Case Title: Miller v. Gunckle

Citation: 2002-Ohio-4932

Docket Number: 20010165

State: ohio

Court: Ohio Supreme Court

Date: 2002-10-02T00:00:00Z

Document:
[Cite as Miller v. Gunckle, 96 Ohio St.3d 359, 2002-Ohio-4932.] 
 
 
MILLER ET AL.,  APPELLANTS, v. GUNCKLE; STATE AUTOMOBILE INSURANCE 
COMPANY, APPELLEE. 
[Cite as Miller v. Gunckle, 96 Ohio St.3d 359, 2002-Ohio-4932.] 
Motor vehicles — Insurance — Uninsured motorist coverage — A dollar 
amount awarded as prejudgment interest pursuant to R.C. 1343.03(C), 
when added to the dollar amount awarded as damages for the personal 
injury, may lawfully exceed the limit of the insured’s uninsured motorist 
policy — An arbitration panel has the authority to award prejudgment 
interest — An arbitration panel, once it enters an award, has no 
authority to reconsider its decision. 
(No. 2001-0165 — Submitted June 4, 2002 — Decided October 2, 2002.) 
APPEAL from the Court of Appeals for Butler County, No. CA2000-02-026. 
__________________ 
 
DOUGLAS, J. 
{¶1} 
According to the amended complaint in this action, Allen J. Miller, 
a minor, was crossing the street in October 1996 to reach his bus stop.  As he 
crossed the street he was struck by a speeding vehicle driven by Kevin Gunckle, 
an uninsured motorist.  As a result of the accident, Allen Miller suffered 
permanent injuries to his head, legs, back, arms, and other parts of his body. 
{¶2} 
On January 24, 1997, Allen Miller, through his mother and next 
friend, Carol Miller, and father, John Miller, appellants, filed an action against 
Gunckle.  Appellants also named State Automobile Insurance Company, appellee, 
as a defendant for purposes of recovering uninsured motorist benefits.  At the time 
of the accident, appellants had, in force and effect, a policy of insurance through 
appellee which included up to $300,000 in uninsured motorist coverage. 
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{¶3} 
On March 11, 1998, the trial court informed the parties that 
Gunckle had filed for bankruptcy and that the trial court had, therefore, ordered a 
stay in the proceedings against Gunckle.  However, the trial court ordered the case 
to proceed against appellee.  On April 27, 1998, the United States Bankruptcy 
Court for the Southern District of Ohio discharged all claims against Gunckle. 
{¶4} 
On September 3, 1998, the trial court ordered the case to 
mediation.  The parties failed to reach an agreement through the court-appointed 
mediator.  The parties then agreed to submit the dispute to arbitration pursuant to 
Loc.R. 4.02 of the Common Pleas Court of Butler County, and an arbitration 
panel was selected. 
{¶5} 
On December 14, 1999, the arbitration panel awarded appellants 
$275,000 in damages plus ten percent interest on the award from October 14, 
1996, the date of the accident.  On December 21, 1999, appellee sent a letter to 
the arbitration panel asking the panel to reconsider the award of prejudgment 
interest on the basis that the panel was not vested with authority to determine the 
issue of interest.  Appellee contended that only the trial court had authority to 
determine when and if prejudgment interest accrued.  Appellee also asserted that 
it had no obligation to pay prejudgment interest because there was no “judgment” 
to which interest could attach.  Appellee alternatively argued that interest should 
be calculated from the date that the trial court enters judgment.  On January 4, 
2000, the arbitration panel, in response to appellee’s letter seeking 
reconsideration, issued a second award.  The panel again awarded appellants 
$275,000 in damages plus ten percent interest; however, the panel deferred to the 
trial court the determination as to when the prejudgment interest began to accrue. 
{¶6} 
On January 10, 2000, appellants filed a motion with the trial court 
for an award of prejudgment interest or in the alternative to affirm the first 
arbitration award.  Appellants argued that the panel did not have authority to 
reconsider the first award and that appellants were entitled to prejudgment interest 
January Term, 2002 
3 
from the date of the accident, pursuant to Landis v. Grange Mut. Ins. Co. (1998), 
82 Ohio St.3d 339, 695 N.E.2d 1140.  The trial court confirmed the panel’s award 
of $275,000 in damages.  However, the court vacated the panel’s award of 
prejudgment interest.  The trial court indicated that the panel had exceeded its 
authority by considering the issue of prejudgment interest since any consideration 
applying R.C. 1343.03, the prejudgment interest statute, is a determination for the 
court and not an arbitration panel.  In reaching its own decision on the issue of 
prejudgment interest, the trial court adopted a bright-line rule, as set forth in 
Bowman v. Progressive Cas. Ins. Co. (1999), 136 Ohio App.3d 259, 736 N.E.2d 
502, for determining the accrual of prejudgment interest.  Bowman held that in 
cases where an insured’s damages are more than the insurance policy limit, 
prejudgment interest accrues from the date of the accident, and, in cases where the 
insured’s damages are less than the policy limit, prejudgment interest should 
generally not be awarded.  Thus, the trial court ruled that appellants, whose 
damages were less than their policy limit, were not entitled to prejudgment 
interest.  The trial court did award what appears to be postjudgment interest and 
ruled that such interest should be assessed from the date of the first arbitration 
award.  Appellants appealed the trial court decision to the Court of Appeals for 
Butler County. 
{¶7} 
The court of appeals affirmed in part and reversed in part the 
judgment of the trial court, and remanded the cause.  The court of appeals initially 
determined that the trial court erred by recognizing the panel’s second award 
because the panel had no authority to reconsider its initial award.  However, the 
court of appeals further found that although appellee, by sending a letter to the 
panel asking for reconsideration, violated Loc.R. 4.02(e)1 of the Common Pleas 
                                                 
1. 
{¶a} 
Loc.R. 4.02(e) of the Common Pleas Court of Butler County provides: 
 
{¶b} 
“Appeal:  Appeals to the court from an award rendered in an arbitration 
proceeding under this rule shall be on the record of the arbitration hearing and shall be limited to 
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Court of Butler County and R.C. 2711.13,2 the trial court did not err in vacating 
the arbitrators’ original award of interest because the arbitration panel was 
without authority even to consider, let alone award, prejudgment interest.  Finally, 
the court of appeals found that the trial court’s reliance upon Bowman was 
misplaced.  Instead, the court of appeals, even though the trial court did not award 
prejudgment interest, established its own bright-line rule regarding the accrual 
date of prejudgment interest in cases involving an insured’s uninsured motorist 
claim against the insurer.  The court of appeals determined that interest should 
accrue from the date of injury, which, in a cause of action based on uninsured 
motorist coverage, is the date when the insured makes an uninsured motorist 
claim to the insurer.  Accordingly, the court of appeals, in reversing the judgment 
of the trial court, found that prejudgment interest accrued on the date when 
appellants first presented their uninsured motorist coverage claim to appellee.  In 
addition, the court of appeals held that the total amount of damages awarded plus 
prejudgment interest may not exceed an insured’s policy limit.  Appellants 
appealed the judgment of the court of appeals. 
{¶8} 
This case is now before this court upon our allowance of a 
discretionary appeal. 
{¶9} 
We are presented with three issues for our determination.  The first 
issue is whether an arbitration panel, and more specifically this arbitration panel, 
                                                                                                                                     
questions of law as set forth in Revised Code Sections 2711.01 through 2711.20, inclusive, and 
shall be commenced by the filing of written objections to the arbitrator’s report.” 
 
{¶c} 
We question this finding of the court of appeals.  The local rule seems to apply 
only to “appeals to the court.”  At the time of the writing of the letter, no appeal was pending.  
This issue needs no further discussion because the issue is not dispositive. 
2. 
 
{¶a} 
R.C. 2711.13 provides: 
 
{¶b} 
“After an award in an arbitration proceeding is made, any party to the arbitration 
may file a motion in the court of common pleas for an order vacating, modifying, or correcting the 
award as prescribed in sections 2711.10 and 2711.11 of the Revised Code.”  (Emphasis added.) 
 
{¶c} 
As in the case of the local rule as discussed in footnote 1, supra, the appellees 
did not violate the statute by writing the letter in question.  They simply did not follow the 
required appeal procedure (R.C. 2711.13) to invoke the jurisdiction of the common pleas court as 
to the panel’s first award. 
January Term, 2002 
5 
has the authority to award prejudgment interest.  We find that such authority 
exists.  The second issue is whether the arbitration panel had authority to 
reconsider its first award and issue a second award.  We find that it did not.  The 
third issue is whether a dollar amount awarded as prejudgment interest pursuant to 
R.C. 1343.03(C), when added to the dollar amount awarded as damages for the 
personal injury, may lawfully exceed the limit of the insured’s uninsured motorist 
policy.  We answer this query in the affirmative.  Accordingly, we reverse the 
judgment of the court of appeals. 
{¶10} “For a dispute resolution procedure to be classified as ‘arbitration,’ 
the decision rendered must be final, binding and without any qualification or 
condition as to the finality of an award.”  Schaefer v. Allstate Ins. Co. (1992), 63 
Ohio St.3d 708, 711, 590 N.E.2d 1242.  An arbitration award may be challenged 
only through the procedure set forth in R.C. 2711.13 and on the grounds 
enumerated in R.C. 2711.10 and 2711.11.  Id.  “The jurisdiction of the courts to 
review arbitration awards is thus statutorily restricted; it is narrow and it is 
limited.”  Warren Edn. Assn. v. Warren City Bd. of Edn. (1985), 18 Ohio St.3d 
170, 173, 18 OBR 225, 480 N.E.2d 456. 
{¶11} R.C. 2711.13 provides: 
{¶12} “After an award in an arbitration proceeding is made, any party to 
the arbitration may file a motion in the court of common pleas for an order 
vacating, modifying, or correcting the award as prescribed in sections 2711.10 
and 2711.11 of the Revised Code.”  (Emphasis added.) 
{¶13} R.C. 2711.10 provides: 
{¶14} “In any of the following cases, the court of common pleas shall 
make an order vacating the award upon the application of any party to the 
arbitration if: 
{¶15} “* * * 
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{¶16} “(D) The arbitrators exceeded their powers, or so imperfectly 
executed them that a mutual, final, and definite award upon the subject matter 
submitted was not made.” 
{¶17} The first issue we consider is whether the arbitration panel had 
authority to award prejudgment interest.  The trial court ruled that the panel 
exceeded its authority by considering prejudgment interest.  We disagree. 
{¶18} There is nothing in the record to indicate that the arbitration 
panel’s authority was limited in any manner by agreement of the parties or by 
order of the trial court.  This court has held that the arbitrator is the final judge of 
both law and fact.  Goodyear Tire & Rubber Co. v. Local Union No. 200, United 
Rubber, Cork, Linoleum & Plastic Workers of Am. (1975), 42 Ohio St.2d 516, 
522, 71 O.O.2d 509, 330 N.E.2d 703.  In addition, Loc.R. 4.1(c) of the Common 
Pleas Court of Butler County provides, “The Board of Arbitration shall have the 
general powers of the court.”  Thus, those powers generally accorded to the court 
were delegated to the arbitration panel in the case at bar.  “Court” is defined as 
“[a]n organ of the government, belonging to the judicial department, whose 
function is the application of the laws to controversies brought before it and the 
public administration of justice.”  (Emphasis added.)  Black’s Law Dictionary (6 
Ed.1990) 352.  Accordingly, the panel was vested with authority to apply the law 
governing interest on the award, pursuant to R.C. 1343.03, to the controversy 
before the panel. 
{¶19} Moreover, “[t]he right to interest, the date from which interest 
should accrue, and the rate of interest involve questions of law and fact properly 
left to the discretion of the arbitrators.”  3 Macneil, Speidel & Stipanowich, 
Federal Arbitration Law: Agreements, Awards, and Remedies under the Federal 
Arbitration Act (1999), Section 36.7.1.1.  In the absence of language restricting 
the authority of an arbitrator to review a particular subject matter or to award a 
particular remedy, courts will generally hold that an arbitrator has the authority to 
January Term, 2002 
7 
make the award and to fashion a remedy even though the agreement is silent on 
the issue of remedial authority.  Queen City Lodge No. 69, Fraternal Order of 
Police, Hamilton Cty., Ohio, Inc. v. Cincinnati (1992), 63 Ohio St.3d 403, 588 
N.E.2d 802. 
{¶20} As indicated above, the panel’s authority in the case before us was 
not limited by agreement of the parties or by order of the court.  Instead, pursuant 
to Loc.R. 4.1(c), the panel was granted the general powers of the court.  Thus, for 
the foregoing reasons, we hold that the panel, in its first award, did not exceed its 
authority, within the meaning of R.C. 2711.10(D), by awarding prejudgment 
interest and determining the date from which interest accrued.  In addition, and 
maybe most important, it is clear that appellee’s December 21, 1999 letter to the 
arbitration panel did not accord with the procedure set forth in R.C. 2711.13 to 
invoke the appellate jurisdiction of the trial court. 
{¶21} Accordingly, we hold that, applying R.C. 2711.10(D) to the case at 
bar, the trial court lacked jurisdiction to vacate any part of the arbitration panel’s 
award. 
{¶22} The second issue we consider is whether the panel had authority to 
reconsider the first award.  It is clear that it did not. 
{¶23} R.C. Chapter 2711 does not confer authority on an arbitration 
panel to reconsider its awards.  Instead, R.C. Chapter 2711 confers jurisdiction 
only on the trial court, pursuant to R.C. 2711.10 and 2711.11, to vacate, modify 
or correct arbitration awards.  Furthermore, “[w]hen the submitted issues are 
decided, the arbitrators’ powers expire.  Thus, a second award on a single, 
circumscribed submission is a nullity.”  Lockhart v. Am. Res. Ins. Co. (1981), 2 
Ohio App.3d 99, 102, 2 OBR 112, 440 N.E.2d 1210, citing Bayne v. Morris 
(1863), 68 U.S. (1 Wall.) 97, 99, 17 L.Ed. 495.  Lockhart also relied on Citizens 
Bldg. of W. Palm Beach, Inc. v. W. Union Tel. Co. (C.A.5, 1941), 120 F.2d 982, 
984, which held, “[A]rbitrators are appointees with but a single duty and * * * 
SUPREME COURT OF OHIO 
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performance of that duty terminates their authority.  When an arbitral board 
renders a final award, its powers and duties under the submission are terminated.  
Its authority is not a continuing one, and, after its final decision is announced, it is 
powerless to modify or revoke it or to make a new award upon the same issues.”  
We find this analysis to be well crafted.  Accordingly, the arbitration panel, once 
it entered the award, had no authority to reconsider its decision. 
{¶24} The third issue is whether an award of prejudgment interest, 
pursuant to R.C. 1343.03(C), may exceed appellants’ uninsured motorist policy 
limit. 
{¶25} R.C. 1343.03(C) provides: 
{¶26} “Interest on a judgment, decree, or order for the payment of money 
rendered in a civil action based on tortious conduct and not settled by agreement 
of the parties, shall be computed from the date the cause of action accrued to the 
date on which the money is paid * * *.” 
{¶27} Appellee argues that an insurer should have no liability for 
prejudgment interest which, when combined with the damage award, would 
exceed the insured’s policy limit.3  While this is an issue of first impression, 
appellee’s argument is unsupported by this court’s decisions regarding the policy 
supporting awards of prejudgment interest. 
{¶28} Ohio courts have long recognized the common-law right to 
prejudgment interest.  Moskovitz v. Mt. Sinai Med. Ctr. (1994), 69 Ohio St.3d 
638, 656-657, 635 N.E.2d 331 (citing cases dating to 1832).  It is well established 
that the underpinning of prejudgment interest awards is to encourage prompt 
settlement of claims, prevent prolonged litigation, and to compensate and make 
the injured party whole.  Royal Elec. Constr. Corp. v. Ohio State Univ. (1995), 73 
Ohio St.3d 110, 116-117, 652 N.E.2d 687.  Moreover, we have held that “ 
                                                 
3. 
We note that the court of appeals raised and decided this issue sua sponte. 
January Term, 2002 
9 
‘interest is allowed, not only on account of the loss which a creditor may be 
supposed to have sustained by being deprived of the use of his money, but on 
account of the gain made from its use by the debtor.’ ”  Moskovitz, 69 Ohio St.3d 
at 656, 635 N.E.2d 331, quoting Hogg v. Zanesville Canal & Mfg. Co. (1832), 5 
Ohio 410, 424, 1832 WL 26. 
{¶29} If we were to adopt appellee’s position it would frustrate the policy 
of encouraging settlement, since there would be little incentive for an insurer to 
settle a meritorious claim.  The insurer in such a situation, knowing that its loss is 
confined to the insured’s policy limit, has less incentive to prevent protracted 
litigation in which the insured is deprived of the use of the money.  Once a 
lengthy litigation process is complete, the insured is not compensated for the lapse 
of time between the accrual of the claim and judgment.  The insurer would clearly 
have the benefit of retaining control over, and earning interest on, money due and 
payable to their insured.  We find that such a result would clearly contradict the 
well-established statutory and common-law basis for prejudgment interest. 
{¶30} By way of example, in the case now before us the panel awarded 
$275,000 as damages for the loss.  The panel then allowed prejudgment interest at 
a rate of ten percent from the date of the accident.  Assuming that the amount of 
the prejudgment interest award, when added to the $275,000 awarded for the 
underlying injury claim, results in a total award of $310,000, the insurer is then 
liable for the full award even though the award exceeds the policy limit of 
$300,000.  If, however, the damage award for the underlying injury had been 
$350,000 and the panel had allowed prejudgment interest, the prejudgment 
interest could be assessed only against the policy limit of $300,000 and the insurer 
would then be responsible for the full policy limit —$300,000—plus the 
prejudgment interest on that amount. 
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{¶31} Accordingly, we hold that an insurer is liable for an entire award 
up to the insured’s policy limit plus any prejudgment interest awarded on that 
policy limit. 
{¶32} For the foregoing reasons, we reverse the judgment of the court of 
appeals and remand this matter to the trial court to reinstate and confirm the 
arbitration panel’s December 2, 1999 award in all respects.4 
Judgment reversed 
and cause remanded. 
MOYER, C.J., RESNICK, F.E. SWEENEY and PFEIFER, JJ., concur. 
COOK, J., concurs in judgment. 
LUNDBERG STRATTON, J., dissents. 
__________________ 
LUNDBERG STRATTON, J., dissenting. 
{¶33} I respectfully dissent.  I agree with the analysis of the court of 
appeals below that the arbitrators lacked authority to award prejudgment interest.  
Arbitrators are assigned the task of deciding issues of liability and damages, 
whereas the issue of entitlement to prejudgment interest is a matter for the court to 
decide.  In addition, I believe that the court of appeals correctly held that the total 
amount of damages and prejudgment interest is limited to the applicable policy 
limits. 
{¶34} This court first recognized that prejudgment interest was 
recoverable on a claim for underinsured motorist (“UIM”) coverage in Landis v. 
Grange Mut. Ins. Co. (1998), 82 Ohio St.3d 339, 695 N.E.2d 1140.  The Landis 
court reasoned that a UIM claim was a contract claim “for the payment of money” 
                                                 
4. 
Appellants also challenged the court of appeals’ establishment of a bright-line rule 
regarding the accrual date of prejudgment interest.  Given that we reverse the judgment of the 
court of appeals for other reasons, we do not reach this issue.  However, we note that in Landis, 82 
Ohio St.3d at 342, 695 N.E.2d 1140, we specifically and clearly declined to establish a bright-line 
rule regarding the accrual date of prejudgment interest but rather left such a determination to the 
trial courts on a case-by-case basis. 
January Term, 2002 
11 
that was “due and payable” based on an “instrument of writing.”  Therefore, the 
court concluded that prejudgment interest was allowed pursuant to R.C. 
1343.03(A).  Id. at 341-342, 695 N.E.2d 1140.  However, the Landis court 
specifically held that the issue of prejudgment interest was a question for the trial 
court to determine.  Id. at 342, 695 N.E.2d 1140.  This court has held in other 
types of cases that prejudgment interest under R.C. 1343.03(C) likewise is a 
matter for the court to decide.  See Moskovitz v. Mt. Sinai Med. Ctr. (1994), 69 
Ohio St.3d 638, 658, 635 N.E.2d 331.  Once a court decides to award 
prejudgment interest, the court then calculates the amount of the interest pursuant 
to R.C. 1343.03(A).  Id. at 665, 635 N.E.2d 331.  Consequently, I believe that 
case law supports the conclusion that it is best left to a court to decide if and when 
prejudgment interest should be awarded whether the award is pursuant to (A) or 
(C) of R.C. 1343.03. 
{¶35} Arbitrators generally determine types of damages that are proven 
with more specificity, such as medical damages or loss of income.  However, a 
court, not a panel of arbitrators, is best suited to decide upon an award of 
prejudgment interest under R.C. 1343.03(A).  I am not convinced that the Federal 
Arbitration Act or case law based on collective bargaining agreements, upon 
which the majority’s opinion relies, necessarily dictates what arbitrators must do 
under Ohio contract law in an Ohio court.  Therefore, I would find that the 
arbitration award should be vacated to the extent that it includes prejudgment 
interest, because the arbitrators exceeded their authority. 
{¶36} I also dissent from the majority’s conclusion that an insurer is 
liable for an entire award of prejudgment interest combined with a damage award 
that exceeds the insured’s policy limits for UIM coverage. The majority contends 
that prejudgment interest is necessary to make the aggrieved party whole.  That 
position, however, is inconsistent with the intent and purpose of UIM coverage.  
Underinsured motorist benefits are based on contract, not tort.  And this court has 
SUPREME COURT OF OHIO 
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repeatedly articulated that the purpose of underinsured and uninsured motorist 
coverage is to place an injured party in the same position that he or she would 
have been if the tortfeasor had been insured.  Clark v. Scarpelli (2001), 91 Ohio 
St.3d 271, 275-276, 744 N.E.2d 719;  Bartlett v. Nationwide Mut. Ins. Co. (1973), 
33 Ohio St.2d 50, 52, 62 O.O.2d 406, 294 N.E.2d 665. 
{¶37} The amount of under- or uninsured motorist coverage that the 
insured contracted for is a finite amount set forth in the policy.  Although this may 
be inadequate to make the aggrieved party whole, it is nevertheless all that is 
available by contract to put the injured party in the same position that he or she 
would be if the tortfeasor had been insured.  With no limitation upon the amount 
of prejudgment interest and damages, the majority now places the insured in a 
better position than he or she would have been had the tortfeasor been insured.  
To allow contract recovery in an amount that exceeds the contract amount is 
contrary to well-established law. 
{¶38} Finally, an implicit result of the majority’s opinion is the tacit 
approval of an award of prejudgment interest accruing on a UIM claim from the 
date of the accident.  The Landis court recognized prejudgment interest on a UIM 
claim under R.C. 1343.03(A) because the benefits were due and payable upon an 
instrument of writing.  I agree with the court of appeals that the accrual date for 
prejudgment interest on a UIM claim can be no earlier than the date the insured 
made a claim under the policy after having exhausted the tortfeasor’s liability 
coverage.  It is illogical to award interest beginning on the date of the accident 
when no UIM claim then existed. 
{¶39} As the court of appeals reasoned, an accrual date based on the date 
the insured made a UIM claim, or a later event, comports with Landis.  This takes 
into account the time value of the money being held by the insurer between the 
time the claim is made and its eventual payment.  (There can be no money owed 
on the date of the accident until it is known that the tortfeasor’s policy is 
January Term, 2002 
13 
exhausted.)  And contrary to the majority’s statement that an insurer would have 
little incentive to settle a meritorious claim, this would encourage the parties to 
settle the claim. 
{¶40} Therefore, for the foregoing reasons, I respectfully dissent. 
__________________ 
 
Pratt, Singer & Thomas Co., L.P.A., Gregory K. Pratt and Martina M. 
Dillon, for appellants. 
 
Jack C. McGowan & Associates and Jack C. McGowan, for appellee. 
__________________