COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 69086 DEBORAH A. MARCELLA, ET AL. : : Plaintiff-appellee : Cross-appellant : : JOURNAL ENTRY -vs- : AND : OPINION NATIONWIDE MUTUAL INS. CO. : : Defendant-appellant : Cross-Appellee : : DATE OF ANNOUNCEMENT OF DECISION: FEBRUARY 22, 1996 CHARACTER OF PROCEEDING: Civil appeal from Court of Common Pleas Case No. CV-273763 JUDGMENT: Affirmed in part, Reversed in part. DATE OF JOURNALIZATION: APPEARANCES: For Plaintiff-Appellee: For Defendant-Appellant: DON C. ILER, ESQ. TIMOTHY D. JOHNSON, ESQ. DON C. ILER CO., L.P.A. GREGORY E. O'BRIEN, ESQ. 1640 Standard Building DANIEL A. RICHARDS, ESQ. 1370 Ontario Street WESTON, HURD, FALLON, Cleveland, Ohio 44113 PAISLEY & HOWLEY 2500 Terminal Tower 50 Public Square Cleveland, Ohio 44113-2241 - 2 - DYKE, J.: The instant case arose from an August 22, 1991 car accident wherein appellee's daughter, Kelly Hughes, sustained injuries. Appellee filed a complaint alleging two counts of bad faith against the insurance company for failure to pay on appellee's claims for her daughter's injuries and her own loss of her daughter's earnings and services. The two parties agreed on the facts of this case. Appellant disputed the element of bad faith in its failure to pay on appellee's claims. The trial court found that appellee was entitled to coverage under the underinsured motorist provision of her policy. The trial court determined further that appellant did not act in bad faith. I THE TRIAL COURT COMMITTED REVERSIBLE ERROR WHEN IT ENTERED JUDGMENT IN FAVOR OF THE PLAINTIFF. THE TRIAL COURT ERRONEOUSLY REFUSED TO RECOGNIZE NATIONWIDE'S CONTRACTUAL AND STATUTORY RIGHT TO SET OFF THE $112,500 PLAINTIFF RECEIVED FROM THE TORTFEASOR AGAINST THE $100,000 IN UIM COVERAGE AVAILABLE UNDER THE PLAINTIFF'S NATIONWIDE POLICY. Appellant argues that the trial court erroneously relied upon Savoie v. Grange Mut. Ins. Co. (1993), 67 Ohio St.3d 500, in finding that appellant owed underinsured motorist ("UIM")coverage to appellee. In support of this argument appellant asserts that R.C. 3937.18(A)(2) limits its liability to pay appellee's claims to the $100,000 limit of UIM coverage, less the $112,500 paid by the tortfeasors' liability coverage. The policy issued by appellant reiterates that any UIM liability will be reduced by amounts paid - 3 - by liable parties. Rather than deducting the $112,500 paid by the tortfeasors' liability coverage from appellee's UIM coverage limits, the trial court deducted the $112,500 from appellee's total damages. Appellant argues that the Ohio Supreme Court did not intend this result when it issued Savoie v. Grange Mut. Ins. Co., supra. Appellant's argument is not well taken. This is a hotly disputed area of law, governed by R.C. 1 3937.18(A)(2). This provision requires insurers to offer underinsured motorists insurance and also sets forth a limitation of coverage as follows: * * * The limits of liability for an insurer providing underinsured motorist coverage shall be the limits of such coverage, less those amounts actually recovered under all applicable bodily injury liability bonds and insurance policies covering persons liable to the insured. The limit of appellee's underinsured motorist coverage is $100,000. The amount actually recovered under the tortfeasors' liability coverages was $112,500. These facts are not in dispute. Under the plain meaning of the statute, appellant would be entitled to a setoff of the $112,500, leaving it owing appellee nothing under the underinsured motorist provision of her policy. The trial court relied upon a paragraph of the syllabus of Savoie v. Grange Mut. Ins. Co. (1993), 67 Ohio St.3d 500, in determining that appellant was entitled to a setoff, not against 1 This legislation has been amended effective October 20, 1994. The accident in this case took place on August 22, 1991. Thus, the former enactment of R.C. 3937.18 is applicable. - 4 - the underinsured motorist limits of appellee's policy, but against appellee's total damages. The trial court stated in its 2/28/95 journal entry: The central underlying fact issue in this case relates to the totality of just and reasonable compensation in money damages. Nationwide is entitled to a dollar for dollar credit of $112,000 against the total award of damages. See syllabus #3 in Savoie v. Grange Mut. Ins. Co. (1993), 67 Ohio St.3d 500. Motion of defendant Nationwide for summary judgment is denied. Paragraph three of the syllabus of Savoie v. Grange Mut. Ins. Co., supra, reads as follows: An underinsurance claim must be paid when the individual covered by an uninsured/underinsured policy suffers damages that exceed those monies available to be paid by the tortfeasor's liability carriers. (Hill v. Allstate Ins. Co. [1990], 50 Ohio St.3d 243, 553 N.E.2d 658, overruled.) Appellant does not dispute that the underinsured motorist provision applies under these facts. The dispute exists as to whether Savoie requires the setoff to be taken from the limits of coverage or from the total damages. The Ohio Supreme Court has clarified this issue for us in Newman v. United Ohio Ins. Co. (1994), 69 Ohio St.3d 1204. Justice Douglas, in a concurring opinion denying appellee's motion for reconsideration, wrote: I concurred in Savoie v. Grange Mut. Ins. Co. (1993), 67 Ohio St.3d 500, 620 N.E.2d 809. My concurrence was based on my understanding (and it is still my belief) that Savoie (1) requires setoff; (2) requires that any setoff be against the insured's damages (not the written limits of underinsured coverage); and (3) that paragraph three of the syllabus of Savoie applies to "* * * all personal injury cases * * *" (emphasis added) (Hillman v. Hastings Mut. Ins. Co. - 5 - [1994], 68 Ohio St.3d 238, 239, 626 N.E.2d 73, 74, Pfeifer, J., concurring) and not just to wrongful death cases. I write now only to reassert what Savoie, in part, stands for and to clarify any alleged confusion with the decision. Newman v. United Ohio Ins. Co. (1994), 69 Ohio St.3d 1204, 1205 (Douglas, J., concurring). Four other justices signed onto Justice Douglas's concurrence. Justice Wright and Chief Justice Moyer dissented, as they have consistently done in this line of cases interpreting and including Savoie. The trial court's determination that appellant was entitled to a setoff of $112,000 against the total amount of damages, rather than against the $100,000 coverage limit is in line with the recent clarification by the Ohio Supreme Court. Therefore, we overrule appellant's first assignment of error. II THE TRIAL COURT COMMITTED REVERSIBLE ERROR WHEN IT ENTERED JUDGMENT IN FAVOR OF THE PLAINTIFF. THE TRIAL COURT ERRONEOUSLY REFUSED TO RECOGNIZE NATIONWIDE'S CONTRACTUAL RIGHT TO LIMIT ALL DERIVATIVE CLAIMS, ARISING OUT OF BODILY INJURY TO ONE PERSON, TO THE "PER PERSON" SINGLE LIMIT OF COVERAGE. Appellant argues that appellee's policy limits recovery on claims stemming from a single bodily injury to the per person limit of $100,000. Appellant acknowledges that Savoie v. Grange Mut. Ins. Co., supra, limited an insurance company's right to enforce this type of per person limitation in cases of wrongful death. However, appellant asserts that this enforceability issue does not apply to personal injury cases, such as the case at hand. - 6 - The trial court determined that appellee's claim for loss of services and earnings was entitled to a separate "per person" limit. Appellee's policy clearly includes derivative claims within the "per person" coverage limits. No case law has specifically found this provision to be unenforceable, except in the case of wrongful death claims. Absent a definitional provision in the insurance policy to the contrary, a claim for loss of consortium, deriving from bodily injury sustained by a spouse, is not a separate bodily injury for purposes of the single per person limit of liability of an automobile liability insurance policy. Tomlinson v. Skolnik (1989), 44 Ohio St.3d 11, paragraph two of the syllabus. This law has been applied in cases where uninsured/underinsured motorists provisions are at issue. See Haukedahl v. Farmer's Ins. (Feb. 9, 1990), (Lucas Cty. App. No. L- 89-101, unreported.) We find Tomlinson to remain good law in this highly contested area. Following Tomlinson, we find that the trial court erred in determining that appellant was not entitled to include the derivative claim under the same limits as the bodily injury suffered by appellee's daughter. Appellant's second assignment of error is sustained. CROSS-ASSIGNMENT OF ERROR I THE TRIAL COURT ERRED IN DISMISSING PLAINTIFF'S BAD FAITH CLAIMS WITHOUT ALLOWING PLAINTIFF THE OPPORTUNITY TO ENGAGE IN CRUCIAL DISCOVERY. Appellee argues that it was error for the trial court to dismiss her bad faith claim without allowing her the opportunity to - 7 - discover documents and other information directly relevant to the bad faith issue. Because the court's decision was not in appellee's favor on the coverage issue, the bad faith claim was not moot. Appellee asserts that she was not given an opportunity to support her claim. Appellee's argument is not well taken. The trial court had the necessary information to render a decision on the issue of appellant's bad faith in failing to pay the claim. The Ohio Supreme Court has set forth the "reasonable justification" standard to determine the issue of bad faith in insurance claims cases: An insurer fails to exercise good faith in the processing of a claim of its insured where its refusal to pay the claim is not predicated upon circumstances that furnish reasonable justification therefor. [citations omitted.] Zoppo v. Homestead Ins. Co. (1994), 71 Ohio St.3d 552, syllabus. The trial court did not need the files and depositions of claims adjusters to determine that appellant had reasonable justification to refuse to pay the claim. The circumstances of this case fall into an area of law which has been much discussed and revisited by the courts of this state. Appellant has made arguments contained in the record which indicate that it exercised good faith when its interpretation of the current laws gave it a reasonable justification for refusing to pay the claim. Appellee's first cross assignment of error is overruled. - 8 - CROSS-ASSIGNMENT OF ERROR II THE TRIAL COURT ERRED IN GRANTING A PROTECTIVE ORDER TO DEFENDANT INSURER WITHOUT FIRST CONDUCTING AN IN CAMERA INSPECTION. Appellee asserts that the court erred in prematurely granting the motion to bifurcate and the motion for a protective order. Appellee argues that the court violated procedural fairness by granting appellant's motions before appellee had the opportunity to file an opposing brief. Appellee's argument is not well taken. Appellant filed several motions for the court's consideration on September 27, 1994. The court below filed its journal entry in which it granted appellant's motions to bifurcate the proceedings and to grant it a protective order on October 12, 1994. Appellee did not file its motion in opposition until November 4, 1994. However, appellee filed a motion to reconsider the October 12th journal entry, which we must presume was reviewed by the trial court. The court denied the motion for reconsideration on November 14th. We find that appellee was not prejudiced by the court's premature determination of the orders, without an in camera inspection, before appellee could file her brief in opposition. Appellee obtained a fair review of the issue by the court through her motion for reconsideration. The court did not deny this motion until ten days after appellee filed her brief in opposition, giving the court ample opportunity to review the brief before determining that appellant's motions were properly granted. - 9 - Appellant's second cross assignment of error is overruled. The trial court's determination that appellee is entitled to $100,000 under the UIM provision of her policy for her daughter's injuries, is affirmed. The court's decision that appellant was not entitled to include the derivative claim of loss of consortium within the single limit of coverage stemming from the bodily injury is reversed. Appellee's bad faith claims were properly considered and dismissed by the trial court. The trial court's dismissal of appellee's claims is affirmed. - 10 - It is ordered that appellee and appellant split the costs herein taxed. The Court finds there were reasonable grounds for this appeal. It is ordered that a special mandate issue out of this Court directing the Common Pleas 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. PORTER, P.J., CONCURS. McMONAGLE, J., CONCURS IN JUDGMENT ONLY ANN DYKE JUDGE N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announce- ment of decision (see Rule 26). Ten (10) days from the date hereof, this document will be stamped to indicate journalization, .