COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 69390 GEORGE THORNE : : Plaintiff-appellee : Cross-Appellant : : JOURNAL ENTRY -vs- : AND : OPINION GRE INSURANCE GROUP dba : THE MIDWESTERN INDEMNITY : GROUP : : Defendant-appellant : Cross-Appellee : : DATE OF ANNOUNCEMENT OF DECISION: MAY 16, 1996 CHARACTER OF PROCEEDING: Civil appeal from Court of Common Pleas Case No. 278973 JUDGMENT: AFFIRMED. DATE OF JOURNALIZATION: APPEARANCES: For Plaintiff-Appellee: For Defendant-Appellant: NICHOLAS D. SATULLO, ESQ. JOHN G. FARNAN, ESQ. 113 St. Clair Building DANIEL A. RICHARDS, ESQ. Cleveland, Ohio 44114-1273 WESTON, HURD, FALLON, PAISLEY & HOWLEY 2500 Terminal Tower Cleveland, Ohio 44113-2241 - 2 - DYKE, J.: Defendant-Appellant, GRE Insurance Group, dba The Midwestern Indemnity Company ("Midwestern") appeals from an award of summary judgment granted in favor of Plaintiff-appellee, George Thorne ("Thorne") in his action for declaratory judgment wherein the trial court, pursuant to paragraph three of the syllabus of Savoie v. Grange Mut. Ins. Co. (1993), 67 Ohio St.3d 500, declared inter alia, that the $300,000 which Thorne anticipated receiving from the tortfeasor's insurer must be set off from his total damages and not from Midwestern's underinsured motorist coverage limits ("UIM"). Midwestern claims that the trial court erred in granting Thorne's cross-motion for summary judgment because paragraph three of Savoie is in conflict with R.C. 3739.18(A)(2), James v. Michigan Mut. Ins. Co. (1985), 18 Ohio St.2d 386 and Nationwide Ins. Co. (1989), 45 Ohio St.3d 11 which prior to Savoie, permitted set off against UIM limits. Midwestern also argued that the award was erroneous because the trial court failed to give retroactive effect to amended R.C. 3739.18(A)(2). Upon review we find Midwestern's assertions to be unpersuasive and affirm the summary judgment of the trial court. In doing so however, we note that Thorne's cause of action accrued prior to October 20, 1994 the effective date of amended R.C. 3937.18(A)(2) which appears to supersede paragraph three of Savoie. Therefore we follow the retrospective application of Savoie as recently explained in Finneran v. Bestor (Nov. 2, 1995), Cuyahoga App. No. 68774, unreported, 4-8. We also affirm - 3 - the trial court's denial of Thorne's motion for attorney's fees as such denial did not constitute an abuse of discretion. The procedural history of this case is stated as follows. On October 19, 1994 Thorne filed an action for declaratory judgment alleging that he had been involved in an automobile accident on May 11, 1993; that he had sustained severe bodily injury and property damages as a result thereof; that he put Midwestern on notice that his damages would exceed the $300,000 insurance limitation of the third-party tortfeasor's policy and that a conflict existed between himself and Midwestern with respect to whether Midwestern's UIM coverage applied to damages in excess of the third-party tortfeasor's liability limits. Thorne prayed for a declaration of his rights on this issue and demanded judgment against Midwestern up to a maximum of $300,000 pursuant to the UIM 1 provisions declared in Midwestern's policy. On November 23, 1994 Midwestern filed a joint answer and counterclaim for declaratory judgment. On January 20, 1995 Midwestern filed its motion for 2 summary judgment. On March 1, 1995 Thorne filed a brief in 1 Midwestern does not dispute the fact that the policy in effect at the time of the accident provided UIM coverage with limits of $100,000 per person and $300,000 per accident. 2 In its motion for summary judgment, Midwestern requested that Thorne's Complaint be dismissed with prejudice and that the following declaratory relief be granted in its Counterclaim: (1) That Plaintiff's claims arising out of the May 11, 1993 automobile accident are subject to a single "per person" limit of coverage and that the maximum available to pay all of the Plaintiff's claims is - 4 - 3 opposition and a cross-motion for summary judgment. On March 28, 1995 Midwestern filed a brief in opposition to Thorne's cross- motion. On July 11, 1995 the trial court denied Midwestern's motion for summary judgment and granted Thorne's cross-motion denying his motion for attorneys fees. This appeal followed. I THE TRIAL COURT ERRED IN GRANTING GEORGE THORNE SUMMARY JUDGMENT AND IN DENYING MIDWESTERN SUMMARY JUDGMENT. Summary judgment is proper, pursuant to Civ.R. 56(C) if the trial court determines that: (1) No genuine issue as to any material fact remains to be litigated; (2) the moving party is entitled to judgment as a matter of law; and (3) it appears from the evidence that reasonable minds can come to but one conclu- $100,000; (2) That the coverage available to the Plaintiff for all of his claims is subject to a setoff in the amount of $300,000, that being the amount that the Plaintiff has or will collect from the party responsible for his injuries; and (3) That because the setoff to which it is entitled exceeds the maximum amount of coverage available to the Plaintiff, that no coverage is owed on Plaintiff's claims. 3 In his cross-motion for summary judgment, Thorne requested a declaration that Savoie applied to personal injury claims; that he had a right to recover up to the limits of his UIM policy with Midwestern; that the amount paid by the tortfeasor's carrier must be set off against his actual damages and not against Midwestern's UIM coverage limits pursuant to Savoie and that amendments to R.C. 3937.18(A)(2) had no retroactive application. Thorne also sought attorneys fees for having to prosecute this action. - 5 - sion and viewing such evidence most strongly in favor of the party against whom the motion for summary judgment is made, that conclusion is adverse to that party. Temple v. Wean United, Inc. (1977), 50 Ohio St.2d 317, 327, 4 O.O.3d 466, 472, 364 N.E.2d 267, 274; See, also Delker v. Ohio Edison Co. (1989), 47 Ohio App.3d 1, 2, 546 N.E.2d 975, 976. See, Manofsky v. Goodyear Tire & Rubber Co. (1990), 69 Ohio App.3d 663, 666, motion to certify overruled (1991), 58 Ohio St.3d 703. Below and in its appeal, Midwestern argued that the trial court erred in granting summary judgment in favor of Thorne because Savoie failed to explicitly comment on or review R.C. 3739.18(A)(2) which they allege permits set off against UIM limits and because Savoie failed to explicitly overrule James and Nationwide, cases 4 which they allege also permit set off against UIM limits. Relying on same, Midwestern claims that it has a right to deduct the $300,000 paid by the tortfeasor's insurer from its $100,000 per person UIM limit and was therefore justified in refusing to pay 5 Thorne's UIM claim. Midwestern also argued that the instant 4 Appellant also cites Smith v. Nationwide Mut. Ins. Co. (December 14, 1995) Shelby App. unreported and Benson v. Mid- American Fire & Casualty Co. (Nov. 21, 1995), Fulton App. unreported as supplemental authority in support of the above cited contention. However, these cases are not controlling on this court. 5 R.C. 3937.18(A)(2) provides as follows: * * * The policy 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 - 6 - judgment was erroneous because the trial court relied on cases which contain no syllabus law to wit, Hillman v. Hastings Mut. Ins. (1994), 68 Ohio St.3d 238 and Newman v. United Ohio Ins. Co. (1994), 16 Ohio St.3d 1204. Lastly, Midwestern contends that Savoie applies only to wrongful death claims and that judgment was erroneous because the trial court improperly, failed to give retroactive effect to amended R.C. 3937.18(A)(2) which supersedes the Savoie interpretation of unamended R.C. 3937.18(A)(2). Upon review, we find Midwestern's arguments to be unpersuasive as they simply ignore the syllabus law of Savoie and invite this court to re-interpret unamended R.C. 3937.18(A)(2) in a manner which contradicts an explicit and controlling pronouncement of Supreme Court of Ohio. We cannot accept Midwestern's analysis that the Supreme Court was unaware of unamended R.C. 3937.18(A)(2) when it issued the Savoie opinion. Hence, implicit in the opinion is the liability bonds and insurance policies covering persons liable to the insured. The portion of James to which Midwestern refers is stated as follows: An insurer may apply payments made by or on behalf of an underinsured motorist as a setoff directly against the limits of its underinsured motorist coverage, so long as such setoff (1) is clearly set forth in the terms of the underinsured motorist coverage and (2) does not lead to a result wherein the insured receives a total amount of compensa- tion that is less than the amount of compen- sation that he would have received if he had been injured by an uninsured motorist. Id. paragraph two, syllabus - 7 - fact that the Court interpreted unamended R.C. 3937.18(A)(2) defining an exception for UIM policy holders whose damages exceeded the limits of their tortfeasor's policy. We also find no language in amended R.C. 3937.18(A)(2) that expressly indicates the General Assembly intended a retroactive application of the statute. See, R.C. 1.48 and Van Fossen v. Babcock & Wilcox (1988), 36 Ohio St.3d 100, 106 citing Kaiser v. Coleman (1986), 28 Ohio St.3d 259, 262. Although it is now clear that the Legislature did not intend that underinsurance was in excess of the tortfeasor's liability coverage as indicated by its amendments to R.C. 3937.18(A)(2), we are nevertheless bound to apply Savoie which was the prevailing law at the time this action was decided since Thorne's cause of action accrued priorto October 20, 1994. For an analysis of the non- retroactive effect of the October 20, 1994 amendment on pending uninsured motorist cases, see, Kehoe v. Pline (February 22, 1996), Cuyahoga App. No. 69182, unreported citing United v. Services Auto Ass'n v. Mack (May 17, 1995), Clark App. No. 94-CA-32, unreported at 3. In Savoie, the Court held that: 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.) Id. paragraph three of the syllabus The Savoie Court reasoned as follows: In order to arrive at the proper conclusion in this case, it is critical to review the purpose of Revised Code 3937.18, which explains how monies received from a - 8 - tortfeasor's liability insurer reduce, or do not reduce, the limits of an underinsured policy. An individual covered by an insurance policy is entitled to receive compensation in an amount no less than what he would receive if he had been injured by an uninsured motorist. James v. Michigan Mut. Ins. Co. (1985), 18 Ohio St.3d 398, 18 OBR 440, 481 N.E.2d 272. Thus, underinsured motorists who suffer from injuries caused by an automobile accident are entitled to collect up to the full limits of their underinsurance policy to the extent that their damages exceed the amounts which the tortfeasor's insurer has already paid to them. The Supreme Court of Ohio further clarified its holding on this issue in Newman v. United Ohio Ins. Co. (1994), 69 Ohio St.3d 1204. In denying United's motion for reconsideration, Justice Douglas wrote the following concurring opinion which states in relevant part as follows: Appellee, United Ohio Insurance Company, has moved this court for reconsideration of our decision in Newman v. United Ohio Ins. Co. (1994), 68 Ohio St.3d 170, 624 N.E.2d 728. Appellee "seeks reconsideration in order that the Court may clarify the ambiguities and confusion created by the Savoie decision, specifically syllabus 3." In seeking reconsideration, appellee argues that "* * * Syllabus 3 of Savoie fails to mention the issue of setoff or to address whether the setoff is to be made from the insured's damages as opposed to the written limit of underinsured coverage. * * *" (Emphasis added.) 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. [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. - 9 - Id. at 1204, 1205 While Midwestern contends that Newman and Hillman state no syllabus law and therefore are not controlling, we find such contention to be devoid of merit as the syllabus of Savoie is controlling. Moreover, we note that four other justices signed on to Justice Douglas's concurrence in Newman which expressly held that Savoie applied to bodily injury actions and that set off must be against the insured's actual damages not UIM limits. We are compelled to follow the Supreme Court's ruling in Savoie as reinforced in Newman and have already done so. See, Prather v. Liberty Mut. Ins. Co. (May 19, 1994), Cuyahoga App. No. 66131, unreported wherein we followed Savoie in holding that the tortfeasor's payments only reduce the damages and not the policy limits which the underinsured carrier was required to pay. Id. 9- 10. Most recently to the same effect, see, Kehoe, supra. and Marcella v. Nationwide Mut. Ins. Co. (February 22, 1996) Cuyahoga App. No. 69086, unreported. Lastly, we consider Thorne's cross-appeal in which he claims that the court erred in denying his motion for attorney's fees. A trial court has the authority under R.C. 2721.09 to assess attorney fees based on a declaratory judgment issued by the court. The trial court's determination to grant or deny a request for fees will not be disturbed, absent an abuse of discretion. Motorists Mut. Ins. Co. (1995), 72 Ohio St.3d 157, paragraph one of the syllabus. An abuse of discretion connotes more than an error of law or fact. It implies that the court's attitude is - 10 - unreasonable, arbitrary or unconscionable. Cedar Bay Constr., Inc. v. Fremont (1990), 50 Ohio St.3d 19. In light of the split of authority on this issue and the controversy surrounding the Savoie opinion, we find that an award of attorney's fees is not "necessary or proper." Hence, the trial court's denial of Thorne's motion for fees did not constitute an abuse of discretion. In summary, we find Savoie, Hillman, Newman, Kehoe and Marcella to be controlling in this particular case because of the time of accrual of the action. Hence, the trial court did not err in granting summary judgment in favor of Thorne as Savoie required that the tortfeasor's award be set off from Thorne's total damages and not from Midwestern's UIM policy limits as a matter of law. 6 Judgment affirmed. 6 Having addressed the specific arguments set forth in Midwestern's brief we decline to provide a specific response to its "Statement of Issues" as the long term applicability of paragraph 3 of the syllabus of Savoie, has been challenged by amendments to R.C. 3937.18(A)(2) effective 10/20/94. (See, Appendix, Pg. 12) - 11 - It is ordered that appellee recover of appellant its 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. HARPER, P.J., AND PATTON, J., CONCUR 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, at which time it will become the judgment and order of the court and time period for review will begin to run. - 12 - APPENDIX STATEMENT OF ISSUES 1. Can an insurer set off from its existing underinsured motorist limits those amounts that the claimant has or will collect from the tortfeasor's liability coverage? 2. Is a claimant entitled to underinsured motorist coverage when the set off to which the insurer is entitled exceeds the amount of UIM coverage available under that insurer's policy? 3. Was the purpose and intent behind R.C. 3937.18(A)(2) to provide an off set against the limits of underinsured motorist coverage of those amounts available for payment under the tortfeasor's liability coverage? 4. Does R.C. 3937.18(A)(2) mandate that the limits of an insurer's liability to its insured under a policy providing underinsured motorist coverage shall be the limits of such coverage less those amounts actually recovered from the tortfeasor? 5. Are the previous decision of the Ohio Supreme Court in James v. Michigan Mutual Ins. Co. (1985), 18 Ohio St.3d 386 and In Re: Nationwide (1989), 45 Ohio St.3d 11, which upheld the statutory scheme permitting the insured to set off against its UIM limits those amounts actually recovered from the tortfeasor, still valid and controlling? 6. Does Savoie v. Grange Mutual Ins. Co. (1993), 67 Ohio St.3d 500, invalidate the insurer's statutory right to set off against the limits of its UIM coverage the full amount of the insured's recovery against the tortfeasor? 7. Should this Court's disposition of the under .