Court Opinion

ID: 6781216
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:56:21.74944+00
Date Added: 2024-06-11T16:02:52.134731
License: Public Domain

Cook, J.,
dissenting. I agree with Justice Stratton that Schumacher lacked standing, since he was not a party to the contract, an insured under the policy, or an intended third-party beneficiary. I further dissent from the majority’s opinion because a plaintiff must be an insured under the applicable liability policy in order to be eligible for imposition of UM coverage by operation of law. Accordingly, the majority’s holding that UM coverage may be extended in favor of a non-insured expands R.C. 3937.18 without support and revises the contract entered into between Motorists and Relay Express.
It is a well-established principle that UM coverage was designed to protect insureds. The text of R.C. 3937.18(A) enunciates this concept: “No automobile liability or motor vehicle liability policy * * * shall be delivered or issued for delivery in this state * * * unless both of the following coverages are offered to persons insured under the policy * * *: (1) Uninsured motorist coverage, which * * * shall provide protection for bodily injury * * * for the protection of insureds thereunder * * * [and] (2) Underinsured motorist coverage, which * * * shall provide protection for insureds thereunder * * * .” (Emphasis added.)
*361Based upon this principle, this court has stated that the object of UM coverage is to “ ‘afford the insured additional protection in the event of an accident.’ ” (Citation omitted.) Motorists Mut. Ins. Co. v. Tomanski (1971), 27 Ohio St.2d 222, 224, 56 O.O.2d 133, 134, 271 N.E.2d 924, 925. We have further interpreted UM coverage as extending only to insureds, specifying that the claimant must be an insured in order to recover. Martin v. Midwestern Group Ins. Co. (1994), 70 Ohio St.3d 478, 480, 639 N.E.2d 438, 440.
Where UM coverage is not offered pursuant to the requirements of R.C. 3937.18 or not properly rejected, it is well settled that such coverage will be imposed by operation of law. See, e.g., Abate v. Pioneer Mut. Cas. Co. (1970), 22 Ohio St.2d 161, 51 O.O.2d 229, 258 N.E.2d 429. When imposed by operation of law, such coverage extends only to the insureds under the liability policy, as they are the individuals who would have benefited from coverage had it been offered. Because coverage by operation of law is rooted in the requirements of R.C. 3937.18, it follows that it exists for the benefit of the individuals R.C. 3937.18 was designed to protect.
Prior to today, this court apparently agreed with that concept, as it had routinely extended coverage by operation of law only to insureds under the policy at issue. See, e.g., Gyori v. Johnston Coca-Cola Bottling Group, Inc. (1996), 76 Ohio St.3d 565, 669 N.E.2d 824; Scott-Pontzer v. Liberty Mut. Fire Ins. Co. (1998), 85 Ohio St.3d 660, 710 N.E.2d 1116. Although the majority now departs from this fundamental principle, case law from this and other jurisdictions continues to support it. See, e.g., 9 Couch on Insurance (3 Ed.1997) 122-90 to 122-91, Section 122:46 (setting forth the effect of failure to offer coverage and implying that it is limited to insureds); Westfield Ins. Co. v. Nationwide Mut. Ins. Co. (1993), 99 Ohio App.3d 114, 650 N.E.2d 112 (determining whether an individual claiming coverage by operation of law was an insured); Abate v. Pioneer Mut. Cas. Co., supra, at 163, 51 O.O.2d at 230, 258 N.E.2d at 431 (“We therefore conclude that unless the insured expressly rejects such protection, the uninsured motorist coverage is provided for him by operation by law.” [Emphasis added.]).
So basic is this concept that this court recently recognized it in Scott-Pontzer v. Liberty Mut. Fire Ins. Co., supra, as the first issue to be addressed in the imposition-of-coverage analysis. There, Justice Douglas wrote on behalf of the court: “If we find [the plaintiff] was not an insured under the policies, then our inquiry is at an end.” Id. at 662, 710 N.E.2d at 1118.
Today’s decision, however, bypasses that important threshold question entirely. In holding that coverage should be imposed in favor of Schumacher by operation of law, the majority neither questions nor resolves whether he was an insured under the Relay Express policy. In fact, the majority avoids any analysis of the *362contract terms whatsoever, concluding only that to hold otherwise would be to make a mockery of the purposes of R.C. 3937.18 and the Ohio Constitution.
Had the majority asked the appropriate question and analyzed whether Schumacher was an insured under the policy, it would have found that he unquestionably was not. Schumacher was neither the named insured in the policy nor was he included as an insured under the policy terms. Because he was the “owner” of the covered vehicle he occupied, he was specifically excluded from the category of “Who Is An Insured” under Section II(A)(1)(b)(2) of the Business Auto Coverage Form.
Nor was Schumacher an insured by means of the Uninsured Motorists Coverage Endorsement to the policy. That endorsement states in Paragraph B.3. that any occupant of a covered auto is an insured for UM purposes. But Schumacher’s vehicle was not listed on the Declarations Page as a covered auto for UM insurance purposes. Therefore, he was not occupying a covered auto when injured and cannot be considered an insured under the endorsement.
Equally untenable is Schumacher’s attempt to categorize himself as an insured after UM coverage is imposed by operation of law. Schumacher argues that once UM coverage is imposed, he would have been occupying a “covered auto.” Therefore, he concludes, he would qualify as an insured and would consequently be entitled to coverage by operation of law. But that circular argument overlooks the fact that R.C. 3937.18, by its very terms, protects those individuals who are insured under the basic liability policy. Those are the only individuals to whom coverage may be extended and Schumacher did not fit into that category.
Because Schumacher was not an insured under the policy terms, UM coverage may not be extended to him by operation of law. Nevertheless, the majority concludes that he was entitled to recovery on precisely that basis. In so deciding, the majority extends UM coverage in favor of a non-insured and rejects the clear language of the contract in favor of its own notions of equity.
Moyer, C.J., and Lundberg Stratton, J., concur in the foregoing dissenting opinion.