Case Name: Ohayon et al., Appellants, v. Safeco Insurance Company of Illinois, Appellee
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 2001-05-30
Citations: 91 Ohio St. 3d 474
Docket Number: No. 00-262
Parties: Ohayon et al., Appellants, v. Safeco Insurance Company of Illinois, Appellee.
Judges: Moyer, C.J., Pfeifer and Lundberg Stratton, JJ., concur.
Reporter: Ohio State Reports, Third Service
Volume: 91
Pages: 474–499

Head Matter:
Ohayon et al., Appellants, v. Safeco Insurance Company of Illinois, Appellee.
[Cite as Ohayon v. Safeco Ins. Co. of Illinois (2001), 91 Ohio St.3d 474.]
(No. 00-262
Submitted November 29, 2000
Decided May 30, 2001.)

Opinion:
Cook, J.
In their sole proposition of law, appellants ask this court to hold that when an insured under an automobile insurance policy issued in Ohio is injured in an automobile accident in another state, coverage under the uninsured/underinsured motorist provisions of the policy is determined by the law of the state in which the injury occurred. For the following reasons, we decline to adopt this proposition and instead affirm the judgment of the court of appeals.
I. Background
In 1996, Safeco Insurance Company of Illinois ("Safeco") issued an automobile insurance policy to Summit County residents Jacob and Brenda Ohayon. The policy covered three vehicles and provided underinsured ("UIM") motorist coverage limited to $100,000 per person and $300,000 per occurrence. The policy contained a setoff provision providing that "the limit of liability [for UIM coverage] shall be reduced by all sums paid because of bodily injury by or on behalf of persons or organizations who may be legally responsible." (Boldface sic.) The policy also contained an antistacking clause providing that "[i]n no event shall the limit of liability for two or more vehicles or two or more policies be added together, combined, or stacked to determine the limit of insurance coverage available to injured persons."
In 1996, Jacob and Brenda's son Jonathon — who lived at the Ohayons' Ohio residence — visited Pennsylvania, where he was struck by an automobile. Jonathon sustained serious leg injuries and eventually settled his claim against the tortfeasor for the $100,000 limit of the tortfeasor's liability coverage.
Jacob, Brenda, and Jonathon Ohayon filed a complaint against Safeco in the Summit County Court of Common Pleas, seeking a declaratory judgment that they were entitled to recover benefits under the UIM provisions of their Safeco policy. The Ohayons sought a declaration (1) that Pennsylvania tort law applied to Jonathon's UIM claims; (2) that Pennsylvania law entitled Jonathon to stack the coverage amounts for each vehicle insured under the Safeco policy, up to $300,000 plus interest and costs; (3) that Pennsylvania law precluded Safeco from setting off the amount already paid by the tortfeasor's insurer in settlement; (4) that due to the loss of their son's consortium, Jonathon's parents could each collect the per-person limit of the UIM coverage provided in the policy, stacking the policy limits to a combined total of $600,000; and (5) that they were entitled to attorney fees and prejudgment interest.
Safeco conceded that Jacob and Brenda Ohayon were named insureds under the Safeco policy in effect on the date of the accident and admitted that Jonathon Ohayon, if a resident of the Ohayon household, was also an insured. Safeco denied, however, that the plaintiffs could recover the UIM benefits that they sought under the applicable policy provisions.
Following discovery, the Ohayons moved for partial summary judgment on the coverage issues. In this motion, the Ohayons reiterated their claims that under Ohio's choice-of-law analysis, Pennsylvania law controlled, that therefore Safeco was precluded from setting off the funds that Jonathon had already received in settlement, and that Pennsylvania law permitted the Ohayons to stack their claims. In its response, Safeco contended that R.C. 3937.18 applied and entitled it to judgment as a matter of law.
The common pleas court held that the Ohayons' claims "are largely based upon tort law and thus tort law governs," and agreed with the Ohayons that Pennsylvania law applied. The court thus concluded that, in spite of the antistacking provision in the Safeco policy, Pennsylvania's Motor Vehicle Financial Responsibility Law, 75 Pa.Cons.Stat. 1738, permitted the Ohayons to stack the stated limits of UIM coverage. The trial court also concluded that Pennsylvania law precluded Safeco from setting off the amount already paid by the tortfeasor's insurer in settlement. Safeco appealed the trial court's order to the Summit County Court of Appeals.
The court of appeals unanimously reversed the lower court's decision, concluding that the trial court erred when it applied Pennsylvania law instead of Ohio law to determine the UIM coverage issues under the insurance contract. Though the court of appeals determined that Ohio's UIM law was the proper law to apply, it concluded that a material fact remained in dispute regarding which version of Ohio's UIM statute should apply. Accordingly, the court of appeals remanded the cause. The Ohayons appealed, and the cause is before this court upon the allowance of a discretionary appeal.
II. Choice of Law
Because the Ohayons seek a declaration that Pennsylvania law should apply to resolve the coverage issues in this action, and because the incident underlying their cause of action occurred in Pennsylvania, resort to Ohio's choice-of-law rules is necessary. Our state's choice-of-law rules "do not themselves determine the rights and liabilities of the parties, but rather guide decision as to which local law rule will be applied to determine these rights and duties." 1 Restatement of the Law 2d, Conflict of Laws (1971) 3, Section 2, Comment a(3).
The Restatement's choice-of-law rules depend on the "classification of a given factual situation under the appropriate legal categories and specific rules of law." Id. at 18, Section 7, Comment b. We must classify the Ohayons' cause of action before we answer the choice-of-law question raised in their complaint because different choice-of-law rules apply depending on whether the cause of action sounds in contract or in tort. Compare Schulke Radio Prod., Ltd. v. Midwestern Broadcasting Co. (1983), 6 Ohio St.3d 436, 6 OBR 480, 453 N.E.2d 683 (contract), with Morgan v. Biro Mfg. Co., Inc. (1984), 15 Ohio St.3d 339, 15 OBR 463, 474 N.E.2d 286 (tort).
We apply different choice-of-law principles to actions sounding in contract than to actions sounding in tort for several reasons. For one, the parties to a contract are largely free to negotiate the law to be applied to disputes arising thereunder. See 1 Restatement of Conflicts at 15, Section 6, Comment g; see, also, id. at Section 187. In the absence of such a choice, the Restatement's contractual choice-of-law rules seek to protect the justified expectations of the contracting parties. See id. at 576, Section 188, Comment b.
Unlike a contracting party, on the other hand, a negligent tortfeasor acts without a conscious regard for the legal consequences of his or her conduct — let alone the particular law to be applied to that conduct — and the parties contesting liability and/or the appropriate measure of damages for the conduct thus "have no justified expectations to protect." Restatement at 15, Section 6, Comment g. Accordingly, the Restatement and courts emphasize different factors when resolving choice-of-law issues in these contextually distinct legal fields.
III. Choosing the Applicable Law in Causes of Action Sounding in Contract
In Sehulke, supra, this court adopted Section 187 of the Restatement of Conflicts. Schulke, 6 Ohio St.3d at 438-439, 6 OBR at 482, 453 N.E.2d at 686. Section 187 provides that, subject to very limited exceptions, the law of the state chosen by the parties to a contract will govern their contractual rights and duties. The very next section of the Restatement, Section 188, enumerates factors that courts should consider in the absence of such a choice, and soon after Sehulke this court expressly adopted Section 188 in Gries Sports Ent., Inc. v. Modell (1984), 15 Ohio St.3d 284, 15 OBR 417, 473 N.E.2d 807, syllabus.
In Gries, minority shareholders in Cleveland Browns, Inc., a Delaware corporation, filed an action in Ohio seeking specific performance of a voting agreement that they had executed over fifteen years earlier with Arthur Modell, the majority shareholder. The parties to the voting agreement had not chosen a particular forum's law to be applied to any controversies arising thereunder. If Delaware law applied to the minority shareholders' cause of action, the voting agreement would have statutorily lapsed by the time the minority shareholders brought their action and thus could not have been specifically performed. Accordingly, this court had to determine which forum's law applied before assessing the merits of the minority shareholders' complaint.
To resolve the choice-of-law issue, the Gries court examined the factors in Section 188 of the Restatement. Section 188 provides that, in the absence of an effective choice of law by the parties, their rights and duties under the contract are determined by the law of the state that, with respect to that issue, has "the most significant relationship to the transaction and the parties." Restatement at 575, Section 188(1). To assist in making this determination, Section 188(2)(a) through (d) more specifically provides that courts should consider the place of contracting, the place of negotiation, the place of performance, the location of the subject matter, and the domicile, residence, nationality, place of incorporation, and place of business of the parties.
Applying the foregoing principles to the voting agreement executed by the shareholders in Gries, this court determined:
"[T]he place of contracting was Ohio, the place of negotiation was Ohio, the place of performance was Ohio, the location of the subject matter of [the] contract was Ohio, the place of incorporation was Delaware, and the place of business of the parties was Ohio. The conclusion is inescapable that Ohio 'bears the most significant relationship to the contract.' " Gries, 15 Ohio St.3d at 287, 15 OBR at 420, 473 N.E.2d at 810, quoting Schulke, 6 Ohio St.3d at 438, 6 OBR at 482, 453 N.E.2d at 685-686.
Accordingly, this court reversed the court of appeals' decision to apply Delaware law.
IV. The Application of Gries and Section 188 to Insurance Coverage Disputes: Nationwide Mut. Ins. Co. v. Ferrin
Just over a year after Gries, this court applied Section 188 to resolve a choice-of-law issue that arose in a dispute over insurance coverage. Nationwide Mut. Ins. Co. v. Ferrin (1986), 21 Ohio St.3d 43, 44-45, 21 OBR 328, 330, 487 N.E.2d 568, 569 (citing Gries and Section 188 as "controlling law"). The application of Ohio's contractual choice-of-law analysis to such a dispute was not a surprising development, considering that this court has long held that an insurance policy is a contract between the insurer and the insured. Ohio Farmers Ins. Co. v. Cochran (1922), 104 Ohio St. 427, 135 N.E. 537, syllabus.
In Ferrin, an employee of a trucking company headquartered in Florida drove a tractor and attached trailer from Florida on his way to Michigan on company business. One weekend during this trip, the driver separated the trailer from the tractor in Dayton, Ohio, and drove the tractor to his parents' residence in Orient for a personal visit. On his way to his parents' home, the driver had an accident. His employer's insurer filed a complaint in Ohio seeking a declaration that the driver was not covered by the insurance policy that it had issued to the driver's employer. The employer's insurance policy covered employees using covered vehicles "with [the employer's] permission," but an employee handbook indicated that the driver should not have been operating the company tractor for his personal use.
Because the applicable insurance policy was issued to the driver's Florida employer, but the insurer's complaint was filed here in Ohio, it was necessary for the trial court to determine which state's law would apply to resolve the controversy about coverage. The trial court determined that Florida law applied and that under Florida law the driver was indeed covered by the policy issued to his employer. Both the court of appeals and this court agreed. Applying the factors enumerated in Section 188 of the Restatement, this court noted in Ferrin that the insurance contract had been issued to the driver's Florida employer at the employer's Florida address. Id. at 45, 21 OBR at 330, 487 N.E.2d at 570. Thus Florida law controlled the question of whether the policy covered the employee during his personal trip to see his parents. Id.
After summarizing Ohio choice-of-law precedent in contract cases, the Ferrin court proceeded to apply Florida law to the merits of the case. The Ferrin court observed that, at the time, Florida courts apparently adhered to the "initial permission rule." Id. at 45, 21 OBR at 330, 487 N.E.2d at 570. Under that rule, once an owner gave express or implied consent to another to operate the owner's automobile, the owner became hable for its negligent operation no matter where the driver went. Id., citing Boggs v. Butler (1937), 129 Fla. 324, 326, 176 So. 174, 176. Florida courts had applied the Boggs rule both with respect to the vehicle owner's liability and with respect to the scope of the owner's insurance coverage. Ferrin at 46, 21 OBR at 331, 487 N.E.2d at 571. For these reasons, this court affirmed the lower courts' decision in favor of coverage. Id.
In Ferrin, the application of Florida law ultimately resulted in an outcome favorable to the driver-insured. If, however, the insurance policy had been issued in a state that did not adhere to the "initial permission rule," and if a consideration of Section 188's factors had resulted in applying that state's law, the final outcome of the insurer's declaratory judgment action may have been different. We note this possibility simply to underscore the fact that Section 188's choice-of-law methodology does not, in and of itself, favor either insureds or insurers in disputes over insurance coverage. As noted above, the choice-of-law rules contained in Section 188 do not themselves determine the actual rights and liabilities of the parties to a contract; they simply decide which forum's local law should apply in determining those rights and liabilities. See Restatement at 3, Section 2, Comment a(3). The factors enumerated in Section 188 are keyed to the justifiable expectations of the parties to the contract, not to the ultimate benefit of one party over another. See id. at 15, Section 6, Comment g.
Section 188's choice-of-law methodology focuses on the place of contracting, the place of negotiation, the place of performance, the location of the subject matter, and the domicile of the contracting parties. In insurance cases, this focus will often correspond with the Restatement's view that the rights created by an insurance contract should be determined "by the local law of the state which the parties understood was to be the principal location of the insured risk during the term of the policy, unless with respect to the particular issue, some other state has a more significant relationship to the transaction and the parties." (Emphasis added.) Restatement at 610, Section 193. "[I]n the case of an automobile liability policy, the parties will usually know beforehand where the automobile will be garaged at least during most of the period in question." Id. at 611, Comment b. The principal location of the insured risk described in Section 193 neatly corresponds with one of Section 188's enumerated factors — the location of the subject matter of the contract.
V. The Application of Section 188, Gries, and Ferrin to Choice-of-Law Issues Arising in Disputes Over UIM Coverage
After Ferrin, application of the Restatement's contractual choice-of-law provisions to liability insurance cases is no longer a subject of dispute in Ohio. See Babcock & Wilcox Co. v. Arkwright-Boston Mfg. Mut. Ins. Co. (N.D.Ohio 1992), 867 F.Supp. 573, 577 (deciding, in a diversity action regarding liability coverage, that "the determinative Ohio choice of law rules" are set forth in Ferrin and Gries). Similarly, resort to the Restatement's contractual choice-of-law provisions in declaratory judgment actions seeking UIM coverage should no longer be a subject of dispute. This court has determined that an action by an insured against his or her insurance carrier for payment of UIM benefits is a cause of action sounding in contract, rather than tort, even though it is tortious conduct that triggers applicable contractual provisions. Landis v. Grange Mut. Ins. Co. (1998), 82 Ohio St.3d 339, 341, 695 N.E.2d 1140, 1141; see, also, Miller v. Progressive Cas. Ins. Co. (1994), 69 Ohio St.3d 619, 624, 635 N.E.2d 317, 321 ("We recognize that an action by an insured against an insurance carrier for payment of uninsured or underinsured motorist benefits is a cause of action sounding in contract"); Kurent v. Farmers Ins. of Columbus, Inc. (1991), 62 Ohio St.3d 242, 245, 581 N.E.2d 533, 536 ("The Kurents' claim for uninsured motorist coverage is determined by their contractual relationship with Farmers"); Motorists Mut. Ins. Co. v. Tomanski (1971), 27 Ohio St.2d 222, 223, 56 O.O.2d 133, 134, 271 N.E.2d 924, 925 ("The right to recover under an uninsured motorist insurance policy is on the contract, not in tort").
The Sixth Circuit Court of Appeals, in diversity actions concerning claims for UIM coverage, has likewise concluded that Ohio's choice-of-law rules derive from Gries, Ferrin, and Section 188. Natl. Union Fire Ins. Co. v. Watts (C.A.6, 1992), 963 F.2d 148, 150; see, also, Miller v. State Farm Mut. Auto. Ins. Co. (C.A.6, 1996), 87 F.3d 822, 824-825.
There are several'reasons to apply the same choice-of-law principles to disputes over UIM coverage that we have already applied to disputes over liability insurance coverage and other contractual disputes. For one, although our state requires insurers to offer UIM coverage, R.C. 3937.18(A)(1), and although a minimum level of coverage will arise by operation of law in the absence of such an offer, Abate v. Pioneer Mut. Cas. Co. (1970), 22 Ohio St.2d 161, 51 O.O.2d 229, 258 N.E.2d 429, R.C. 3937.18 does not impose upper limits on the amount of UIM coverage that may be negotiated between the parties to an insurance agreement. The limits of UIM coverage under a particular policy are subject to negotiation and modification by the contracting parties just as other terms of the contract are. Insureds can receive higher limits when they agree to pay higher premiums. The Restatement's contractual choice-of-law rules will protect the justified expectations of the parties who bargain for those terms. See Restatement at 15, Section 6, Comment g.
Finally, R.C. 3937.18, unlike some Ohio statutes that apply to contractual relationships, imposes no choice of law on the parties if a dispute arises concerning the existence or extent of coverage. Compare R.C. 3937.18 with 1302.43(C)(2) (imposing the "law of the state where the goods are situated" to determine whether a fraudulent transfer or voidable preference has occurred). Courts need a predictable methodology, such as the one embodied in Restatement Section 188, to choose the applicable law if neither the parties nor the statutory scheme make that choice for them.
VI. Application of the Foregoing Principles to the Case at Bar
When addressing the parties' competing motions for summary judgment in this case, the trial court erroneously applied the Restatement's tort choice-of-law methodology. In doing so, the trial court relied not on the authority discussed above, but rather on an unreported ease from the Erie County Court of Appeals, Mayse v. Watson (Sept. 27, 1985), Erie App. No. E-85-8, unreported, 1985 WL 7613. In Mayse, which was decided before this court had even applied Section 188 of the Restatement to the insurance context in Ferrin, the plaintiffs had an accident in Florida with an uninsured motorist. At the time, Florida's no-fault laws limited a plaintiffs potential recovery for pain, suffering, mental anguish, and inconvenience. For this reason, in their complaint against their insurer, the Mayses sought a declaration that Florida law did not control the parties' rights and duties under the insurance contract.
The trial court awarded damages to the Mayses, ordered their insurer to proceed to arbitration, and determined that Florida's no-fault laws should apply— effectively limiting the Mayses' potential recovery. The Erie County Court of Appeals reversed, applying a tort choice-of-law analysis to conclude that Ohio law should control. In reaching this conclusion, the Mayse panel reasoned that the crucial issue in the case concerned the measure of damages recoverable from the tortfeasor: "[I]f tort law controls the factors which establish how the injury occurred and who was at fault, then tort law should also control the measure of damages which are recoverable." (Emphasis added.)
Relying on this language from Mayse, the trial court in this case applied a tort choice-of-law analysis to determine which state's law applies. The trial court thus applied the Restatement's presumption that the law of the place of injury controls unless another jurisdiction has a more significant relationship. See Morgan v. Biro Mfg., 15 Ohio St.3d at 341-342, 15 OBR at 465, 474 N.E.2d at 289, citing 1 Restatement of Conflicts at 430, Section 146. Because Jonathon was injured in Pennsylvania, the trial court determined that Pennsylvania law should control.
The trial court's choice-of-law analysis, however, was flawed. If the Ohayons had filed a civil action for damages against the Pennsylvania tortfeasor in an Ohio court, the measure of damages —if any — recoverable from the tortfeasor would have been, the essential issue before the court, and our state's tort choice-of-law analysis, as expressed in Mayse, would indeed determine which local law to apply. See id.
In the case at bar, however, the measure of damages recoverable from the Pennsylvania tortfeasor is not the critical issue. Jonathon Ohayon has already settled with the Pennsylvania tortfeasor for the $100,000 limit of the tortfeasor's liability insurance. Instead of seeking damages from the tortfeasor for liability in tort, the Ohayons now seek a declaration that they may stack the stated per-person limits of UIM coverage contained in their insurance contract with Safeco, and that Safeco is not entitled to set off the amounts Jonathon has already received in settlement. The resolution of these stacking and setoff issues is a coverage issue, separate and independent from the measure of damages assessed to the tortfeasor. The resolution of these coverage issues depends on (1) the applicable UIM provisions of the insurance contract executed by the parties, contained in Part C of that contract; and (2) the enforceability of those contractual provisions under state law. These are issues to be resolved under the law of contracts, to which the court of appeals correctly applied the Restatement's contract choice-of-law analysis.
The Sixth Circuit Court of Appeals agrees that Mayse's tort choice-of-law analysis does not apply in a suit for UIM benefits. Miller v. State Farm Mut. Auto. Ins. Co., 87 F.3d at 826. In Miller, the executor of a Pennsylvania insured exhausted the limits of the Ohio tortfeasor's insurance policy, then instituted a declaratory judgment action against her decedent's insurer to recover UIM benefits. The Sixth Circuit, while noting that Mayse's tort choice-of-law analysis would indeed apply if the measure of damages due the executor had been at issue, upheld the district court's application of Ohio's contract choice-of-law analysis. Id. at 826. As the Sixth Circuit unanimously determined, "The question before us does not concern the measure of damages from the underlying accident; rather, it concerns the limits on the amount of coverage which State Farm must provide under the policy it issued to [the decedent]." Id. The Miller court concluded, "[W]e view the instant case as one that sounds in contract and not in tort. [T]he true heart of the matter — i.e., whether to apply the 'per person' or 'per accident' limit stated in the policy — involves the interpretation of an insurance contract executed in Pennsylvania by a Pennsylva nia resident, with a company licensed to do business in Pennsylvania." Id. at 826-827, citing Ferrin, 21 Ohio St.3d 43, 21 OBR 328, 487 N.E.2d 568.
Like the cause of action in Miller, the Ohayons' declaratory judgment action against Safeco here concerns the nature and extent of the rights and duties created by the UIM provisions of their contract of insurance. Questions involving the nature and extent of the parties' rights and duties under an insurance contract's underinsured motorist provisions shall be determined by the law of the state selected by applying the rules of Sections 187 and 188 of the Restatement. Id. at 660, Section 205.
For the foregoing reasons, the court of appeals correctly applied Section 188 of the Restatement to resolve the choice-of-law issue. The insurance contract was executed and delivered in Ohio by Ohio residents and an Ohio-license,d insurance agent. The policy insured vehicles principally garaged in Ohio. Under Section 188's contractual choice-of-law analysis, Ohio law should apply to determine the parties' rights and duties under that contract, including those rights and duties created by the contract terms providing UIM coverage.
VII. The Ohayons' Alternative Arguments
A. Csulik v. Nationwide Mut. Ins. Co.
The Ohayons contend that the foregoing choice-of-law analysis is not necessary and that the decision of the court of appeals should be reversed on the authority of this court's recent decision in Csulik v. Nationwide Mut. Ins. Co. (2000), 88 Ohio St.3d 17, 723 N.E.2d 90. We disagree.
As a threshold matter, we note that only three justices of this court joined the lead opinion in Csulik. See id., 88 Ohio St.3d at 20-22, 723 N.E.2d at 93-94 (Douglas, J., concurring separately with the judgment of the majority "but only on a very limited basis"; Lundberg Stratton, J., dissenting, joined by Moyer, C.J., and Cook, J.). Moreover, the case at bar differs substantively from Csulik. In Csulik, the insurer agreed to pay "compensatory damages, including derivative claims, which are due by law to you or a relative." (Emphasis added.) Id. at 17, 723 N.E.2d at 91. The justices joining the lead opinion in Csulik deemed the phrase "due by law" ambiguous and interpreted that phrase in favor of the insured under Ohio's law for resolving contractual ambiguities. The Ohayons contend that "the same ambiguous provision exists in the policy in the present case," but this assertion is incorrect.
The Safeco policy, in an amendatory endorsement specifically written for policies issued in Ohio, provides that the insurer "will pay damages which an insured is legally entitled to recover from the owner or operator of an uninsured motor vehicle or underinsured motor vehicle because of bodily injury." (Empha sis added; boldface sic.) This provision differs on its face from the one addressed in Csulik and is not ambiguous.
As this court has already noted, "the phrase 'legally entitled to recover' means the insured must be able to prove the elements of his or her claim" against the tortfeasor. Kurent v. Farmers Ins. of Columbus, 62 Ohio St.3d at 245, 581 N.E.2d at 536; see, also, State Farm Auto. Ins. Co. v. Webb (1990), 54 Ohio St.3d 61, 62, 562 N.E.2d 132, 133 (noting that the very same phrase appears in R.C. 3937.18[A]). Here, Jonathon's ability to prove the elements of his claim and recover damages from the Pennsylvania tortfeasor is not "at issue — he has already received $100,000 in settlement with the tortfeasor's insurer. As the Sixth Circuit explained in Miller, "there is no question that Miller is 'legally entitled to recover' underinsured motorist benefits under the policy . Miller has already exhausted the tortfeasor's insurance." Id., 87 F.3d at 825. Instead, the issue in the Ohayons' declaratory judgment action is the amount of coverage, if any, that Safeco must provide under the contract it executed with the Ohayons— an issue itself dependent on the enforceability and application of the policy's stacking and setoff provisions. These are issues sounding in contract law, and Csulik did not displace this court's traditional contract choice-of-law principles. See Csulik, 88 Ohio St.3d at 20-21, 723 N.E.2d at 93 (Douglas, J., concurring separately in judgment). For these reasons, the Ohayons' reliance on Csulik is misplaced.
B. Kurent v. Farmers Ins. of Columbus
The Ohayons also contend in their brief that in Kurent, 62 Ohio St.3d 242, 581 N.E.2d 533, "this Court established the basic principle, using a tort conflict-of-law analysis, that there is a strong presumption in favor of applying the law of the state where the injury occurred in determining uninsured/underinsured motorist claims." Though the Ohayons are correct that this court applied a tort choice-of-law analysis in Kurent, we did so for reasons not applicable to the case at bar. Accord Miller, 87 F.3d 822 (distinguishing Kurent).
In Kurent, a Michigan driver injured Ohio residents in Michigan. At the time, Michigan law denied noneconomic damages to plaintiffs unless such damages surpassed a certain threshold. The Ohio plaintiffs, who could not meet that threshold, sued their insurer in Ohio for uninsured motorist benefits, contending that Ohio law should control the determination of coverage. This court held:
"[W]hen an Ohio resident is injured in an automobile accident in a no-fault insurance state, by a resident of that state who is insured under that state's no-fault insurance laws, the Ohio resident's legal right to recover from the tortfeasor-motorist must be determined with reference to the no-fault state's laws. Where the no-fault state does not recognize a claim against the tortfeasor motorist, the Ohio insured is not entitled to collect uninsured motorist benefits from his own insurer." Id. at syllabus.
The Ohayons misinterpret Kurent's holding as a statement that a tort choice-of-law analysis will always control UM and UIM claims. But the Ohayons overlook the fact that in Kurent, this court applied Michigan tort law to the underlying accident, explicitly recognized that "[t]he Kurents' claim for uninsured motorist coverage is determined by their contractual relationship with Farmers," and interpreted the terms of that contract "[ajccording to Ohio law." (Emphasis added.) Id. at 246 and 245, 581 N.E.2d at 536. As the Sixth Circuit explained in Miller, the substantive tort question of whether the insured was "legally entitled to recover" benefits at all from the tortfeasor was the central issue in Kurent — a question that Michigan's no-fault laws answered in the negative. Id., 87 F.3d at 825. Accord Hooker v. Nationwide Mut. Ins. Co. (June 19, 1997), Cuyahoga App. No. 71472, unreported, 1997 WL 337623. Here, the substantive tort question regarding the damages Jonathon is entitled to recover from the tortfeasor is not before us. Instead, the Ohayons seek a declaration regarding the stacking and setoff provisions of their insurance agreement with Safeco — contract issues to which a contract choice-of-law analysis applies.
C. An Alleged Choice-of-Law Provision
Finally, the Ohayons contend that resort to Section 188 is unnecessary because the Safeco policy already contains a choice-of-law provision. To support this contention, the Ohayons point to the following policy language:
"OUT OF STATE COVERAGE
"If an auto accident to which this policy applies occurs in any state or province other than the one in which your covered auto is principally garaged, we will interpret your policy for that accident as follows:
"A. If the state or province has:
"1. A financial responsibility or similar law specifying limits of liability for bodily injury or property damage higher than the limit shown in the Declarations, your policy will provide the higher specified limit.
"2. A compulsory insurance or similar law requiring a nonresident to maintain insurance whenever the nonresident uses a vehicle in that state or province, your policy will provide at least the required minimum amounts and types of coverage." (Boldface sic.)
This provision of the Safeco policy assures the policyholder that he or she may drive an insured vehicle into states that may require higher levels of liability insurance without violating those states' financial responsibility laws. It appears in a section of the Safeco policy titled "PART A — LIABILITY COVERAGE." Without this provision, an insured would be required to check the financial responsibility statutes of every jurisdiction into which he or she happened to drive in order to ensure that his or her policy included sufficient liability insurance to comply with each jurisdiction's laws.
This provision, however, does not represent an express choice of law to be applied by courts in an action for UIM benefits under those independent provisions of the Safeco policy that appear in Part C. We do not invoke Restatement Section 187 to apply the law of the state chosen by the parties unless we are satisfied that the parties have actually made an express choice of law regarding the issue before the court. See Restatement at 561-562, Section 187, Comment a ("the rule of this Section is inapplicable unless it can be established that the parties have chosen the state of the applicable law. It does not suffice to demonstrate that the parties, if they had thought about the matter, would have wished to have the law of a particular state applied"). We do not agree with the Ohayons that the policy's provision for minimum out-of-state liability coverage dispenses with the need for a choice-of-law analysis regarding UIM coverage.
VIII. Conclusion
Our holding today does not determine the respective rights and liabilities of the parties in this case. Rather, we decide only that the trial court must employ Ohio law to make this determination. And as the court of appeals noted, in order for the trial court to resolve this case, it must also determine which version of R.C. 3937.18 (and related authority from this court) would apply to these facts. The parties have not briefed this issue here, and we express no opinion as to its resolution.
For the foregoing reasons, the judgment of the court of appeals is affirmed.
Judgment affirmed.
Moyer, C.J., Pfeifer and Lundberg Stratton, JJ., concur.
Douglas, Resnick and F.E. Sweeney, JJ., dissent.
. The author of the dissent states, "Having determined that this case presents issues in contract, and since appellants concede that 'under contract law analysis, Ohio law prevails,' our inquiry should end here. The only remaining issue is whether Ohio law in effect at the time of contracting upheld or prohibited setoff and antistacking provisions in a UM/UIM policy, and this issue should be remanded to the trial court for determination."
This is precisely the disposition adopted by the majority herein. By affirming the court of appeals' judgment, which reversed the trial court's decision granting summary judgment in favor of Safeco, we likewise adopt the court of appeals' disposition remanding the cause to the trial court for further proceedings. As noted supra, these proceedings will address the very issue correctly identified by the dissent as "[t]he only remaining issue" — the application of Ohio law to the stacking and setoff questions contained in the Ohayons' declaratory judgment action. Given that the dissent agrees that "our inquiry should end" precisely where the majority's does, and given that the dissent also agrees that the appellants have conceded that Ohio law would apply "under contract law analysis," the dissent's criticism of the majority's analysis as "myopic and mechanical" is puzzling.
Equally puzzling is the fact that, after deciding that "our inquiry should end" with a determination that the lower court should apply Ohio law on remand, the dissent then embarks on a lengthy analysis of what it concedes is a rare exception to the contract choice-of-law analysis in the Restatement of the Law 2d, Conflict of Laws. At the conclusion of this analysis, the dissent declares that, in fact, Pennsylvania law should apply. This conclusion directly contradicts the dissent's prior statement that "our inquiry should end" (as it already does) with the appellants' concession that Ohio law prevails.
The dissent also decides that the majority's stated reasons for rejecting the Ohayons' reliance on Csulik, 88 Ohio St.3d 17, 723 N.E.2d 90, "make no sense other than to artificially limit its holding." This is a flawed contention, given that both the majority and the dissent find the Ohayons' reliance on Csulik "misplaced" on the very same basis —that the contractual language at issue here, unlike the contractual language at issue in Csulik, is simply not ambiguous. Compare the majority's statement, "this provision differs on its face from the one addressed in Csulik and is not ambiguous" with the dissent's statement, "the Safeco policy in this case contains no such ambiguity."