Court Opinion

ID: 3694692
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:35:45.001895+00
Date Added: 2024-06-11T14:09:43.146382
License: Public Domain

I believe that the majority comes to the wrong conclusion because it approaches the problem incorrectly.
Motorists contends, and the majority agree, that R.C.2744.05(B) "retroactively destroys a subrogation claim which existed prior to the effective *Page 98 
date of the statute." They conclude, therefore, that because the law recognizes a vested property right in an accrued cause of action, retroactive application of the statute, which would abort Motorists' claim, is unconstitutional.
However, a subrogee's rights (here, the insurance company) are derivative of the subrogor's. Thus, the rights of the subrogee can rise no higher than those of the subrogor. Automobile Ins.Co. of Hartford v. Pennsylvania Rd. Co. (1938), 133 Ohio St. 449,454, 11 Ohio Op. 148, 150, 14 N.E.2d 613, 615. Therefore, the statute must be examined from the subrogor's perspective.
R.C. 2744.05(B) provides that any benefits a claimant receives or is entitled to receive from a policy of insurance or any other source shall be deducted from any award recovered by a claimant against a political subdivision. The statute thus precludes the claimant from twice recovering for the same damages. The predicate of liability, however, has not been changed by the statute — the political subdivision remains liable to the claimholder for its negligence. R.C. 2744.05(B) merely affects the claimant's available remedy by reducing the amount of damages the political subdivision must pay. The issue, therefore, is whether a statute affecting the amount of recovery violates the constitutional prohibition against retroactive legislation.
In French v. Dwiggins (1984), 9 Ohio St. 3d 32, 9 OBR 123,458 N.E.2d 827, the Ohio Supreme Court determined that an amendment to Ohio's wrongful death statute expanding the amount of recoverable damages represented a remedial change in the statute and could be applied retrospectively. If French is still good law, we are compelled to hold that R.C. 2744.05(B) affects only a remedial right and its retroactive application is constitutional.
Furthermore, the suggestion that the statute somehow unconstitutionally impairs the subrogation contract is misplaced. "`One whose rights, such as they are, are subject to state restriction, cannot remove them from the power of the State by making a contract about them.'" Allied Structual Steel Co. v.Spannaus (1978), 438 U.S. 234, 241, quoting Hudson Cty. WaterCo. v. McCarter (1908), 209 U.S. 349, 357.
                          Assignment of Error I
"Ohio Revised Code Section 2744.05(B) creates a classification which discriminates against insurance companies and other subrogated claimholders in violation of constitutional equal protection guarantees."
Motorists relies upon Greyhound Food Mgt., Inc. v. Dayton (S.D. Ohio 1986), 653 F. Supp. 1207, in support of this assignment of error. In Greyhound, the court determined that R.C. 2744.05(B) created "a classification between those holding claims under a subrogation provision in an insurance or other contract (subrogated claimholders) and other claimholders." Id. at 1213. As the legislation neither affects fundamental rights nor involves a suspect class, the Greyhound court properly applied the rational basis test:
"* * * `The rational basis test requires the Court to identify the class created by the statute, and then to determine whether the classification is rationally related to a legitimate governmental interest.' Edwards v. [Valdez (C.A. 10, 1986)], 789 F.2d [1477,] at 1483 * * *."
The Greyhound court determined that the legitimate state purpose behind R.C. 2744.05(B) involved the "[p]rotection of the fiscal integrity of [the] state's political subdivisions" due to their "inability to acquire insurance and the astronomical increase in liability claims and exposure." Greyhound, supra, at 1214. However, the Greyhound *Page 99 
court concluded that the classification created by the statute was not rationally related to the legitimate state purpose, and therefore determined that R.C. 2744.05(B) violated the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution.
As suggested by the analysis under the previous assignment of error, I disagree with the classification the Greyhound court has identified as being created by R.C. 2744.05(B). As distinguished from a classification between contractually subrogated claimholders and other claimants, the classification created by R.C. 2744.05(B) is between claimants entitled to receive benefits from a collateral source and claimants not entitled to such benefits. The end result of such a classification is that the victims of a political subdivision's negligence are not prevented from receiving full compensation for their injuries, while enabling the municipalities to conserve scarce resources. I conclude, therefore, that there is a rational relationship between the classification and the legitimate state purpose.
I would overrule assignment of error one.