COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 60439 : STELLA LAWRENCE : : : JOURNAL ENTRY Plaintiff-Appellant : : and -vs- : : OPINION SAFECO INSURANCE COMPANIES : : : Defendant-Appellee : : : DATE OF ANNOUNCEMENT OF DECISION: APRIL 16, 1992 CHARACTER OF PROCEEDING: Civil appeal from Common Pleas Court Case No. 130911 JUDGMENT: Reversed and Remanded. DATE OF JOURNALIZATION: __________________________ APPEARANCES: For Plaintiff-Appellant: For Defendant-Appellee: Anne L. Kilbane, Esq. John D. Campbell, Esq. Joel Levin, Esq. Gregory E. O'Brien, Esq. NURENBERG, PLEVIN, HELLER JOHNSON, HOFFMAN, FANOS & & McCARTHY CO., L.P.A. CAMPBELL 1370 Ontario, First Floor 1490 Illuminating Building Cleveland, Ohio 44113-1792 55 Public Square Cleveland, Ohio 44113 - 2 - HARPER, J.: Plaintiff-appellant, Stella Lawrence, brought an action in the Cuyahoga County Court of Common Pleas seeking a declaratory judgment with respect to motorists coverage under her insurance policy with defendant-appellee, Safeco Insurance Companies ("Safeco"). Safeco responded with an answer, a counterclaim, and 1/ a third-party complaint against Paul Lawrence, the uninsured driver of Mrs. Lawrence's automobile at the time of the accident. Safeco subsequently filed a motion for summary judgment to which Mrs. Lawrence filed a response and a cross-motion. The trial court granted summary judgment in favor of Safeco. Mrs. Lawrence timely appeals from that ruling and a careful review of the record compels reversal and remand of the action. I. Mrs. Lawrence purchased an automobile insurance policy from Safeco. Mrs. Lawrence and her son were involved in a motor vehicle accident due to her son's negligent operation of Mrs. Lawrence's vehicle. Mrs. Lawrence applied for bodily injury coverage under the liability portion of her insurance policy. Safeco denied the coverage based on an exclusion clause contained in that portion of the contract. 1/ Safeco brought a third-party action against Mrs. Lawrence's son, Paul Lawrence, the driver of the insured vehicle at the time of the collision. Safeco thereafter filed a Motion for Default Judgment when Paul Lawrence failed to make an appearance or otherwise respond to the third-party complaint. The trial court failed to rule upon the motion. However, Civ. R. 54(B) is not applicable since the granting of Safeco's motion for summary judgment mooted the third-party complaint for purposes of appeal. - 3 - Mrs. Lawrence, in the alternative, applied for bodily injury coverage under another portion of the policy for uninsured motorists benefits. The relevant portion of the policy sets forth the following: "Coverage G - Uninsured Motorists: To pay all sums which the insured or his legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle because of bodily injury, sickness or disease, including death resulting therefrom, hereinafter called 'bodily injury', sustained by the insured, caused by accident and arising out of the ownership, maintenance or use of such uninsured motor vehicle ***. *** "'Insured' means: (a) the named insured and any relative *** "'Insured automobile' means: (a) an automobile described in the policy declarations for which a specific premium charge indicates that Uninsured Motorists coverage is afforded ***." Safeco denied coverage on the uninsured motorists portion of the policy based upon the latter definition that an insured automobile is an automobile which is described in the policy declarations. Safeco asserts that since Mrs. Lawrence's Mazda is the motor vehicle for which the policy was issued, the Mazda is not an "uninsured vehicle" and Mrs. Lawrence is not, therefore, entitled to "uninsured motorist coverage." Mrs. Lawrence thereafter filed an action in the trial court seeking a declaratory judgment with respect to the insurance policy. II. - 4 - In her assignments of error, Mrs. Lawrence contends that: "I. The Trial Court Committed Prejudicial Error In Granting Appellee Summary Judgment As A Matter Of Law, Where Appellant Presented Case Law And Legal Argument Demonstrating That Appellee's Attempt To Restrict Uninsured Motorist Coverage By Definition, Only, Was In Contradiction To The Laws Of Ohio As Found In Ohio Revised Code Section 3937.18. "II. The Trial Court Committed Prejudicial Error In Granting Appellee Summary Judgment As A Matter Of Law, Where It Was Undisputed That The Driver Was Uninsured And Appellant Demonstrated That Under Ohio Revised Code Section 3937.18 Appellee Was Required To Provide Appellant Uninsured Motorist Coverage For An Accident Involving An Uninsured Driver/Motorist." Mrs. Lawrence, in these two interrelated assignments of error, argues that Safeco circumvented R.C. 3937.18 through its definitions of an insured and an uninsured motor vehicle. This argument has merit. R.C. 3937.18 provides in pertinent part: "Mandatory offering of uninsured and underinsured motorist coverage: "(A) No automobile liability or motor vehicle liability policy of insurance insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance, or use of a motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state unless both of the following are provided: "(1) Uninsured motorist coverage, which shall be in an amount of coverage equivalent to the automobile liability or motor vehicle liability coverage and shall provide protection for bodily injury or death under provisions approved by the superintendent of insurance, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness, or disease, including death, resulting therefrom: - 5 - *** "(D) For the purpose of this section, a motor vehicle is uninsured if the liability insurer denies coverage or is or becomes the subject of insolvency proceedings in any jurisdiction." Mrs. Lawrence argues that Safeco avoids R.C. 3937.18(D) by first causing her vehicle to become "uninsured" under the statute when it denied coverage under the liability portion of her insurance policy, but then defining her vehicle as "insured" under the uninsured motorists portion of the policy. Mrs. Lawrence asserts that R.C. 2937.18 does not permit Safeco to thus refuse her coverage. Recently, the Ohio Supreme Court addressed the issue of whether an insurance company "*** may, by policy definition, eliminate uninsured and underinsured motorist coverage 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". State Farm v. Alexander (1992), 62 Ohio St. 3d 397, 398. In holding that an insurance company may not eliminate such coverage which is required by R.C. 3927.18, the court 2/ overruled paragraph two of the syllabus in Dairyland Ins. Co. v. Finch (1987), 32 Ohio St. 3d 360, a case relied upon by Safeco. 2/ "Public policy does not prevent the issuance and enforcement of an automobile liability insurance policy containing a reasonable exclusionary clause, within the uninsured motorist provision, prohibiting intrafamilial recovery of damages against the issuer of the policy." (Citation omitted.) - 6 - The defendant-appellant in State Farm, Percy Alexander, purchased an automobile insurance policy for his motor vehicle from plaintiff-appellee, State Farm Automobile Insurance Company ("State Farm"). While Alexander was a passenger in his own vehicle, the driver, O'Neal Cosey, lost control of the vehicle. Alexander was injured and Cosey died as a result of the accident. Alexander's insurance policy was in effect at the time of the accident. Cosey was insured under an automobile policy with Atlantic Casualty ("Atlantic"). Atlantic accepted primary liability coverage and paid Alexander the policy's limit of $12,500 for bodily injury. The $12,500, however, failed to cover the injuries sustained by Alexander. He, therefore, sought underinsured motorist coverage from State Farm. Coverage was refused by State Farm since Alexander's vehicle did not meet the policy's definition of an underinsured vehicle. State Farm thereafter sought a declaratory judgment that Alexander was not entitled to underinsured motorists coverage. The Supreme Court noted that an insured's own automobile could never be an uninsured or underinsured vehicle in a one-car - 7 - 3/ accident under State Farm's "household exclusion". Such is the case in the instant appeal. Furthermore, in State Farm, the insurance company argued that "*** it is reasonable to eliminate uninsured and underinsured motorist coverage for an automobile insured under the liability provision of the policy and furnished for the regular use of the insured or his family", State Farm, supra, 399, when an insured or a family member files a claim under the policy. The insurance company herein makes the same claim. In disagreeing with the insurance company's position and claim in State Farm, the court initially acknowledged that any restriction on the coverage mandated by R.C. 3937.18 must comply with the purpose of the statute. Id., Ady v. West American Ins. Co. (1982), 69 Ohio St. 2d 593. Any policy restrictions are unenforceable if they stray from the statute's requirements. Id.; Sexton v. State Farm Mut. Ins. Co. (1982), 69 Ohio St. 2d 431, 433. The court thus stated: "R.C. 3937.18(A)(1) and (2) are premised on the tortfeasor's legal liability to the injured insured. See Kurent v. Farmers Ins. of Columbus (1991), 62 Ohio St. 3d 242, 581 N.E.2d 533. Thus, the intent of the statute is to provide uninsured and underinsured 3/ "'An uninsured motor vehicle does not include a land motor vehicle: "'1. insured under the liability coverage of this policy; "'2. furnished for the regular use of you, your spouse or any relative ***.' (Emphasis added.)" - 8 - motorist coverage for injured persons who have a legal cause of action against a tortfeasor but who are uncompensated because the tortfeasor is either (1) not covered by liability insurance or (2) covered in an amount that is less than the insured's uninsured motorist coverage. "State Farm's household exclusion ignores the statute's basic premise, to wit: the tortfeasor's legal liability to the insured. The State Farm policy eliminates uninsured and underinsured motorist coverage based solely on the fact that the tortfeasor is driving the insured's automobile. By excluding coverage for torts that occur in the insured's vehicle, State Farm seeks to escape from part of the uninsured motorist coverage that R.C. 3937.18 requires it to provide. "In essence State Farm's exclusion is an attempt to change Ohio's tort law, by contractual definition, in order to circumvent its duty to provide uninsured and underinsured motorist coverage pursuant to R.C. 3937.18. This it cannot do. Accordingly, State Farm's exclusion is unenforceable because it conflicts with R.C. 3927.18. (Emphasis in original.)" Id., 400. In the case sub judice, Safeco's insurance policy eliminates uninsured motorist coverage based solely on the fact that the tortfeasor drove Mrs. Lawrence's insured automobile. The policy, therefore, excludes coverage for torts which occur in the insured's vehicle and allows Safeco to avoid the statutory requirements of R.C. 3937.18. As in State Farm, Safeco's exclusion is unenforceable because it conflicts with R.C. 3937.18. Appellant's assignments of error are accordingly sustained. Reversed and remanded for proceedings consistent with this opinion. - 9 - This cause is reversed and remanded for proceedings consistent with this opinion. It is, therefore, considered that said appellant recover of said appellee her costs herein. It is ordered that a special mandate be sent to said court to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. Exceptions. J.F. CORRIGAN, P.J., and MARTIN*, J., CONCUR. SARA J. HARPER JUDGE *Judge William J. Martin, Carroll County Common Pleas Court, sitting by assignment. N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announcement of decision (see Rule 26). Ten (10) days from the date hereof this document will be stamped to indicate journalization, at which time it will become the judgment and order of the court and time period for review will begin to run. .