Miller v. Progressive Cas. Ins. Co. - Ohio Supreme Court Opinion - Ohio Supreme Court Decision

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OPINIONS OF THE SUPREME COURT OF OHIO
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Miller et al., Appellants, v. Progressive Casualty Insurance
Company, Appellee.
[Cite as Miller v. Progressive Cas. Ins. Co. (1994), Ohio
St.3d .]
Automobile liability insurance -- Provision in policy for
uninsured or underinsured motorist coverage which
precludes insured from commencing any action against
insurance carrier for payment of uninsured or underinsured
motorist benefits, unless the insured has commenced suit
within one year from the date of the accident, is void as
against public policy.
---
A provision in a policy for uninsured or underinsured
motorist coverage which precludes the insured from
commencing any action or proceeding against the insurance
carrier for payment of uninsured or underinsured motorist
benefits, unless the insured has demanded arbitration
and/or commenced suit within one year from the date of the
accident, is void as against public policy. (Colvin v.
Globe Am. Cas. Co. [1982], 69 Ohio St.2d 293, 23 O.O.3d
281, 432 N.E.2d 167; and Duriak v. Globe Am. Cas. Co.
[1986], 28 Ohio St.3d 70, 28 OBR 168, 502 N.E.2d 620,
overruled to the extent inconsistent herewith.)
---
(No. 93-987 -- Submitted April 26, 1994 -- Decided July
27, 1994.)
Appeal from the Court of Appeals for Lucas County, No.
L-92-235.
On August 18, 1990, Robert S. Miller, appellant, was
injured when the automobile he was driving was struck in the
rear by a vehicle operated by an uninsured motorist. The
collision was caused by the negligence of the uninsured
tortfeasor.
At the time of the accident, Miller and appellant Sharon
Miller (collectively referred to as "appellants") had an
automobile insurance policy with appellee, Progressive Casualty
Insurance Company. The policy provided appellants with
uninsured and underinsured motorist coverage. Following the

accident, a dispute apparently arose concerning the amount of
uninsured motorist benefits due appellants. The matter
remained unresolved for a period exceeding one year. During
that period, appellants never commenced suit against appellee
or demanded arbitration of the disputed issue(s). On September
9, 1991, appellee denied appellants' claim for uninsured
motorist benefits on the basis of a provision in the policy
which states:
"If an insured person and we [the insurer] have not
reached an agreement (1) that the insured person is legally
entitled to recover damages from the owner or operator of an
uninsured motor vehicle or underinsured motor vehicle, or (2)
as to the amount of payment under this Part V
[uninsured/underinsured motorist coverage], the insured person
shall make written demand upon us within twelve (12) months
from the date of accident that the issue be determined by
arbitration.
"In that event, the matter or matters upon which an
agreement has not been reached shall be determined by
arbitration * * *.
"No lawsuit or action whatsoever or any proceeding in
arbitration shall be brought against us for the recovery of any
claim under this Part unless the insured person has satisfied
all of the things that insured person is required to do under
this policy and unless the lawsuit or arbitration is commenced
within twelve (12) months from the date of the accident."
On September 12, 1991, appellants filed a complaint
against appellee in the Court of Common Pleas of Lucas County.
In the complaint, appellants sought recovery against appellee
for uninsured motorist benefits and for the tort of bad faith.
Appellee answered the complaint and counterclaimed for
declaratory relief, asserting that appellants were not entitled
to coverage since they had failed to initiate suit or demand
arbitration within the one-year limitations period provided in
the insurance contract.
On January 27, 1992, appellee filed a motion for summary
judgment on the claims set forth in the complaint. In support,
appellee argued that it was not responsible to pay uninsured
motorist benefits due to the requirement in the policy that
arbitration be demanded and any proceeding against the insurer
be initiated within one year of the date of the accident.
Additionally, appellee argued that appellants had adduced no
evidence to support the claim of bad faith. On May 27, 1992,
the trial court granted the motion and entered judgment in
favor of appellee.
On appeal to the court of appeals, appellants urged that
the one-year limitations period in the policy was invalid and
unenforceable. The court of appeals, citing Colvin v. Globe
American Cas. Co. (1982), 69 Ohio St.2d 293, 23 O.O.3d 281, 432
N.E.2d 167, rejected appellants' contention. Thus, the court
of appeals concluded that summary judgment was appropriate on
appellants' claim for uninsured motorist benefits.
Additionally, the court of appeals held that summary judgment
was properly granted on the claim of bad faith, finding no
evidence to support that claim. Accordingly, the court of
appeals affirmed the judgment of the trial court.
The cause is now before this court pursuant to the

allowance of a motion to certify the record.

Rogers, Godbey & Horner Co., L.P.A., and George C. Rogers,
for appellants.
Jones & Bahret Co., L.P.A., Robert J. Bahret and Keith J.
Watkins, for appellee.

Douglas, J. The time has arrived for this court to
revisit the holding in Colvin, supra, 69 Ohio St.2d 293, 23
O.O.3d 281, 432 N.E.2d 167. In that case, an insured was
injured as a result of a collision with an uninsured motorist.
The insured's policy provided uninsured motorist coverage.
That coverage contained a provision requiring that any dispute
between the insured and his insurance carrier be submitted to
arbitration. However, the right to arbitration was limited by
the following provision:
"'Action Against the Company: No suit or action
whatsoever or any proceeding instituted or processed in
arbitration shall be brought against the company for the
recovery of any claim under this coverage unless as a condition
precedent thereto, the insured or his legal representative has
fully complied with all of the terms of the policy and unless
same is commenced within twelve months next after the date of
the accident.'" Id. at 293, 23 O.O.3d at 281, 432 N.E.2d at
168.
In Colvin, the insured failed to request arbitration
within one year of the date of the accident. On this basis,
the carrier denied uninsured motorist coverage. Thereafter,
the insured filed a declaratory judgment action seeking a
determination that the one-year limitations period in the
insurance contract was void as against public policy. The
trial court held that the provision was neither unlawful nor
violative of public policy. On appeal, the court of appeals
reversed. Upon further appeal, this court reversed the
judgment of the court of appeals, holding that the one-year
time limitation contained in the uninsured motorist provisions
of the policy was "neither in conflict with R.C. 2305.10, the
two-year statute of limitations for bringing actions for
personal injuries, nor in violation of the public policy as
embodied in R.C. 3937.18, the statute requiring the offering of
uninsured motorist insurance." Id at 297, 23 O.O.3d at 283,
432 N.E.2d at 170. The plurality in Colvin held that the
parties to an insurance contract can agree to limit the time
within which to commence an action or proceeding for payment of
uninsured motorist benefits, if the contractual limitation is
clear, unambiguous and reasonable. Id. at 296, 23 O.O.3d at
283, 432 N.E.2d at 169. Finding that these requirements had
been satisfied, the plurality in Colvin upheld the one-year
limitations period in the uninsured motorist provisions of the
policy.
In the years since Colvin was decided, the courts of
appeals in this state have apparently sought to limit the full
effect of that decision. Specifically, the courts of appeals
in a number of appellate districts have held that a contractual
one-year time limitation of the type upheld in Colvin is
invalid (unreasonable) as applied to underinsured motorist
coverage. See, e.g., Cook v. Ohio Mut. Ins. Assn. (May 29,

1990), Clermont App. No. CA89-09-081, unreported; Worley v.
Ohio Mut. Ins. Assn. (1991), 76 Ohio App.3d 531, 602 N.E.2d
416; Lapata v. Progressive Cas. Ins. Co. (1992), 79 Ohio App.3d
65, 606 N.E.2d 1015; and Medved v. Progressive Cos. (Jan. 31,
1992), Lake App. No. 90-L-15-161, unreported. In essence,
these courts have distinguished Colvin as a case applying to
uninsured motorist coverage. See, also, Am. Select Ins. Co. v.
Stopar (Dec. 10, 1992), Cuyahoga App. Nos. 61158 and 61159,
unreported. Further, at least one Ohio appellate court has
found, in a case involving uninsured motorist coverage, that a
one-year contractual limitations period, like the one at issue
in Colvin, is unenforceable in certain limited circumstances.
See Dougherty v. Colonial Ins. Co. of California (Aug. 31,
1992), Stark App. No. CA-8753, unreported. In this regard, we,
too, have strained to avoid the impact of Colvin under
circumstances where Colvin would seemingly compel a conclusion
perceived by us to be unfair. See, e.g., Kraly v. Vannewkirk
(1994), Ohio St.3d , N.E.2d .
To enforce our pronouncements of the law, courts must rely
to a large extent upon the strength and reasoning of our
opinions and judgments. Obviously, we have no army or police
force at our disposal to enforce our pronouncements. It is
clear to us that Colvin has been viewed as unfair and that,
where possible, the rule in Colvin has been avoided. Colvin
has been riddled with exceptions and distinguished to death.
The time has come for its judicial burial.
R.C. 3937.18(A) mandates that uninsured and underinsured
motorist coverage must be offered when a policy of automobile
or motor vehicle liability insurance is delivered or issued for
delivery in this state with respect to any motor vehicle
registered or principally garaged in Ohio. In considering a
former version of this statute, and the requirement of offering
uninsured motorist coverage, this court said in Bartlett v.
Nationwide Mut. Ins. Co. (1973), 33 Ohio St.2d 50, 52, 62
O.O.2d 406, 408, 294 N.E.2d 665, 666, that "the legislative
purpose in creating compulsory uninsured motorist coverage was
to place the injured policyholder in the same position, with
regard to the recovery of damages, that he would have been in
if the tortfeasor had possessed liability insurance." Further,
as we recognized in State Farm Auto. Ins. Co. v. Alexander
(1992), 62 Ohio St.3d 397, 400, 583 N.E.2d 309, 312, the intent
of R.C. 3937.18 is (1) to provide uninsured motorist coverage
for injured persons who have a legal cause of action against a
tortfeasor but who are uncompensated for their injuries because
the tortfeasor lacks liability insurance, and (2) to provide
underinsured motorist coverage for injured persons who have a
legal cause of action against the tortfeasor but who are
undercompensated for their injuries because the tortfeasor's
liability coverage is insufficient to provide full compensation.
The policy provision at issue in this case, like the
provision at issue in Colvin, supra, limits the insured to a
period of one year to demand arbitration and/or file suit
against the insurer for payment of uninsured motorist
benefits. Failure to satisfy this deadline results in the loss
of coverage and precludes any legal action whatsoever against
the insurance carrier for payment of uninsured motorist
benefits. Such a provision is contrary to the purposes of R.C.

3937.18. In Ohio, the statute of limitations for bodily injury
actions is two years. R.C. 2305.10. Thus, appellants, who
apparently claim to have suffered bodily injury as a result of
the accident, were entitled to a statutory two-year period to
commence an action for bodily injury against the tortfeasor.
Conversely, the time-limitation provision in appellants' policy
provided a lesser period of time for appellants to initiate an
action or proceeding against appellee to recover benefits for
the injuries they suffered at the hands of the tortfeasor. As
a result of the policy provision, appellants were not placed in
the same position, with regard to the recovery of damages, that
they would have enjoyed had the tortfeasor been insured. As a
practical matter, the effect of the policy provision was to
deprive appellants of the coverage required by R.C. 3937.18.
In Alexander, supra, syllabus, we held that: "An
automobile insurance policy may not eliminate or reduce
uninsured or underinsured motorist coverage, required by R.C.
3937.18, to persons injured in a motor vehicle accident, where
the claim or claims of such persons arise from causes of action
that are recognized by Ohio tort law." Contrary to Alexander
and the purposes of R.C. 3937.18, that is precisely what the
time-limitation provision in the policy issued by appellee
sought to do. Accordingly, the provision must fail.
We recognize that an action by an insured against an
insurance carrier for payment of uninsured or underinsured
motorist benefits is a cause of action sounding in contract.
The statute of limitations for an action upon a written
contract is fifteen years. See R.C. 2305.06. We are also
aware, and are in agreement with, the principle recognized in
Colvin, supra, 69 Ohio St.2d at 295, 23 O.O.3d at 282, 432
N.E.2d at 169, that, "[g]enerally, in the absence of a
controlling statute to the contrary, a provision in a contract
may validly limit, as between the parties, the time for
bringing an action on such contract to a period less than that
prescribed in a general statute of limitations provided that
the shorter period shall be a reasonable one." However, the
contractual limitations period in the case at bar violates the
public policy embodied in R.C. 3937.18 because it purports to
dilute or eliminate the rights of the insured to coverage
required by statute.
The purposes of uninsured and underinsured motorist
coverage are similar. Our determination with respect to the
validity of a contractual time-limitation provision for
uninsured motorist coverage applies with equal force to the
validity of a limitations provision affecting underinsured
motorist coverage. Whether a case involves uninsured or
underinsured coverage, the central question concerning the
validity of a contractual period of limitations remains the
same: Does the public policy embodied in R.C. 3937.18 prohibit
provisions in an insurance contract which limit the period
within which an insured must initiate an action or proceeding
for payment of uninsured or underinsured motorist benefits to a
period of one year? We answer this question in the affirmative.
Accordingly, we hold that a provision in a policy for
uninsured or underinsured motorist coverage which precludes the
insured from commencing any action or proceeding against the
insurance carrier for payment of uninsured or underinsured

motorist benefits, unless the insured has demanded arbitration
and/or commenced suit within one year from the date of the
accident, is void as against public policy. Therefore, to the
extent that they conflict with this holding, Colvin, supra, 69
Ohio St.2d 293, 23 O.O.3d 281, 432 N.E.2d 167, and Duriak v.
Globe Am. Cas. Co. (1986), 28 Ohio St.3d 70, 28 OBR 168, 502
N.E.2d 620 (applying and reaffirming Colvin), are overruled.
Finally, we do not suggest that time-limitation provisions
of the type at issue in this case are altogether prohibited.
Consistent with our analysis, a two-year period, such as that
provided for bodily injury actions in R.C. 2305.10, would be a
reasonable and appropriate period of time for an insured who
has suffered bodily injuries to commence an action or
proceeding for payment of benefits under the uninsured or
underinsured motorist provisions of an insurance policy.
For the foregoing reasons, we reverse the judgment of the
court of appeals regarding the validity of the contractual
time-limitations provision of the policy. We remand this cause
to the trial court to reinstate appellants' action for payment
of uninsured motorist benefits and for further proceedings on
that claim.1
Judgment reversed
and cause remanded.
A.W. Sweeney, Resnick, F.E. Sweeney and Pfeifer, JJ.,
concur.
Moyer, C.J., and Wright, J., dissent.
FOOTNOTE:
1 Appellants have raised a number of other issues in this
appeal. However, without further comment, we do not disturb
the findings of the trial court or court of appeals on any of
these matters, including the trial court's and court of
appeals' determination that appellee was entitled to summary
judgment on appellants' cause of action for the tort of bad
faith.
Wright, J., dissenting. Judicial decisions are
theoretically keyed to ideas and, in cases having little
precedent, are creative in character. And although constraints
on the process do exist, our system is such that these
constraints are largely internal in nature, i.e., they are
enforced chiefly by self-restraint. Thus, I believe it is a
given that the reasoning contained in our opinions is the only
way to lend legitimacy to the results. We must be accountable
to the public and to interested parties, and when courts exceed
the boundary of justification by a lack of reasoning,
legitimacy goes out the window. Thus, where a court rules
seemingly from the heart, ignoring precedent and indulging in
"reasoning" skewed toward a desired result as opposed to
applying the prevailing law to the facts at hand, legitimacy is
lost.
I must say that there is a certain amount of irony in the
stated rationale for "revisiting" Colvin v. Globe Am. Cas. Co.
(1982), 69 Ohio St.2d 293, 23 O.O.3d 281, 432 N.E.2d 167.
Aside from citing sundry appellate court decisions
distinguishing Colvin, the majority simply states that "[i]t is
clear to us that Colvin has been viewed as unfair ***." The
majority echoes one of the founders of our country, Alexander
Hamilton,2 by stating that "courts must rely to a large extent

upon the strength and reasoning of our opinions" for
enforcement of our pronouncements, as "we have no army or
police force at our disposal." I quite agree with this thesis,
but the specter of barbarians at the gate in this context is a
tad overdone.
My fundamental objection to the majority opinion is the
total absence of "reasoning" underlying its destruction of a
simple, unambiguous contractual limitation running between an
insurer and its insured. I suppose "unfairness" lies in the
eyes of the beholder, but it is worth noting that there is no
hint of fraud or misrepresentation in the present case. I also
note that we have repeatedly upheld statutes of limitations as
short as one year or even six months. The question asks
itself: Why there and not here?
I suggest that all this talk of unfairness has no real
validity. When one cuts to the bone, what emerges here is a
simple case of negligence by one of the parties and a misguided
effort by this court to ameliorate the effects of that error.
For the record, I would reiterate the solid reasoning
contained in Colvin, where we stated:
"This court has previously stated that the legal basis for
recovery under the uninsured motorist coverage of an insurance
policy is contract and not tort. Motorists Mutl. Ins. Co. v.
Tomanski (1971), 27 Ohio St.2d 222 [223, 56 O.O.2d 133, 134,
271 N.E.2d 924, 925].
"***
"Generally, in the absence of a controlling statute to the
contrary, a provision in a contract may validly limit, as
between the parties, the time for bringing an action on such
contract to a period less than that prescribed in a general
statute of limitations provided that the shorter period shall
be a reasonable one. United Commercial Travelers v. Wolfe
(1947), 331 U.S. 586, 608 [67 S.Ct. 1355, 1365, 91 L.Ed.2d
1687, 1695].
"***
"R.C. 3937.18, the statute providing for the mandatory
offering of uninsured motorist coverage, has no statute of
limitations, nor does it make reference to any prescribed
statute of limitations. Therefore, again it may be reasonably
concluded that the time within which to bring an action on the
policy may be provided within the instrument, if the time
provision is clear, unambiguous, and a reasonable period.
Here, the contract of insurance is unambiguous in its terms
relating to the period within which an action must be brought
against the company on the uninsured motorist provisions of the
policy, and that is clearly one year."
Our conclusion in Colvin bears repeating:
"Although this case and its fact situation may present
some degree of hardship, we cannot say as a general rule that a
period of one year provided by the insurance contract entered
into by the parties is an unreasonable period of time within
which to bring an action against the company on the uninsured
motorist provision of the policy.
"We therefore conclude that such a time limitation as
contained within an uninsured motorist provision of the policy
is neither in conflict with R.C. 2305.10, the two-year statute
of limitations for bringing actions for personal injuries, nor

in violation of the public policy as embodied in R.C. 3937.18,
the statute requiring the offering of uninsured motorist
insurance."
For the reasons noted above, I respectfully but vigorously
dissent.
Moyer, C.J., concurs in the foregoing dissenting opinion.
FOOTNOTE:
2 "Whoever attentively considers the different
departments of power must perceive, that, in a government in
which they are separated from each other, the judiciary, from
the nature of its functions, will always be the least dangerous
to the political rights of the Constitution; because it will be
least in a capacity to annoy or injure them. The Executive not
only dispenses the honors, but holds the sword of the
community. The legislature not only commands the purse, but
prescribes the rules by which the duties and rights of every
citizen are to be regulated. The judiciary, on the contrary,
has no influence over either the sword or the purse; no
direction either of the strength or of the wealth of the
society; and can take no active resolution whatever. It may
truly be said to have neither FORCE nor WILL, but merely
judgment; and must ultimately depend upon the aid of the
executive arm even for the efficacy of its judgments.
Hamilton, The Federalist No. 78.