Court Opinion

ID: 6787493
Source: CourtListenerOpinion
Date Created: 2022-07-21 01:05:05.219198+00
Date Added: 2024-06-11T16:02:58.275291
License: Public Domain

Lundberg Stratton, J.,
concurring in part and dissenting in part.
{¶ 42} I concur in the syllabus paragraph; however, I respectfully dissent from the majority’s analysis of the P.I.E. insurance contracts and its conclusion as to OIGA’s statutory exposure.
{¶ 43} Plaintiffs asserted four claims against Dr. Katz, all derived from a single act of malpractice. For purposes of insurance coverage under the P.I.E. primary policy, however, the express language of the policy limits the company’s liability “for all damages because of any one claim or suit or all claims or suits first made during the policy period because of injury to or death of any one person” to the limit for “each claim.” I agree with Justice O’Connor that this is a clear and unambiguous consolidation clause. Therefore, under the primary policy, P.I.E. would have been liable up to the single-claim limit of $200,000.
{¶ 44} P.I.E.’s insolvency triggered OIGA’s obligation as “insurer to the extent of [the insurer’s] obligation on the covered claims.” R.C. 3955.08(A)(2). A “covered claim” is defined as a claim “which arises out of and is within the coverage of an insurance policy * * * issued by an insurer which becomes * * * insolvent.” (Emphasis added.) R.C. 3955.01(D)(1). It is limited by the language of the policy and the statutory cap of $300,000. R.C. 3955.01(D)(2)(b). In other words, OIGA steps into the shoes of P.I.E. up to a maximum of $300,000.
*13{¶ 45} Nevertheless, the majority obligates OIGA to pay up to $1.2 million for one medical malpractice action against Dr. Katz under the guise of four “covered claims” reaching Katz’s excess liability policy. I do not agree that OIGA’s payment of $200,000 constitutes exhaustion of the primary policy for purposes of reaching Katz’s excess liability insurance policy. However, even if an OIGA payment of $200,000 satisfied the exhaustion requirement in the primary policy in order to access coverage under the excess policy, I believe that OIGA is obligated to pay only an additional $100,000 because its liability is capped by statute at $300,000.
{¶ 46} Katz’s excess liability policy provides a level of coverage above that of the primary policy. The excess policy does not become an issue until the limits of the underlying primary policy are exhausted. Had P.I.E. remained solvent, the excess policy would have provided an additional $1 million of liability coverage upon exhaustion of the primary coverage. However, the excess policy applies “only if the underlying coverage is applicable and the claim is first made in accordance with the applicable provisions of the Underlying Insurance.” Except in limited instances, the excess policy incorporates provisions of the underlying insurance, including the primary policy’s consolidation clause.
{¶ 47} The purpose of the OIGA is to prevent catastrophic loss by compensating claimants when an insurance company becomes insolvent. PIE Mut. Ins. Co. v. Ohio Ins. Guar. Assn. (1993), 66 Ohio St.3d 209, 212, 611 N.E.2d 313. Although OIGA assumes the place of the insolvent insurer, it is not replacement insurance. I believe that the majority’s interpretation has the potential to deplete OIGA funds by exposing OIGA to expansive, unanticipated liability that may jeopardize OIGA’s financial stability and the viability of its funds for other qualified claimants. It will erode the system put in place by the General Assembly to protect policyholders and claimants who are affected by insolvent insurance companies. This decision will also potentially affect all Ohio insurance consumers as the cost of these multiple claims is ultimately passed on to them through increased premiums.
{¶ 48} The General Assembly intended OIGA to pay what the insolvent insurer would have been obligated to pay, subject to a statutory maximum limit of $300,000 per claim. Today’s majority ignores that limit in favor of expansive liability that obligates OIGA to the maximum insurance coverage that was available under the P.I.E. policies. I do not agree with this interpretation. Therefore, to the extent that the majority recognizes more than one “covered claim,” I respectfully dissent.