.2d 467, 468 (Ohio 1955). Absent a declaration that the
decision should only apply prospectively, “the decision shall be applied retrospectively as well.”
State ex rel. Bosch v. Indus. Comm’n, 438 N.E.2d 415, 418 (Ohio 1982). “The one general
exception to this rule is where contractual rights have arisen or vested rights have been acquired
under the prior decision.” Peerless, 129 N.E.2d at 468.
In Hindall’s case, neither exception prevents the retroactive application of Galatis. The
contractual rights exception was designed so that courts would not “disturb the operation of
contracts formed in contemplation of and reliance upon law that is later overturned by judicial
decision.” Parks v. Rice, 809 N.E.2d 1192, 1197 (Ohio Ct. App. 2004). Hindall entered into a
contract with the tortfeasor because of Scott-Pontzer, but he never entered into a contract with the
insurance company defendants. Rather, his employer purchased insurance policies from the
defendants; his right to recover under those policies arose because of Scott-Pontzer and not because
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Hindall v. Winterthur International, No. 04-3289
he himself had entered into a contract with the defendants. The application of Galatis to his case
will not interfere with the operation of any contract to which Hindall is a party, making the
contractual rights exception inapplicable. With respect to the vested rights exception, a right does
not vest “unless it constitutes more than a mere expectation or interest based upon an anticipated
continuance of existing law.” Kallas v. Ohio Water Serv. Co., 725 N.E.2d 324, 329 (Ohio Ct. App.
1999) (internal quotation and citation omitted). Hindall merely had an expectation that Scott-
Pontzer would continue to be good law and therefore does not have a vested right to have its rule
applied to his case.
Hindall also argues that his reliance interest and the law-of-the-case doctrine make the
application of Galatis to his case unfair. Hindall’s arguments fail. Detrimental reliance has not been
recognized as one of the limited exceptions to the general rule that an Ohio Supreme Court decision
should apply retroactively.2 See Peerless, 129 N.E.2d at 468. With respect to the law-of-the-case
doctrine, the Ohio Supreme Court’s decision in Hopkins v. Dyer establishes that “the decision in
Galatis constituted extraordinary circumstances that created an exception to the law-of-the-case
doctrine and that . . . obligated [the lower court] to apply Galatis.” 820 N.E.2d 329, 334 (Ohio
2004). Thus, while this court previously stated that coverage had arisen by operation of law under
the Travelers and Winterthur policies, we are obligated to apply Galatis because it represents a
2
While Galatis discusses potential plaintiffs’ reliance interest on Scott-Ponzter, it does so in
the context of deciding whether to depart from the principle of stare decisis. The Ohio Supreme
Court’s conclusion that “[n]o reliance interest will be jeopardized by limiting Scott-Pontzer,”
Galatis, 797 N.E.2d at 1270, weighs against Hindall’s argument that his reliance interest justifies
allowing his case to proceed under Scott-Pontzer.
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fundamental change in Ohio law requiring a departure from the law-of-the-case doctrine.3
For these reasons, we conclude that Galatis applies retroactively to Hindall’s case and
prevents him from recovering under the policies issued by the defendants. Accordingly, we affirm
the district court’s decision.
3
We recognize appellant’s argument that we previously stated that the insurance companies
had “no defense” to Hindall’s claim. See Hindall, 337 F.3d at 685. Nevertheless, this statement
arose in the context of interpreting pre-Galatis law. We cannot now give effect to that language
given the subsequent change in law that occurred with Galatis and provided the insurance
companies with a defense in this case.
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