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IN THE SUPREME COURT OF OHIO
GEICO GENERAL INSURANCECOMPANY CASE NO. 2008-1908
Appellant,
-v-
STATE FARM MUTUAL AUTOMOBILEINSURANCE COMPANY, et al.,
On Appeal from the HamiltonCounty Court of Appeals,First Appellate DistrictCase No. C-070733
Appellees.
MEMORANDUM IN OPPOSITION TO JURISDICTION SUBMITTED BYAPPELLEE STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
P. Christian Nordstrom (0065439)JENKS, PYPER & OXLEY CO., L.P.A.901 Courthouse Plaza S.W.10 N. Ludlow St.Dayton, Ohio 45402Telephone: (937) 223-3001Facsirnile: (937) [email protected]
Attorney for AppellantGeico General Insurance Company
James R. Gallagher (0025658)Patricia A. Boyer (0074374)GALLAGHER, GAMS, PRYOR,TALLAN & LITTRELL, LLP471 East Broad Street, 19th FloorColumbus, Ohio 43215-3872Telephone: (614) 228-5151Fascimile: (614) [email protected]
Attomeys for AppelleeState Farm Mutual AutomobileInsurance Company
0 Cn T F -r 2 ^l 0 8
CLERK OF COURTSUPREME COURT O F OHIO
TABLE OF CONTENTS
Page
STATEMENT OF WHY THIS CASE IS NOT OF PUBLIC ORGREAT GENERAL INTEREST ..................................................................................................1
STATEMENT OF THE CASE AND FACTS .............................................................................4
ARGUMENT IN OPPOSITION TO APPELLANTS' PROPOSITION OF LAW .......... ...........6
Appellant's Proposition of Law No. 1:Ohio's Financial Responsibility Act presently requires that all certifiable liability
policies issued to Ohio motor vehicle owners cover the permissive users of thosevehicles . ............................................................................................................................6
1. KATHRYN THORNTON DOES NOT QUALIFY AS AN INSUREDUNDER THE TERMS OF THE LIABILITY COVERAGE OF THESTATE FARM POLICY . .....................................................................................6
II. OHIO LAW PROVIDES THAT AN INSURER MAY RESTRICTIVELYDEFINE WHO QUALIFIES AS AN INSURED UNDER ITS POLICY.ACCORDINGLY, OHIO COURTS HAVE REPEATEDLY ENFORCEDDEFINITIONS, SUCH AS THE ONE SET FORTH IN STATE FARM'SPOLICY, WHICH DO NOT INCLUDE PERMISSIVE USERS WHOHAVE THEIR OWN INSURANCE POLICIES AS ADDITIONALINSUREDS . ................... .......................................................................................6
HI. THE PROVISIONS OF R.C. 4509.51 THAT APPELLANT ASSERTSARE CONTROLLING DO NOT APPLY TO THIS CASE . ....... ........................8
IV. EVEN IF THE PROVISIONS OF R.C. 4509.51 ET. SEQ. DID APPLYTO THIS CASE, THE STATE FARM POLICY FULLY COMPLIESWITH THE PROVISIONS OF CHAPTER 4509 OF THE REVISEDCODE . ................................................................................................................11
CONCLUSION ...........................................................................................................................13
CERTIFICATE OF SERVICE ........ ......................:....................................................................15
i
STATEMENT OF WHY THIS CASE IS NOT OF PUBLICOR GREAT GENERAL INTEREST
This case does not present an issue of public or great general interest. To the contrary, it
involves issues specifically governed by case law and statutory authority that have been
consistently, and con-ectly, interpreted and enforced by this Court and Ohio appellate courts.
Appellant simply disagrees with the current statutory law and thus seeks to have it changed to
confonn to its interest as it relates to this specific litigation.
Ohio law is already clear that parties to an insurance contract are free to define the terms
therein, subject to lawful statutory requirements set forth by the legislature. Westfield v. Galatis
(2003), 100 Ohio St.3d 216, 2003 Ohio 5849. Included in this general concept is the notion that
the parties to the policy can define who qualifies as an insured under that policy. Holliman v.
Allstate Ins. Co. (1999), 86 Ohio St.3d 414. And, when circumstances arise that call for the
interpretation of the policy, the issue of who qualifies as an insured is determined and governed
by the agreed policy terms unless the result is contrary to law.
As recently as five months ago, in Wohl v. Swinney, 118 Ohio St.3d 277, 2008 Ohio
2334, this Court upheld a similar defmition of who qualifies as an insured in the context of
uninsured/underinsured motorists coverage. In that case, this Court found nothing ambiguous or
unenforceable about a policy defmition that specifically excluded from the definition of an
insured "any other person" occupying the covered auto "who is not a named insured or an
insured family member for uninsured motorists coverage under another policy." Id. ¶¶9, 23-24.
Although the Wohl decision did not address the propriety of the use of such a definition within a
liability policy, it did reaffirm the concept that the parties to an insurance policy are free to
define the applicable terms tlierein. "When the Motorists policy in this case is viewed as a
whole, it becomes clear that the intention of the parties was to narrowly define "insured" for UM
coverage." Id. at ¶14.
Furthermore, this Court has consistently emphasized that the parties' agreed terms within
an insurance policy need not be modified to comply with specific provisions of Ohio's Financial
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Responsibility Act unless such policy is affirmatively "certified" as proof of financial
responsibility. Moyer v. Aron (1964), 175 Ohio St. 490; Bob-Boyd Lincoln Mercury v. Hyatt
(1982), 32 Ohio St.3d 300. Contrary to Appellant's arguments, this has been the controlling law
in Ohio for over forty years. Myriad appellate courts have steadfastly followed this Court's
pronouncements to adequately resolve challenges to these well-settled tenets of contract and
insurance law.
In fact, the only apparent confusion lies with Appellant's own misinterpretation of Ohio's
Financial Responsibility Act. Despite the clear differences drawn by the legislature therein,
Appellant seeks to have the same statutory requirements apply to all automobile liability
insurance policies, regardless of whether they are merely "certifiable" or actually "certified."
Appellant continuously fails to recognize that an individual may provide proof of financial
responsibility through an identification card, a policy of insurance, a bond, a certificate of
deposit or a certificate of self-insurance. More importantly, only those insurance policies that are
actually required to be, and are, certified as proof of financial responsibility are subject to the
constraints set forth in R.C. 4509.51. The words certifiable and certified are not synonymous;
just because a policy is capable of being certified does not equate to that policy actually being
certified. Clearly, if the General Assembly intended for all liability insurance policies to be
subject to the same requirements in this regard, it would have taken action to eradicate the
distinction of its own creation.
In other words, the State Fami policy at issue may exclude permissive users who are
otherwise insured under a different policy of insurance from its defmition of an insured where
the State Farm policy was not "certified" as proof of financial responsibility pursuant to the
Financial Responsibility Act. However, even if the policy was certified and subject to the
provisions of R.C. 4509.51, it is still compliant with the Financial Responsibility Act. R.C.
4509.50 specifically permits those requirements to be met by one or more insurance policies
issued by one or more different insurance companies. This, too, has been the law of Ohio for
more than forty years. State Farm's policy is fully compliant with the statute. This is evidenced
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by the fact that there was liability insurance coverage available to cover the pennissive user of
the State Farm vehicle, albeit through his own policy.
The First District Court of Appeals correctly applied the aforementioned long-standing
statutes and case law in a well-reasoned decision giving due consideration to Appellant's
arguments. Appellant simply disagrees with the outcome which requires it to extend liability
coverage to cover the damages caused by its own policyholder in this individual case. In this
appeal Appellant seeks to unravel virtually all of the principles set forth in the case law cited
above while simultaneously rewriting Ohio's Financial Responsibility Act. It does so by
de0ming all "certifiable" policies subject to the statutory requirements of the Financial
Responsibility Act in derogation of long-standing statutory and conunon law which make the
actual certification of the policy necessary to trigger the statutory requirements. This one dispute
between two insurance companies hardly creates an issue of public or great general interest.
This is especially so given that the statutory and Supreme Court law in question have been in
effect for decades with little litigation activity questioning the well-established body of law.
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STATEMENT OF THE CASE AND FACTS
On June 5, 2006, a minivan driven by Michele Woods was rearended by a Cadillac
driven by Kathryn Thomas. The motor vehicle accident resulted in damage to Ms. Woods'
minivan, as well as injuries to her person. At the time of the accident, Ms. Thomas, age 17, was
living with her mother and step-father and was covered under her rnother's policy of insurance
issued by Geico. The Cadillac driven by Ms. Thomas was owned by her step grandfather,
Robert Browning, who had insured his vehicle under a policy with State Farm. After the
accident, a dispute arose as to wluch insurer-Geico or State Farm-would provide liability
coverage. State Farm ultimately denied coverage based on policy language defining who
qualified as an insured. Specifically, the State Fann policy states within its definition of an
insured:
WHO IS AN INSURED.
4. any other person who is not insured for vehicle liability coverage by anyother insurance policy, a self insurance program, or a liability bond whileusing such a car. The use of such car must be within the scope of consentofyou or your spouse; * * *
Therefore, because Ms. Thomton was a pemrissive user who was insured for vehicle liability
coverage by another insurance policy, she did not qualify as an "insured" for liability coverage
under the State Farm policy. After State Farm denied coverage, Geico paid the loss then filed a
declaratory judgment action seelcing a determination that Ms. Thomton should have qualified as
an insured under the State Farm policy covering the vehicle she was driving.
State Farm and Geico exchanged cross-motions for summary judgment and, on August 9,
2007, jointly filed Stipulations of Fact with the trial court. On August 28, 2007, the trial court
heard oral arguments by counsel on the cross-motions for summary judgment, after which it
ruled in favor of State Farm from the bench.
The trial court journalized its ruling in a Judgment Entry filed October 4, 2007. The trial
court found that the language of the State Farm policy is controlling as to the definition of an
"insured," not the statutory language set forth in R.C. 4509.51, as the State Farm policy was not
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"certified" prior to the June 5, 2006 motor vehicle accident. The court further found that, even
had the policy been certified, it complied with the requirements set forth in R.C. 4509.51 by
virtue of the application of R.C. 4509.50, which provides that the statutory requirements may be
fulfilled by more than one insurance policy issued by one or more insurance providers.
Accordingly, the trial court issued a declaratory judgment in favor of State Farm to the effect that
Kathryn Thornton does not qualify as an insured under the policy issued by State Farm to Robert
Browning and, thus, State Fann has no obligation to defend or indemnify Kathryn Thornton for
atry claims asserted against her arising from the June 5, 2006 accident.
Appellant filed an appeal with the First District Court of Appeals for Hamilton County.
On appeal, Geico submitted that the definitional exclusion within State Farm's policy should be
declared invalid and unenforceable pursuant to Ohio's Financial Responsibility Act. Geico
argued that R.C. 4509.51, which requires an "owner's policy" to cover all permissive users,
should apply to all ceitifiable policies issued to vehicle owners in Ohio, regardless of whether the
policy is actually certified. The Court of Appeals disagreed and reaffirmed that only certain,
statutoiy specified insurance policies are required to be "certified" and thus cover all permissive
users as required by R.C. 4509.51. No other policies need comply with the constraints of R.C.
4509.51. As such, the policy issued to Robert Browning by State Farm was not required to
insure permissive users who are covered under other different policies of insurance. Thus, the
Court of Appeals affirmed the trial court's judgment entered in favor of State Farm. It is from
that decision that Appellant now appeals to this Court.
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OPPOSITION TO APPELLANT'S PROPOSITION OF LAW
Appellant's Proposition of Law No. 1:
Ohio's Financial Responsibility Act presently requires that all certifiable liabilitypolicies issued to Ohio motor vehicle owners cover the permissive users of thosevehicles.
1. KATHRYN THORNTON DOES NOT QUALIFY AS AN INSURED UNDER THETERMS OF THE LIABILITY COVERAGE OF THE STATE FARM POLICY.
As is relevant to this proceeding, included in the definition of "Who is an Insured" in the
policy of insurance issued to Robert Browning is the following:
WHO IS AN INSURED.
4. any other person who is not insured for vehicle liability coverage by any otherinsurance policy, a self insurance program, or a liability bond while using such acar. The use of such car must be within the scope of consent of you or your
spouse; * * *
Pursuant to this clause, a permissive user who is insured under another liability insurance policy
does not qualify as an insured under the State Farm policy. Pursuant to the stipulated facts of
this case, Kathryn Thomton is insured for liability coverage under the automobile insurance
policy issued to her mother by Appellant. Therefore, she does not qualify as an insured under
the State Farm policy.
II. OHIO LAW PROVIDES THAT AN INSURER MAY RESTRICTIVELY DEFINEWHO QUALIFIES AS AN INSURED UNDER ITS POLICY. ACCORDINGLY,OHIO COURTS HAVE REPEATEDLY ENFORCED DEFINITIONS, SUCH ASTHE ONE SET FORTH IN STATE FARM'S POLICY, WHICH DO NOTINCLUDE PERMISSIVE USERS WHO HAVE THEIR OWN INSURANCEPOLICIES AS ADDITIONAL INSUREDS.
Holliman v. Allstate Ins. Co. (1999), 86 Ohio St.3d 414, is the seminal case regarding the
rights of the parties to an insurance contract to limit those persons who qualify as an insured. In
Holliman, there was an umbrella policy that restricted the definition of insured persons to only
"you and any resident relative." It was argued that the umbrella policy's coverage, i.e., its
definition of who qualified as an insured, should be extended to encompass a guest passenger.
This Court disagreed, stating:
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Nothing in R.C. 3937.18 or Martin prohibits the parties to an insurance contractfrom defining who is an insured person under the policy.
Id. at 417.
Based on this Court's holding in Holliman, supra, Ohio appellate courts have consistently
permitted insurance companies to restrictively define the class of insureds for any particular
policy. "* **Holliman reaffirms the right of parties to an insurance contract to define the class
of insureds for any particular policy and acknowledges that the determination of `who is an
insured' is the initial issue in any insurance coverage dispute." Finn v. Nationwide Agribusiness
Ins. Co., Allen App. No. 1-02-80, 2003 Ohio 4233, ¶52, discretionary appeal not allowed by 100
Ohio St.3d 1544, 2003 Ohio 6879. "It is perfectly within the province of an insurance provider
to define who will be an insured." Crabtree v. 21S` Century Ins. Co., 176 Ohio App.3d 507, 513,
2008 Ohio 3335, ¶18.
Relying on Holliman, supra, Ohio appellate courts that have had the opportunity to
consider whether insurers may exclude a person from qualifying as an insured, if such person has
his or her own insurance coverage have almost exclusively answered in the affirmative. For
example, in Shephard v. Scott, Hancock App. No. 05-02-22, 2002 Ohio 4417, the Third District
discussed this exact issue when reviewing the terms of underinsured motorist coverage in a
policy that defined an insured as:
Any other person occupying your covered auto who is not a named insured or aninsured family member for uninsured motorists coverage under another policy.
Id. at ¶14. The Shephard Court disagreed with the appellant's contention that the defmition was
invalid and unenforceable, stating:
We find Holliman to be controlling in the matter sub judice. Appellant, like theplaintiff in Holliman, argues that Sheppard, the passenger in Hites' vehicle, inentitled to UM/UIM coverage simply because that vehicle was driven by a personwho was insured under a UNUUIM policy. The Holliman court rejected thisargument and so must we. Therefore, the clause identified as section B(2),defining who will be an insured for purposes of UNUUIIVI coverage is not invalidand unenforceable.
Shephard, supra, at ¶24.
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The same issue was also litigated in Mitchell v. Motorists Mut. Ins. Group, Franklin App.
No. 04AP-589, 2005 Ohio 3988. Therein, the Tenth District agreed that nothing prevented an
insurer from defining an insured so as to exclude individuals who have their own uninsured
motorists coverage:
Here, Motorists utilized its ability to defme who is an insured under the policy toexclude from that definition passengers who are insureds under other policies.Although Mitchell is unhappy with the result, i.e., that he is limited to collectingbenefits only under his cousin's policy, no public policy or statute prohibits oreven militates against it.
Mitchell, supra, at ¶22.
The Eighth Appellate District and the Sixth Appellate District have reached similar
conclusions in Safeco Ins. Co. of Illinois v. Motorists Mut. Ins. Co., Cuyahoga App. No. 86124,
2006 Ohio 2063 and Engler v. Stafford, Lucas App. No. L-06-1257, 2007 Ohio 2256,
respectively. Both appellate courts agreed that insurers could exercise their right to contract by
properly excluding individuals who were insured under other policies from the definition of who
qualifies as an "insured" under their own.
Given the weight of case law confirming the right of parties to an insurance contract to
define the term "insured" under a given policy, Appellant does not dispute the fact that Thornton
does not qualify as an insured based on the definition set forth in the State Farm policy.
Appellant thus went searching for statutory authority upon which it could base an argument that
the defmitional language is contrary to law. Hence, Appellant has asserted the misguided and
meritless argument that the language of State Farm's policy violates certain provisions of Ohio's
Financial Responsibility Act, Ohio Revised Code Chapter 4509, et seq.
III. THE PROVISIONS OF R.C..4509.51 THAT APPELLANT ASSERTS ARECONTROLLING DO NOT APPLY TO THIS CASE.
This Court first considered the issue of whether the terms of an insurance policy must be
modified to comply with Ohio's Financial Responsibility Act in Moyer v. Aron (1964), 175 Ohio
St. 490, and the pertinent law in Ohio has not deviated from the course set therein in the past 44
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years. In Moyer, this Court held that the terms of an insurance policy control whether a person is
an insured under a policy, unless the policy has been affirmatively certified.
A person is not an insured under an automobile insurance policy unless suchperson is defined as an insured by the terms of the policy, except where suchpolicy has been "certified" under the provisions of Section 4509.46, RevisedCode, and thereby the defmition of who is an "insured" under the policy has beenmodified to the provision of the state. (Section 4509.51, Revised Code.)
Moyer, supra, paragraph two of the syllabus.
Subsequently, in Bob-Boyd Lincoln Mercury v. Hyatt (1987), 32 Ohio St.3d 300, the
Court cited Moyer with approval in holding, once again, that the terms of an insurance policy are
required to comply with Chapter 4509 only where such policy is certified as proof of financial
responsibility. Otherwise, as stated by the Court in Moyer, the definitional language of the
policy controls who qualifies as an insured.
Thus, the statutory language is clear that an insurance policy, such as the onein the case at bar, can be modified to make it comply with the [F]inancialResponsibility Act, and specifically with the provisions of R.C. 4509.51, onlywhere the policy has been certified as proof of financial responsibility. At notime prior to Hyatt's accident was Bob-Boyd required to show proof of fniancialresponsibility and have its insurance policy "certified." In the absence of suchfacts, only the terms of the policy define who is an insured.
Bob-Boyd Lincoln Mercury, supra, at 302. (Emphasis added.)
Bob-Boyd Lincoln Mercury and Moyer are directly on point with the case at bar and
mandate that the actual terms of an insurance policy dictate who qualifies as an insured
thereunder unless the policy is certified as proof of financial responsibility. Noticeably absent is
any inference that a policy that is merely certifiable, as opposed to affirmatively certified, is also
subject to modification to confonn with R.C. 4509.51. In recognition of the controlling nature of
these cases, Ohio appellate courts have correctly and effectively applied the law espoused therein
to previous arguments similar to those raised by Appellant herein.
For example, in Cincinnati Ins. Co. v. Kramer (1993), 91 Ohio App.3d 528, the First
Appellate District addressed the argument that the terms of an insurance policy must always
comply with R.C. 4509.51 and/or R.C. 4509.02. In rejecting that argument, the appellate court
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found that the definitions of "operators policy" and/or "owners policy" contained in Chapter
4509 relate only to insurance policies that are subject to proof of financial responsibility as
required by R.C. 4509.45 and R.C. 4509.46. "Only those persons who have failed to satisfy
automobile-related judgments or have committed certain serious traffic offenses are required to
have `certified' insurance policies." Kramer, supra, at 533. See also Nentwick v. Erie Ins. Co.,
Columbiana App. No. 03 CO 47, 2004 Ohio 3635, wherein the appellate court held that R.C.
4509.51 was irrelevant, as the policy at issue was not certified.
The Financial Responsibility Act does not require all persons who carryautomobile insurance to comply with the mandates of the Act. R. C. § 4509.51 is
triggered only when the insurance policy has been certified There is no
indication in the instant case that the Erie Ins. policy is a certified policy, and
there is no reason for us to consider the implications of R.C. § 4509.51 in this
appeal.
Id. at P31-P32. (Emphasis added.)
In 1987, the Ohio Supreme Court again ruled that, unless a policy had been certified, the
provisions of the policy applied and R.C. 4509.51 had no application.
Without question, unless the policy of insurance is certified in conjunction withR.C. 4509.46 or 4509.47, the provisions of R.C. 4509.51 do not apply.
Dairyland Ins. Co. v. Finch, (1987), 32 Ohio St. 3d 360, 361.
In George v. Ohio Casualty Group of Ins. Cos., (1989), 65 Ohio App. 3d 416, 419, the
court also specifically considered this issue and held that R.C. 4509.51 "is not self executing." It
only applies where the policy has been certified.
The Financial Responsibility Act, R.C. 4509.01 et seq., requires proof of financialresponsibility in the form of a certified insurance policy only after the driver hasfailed to satisfy a judgment for damages arising from a car accident within areasonable time or when the driver has been convicted of certain traffic offenses.Bob-Boyd Lincoln Mercury v. Hyatt (1987), 32 Ohio St.3d 300, 303, 513 N.E.2d331, 334. Thus, the Ohio Legislature does not require all persons who carryautomobile insurance to comply with the mandates of the Act. Thus, R.C.
4509.51 is not self-executing and is triggered only when the insurance policyhas been certified. If the policy in effect at the time of the accident was not
certified, then it is the language of the policy that controls. Id. at 302, 513
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N.E.2d at 333; State Farm Mut. Ins. Co. v. Callison (Aug. 3, 1988), Wayne App.
No. 2348, unreported, 1988 WL 82425.
Id. at 419. (Emphasis added.)
The provisions of R.C. 4509.101 upon which Appellant heavily relies does not require
that every person have an insurance policy complying with R.C. 4509.51. According to R.C.
4509.101(G)(1), financial responsibility may be shown by an identification card, a policy of
liability insurance, a bond, a certificate of deposit, or even a certificate of self insurance. It is
obvious that proof such as a certificate of deposit or a certificate of self insurance would have
nothing to do with the provisions of R.C. 4509.51.
Finally, the definition of "motor vehicle liability policy" set forth in R.C. 4509.01
continues to state that it means "an `owner's policy' or an `operator's policy' of liability
insurance, certified as provided in section 4509.46 or 4509.47 or the Revised Code as proof of
financial responsibility." R.C. 4509.01(L). As such, the statutory definition itself includes the
requirement that a policy be "certified" in order for the mandates set forth in 4509.51 to apply
There is no evidence in this case that the State Farm policy was ever "certified" as proof
of financial responsibility in advance of the accident giving rise to this litigation. Therefore,
pursuant to the appellate authority cited above, the terms of the policy control and the provisions
of R.C. 4509.51 asserted by GEICO may not be used to invalidate the same.
IV. EVEN IF THE PROVISIONS OF R.C. 4509.51 ET. SEQ. DID APPLY TO THISCASE, THE STATE FARM POLICY FULLY COMPLIES WITH THEPROVISIONS OF CHAPTER 4509 OF THE REVISED CODE.
Even if, despite the appellate authority cited above, the court were to accept Geico's
argument that R.C. 4509.51 applies, then the State Farm policy still complies with the statute.
This is because the provisions of R.C. 4509.51 must be read in concert with the provisions of the
statute which directly precedes it, R.C. 4509.50.
Because these statutes relate to the same subject matter, they must be construed inpari materia and harmonized so as to give full effect to the statutes.
State ex rel. Choices for South-Western City Sch. v. Anthony (2005), 108 Ohio St. 3d 1, 9.
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Admittedly, R.C. 4509.51 requires that to be certified as proof of financial responsibility
an owner's policy must insure the person named under the policy and any other person using the
vehicle with the permission of the insured.
(B) Shall insure the person named therein and any other person, as insured, usingany such motor vehicles with the express or implied permission of the insured. ...
What GEICO continues to fail to comprehend is that R.C. 4509.50, which directly
precedes R.C. 4509.51 allows the above requirement may be fulfilled by the policies of one or
more insurance policies, issue by one or more insurance carriers.
The requirements for a motor vehicle liability policy may be fulfilled by thepolicies of one or more insurance carriers, which policies together meet suchrequirements.
R.C. 4509.50.
The trial court and appellate court below agreed that R.C. 4509.51 did not apply. The
trial court fiuther agreed that even if it did, the State Farm policy complied with Ohio's Financial
Responsibility Act because pursuant to R. C. 4509.50, one or more policies of insurance issued
by one or more insurers may be used to satisfy the statutory requirements.
As authorized by R.C. 4509.50, the State Farm policy language, either by itself or in
conjunction with other insurance policies, will always fully satisfy the requirements of R.C.
4509.51. If a permissive user of a vehicle insured by State Farm causes an accident and has his
or her own liability insurance policy, then such person does not qualify as an insured under the
State Farm policy. The person would, however, qualify for liability coverage under the person's
own policy in that situation thus complying with R.C. 4509.51.
If a permissive user causes an accident and is not covered by his or her own liability
insurance policy, then the State Farm policy will include such permissive user as an insured
under the State Farm liability coverage which will also fully comply with R.C. 4509.51. All
permissive drivers of State Farm insured vehicles are, therefore, always covered, either under
their own policy, or under the State Farm policy if they have no liability insurance of their own.
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R.C. 4509.50 expressly authorizes insurers to comply with the financial responsibility laws in
this fashion.
CONCLUSION:
The State Farm policy contains a clause stating that permissive users of a State Farm
vehicle do not qualify as insureds where such users have their own liability coverage. The Ohio
Supreme Court has clearly ruled that insurers may agree with their policyholders to define who
qualifies as an insured under their policies as they deem fit. The Ohio Supreme Court and
appellate courts in Ohio have specifically reviewed clauses such as the one set forth in State
Farm's policy and have agreed that this is a vafid manner of defining who is to be insured.
GEICO's only argumetit that the State Farm policy language ought not be enforced is that
the State Farm policy, by itself, will not always cover permissive drivers for liability coverage.
Having not been "certified" as proof of fmancial responsibility, there was no requirement that the
State Farm policy do so. More importantly, even if R.C. 4509.51 applied, the test is not whether
a single policy complies with the statute's mandates. According to R.C. 4509.50, a policy will
satisfy the requirements of Ohio's Financial Responsibility Laws so long as it, in conjunction
with other policies issued by other carriers, fulfills the requirements of R.C. 4509.51, The test
is, therefore, as well established by statute, whether the State Farm policy, in conjunction with
other policies issued by other carriers, satisfies the mandates of R.C. 4509.51. It does and
GEICO does not dispute that is the case. GEICO simply argues that R.C. 4509.50 does not mean
what it plainly says it means. This appeal does not present an issue of public or great general
interest because it merely involves the lower courts' application of two statutes which have been
on the books for over 40 years as well as the application of Supreme Court authority which is
directly on point and controlling herein. Ohio law is already clear that an insurance policy need
not comply with R.C. 4509.51 unless it has previously been certified. Ohio law is also perfectly
clear that, even if certified, the requirements set forth in R.C. 4509.51 may be "fulfilled by the
13
policies of one or more insurance carriers, which policies together meet such requirements."
R.C. 4509.50.
State Farm respectfully submits that this Honorable Court ought to decline this appeal
and Appellant's request that the Court judicially re-write the statutory provisions of Chapter
4509 of the Revised Code.
Respectfully submitted,
GALLAGHER, GAMS, PRYORTALLAN & LITTRELL L.L.P.
Z
By^1AMES R. GALL GHE 025658)PATRICIA A. BOYER (0074374)Attomeys for AppelleeState Farm Mutual Automobile
Insurance Company471 East Broad Street, 19th FloorColumbus, Ohio 43215-3872(614) 228-5151 FAX: (614) 228-0032j gallagher@ggptl. com;[email protected]
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CERTIFICATE OF SERVICE
I hereby certify that a copy of the foregoing was served upon P. Christian Nordstrom,
Attorney for Plaintiff-Appellant Geico General Insurance Company, at Jenks, Pyper & Oxley
Co., LPA, 901 Courthouse Plaza S.W., 10 N. Ludlow Street, Dayton, Ohio 45402 by ordinary
U.S. Mail delivery this 27t'' of October, 2008.
AMES R. GALLALGHEir(0025658)PATRICIA A. BOYER (0074374)Attorneys for AppelleeState Farm Mutual AutomobileInsurance Company
jrg\ 200323^p1\10 Memo Resp Jur SCt pb
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