Transcript UN/UNDERINSURED MOTORISTS COVERAGE UPDATE

UM/UIM COVERAGE FOR FAMILY MEMBERS
AFTER Kyle v. Buckeye Union Ins. Co.,
103 Ohio St.3d 170, 2004-Ohio-4885
Robert W. Kerpsack, Esq.
ROBERT W. KERPSACK CO., L.P.A.
21 East State Street, Suite 300
Columbus, OH 43215
Telephone: (614) 242-1000
Facsimile: (614) 242-4180
Email: [email protected]
November 19, 2004
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KYLE TOPICS:
• REVIEW OF RELEVANT LEGISLATIVE HISTORY OF
FORMER R.C. 3937.18(J) AND (K)
• REVIEW OF FACTS/ISSUES IN KYLE, AND IN OTHER OH.
SUP. CRT. CASES DECIDED ON AUTHORITY OF KYLE
• REVIEW OF KYLE HOLDING
• REVIEW OF KYLE DISSENT
• WHERE ARE WE AFTER KYLE?
2
LEGISLATIVE HISTORY OF
FORMER R.C. 3937.18(J) AND (K)
• H.B. 261 (EFFECTIVE 9/3/97) ADDED SUBSECTION
(J)(1) TO R.C. 3937.18
– “OWNED BUT UNINSURED AUTO” EXCLUSION:
• PERMISSIBLE FOR INSURERS TO EXCLUDE UM/UIM
COVERAGE FOR AN INSURED INJURED WHILE
OCCUPYING A VEHICLE THAT IS “AVAILABLE FOR
HIS/HER REGULAR USE,” BUT NOT COVERED
UNDER POLICY’S BI COVERAGE
3
LEGISLATIVE HISTORY OF
FORMER R.C. 3937.18(J) AND (K) (con’t)
• H.B. 261 ALSO ADDED (K)(2) TO R.C. 3937.18:
– VEHICLE “AVAILABLE FOR THE REGULAR USE” OF AN
INSURED IS EXCLUDED FROM THE DEFINITION OF AN
“UNINSURED MOTOR VEHICLE”
• S.B. 267 (EFFECTIVE 9/21/00) REPEALED (K)(2)
– VEHICLES “LISTED” IN A POLICY (BUT EXCLUDED
UNDER BI COVERAGE) ARE INCLUDED IN THE
DEFINITION OF AN “UNINSURED MOTOR VEHICLE”
4
OH SUP CT CASES HELD FOR KYLE:
Morris v. United Ohio Ins. Co.
• MORRIS FACTS: WIFE INJURED BY NEGLIGENCE OF
HUSBAND WHILE RIDING IN INSURED FAMILY VEHICLE
– DENIAL OF COVERAGE ON WIFE’S UM CLAIM, CITING R.C.
3937.18(K)(2)
• MORRIS HOLDING (4th District Court of Appeals):
– (K)(2) RENDERS THE (J)(1) “PROMISE” OF COVERAGE
FOR A “LISTED VEHICLE” ILLUSORY IN NATURE
– TAKEN TOGETHER, (J)(1) AND (K)(2) ARE SO
AMBIGUOUS AS TO BE UNENFORCEABLE
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OH SUP CT CASES HELD FOR KYLE:
Ratkosky v. Scottsdale Surplus Lines Ins. Co.
• RATKOSKY FACTS: RESIDENT BROTHERS INVOLVED IN A
ONE-CAR CRASH WHILE RIDING IN INSURED FAMILY VEHICLE
– DENIAL OF COVERAGE ON INJURED BROTHER’S UM
CLAIM, CITING R.C. 3937.18(K)(2)
• RATKOSKY HOLDING (8th District Court of Appeals):
– (J)(1) “IMPLIES” THAT UM COVERAGE IS AVAILABLE FOR
“LISTED” VEHICLES, WHILE (K)(2) MAKES IT CLEAR THAT,
EVEN IF LISTED, COVERAGE CAN NEVER BE AVAILABLE
• THIS “DOUBLESPEAK” CREATES AN AMBIGUITY, WHICH
MAKES R.C. 3937.18(K)(2) UNENFORCEABLE
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OH SUP CT CASES HELD FOR KYLE:
Kuhnle v. Zander
• KUHNLE FACTS: MOTHER INJURED IN CRASH CAUSED BY
RESIDENT DAUGHTER’S NEGLIGENCE WHILE RIDING IN
INSURED FAMILY VEHICLE
– DENIAL OF COVERAGE ON MOTHER’S UM CLAIM, CITING
R.C. 3937.18(K)(2)
• KUHNLE HOLDING: (6th District Court of Appeals):
– NO AMBIGUITY: (J)(1) IS “LIMITED BY” (K)(2)
– (J)(1) APPLIES ONLY WHEN THE INSURED IS DRIVING A
VEHICLE NOT COVERED BY THE POLICY AND THE
TORTFEASOR IS NOT THE NAMED INSURED, SPOUSE, OR
RESIDENT RELATIVE OF THE NAMED INSURED
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OH SUP CT CASES HELD FOR KYLE:
Cincinnati Cos. v. Albers
• ALBERS FACTS: MULTIPLE UNRELATED TEENAGERS
INJURED IN ONE-CAR CRASH. AFTER LIABILITY INSURER
DEPOSITED ITS BI LIMITS WITH THE COURT, THE COURT
ORDERED DISTRIBUTION OF BI LIMITS TO CLAIMANTS IN
AMOUNTS LESS THAN “PER PERSON” UIM LIMITS
– DENIAL OF COVERAGE ON UIM CLAIMS, CITING R.C.
3937.18(K)(2)
• ALBERS HOLDING: (3rd District Court of Appeals):
– POLICY UNAMBIGUOUSLY EXCLUDES VEHICLES OWNED
BY THE NAMED INSURED FROM THE DEFINITION OF AN
“UN/UNDERINSURED MOTOR VEHICLE”
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KYLE FACTS
•
ON JUNE 11, 2000, KATHRYN KYLE WAS INJURED IN A
CRASH CAUSED BY THE NEGLIGENCE OF HER SISTER,
ANDREA, WHILE RIDING IN AN INSURED FAMILY CAR
•
ANDREA AND KATHRYN EACH RESIDED IN PARENTS’
HOUSEHOLD
•
–
EACH SISTER IS AN INSURED UNDER THE BUCKEYE
UNION POLICY COVERING THE CRASH VEHICLE
–
THE POLICY EXPRESSLY IDENTIFIED ANDREA AS
THE “RATED DRIVER” OF CRASH VEHICLE
THE BUCKEYE UNION POLICY PROVIDED EQUIVALENT
AMOUNTS OF BI AND UM COVERAGE
9
KYLE FACTS (con’t)
•
BUCKEYE UNION DENIED BI COVERAGE FOR
KATHRYN’S PERSONAL INJURY CLAIM, CITING THE
POLICY’S INTRA-FAMILY EXCLUSION
–
•
KATHRYN CONTENDED, THEREFORE, THAT ANDREA
WAS AN UNINSURED DRIVER, AND PRESENTED AN
UM CLAIM AGAINST THE BUCKEYE UNION POLICY
BUCKEYE UNION DENIED COVERAGE FOR KATHRYN’S
UM CLAIM, CITING R.C. 3937.18(K)(2) AND THE
POLICY’S EXPRESS EXCLUSION OF VEHICLES
OWNED BY FAMILY MEMBERS FROM THE DEFINITION
OF AN “UNINSURED MOTOR VEHICLE”
10
KYLE LEGAL ISSUES
•
WHETHER THE PROVISIONS OF FORMER R.C. 3937.18
(J)(1) AND (K)(2) CONFLICT, WHEN READ TOGETHER?
•
WHETHER AN AMBIGUITY ARISES BY THE ALLEGED
CONFLICT BETWEEN FORMER (J)(1) AND (K)(2)?
–
•
IS THE EXCLUSION” IN R.C. 3937.18(J)(1) “PERMISSIVE”
AND THE (K)(2) EXCLUSION “MANDATORY?”
WHETHER R.C. 3937.18(J)(1) ALONE CONTROLS WHEN
THE ALLEGED CONFLICT BETWEEN (J)(1) AND (K)(2) IS
LIBERALLY CONSTRUED IN FAVOR OF COVERAGE?
11
KYLE HOLDING (BY VOTE OF 4-3)
•
FORMER R.C. 3937.18(J)(1) AND (K)(2) NEITHER CONFLICT
NOR ARE AMBIGUOUS BECAUSE EACH PARAGRAPH
REGULATES DIFFERENT “TOPICS”
–
SUBSECTION (J) ADDRESSES CERTAIN “CIRCUMSTANCES”
FOR THE PERMISSIBLE DENIAL OF UM/UIM COVERAGE
–
SUBSECTION (K) EXPRESSLY EXCLUDES CERTAIN
“TORTFEAORS’ VEHICLES” FROM THE DEFINITION OF AN
“UNINSURED MOTOR VEHICLE”
•
(J)(1) AND (K)(2) ARE “COMPLEMENTARY”
–
(J) AND (K) MAY FUNCTION “IN THE ALTERNATIVE” OR
TOGETHER
12
KYLE HOLDING (con’t)
• (J)(1) IS INAPPLICABLE TO THE “CIRCUMSTANCES” OF
KATHRYN’S UM CLAIM BECAUSE THE VEHICLE SHE WAS
OCCUPYING IS EXPRESSLY IDENTIFIED IN THE POLICY
– (J)(1) PERMITS THE EXCLUSION OF UM COVERAGE FOR
OCCUPYING “OWNED BUT UNINSURED” AUTOS
• (K)(2) EXPRESSLY EXCLUDES THE VEHICLE OCCUPIED BY
KATHRYN KYLE FROM THE DEFINITION OF AN
“UNINSURED MOTOR VEHICLE”
– THE TORTFEAOR’S VEHICLE (OCCUPIED BY KATHRYN) IS
1) INSURED UNDER THE SAME POLICY UNDER WHICH
KATHRYN SEEKS UM/UIM COVERAGE; AND 2) IS AVAILABLE
FOR ANDREA’S AND KATHRYN’S REGULAR USE
13
14
KYLE DISSENT
• (J)(1) AND (K)(2) ADDRESS THE SAME TOPIC:
UM/UIM COVERAGE FOR OTHER-OWNED AUTOS
• THE STATUTORY LANGUAGE OF (J)(1) AND (K)(2) IS
AMBIGUOUS AND DIRECTLY CONFLICTING
– (J)(1) EXPRESSLY “PERMITS” UM/UIM COVERAGE
FOR OTHER-OWNED VEHICLES SPECIFICALLY
IDENTIFIED IN THE POLICY
– SUBSECTION (K)(2) PROVIDES, HOWEVER, THAT ALL
OTHER-OWNED VEHICLES ARE, BY DEFINITION, NOT
UNINSURED VEHICLES
15
KYLE DISSENT (con’t)
•
THE ONLY LOGICAL INFERENCE THAT CAN BE
DRAWN FROM THE LANGUAGE OF SUBSECTION
(J)(1) IS THAT THIS EXCLUSION IS LIMITED TO
VEHICLES THAT THE CLAIMANT OWNS BUT HAS
CHOSEN NOT TO COVER UNDER THE POLICY.
–
IF THE VEHICLE IS LISTED IN THE UNINSURED
MOTORIST COVERAGE, THE EXCLUSION CANNOT
APPLY BY ITS OWN TERMS.
–
SUBSECTION (J)(1) MEANS THAT YOU HAVE NO
UM/UIM COVERAGE ON A VEHICLE YOU OWN,
UNLESS THAT VEHICLE IS EXPRESSLY IDENTIFIED IN
THE POLICY.
16
KYLE DISSENT (con’t)
• (K)(2) PROVIDES THAT AN INSURED’S VEHICLE CAN
NEVER BE AN UNINSURED MOTOR VEHICLE, EVEN IF
YOU EXPRESSLY IDENTIFY THE VEHICLE IN THE
POLICY AND PAY A PREMIUM TO INSURE IT.
– STANDING ALONE, (K)(2) MEANS THAT UM/UIM
COVERAGE CAN BE PURCHASED ONLY FOR
ACCIDENTS THAT ARE NOT CAUSED BY THE
INSURED’S OWN VEHICLE.
• HOWEVER, WHEN SUBSECTION (J)(1) IS ADDED TO
THE MIX, SUBSECTION (K)(2) CANNOT BE READ SO
RESTRICTIVELY.
17
KYLE DISSENT (con’t)
• AFTER CONSTRUING FORMER R.C. 3937.18 TO GIVE
EFFECT TO THE GENERAL ASSEMBLY’S INTENT IN
ENACTING THE UM STATUTE, SUBSECTIONS (J)(1) AND
(K)(2) CANNOT BE RECONCILED.
• THE PURPOSE BEHIND R.C. 3937.18 IS TO PROTECT
PERSONS FROM LOSSES THAT, BECAUSE OF THE
TORTFEASOR’S LACK OF LIABILITY COVERAGE, WOULD
OTHERWISE GO UNCOMPENSATED. [Citing Abate v. Pioneer
Mut. Cas. Co. (1970), 22 Ohio St.2d 161,165]
• R.C. 3937.18 IS REMEDIAL LEGISLATION; THEREFORE, A
COURT MUST CONSTRUE THE STATUTE LIBERALLY TO
GIVE EFFECT TO ITS LEGISLATIVE PURPOSE. [Citing Moore
v. State Auto. Mut. Ins. Co. (2000), 88 Ohio St.3d 27, 31]
18
KYLE DISSENT (con’t)
•
THE GENERAL ASSEMBLY’S OBJECTIVE IN
ENACTING (J)(1) AND (K)(2) AT THE SAME TIME WAS
TO ALLOW THE EXCLUSION OF UM/UIM COVERAGE
FOR OCCUPANTS OF VEHICLES OWNED BY AN
INSURED, BUT ONLY IF THOSE VEHICLES WERE NOT
IDENTIFIED IN THE POLICY.
–
IN THIS WAY, WHILE THE INSURANCE COMPANY
COULD EXCLUDE VEHICLES OWNED BY THE
INSURED BUT NOT IDENTIFIED IN THE POLICY, THE
INSURED AND INSURER COULD ALSO AGREE TO
IDENTIFY ALL THE FAMILY VEHICLES IF THEY SO
CHOSE.
19
KYLE DISSENT (con’t)
• SUBSECTIONS (J)(1) AND (K)(2) CONFLICT;
HOWEVER, THEY CAN BOTH BE GIVEN EFFECT
AND HARMONIZED WHEN (K)(2) IS INTERPRETED
AS APPLYING ONLY TO VEHICLES NOT IDENTIFIED
IN THE INSURANCE POLICY.
– THIS LIBERAL CONSTRUCTION IS CONSISTENT
WITH THE PURPOSE OF R.C. 3937.18, WHICH IS TO
PROVIDE PROTECTION FOR PERSONS INJURED BY
TORTFEASORS WHO LACK SUFFICIENT LIABILITY
INSURANCE.
20
KYLE DISSENT (con’t)
•
BY REFUSING TO FIND COVERAGE, THE KYLE
MAJORITY “UNDERMINES” THE PURPOSE BEHIND
R.C. 3937.18
•
THE TRAGEDY OF THE KYLE DECISION:
–
THE KYLES SPECIFICALLY IDENTIFIED IN THEIR
BUCKEYE UNION POLICY THE VEHICLE THAT WAS
INVOLVED IN THE CRASH, AND A PREMIUM WAS
PAID FOR UM/UIM COVERAGE ON THIS VEHICLE
21
OH SUP CT CASES DECIDED ON THE
AUTHORITY OF KYLE
• Morris v. United Ohio Ins. Co.–Court of Appeals’
judgment reversed at 103 Ohio St.3d 462, 2004-Ohio-5706
• Ratkosky v. Scottsdale Surplus Lines Ins. Co.–Court of
Appeals’ judgment reversed at 103 Ohio St.3d 462, 2004Ohio-5705
• Kuhnle v. Zander –Court of Appeals’ judgment affirmed at
103 Ohio St.3d 474, 2004-Ohio-5699
• Cincinnati Cos. v. Albers—Court of Appeals’ judgment
affirmed at 103 Ohio St.3d 475, 2004-Ohio-5702
22
WHERE ARE WE AFTER KYLE?
• OHIO FAMILIES ARE LEFT WITH NO UM COVERAGE
UNDER MOTOR VEHICLE LIABILITY INSURANCE
POLICIES ISSUED BETWEEN SEPTEMBER 3, 1997, AND
SEPTEMBER 21, 2000, WHEN ONE FAMILY MEMBER IS
INJURED BY THE NEGLIGENCE OF ANOTHER FAMILY
MEMBER WHILE RIDING IN A FAMILY-OWNED VEHICLE.
• IT IS POSSIBLE, HOWEVER, THAT THIS GAP IN FAMILY
UM COVERAGE EXTENDS UNTIL SEPTEMBER 21, 2002.
– SEE Flowers v. Ohio Mut. Ins. Grp., Seneca App. No. 13-02-28,
2003-Ohio-441, CITING THE TWO-YEAR COVERAGE
“GUARANTEE” CONTAINED IN FORMER R.C. 3937.31(A)
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