Opinion ID: 888364
Heading Depth: 2
Heading Rank: 1

Heading: Did the District Court misapply Ohio law to allow offsets and preclude stacking?

Text: ¶ 40 Ohio and Montana share similar principles of contract interpretation. The interpretation of an unambiguous insurance contract presents a question of law. Nationwide Mut. Fire Ins. v. Guman Bros. Farm, 73 Ohio St.3d 107, 652 N.E.2d 684, 686 (1995). Provisions in an insurance contract that are reasonably susceptible of more than one interpretation are construed strictly against the insurer and liberally in favor of the insured. King v. Nationwide Ins. Co., 35 Ohio St.3d 208, 519 N.E.2d 1380, 1383 (1988). ¶ 41 The personal auto policy listed Mary Modroo as the Named Insured and provided that Nationwide would pay compensatory damages that you or a relative are legally entitled to recover from the owner or driver of an underinsured motor vehicle under the tort law of the state where the motor vehicle accident occurred.... The personal auto policy also provides that the contract law of the State of Ohio governs the interpretation of this contract. Modroo asserts that Ohio law holds that policies containing ambiguous choice-of-law language  i.e., some language saying Ohio law applies, some suggesting otherwise ... must be construed to apply whatever law is most favorable to the insured. Modroo relies on Csulik v. Nationwide Mut. Ins. Co., 88 Ohio St.3d 17, 723 N.E.2d 90 (2000) (plurality) to support its proposition. ¶ 42 In Csulik, the Ohio Supreme Court held that language requiring Nationwide to pay compensatory damages, which are due by law to you or a relative from the owner or driver of an uninsured motor vehicle was ambiguous because the phrase due by law was subject to more than one interpretation. Csulik, 723 N.E.2d at 91-92 (plurality). The insureds argued that Pennsylvania law, the law of the state where the accident occurred, should govern UIM recovery; Nationwide argued that the law of Ohio applied. Csulik, 723 N.E.2d at 91 (plurality). ¶ 43 The court determined that the due by law language was ambiguous because it was unclear whether Nationwide must pay what is due by the law of the state where the accident occurred or due by Ohio law. Csulik, 723 N.E.2d at 91 (plurality). Csulik's policy required an insured to sue for UIM coverage within the time limits provided by the state in which the accident occurred, and the court reasoned that this language could lead one to logically conclude that the laws of the accident state also determined the rights of the insured under the policy. Csulik, 723 N.E.2d at 92 (plurality). Based on its practice of strictly construing ambiguities against the insurer and liberally in favor of the insured[,] the court declined to conduct a choice-of-law analysis and held that Pennsylvania law, which more favored the insured, applied to the insurance contract. Csulik, 723 N.E.2d at 92-93 (plurality). ¶ 44 Modroo asserts that the personal auto policy's multiple choice-of-law provisions result in an ambiguity. Under Csulik, Modroo argues that Montana law should apply to determine Modroo's rights because Montana law prohibits offsets and allows stacking of coverage; thus, Montana law favors Modroo. We disagree. ¶ 45 The personal auto policy provides that Nationwide will pay compensatory damages that you or a relative are legally entitled to recover from the owner or driver of an underinsured motor vehicle under the tort law of the state where the motor vehicle accident occurred.... This policy language unambiguously invokes Montana tort law. The personal auto policy also provides that the contract law of the State of Ohio governs the interpretation of this contract. This policy language unambiguously designates that Ohio law governs the interpretation of the insurance contract. The presence of two choice-of-law provisions, however, does not necessarily create an ambiguity. Contrary to Modroo's assertion, Csulik does not hold that a policy is ambiguous because different state's laws apply to different provisions. In fact, the Ohio Supreme Court specifically discussed Nationwide's ability to designate different state's laws to the policy provisions, and the court implied that Nationwide could have clarified the `due by law' language by following this practice. Csulik, 723 N.E.2d at 92 (plurality). In short, the provisions in the personal auto policy are not ambiguous because they are not susceptible of more than one interpretation.... King, 519 N.E.2d at 1383. Thus, under the personal auto policy, Montana tort law determines Modroo's entitlement to compensatory damages, and Ohio contract law governs the interpretation of the insurance contract. ¶ 46 The personal auto policy limits the amounts recoverable under UIM coverage to $300,000 per person, and the policy contains anti-stacking language, which states that the per person policy limit shall be enforceable regardless of the number of ... vehicles or premiums shown in the Declarations or policy.... At the time of the accident, Modroo insured two vehicles under the personal auto policy with Nationwide. The personal auto policy also provides that any amounts available under UIM coverage will be offset by any amounts available for payment by or on behalf of any liable parties.... ¶ 47 The issue presented by Modroo does not concern the amount of damages from Mamie's accident; rather, it concerns the amount of coverage that Nationwide must provide under the personal auto policy. The amount of coverage available under a UIM provision is defined under principles of contract law, not tort law. State Farm v. Estate of Braun, 243 Mont. 125, 128, 793 P.2d 253, 255 (1990). Whether Modroo may recover under multiple UIM coverages thus presents a question of contract law, and Ohio law applies to determine the amount of coverage that Modroo may recover under the personal auto policy. Ohio law allows an insurance contract to include terms and conditions that preclude any and all stacking of UIM coverages. Ohio Rev.Code Ann. § 3937.18(F). Ohio law also states that UIM policy limits shall be reduced by those amounts available for payment under ... insurance policies covering persons liable to the insured. Ohio Rev.Code Ann. § 3937.18(C). Based on these statutory provisions, we conclude that the District Court did not misapply Ohio law when it denied the stacking of coverages and allowed offsets under the personal auto policy.