Summary
The Ohio Supreme Court addresses how the phrase "amounts available for payment" in Ohio Revised Code 3937.18(A)(2) affects setoffs against underinsured motorist coverage. Applying its holding in Clark v. Scarpelli, the court concludes that the relevant amounts are those actually accessible to and recoverable by each claimant, while applying that rule to the consolidated Littrell, Stickney, and Karr appeals. The court reverses the judgments of the courts of appeals and remands the matters for further proceedings.
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Practice areas
Questions Presented
- Whether the phrase "amounts available for payment" in R.C. 3937.18(A)(2) refers to the amounts actually accessible to and recoverable by an underinsured-motorist claimant or instead to the tortfeasor's liability-policy limits.
- How the statutory setoff is calculated when multiple claimants share proceeds from a tortfeasor's liability policy.
- Whether attorney fees and expenses, and a statutory Medicare subrogation lien, are included in determining the amount available for payment.
- Whether the claimants in Littrell, Stickney, and Karr were entitled to underinsured-motorist benefits under the governing statutory interpretation.
Holdings
- For purposes of the underinsured-motorist setoff, "amounts available for payment" means the amounts actually accessible to and recoverable by the individual underinsured-motorist claimant from all bodily-injury liability bonds and insurance policies covering persons liable to the claimant.
- When multiple claimants share a tortfeasor's liability proceeds, the setoff is based on the amount actually available to the particular insured claimant, not the total liability-policy limits or total settlement paid to all claimants.
- Attorney fees and other expenses of the insured are not deducted from the amount available for payment and therefore are not part of the setoff calculation.
- A statutory Medicare subrogation lien is considered when determining the amount available for payment from the tortfeasor because it is not an expense of the insured.
- The Westfield-insured Pratt occupants and the Stickney wrongful-death beneficiaries were not entitled to underinsured-motorist benefits because the amounts available from the tortfeasors exceeded the applicable uninsured-motorist protection; Ernie Pratt was entitled to benefits reduced by the $8,000 he received; Vicki Husk and John Beddow were entitled to benefits after the appropriate claimant-specific setoff; and Ginger Karr was not entitled to benefits because her recovery exceeded her $12,500 per-person limit.
Key quotations
“For the purpose of setoff, the ‘amounts available for payment’ language in R.C. 3937.18(A)(2) means the amounts actually accessible to and recoverable by an underinsured motorist claimant from all bodily injury liability bonds and insurance policies (including from the tortfeasor’s liability carrier).” (430)
“As a preliminary matter, we hold that expenses and attorney fees are not part of the setoff equation.” (434)
“Conversely, a statutory subrogation lien to Medicare should be considered when determining the amounts available for payment from the tortfeasor.” (434)
Factual background
The consolidated appeals arose from automobile accidents causing deaths and injuries, with tortfeasor liability policies and separate underinsured-motorist policies covering some claimants. The tortfeasors' liability policies were settled for specified amounts, which were allocated among multiple wrongful-death and personal-injury claimants. The claimants sought underinsured-motorist benefits, and the insurers argued that the tortfeasors' policy limits or total settlement amounts barred recovery under the statutory setoff provision.
Procedural history
In Littrell, the Butler County Court of Common Pleas granted summary judgment to the defendant insurers, and the Butler County Court of Appeals affirmed. The court of appeals certified a conflict with decisions of the Second District. In Stickney and Karr, the Ohio Supreme Court had previously vacated the appellate judgments and remanded the matters, then held them for resolution with Littrell. The Supreme Court reversed the appellate judgments and remanded the causes to the trial courts.
Remand instructions
The matters were remanded to the trial courts for further proceedings consistent with the opinion, subject to the possibility that actions already taken on remand in Stickney and Karr may have resolved those matters.