Court Opinion

ID: 3707832
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:43:51.100125+00
Date Added: 2024-06-11T14:10:16.210826
License: Public Domain

This is an appeal from a judgment entered by the Lawrence County Court of Common Pleas granting summary judgment to Nancy L. Jackson, plaintiff below and appellee herein, against Republic-Franklin Insurance Company, defendant below and appellant herein, and overruling a summary judgment motion filed by appellant in a declaratory judgment action instituted by appellee. The following error is assigned:
"The trial court erred in denying Republic-Franklin's motion for summary judgment; in granting Nancy Jackson's motion for summary judgment, the trial court based it upon an erroneous interpretation of the rule of law to be followed in this case:
"If an insured, in good faith, prosecutes a lawsuit against an underinsured motorist with the knowledge of the insured's insurance company, generally both the insured and his insurance company are bound by any final judgment rendered as a result of such lawsuit that determines the liability of the underinsured motorist to the insured. Motorists Mut. Ins. Co. v. Handlovic
(1986), 23 Ohio St. 3d 179 [23 OBR 343, 492 N.E.2d 417]."
The facts pertinent to this appeal are as follows. On October 10, 1985, appellee was injured in an automobile accident which occurred as a result of the negligence of a certain Jeannie M. Hart. On October 26, 1986, appellee commenced an action against the said Jeannie M. Hart for damages incurred as a result of the accident. Subsequently appellee gave notice to appellant that she was asserting a claim for underinsured motorist coverage on a policy of insurance issued by appellant.1
The aforesaid policy of insurance provided, inter alia, as follows:
"PART C — UNINSURED/UNDERINSURED MOTORIST COVERAGE *Page 361 
"* * *
"Any judgment for damages arising out of a suit brought without our written consent is not binding on us. If we and you do not agree as to whether or not a vehicle is actually uninsured, the burden of proof as to that issue shall be on us."
On November 11, 1987, appellee gave notice to appellant that a trial in her action against the said Jeannie M. Hart would commence on December 7, 1987. At that time, appellee requested a determination of whether appellant would "consent" to be bound by the jury verdict rendered in that case. While appellant made a response to such request, the parties are in disagreement over the legal effect of such response. Appellant's response, in pertinent part, was as follows:
"In the event the verdict is in excess of the tortfeasor's limits, then we'll either agree with the verdict as presented or submit to arbitration under the terms of the policy contract."
Appellee argues that such language "conclusively operates as an additional agreement of [appellant] * * * that it would not be bound by the verdict." Appellant argues to the contrary and states that after the verdict was rendered, it agreed to be bound by such amount.
Following trial, the jury returned a verdict of $53,812 in favor of appellee. Although the limit on the liability policy covering Jeannie M. Hart was $50,000, it appears from the summary judgment materials before us that the tortfeasor's insurance carrier did, in fact, pay the full amount of the verdict, $53,812. On December 27, 1987, appellee made a formal demand for arbitration to appellant. Such demand was denied.
On March 14, 1988, appellee commenced the present action below seeking both a declaratory judgment, and order, that appellant comply with the arbitration provisions set forth in the aforementioned policy and that appellant pay to appellee whatever arbitration award is made by the arbitration panel in excess of $53,812 up to the policy limit of $100,000. Appellant filed its answer denying any duty to arbitrate and filed a counterclaim for declaratory judgment that appellee was bound by the previous jury award. Contemporaneously, appellant filed its motion for summary judgment on its counterclaim. Appellee, apparently without making a reply to appellant's counterclaim pursuant to Civ.R. 7(A), filed her own motion for summary judgment. Neither motion was supported by affidavit, or otherwise.
A decision was rendered on these cross-motions and a judgment entry filed on August 25, 1989, granting judgment to appellee as a matter of law and *Page 362 
ordering appellant to comply with the arbitration provisions and to pay appellee any arbitration award made in excess of $53,812 up to $100,000.
The issue presented for review herein is whether the parties are bound by the final judgment rendered for appellee against the uninsured motorist, Jeannie M. Hart. For the following reasons, we hold that both parties are so bound.
In Motorist Mut. Ins. Co. v. Handlovic (1986), 23 Ohio St. 3d 179, 23 OBR 343, 492 N.E.2d 417, the Ohio Supreme Court held, in the syllabus, as follows:
"If an insured, in good faith, prosecutes a lawsuit against an underinsured motorist with the knowledge of the insured'sinsurance company, generally both the insured and his insurancecompany are bound by any final judgment rendered as a result of such lawsuit that determines the liability of the underinsured motorist to the insured." (Emphasis added.) (Citations omitted.)
The issue in Handlovic was whether an insurance carrier could refuse to arbitrate an underinsured motorist claim, asserted by its insured, subsequent to a final judgment of liability and damages being entered against the tortfeasor in a separate action. The court found that the insurance carrier could refuse to arbitrate the claim. This ruling was predicated on the rule of law set forth in the syllabus of Universal Underwriters Ins.Co. v. Shuff (1981), 67 Ohio St. 2d 172, 21 O.O.3d 108,423 N.E.2d 417, which reads as follows:
"An insured who seeks to recover damages from his insurer under an uninsured motorist policy and is unsuccessful after a trial on the merits and a jury verdict, may not thereafter submit to arbitration the issue of the liability of the uninsured motorist." (Citation omitted.)
In Shuff, the court ruled that an insured could not seek recovery under the underinsured motorist provision of a policy from his insurance carrier by virtue of the doctrine of resjudicata.2 *Page 363 
The cause sub judice is legally indistinguishable fromHandlovic. As in that case, the appellee herein has already had a final judgment entered in her favor against the negligent party. Both appellant herein and the insurance carrier in Handlovic had knowledge of the impending trial. Therefore, we conclude that the doctrine of res judicata similarly applies herein and that appellant may refuse to arbitrate.
Appellee argues that Handlovic is distinguishable from the cause sub judice and that the proper standard to apply was that set forth in Bogan v. Progressive Cas. Ins. Co. (1988), 36 Ohio St. 3d 22,  521 N.E.2d 447. We disagree.
Appellee asserts that Handlovic must be read as "merely reaffirming" the Shuff decision which stands for the proposition that a jury verdict would be binding on both parties herein only if recovery was for less than the policy limit of the tortfeasor. Appellee would buttress this contention by further arguing that the portion of Handlovic previously cited in this opinion, and contained in the Supreme Court syllabus of that opinion, is mere dicta and should not be followed.
It is well established that the syllabus of a Supreme Court opinion states the controlling points of law arising from the case. Rule 1(B) of the Supreme Court Rules for the Reporting of Opinions; Palmer v. Zeigler (1907), 76 Ohio St. 210, 227,81 N.E. 234, 238 (citing Rule VI of the Rules of Court adopted in 1858, 5 Ohio St. v). An exception to this rule occurs where "the controlling facts are totally different from those in the case wherein the syllabus was announced." Troy v. Schnell (1933),48 Ohio App. 325, 331, 1 Ohio Op. 508, 511, 193 N.E. 782, 785. Accordingly, the syllabus from Handlovic is the controlling point of law from the case unless the "controlling facts" of the cause sub judice are totally different from those of Handlovic.
As stated above, the controlling facts in both cases are the same.
Appellee urges that Handlovic is distinguishable for the reason that, unlike Handlovic, the judgment herein against the tortfeasor exceeded the tortfeasor's policy limit by $3,812 and such fact entitles appellee to arbitration under the underinsured provisions of her policy up to the $100,000 limit therein. In short, appellee contends she is not bound by the jury determination of her damages.
Appellee's argument ignores the rationale upon whichHandlovic is based. As stated in Handlovic,23 Ohio St.3d at 183, 23 OBR at 346, *Page 364 492 N.E.2d at 420, because the judgment against the tortfeasor therein "conclusively determined the full extent of appellant's legal entitlement to damages, no purpose is served by requiring Motorists to comply with the appellants' demand for arbitration in this case." (Emphasis deleted.) The same conclusion follows herein irrespective that the judgment exceeded the tortfeasor's policy limits.
Because both appellant and appellee were bound by the judgment of the jury and under the underinsured policy provision that "[w]e will pay damages which a covered person is legally entitled to recover for bodily injury," but for the fact that the tortfeasor's insurance paid the full amount of the judgment of $53,812, appellee would have been entitled to be paid $3,812 under her policy even though she was not entitled to arbitration. Moreover, appellee cites Bogan, supra, for the proposition that an underinsured motorist claim is "ripe for arbitration" if there has been an "exhaustion" of the policy limits of the tortfeasor's liability insurance. However, the insurance policy in Bogan directly provided that the underinsured coverage would not make payment for any injury until after the limits of liability under all * * * insurance policies * * * have been exhausted by payments of judgments orsettlements. Bogan, supra, 36 Ohio St.3d at 23,521 N.E.2d at 449.3 Thus, Bogan turned, in part, on construction of the language contained in the insurance policy at issue therein and did not create a general doctrine of "exhaustion" of a tortfeasor's liability policy limits as a test for determining whether there exists a valid claim for underinsured motorist coverage. Accordingly, we find appellee's arguments to be without merit. Finally, Bogan is distinguishable for the reason that the primary issues adjudicated therein related to the right of the insured to settle with the tortfeasor as opposed to proceeding to judgment at trial against the tortfeasor.
As aforesaid, the syllabus in Handlovic is the controlling principle to be applied herein. Because it is undisputed among the pleadings filed below that appellant had knowledge of the lawsuit prior to trial and after the trial a final judgment was entered therein on the issue of liability and damages, the parties herein are bound by such judgment. Appellant's assignment of error is sustained, the judgment of the trial court is reversed, and final judgment is entered in favor of appellant.
Judgment reversed. *Page 365 
HARSHA, J., concurs.
GREY, J., dissents.
1 The subject policy contained underinsured motorist coverage up to a limit of $100,000 per person for a period of coverage from August 27, 1985 to February 27, 1986, to the named insured, Lucy K. Abrams. It is unclear what relationship there is between the named insured and appellee herein, but, in any event, coverage of appellee is not disputed.
2 The court noted that while the doctrine of res judicata
would not be directly applicable therein, the doctrine would dictate the same results:
"Customarily, arbitrators decide issues without judicial review. A court may, however, vacate an arbitration result when the arbitrators rule contrary to law, or make `such manifest mistake as naturally works a fraud.' That is, even if appellees compelled appellant to arbitrate this matter and received a damage award, that result would clearly be erroneous and contrary to law under the doctrine of res judicata. Universal would then be entitled to undertake another proceeding to reinstate the jury verdict. After all this, the parties would be exactly where the jury left them. Arbitration, in this case, would be a `vain thing,' and the well-settled policy of caution is expressed by the maxim, `equity will not decree a vain thing.' Therefore, under the terms of this insurance policy, Universal may refuse to arbitrate." (Citations omitted.)Shubb, 67 Ohio St. 2d 172 at 174, 21 O.O.3d 108 at 109,423 N.E.2d 417 at 418; See, also, Handlovic, supra,23 Ohio St.3d at 183, 23 OBR at 346, 492 N.E.2d at 420, which applies the facts therein to the same analysis and reaches the same result.
3 The pertinent policy provision, as cited in Bogan, read as follows:
"3. The company shall not be obligated to make any payment because of bodily injury to which this insurance applies and which arises out of the ownership, maintenance or use of an underinsured motor vehicle until after the limits of liability
under all bodily injury liability bonds or insurance policies available at the time of the accident have been exhausted bypayment of judgments or settlements." (Emphasis sic.) Id.,36 Ohio St. 3d at 23, 521 N.E.2d at 449.