As a St. Louis auto accident attorney, I was interested to read a recent Ohio case about when accident victims may invoke their underinsured motorist coverage. In Barbee v. Nationwide Mutual Insurance Company, four members of the Barbee family were in a serious accident while visiting Wisconsin. They first sued the at-fault drivers, who were named only as “the tortfeasors,” but eventually found that the judgment was insufficient to cover all of their damages. They then sued Nationwide for coverage under their underinsured motorist policy, only to have the case dismissed because it was filed after a three-year deadline in the policy. The trial court and court of appeals found that the policy was ambiguous, but the Ohio Supreme Court reversed, finding no ambiguity serious enough to toll the deadline.
The Barbees’ policy with Nationwide contained three relevant provisions. One requires any lawsuit to be filed within three years of the crash. Another says no payment will be made until the limits of all other applicable insurance are exhausted. A third clause says no lawsuit may be filed unless the plaintiff has fully complied with the policy, including pursuing Nationwide’s subrogation rights. Nationwide itself sued the tortfeasor to obtain payment of medical costs, but the Barbees did not sue Nationwide within the three-year deadline. Rather, they sued the tortfeasors in Wisconsin federal court and eventually won — but the limits of one tortfeasor’s insurance policy were insufficient to cover their damages. Thus, the Barbees sued in Ohio state court, more than four years after the crash, to recover additional money from their underinsured motorist policy. Nationwide moved for summary judgment because of the deadline provision, but the trial court denied this, finding that the exhaustion provision tolled the deadline provision. Ohio’s Ninth District Court of Appeals agreed, reading the three provisions together as creating ambiguity. Ambiguities in insurance contracts are always construed in favor of the insured, so the appeals court found for the Barbees. Nationwide appealed.
It had better luck at the Ohio Supreme Court, which found the contract unambiguous. The court started by noting that the dispute is about when the three-year deadline began to run, not the existence of the deadline. The Barbees argued that they could not have known they needed the underinsured motorist coverage until after the federal lawsuit was concluded. Nationwide argued that there was no ambiguity because the exhaustion clause limits payment, not the right to sue. The high court agreed, citing 1998’s Ross v. Farmers Insurance Group, which found the right to payment was separate from the accrual of the claim. An insured can still file suit even if the right to payment is not yet settled, the court said. In fact, this is what happened with another victims of the same accident, Faith Donley, whose suit against Nationwide was stayed pending the outcome of litigation with the tortfeasors. Ohio state law supports this by allowing a three-year deadline to sue. The court dismissed the Barbees’ argument that this would create a flood of unnecessary litigation, saying there would be little extra burden because cases could be stayed when necessary. Thus, it reversed the lower courts. In a strongly worded dissent, Judges Pfeifer and McGee Brown disagreed that this was little burden, saying the situation could be resolved much more efficiently by tolling the deadline.
As a southern Illinois motor vehicle accident lawyer, I have to agree. The Ohio courts probably do not lack cases or attention. By requiring plaintiffs to file lawsuits before they know they need to do so, the court’s decision ensures more clogging of the courts and more work for attorneys on both sides, at the expense of the litigants. This is a financial burden that insurance companies can likely bear, but the same is not true of injured people. Sustaining a serious personal injury typically makes the victim’s financial situation worse, and in fact, many of my clients file suit as a way to defray the heavy medical costs of injuries that were not their fault. And of course, this case sticks the Barbees with the bills for injuries that everyone agrees were caused by someone else’s negligence, simply because they had the bad luck to interpret their insurance contract differently. As a Missouri car wreck attorney, I don’t believe this decision is in most Ohioans’ best interests.
If you or someone you love was seriously hurt in a car crash caused by someone else’s bad decisions, you should call Carey, Danis & Lowe. To speak to us about your rights and your legal options, send us an email or call 1-877-678-3400 today.
Similar blog posts:
Eighth Circuit Upholds Voiding of Insurance Provision Limiting Recovery as Contrary to Public Policy – Schubert v. Auto Owners Ins. Co.
Eighth Circuit Denies Uninsured Motorist Coverage Where Negligent Driver Had Excess Liability Policy – Jung v. General Casualty Co.
Injured Pedestrian May Not Stack Auto Insurance Policies With Express Anti Stacking Clauses – DeMeo v. State Farm
