Engler v. Stafford and Grange Mutual, 2007 WL 1378384 (Ohio App. 6 Dist. 2007) arose from a two-car automobile accident involving vehicles operated by Scott Sonnenberg and Scott Stafford. Engler was a passenger in the Sonnenberg vehicle. It was undisputed that the accident was caused by the negligence of Stafford and that Stafford was an uninsured motorist.
The Sonnenberg vehicle was insured by a Grange policy containing an uninsured / underinsured motorist coverage that provided: “We will pay damages which an insured is legally entitled to recover from an owner or operator of an uninsured motor vehicle because of Bodily injury suffered by the insured and caused by an accident.“ Engler qualified as an “insured“ under his policy from Citizens Insurance. Stafford was the operator of an “uninsured motor vehicle“ as defined by the Citizens policy. Citizens settled Engler's uninsured motorist claim and requested contribution from Grange. Grange denied the claim, contending that Engler was not an “insured“ under its policy.
Grange excluded coverage to any person-other than the named insured or “family members“ for uninsured motorist coverage. It was undisputed that Engler was not a named insured or a “family member“ as defined by Grange. It was undisputed that Engler, although a permissive occupant of the Sonnenbergs' vehicle, was insured for uninsured motorist coverage by Citizens. Based upon these undisputed facts, the trial court found that Engler failed to qualify as an “insured“ under any of the three criteria listed under Grange's definition.
Grange defined “insured“ for purposes of uninsured / underinsured motorist coverage as: “You or any other family member; Any family member who does not own a motor vehicle; Any other person while occupying your covered auto with a reasonable belief that that person is entitled to do so, if that person is not insured for Uninsured Motorist Coverage under another policy.“
Citizens defined “insured“ for purposes of uninsured motorist coverage as: “1. You or any 'family member'. 2. Any other person 'occupying' 'your covered auto'. “3. Any person for damages that person is entitled to recover because of 'bodily injury' to which this coverage applies sustained by a person described in 1. or 2.“ The definition of “uninsured motor vehicle“ in this policy includes any motor vehicle “to which no bodily injury liability bond or policy applies at the time of the accident.“
The Citizens policy also contained an “other insurance“ clause which provided: “If there is other applicable insurance available under one or more policies or provisions coverage: Any insurance we provide with respect to a vehicle you do not own shall be excess over any collectible insurance providing coverage on a primary basis.“
The trial court granted Engler and Citizen's motion for summary judgment and determined that Grange was obligated to provide uninsured motorist coverage to Engler. Grange appealed, arguing that Engler was not entitled to uninsured motorist benefits from them because he was not an “insured“ for uninsured motorist coverage under the Sonnenbergs' Grange policy.
Both statutory law and recent case law support Grange's position. Ohio law mandates uninsured motorist coverage where: “1) the claimant is an insured under a policy which provides uninsured motorist coverage; (2) the claimant was injured by an uninsured motorist; and (3) the claim is recognized by Ohio tort law.” Insurers may deny coverage for bodily injury or death “[w]hen the person actually suffering the bodily injury, sickness, disease, or death is not an insured under the policy.“ Nothing in R.C. 3937.18 prohibits the parties from defining who is an insured person under the policy. The law does not mandate who must be an insured for purposes of underinsured motorist coverage, so the parties are free to draft their own restrictions regarding who is and is not an insured. Grange defined the term “insured“ to exclude passengers insured under other policies. The court found this was proper.
Engler, argued that the Grange definition was an “escape clause“ which, when coupled with the excess clause set forth in the “other insurance“ provision of the Citizens policy, is invalid and unenforceable. “An 'escape clause' declares that the insurer is not liable to cover an insured if there is other valid and collectible insurance covering the risk.“ “An 'excess clause' contained in an 'other insurance' provision purports to make an otherwise primary policy excess insurance should another primary policy cover the loss.“ One of those policies contained an escape clause, and the other contained an excess clause. If the court had given both clauses full effect, the injured insured would not have been covered by either, because one insurer would have avoided covering the loss due to the existence of other collectible insurance, and the other insurer would have avoided covering the loss because the existence of the other collectible insurance would have limited its coverage to excess insurance alone.
The court resolved the problem by concluding “Where an insurance policy insures a loss 'only if no other valid and collectible automobile liability insurance, either primary or excess * * * is available,' and another insurance policy insures the same loss only as to the 'excess over other collectible insurance,“ the latter provision will be given effect; thus the former policy will be held to furnish the insurance for the loss.“ Since Engler was not an “insured“ under the Grange policy, he was not entitled to uninsured / underinsured motorist coverage under that policy, and the “other insurance“ language of the Citizens policy was never triggered. As a result, the Citizens coverage never converted from primary to excess and Citizens remained the primary insurer for Engler's loss.
The court concluded that the “other insurance“ clause applied only to those insured under the Grange policy. Engler was not an insured under the Grange policy. Therefore, the “other insurance“ clause was never triggered, and Grange never became liable to pay any share. The two clauses do not conflict and the entire policy is enforceable.
The court of appeals ruled that the trial court had erred in granting summary judgment in favor of Citizens and Engler. The judgment of the trial court was reversed.