Case Title: Angel v. Reed

Citation: 2008-Ohio-3193

Docket Number: 20070758

State: ohio

Court: Ohio Supreme Court

Date: 2008-07-03T00:00:00Z

Document:
[Cite as Angel v. Reed, 119 Ohio St.3d 73, 2008-Ohio-3193.] 
 
 
ANGEL, APPELLEE, v. REED ET AL.; ALLSTATE INSURANCE  
COMPANY, APPELLANT. 
[Cite as Angel v. Reed, 119 Ohio St.3d 73, 2008-Ohio-3193.] 
Insurance – Uninsured motorists – Policy providing that claim must be brought 
within two years enforceable despite insured’s failure to discover 
uninsured status of tortfeasor until two years had elapsed – Insured could 
have discovered tortfeasor’s lack of coverage within two years had she 
exercised reasonable care. 
(No. 2007-0758 – Submitted March 25, 2008 – Decided July 3, 2008.) 
APPEAL from the Court of Appeals for Geauga County, 
No. 2005-G-2669, 2007-Ohio-1069. 
__________________ 
 
MOYER, C.J. 
{¶ 1} Appellant, Allstate Insurance Company, appeals from the judgment 
of the Geauga County Court of Appeals, which reversed the trial court’s grant of 
summary judgment in its favor.  For the following reasons, we reverse the court of 
appeals. 
{¶ 2} Appellee, Teresa L. Angel, was injured in a motor vehicle accident 
caused by the negligence of Eric J. Reed in June 2001.  Appellee was a passenger 
in Reed’s vehicle.  Reed indicated on the police report that he had liability 
insurance with Nationwide Insurance Company.  In fact, Reed’s policy with 
Nationwide had been canceled about three months prior to the accident.  At the 
time of the accident, appellee had uninsured/underinsured-motorist insurance with 
appellant Allstate. 
{¶ 3} According to the terms of the Allstate policy, “an uninsured auto” 
includes “a motor vehicle which has no bodily injury liability bond or insurance 
SUPREME COURT OF OHIO 
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policy in effect at the time of the accident.”  The Allstate policy states that Allstate 
is not obligated to make payments under the uninsured/underinsured-motorist 
provisions of the policy “until after the limits of liability for all liability protection 
in effect and applicable at the time of the accident have been fully and completely 
exhausted by payment of judgments or settlements.”  Further, the Allstate policy 
states that “[a]ny legal action against Allstate must be brought within two years of 
the date of the accident.  No one may sue us under this coverage unless there is 
full compliance with all the policy terms and conditions.”  (Emphasis added.) 
{¶ 4} Appellee filed suit against Reed in May 2003 and later dismissed 
the suit without prejudice.  In May 2004, appellee discovered that Reed’s liability 
policy with Nationwide had been canceled prior to the accident.  In July 2004, 
appellee notified appellant that she was making a claim for uninsured-motorist 
benefits. 
{¶ 5} In 2005, appellee filed suit against Reed, including appellant as an 
additional defendant.  The trial court granted appellant’s motion for summary 
judgment, noting that appellee had received the benefit of the full two years in 
which to bring her uninsured-motorist claim and had failed to bring her claim 
against appellant during that time.  
 
{¶ 6} In appellee’s appeal, she argued that the two-year contractual 
limitation period for filing suit for uninsured-motorist benefits in the Allstate 
policy does not begin to run until the claim accrues.  Though the accident occurred 
in June 2001, appellee argued that her claim did not accrue until she learned in 
May 2004 that Reed did not have a valid insurance policy from Nationwide. 
{¶ 7} In a split decision, a majority of the court of appeals agreed with 
appellee and held that, based on the facts of this case, the two-year limitation 
period for bringing a cause of action for uninsured-motorist benefits was 
unenforceable.  Angel v. Reed, Geauga App. No. 2005-G-2669, 2007-Ohio-1069, ¶ 
8.  The court of appeals determined that because Reed avoided service several times, 
January Term, 2008 
3 
it was “essentially impossible” for appellee to discover Reed’s uninsured status 
within the two-year period.  Id. at ¶ 13.  The court concluded that “a cause of action 
for uninsured motorist benefits accrues when the injured party knows, or has reason 
to know, with the exercise of due diligence, that the tortfeasor was uninsured.”  Id. at 
¶ 14. 
{¶ 8} The dissenting judge argued that appellee’s claim against Allstate 
was time-barred.  Id. at ¶ 21 (Grendell, J., dissenting).  The Allstate policy expressly 
states that a policyholder has two years from the date of an accident to bring legal 
action for uninsured-motorist benefits against Allstate.  The dissent concluded that 
appellee did not file a claim against Allstate within two years of the accident, which 
is the proper accrual date; therefore, summary judgment in favor of Allstate was 
proper. 
{¶ 9} This cause is before us upon our acceptance of a discretionary 
appeal. 
{¶ 10} “ ‘This court has previously stated that the 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 Colvin v. Globe Am. Cas. Co. (1982), 69 Ohio St.2d 293, 295-296, 23 
O.O.3d 281, 432 N.E.2d 167, overruled on other grounds, Miller v. Progressive 
Cas. Ins. Co. (1994), 69 Ohio St.3d 619, 624, 635 N.E.2d 317. 
{¶ 11} “In Ohio, the statutory limitation period for a written contract is 15 
years.  * * * 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.  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.”  
(Citations omitted.)Sarmiento v. Grange Mut. Cas. Co., 106 Ohio St.3d 403, 
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2005-Ohio-5410, 835 N.E.2d 692, at ¶ 11, citing Colvin, 69 Ohio St.2d at 296, 23 
O.O.3d 281, 432 N.E.2d 167. 
{¶ 12} We noted in Miller that a two-year limitation period would be a 
“reasonable and appropriate” period of time in which to require an insured who 
has 
suffered 
bodily 
injury 
to 
commence 
an 
action 
under 
the 
uninsured/underinsured-motorist provisions of an insurance policy.  69 Ohio St.3d 
at 625, 635 N.E.2d 317;   Sarmiento, 106 Ohio St.3d 403, 2005-Ohio-5410, 835 
N.E.2d 692, at ¶ 16. 
{¶ 13} Our precedent controls, and the two-year limitation period in the 
Allstate policy is enforceable. 
{¶ 14} We next determine when the two-year limitation period began to 
run.  Appellant argues that a cause of action for uninsured-motorist benefits 
accrues on the date of the accident caused by the uninsured tortfeasor.  The 
appellee argues that the claim did not accrue until she discovered that Reed was 
uninsured. 
{¶ 15} The Allstate policy states that an “uninsured auto” is an automobile 
that does not have an insurance policy in effect at the time of the accident and that 
“[a]ny legal action against Allstate must be brought within two years of the date of 
the accident.”  (Emphasis added.)  Despite Reed’s representation that he was 
insured on the day of the motor vehicle accident, his policy had been canceled 
three months earlier, and as a result, he was uninsured.  Based on the express 
language in the Allstate policy, appellee had two years from the date of the 
accident to file her uninsured-motorist claim with Allstate. 
{¶ 16} Appellee argues that she tried repeatedly to serve Reed, but she 
was unsuccessful each time, that she therefore had no way of knowing that Reed 
was uninsured, and that the two-year limitation period in her Allstate policy could 
not begin to run until she learned of Reed’s uninsured status. 
January Term, 2008 
5 
{¶ 17} We agree with the dissenting judge in the court of appeals, who 
stated:   “[T]he majority alleges that it was ‘virtually impossible for * * * Angel to 
discover [Reed’s] uninsured status within [the] two year period.’  On the contrary, all 
that was necessary to determine Reed’s insurance status was to contact Nationwide.  
There is no reason why it should have taken Angel three years to realize Reed was 
uninsured.”  Angel v. Reed, Geauga App. No. 2005-G-2669, 2007-Ohio-1069, at ¶ 27 
(Grendell, J., dissenting). 
{¶ 18} Appellee further argues that our opinion in Kraly v. Vannewkirk 
controls the outcome of this case.  In Kraly, we considered a claim for uninsured-
motorist coverage in which the tortfeasor had a valid liability policy at the time of 
the accident, but the liability carrier subsequently became insolvent, rendering the 
coverage ineffective.  We held that in such a case, the right of action for 
uninsured-motorist benefits accrues on the date the insured receives notice of the 
insolvency.  Id., 69 Ohio St.3d 627, 635 N.E.2d 323, paragraph three of the 
syllabus.  In that unique factual situation, 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. 
{¶ 19} 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.  We reverse the 
decision of the court of appeals and reinstate the trial court’s summary judgment 
order in favor of appellant. 
Judgment reversed. 
SUPREME COURT OF OHIO 
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PFEIFER, LUNDBERG STRATTON, O’CONNOR, O’DONNELL, LANZINGER, and 
CUPP, JJ., concur. 
__________________ 
 
Elk & Elk Co., Ltd., Martin S. Delahunty III, Peter D. Traska, and John W. 
Gold, for appellee. 
 
Williams, Moliterno & Scully Co., L.P.A., Perrin I. Sah, and Phillip C. 
Kosla, for appellant. 
______________________