Marusa v. Erie Ins. Co.

[Cite as Marusa v. Erie Ins. Co., 2011-Ohio-6276.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 96556
MARIA MARUSA, ET AL.
PLAINTIFFS-APPELLANTS
vs.
ERIE INSURANCE COMPANY
DEFENDANT-APPELLEE
JUDGMENT:
AFFIRMED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-739818
BEFORE: Jones, J., Stewart, P.J., and Cooney, J.
RELEASED AND JOURNALIZED: December 8, 2011
ATTORNEYS FOR APPELLANTS
Donald E. Caravona
Aaron P. Berg
1900 Terminal Tower
50 Public Square
Cleveland, Ohio 44113
ATTORNEYS FOR APPELLEE
Robert L. Tucker
John R. Chlysta
Emily R. Yoder
Hanna, Campbell & Powell, LLP
3737 Embassy Parkway
P.O. Box 5521
Akron, Ohio 44334
LARRY A. JONES, J.:
{¶ 1} This cause came to be heard upon the accelerated calendar pursuant to
{¶ 2} App.R. 11.1 and Loc.R. 11.1, the trial court records and briefs of counsel.
{¶ 3} Plaintiffs-appellants, Maria and Melanie Marusa, appeal the trial court’s grant
of summary judgment in favor of defendant-appellee, Erie Insurance Company.
Reluctantly, we affirm.
I.
{¶ 4} The Marusas initiated this action in 2010 as a result of injuries they suffered
in a 2009 motor vehicle accident. Specifically, their vehicle was struck by a motor vehicle
operated by Michael Canda, a North Royalton police officer who was responding to an
emergency call. The Marusas filed a claim with their insurer, Erie Insurance Company.
Erie denied the claim.
{¶ 5} Erie filed a motion for summary judgment, and the Marusas filed a cross-
motion for partial summary judgment. For the limited purpose of the summary judgment
exercise, the parties entered into the following relevant stipulations: (1) “The accident
and the Marusas’ injuries were proximately caused by Officer Canda’s negligent operation
of his police cruiser”; (2) “The Marusas were not negligent and were not at fault for
causing the collision”; (3) “Officer Canda and the City of North Royalton are immune from
liability for the accident under the Ohio Political Subdivision Tort Liability Act, Ohio
Revised Code Chapter 2744”; and (4) “Because Officer Canda and his employer are
immune from suit under the Ohio Political Subdivision Tort Liability Act, Officer Canda
qualifies as an ‘uninsured motorist’ under the terms of the * * * Policy.”
{¶ 6} Relying on the Ohio Supreme Court’s decision in Snyder v. Am. Family Ins.
Co., 114 Ohio St. 3d 239, 2007-Ohio-4004, 871 N.E.2d 574, the trial court granted Erie’s
motion for summary judgment and denied the Marusas’ cross-motion for partial summary
judgment. The Marusas present the following errors for our review, which will be
considered together:
“[I.] The trial court erred in granting summary judgment on behalf of Defendant Erie
Insurance Company and denying summary judgment on behalf of the Plaintiffs
Maria and Melanie Marusa by not applying the correct rules of construction and
interpretation when reviewing an insurance policy in order to determine whether an
insured is entitle[d] to coverage under an insurance policy.
“[II.] The insurance policy at bar is a contract of adhesion, that is prepared and phrased by
the insurer and, as such, the [ ] contract of insurance is to be liberally construed in
favor of the insured and strictly against the insurer where any ambiguous or
undefined terms are used in the insurance contract.”
II.
{¶ 7} Appellate review of summary judgment is de novo. Grafton v. Ohio Edison
Co., 77 Ohio St. 3d 102, 105, 1996-Ohio-336, 671 N.E.2d 241. The Ohio Supreme Court
stated the appropriate test in Zivich v. Mentor Soccer Club, 82 Ohio St. 3d 367, 369-370,
1998-Ohio-389, 696 N.E.2d 201, as follows:
“Pursuant to Civ.R. 56, summary judgment is appropriate when (1) there is no genuine
issue of material fact, (2) the moving party is entitled to judgment as a matter of law,
and (3) reasonable minds can come to but one conclusion and that conclusion is
adverse to the nonmoving party, said party being entitled to have the evidence
construed most strongly in his favor. Horton v. Harwick Chem. Corp. (1995), 73
Ohio St. 3d 679, 653 N.E.2d 1196, paragraph three of the syllabus. The party
moving for summary judgment bears the burden of showing that there is no genuine
issue of material fact and that it is entitled to judgment as a matter of law. Dresher v.
Burt (1996), 75 Ohio St. 3d 280, 292-293, 662 N.E.2d 264, 273-274.”
III.
{¶ 8} In Snyder, the insured, a police officer, was injured when she was hit by
another police officer’s cruiser during the chase of a suspect. Snyder sought coverage
under her personal motor vehicle liability insurance policy with American Family
Insurance, but the insurer denied coverage. The relevant language of the policy provided:
“‘[American Family] will pay compensatory damages for bodily injury which an insured
person is legally entitled to recover from the owner or operator of an uninsured motor
vehicle.’ (Boldface sic.)” Snyder at ¶5, quoting policy.
{¶ 9} Snyder sued American Family, arguing that she was entitled to coverage
because R.C. 3937.18 includes persons who have immunity under R.C. Chapter 2744
within its definition of uninsured motorists. Snyder also contended that under the 2001
amendments to R.C. 3937.18, Ohio’s uninsured- and underinsured-motorist coverage law,
there is no longer a requirement that the insured be “legally entitled to recover” from the
tortfeasor and, therefore, the term as used in American Family’s policy is void because it
contradicts the statute. Further, Snyder contended that the term “legally entitled to
recover,” which was undefined in the policy, was ambiguous and therefore must be
construed in her favor.
{¶ 10} The Ohio Supreme Court rejected Snyder’s contentions. The Court ruled
that:
“Removal of the ‘legally entitled to recover’ language from the statute does not mean that
insurance contracts may not require proof that the insured is legally entitled to
recover from the uninsured motorist. Absent a specific statutory or common-law
prohibition, parties are free to agree to the contract’s terms.” Snyder at ¶24.
{¶ 11} The Snyder Court further ruled that it was “not illogical” for the General
Assembly to include tortfeasors who have immunity under R.C. Chapter 2744 in the
definition of an uninsured motorist, but then also permit policy terms to exclude coverage
based on that same immunity. Id. at ¶27. The Court held that “a policy provision
limiting the insured’s recovery of uninsured- or underinsured-motorist benefits to amounts
which the insured is ‘legally entitled to recover’ is enforceable, and its effect will be to
preclude recovery when the tortfeasor is immune under R.C. Chapter 2744.” Id. at ¶29.
Additionally, the Snyder Court held that the phrase “legally entitled to recover” is “not
ambiguous and must be accorded its plain meaning.” Id. at ¶32.
{¶ 12} The relevant portions of the Marusas’ insurance policy provided as follows:
“‘Uninsured motor vehicle’ means a ‘motor vehicle:’
“***
“4. For which the owner or operator of the ‘motor vehicle’ has immunity under
the Ohio Political Subdivision Tort Liability or a diplomatic immunity.
“***
“OUR PROMISE
“‘We’ will pay for bodily injury that ‘anyone we protect’ or the legal representative of
‘anyone we protect’ are legally entitled to recover from the owner or operator of an
‘uninsured motor vehicle’ or ‘underinsured motor vehicle.’” (Emphasis sic.)
{¶ 13} The Marusas contend that Snyder is “significantly distinguishable” from this
case. Specifically, they contend that Snyder dealt with the statutory definition of
“uninsured motorist” under R.C. 3937.18(B)(5), as opposed to “uninsured motorist” as
defined in a policy. Although the coverage issue in Snyder arose from the 2001
amendments to R.C. 3937.18, the Snyder Court also addressed coverage exclusion based on
immunity as set forth in a policy. The Court held:
“We also conclude that policy language restricting uninsured-motorist coverage to those
amounts the insured is ‘legally entitled to recover’ from the tortfeasor owner or
operator of an uninsured motor vehicle unambiguously denies coverage for injuries
caused by uninsured motorists who are immune from liability under R.C. Chapter
2744 or R.C. 4123.741.” (Emphasis added.) Id. at ¶2.
{¶ 14} In light of the above, the Marusas’ contention that Snyder applies only to the
statutory definition of “uninsured motorist” is without merit.
{¶ 15} The Marusas further contend that when the definition of an “uninsured motor
vehicle” as set forth in their policy is read together with the policy’s “promise,” “it is
obvious that the clear intent of the policy is to provide uninsured/underinsured motorist
coverage to an insured when the owner and/or operator of motor vehicle, who would
otherwise be immune from liability by virtue of ‘the Ohio Political Subdivision Tort
Liability,’ is negligent.” But the “promise” portion of the policy requires that the insured
be “legally entitled to recover” from the operator of the uninsured vehicle. Snyder
addressed the “legally entitled to recover” requirement and held that although the 2001
amendments to R.C. 3937.18 eliminated the phrase, that “does not mean that insurance
contracts may not require proof that the insured is legally entitled to recover from the
uninsured motorist.” Id. at ¶24.
{¶ 16} The Marusas were not legally entitled to recover from Officer Canda because
of his immunity. Thus, when the definition and promise sections of the policy are read
together, the Marusas were not entitled to coverage under the policy.
{¶ 17} We do not believe that Snyder advances the public policy that the
“predominate social purpose of liability insurance is to compensate injured persons.”
Stickovich v. Cleveland, 143 Ohio App. 3d 13, 25, 2001-Ohio-4117, 757 N.E.2d 50. But
we are duty-bound to follow it. Reluctantly, therefore, in light of Snyder, the Marusas’
two assignments of error are without merit and the trial court’s judgment is affirmed.
It is ordered that appellee recover of appellants its costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the Cuyahoga
County Court of Common Pleas to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the
Rules of Appellate Procedure.
LARRY A. JONES, JUDGE
COLLEEN CONWAY COONEY, J., CONCURS;
MELODY J. STEWART, P.J., DISSENTS WITH
SEPARATE OPINION
MELODY J. STEWART, P.J., DISSENTING:
{¶ 18} The introduction to the Erie policy states that “[t]he protection provided by
this policy is in keeping with the single purpose of our Founders which is, ‘To provide
YOU with as near PERFECT PROTECTION, as near PERFECT SERVICE, as is humanly
possible, and to do so at the LOWEST POSSIBLE COST.” (Emphasis sic.) The UM
provisions of the Marusas’ policy specifically give coverage, but then generally take it
away — and do so in the definitions and promise sections of the policy, notwithstanding the
fact that those sections are immediately followed by sections entitled, “Exclusions — What
We Do Not Cover” and “Limitations of Protection,” both of which are completely devoid
of any exclusion related to governmental immunity. This is a complete failure of the
promise to provide “near PERFECT PROTECTION” and deprives the Marusas of the
benefit of their bargain. I vehemently dissent from the decision reached in this case.
{¶ 19} The majority “reluctantly” holds that the Marusas are not entitled to
uninsured motorist (UM) coverage under their insurance policy “when the definition and
promise sections of the policy are read together.” In reaching its decision, the majority
relies on a tortured interpretation and analysis of the phrase “legally entitled to recover” set
forth in Snyder v. Am. Family Ins., supra. This case is distinguishable from Snyder
because the supreme court’s decision in that case was firmly rooted in resolving what the
court perceived to be a conflict between the general statement, “legally entitled to recover,”
contained in the insurance policy, and provisions in Chapter 3937 of the Revised Code.
The Snyder court rejected the insured’s argument that R.C. 3937.17, which included those
immune under Chapter 2744 of the Revised Code in its definition of uninsured motorist,
should prevail over the interpretation of the phrase “legally entitled to recover” to find UM
coverage. Key to the court’s analysis was its belief that provisions in Chapter 3937 of the
Revised Code did not prohibit parties from setting forth the terms of their contract and the
interpretation of those terms will supersede statutory language (a proposition rejected by
the dissent). The court noted that, “[a]bsent a specific statutory or common-law
prohibition, parties are free to agree to the contract’s terms. Martin v. Midwestern Group
Ins. Co. (1994), 70 Ohio St. 3d 478, 480, 639 N.E.2d 438 (noting that R.C. 3937.18 does not
displace principles of contract law), superseded by statute on other grounds, as noted in
Baughman v. State Farm Mut. Auto. Ins. Co. (2000), 88 Ohio St. 3d 480, 484, 727 N.E.2d
1265.” Snyder at ¶24.
{¶ 20} The majority in this case has, in essence, interpreted Snyder to say that, even
if an insurance policy specifically promises to pay for injuries sustained from “a motor
vehicle for which the owner or operator of the motor vehicle has immunity under the Ohio
Political Subdivision Tort Liability Law***” — as the UM definition and promise sections
of the policy do in this case — the insurance company can, nonetheless, negate that
specific coverage by arguing to a court of law that its inclusion of the phrase “legally
entitled to recover” in the “Promise” section of the policy should be interpreted to exclude
that very coverage.1 No court should condone such chicanery.
This interpretation would also have to necessarily assume that Erie has no idea what the term
1
“immunity” means: a wholly unbelievable proposition.
{¶ 21} In Payton v. Peskins, 12th Dist. No. CA2010-10-022, 2011-Ohio-3905, the
court of appeals found that a UM policy exclusion, worded similarly to the one used in this
case, did not effectively exclude UM coverage despite the policy using the “legally entitled
to recover” language noted in Snyder. Payton’s policy stated that, the insurer, Progressive,
“will pay for damages that an insured person is legally entitled to recover from an
uninsured motorist or underinsured motorist because of bodily injury.” The Twelfth
District noted that, “unlike Snyder, the Progressive policy at issue goes on to state, ‘an
“uninsured motorist” does not include an owner or operator of a motor vehicle: (c) that is
owned by any governmental unit or agency unless the operator of the motor vehicle has
immunity under Chapter 2744 of the Ohio Revised Code (relating to certain political
subdivisions operating a fire department, police department, or emergency medical
service).’” Id. at ¶11 (emphasis sic.) The court of appeals went on to state:
{¶ 22} “The court in Snyder found that the general term ‘legally entitled to recover’
was an additional condition for coverage that unambiguously excluded coverage for
injuries caused by a driver who is immune from liability under R.C. Chapter 2744.
Payton’s Progressive policy, however, specifically took the general preamble to Section
III’s uninsured/underinsured section and made a more specific coverage condition, mainly
that vehicles owned by any governmental unit or agency were not covered unless the
operator of the vehicle has immunity under R.C. Chapter 2744. ‘It is well-established under
the generally applicable rules governing contract interpretation that specific provisions take
precedence over more general provisions.’ Smith v. Littrell, Preble App. No.
CA2001–02–004, 6, 2001-Ohio-8642.
{¶ 23} “The Ohio Supreme Court made it clear in Snyder that insurance companies
and their customers have the right to agree to uninsured-motorist coverage without
precluding recovery because of a tortfeasor’s immunity. The Progressive policy did just
that. It carved out an exception to the ‘legally entitled to recover’ language listed in
Snyder by stating that the policy holder could not recover for uninsured motorist protection
when bodily injury was caused by a government-owned vehicle unless that vehicle was
driven by an operator who has immunity under R.C. Chapter 2744. The parties stipulated
that Peskins and the village of Georgetown are immune under R.C. Chapter 2744, and
Progressive cannot now claim that the general statement made in the preamble to its
uninsured motorist section subjugates the more specific statement granting coverage when
the driver has immunity, as Peskins did in this case.” Id. at ¶14-15.
{¶ 24} Although Erie couched its coverage in terms of what the insured was “legally
obligated to recover,” it created an exception to that in the UM portion of the policy by
defining an “uninsured motor vehicle” as a motor vehicle “for which the owner or operator
of the ‘motor vehicle’ has immunity under the Ohio Political Subdivision Tort Liability
Law or a diplomatic immunity.” As in Payton, the specific inclusion of language defining
an uninsured motor vehicle as one in which the operator has immunity under R.C. 2744.02
was enough to overcome the more general “legally obligated to recover” language. To
read the policy differently would elevate general language over the specific and undermine
the well-established legal proposition that Ohio law presumes insurance coverage, so an
exclusion to coverage must be clearly expressed. See, e.g., Sharonville v. Am. Emps. Ins.
Co., 109 Ohio St. 3d 186, 2006-Ohio-2180, 846 N.E.2d 833, ¶6. If Erie wished to ride on
the coattails of governmental immunity to deny UM coverage to its unsuspecting and
oblivious customers, the law requires that it clearly do so. This can be done in a number
of ways: vehicles owned and operated by those who are immune can be removed from the
definition of uninsured motor vehicles, or Erie can include such an exclusion in the
“Exclusions — What We Do Not Cover” section of the policy.
{¶ 25} The broader principle at issue here, and the one that apparently troubles the
majority, too, is the prospect that an insured who specifically pays for UM coverage could
be denied that coverage simply because the tortfeasor happened to be immune from
liability, despite being fully at fault as is the case here. UM coverage is designed just for
these types of situations, yet court decisions have effectively denied a significant number of
people insurance coverage that they pay for, and think that they have, but do not. This is
an intolerable state of the law and one I hope is quickly rectified.