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Ohio Supreme Court: Insurance Policy Language Does Not Preclude Uninsured Motorist Coverage For Damage Caused by Government Driver

The Supreme Court of Ohio ruled today that when the uninsured motorist/underinsured motorist (UM/UIM) coverage in an Ohio auto insurance policy includes in the definition of an “uninsured vehicle” vehicles whose drivers are subject to governmental immunity, other policy language limiting coverage to damages an insured person “is legally entitled to recover” does not preclude UM/UIM claims for damages caused by another driver who had governmental immunity.

The court’s 4-3 decision was authored by Justice Paul E. Pfeifer.

The case arose from a November 2009 traffic accident in which a car driven by Maria Marusa was struck by a police cruiser driven by Officer Michael Canda. Marusa and her daughter, Melanie, were both injured in the crash. The parties stipulated that the Marusas’ injuries were caused by the officer’s negligent operation of his police cruiser, and that the Marusas “were not negligent and were not at fault for causing the collision.”

Under Ohio’s political subdivision immunity law, both Canda and his employer were immune from civil liability for injuries suffered by third parties as a result of Canda’s negligent performance of  his official duties. 

Unable to collect from Canda or the city, the Marusas sought coverage for their medical expenses and other damages through the uninsured motorist coverage in  their own auto insurance policy issued by the Erie Insurance Company.  Erie denied coverage. 

The Marusas filed suit in the Cuyahoga County Court of Common Pleas, citing language in the Erie policy that specifically included in the definition of an “uninsured vehicle” a vehicle whose owner or operator is covered by a governmental immunity. Erie stipulated that Canda and his employer were covered by governmental immunity, and that Canda qualified as an “uninsured motorist” under the terms of its policy, but argued that coverage for the Marusas’ injuries was precluded by other language in its policy that limited UM/UIM coverage to damages for which an insured “is legally entitled to recover.”  Because the Marusas were not ‘legally entitled’ to recover damages from Canda or his employer as a result of their governmental immunity, Erie argued that its policy provided no coverage for their damages.

The trial court granted summary judgment in favor of Erie, citing the Supreme Court of Ohio’s 2007 holding in Snyder v. American Family Ins. Co. that policy language limiting coverage to damages that an insured was “legally entitled to recover” precluded UM coverage for damages caused by a driver protected by governmental immunity.  On review, the Eighth District Court of Appeals affirmed the trial court’s ruling, concluding that the Supreme Court’s holding in Snyder was controlling precedent.

The Marusas sought and were granted Supreme Court review of the Eighth District’s ruling.

In today’s lead opinion reversing the Eighth District, Justice Pfeifer wrote that there was a crucial difference between the insurance policy at issue in the Snyder case and the Marusas’ policy with Erie. 

He wrote: “In Snyder, this court stated 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.’ ... The court also stated that ‘[o]ur ruling here, of course, does not prevent insurers from responding to consumer demand by offering uninsured-motorist coverage without precluding recovery because of a tortfeasor’s immunity.’ ... The UM endorsement in this case does just that.”

“The UM endorsement provides that ‘(u)ninsured motor vehicle’ includes a motor vehicle whose owner or operator ‘has immunity under the Ohio Political Subdivision Tort Liability Law [OPSTLL].’   ... Erie Insurance claims that language elsewhere in the endorsement that Erie will pay damages that the insured is ‘legally entitled to recover’ makes Snyder dispositive, as that phrase mirrors the language relied upon in Snyder to preclude coverage.  We do not agree.  We conclude that the language of the definitional provision controls, and it plainly and unambiguously provides UM coverage when an insured is injured by an owner or operator who is immune under the OPSTLL.”

“The critical distinction between Snyder and this case is that in Snyder, the plaintiff relied on a statutory definition of ‘uninsured motor vehicle.’  Here, Marusa is not constrained by a statutory definition. This court’s decision, therefore, is not controlled by Snyder. ...  Given our conclusion concerning the definition of ‘uninsured motor vehicle’ contained in this insurance contract, we cannot conclude, as the Snyder court did when confronted with language from outside the insurance contract, that the phrase ‘legally entitled to recover’ precludes uninsured-motorist coverage when the owner or operator is immune under the OPSTLL.”

“To give effect to the policy definition of an ‘uninsured motor vehicle,’ it is necessary to consider it an exception to the limiting phrase ‘legally entitled to recover,’ which the Snyder court foresaw as a possibility. ... Furthermore, the definitional provision is specific and the ‘legally entitled to recover’ provision is general. When faced with provisions that are arguably in conflict, we apply the more specific provision.”

“The trial court granted Erie’s motion for summary judgment.  We conclude that the motion was improperly granted. The definitional provision at issue operates to expand UM coverage, not to limit or preclude it.  Accordingly, we conclude that summary judgment should have been denied to Erie Insurance. Marusa also moved for summary judgment on the issue whether the policy provides UM coverage, which the trial court denied. Having concluded that neither Snyder nor the insurance contract precludes UM coverage, we remand the cause to the trial court for further proceedings consistent with this opinion.”

Justice Pfeifer’s opinion was joined by Justice William M. O’Neill.  

Justice Judith Ann Lanzinger entered a separate opinion, joined by Chief Justice Maureen O’Connor, in which she concurred with the lead opinion in judgment, but stated her belief that the court should “forthrightly overrule Snyder rather than simply distinguish it as a case premised on the statutory definition of ‘uninsured motor vehicle’ rather than the policy definition.”

Justice Lanzinger noted that under R.C. 3937.18(B)(2) any Ohio auto insurance policy offering “uninsured motorist” coverage, by definition, covers damages suffered by an insured that are caused by a driver who “has immunity under Chapter 2744 of the Revised Code” (Ohio’s governmental immunity statute).  She wrote that in her view the Snyder decision wrongly interpreted language in  R.C. 3937.18(I) to allow an insurer to completely eliminate coverage for  governmentally immune drivers through the insertion of the words “legally entitled to recover” in its policy.

She wrote: “I would hold that a policy that defines an uninsured motor vehicle as a vehicle owned or operated by one with political subdivision immunity does not exclude the promise of UM/UIM insurance coverage by using the term ‘legally entitled to recover’  in the insuring clause.  I do not believe that we can continue to hold that these words effectively demolish the UM/UIM protection that the insured expects to receive in such a policy.”

Justices Terrence O’Donnell, Sharon L. Kennedy, and Judith L. French dissented, stating that they  would hold the Supreme Court’s decision in Snyder is controlling precedent that must be followed in this case.

Please note: Opinion summaries are prepared by the Office of Public Information for the general public and news media. Opinion summaries are not prepared for every opinion, but only for noteworthy cases. Opinion summaries are not to be considered as official headnotes or syllabi of court opinions. The full text of this and other court opinions are available online.

2012-0058. Marusa v. Erie Ins. Co., Slip Opinion No. 2013-Ohio-1957.
Cuyahoga App. No. 96556, 2011-Ohio-6276.  Judgment reversed and cause remanded.
Pfeifer and O’Neill, JJ., concur.
O’Connor, C.J., and Lanzinger, J., concur in judgment and concur separately.
O’Donnell, Kennedy, and French, JJ., dissent.
Opinion: http://www.supremecourt.ohio.gov/rod/docs/pdf/0/2013/2013-Ohio-1957.pdf

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