Shirley v. Republic-Franklin Ins. Co., (Ohio 2006)
Linked as:
Summary
Insurance contract interpretation.
Summary
Insurance contract interpretation.
Text
[Cite as Shirley v. Republic-Franklin Ins. Co., 2006-Ohio-1848.]
COURT OF APPEALS STARK COUNTY, OHIO FIFTH APPELLATE DISTRICT
JUDGES: NORMA J. SHIRLEY, INDIVIDUALLY : Hon: W. Scott Gwin, P.J.
AND AS ADMINISTRATRIX OF THE : Hon: Sheila G. Farmer, J.
ESTATE OF ROBERT S. SHIRLEY, : Hon: John F. Boggins, J.
DECEASED, ET AL :
: Plaintiff-Appellee : Case No. 2005-CA-00210
: -vs- :
: O P I N I O N REPUBLIC-FRANKLIN INSURANCE
COMPANY, ET AL Defendant-Appellant and STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Defendant-Appellant
CHARACTER OF PROCEEDING: Civil appeal from the Stark County Court of Common Pleas, Case No. 2001CV03092
JUDGMENT: Reversed
DATE OF JUDGMENT ENTRY: April 10, 2006
APPEARANCES: For Plaintiff-Appellee For Defendant-Appel ant
JOHN S. COURY JOHN B. LINDAMOOD 116 Cleveland Ave. N.W., Ste 717 JAMES F MATHEWS Canton, OH 44702 400 South Main Street
North Canton, OH
- 1 -
[Cite as Shirley v. Republic-Franklin Ins. Co., 2006-Ohio-1848.]
Gwin, P.J.
Defendant State Farm Mutual Automobile Insurance Company appeals a judgment of the Court of Common Pleas of Stark County, Ohio, entered in favor of plaintiffs-appellees John and Norma Shirley. Appel ants assign two errors to the trial court:
"I. THE TRIAL COURT ERRED IN ITS REFUSAL TO FIND THAT THE APPELLEE'S CLAIMS FOR UNINSURED MOTORISTS COVERAGE ARE BARRED BY THE TWO-YEAR CONTRACTUAL LIMITATIONS CLAUSE OF THE POLICY AT ISSUE, TO APPELLANT'S PREJUDICE.
"II. THE TRIAL COURT ERRED IN CONCLUDING THAT THE APPELLEES' CLAIMS WERE NOT BARRED FOR FAILURE TO SATISFY CONDITIONS PRECEDENT TO COVERAGE UNDER THE STATE FARM POLICY, TO APPELLANT'S PREJUDICE."
This case has a long history, arising out of an accident on February 1, 1998. Appellees' decedent Robert Shirley and his wife Patricia Shirley were killed in a traffic accident in Carrol County, Ohio. Patricia Shirley owned and operated the vehicle and Robert Shirley was a passenger.
Appellees and others brought suit against numerous defendants. Most of the claims were based upon the Ohio Supreme Court decisions in Scott-Pontzer v. Liberty Mutual Fire Insurance Company (1999), 85 Ohio St. 3d 660, and Ezawa v. Yasuda Fire & Marine Insurance Company (1999), 86 Ohio St. 3d 557.
Appellees also sued their own personal automobile carrier, the appellant here, State Farm, claiming they were entitled to uninsured/underinsured motorist's
- 2 -
Stark County, Case No. 2005-CA-00210 3
benefits under their personal auto policy for the wrongful death of their son. Their claim against State Farm was based upon Moore v. State Auto Insurance Company (2000), 88 Ohio St. 3d 27 and Sexton v. State Farm Mutual Auto Insurance Company (1982), 69 Ohio St. 2d 431. The appeal before us deals with the Moore/Sexton claim, and not the Scott-Pontzer/ Ezawa claims.
Eventually, the trial court ruled on the various coverage issues involving State Farm and the other defendants on June 4, 2002. In this first judgment, the trial court sustained State Farm's motion for summary judgment, finding appellees' claims were barred on the grounds appellees had failed to protect State Farm's subrogation rights, and because appellees gave late notice of the accident.
On appeal, this particular claim was lost in the crowd of Scott-Pontzer claims brought by various plaintiffs against various insurance companies. See Shirley v. Republic Franklin Insurance Company (December 15, 2003), Stark App. No. 2002- CA-00221. The motion for reconsideration brought this overlooked claim to our attention, and on January 5, 2004, we sustained the motion for reconsideration and remanded this portion of the case for proceedings pursuant to Ferrando v. Auto Owners Mutual Insurance Company, 98 Ohio St. 3d 186, 2002-Ohio-7217. In so doing, we stated: "Ferrando holds violations of notice and/or subrogation clauses do not preclude recovery as a matter of law. Instead, this issue presents a question of fact regarding whether the insureds acted reasonably and whether the insurance company was actually prejudiced." Judgment Entry of January 5, 2004, Page Two.
On remand, the parties briefed the issue and the trial court conducted a hearing on July 22, 2005. On July 25, 2005, the trial court found appellee's claims were
- 3 -
Stark County, Case No. 2005-CA-00210 4
not barred for the alleged violation of various conditions and limitations contained in the State Farm policy. Specifically, the court found appellee's notice to State Farm was not unreasonable under the circumstances, and appellees did not destroy State Farm's subrogation rights, particularly in view of the fact the tortfeasor was completely uncollectible.
On August 24, 2005, State Farm filed a notice of appeal and brought the matter before this court once more.
I
In its first assignment of error, State Farm asserts the trial court should have enforced the two year limitation clause. We agree.
During the pendency of this appeal, the Supreme Court decided Sarmiento v. Grange Mutual Casualty Company, 106 Ohio St. 3d 403, 2005-Ohio-5410, 835 N.E. 2d 692. In Sarmiento, the Supreme Court held a two-year contractual limitation period for filing uninsured/underinsured motorists claims is reasonable and enforceable even when the statute of limitations for the underlying tort claim is longer than two years, or if the plaintiff is a minor for whom R.C. 2305.16 tol s the running of the statute of limitations for certain actions. Prior to Sarmiento, provisions in an insurance contract limiting the time for bringing an action to a shorter time than the applicable statute of limitations were enforceable if the provisions are unambiguous and reasonable, Miller v. Progressive Casualty Insurance Co. (1994),69 Ohio St.3d 619, 635 N.E.2d 3d17.
Sarmiento did not overrule Ferrando.
The insurance policy in question had a section labeled "Conditions". One of the conditions stated: "There is no right of action against us *** under uninsured motor
- 4 -
Stark County, Case No. 2005-CA-00210 5
vehicle coverage unless such action is commenced within two years after the date of the accident." Another section of the policy provided a heading labeled "Reporting a Claim". One portion states: "*** The insured must give us or one of our agents written notice of the accident or loss as soon as reasonably possible***" [emphasis sic].
In the original common pleas case, State Farm had raised the two-year limitation provision of its policy. It had also argued appellees had breached the portion of the policy that required notice as soon as reasonably possible. In addition, State Farm denied coverage based upon the appellees' failure to protect its subrogation rights. In the first case the trial court held the prompt notice and subrogation clauses barred appellees' recovery. Our remand directed the court to analyze the claim in light of Ferrando. In the remand, we did not directly address the two year provision, but under Miller it was subject to review as wel .
On remand, State Farm argued the two year provision was enforceable on its face. State Farm also argued the two year limitation demonstrated appel ees' delay of more than three years was unreasonable.
The trial court found the two year limitation was not enforceable because appellees' claims were based on Moore, which was not announced until after the two years had run. The court found until the Supreme Court decided Moore, appel ees could not have known they were covered. The court found appellees' notice was reasonable under the circumstances of the case.
Appellees urge because in the first appeal we did not determine the two year limitation was enforceable, and instead remanded it for a Ferrando review, the principles of res judicata and law of the case preclude application of Sarmiento to the
- 5 -
Stark County, Case No. 2005-CA-00210 6
issue now. In other words, the only possible analysis of the two year clause is pursuant to Ferrando. We do not agree. When this court first remanded the issue, the two year limitation was subject to a Ferrando review pursuant to Miller, supra. In Sarmiento, the Supreme Court found a two year limitation is per se reasonable and enforceable, without any equitable test or interpretation. This holding removes it from Ferrando. We find so long as the two year clause is pending in the courts for review and interpretation, the courts must apply any change or modification in the law, see Hopkins v. Dyer, 104 Ohio St. 3d 461, 2004-Ohio-6769, 820 N.E. 2d 329,
We find the trial court should have found appellees' claim for uninsured/underinsured motorist's coverage was barred because appellees failed to give notice within two years as required by the policy language. The fact Moore was decided after the two years had run is not relevant to the analysis, nor is any question of reasonableness or prejudice.
The first assignment of error is sustained.
II.
In their second assignment of error, State Farm argues the trial court's Ferrando analysis was faulty, and it should have found the appellees could not prevail.
Pursuant to the above, Ferrando now applies only to the provisions requiring notice as soon as possible, and to the subrogation issue. Because we find the two year limitation bars appellees' recovery, the second assignment of error is moot.
- 6 -
Stark County, Case No. 2005-CA-00210 7
For the foregoing reasons, the judgment of the Court of Common Pleas of Stark County, Ohio, is reversed.
By: Gwin, P.J., Farmer, J., and Boggins, J., concur
____________________
JUDGE W.
SCOTT GWIN
____________________
JUDGE SHEILA G. FARMER
____________________
JUDGE JOHN F. BOGGINS
WSG: clw
- 7 -
[Cite as Shirley v. Republic-Franklin Ins. Co., 2006-Ohio-1848.]
IN THE COURT OF APPEALS FOR STARK COUNTY, OHIO FIFTH APPELLATE DISTRICT
NORMA J. SHIRLEY, INDIVIDUALLY :
AND AS ADMINISTRATRIX OF :
THE ESTATE OF ROBERT S. SHIRLEY, : DECEASED, ET AL :
:
Plaintiff-Appellant :
:
: -vs- : JUDGMENT ENTRY :
REPUBLIC-FRANKLIN :
INSURANCE COMPANY, ET AL :
:
: Defendant-Appellee :
CASE NO. 2005-CA-00210
and STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Defendant-Appellant
For the reasons stated in our accompanying Memorandum-Opinion, the judgment of the Court of Common Pleas of Stark County, Ohio, is reversed. Costs to appellees.
____________________
JUDGE W.
SCOTT GWIN
____________________
JUDGE SHEILA G. FARMER
____________________
JUDGE JOHN F. BOGGINS
- 8 -
JUDGES
- 9 -
Sponsored links
