Case Name: Martin, Appellant, v. Midwestern Group Insurance Company, Appellee
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1994-10-05
Citations: 70 Ohio St. 3d 478
Docket Number: No. 93-1178
Parties: Martin, Appellant, v. Midwestern Group Insurance Company, Appellee.
Judges: A.W. Sweeney, Resnick and Pfeifer, JJ., concur.
Reporter: Ohio State Reports, Third Service
Volume: 70
Pages: 478–486

Head Matter:
Martin, Appellant, v. Midwestern Group Insurance Company, Appellee.
[Cite as Martin v. Midwestern Group Ins. Co. (1994), 70 Ohio St.3d 478.]
(No. 93-1178
Submitted May 16, 1994
Decided October 5, 1994.)
Tyler & Fire and Thomas S. Tyler, for appellant.
Weston, Hurd, Fallon, Paisley & Howley, Kathryn M. Murray and Ronald A. Rispo, for appellee.

Opinion:
Francis E. Sweeney, Sr., J.
The issue before us is whether the "other owned vehicle" exclusion in the uninsured motorist coverage of appellant's automobile insurance policy is enforceable. For the following reasons, we hold that the exclusion is not enforceable. Accordingly, we reverse the judgment of the court of appeals.
The General Assembly has determined that automobile liability carriers must offer uninsured motorist coverage to their customers. R.C. 3937.18 provides in part:
"(A) No automobile liability or motor vehicle liability policy of insurance insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance, or use of a motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state unless the following [is] provided:
"(1) Uninsured motorist coverage, which shall be in an amount of coverage equivalent to the automobile liability or motor vehicle liability coverage and shall provide protection for bodily injury or death for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness, or disease, including death, resulting therefromf.]" (Emphasis added.)
This court has consistently held that the purpose of uninsured' motorist coverage is to protect persons from losses which, because of the tortfeasor's lack of liability coverage, would otherwise go uncompensated. Abate v. Pioneer Mut. Cas. Co. (1970), 22 Ohio St.2d 161, 165, 51 O.O.2d 229, 231, 258 N.E.2d 429, 432; Stanton v. Nationwide Mut. Ins. Co. (1993), 68 Ohio St.3d 111, 113, 623 N.E.2d 1197, 1199, citing Watson v. Grange Mut. Cas. Co. (1988), 40 Ohio St.3d 195, 532 N.E.2d 758.
In fact, R.C. 3937.18(A)(1) explicitly provides that uninsured motorist coverage is "for the protection of persons." We have held that R.C. 3937.18 is remedial legislation. Stanton, supra, 68 Ohio St.3d at 113, 623 N.E.2d at 1199. Thus, we must liberally construe this law in order to effectuate the legislative purpose. Curran v. State Auto. Mut. Ins. Co. (1971), 25 Ohio St.2d 33, 54 O.O.2d 166, 266 N.E.2d 566.
While R.C. 3937.18 does not displace ordinary principles of contract law, a party cannot enter into contracts that are contrary to law. See Hedrick v. Motorists Mut. Ins. Co. (1986), 22 Ohio St.3d 42, 51, 22 OBR 63, 71, 488 N.E.2d 840, 847 (AW. Sweeney, J., dissenting). Therefore, the validity of an insurance policy exclusion of uninsured coverage depends on whether it conforms to R.C. 3937.18.
The insurance policy issued by Midwestern to appellant specifically names him as the insured. Midwestern relies upon the following exclusionary language to deny coverage:
"We do not cover bodily injury to a person:
"1. Occupying, or struck by, a motor vehicle owned by you or a relative for which insurance is not afforded under this part."
This exclusion is commonly known as the "other owned vehicle" exclusion and is found in virtually every automobile insurance policy written in this state.
Appellant argues, and the trial court determined, that State Farm Auto. Ins. Co. v. Alexander (1992), 62 Ohio St.3d 397, 583 N.E.2d 309, is dispositive of this case. Alexander involved an insured who was injured while a passenger in his own vehicle. The State Farm policy in that case excluded from the definition of "uninsured motor vehicle" any vehicle "insured under the liability coverage of this policy" as well as one "furnished for the regular use" of the insured, his spouse or any relative. In striking down this exclusion, commonly known as "the household exclusion," we held that any provision depriving an insured of uninsured motorist coverage for tort claims against an uninsured motorist is invalid and unenforceable. The syllabus in Alexander states:
"An automobile insurance policy may not eliminate or reduce uninsured or underinsured motorist coverage, required by R.C. 3937.18, to persons injured in a motor vehicle accident, where the claim or claims of such persons arise from causes of action that are recognized by Ohio tort law."
The rationale of Alexander is not limited to the analyzed exclusion. Instead, this court made clear that R.C. 3937.18 is the yardstick by which all exclusions of uninsured motorist coverage must be measured. Under Alexander, the statute mandates coverage if (1) the claimant is an insured under a policy which provides uninsured motorist coverage; (2) the claimant was injured by an uninsured motorist; and (3) the claim is recognized by Ohio tort law.
Applying this test, it is clear that appellant has satisfied the requirements of R.C. 3937.18: (1) appellant is the named insured on the insurance policy; (2) the tortfeasor did not have liability insurance; and (3) appellant has a cause of action under Ohio tort law.
Relying on Alexander, we recently invalidated a "for fee" exclusion in Stanton v. Nationwide Mut. Ins. Co., supra, 68 Ohio St.3d 111, 623 N.E.2d 1197, which would have eliminated uninsured motorist coverage mandated by R.C. 3937.18.
In keeping with precedent, and finding no reason for holding otherwise, we now invalidate the "other owned vehicle" exclusion.
In striking down this exclusionary provision, it is necessary to revisit our decision in Hedrick, supra, which appellee asserts directly supports its position.
Hedrick involved an automobile accident with an uninsured motorist in which the plaintiff was riding a motorcycle owned by his father. The motorcycle was not insured under the policy issued by the defendant insurance company. The insurance company denied coverage on the basis of an exclusion essentially identical to the one at issue here. This court upheld the exclusion. The Hedrick syllabus provides:
"An insurance policy provision which denies uninsured motorist coverage, when bodily injury is sustained by any person while occupying a motor vehicle owned by an insured but which vehicle is not specifically insured under the policy, is a valid exclusion." (Emphasis sic.)
Because we do not believe Hedrick is in accord with the law of our state, which is that uninsured motorist coverage was designed by the General Assembly to protect persons, not vehicles, we now expressly overrule it. If an insured is negligently injured by an uninsured motorist, he cannot be denied uninsured motorist coverage by a policy exclusion requiring that he be occupying an insured automobile under the policy.
Accordingly, we hold that an automobile liability insurance policy provision which eliminates uninsured motorist coverage for persons insured thereunder who are injured while occupying a motor vehicle owned by an insured, but not specifically listed in the policy, violates R.C. 3937.18 and is therefore invalid.
In so holding, we are not unmindful of Midwestern's argument that a premium was not paid on the vehicle appellant was riding when injured. But the amount of the premium received by Midwestern is irrelevant. The fact is that appellant accepted and paid for uninsured motorist coverage. Pursuant to R.C. 3937.-18(A)(1), such insurance must provide coverage "for bodily injury for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles The statute does not permit insurers to eliminate this required coverage on the basis that the injury was incurred in a vehicle not listed in the policy.
Appellant paid a premium for uninsured motorist insurance which covered him, not his vehicles. It certainly cannot be argued that appellant would not be covered if he had been injured by this same tortfeasor while standing on a sidewalk, or riding or driving a vehicle owned by another. Indeed, Midwestern's counsel admitted as much during oral argument. To deny it in this instance would contravene Ohio law.
It is state law (R.C. 3937.18) which determines the scope of uninsured motorist coverage, not the insurance policy or the amount of the premium paid. It is the responsibility of the insurance company to set a premium in accordance with the risks involved.
For the foregoing reasons, the judgment of the court of appeals is reversed and the judgment of the trial court is reinstated.
Judgment reversed.
A.W. Sweeney, Resnick and Pfeifer, JJ., concur.
Douglas, J., concurs separately.
Moyer, C.J., and Wright, J., dissent.