Court Opinion

ID: 6764696
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:35:24.01512+00
Date Added: 2024-06-11T16:02:40.443782
License: Public Domain

Holmes, J.,
dissenting. The process of this court’s annihilation of insurance policy language as demonstrated in Wood v. Shepard (1988), 38 Ohio St.3d 86, 526 N.E.2d 1089, continues here.2 It is clear from this opinion that henceforth in Ohio, contracts of insurance, particularly their limits of recovery, will mean *544only what this court wishes them to mean, notwithstanding what the parties have agreed to.
The basic principle and legislative purpose of uninsured/underinsured motorist coverage were set forth in Bartlett v. Nationwide Mut. Ins. Co. (1973), 33 Ohio St.2d 50, 52, 62 O.O.2d 406, 408, 294 N.E.2d 665, 666, quoted favorably in Sexton v. State Farm Mut. Auto. Ins. Co. (1982), 69 Ohio St.2d 431, 436, 23 O.O.3d 385, 388, 433 N.E.2d 555, 559:
“ * * * [T]he legislative purpose in creating compulsory uninsured motorist coverage was to place the injured policyholder in the same position, with regard to the recovery of damages, that he would have been in if the tortfeasor had possessed liability insurance.”
The purpose of the uninsured motorist law had been carried out here when the appellant was paid a total of $400,000. It cannot reasonably be argued that the Derrs individually or collectively could have recovered more than $400,000 from the tortfeasors’ insurer if the tortfeasors had been covered by a liability insurance policy with a single limit of $400,000, as contained in the Westfield policy.
The purposes of R.C. 3937.18 have been properly met here in that the Derrs, individually and in the aggregate, received what they would have received if the tortfeasors had been insured in the amount selected by the Derrs in their policy. Also, the Derrs received what they would have received if the tortfeasors had been uninsured.
Specifically as to the setoff required by this policy, the language of the setoff is clear and unambiguous, and such a setoff is clearly authorized by statute and pronouncements from this court. In James v. Michigan Mut. Ins. Co. (1985), 18 Ohio St.3d 386, 18 OBR 440, 481 N.E.2d 272, we set forth at paragraph two of the syllabus:
“An insurer may apply payments made by or on behalf of an underinsured motorist as a setoff directly against the limits of its underinsured motorist coverage, so long as such setoff (1) is clearly set forth in the terms of the underinsured motorist coverage and (2) does not lead to a result wherein the insured receives a total amount of compensation that is less than the amount of compensation that he would have received if he had been injured by an uninsured motorist.”
Applying the law enunciated in James here, it is apparent that the setoff provision in the Westfield policy is unambiguously set forth and provides as follows:
*545“However, the limit of liability shall be reduced by all sums paid because of the bodily injury by or on behalf of persons or organizations who may be legally responsible. * * * ”
This court in construing a similar setoff provision in James stated:
“ * * * The setoff provision set forth in the endorsement to the appellee’s insurance policy states that the ‘limit of liability shall be reduced by all sums paid because of the bodily injury by or on behalf of persons or organizations who may be legally responsible.’ (Emphasis added.) Even under a construction most favorable to the insured, this provision is clear and unambiguous [emphasis added], and we would be altering the plain terms of the appellee’s insurance policy if we were to limit the application of the setoff described herein only to instances where the insured has been fully compensated for all of his injuries. * * * ” Id., 18 Ohio St.3d at 389, 18 OBR at 443, 481 N.E.2d at 275.
The same law announced in James should apply here, even though the instant policy is a single limit rather than a split-limit policy. The law in Ohio is clear that the setoff is to be applied not to the insured’s total damages, but rather to the insurer’s policy limit. With respect to the right to setoff by the insurer providing underinsured motorist coverage, R.C. 3937.18(A)(2) provides, in pertinent part:
“ * * * The limits of liability for an insurer providing underinsured motorist coverage shall be the limits of such coverage [the insured’s uninsured motorist coverage], less those amounts actually recovered under all applicable bodily injury liability bonds and insurance policies covering persons liable to the insured.”
Accordingly, in my view the majority of the court of appeals correctly found that Westfield was entitled under the law and the specific terms of its insurance contract to set off all sums paid to the Derrs directly against the total policy limits for which the Derrs contracted. The total policy limit in this case was $400,000 and the total sum paid by American was $100,000, leaving Westfield with a total liability of $300,000, which it satisfied.
Thus, I would affirm the judgment of the court of appeals.
Moyer, C.J., and Wright, J., concur in the foregoing dissenting opinion.

. Continued reliance on Wood v. Shepard (1988), 38 Ohio St.3d 86, 526 N.E.2d 1089, is misplaced, given our recent pronouncements in State Farm Auto. Ins. Co. v. Rose (1991), 61 Ohio St.3d 528, 575 N.E.2d 459 (limiting Wood’s applicability to cases where the insurer’s contract is ambiguous as to separate claims and policy limits), and Hill v. Allstate Ins. Co. (1990), 50 Ohio St.3d 243, 553 N.E.2d 658 (distinguishing Wood and holding that separate wrongful death claims do not exist where the insured’s policy limits are identical to a tortfeasor’s liability insurance coverage, since separate claims are cognizable only to the extent the insured’s single limit of coverage would permit them).