Case Title: Burkholder v. German Mut. Ins. Co.

Citation: 2003-Ohio-2953

Docket Number: 20020702

State: ohio

Court: Ohio Supreme Court

Date: 2003-06-25T00:00:00Z

Document:
[Cite as Burkholder v. German Mut. Ins. Co., 99 Ohio St.3d 163, 2003-Ohio-2953.] 
 
 
BURKHOLDER ET AL., APPELLANTS, v. GERMAN MUTUAL INSURANCE 
COMPANY, APPELLEE. 
[Cite as Burkholder v. German Mut. Ins. Co., 99 Ohio St.3d 163, 2003-Ohio-
2953.] 
Insurance — Motor vehicles — Uninsured/underinsured motorist coverage — 
Limited liability coverage that may arise under the residence-employee 
exception in a farmowner’s insurance policy is insufficient to transform 
the policy into a motor vehicle insurance policy for purposes of former 
R.C. 3937.18(A) — Court of appeals’ judgment affirmed on authority of 
Hillyer v. State Farm Fire & Cas. Co. 
(No. 2002-0702 — Submitted March 26, 2003 — Decided June 25, 2003.) 
APPEAL from the Court of Appeals for Lucas County, No. L-01-1413, 2002-Ohio-
1184. 
__________________ 
{¶1} 
The judgment of the court of appeals is affirmed on the authority 
of Hillyer v. State Farm Fire & Cas. Co., 97 Ohio St.3d 411, 2002-Ohio-6662, 
780 N.E.2d 262. 
 
MOYER, C.J., F.E. SWEENEY, PFEIFER, LUNDBERG STRATTON and 
O’CONNOR, JJ., concur. 
 
CARR and DEGENARO, JJ., concur in judgment only. 
 
DONNA J. CARR, J., of the Ninth Appellate District, sitting for Resnick, J. 
 
MARY DEGENARO, J., of the Seventh Appellate District, sitting for COOK, 
J. 
__________________ 
 
DEGENARO, J., concurring in judgment only. 
SUPREME COURT OF OHIO 
2 
{¶2} 
I must respectfully concur in judgment only because Hillyer v. 
State Farm Fire & Cas. Co., 97 Ohio St.3d 411, 2002-Ohio-6662, 780 N.E.2d 
262, is not controlling here.  Hillyer addressed what constituted a motor vehicle 
policy under a former version of the statute because the statute lacked a definition 
of the term, which has since been provided by the legislature. Significantly, the 
policy at issue here is subject to a later 1997 amended version of R.C. 3937.18, 
which defined “automobile liability or motor vehicle liability policy of insurance” 
for purposes of the uninsured and underinsured motorist coverage statute.  Former 
R.C. 3937.18(L), 1997 Am.Sub.H.B. No. 261, 147 Ohio Laws, Part II, 2377. 
{¶3} 
Pursuant to Ross v. Farmers Ins. Group of Cos. (1998), 82 Ohio 
St.3d 281, 695 N.E.2d 732, the statutory law in effect on the date of issue of each 
new policy is the law to be applied.  Thus, analysis of this policy turns on the 
question of whether the residence-employee exception in this particular policy 
comports with the legislature’s definition of an automobile liability policy, rather 
than a judicial interpretation of an undefined statutory phrase.  Accordingly, this 
case should be resolved by applying the 1997 amended version of R.C. 3937.18 
rather than the analysis in Hillyer.  Albeit by a different analysis, I would reach 
the same conclusion as the majority, that the residence-employee exception in this 
policy is insufficient to transform it into a motor vehicle insurance policy.  
Specifically, the policy in this case does not constitute proof of financial 
responsibility as required by R.C. 4509.01.1 
{¶4} 
The 1997 version of R.C. 3937.18(L) defined “automobile liability 
or motor vehicle liability policy of insurance” as “[a]ny policy of insurance that 
serves as proof of financial responsibility, as proof of financial responsibility is 
defined by division (K) of section 4509.01 of the Revised Code, for owners or 
                                          
 
1 This conclusion was foreshadowed by the majority in Hillyer at ¶25. However, this was 
not central to the analysis.  Rather, it appears to be an acknowledgement that the 
legislature had defined the term after the issuance of the policy in Hillyer but before the 
case had been resolved. 
January Term, 2003 
3 
operators of the motor vehicles specifically identified in the policy of insurance.”  
R.C. 4509.01(K) defines “[p]roof of financial responsibility” as “proof of ability 
to respond in damages for liability, on account of accidents occurring subsequent 
to the effective date of such proof, arising out of the ownership, maintenance, or 
use of a motor vehicle in the amount of twelve thousand five hundred dollars 
because of bodily injury to or death of one person in any one accident, in the 
amount of twenty-five thousand dollars because of bodily injury to or death of 
two or more persons in any one accident, and in the amount of seven thousand 
five hundred dollars because of injury to property of others in any one accident.” 
{¶5} 
These are the statutory benchmarks by which it must be 
determined whether the instant policy must provide UM/UIM coverage.  I 
conclude that it need not.  I am persuaded by the rationale of the Tenth District 
Court of Appeals in Gibbons-Barry v. Cincinnati Ins. Cos., 10th Dist. No. 01AP-
1437, 2002-Ohio-4898, 2002 WL 31087264.  In that case, the appellant argued 
that a homeowner’s policy can serve as “proof of financial responsibility” when 
the residence-employee exception provides certain limited liability coverage.  The 
appellant also argued in Gibbons-Barry that the policy “specifically identified” 
the affected motor vehicles as those “owned or operated by or rented or loaned to 
an insured.”  Accordingly, the appellant concluded that the homeowner’s policy 
was an “automobile liability or motor vehicle liability policy of insurance” as 
defined in R.C. 3937.18(L)(1). 
{¶6} 
The Tenth District rejected that argument, concluding that the 
policy in that case could not serve as proof of financial responsibility, reasoning: 
{¶7} 
“Here, the minimal coverage offered under the homeowner’s 
policy does not rise to the level of ‘proof of financial responsibility’ because it is 
extended to only one person—appellant’s ‘residence employee.’  Thus, the policy 
fails to provide any liability coverage if ‘two or more persons’ are injured or die 
in an accident, much less coverage for the two or more persons in the amount of 
SUPREME COURT OF OHIO 
4 
$25,000.  Further, the policy fails to provide any liability coverage for property 
damage from any motor vehicle accident, whether or not a ‘residence employee’ 
is involved. 
{¶8} 
“Moreover, the homeowner’s policy fails to fulfill the purpose for 
which ‘proof of financial responsibility’ is required in the first place.  Instead of 
‘minimiz[ing] those situations in which persons are not compensated for injuries 
and damages sustained in motor vehicle accidents,’ reliance on a homeowner’s 
policy with a ‘residence employee’ exception as ‘proof of financial responsibility’ 
would only provide coverage to a select group of persons and little or no coverage 
for damages resulting from vehicular accidents.  R.C. 4509.101(J).  Therefore, the 
homeowner’s policy cannot serve as ‘proof of financial responsibility.’ 
{¶9} 
“Second, the homeowner’s policy is not an ‘automobile liability or 
motor vehicle liability policy of insurance’ because neither the declarations page 
nor the policy itself ‘specifically identifies’ any motor vehicles.  In order to be 
‘specifically identified,’ the motor vehicles referred to in the policy ‘must be 
precisely, particularly and individually identified.’  Burkholder [v. German Mut. 
Ins. Co. (Mar. 15, 2002), Lucas App. No. L-01-1413], supra [2002 WL 398223], 
at ¶ 21.  However, the policy at issue here identifies the [a]ffected motor vehicles 
only as those ‘owned or operated by or rented or loaned to an insured.’  As we 
recently held in our decision in Dixon, such a general description does not satisfy 
the requirement of R.C. 3937.18(L)(1) that the motor vehicles be ‘specifically 
identified.’  Dixon [v. Professional Staff Mgt., 10th Dist. No. 01AP-1332, 2002-
Ohio-4493], supra [2002 WL 2005689], at ¶ 33.”  Gibbons-Barry at ¶ 42-44. 
{¶10} In the present case, appellants try to create a motor vehicle policy 
out of the residence-employee section of a farm owner’s policy.  For the very 
same reasons expounded upon by the Tenth District, appellants in this case are not 
entitled to underinsured/uninsured motorist coverage by operation of law.  
Appellants’ policy likewise limits coverage to liability for bodily injury to the 
January Term, 2003 
5 
residence employee and not to any other person who may be injured in an 
accident.  Thus, the policy could not serve as proof of financial responsibility 
pursuant to R.C. 4509.01(K) and would not constitute a motor vehicle policy for 
the purposes of R.C. 3937.18(L). 
{¶11} Although appellants in this case and in Gibbons-Barry argued at 
great length whether the vehicles involved were “specifically identified,” that 
issue need not be reached, as the policy could not serve as proof of financial 
responsibility. 
{¶12} Because the homeowner’s policy is not an “automobile liability or 
motor vehicle liability policy of insurance” as defined in R.C. 3937.18(L), I 
would find that appellee was not required to offer uninsured or underinsured 
motorist coverage as part of the policy and that such coverage does not arise by 
operation of law.  Therefore, appellant is not entitled to recover for damages due 
to her son’s death under her farmowner’s policy. 
 
CARR, J., concurs in the foregoing concurring opinion. 
__________________ 
 
Connelly, Jackson & Collier, L.L.P., Steven P. Collier and Anthony E. 
Turley, for appellants. 
 
Bahret & Associates Co., L.P.A., Robert J. Bahret and Kevin A. Pituch, 
for appellee. 
 
Boyk & Crossmock, L.L.C., and Steven L. Crossmock, urging reversal for 
amicus curiae Ohio Academy of Trial Lawyers. 
__________________