Case Title: Barbee v. Nationwide Mut. Ins. Co.

Citation: 2011-Ohio-4914

Docket Number: 20101091

State: ohio

Court: Ohio Supreme Court

Date: 2011-09-29T00:00:00Z

Document:
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as 
Barbee v. Nationwide Mut. Ins. Co., Slip Opinion No. 2011-Ohio-4914.] 
 
 
 
 
NOTICE 
This slip opinion is subject to formal revision before it is published in 
an advance sheet of the Ohio Official Reports.  Readers are requested 
to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 
65 South Front Street, Columbus, Ohio 43215, of any typographical or 
other formal errors in the opinion, in order that corrections may be 
made before the opinion is published. 
 
SLIP OPINION NO. 2011-OHIO-4914 
BARBEE ET AL., APPELLEES, v. NATIONWIDE MUTUAL  
INSURANCE COMPANY, APPELLANT. 
[Until this opinion appears in the Ohio Official Reports advance sheets, it 
may be cited as Barbee v. Nationwide Mut. Ins. Co.,  
Slip Opinion No. 2011-Ohio-4914.] 
Underinsured-motorist policy — Alleged conflict between insurance-contract 
provisions — Exhaustion of the tortfeasor’s liability limits is a condition 
precedent to an insured’s right to payment, but it is not a precondition to 
filing suit by the insured against his insurer within the limitation period — 
Judgment reversed. 
(No. 2010-1091 — Submitted May 24, 2011 — Decided September 29, 2011.) 
APPEAL from the Court of Appeals for Lorain County, 
Nos. 09 CA 009594 and 09 CA 009596, 2010-Ohio-2016. 
__________________ 
 
CUPP, J. 
{¶ 1} We are asked to decide whether a provision in an automobile 
insurance policy involving uninsured/underinsured motorist coverage is 
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ambiguous when read in conjunction with another policy provision.  The policy 
provision at issue requires that an action for uninsured/underinsured motorist 
coverage be brought against the insurer within three years of the date of the 
accident.  Other provisions, however, require that proceeds from any other 
available insurance be exhausted first and that the insured must fully comply with 
all policy terms before filing suit.  For the reasons that follow, we conclude that 
the policy provision is unambiguous and is enforceable.  The judgment of the 
court of appeals is reversed, and this matter is remanded to the trial court for 
further proceedings consistent with this opinion. 
I.  Facts and Procedural History 
{¶ 2} On October 12, 2002, appellees, Edward Barbee, Darlene Barbee, 
Thomas Barbee, and Margaret Barbee (“the Barbees”), were involved in an 
automobile accident in Madison, Wisconsin.1   Edward was operating the 
automobile, which was owned by Margaret.  Thomas, Margaret, and Darlene 
were passengers. 
{¶ 3} Appellant, Nationwide Mutual Insurance Company, insured the 
automobile, which included coverage for uninsured motorists.  Under the policy 
definitions, an uninsured motor vehicle includes “one which is underinsured.”2  
The policy also contained the following “exhaustion provision”: 
{¶ 4} “Limits and Conditions of Payment 
{¶ 5} “ * * *  
{¶ 6} “6. 
No payment will be made until the limits of all other 
liability insurance and bonds that apply have been exhausted by payments. 
                                                          
 
1 Matthew and Harvey Barbee were also involved in the accident.  They were riding in another 
automobile, which was insured by Allstate Insurance Company.  A separate suit was filed against 
Allstate, and the cases were consolidated.  Allstate has settled all claims and is not involved in this 
appeal.   
 
2 As the issue in this case arose because the tortfeasor was underinsured, in the facts, we will refer 
to “underinsured-motorist coverage” and not “uninsured-motorist coverage.”   
January Term, 2011 
3 
 
{¶ 7} The policy also contained the following “compliance provision”:  
{¶ 8} “10.  SUIT AGAINST US 
{¶ 9} “No lawsuit may be filed against us by anyone claiming any of the 
coverages provided in this policy until the said person has fully complied with all 
the terms and conditions of this policy, including but not limited to the protection 
of our subrogation rights. 
{¶ 10} “Subject to the preceding paragraph, under the Uninsured 
Motorists coverage of this policy, any lawsuit must be filed against us: 
{¶ 11} “a) within three (3) years from the date of the accident; * * *.” 
{¶ 12} The Barbees’ counsel had placed Nationwide on notice of potential 
underinsured-motorist claims within one year of the accident but did not then file 
suit. 
{¶ 13} Nationwide filed suit separately against the tortfeasors to recover 
the medical payments that Nationwide had paid on behalf of appellees.  Then, 
more than two years after the accident, the Barbees filed suit against the 
tortfeasors in federal court in Wisconsin.  One defendant was an estate, and the 
other was the United States of America, by and through its insured, a member of 
the Armed Forces. 
{¶ 14} Faith C. Donley was also injured in the automobile accident.  She 
filed a separate action against the tortfeasors in federal court in Wisconsin, and 
that suit was consolidated with the Nationwide case.  Additionally, within two 
years of the date of the accident, Donley filed suit against her insurer in the Lorain 
County Court of Common Pleas, asserting an underinsured-motorist claim.  That 
action was stayed pending resolution of the actions in federal court.   
 
{¶ 15} In Nationwide’s case, the court determined that the service 
member was 30 percent liable for causing the damages in the accident, and the 
estate was 70 percent liable. 
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{¶ 16} The Barbees’ case then proceeded to trial.  Judgment was awarded 
in their favor.  The United States government paid 30 percent of the amounts 
awarded to the Barbees, and the estate’s $75,000 policy coverage was split among 
them.  After this payment, outstanding amounts remained on each of the Barbees’ 
judgments. 
{¶ 17} On January 18, 2007, more than four years after the accident, the 
Barbees filed suit against Nationwide in the Lorain County Court of Common 
Pleas to recover, under the policy’s underinsured-motorist coverage, the 
outstanding amounts on each of their judgments.  Nationwide filed a motion for 
summary judgment, arguing that the Barbees’ claims were barred for failure to 
bring the claims within the three-year period required by the policy’s limitation 
provision, a period authorized by R.C. 3937.18(H).  The trial court denied 
Nationwide’s motion for summary judgment, concluding that the limitation 
provision was tolled until the exhaustion provision was satisfied. 
{¶ 18} Nationwide appealed the decision to the Ninth District Court of 
Appeals.  In affirming the denial of Nationwide’s motion for summary judgment, 
the court of appeals held that the exhaustion and limitation provisions of 
Nationwide’s underinsured-motorist coverage conflicted, and the conflict created 
an ambiguity under the facts of the case.  Barbee v. Allstate Ins. Co., Lorain App. 
Nos. 09 CA 009594 and 09 CA 009596, 2010-Ohio-2016, ¶ 33.  Therefore, the 
Ninth District determined, the limitation provision was not enforceable against the 
Barbees’ claims.  It held that the trial court had correctly determined that the 
Barbees did not have a claim for underinsured-motorist coverage until all other 
liability insurance had been exhausted, and exhaustion did not occur in this case 
until after the federal court case was concluded.  Id. at ¶ 36. 
{¶ 19} We accepted Nationwide’s appeal under our discretionary 
jurisdiction. Nationwide presents the following proposition of law:  “A policy 
provision that requires uninsured/underinsured actions to be brought against the 
January Term, 2011 
5 
 
insurer within three years from the date of the accident is unambiguous and 
enforceable even when read in conjunction with the exhaustion provision and the 
provision requiring the insured to fully comply with the terms of the policy before 
filing suit."  Barbee v. Allstate Ins. Co., 126 Ohio St.3d 1581, 2010-Ohio-4542, 
934 N.E.2d 354. 
II.  Relevant Statute 
{¶ 20} R.C. Chapter 3937 sets forth the laws governing motor-vehicle 
insurance.  R.C. 3937.18 specifically deals with uninsured- and underinsured-
motorist coverage.  In subsection (H), the General Assembly authorizes a three-
year limitation period within which an insured must bring suit against his insurer 
for underinsured-motorist coverage: 
{¶ 21} “Any policy of insurance that includes uninsured motorist 
coverage, underinsured motorist coverage, or both uninsured and underinsured 
motorist coverages may include terms and conditions requiring that, so long as the 
insured has not prejudiced the insurer's subrogation rights, each claim or suit for 
uninsured motorist coverage, underinsured motorist coverage, or both uninsured 
and underinsured motorist coverages be made or brought within three years after 
the date of the accident causing the bodily injury, sickness, disease, or death, or 
within one year after the liability insurer for the owner or operator of the motor 
vehicle liable to the insured has become the subject of insolvency proceedings in 
any state, whichever is later.” 
III.  Analysis 
{¶ 22} Our analysis begins with some well-settled principles.  "[T]he legal 
basis for recovery under the uninsured motorist coverage of an insurance policy is 
contract and not tort."  Kraly v. Vannewkirk (1994), 69 Ohio St.3d 627, 632, 635 
N.E.2d 323, quoting Motorists Mut. Ins. Co. v. Tomanski (1971), 27 Ohio St.2d 
222, 222-223, 56 O.O.2d 133, 271 N.E.2d 924. 
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{¶ 23} "In Ohio, the statutory limitation period for a written contract is 15 
years. R.C. 2305.06.  However, the parties to a contract may validly limit the time 
for bringing an action on a contract to a period that is shorter than the general 
statute of limitations for a written contract, as long as the shorter period is a 
reasonable one.”  Sarmiento v. Grange Mut. Cas. Co., 106 Ohio St.3d 403, 2005-
Ohio-5410, 835 N.E.2d 692, ¶ 11, citing Miller v. Progressive Cas. Ins. Co. 
(1994), 69 Ohio St.3d 619, 624, 635 N.E.2d 317; Colvin v. Globe Am. Cas. Co. 
(1982), 69 Ohio St.2d 293, 295, 23 O.O.3d 281, 432 N.E.2d 167, overruled on 
other grounds by Miller.  “A contract provision that reduces the time provided in 
the statute of limitations must be in words that are clear and unambiguous to the 
policyholder.”  Id., citing Colvin at 296. 
{¶ 24} The parties do not dispute that the policy clearly and 
unambiguously limits to three years the time in which the Barbees may sue 
Nationwide for underinsured-motorist benefits and complies with R.C. 
3937.18(H).  Instead, the dispute is about when the three-year period began to 
run. 
{¶ 25} Nationwide argues that the exhaustion, compliance, and limitation 
provisions unambiguously declare that the Barbees’ causes of action for 
underinsured-motorist benefits arise on the date of the accident.  Moreover, the 
provisions, when read together, plainly require an insured to  (1) fully comply 
with the terms and conditions of the policy (2) which include, but are not limited 
to, protecting Nationwide’s subrogation rights, and (3) file suit within three years 
of the date of the accident. 
{¶ 26} The Barbees contend that reading the exhaustion, compliance, and 
limitation provisions in concert dictates that an insured’s underinsured-motorist 
claim does not arise until all other liability-insurance limits are exhausted.  They 
assert that under the factual circumstances of this case, the claim accrued three 
years after the conclusion of the federal litigation.  Only at the end of the federal 
January Term, 2011 
7 
 
litigation, the Barbees argue, did they know that they had an underinsured-
motorist claim. 
{¶ 27} Nationwide, however, contends that the exhaustion provision 
limits and conditions the timing of its payments to its insured but does not impose 
any duties or responsibilities on the insureds.  In other words, the exhaustion 
provision is not a term or condition of the policy that must be satisfied prior to 
filing suit against Nationwide for determining coverage. 
{¶ 28} Accepting that Nationwide’s interpretation is plausible, the 
Barbees nevertheless assert that their construction of the provisions, when read in 
pari materia, is as reasonable as Nationwide’s.  And when two plausible 
interpretations of policy language exist, they say, the uncertainty must be resolved 
in favor of the insured.  See Neal-Pettit v. Lahman, 125 Ohio St.3d 327,  2010-
Ohio-1829, 928 N.E.2d 421, ¶ 17, citing Buckeye Union Ins. Co. v. Price (1974), 
39 Ohio St.2d 95, 68 O.O.2d 56, 313 N.E.2d 844, syllabus.  Alternatively, the 
Barbees assert that the cases upon which Nationwide relies are all distinguishable, 
and they argue that Kraly v. Vannewkirk (1994), 69 Ohio St.3d 627, 635 N.E.2d 
323, is the appropriate precedent. 
{¶ 29} We commence our analysis by first examining whether Kraly is 
dispositive.  The Kralys’ contract of insurance with State Farm Mutual 
Automobile Insurance Company provided uninsured/underinsured-motorist 
coverage.  The policy required that a claim for uninsured-motorist coverage be 
brought within two years of the date of the accident.  Id. at 629. 
{¶ 30} The Kralys were injured in an automobile accident by an insured 
tortfeasor.  Id. at 629-630.  The Kralys filed suit against the tortfeasor within two 
years of the date of the accident.  Id. at 630.  However, shortly before the end of 
the policy’s two-year limitation period, the Kralys were notified that the 
tortfeasor's insurance carrier was insolvent.  Id.  Consequently, the Kralys 
amended their complaint, pursuant to Civ. R. 15(C) (“relation back of 
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amendments”), to include a claim against State Farm for uninsured-motorist 
coverage.  But the amendment did not occur until after the expiration of the two-
year limitation period. 
{¶ 31} The trial court granted summary judgment in favor of State Farm, 
holding that the Kralys' claim for uninsured-motorist benefits was not commenced 
within two years of the date of the accident.  Reversing, this court held that a 
contractual period of limitations is per se unreasonable if the time allotted for 
filing suit “expires before or shortly after the accrual of a right of action for 
[uninsured motorist] coverage.”  Kraly, 69 Ohio St.3d 627, 635 N.E.2d 323, 
paragraph four of the syllabus.  The court reasoned that the Kralys' claim for 
uninsured-motorist benefits did not accrue until the date they received notice that 
the tortfeasor's insurance company was insolvent.  Id. at 634.  Because only three 
and one-half months remained before the end of the contract-limitations period 
when the Kralys received the insolvency notice, the court determined that the time 
remaining for the Kralys to bring a claim for uninsured-motorist coverage was 
unreasonable.  Id. at 635. 
{¶ 32} Since Kraly, however, this court has repeatedly distinguished its 
holding on the facts.  In Ross v. Farmers Ins. Group. of Cos (1998), 82 Ohio St.3d 
281, 695 N.E.2d 732, Farmers argued, just as the Barbees do here, “that [the 
Rosses’] claims for underinsured motorist coverage did not accrue until they had 
settled with the tortfeasor, thereby exhausting the tortfeasor’s available liability 
coverage.”  Id. at 285.  Farmers relied on Kraly in support of its argument.  Id. 
{¶ 33} We found Farmers’ argument unpersuasive and held that Kraly 
was “clearly distinguishable.”  We stated, “Kraly unarguably involved a unique 
factual situation, and this court accordingly fashioned a remedy based upon 
concepts of fairness and public policy.  * * * An automobile liability insurance 
policy will typically require exhaustion of the proceeds of a tortfeasor's policy 
before the right to payment of underinsured motorist benefits will occur.  
January Term, 2011 
9 
 
However, the date that exhaustion of the tortfeasor's liability limits occurs is not 
determinative of the applicable law to a claim for underinsured motorist 
coverage.”  (Emphasis sic.)  Id. at 287, 695 N.E.2d 732. 
{¶ 34} We also distinguished Kraly in Angel v. Reed, 119 Ohio St.3d 73, 
2008-Ohio-3193, 891 N.E.2d 1179.  Teresa Angel was in an automobile accident 
with Eric Reed.  The police report indicated that Reed was insured.  Angel filed 
suit against Reed, and although she repeatedly tried to serve him with the 
complaint, she was unsuccessful.  After the time for asserting an uninsured-
motorist claim with Angel’s insurance carrier had expired, Angel learned that 
Reed had not had a valid automobile-insurance policy. 
{¶ 35} Angel argued to this court that Kraly controlled the outcome of her 
case, and thus, the period for filing suit did not begin to run until she discovered 
that Reed had been uninsured.  Rejecting this argument, we held, “In that unique 
factual situation [of Kraly], we differentiated between the standard situation of an 
uninsured-motorist claim involving a tortfeasor with no insurance at the time of 
the accident and the situation in Kraly, in which an insured motorist subsequently 
became uninsured, for all practical purposes, due to the insurer's insolvency. 
{¶ 36} “Unlike Kraly, this case presents a standard uninsured-motorist 
claim in which the tortfeasor was uninsured at the time of the accident.  No 
subsequent event rendered Reed uninsured; he already was uninsured. 
Consistency with precedent requires the application of the unambiguous language 
in the Allstate policy.  Appellee failed to make her uninsured-motorist claim 
within the limitations period designated in the Allstate policy.”  Id. at ¶ 18-19. 
{¶ 37} The Barbees’ reliance on Kraly is misplaced, just as it was in Ross 
and Angel, because the rationale of Kraly is not applicable here.  In Kraly, a 
threshold question was the applicability of Civ.R. 15(C), a matter that is not 
implicated here.  Similar to Angel, there was no event in the present case that 
changed the status of the estate’s coverage.  The limits of the estate’s policy, 
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$75,000, remained the same from the time of the accident through the 
announcement of the judgment by the federal court.  We have repeatedly 
emphasized that Kraly is limited to the unique factual circumstances of that 
case—in which the insured tortfeasor was rendered uninsured due to the 
insolvency of his insurance carrier shortly before the claimant’s own policy’s time 
period for filing an uninsured-motorist claim was to expire.  Moreover, we note 
that after Kraly, the General Assembly enacted the current version of R.C. 
3937.18(H), effective October 31, 2001, authorizing a special time-frame for 
bringing an uninsured/underinsured motorist claim against an insolvent insurance 
carrier.  Am.Sub.S.B. No 97, 149 Ohio Laws, Part I, 779, 784, 791. 
{¶ 38} However, as explained in Ross, an insured’s right to payment of 
the underinsured-motorist benefits only upon exhaustion of the tortfeasor’s policy 
is distinct from the accrual of the claim itself to underinsured-motorist benefits.  
“An automobile liability insurance policy will typically require exhaustion of the 
proceeds of a tortfeasor's policy before the right to payment [emphasis sic] of 
underinsured motorist benefits will occur.  However, the date that exhaustion of 
the tortfeasor's liability limits occurs is not determinative of the applicable law to 
a claim [emphasis added] for underinsured motorist coverage.”  Ross, 82 Ohio 
St.3d at 287, 695 N.E.2d 732. 
{¶ 39} In the case at bar, Nationwide’s exhaustion provision states, “No 
payment will be made until the limits of all other liability insurance and bonds 
that apply have been exhausted by payments.”  The plain meaning is that the 
exhaustion of a tortfeasor’s limits of liability is a condition that must be satisfied 
before an insured has a right to receive payment of underinsured-motorist benefits 
from his own insurer.  It does not, however, impose exhaustion of the tortfeasor’s 
insurance as a condition that must be satisfied before an insured can file suit 
against his insurer to establish his claim under the policy for underinsured-
motorist benefits. 
January Term, 2011 
11 
 
{¶ 40} Because the exhaustion clause does not affect when the insured 
may commence suit against his insurer for determination of underinsured-motorist 
benefits, no conflict exists among the exhaustion, compliance,  and limitation 
provisions of the Barbees’ policy with Nationwide so that an ambiguity is created.  
The plain meaning of the policy provisions is that an insured must file the action 
within three years of the date of the accident and, within that three-year period, 
fully comply with the terms and conditions of the policy,  including, but not 
limited to, protecting the insured’s subrogation rights.  Failure to fully comply 
with the terms and conditions of the policy and/or to file suit within three years of 
the date of the accident will bar the underinsured-motorist claim.  The provision 
requiring exhaustion of all other liability insurance and bonds before payment of 
an underinsured-motorist claim provides only for the order, timing, and amount of 
payments under the underinsured-motorist coverage of the insured’s policy and 
does not establish a condition precedent to filing an action to claim such benefits. 
{¶ 41} Additional support for this conclusion is found in the following 
language of R.C. 3937.18(H):  “Any policy of insurance * * * may * * * require[ ] 
that * * * each claim or suit for * * * underinsured motorist coverage * * * be 
made or brought within three years after the date of the accident * * * .”  
(Emphasis added.)  The language “date of the accident” was chosen by the 
General Assembly after our decision in Ross.  The General Assembly was aware 
that underinsured-motorist-coverage provisions routinely require exhaustion of 
the tortfeasor’s limits of liability.  If the General Assembly had wanted to run the 
three-year period from the date that liability limits are exhausted, rather than from 
the date of the accident, it could easily have drafted the statute to reflect this 
intention.  It did not. 
{¶ 42} Finally, the Barbees argue that unless this court holds that the 
failure to make exhaustion of a tortfeasor’s liability limits a condition that must 
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occur before an insured’s claim accrues, there will be a flood of unnecessary cases 
onto the dockets of the courts. 
{¶ 43} It appears, however, that filing within the three-year policy period 
from the date of the accident to preserve an insured’s underinsured-motorist claim 
is an existing practice.  Donley, for example, filed an underinsured-motorist claim 
against her insurer in Ohio before the federal suits were concluded.  The Ohio 
trial court stayed the case pending the resolution of the federal suits.  In many 
cases, counsel will likely be able to learn about a party’s coverage through 
discovery.  Counsel’s knowledge of the extent of injuries and damages sustained 
by the claimant will further determine whether an action for underinsured-
motorist coverage must be asserted to preserve the policyholder’s underinsured-
motorist-coverage rights.  And because the trial court can stay proceeding on the 
underinsured-motorist claim until the claims against the tortfeasor are resolved, 
there is little extra burden on the court’s docket in preserving the insured’s claim 
for underinsured-motorist coverage in this manner. 
IV.  Conclusion 
{¶ 44} A provision in an automobile insurance policy requiring an action 
for uninsured/underinsured motorist coverage to be brought against the insurer by 
the policyholder within three years of the date of the accident is unambiguous and 
enforceable.  The provision does not conflict with co-existing policy provisions 
that require the insured to fully comply with the policy terms before filing suit and 
that require the tortfeasor’s insurance assets to be exhausted before payment by 
the policyholder’s own insurer.  Although exhaustion of the tortfeasor’s liability 
limits is a condition precedent to an insured’s right to payment, it is not a 
precondition to filing suit by the insured against his insurer within the limitation 
period. 
{¶ 45} Accordingly, we reverse the judgment of the court of appeals that 
the three-year-limitation provision was not enforceable because the Barbees’ 
January Term, 2011 
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claim for underinsured-motorist coverage did not arise until all other liability 
insurance was exhausted.  This cause is remanded to the trial court for further 
proceedings consistent with our decision herein. 
Judgment reversed 
and cause remanded. 
O’CONNOR, 
C.J., 
and 
LUNDBERG 
STRATTON, 
O’DONNELL, 
and 
LANZINGER, JJ., concur. 
PFEIFER and MCGEE BROWN, JJ., dissent. 
_________________ 
PFEIFER, J., dissenting. 
{¶ 46} Insurance companies are extremely resourceful at collecting 
premiums and exceedingly reluctant to pay claims—even when an accident is 
known to them and the claim is meritorious.  Today, this court aids and abets 
Nationwide  Mutual Insurance Company in avoiding payment of one relatively 
modest claim while opening all insurance companies up to massive ongoing legal 
costs.  It’s all so unnecessary. 
I 
{¶ 47} The Barbees were injured in an automobile accident.  Some were 
covered by insurance policies from Allstate, which has now settled all claims, and 
others were covered by Nationwide.  Among the various misfortunes to befall the 
Barbees is that one of the people who caused the accident was an employee of the 
federal government.  This circumstance caused the Barbees to file suit in federal 
court in Wisconsin, which—well, the majority opinion has ably recited the facts.  
Suffice it to say, the Barbees did not learn that they had an underinsured-motorist 
claim until almost three years after the accident.  When the suit was filed, 
Nationwide was quick to point out that it could no longer be sued, based on the 
three-year limitations period in its insurance policy.  Never mind that Nationwide 
had collected premiums for underinsured-motorist coverage, that it knew about 
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the accident (having paid medical claims), that its insureds had suffered grievous 
injuries, or that it had written a policy that appeared to require the insured to 
establish that it needed underinsured-motorist coverage before asking for it.  
There was an opportunity to avoid coverage, and Nationwide snatched it. 
{¶ 48} The insurance policy unequivocally contains a provision that states 
that Nationwide cannot be sued more than three years after the accident.  
Although the three-year limitation period is unambiguous, it is much less clear, 
given other provisions in the policy and the circumstances of this case, when the 
three years should start to run. 
{¶ 49} The policy contains a compliance clause, which provides that suit 
cannot be filed unless all provisions of the policy have been complied with.  
Among the provisions to be complied with is an exhaustion provision, which 
states that Nationwide is not required to pay until the Barbees have exhausted all 
other sources of payment.  Nationwide, not unreasonably, states that the 
exhaustion provision does not prohibit the insured from filing suit; it merely 
allows the insurance company to defer payment.  The Barbees, not unreasonably, 
assert that they shouldn’t be required to file suit to collect something that they 
might not be entitled to.  If the Wisconsin lawsuit had gone differently—if, for 
example, the federal employee had been found 51percent liable, instead of 30 
percent liable—then all damages would have been paid by the federal 
government, and no suit for underinsured-motorist coverage would have been 
warranted. 
{¶ 50} At a minimum, I consider the interplay of the various insurance-
policy provisions ambiguous.  Nationwide’s argument makes sense, from a 
certain perspective, and so does the Barbees’.  In such a situation, this court has 
long deferred to a venerable principle: “Language in a contract of insurance 
reasonably susceptible of more than one meaning will be construed liberally in 
favor of the insured and strictly against the insurer.”  Faruque v. Provident Life & 
January Term, 2011 
15 
 
Acc. Ins. Co. (1987), 31 Ohio St.3d 34, 31 OBR 83, 508 N.E.2d 949, syllabus.  
Recently, citing Buckeye Union Ins. Co. v. Price (1974), 39 Ohio St.2d 95, 68 
O.O.2d 56, 313 N.E.2d 844, we stated that “insofar as the parties have offered 
their own separate interpretations of the language of the policy, both of them 
plausible, we must resolve any uncertainty in favor of the insured.”  Neal-Pettit v. 
Lahman, 125 Ohio St.3d 327, 2010-Ohio-1829, 928 N.E.2d 421, ¶ 17. 
{¶ 51} Nationwide and this court see no ambiguity.  To them, the issue is 
clear:  the Barbees should have filed suit for underinsured-motorist coverage even 
though they did not know whether they would be underinsured.  Nationwide and 
this court point to another person injured in the same accident, who filed for 
underinsured-motorist coverage before knowing whether she was entitled to it.  
This observation seems an odd way to determine that a policy is unambiguous:  to 
point to someone who acted differently.  In fact, this dichotomy actually seems 
like proof of how ambiguous the policy is.  One party did one thing, another party 
did something else.  Two lower courts read the policy language and decided that 
the policy is ambiguous.  The seven justices on this court read the policy language 
and, although the court is divided, decide that the policy is not ambiguous.  Such 
circumstances—different people, all schooled in the law and the language of 
insurance policies, reading the same policy language and reaching different 
conclusions—amply illustrate the very definition of ambiguity. 
II 
{¶ 52} Unfortunately, 
this 
case 
has 
far-reaching 
ramifications.  
Ultimately, Nationwide and this court have determined, as a matter of public 
policy, that it is better for insureds to file suit for underinsured-motorist coverage 
in all circumstances than to file only when underinsured status is known.  
Nationwide and this court have concluded that the trial court can simply stay the 
suit for underinsured-motorist coverage until after damages are assessed and it 
can be determined whether underinsured-motorist coverage is applicable.  Never 
SUPREME COURT OF OHIO 
16 
 
mind the waste of time and effort for everyone involved.  Apparently, the court’s 
time is of no consequence.  A far better practice would be to toll the limitations 
period relevant to an underinsured-motorist claim until it is known whether that 
coverage is needed.  See Kraly v. Vannewkirk (1994), 69 Ohio St.3d 627, 635 
N.E.2d 323, paragraph three of the syllabus. 
{¶ 53} This case is a minor win for Nationwide, which avoids paying 
several thousand dollars on an otherwise meritorious claim.  This case is a 
significant loss for the Barbees, all of whom were physically injured and who 
aren’t able to collect the full extent of their damages from the tortfeasor or—even 
though they purposely purchased underinsured-motorist coverage for just such an 
eventuality—from their insurance company.  And this case is an unmitigated boon 
for insurance-company lawyers, whose jobs are now a bit more secure.  They will 
now be required to answer, however perfunctorily, complaints for underinsured-
motorist coverage in almost every motor-vehicle accident that occurs in Ohio.  
According to the Ohio Department of Public Safety, in 2009, there were 298,646 
motor-vehicle accidents in Ohio.  http://www.publicsafety.ohio.gov/links/ 
2009CrashFacts.pdf.  I am reminded of a Scottish proverb:  penny wise and pound 
foolish.  See Edward Topsell, The Historie of Foure-footed Beastes (1607). 
III 
{¶ 54} I conclude that the interplay of the various insurance-policy 
provisions in this case is ambiguous, even though none of the provisions are 
ambiguous when read separately.  As this court has always done, I would resolve 
the ambiguity in favor of the insured, as the trial court and the court of appeals 
properly did.  I would affirm the decision of the court of appeals.  I dissent. 
__________________ 
 
Joyce V. Kimbler, for appellant. 
 
Chamberlain Law Firm Co., L.P.A., and Henry W. Chamberlain; and Paul 
W. Flowers Co., L.P.A., and Paul W. Flowers, for appellees. 
January Term, 2011 
17 
 
 
Elk & Elk Co., L.P.A., Peter D. Traska, and Ryan M. Harrell, urging 
affirmance for amicus curiae Ohio Association for Justice. 
___________________