COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 71472 MARY LOU HOOKER : : Plaintiff-appellant : : JOURNAL ENTRY -vs- : AND : OPINION NATIONWIDE MUTUAL INS. : COMPANY, ET AL. : : Defendant-appellee : : DATE OF ANNOUNCEMENT : OF DECISION : JUNE 19, 1997 CHARACTER OF PROCEEDING : Civil appeal from Court of Common Pleas : Case No. 277856 JUDGMENT : Affirmed. DATE OF JOURNALIZATION : APPEARANCES: FOR PLAINTIFF-APPELLANT: FOR DEFENDANT-APPELLEE: Stephen E. Walters, Esq. Timothy D. Johnson, Esq. Pattijo Mooney, Esq. Gregory E. O'Brien, Esq. Reminger & Reminger Co. Daniel A. Richards, Esq. The 113 St. Clair Building Weston, Hurd, Fallon, Paisley Cleveland, Ohio 44114 & Howley 2500 Terminal Tower Cleveland, Ohio 44113-2241 -2- ROCCO, J.: Appellant Mary Lou Hooker appeals the decision of the trial court, granting appellee Nationwide Mutual Insurance Company's motion for summary judgment. As the trial court's decision granting summary judgment was proper, we affirm. Appellant, at all times relevant to the within action, was a resident of the state of North Carolina. On July 25, 1990, appellant was injured while she was riding as a passenger in Ashtabula County, Ohio. The automobile in which appellant was riding was being driven by her mother, Rose Voirol, and was owned by her father, Virgil Voirol. The Voirols, at the time of the accident, were insured by Motorists Mutual Insurance Company. At the time of the accident, appellant had, in full force and effect, an automobile insurance policy with Nationwide Mutual Insurance Company, Policy Number 61B976618 (hereinafter the Nationwide policy). The policy was delivered to appellant in the state of North Carolina, and was issued with respect to an automobile that was principally garaged in North Carolina and was registered in North Carolina. The Nationwide policy provided for uninsured/underinsured motorist coverage of $100,000 per person, and $300,000 per accident. The accident was the fault of Stephanie L. Faulkerson. Ms. Faulkerson, at the time of the accident, was insured by Aetna Insurance Company. Appellant subsequently filed a lawsuit against Ms. Faulkerson. As the result of a settlement agreement in that lawsuit, Aetna Insurance Company paid $286,250.00 to -3- appellant. Appellant maintains that the settlement amount is less than the damages she suffered in the accident. Appellant subsequently filed a declaratory judgment action against Nationwide Insurance Company (hereinafter appellee) and Motorists Mutual Insurance Company (hereinafter Motorists), seeking a declaration of the rights of the parties involved with respect to the insurance policies in effect at the time of the accident. In particular, appellant seeks a declaration that appellee and Motorists are obligated to provide uninsured/underinsured insurance coverage to appellant pursuant to the terms of their respective policies. Appellee then filed a counterclaim for declaratory judgment, seeking a declaration that the Nationwide policy, as it was delivered and issued in the state of North Carolina, must be interpreted according to the laws of that state, and that the language in the Nationwide policy precludes appellant from recovering. In the alternative, appellee requests that, if appellee is determined to owe coverage to appellant, the limits of coverage will be set-off by the amounts paid by or for any liable parties, and any damages payable, if less than the coverage limits, will be set-off by any amount paid by or for any liable parties. All parties subsequently filed dispositive motions. On September 25, 1996, the trial court granted appellee's motion for summary judgment and overruled appellant's motion for summary judgment as to appellee. The trial court also overruled Motorists' motion for summary judgment, and granted appellant's -4- motion for summary judgment as to Motorists. Appellant timely appealed the trial court's decision granting appellee's motion 1 for summary judgment. On November 20, 1996, this court dismissed appellant's appeal for lack of a final appealable order. The trial court thereafter issued an entry declaring that appellant was entitled to recover from Motorists on the policy issued to Virgil Voirol for whatever damages appellant has incurred over $286,250.00 and up to the per person policy limits of $25,000.00. The court further declared that appellant was not entitled to recover under the Nationwide policy. Appellant moved this court for reconsideration of this court's dismissal of the appeal. This court granted appellant's motion. ASSIGNMENT OF ERROR In her sole assignment of error, appellant contends: THE TRIAL COURT ERRED IN DETERMINING THAT MARY LOU HOOKER IS NOT ENTITLED TO UNINSURED/UNDERINSURED COVERAGE UNDER THE NATIONWIDE POLICY. Appellant maintains that the language of the policy, interpreted under Ohio law, requires that appellee provide coverage to appellant. When reviewing a motion for summary judgment, the appellate court applies the same standard as that employed by the trial court. Lorain Natl. Bank v. Saratoga Apts. (1989), 61 Ohio App.3d 127, 129. Civ. R. 56(C) provides that summary judgment is 1 The trial court's decisions regarding Motorists Mutual Insurance Company have not been appealed. -5- properly entered when the admissible evidence as enumerated in the rule shows that there is no genuine issue of any material fact and the moving party is entitled to judgment as a matter of law. Appellant's Nationwide policy includes Endorsement 1676D. The Endorsement at Section E, provides: With respect to damages you or a family member are legally entitled to recover from the owner or operator of an uninsured motor vehicle as defined in Section 5 of the definition of an uninsured motor vehicle, the first paragraph of the Other Insurance provision is replaced by the following: If this policy and any other auto insurance policy issued to you apply to the same accident, the maximum limit of liability for your or a family member's injuries shall be the sum of the limits of liability for this coverage under all such policies. The Limit of Liability provision includes: Any amounts otherwise payable for damages under this coverage shall be reduced by all sums: 1. Paid because of the bodily injury or property damage by or on behalf of persons or organizations who may be legally responsible. *** Endorsement 1676D, at Section D, adds to the Limit of Liability provision: The most we will pay under this coverage is the lesser of the amount by which the: a. limit of liability for this coverage; or b. damages sustained by the insured for bodily injury; exceeds the amount paid under all bodily injury liability bonds and insurance policies applicable to the insured's bodily injury. The policy also provides, at Other Insurance: If this policy and any other auto insurance policy issued to you apply to the same accident, the maximum -6- limit of liability for your injuries under all the policies shall not exceed the highest applicable limit of liability under any one policy. Appellant argues that, under Ohio law, she is "legally entitled" to coverage under the Nationwide policy. Appellee, on the other hand, maintains that under North Carolina law, appellee is entitled to a complete set-off against appellant's coverage of $100,000, and appellant is not entitled to any further recovery. Therefore, the first issue that must be determined is whether Ohio or North Carolina law should be applied to the matter sub judice. Analysis of a choice of law issue that arises in a tort action begins with Section 146 of 1 Restatement of the Law 2d, Conflict of Laws (1971) 430. See Morgan v. Biro (1984), 15 Ohio St.3d 339, 342. Section 146 provides: In an action for a personal injury, the local law of the state where the injury occurred determines the rights and liabilities of the parties, unless, with respect to the particular issue, some other state has a more significant relationship under the principles stated in [section] 6 to the occurrence and to the parties, in which event the local law of the other 2 state will be applied. 2 The principles stated in Section 6 include: (1) A court, subject to constitutional restrictions, will follow a statutory directive of its own state on choice of law. (2) When there is no directive, the factors relevant to the choice of the applicable law include: (a) the needs of the interstate and international systems, (b) the relevant policies of the forum, (c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue, (d) the protection of justified expectations, -7- In order to determine the state with the most significant relationship in a tort action, the general principles set forth in Section 145 of 1 Restatement of the Law 2d, Conflict of Laws, 414, must be considered. Morgan v. Biro, supra. This section provides, in pertinent part: *** (2) Contacts to be taken into account in applying the principles of [section] 6 to determine the law applicable to an issue include: (a) the place where the injury occurred, (b) the place where the conduct causing the injury occurred, (c) the domicile, residence, nationality, place of incorporation and place of business of the parties, and (d) the place where the relationship between the parties, if any, is centered. See Morgan v. Biro, supra at footnote 5. Applying the interest analysis test established in Morgan which adopted the Restatement of the Law of Conflicts view, the law of Ohio would apply. First of all, the injury occurred in Ohio. Then, applying the relevant factors enumerated in Section 145, there is no evidence that another state has a more significant relationship to the occurrence and the parties than (e) the basic policies underlying the particular field of law, (f) certainty, predictability and uniformity of result, and (g) ease in the determination and application of law to be applied. See Section 6 of 1 Restatement of the Law 2d, Conflict of Laws, 10. -8- Ohio. Moreover, applying Ohio law would not be counter to the objectives in Section 6. However, a different interest analysis test applies to contract actions. The court in Gries Sports Enterprises, Inc. v. Modell (1984), 15 Ohio St.3d 284, at the syllabus, held that: In the absence of an effective choice of law by the parties, the contacts to be taken into account to determine the law applicable to an issue include: (a) the place of contracting, (b) the place of negotiation of the contract, (c) the place of performance, (d) the location of the subject matter of the contract, and (e) the domicile, residence, nationality, place of incorporation and place of business of the parties. (Section 188 of 1 Restatement of the Law 2d, Conflicts 3 of Laws, adopted an Under this test, North Carolina law would apply. The contract was issued and delivered in North Carolina. The automobile to which it principally applies is registered and primarily garaged in North Carolina. Thus, it is crucial to the outcome of this matter to determine whether the action sub judice is one sounding in tort or in contract. In support of her contention that the action sounds in tort, appellant relies on Mayse v. Watson (September 27, 1985), Erie Cty. App. No. E-85-8, unreported. In Mayse, the court noted that, critical to the determination of whether the action was 3 Where the parties have chosen the law to apply to their contract, the principles in Section 187 of 1 Restatements of the Law 2d, Conflict of Laws, 561 apply. See Schulke Radio Productions, Ltd. v. Midwestern Broadcasting Co. (1983) 6 Ohio St.3d 436. -9- governed by the principles of contract law or of tort law, is whether the measure of damages is substantive in nature or remedial/procedural. Id. The court stated: [t]he contract, however, is not intended to establish what type and to what extent the damages should be recoverable. The damages available to the injured party must first be determined by the tortfeasor's degree of care owed the injured party, and any associated negligence/fault on the part of the injured insured. Id. The court concluded that: *** tort law controls the factors which establish how the injury occurred and who was at fault, then tort law should also control the measure of damages which are recoverable. Id. Appellant also contends that Kurent v. Farmers Ins. of Columbus (1991), 62 Ohio St.3d 242 controls, and requires that Ohio law apply. In Kurent, the plaintiffs were Ohio residents who were involved in an automobile accident in Michigan, a no- fault state. The plaintiffs received no-fault liability coverage from their insurer as required in Michigan, although Ohio, the 4 place wher The no-fault benefits consisted of economic damages. As Michigan law did not permit the plaintiffs to recover non- economic damages unless their claim reached a certain threshold, 4 The policy at issue in Kurent included a provision that provides that "[a]n insured person may become subject to the financial responsibility law, compulsory insurance law of [sic] similar law of another state ***. We will interpret this policy to provide any broader coverage required by those laws, except to the extent that other liability insurance applies." Id. at 244. -10- the plaintiffs sought recovery for non-economic damages under the uninsured motorist provision of their policy. Id. The court initially stated that "[the plaintiff's] claim for uninsured motorist coverage is determined by their contractual relationship with Farmers." Id. The court examined the language in the policy, and noted that it complied with R.C. 3937.18. Id. at 245. Further, the relevant phrase "legally entitled to recover" was interpreted pursuant to Ohio case law. Id. Thus, although not specifically stated, the court applied Ohio law to its interpretation of the contract. The court then applied Michigan tort law to determine the tortfeasor's legal liability to the plaintiffs, as a "motorist traveling in Michigan accepts Michigan law as it pertains to accidents occurring in Michigan." Id. at 246. The facts in both Mayse and Kurent are different from the facts in the action sub judice, and thus, required a different analysis. The Mayse court applied a tort analysis; however, it addressed the measure of damages issue. Mayse v. Watson, supra. In Kurent, the court also applied a tort analysis, yet it was determining the liability of the tortfeasor. Kurent v. Farmers 5 Ins. of Columbus, supra. This controversy was recently addressed by the court in Miller v. State Farm Mutual Insurance Company 87 F.3d 822 (6th Cir. 1996), applying Ohio choice of law rules. In Miller, the 5 Appellee admits that "Ohio tort law applies to determine the existence and extent of liability between the tortfeasor and Mary Lou Hooker." -11- decedent, killed in Ohio by a Ohio driver, was a Pennsylvania resident with an insurance policy he had purchased in Pennsylvania. The issue before the court was an insurance company's liability pursuant to an underinsured motorist policy. Id. The court determined that the action was one sounding in contract. Id. at 825. The plaintiff in Miller also relied on the court's decision in Kurent. The Miller court explained that Kurent is distinguish-able as the question it resolves is different from the question in Miller. Id. In Kurent, the issue was whether the plaintiff was "legally entitled" to recover pursuant to the policy. Id. In contrast, in Miller, there was no question that the insured was legally entitled to recover benefits; the tortfeasor's liability had already been determined and the plaintiff's insurer had paid her what they believed to be the full amount due. Id. The issue was not the measure of damages, but concerned the limits on the amount of coverage the policy obligated the insurer to pay to the plaintiff. Id. at 826. The issue in Miller is analogous to the matter sub judice. The tortfeasor, Ms. Faulkerson, has already been determined to be liable, and has paid a settlement to appellant. The issue now to be determined is what amount, if any, appellee is obligated to 6 pay t 6 Contrary case law does exist, but is not persuasive. See e.g. Rixey v. Nationwide Mutual Insurance Co. (February 21, 1992), Lucas County App. No. L-91-064, unreported, (in a declaratory judgment where the plaintiffs assert the insurer's denial of their claim constituted a breach of contract, the court applied the law of the state where the accident occurred); -12- Moreover, the Ohio Supreme Court has recognized 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." Miller v. Progressive Cas. Ins. Co. (1994), 69 Ohio St.3d 619, 624. Even though the "triggering event" to a cause of action may be an automobile accident, when the cause of action is that of an insured against his own insurer, the matter sounds in contract, not in tort. Fiste v. Atlantic Mutual Insurance Company (1994), 94 Ohio App.3d 165, 167. See, also, Saddler v. United Services Automobile Association (November 16, 1995), Cuyahoga County App. No. 68603, unreported, (the tortfeasor's legal obligation to the plaintiff may sound in tort, but the recovery sought under the underinsured motorist coverage provision of the policy sounds in contract); Hunt v. Nationwide Mutual Insurance Company (July 6, 1995) Cuyahoga County App. No. 66562, unreported, ("although a tortious injury may have led to the instant action, since it seeks essentially to determine appellee's contractual obligations to appellant, the action itself sounds in contract rather than tort"); Jarvis v. State Farm Mutual Automobile Insurance Company (December 30, 1993), Cuyahoga County App. No. 64597, unreported, ("[i]n Ohio, it is now well established that the analysis and resolution of a choice of law problem involving an insurance Motorists Mutual Insurance Company v. Howard (1996), 110 Ohio App.3d 709, (the court determined that the law of the place where the accident occurred applied). -13- contract are the principles set forth in Section 188 of 1 Restatement of the Law 2d (1971), Conflict of Laws."). Thus, the matter sub judice is an action sounding in contract. The applicable interest analysis test is that found in Section 188 of 1 Restatement of the Law 2d, Conflict of Laws, supra. The Nationwide policy was issued and delivered in North Carolina. The automobile to which the policy primarily applies is garaged and registered in North Carolina. Appellant is a resident of North Carolina. Examining the relevant contacts and applying the principles of Section 6, as noted above, North Carolina law should be applied to interpret the Nationwide policy. As North Carolina law applies to interpret the Nationwide policy, this court must now examine whether appellant is entitled to recover pursuant to North Carolina case law and statutes. North Carolina's Motor Vehicle Financial Responsibility Act includes the following at N.C. Gen. Stat. 20-279.21(b)(4): In any event, the limit of underinsured motorist coverage applicable to any claim is determined to be the difference between the amount paid to the claimant pursuant to the exhausted liability policy and the total limits of the owner's underinsured motorist coverages provided in the owner's policies of insurance; it being the intent of this paragraph to provide to the owner, in instances where more than one policy may apply, the benefit of all limits of liability of underinsured motorist coverage under all such policies ***. "The reduction for which this clause provides is for payments made for those legally responsible to the plaintiff. This would be the tortfeasor." Harrington v. Stevens (1992), 334 N.C. 586, 434 S.E.2d 212. -14- Further, the explicit language in the Nationwide policy also limits the amount of coverage to the difference between the amount paid and the total limits of the insured's underinsured motorist coverage. Appellant submits no evidence to contradict appellee's assertion that, under North Carolina law, appellee is entitled to a set-off for the amounts she has already recovered. Appellant's policy provides underinsured motorist coverage up to a maximum of $100,000. Appellant has already received $286,250.00 from the tortfeasor's insurer. Thus, appellant is not entitled to any further recovery under the express terms of the policy and the North Carolina statute. Appellant's assignment of error is overruled. This matter is affirmed. -15- 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 Cuyahoga County 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. JAMES D. SWEENEY, C.J., AND PATRICIA ANN BLACKMON, J., CONCUR JUDGE KENNETH A. ROCCO N.B. This entry is an announcement of the court's decision. See App.R. 22(B), 22(D) and 26(A); Loc. App.R. 27. This decision will be journalized and will become the judgment and order of the court pursuant to App.R. 22(E), unless a motion for reconsideration with supporting brief, per App.R. 26(A) is filed within ten (10) days of the announcement of the court's decision. The time period for review by the Supreme Court of Ohio shall begin to run upon the journalization of this court's announcement .