Seeking underinsured motorist coverage

Ohio Appellate Reports

Unpublished

WESTFIELD NATL. INS. v. FARMERS INS. EXC., Unpublished
Decision (12-26-2006) 2006-Ohio-6849 WESTFIELD NATIONAL
INSURANCE CO., PLAINTIFF-APPELLANT v. FARMERS INSURANCE
EXCHANGE, DEFENDANT-APPELLEE. No. 5-06-12. Court of
Appeals of Ohio, Third District, Hancock County. DATE OF
JUDGMENT ENTRY: December 26, 2006.

[EDITOR’S NOTE: This case is unpublished as indicated by the
issuing court.] CHARACTER OF PROCEEDINGS: Civil Appeal from
Common Pleas Court.

Judgment Reversed and Cause Remanded.

DAVID W. DOERNER, Attorney at Law, Reg. #0003962, Ohio,
For Appellant.

MICHAEL J. MANAHAN, Attorney at Law, Reg. #0021397, Stephen
E. House, Attorney at Law, Reg. #0068976, Ohio, For
Appellee.

OPINION

ROGERS, J.

{¶ 1} Plaintiff-Appellant, Westfield National
Insurance Co. (hereinafter referred to as “Westfield”),
appeals the judgment of the Hancock County Court of Common
Pleas granting summary judgment in favor of
Defendant-Appellee, Farmers Insurance Exchange (hereinafter
referred to as “Farmers”). On appeal, Westfield argues that
the trial court erred in determining that it was a
volunteer and was therefore not entitled to contribution
from Farmers in connection with the settlement of an
underinsured motorist claim. Based on the following, we
reverse the judgment of the trial court and remand for
further proceedings consistent with this opinion.

{¶ 2} On March 30, 2000, Morgan Grose, the mother of
one year old Isaac Grose, was operating a vehicle owned by
Isaac’s paternal grandfather, Kevin Grose. Morgan failed to
yield at a stop sign and drove the vehicle onto a major
highway, which was then struck by a larger and heavier
vehicle, resulting in the death of both Morgan and Isaac.
It is undisputed that the accident was caused Morgan’s
negligence.

{¶ 3} On the date of the accident, Westfield had in
effect a policy of insurance issued to Patrick and Diana
Altvater, Isaac’s maternal grandparents, with
uninsured/underinsured motorist coverage. (Hereinafter
referred to as “the Westfield policy”.). Also, Troy Grose,
Isaac’s father, Morgan, and Isaac lived with Patrick and
Diana Altvater and were insureds under the Westfield policy
for purposes of uninsured/underinsured motorist coverage.

{¶ 4} National General Assurance Company
(hereinafter referred to as “National General”) insured the
vehicle Morgan was operating. National General paid the
full $25,000 limit under its liability coverage in the
settlement of the wrongful death claim asserted on behalf of
Isaac against Morgan.

{¶ 5} On April 1, 2002, Patrick and Diana Altvater
and Troy, individually and as the administrator of Isaac’s
estate, filed suit against Westfield seeking underinsured
motorist coverage under the Westfield policy.

{¶ 6} On December 9, 2002, Troy was deposed and
testified that he was self-employed as an auto mechanic,
doing business as Confident Auto Ltd., and that he
believed, at the time of the accident, American Family
Insurance Company insured his business.

{¶ 7} On December 27, 2002, counsel for Isaac’s
estate and counsel for Westfield discussed a request for
the insurance policy which covered Troy in connection with
his business.

{¶ 8} In January of 2003, counsel for Westfield
requested, via letter, the insurance policy, and Westfield
filed a request for the production of copies of all
insurance policies issued to Troy that were in effect on
March 30, 2000.

{¶ 9} On April 15, 2003, Westfield moved to compel
Troy to produce the requested insurance policies, which the
trial court granted. On that same date, the parties
proceeded to mediate the case in an attempt to avoid trial.
The mediation proceeded with an agreement that it was
intended to discharge all potential underinsured motorist
claims, because Westfield knew that an additional
unidentified insurance carrier could also be liable for the
accident. At the time of the mediation, the unidentified
insurance carrier was tentatively identified as one of the
State Farm Insurance Groups; however, it was later
determined that the unidentified insurance carrier was
Farmers.

{¶ 10} On June 26, 2005, without any notice to
Farmers, Westfield settled the entire claim for the sum of
$225,000. Westfield prepared its written release and
assignment agreement to include the release of Farmers
which the parties executed upon the Hancock County Probate
Court’s approval of the settlement. Additionally, in the
settlement, Westfield received from the Isaac’s estate,
Troy, and Patrick and Diana Altvater, a full and final
release releasing Westfield, Farmers, and any other
insurance company providing uninsured or underinsured
motorist coverage from all underinsured motorist claims and
all rights and interest to all claims against Farmers and
any other insurance company providing uninsured or
underinsured motorist coverage arising out of the March 30,
2000 accident and death of Isaac.

{¶ 11} On August 19, 2003, Westfield filed a
complaint for declaratory judgment against Farmers, seeking
contribution for Farmers’ claimed proportionate share of
the loss.

{¶ 12} In July of 2004, Westfield and Farmers filed
motions for summary judgment.

{¶ 13} On February 28, 2006, the trial court found
that both insurance carriers had pro-rata coverage for the
resolved underinsured motorist claim; however, the trial
court further found that Westfield had acted as a volunteer
in paying the entire claim. As a result, the trial court
denied Westfield’s motion for summary judgment and granted
Farmers’ motion for summary judgment.

{¶ 14} It is from this judgment Westfield appeals,
presenting the following assignment of error for our
review:

THE TRIAL COURT ERRED IN ITS JUDGMENT ON THE MOTIONS FOR
SUMMARY JUDGMENT, WHEN IT HELD THAT WESTFIELD NATIONAL
INSURANCE COMPANY WAS A VOLUNTEER AND AS A RESULT WAS NOT
ENTITLED TO CONTRIBUTION FROM FARMERS INSURANCE EXCHANGE
IN CONNECTION WITH THE SETTLEMENT OF AN UNDERINSURED
MOTORIST CLAIM.

{¶ 15} On appeal, Westfield argues that the trial
court erred when it determined that Westfield was a
volunteer and was therefore not entitled to contribution
from Farmers in connection with the settlement of the
underinsured motorist claim.

{¶ 16} An appellate court reviews a summary judgment
order de novo. Wampler v. Higgins, 93 Ohio St.3d 111, 127,
2001-Ohio-1293; Hillyer v. State Farm Mut. Auto. Ins. Co.
(1999), 131 Ohio App.3d 172, 175. Accordingly, a reviewing
court will not reverse an otherwise correct judgment merely
because the lower court utilized different or erroneous
reasons as the basis for its determination. Diamond Wine &
Spirits, Inc. v. Dayton Heidelberg Distr. Co., 148 Ohio
App.3d 596, 2002-Ohio-3932, at ¶ 25, citing State ex
rel. Cassels v. Dayton City School Dist. Bd. of Ed., 69
Ohio St.3d 217, 222, 1994-Ohio-92. Summary judgment is
appropriate when, looking at the evidence as a whole: (1)
there is no genuine issue as to any material fact; (2)
reasonable minds can come to be one conclusion and that
conclusion is adverse to the party against whom the motion
for summary judgment is made; and, therefore (3) the moving
party is entitled to judgment as a matter of law. Civ.R
56(C); Horton v. Harwick Chemical Corp., 73 Ohio St.3d 679,
686-87, 1995-Ohio-286. If any doubts exist, the issue must
be resolved in favor of the nonmoving party. Murphy v.
Reynoldsburg, 65 Ohio St.3d 356, 358-59, 1992-Ohio-95.

{¶ 17} The party moving for summary judgment has the
initial burden of producing some evidence which
affirmatively demonstrates the lack of a genuine issue of
material fact. State ex rel. Burnes v. Athens Cty. Clerk of
Courts, 83 Ohio St.3d 523, 524, 1998-Ohio-3; see, also,
Dresher v. Burt, 75 Ohio St.3d 280, 293, 1996-Ohio-107. The
nonmoving party must then rebut with specific facts showing
the existence of a genuine triable issue; they may not rest
on the mere allegations or denials of their pleadings. Id.

{¶ 18} Both the Westfield policy and Farmers’
insurance policy contain an “other insurance” clause. These
clauses provide that if there is other insurance covering
the same risk, the policy will only pay amounts in excess
of the amount paid by the other insurance carrier. The
Supreme Court of Ohio addressed the issue of assigning
liability to multiple insurance carriers when each contains
an “other insurance” clause in Buckeye Union Ins. Co. v.
State Auto. Mut. Ins. Co., providing:

Where two insurance policies cover the same risk and both
provide that their liability with regard to that risk
shall be excess insurance over other valid, collectible
insurance, the two insurers become liable in proportion to
the amount of insurance provided by their respective
policies.

(1977), 49 Ohio St.2d 213, syllabus. Therefore, since both
policies included an “other insurance” clause, both
Westfield and Farmers were legally obligated to pay a
proportionate share; however, not the entire amount.

{¶ 19} The Supreme Court of Ohio held in Farm Bureau
Mut. Auto. Ins. Co. v. Buckeye Union Cas. Co. that “[o]ne
who, with knowledge of the facts and without legal
liability, makes a payment of money, thereby becomes a
volunteer” and that “[e]quity will not aid a volunteer.”
(1946), 147 Ohio St. 79, paragraphs six and seven of the
syllabus. Furthermore,

If the policy of each of several insurers limits its
liability to such proportion of a loss as the amount
insured by such insurer bears to the total applicable
limit of liability of all valid and collectible insurance
against such loss, the payment by one insurer of more than
its proportion of a loss creates no right to
contribution from the other insurers.

id. at paragraph eight of the syllabus.

{¶ 20} The Eleventh District applied the holding in
Farm Bureau in Buckeye Union Ins. Co. v. Allstate Ins. Co.
(Feb. 23, 1981), 11th Dist. No. 1017. In that case, the
Eleventh District found that Buckeye Union Insurance
Company was a volunteer and could not recover from the
other insurance carrier, because it had paid the entire
loss, even though it was not required to do so. Id.

{¶ 21} Additionally, the Eighth District has
determined that an insurance company can be considered a
“volunteer” when it settles a claim even though it had
concluded that it had no liability in the case and that
another insurance company with whom they had communicated
did have liability. Insurance Co. of N. Am. v. Travelers
Ins. Co. (1997), 118 Ohio App.3d 302, 318.

{¶ 22} The real question here is, “how much”
knowledge is “knowledge”? Westfield had been told for a
period of years that there may have been another insurance
policy that could have potentially offered additional
coverage. This Court finds this to be quite different from
the facts considered by the Ohio Supreme Court in Farm
Bureau, and the Eleventh District in Buckeye Union. In each
of those cases, the evidence appears to be uncontroverted
that the “volunteers” had full knowledge that another
insurance company had specific coverage and liability on
the incident for which they executed a settlement.

{¶ 23} In the case sub judice, Westfield had only a
suggestion that another insurance company could have
offered additional coverage. Even if another policy
existed, Westfield had no information whether the policy
covered the circumstances of Isaac’s demise, which would
render the unknown insurance company liable.

{¶ 24} Even Farmers acknowledges the speculative
nature of the information regarding whether its insurance
policy would have provided additional coverage in this
case. In its brief to this Court, Farmers states that
“Westfield contemplated — and so had knowledge of
— other potential underinsured motorist coverage”
and that “Westfield had express knowledge that additional
underinsured motorist coverage potentially existed * * *.”
(Farmers’ brief p. 7). (Emphasis added). We conclude that
the potential existence of another insurance policy that
may or may not provide additional insurance coverage does
not constitute “knowledge” sufficient to waive an insurance
company’s right to contribution against another insurance
company whose coverage and liability is not fully
demonstrated until after a settlement has been executed.

{¶ 25} Further, we do not want to discourage the
prompt settlement of insurance claims. We agree with the
Fifth District when it concluded that finding an insurance
company in a situation similar to Westfield a volunteer
“would also encourage [an insurance] carrier to wrongfully
deny coverage in the hopes that another carrier would step
up, admit coverage, and pay the claim, thereby absolving
the obstinate carrier of any responsibility to fulfill its
contractual obligations.” Westfield Ins. Co. v. Wausau
Business Ins. Co., 5th Dist. Nos. 2002CA00138, 2002CA00150,
2002-Ohio-7391, at ¶ 87, overruled on other grounds
as noted in In re Uninsured & Underinsured Motorist
Coverage Cases, 100 Ohio St.3d 302, 305, 2003-Ohio-5888, at
¶ 54. The Fifth District also observed:

From a public policy standpoint, the Ohio Supreme Court
decided the Farm Bureau case in 1946, well before the
General Assembly enacted the UM/UIM statute and the Ohio
Supreme Court issued its decision in the Scott-Pontzer
case. In fact, the Court now requires insurance companies
to be vigilant in recognizing and fulfilling their
contractual rights. See Landis v. Grange Mut. Ins. Co.
(1998), 82 Ohio St.3d 339, [1998 Ohio 387,] 695 N.E.2d
1140. Accordingly, to toll the running of prejudgment
interest, insurers must make payment to injured insureds
as soon as possible.

Westfield, 2002-Ohio-7391, at ¶ 88.

{¶ 26} For the foregoing reasons, we find that
Westfield is entitled to contribution from Farmers.
Accordingly, Westfield’s sole assignment of error is
sustained.

{¶ 27} Having found error prejudicial to the
appellant herein, in the particulars assigned and argued,
we reverse the judgment of the trial court and remand the
matter for further proceedings consistent with this
opinion.

Judgment Reversed and Cause Remanded.

CUPP, J., concurs.

SHAW, J. Dissenting.

{¶ 28} I respectfully disagree with the majority’s
reliance on a public policy rationale of encouraging
settlements as the primary basis of interpreting specific
documentary language, information and events in the record
indicating knowledge of the relevant circumstances in this
case. In addition, I do not agree with the conclusion of
Westfield and the majority that Farm Bureau; Landmark Ins.
Co. v. Cincinnati Ins. Co., 11th Dist. No. 2000-P-0093,
2001-Ohio-4311; and Ins. Co. of N. Am. v. Travelers Ins.
Co., (8th Dist. 1997), 118 Ohio App.3d 302, 692 N.E.2d
1028, which were relied upon by the trial court in its
decision, can be distinguished factually from the situation
in this case. On the contrary, I concur with the trial
court’s findings that this case is not materially
distinguishable from those decisions in which courts found
an insurer to be a volunteer in settling a claim. Farm
Bureau; Landmark Ins. Co. v. Cincinnati Ins. Co., 11th
Dist. No. 2000-P-0093, 2001-Ohio-4311; and Ins. Co. of N.
Am. v. Travelers Ins. Co., (8th Dist. 1997), 118 Ohio
App.3d 302, 692 N.E.2d 1028. Furthermore, I believe that
Farm Bureau still provides the controlling case law on this
issue and, therefore, I would argue that this Court should
follow the law as established by the Supreme Court of Ohio.
Landmark, 2001-Ohio-4311.

{¶ 29} In sum, I would hold that Westfield was a
volunteer in this instance. Prior to any settlement,
Westfield was clearly aware that there was other potential
insurance coverage involved; and in fact, Westfield
obtained an order requiring Troy to produce the other
insurance policy on the same day that it proceeded with
settlement rather than waiting for information regarding
the other insurance carrier — information that
Westfield clearly knew could affect the extent of its own
proportionate share. Finally, although executed after the
settlement, the release from Troy to Westfield specifically
named Farmers Insurance Co. Under these circumstances, it
is my conclusion that Westfield chose to assume the
responsibility for the settlement before identifying
Farmers and thus, paid an amount it was not necessarily
obligated to pay.

{¶ 30} As a result, I would conclude that Westfield
is not entitled to contribution from Farmers and,
accordingly, I would affirm the judgment of the trial
court.