Court Opinion

ID: 2972341
Source: CourtListenerOpinion
Date Created: 2015-09-22 16:47:48.736827+00
Date Added: 2024-06-11T15:30:48.301785
License: Public Domain

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                           File Name: 05a0401n.06
                             Filed: May 16, 2005

                                           No. 04-3289

                          UNITED STATES COURT OF APPEALS
                               FOR THE SIXTH CIRCUIT

JAMES HINDALL,                                    )
                                                  )
       Plaintiff-Appellant,                       )
                                                  )
v.                                                )   ON APPEAL FROM THE UNITED
                                                  )   STATES DISTRICT COURT FOR THE
WINTERTHUR INTERNATIONAL;                         )   NORTHERN DISTRICT OF OHIO
TRAVELERS PROPERTY CASUALTY                       )
COMPANY,                                          )
                                                  )
       Defendants-Appellees.                      )

       Before: KEITH, MOORE, and GIBBONS, Circuit Judges.
       JULIA SMITH GIBBONS, Circuit Judge. Plaintiff-appellant James Hindall was in an

automobile accident.1 He settled with the tortfeasor for the limit of her liability policy, but his

damages exceeded this amount. Hindall then sought coverage under his employer’s insurance

policies based upon the Ohio Supreme Court’s decision in Scott-Pontzer v. Liberty Mutual Fire

Insurance Co., 710 N.E.2d 1116 (Ohio 1999). The district court granted summary judgment to the

defendants,   because    it   concluded    that   Hindall’s   employer     had   validly   rejected

uninsured/underinsured motorist coverage under its policies. We reversed the district court, holding

that coverage had arisen by operation of law. Hindall v. Winterthur Int’l, 337 F.3d 680 (6th Cir.

2003). The case was remanded back to the district court. Subsequently, the Ohio Supreme Court

       1
        This is a diversity case, brought pursuant to 28 U.S.C. § 1332, in which Ohio law controls.
Hindall v. Winterthur International, No. 04-3289

issued its decision in Westfield Insurance Co. v. Galatis, 797 N.E.2d 1256 (Ohio 2003), which

severely limited Scott-Pontzer by holding that a party could only obtain uninsured/underinsured

motorist coverage under an employer’s policies if the party was injured while driving in the course

and scope of employment. Because Hindall conceded that he was not acting within the course and

scope of employment when his accident occurred, the district court dismissed his case based upon

Galatis.

       Hindall appeals, arguing that Galatis should not be applied retroactively to his case. Under

Ohio law, “a decision of a court of supreme jurisdiction overruling a former decision is retrospective

in its operation, and the effect is not that the former was bad law, but that it never was the law.”

Peerless Elec. Co. v. Bowers, 129 N.E.2d 467, 468 (Ohio 1955). Absent a declaration that the

decision should only apply prospectively, “the decision shall be applied retrospectively as well.”

State ex rel. Bosch v. Indus. Comm’n, 438 N.E.2d 415, 418 (Ohio 1982). “The one general

exception to this rule is where contractual rights have arisen or vested rights have been acquired

under the prior decision.” Peerless, 129 N.E.2d at 468.

       In Hindall’s case, neither exception prevents the retroactive application of Galatis. The

contractual rights exception was designed so that courts would not “disturb the operation of

contracts formed in contemplation of and reliance upon law that is later overturned by judicial

decision.” Parks v. Rice, 809 N.E.2d 1192, 1197 (Ohio Ct. App. 2004). Hindall entered into a

contract with the tortfeasor because of Scott-Pontzer, but he never entered into a contract with the

insurance company defendants. Rather, his employer purchased insurance policies from the

defendants; his right to recover under those policies arose because of Scott-Pontzer and not because

                                                -2-
Hindall v. Winterthur International, No. 04-3289

he himself had entered into a contract with the defendants. The application of Galatis to his case

will not interfere with the operation of any contract to which Hindall is a party, making the

contractual rights exception inapplicable. With respect to the vested rights exception, a right does

not vest “unless it constitutes more than a mere expectation or interest based upon an anticipated

continuance of existing law.” Kallas v. Ohio Water Serv. Co., 725 N.E.2d 324, 329 (Ohio Ct. App.

1999) (internal quotation and citation omitted). Hindall merely had an expectation that Scott-

Pontzer would continue to be good law and therefore does not have a vested right to have its rule

applied to his case.

       Hindall also argues that his reliance interest and the law-of-the-case doctrine make the

application of Galatis to his case unfair. Hindall’s arguments fail. Detrimental reliance has not been

recognized as one of the limited exceptions to the general rule that an Ohio Supreme Court decision

should apply retroactively.2 See Peerless, 129 N.E.2d at 468. With respect to the law-of-the-case

doctrine, the Ohio Supreme Court’s decision in Hopkins v. Dyer establishes that “the decision in

Galatis constituted extraordinary circumstances that created an exception to the law-of-the-case

doctrine and that . . . obligated [the lower court] to apply Galatis.” 820 N.E.2d 329, 334 (Ohio

2004). Thus, while this court previously stated that coverage had arisen by operation of law under

the Travelers and Winterthur policies, we are obligated to apply Galatis because it represents a

       2
        While Galatis discusses potential plaintiffs’ reliance interest on Scott-Ponzter, it does so in
the context of deciding whether to depart from the principle of stare decisis. The Ohio Supreme
Court’s conclusion that “[n]o reliance interest will be jeopardized by limiting Scott-Pontzer,”
Galatis, 797 N.E.2d at 1270, weighs against Hindall’s argument that his reliance interest justifies
allowing his case to proceed under Scott-Pontzer.

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Hindall v. Winterthur International, No. 04-3289

fundamental change in Ohio law requiring a departure from the law-of-the-case doctrine.3

        For these reasons, we conclude that Galatis applies retroactively to Hindall’s case and

prevents him from recovering under the policies issued by the defendants. Accordingly, we affirm

the district court’s decision.

        3
        We recognize appellant’s argument that we previously stated that the insurance companies
had “no defense” to Hindall’s claim. See Hindall, 337 F.3d at 685. Nevertheless, this statement
arose in the context of interpreting pre-Galatis law. We cannot now give effect to that language
given the subsequent change in law that occurred with Galatis and provided the insurance
companies with a defense in this case.

                                             -4-