October 2, 2013
Uninsured Motorist Coverage

by Justice Paul E. Pfeifer

In November 2009, Maria Marusa was driving her car when it was struck by a police cruiser driven by Officer Michael Canda. Maria and her daughter, Melanie – who was riding in the car with her – were both injured in the accident.  Maria’s ensuing dispute with her insurance company – Erie Insurance Company – eventually came before us – the Supreme Court of Ohio.

No one disputed that Maria’s and Melanie’s injuries were proximately caused by Officer Canda’s negligent operation of his police cruiser. Further, no one disputed that Maria and Melanie “were not negligent and were not at fault for causing the collision.”

The Marusas filed suit against Erie Insurance Company seeking damages to compensate for, among other claims, medical expenses and pain and suffering. The parties to the lawsuit have stipulated that Officer Canda and his employer are immune from suit under the Ohio law that provides immunity to political subdivisions – such as villages, townships and cities – and to their employees.

Both parties also stipulated that Officer Canda qualifies as an “uninsured motorist” under the terms of the insurance policy that Maria has with Erie Insurance.

In its answer to the lawsuit, Erie claimed that it was not obligated to pay damages, because even though the policy includes uninsured-motorist coverage and officer Canda is an uninsured motorist, the Marusas were not “legally entitled to recover.” Erie made that claim based upon a 2007 decision by our court in a case called Snyder v. Am. Fam. Ins. Co.

Erie Insurance filed a motion for summary judgment, meaning the company asked the court to rule on the lawsuit without a trial. The trial court granted the motion, stating that the Marusas “are precluded from recovery under the terms of the Policy.” The court of appeals affirmed that decision, concluding that the decision in Snyder controlled the outcome of this case.

After the court of appeals’ decision, Maria’s case came before us for a final review. The issue before us was whether the trial court properly granted summary judgment for Erie Insurance and against Maria.

Summary judgment may be granted only when three conditions apply. First, when there is no genuine issue of material fact. Second, when the party filing the motion is entitled to judgment as a matter of law. And third, when viewing the evidence most strongly in favor of the party that did not file the motion, reasonable minds can come to but one conclusion and that conclusion is adverse to the party that did not file the motion for summary judgment.

There are also some rules that we follow when interpreting insurance contracts. “The meaning of a contract is to be gathered from a consideration of all its parts, and no provision is to be wholly disregarded as inconsistent with other provisions unless no other reasonable construction is possible.”

And because the cause that was before us involved the interpretation of an insurance contract, any ambiguities that we encountered in the contract would be construed strictly against the insurer and liberally in favor of the insured, in this case, Maria Marusa.

The court of appeals stated that our court’s decision in the Snyder case guided its conclusion in Maria’s case. In Snyder, our court stated that “a policy provision limiting the insured’s recovery of uninsured-motorist benefits to amounts the insured is ‘legally entitled to recover’ is enforceable, and its effect will be to preclude recovery” when the person responsible for causing the accident or injury is immune under the political subdivision immunity law.

But in that opinion, we also stated that our ruling in Snyder did not “prevent insurers from responding to consumer demand by offering uninsured-motorist coverage without precluding recovery” even if the person causing the accident has immunity under the law.

As it turned out, the uninsured motorist portion in Maria’s contract did just that. The uninsured motorist portion in her policy provides that “uninsured motor vehicle” includes a motor vehicle whose owner or operator “has immunity under” Ohio’s political subdivision immunity law.

Erie Insurance, however, disputed that. Erie said that language elsewhere in the uninsured motorist portion of the policy – which states that Erie will pay damages that the insured is “legally entitled to recover” – makes the decision in Snyder the controlling factor in whether or not Maria could recover. That phrase – “legally entitled to recover” – is the same language relied upon in Snyder to preclude coverage.

But by a four-to-three vote, we did not agree. We concluded that the language of the definitional provision of the insurance policy controlled the claim, and that language plainly and unambiguously provided uninsured motorist coverage when an insured is injured by an owner or operator who is immune under the political subdivision immunity law.

The critical distinction between the Snyder case and Maria’s case is that in Snyder, the person filing the suit relied on a definition of “uninsured motor vehicle” from the language of the law. But Maria is not constrained by such a definition. Our decision in her case, therefore, was not controlled by the Snyder decision.

Given our determination concerning the definition of “uninsured motor vehicle” contained in Maria’s insurance contract, we could not conclude, as we did in Snyder when our court was confronted with language from outside the insurance contract, that the phrase “legally entitled to recover” precludes uninsured-motorist coverage when the owner or operator is immune under the political subdivision immunity law.

The trial court granted Erie’s motion for summary judgment. We concluded that the motion was improperly granted.  The definitional provision in Maria’s policy operates to expand uninsured motorist coverage, not to limit or preclude it. Accordingly, we concluded that summary judgment should have been denied to Erie Insurance. We therefore sent the matter back to the trial court for further proceedings consistent with our opinion in this case.

EDITOR'S NOTE: The case referred to is Marusa v. Erie Ins. Co., 136 Ohio St.3d 118, 2013-Ohio-1957. Case No. 2012-0058. Decided May 21, 2013. Majority opinion written by Justice Paul E. Pfeifer.