Case Name: Kurent et al., Appellants, v. Farmers Insurance of Columbus, Inc., Appellee
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1991-12-18
Citations: 62 Ohio St. 3d 242
Docket Number: No. 90-1633
Parties: Kurent et al., Appellants, v. Farmers Insurance of Columbus, Inc., Appellee.
Judges: Moyer, C.J., Holmes and Wright, JJ., concur.
Reporter: Ohio State Reports, Third Service
Volume: 62
Pages: 242–251

Head Matter:
Kurent et al., Appellants, v. Farmers Insurance of Columbus, Inc., Appellee.
[Cite as Kurent v. Farmers Ins. of Columbus, Inc. (1991), 62 Ohio St.3d 242.]
(No. 90-1633
Submitted September 18, 1991
Decided December 18, 1991.)
Beños, Cummings, Mann & Valenti Co., L.P.A., and Wayne F. Beños, for appellants.
Christoff, Slater & Zurz, James W. Slater and Richard V. Zurz, Jr., for appellee.

Opinion:
Herbert R. Brown, J.
The sole issue before the court is whether the Kurents are entitled to uninsured motorist benefits under their policy with Farmers for an automobile accident that occurred in Michigan and was caused by a Michigan resident who is insured pursuant to Michigan's no-fault insurance laws. For the reasons which follow we hold that the Kurents are not entitled to uninsured motorist coverage.
The basis of Farmers' obligation to the Kurents lies in the insurance contract and our analysis begins with an examination of the policy as it applied when the Kurents entered Michigan and became involved in the accident with Karczewski.
Under Part I — Liability, the Kurents' insurance policy provides:
"An insured person may become subject to the financial responsibility law, compulsory insurance law of [sic ] similar law of another state or in Canada. This can happen because of ownership, maintenance or use of your insured car when you travel outside of Ohio. We will interpret this policy to provide any broader coverage required by those laws, except to the extent that other liability insurance applies. No person may collect more than once for the same elements of loss."
The effect of this contractual provision was to provide the Kurents with adequate insurance coverage when they left Ohio and became subject to the laws of a different jurisdiction. The contract's out-of-state provision required Farmers to provide no-fault liability coverage as required by Michigan law while the Kurents were traveling in Michigan. Accordingly, the Kurents received no-fault coverage from Farmers for the Michigan accident. The no-fault benefits consisted of economic damages, which included lifetime medical expenses for their injuries and wage loss during the first three years after the date of the accident, subject to certain restrictions. M.C.L.A. Section 500.-3107.
Central to the dispute is the Kurents' claim for non-economic damages. Under Michigan no-fault laws the Kurents are not entitled to recover non-economic damages unless their claim reaches the threshold level. Accordingly, they seek non-economic damages under the uninsured motorist coverage of their policy.
The uninsured motorist provision of the Kurents' policy provides in relevant part:
"We will pay all sums which an insured person is legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle because of bodily injury sustained by the insured person. The bodily injury must be caused by accident and arise out of the ownership, maintenance or use of the uninsured motor vehicle.
"Determination as to whether an insured person is legally entitled to recover damages or the amount of damages shall be made by agreement between the insured person and us. If no agreement is reached, the decision will be made by arbitration." (Emphasis added.)
The uninsured motorist provision is subject to the following definition and limitation:
"3. Uninsured motor vehicle means a motor vehicle which is:
"a. Not insured by a bodily injury liability bond or policy at the time of the accident.
"d. Insured by a bodily injury liability bond or policy at the time of the accident but the Company denies coverage or is or becomes insolvent." (Emphasis added.)
The policy's language complies with R.C. 3937.18 which requires insurance companies to offer uninsured motorist coverage to Ohio residents. The General Assembly enacted R.C. 3937.18 to protect Ohio residents from financially irresponsible drivers. York v. State Farm Fire & Cas. Co. (1980), 64 Ohio St.2d 199, 202, 18 O.O.3d 412, 414, 414 N.E.2d 423, 425. The basic purpose of R.C. 3937.18 is to protect persons injured in automobile accidents from uncompensated losses because a tortfeasor lacked liability coverage. It is a protection against injury at the hands of irresponsible or impecunious drivers. It was not intended to provide coverage in every uncompensated situation. York, 64 Ohio St.2d at 202, 18 O.O.3d at 413-414, 414 N.E.2d at 425. See, also, State Farm Mut. Auto. Ins. Co. v. Webb (1990), 54 Ohio St.3d 61, 61-62, 562 N.E.2d 132, 133, fn. 2. In accordance with this intent we have previously held that an injured person is not entitled to uninsured motorist coverage where the insured tortfeasor-motorist is immune from liability pursuant to statutory immunity. In Webb we stated that an insurance company must be able to assert the same defenses as the uninsured driver. Id. at 64, 562 N.E.2d at 135.
The Kurents' claim for uninsured motorist coverage is determined by their contractual relationship with Farmers. Under the contract the Kurents must show (1) Karczewski's vehicle was uninsured and (2) they are legally entitled to recover from him.
The Kurents claim they satisfied the policy and statutory definition of an uninsured vehicle in that AAA "denied coverage" based on the fact that the Kurents' injuries did not rise to Michigan's threshold level. Farmers, on the other hand, maintains that AAA did not deny coverage to the Kurents because they were not "legally entitled to recover" non-economic damages.
We agree with Farmers. According to Ohio law, the phrase "legally entitled to recover" means the insured must be able to prove the elements of his or her claim. Sumwalt v. Allstate Ins. Co. (1984), 12 Ohio St.3d 294, 12 OBR 368, 466 N.E.2d 544, at syllabus. The amount of damages is one element of the claim the Kurents must prove. Further, uninsured motorist coverage is dependent on the uninsured motorist's legal liability to the injured person. See York, 64 Ohio St.2d at 202, 18 O.O.3d at 414, 414 N.E.2d at 425. Therefore the Kurents are only entitled to recover damages which Karczewski is legally liable to pay.
Michigan law determines Karczewski's legal liability to the Kurents. He is a Michigan resident and the accident occurred in Michigan. A motorist traveling in Michigan accepts Michigan law as it pertains to accidents occurring in Michigan. That motorist does not have the option, for example, of claiming that Ohio's speed limit or traffic laws govern simply because the motorist resides in Ohio. The notion that Ohio law somehow controls the amount of damages flowing from torts committed on Michigan highways is akin to a contention that a Michigan resident who commits murder in Ohio is exempt from the death penalty because Michigan does not recognize capital punishment.
Under Michigan law, the Kurents have not proved all the elements of their claim against Karczewski because they have not shown non-economic damages beyond the threshold level. Therefore, the Kurents are not "legally entitled to recover" from Karczewski and may not collect uninsured motorist coverage for their claim against him.
Our decision to apply Michigan tort law to the underlying accident is consistent with the Restatement of the Law of Conflicts approach we adopted in Morgan v. Biro Mfg. Co. (1984), 15 Ohio St.3d 339, 341-342, 15 OBR 463, 465-466, 474 N.E.2d 286, 288-289. Specifically, Section 146 of 1 Restatement of the Law 2d, Conflict of Laws (1971) 430, creates a presumption that the law of the place of the injury controls unless another jurisdiction has a more significant relationship to the lawsuit. Comment d to Section 146 emphasizes that the state in which both the conduct and the injury occur has the dominant interest in regulating that conduct, determining whether it is tortious in character, and determining whether the interest is entitled to legal protection. Id. at 431.
Section 145 of the Restatement of the Law of Conflicts 2d, supra, at 414, sets forth factors to determine whether one state has a more significant relationship to the lawsuit. These include the place of injury, the place where the conduct causing the injury occurred, the residence or place of incorporation and/or business of the parties, and the place where the relationship between the parties is centered.
The Kurents argue that these factors weigh more heavily in favor of Ohio's interest. They urge that Ohio's policy to fully compensate injured drivers for non-economic damages, regardless of amount, must apply to an Ohio contract between two Ohio parties. Essentially their argument is that even though Michigan tort law applies to the actual accident, Ohio tort law should be applied to the accident for purposes of determining uninsured motorist coverage. They argue that Michigan's interests are unaffected by any decision we reach today because Michigan law will still protect its resident, Karczewski, from liability. Their position is that if they are not allowed to recover for non-economic damages under their uninsured motorist provision, they will have been deprived of the uninsured motorist protection for which they paid and which Ohio law requires.
We are not persuaded that Ohio's interests are sufficient to override the presumption that the place where the injury occurred determines the rights and liabilities of the parties. The Kurents are only entitled to uninsured motorist coverage when they are injured by an uninsured motorist. Since Karczewski is not an uninsured motorist, they have not been denied their uninsured motorist benefits and R.C. 3937.18 has not been violated.
Secondly, the Kurents overlook Farmers' subrogation rights under the insurance contract. The relevant provisions of R.C. 3937.18 and the insurance contract recognize Farmers' right to proceed directly against the uninsured motorist after paying uninsured motorist coverage. As the subrogee, Farmers stands in the Kurents' shoes and can only assert claims against Karczewski that the Kurents can assert. See Bogan v. Progressive Cas. Ins. Co. (1988), 36 Ohio St.3d 22, 29-30, 521 N.E.2d 447, 455. The Kurents have no claim against Karczewski to which Farmers can be subrogated. To hold that Farmers must pay uninsured motorist coverage to the Kurents in the absence of subrogation rights would be contrary to the intent which underlies R.C. 3937.18. Further, such a holding would deprive Farmers of rights for which it contracted.
Accordingly, we hold that when 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.
For the above-stated reasons, the judgment of the court of appeals is affirmed.
Judgment affirmed.
Moyer, C.J., Holmes and Wright, JJ., concur.
Sweeney, Douglas and Resnick, JJ., dissent.
. A suit is currently pending in Michigan to determine whether the Kurents' claim surpasses the threshold limit. We make no determination on the extent of the Kurents' damages as that issue is not before us.
. Under Part V — CONDITIONS, the insurance policy specifies:
"5. OUR RIGHTS to Recover Payment
"In the event of any payment under this policy, we are entitled, except where prohibited by law, to all the rights of recovery of the person to whom payment was made against another.
. R.C. 3937.18(E) provides in relevant part:
"In the event of payment to any person under the coverages required by this section and subject to the terms and conditions of such coverages, the insurer making such payment to the extent thereof is entitled to the proceeds of any settlement or judgment resulting from the exercise of any rights of recovery of such person against any person or organization legally responsible for the bodily injury or death for which such payment is made