Case Title: Walburn v. Dunlap

Citation: 2009-Ohio-1221

Docket Number: 20072150 and 20072302

State: ohio

Court: Ohio Supreme Court

Date: 2009-03-24T00:00:00Z

Document:
[Cite as Walburn v. Dunlap, 121 Ohio St.3d 373, 2009-Ohio-1221.] 
 
 
WALBURN ET AL., APPELLEES, v. DUNLAP ET AL.; NATIONAL UNION FIRE 
INSURANCE COMPANY OF PITTSBURGH, PENNSYLVANIA, APPELLANT. 
[Cite as Walburn v. Dunlap, 121 Ohio St.3d 373, 2009-Ohio-1221.] 
Appellate procedure — Final orders — Declaratory judgment on liability not 
appealable while issue of damages is pending. 
(Nos. 2007-2150 and 2007-2302 — Submitted November 18, 2008 — Decided 
March 24, 2009.) 
APPEAL from and CERTIFIED by the Court of Appeals for Vinton County,  
No. 06CA655, 2007-Ohio-5398. 
__________________ 
SYLLABUS OF THE COURT 
An order that declares that an insured is entitled to coverage but does not address 
damages is not a final order as defined in R.C. 2505.02(B)(2), because the 
order does not affect a substantial right even though made in a special 
proceeding. 
__________________ 
 
LUNDBERG STRATTON, J. 
{¶ 1} We are asked to determine whether an order granting partial 
summary judgment that declares that an insured is entitled to coverage, but does 
not decide whether the insured is entitled to damages, is a final, appealable order 
even when the trial court includes a Civ.R. 54(B) determination of no just reason 
for delay. 
{¶ 2} In addition, upon review of an order by the Fourth District Court of 
Appeals, we determined that a conflict exists and ordered that the parties brief the 
following issue: 
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{¶ 3} “In a case involving multiple claims, is a judgment in the 
declaratory judgment action a final appealable order when the trial court finds that 
an insured is entitled to coverage, includes a Civ.R. 54(B) certification, but does 
not address the issue of damages?” 
{¶ 4} We hold that an order that declares that an insured is entitled to 
coverage but does not address damages is not a final order as defined in R.C. 
2505.02(B)(2), because the order does not affect a substantial right even though 
made in a special proceeding.  See Gen. Acc. Ins. v. Ins. Co. of N. Am. (1989), 44 
Ohio St.3d 17, 540 N.E.2d 266.  Therefore, our answer to the certified question is 
no.  In a case involving multiple claims, a judgment in a declaratory judgment 
action is not a final, appealable order when the trial court finds that an insured is 
entitled to coverage but has not addressed the issue of damages, even though the 
order includes a Civ.R. 54(B) certification. 
{¶ 5} Plaintiff-appellee Styrk Walburn was a passenger in a motor 
vehicle driven by Charles W. Billingsley when it collided with a vehicle driven by 
Wendy Sue Dunlap on January 23, 2001.  At the time of the accident, Walburn 
was in the scope and course of his employment. 
{¶ 6} On January 23, 2003, plaintiffs-appellees, Styrk and Betty 
Walburn, filed a complaint against Wendy Sue Dunlap for negligent operation of 
a motor vehicle that resulted in injuries to Styrk Walburn.  They included a claim 
for the loss of consortium of Betty Walburn.  Because Dunlap was uninsured, the 
Walburns also asserted claims for uninsured- or underinsured-motorist (“UM”) 
coverage under their own liability insurance policy from Ohio Mutual Insurance 
Group and under insurance policies issued by appellant, National Union Fire 
Insurance Company of Pittsburgh, Pennsylvania (“National Union”), to 
Walburn’s employer.  The Walburns requested an order determining the rights 
and responsibilities of the parties.  The prayer for relief demanded an award of 
damages. 
January Term, 2009 
3 
{¶ 7} The plaintiffs and National Union filed cross-motions for summary 
judgment on the issue of the availability of UM coverage. On August 28, 2006, 
the trial court granted plaintiffs’ motion for partial summary judgment, denied 
National Union’s motion, and ordered that plaintiffs were entitled to UM 
coverage under the National Union policies.  The judgment entry stated, “This is a 
Final and Appealable order.  The Court finds there is no just cause for delay.” 
{¶ 8} National Union asked the trial court to reconsider its judgment, in 
part on the basis that it was not a final, appealable order, because the entry did not 
terminate the action or resolve all the claims against all parties.  National Union 
also filed a notice of appeal with the Fourth District Court of Appeals (“Walburn 
I”).  The trial court granted the motion for reconsideration and vacated the August 
28, 2006 judgment.  In response, National Union moved the court of appeals to 
dismiss its appeal.  The court granted National Union’s motion to dismiss. 
{¶ 9} The plaintiffs again filed a motion for summary judgment in the 
trial court on the issue of Wendy Sue Dunlap’s liability and their entitlement to 
UM coverage from National Union.  The trial court granted partial summary 
judgment again to the plaintiffs on December 12, 2006.  The judgment entry, 
almost identical to the August 28, 2006 entry, again stated that it was a final, 
appealable order and that there was no just cause for delay. 
{¶ 10} National Union filed a notice of appeal from the December 12 
judgment entry (“Walburn II”).  The court of appeals raised concerns about the 
finality of the August 28, 2006 entry and ordered the parties to brief the issue of 
the court’s jurisdiction over the December 12, 2006 entry.  The court of appeals 
subsequently dismissed Walburn II for lack of jurisdiction.  The appellate court 
concluded that the August 28, 2006 order was a final, appealable order under R.C. 
2505.02(B)(2) because it was an order that affected a substantial right made in a 
special proceeding and the trial court had included a Civ.R. 54(B) certification 
that there was no just reason for delay.  2007-Ohio-5398 at ¶ 10.  The court of 
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appeals also held that the trial court had lacked jurisdiction to reconsider and 
vacate the August 28 final order.  Thus, when National Union voluntarily 
dismissed Walburn I, the court held, its right to appeal was terminated.  Id. at ¶ 
12. 
{¶ 11} The Fourth District Court of Appeals certified that its decision was 
in conflict with decisions by the Second, Ninth, and Tenth District Courts of 
Appeals in Beheshtaein v. Am. States Ins. Co., Montgomery App. No. 20839, 
2005-Ohio-5907; Walter v. Allstate Ins. Co., Summit App. No. 21032, 2002-
Ohio-5775; and Tinker v. Oldaker, Franklin App. Nos. 03AP-671 and 03AP-
1036, 2004-Ohio-3316. 
{¶ 12} We determined that a conflict exists and ordered that the parties 
brief the issue.  This cause is also before us on National Union’s discretionary 
appeal. 
{¶ 13} “It is well-established that an order must be final before it can be 
reviewed by an appellate court.  If an order is not final, then an appellate court has 
no jurisdiction.”  Gen. Acc. Ins. Co. v. Ins. Co. of N. Am., 44 Ohio St.3d at 20, 540 
N.E.2d 266.  “An appellate court, when determining whether a judgment is final, 
must engage in a two-step analysis.  First, it must determine if the order is final 
within the requirements of R.C. 2505.02.  If the court finds that the order 
complies with R.C. 2505.02 and is in fact final, then the court must take a second 
step to decide if Civ.R. 54(B) language is required.”  Id. at 21. 
{¶ 14} In this case, the court of appeals applied R.C. 2505.02(B)(2), 
which provides, “An order is a final order that may be reviewed, affirmed, 
modified, or reversed, with or without retrial, when it is * * * [a]n order that 
affects a substantial right made in a special proceeding * * *.”  The court 
determined that the trial court’s August 28, 2006 order was a final order because 
it was a declaratory judgment that decided insurance coverage, thus affecting a 
substantial right of National Union, citing Gen. Acc. Ins. Co.  Because the trial 
January Term, 2009 
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court added a Civ.R. 54(B) certification, the order became final and appealable, 
according to the court of appeals. 
{¶ 15} We must first determine whether the August 28, 2006 order is a 
final order under R.C. 2505.02(B)(2).  The answer depends upon whether this 
case falls within the dictates of Gen. Acc. or, as National Union contends, neither 
the August 28, 2006 order nor the December 12, 2006 order is a final order 
because they were not orders that affected a substantial right made in a special 
proceeding. 
{¶ 16} Gen. Acc. was an action for declaratory judgment in which the 
plaintiff insurance company asked the trial court to declare that the defendants 
Insurance Company of North America (“INA”) and National Union had a duty to 
defend and indemnify in a companion tort case.  INA filed a counterclaim for a 
declaration that it did not have a duty to defend and also requested that General 
Accident be required to reimburse the $1 million that INA had contributed to 
General Accident’s settlement of the underlying action.  The trial court issued an 
order that INA had no duty to defend and included a Civ.R. 54(B) certification 
that there was no just reason for delay.  General Accident appealed.  INA moved 
to dismiss for lack of a final, appealable order.  The court of appeals dismissed the 
action. 
{¶ 17} In Gen. Acc., we held that a declaratory judgment was a special 
proceeding and that the duty to defend involves a substantial right to both the 
insured and the insurer.  Thus, the trial court’s judgment was a final order under 
R.C. 2505.02 because it was “an order that affects a substantial right made in a 
special proceeding.”1  We reasoned that although there were other pending 
claims, the trial court had made a Civ.R. 54(B) determination that there was no 
just reason for delay, and thus, the order was a final, appealable order. 
                                                 
1.  Gen. Acc. applied a former version of R.C. 2505.02.  1986 Am.Sub.H.B. No. 412, 141 Ohio 
Laws, Part II, 3597.   
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{¶ 18} First, National Union contends that this declaratory judgment is not 
a special proceeding for purposes of R.C. 2505.02(B)(2).  National Union argues 
that when an insured’s demand for declaratory relief is made in the context of, 
and inextricably intertwined with, the insured’s action for breach of contract, an 
order that declares that coverage exists is part of the underlying breach-of-
contract action and not made in a special proceeding. 
{¶ 19} In Polikoff v. Adam (1993), 67 Ohio St.3d 100, 616 N.E.2d 213, 
we considered the question of what constitutes a final order in a special 
proceeding.  We held, “Orders that are entered in actions that were recognized at 
common law or in equity and were not specially created by statute are not orders 
entered in special proceedings pursuit to R.C. 2505.02.”  Id. at syllabus.  We later 
clarified that “[i]t is the underlying action that must be examined to determine 
whether an order was entered in a special proceeding.”  Walters v. Enrichment 
Ctr. of Wishing Well, Inc. (1997), 78 Ohio St.3d 118, 121-122, 676 N.E.2d 890. 
{¶ 20} On the other hand, “[d]eclaratory judgment actions are a special 
remedy not available at common law or at equity.”  Gen. Acc., 44 Ohio St.3d at 
22, 540 N.E.2d 266.  This definition has since been codified in R.C. 
2505.02(A)(2):  “ ‘Special proceeding’ means an action or proceeding that is 
specially created by statute and that prior to 1853 was not denoted as an action at 
law or a suit in equity.” 
{¶ 21} Here, the Walburns sought a declaration of the parties’ rights and 
responsibilities as they pertain to UM coverage for the Walburns’ claims.  Under 
Gen. Acc. and R.C. 2505.02(A)(2), this is a declaratory judgment action that is a 
special proceeding for purposes of R.C. 2505.02(B)(2). 
{¶ 22} However, this conclusion does not end the analysis.  Next, we must 
determine whether an order that declares that an insured is entitled to UM 
coverage but does not address damages affects a substantial right for purposes of 
R.C. 2505.02(B)(2).  Since Gen. Acc., R.C. 2505.02(A)(1) has been added to 
January Term, 2009 
7 
define “substantial right” as “a right that the United States Constitution, the Ohio 
Constitution, a statute, the common law, or a rule of procedure entitles a person to 
enforce or protect.” 
{¶ 23} National Union contends that an order that declares that an insured 
is entitled to insurance coverage but does not rule on whether the insured is 
entitled to damages does not affect a substantial right.  National Union cites the 
conflict case Tinker v. Oldaker, Franklin App. Nos. 03AP-671 and 03AP-1036, 
2004-Ohio-3316, in which the Tenth District Court of Appeals concluded that an 
order that entitled an insured to UM coverage but did not decide damages did not 
affect a substantial right and was not a final order. 
{¶ 24} In Gen. Acc., we held that the duty to defend involves a substantial 
right to both the insured and the insurer.  44 Ohio St.3d 17, 540 N.E.2d 266, at 
paragraph one of the syllabus.  We discussed the immediate consequences to both 
the insured and the insurer of a decision regarding the duty to defend.  If an 
insurer mistakenly refuses to defend its insured, that insurer is liable for the costs 
of defending its insured in the initial litigation and of defending itself in a 
subsequent action by its insured.  On the other hand, the insurer may incur 
substantial costs if wrongfully required to defend an insured in a case that a court 
may later hold was not within the terms of the policy.  Id. at 21. 
{¶ 25} Likewise, an insured, when not provided a defense, may have to 
choose a quick settlement over costly litigation, file a separate declaratory 
judgment action against the insurer, or incur great expense defending without 
insurance.  Id. at 22.  Because the duty to defend was of great importance to both 
the insured and the insurer, we concluded that it involved a substantial right.  Id. 
{¶ 26} A declaration that an insured is entitled to UM coverage presents a 
different scenario.  Here, the court ordered that National Union must provide UM 
coverage.  However, the Walburns must still establish their damages in order to 
receive the UM benefits.  National Union is obligated to pay the Walburns only if 
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they are awarded damages.  Thus, a declaration that an insured is entitled to 
coverage but does not address damages does not affect a substantial right as that 
term is defined in R.C. 2505.02(A)(1). 
{¶ 27} Cases in which an insured seeks both a defense and 
indemnification are controlled by Gen. Acc.  This case, however, involves only 
the insured’s entitlement to coverage and does not involve a duty to defend.  
While a decision regarding the duty to defend immediately affects a substantial 
right of the insured or insurer, a decision that an insured is entitled to UM 
coverage, without a determination of damages, does not.  Consequently, we hold 
that an order that declares that an insured is entitled to UM coverage but does not 
determine damages does not affect a substantial right for purposes of R.C. 
2505.02(B)(2).  The August 28, 2006 judgment entry in this case did not affect a 
substantial right made in a special proceeding and, therefore, was not a final order 
as defined in R.C. 2505.02(B)(2). 
{¶ 28} The conflict cases recognized this distinction.  In Tinker v. 
Oldaker, Franklin App. Nos. 03AP-671 and 03AP-1036, 2004-Ohio-3316, the 
plaintiffs were injured in a motor vehicle accident caused by Christy Oldaker.  
Their complaint arguably sought a declaration that they were entitled to UM 
coverage from the company that insured Mr. Tinker’s employer and for an award 
of damages.  Id., ¶ 12, fn. 2.  The trial court ordered that the plaintiffs were 
entitled to UM coverage but did not address damages.  The appellate court in 
Tinker concluded that there was no final, appealable order.  “[E]ven assuming the 
order was rendered in a special proceeding, it did not ‘affect’ a substantial right.”  
Id. at ¶ 14. 
{¶ 29} In Walter v. Allstate Ins., Summit App. No. 21032, 2002-Ohio-
5775, the plaintiffs sought a declaration that they were entitled to UM coverage 
under their personal automobile policy for damages that Mary Walter sustained in 
a collision with another vehicle.  The trial court granted summary judgment on the 
January Term, 2009 
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issue of UM coverage, but did not decide damages.  ¶ 6.  The Ninth District Court 
of Appeals determined that an order determining liability but deferring the issue 
of damages was not a final order.  ¶ 10. 
{¶ 30} In Beheshtaein v. Am. States Ins. Co., Montgomery App. No. 
20839, 2005-Ohio-5907, the Second District Court of Appeals concluded that 
despite the order’s Civ.R. 54(B) certification, the summary judgment on the issue 
of insurance coverage was interlocutory because other issues involving damages 
and priority of coverage had not yet been resolved.  ¶ 2. 
{¶ 31} Because this was not a final order, the Civ.R. 54(B) determination 
of no just reason for delay was of no effect.  See Gen. Acc., 44 Ohio St.3d at 21, 
540 N.E.2d 266.  “As a general rule, even where the issue of liability has been 
determined, but a factual adjudication of relief is unresolved, the finding of 
liability is not a final appealable order even if Rule 54(B) language was 
employed.”  Noble v. Colwell (1989), 44 Ohio St.3d 92, 96, 540 N.E.2d 1381.  A 
trial court’s use of such language does not convert an otherwise nonfinal order 
into a final, appealable order.  Id. 
{¶ 32} Consequently, we answer no to the certified question.  We hold 
that in a case involving multiple claims, a judgment in a declaratory judgment 
action is not a final, appealable order when the trial court finds that an insured is 
entitled to coverage but has not addressed the issue of damages, even though the 
order includes a Civ.R. 54(B) certification. 
{¶ 33} The trial court again granted partial summary judgment to the 
Walburns on the issue of UM coverage under the National Union policy on 
December 12, 2008.  Even though the trial court had included a Civ.R. 54(B) 
determination in both the August 28, 2006 and the December 12, 2006 orders, 
because the trial court had not yet determined the issue of damages, neither 
judgment entry was a final, appealable order, and the parties’ rights to appeal 
have not yet attached. 
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{¶ 34} Consequently, we reverse the judgment of the court of appeals, and 
we remand this matter to the trial court for further proceedings consistent with 
this opinion. 
Judgment reversed 
and cause remanded. 
 
MOYER, C.J., and O’CONNOR, O’DONNELL, LANZINGER, and CUPP, JJ., 
concur. 
 
PFEIFER, J., dissents and would dismiss the cause as having been 
improvidently accepted and certified. 
__________________ 
 
Agee, Clymer, Mitchell & Laret and C. Russell Canestraro, for appellees. 
 
Janik, Dorman & Winter, L.L.P., Steven G. Janik, and Christopher Van 
Blargan, for appellant. 
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