Court Opinion

ID: 3771728
Source: CourtListenerOpinion
Date Created: 2016-07-06 07:23:58.964683+00
Date Added: 2024-06-11T18:05:08.509950
License: Public Domain

I would sustain appellant's first and second assignments of error and reverse the judgment of the trial court.
I believe that the law in Ohio as to prejudice to an insured by virtue of an insurer's failure to give seasonable notice of a coverage disclosure was properly stated by Judge Reece of the Ninth Appellate District in Turner Liquidating v. St. PaulSurplus (1994), 93 Ohio App. 3d 292, 638 N.E.2d 174, with Judges Baird and Cook concurring. Turner essentially holds, for this purpose, that prejudice must be shown by the record, not presumed by a mere measure of time, as the lower court found in this case.
Here, West told Miller, Bush's lawyer, by letter dated November 15, 1991, that coverage was uncertain. This first communication to Miller was only five months after Miller filed the answer to the complaint for Bush. The trial court measures time from the filing of the complaint on May 24, 1991, to the reservation of rights letter sent by West to Bush on May 18, 1993. In twenty-two separate fact findings, the trial court finds no facts as to actual prejudice, but rather concludes as a matter of law that Bush was prejudiced by giving up the right to conduct his own defense. This contradicts Bush's own testimony that he was involved in this litigation from the outset.
The general rule is that waiver and estoppel cannot be used to extend the coverage of an insurance policy. This could leave no recourse for an insured whose insurer withdraws its defense the day before trial. The Ninth District's exception to the general rule allows the insured an opportunity to show that a last-hour withdrawal may prejudice his or her rights. Turner at 299, 300,638 N.E.2d at 179, 179-180. The trial court below has swung the pendulum all the way to the other side by presuming prejudice by the mere passage of time where none is shown in fact. I think the middle ground requiring the insured to show actual prejudice to qualify for the exception is the just result. Therefore, I would reverse. *Page 581