Mr. Stumbo was killed when his tractor-trailer truck collided with the Farringtons' horse that was loose on the highway. Mrs. Stumbo filed a lawsuit on her behalf and on behalf of other survivors of the deceased.
The trial court ruled that the Farringtons' insurance company was liable only up to $300,000 under a limitation in the policy. Mrs. Stumbo argued on appeal that a higher limit of $1,000,000 applied because several people were injured by Mr. Stumbo's death. The Court of Appeals ruled that the $300,000 limit applied without regard to the number of persons who claim to have been injured by the death of Mr. Stumbo.
Plaintiff-appellant, Bonita Mae Stumbo, administratrix of the estate of Leo Curtis Stumbo, appeals from a decision of the Franklin County Court of Common Pleas granting summary judgment for defendant-appellee, Acceleration National Insurance Company.
Plaintiff's decedent was killed when his tractor-trailer truck struck a horse which had apparently escaped from its barn and wandered into the roadway. At the time of the accident, the horse's owners, defendants Bradley Farrington and Richard Wilgus, were covered by Acceleration's commercial liability policy issued to the Ohio Harness Horsemen's Association ("OHHA") and its members. Appellant, on her own behalf and on behalf of the couple's minor children, the decedent's parents, and other next of kin, brought a wrongful death action against Farrington and Wilgus as owners and keepers of the horse for their failure to maintain the horse off a public roadway.
The present declaratory judgment action sought a determination of the applicable policy limits under the Acceleration policy, which provided for $ 300,000 coverage per occurrence and $ 1,000,000 aggregate coverage per policy period. Appellant initially asserted that the policy provided $ 300,000 for each of the insureds (Farrington and Wilgus), for a total of $ 600,000; appellant subsequently amended her demand to assert that $ 1,000,000 was payable under the policy on the basis that the multiple claimants in the case could each claim $ 300,000 up to the $ 1,000,000 aggregate limit.
The case was decided by the trial court on cross-motions for summary judgment, with the trial court finding that (a) the policy provided joint coverage for Farrington and Wilgus with a total maximum of $ 300,000 for all damages that either or both of them might be obligated to pay due to the death of Leo Curtis Stumbo, and (b) that the policy provided $ 300,000 in total liability coverage for all claims or suits relating to the death of Leo Curtis Stumbo regardless of the number of claimants.
Appellant has timely appealed and brings the following assignment of error:
"THE LOWER COURT COMMITTED REVERSIBLE ERROR IN GRANTING SUMMARY JUDGMENT IN FAVOR OF DEFENDANT-APPELLEE ACCELERATION NATIONAL INSURANCE COMPANY."
An axiom of insurance law is that "language in a contract of insurance reasonably susceptible of more than one meaning will be construed liberally in favor of the insured and strictly against the insurer." Faruque v. Provident Life & Accident Ins. Co. (1987), 31 Ohio St.3d 34. However, "when words used in a policy of insurance have a plain and ordinary meaning, it is neither necessary nor permissible to resort to construction unless the plain meaning would lead to an absurd result." Olmstead v. Lumbermens Mutual Ins. Co. (1970), 22 Ohio St.2d 212, 216. The liberal construction rule is, therefore, not applicable if the contract as a whole is clear and the normal rules of contractual construction can be applied. Dairyland Ins. Co. v. Finch (1987), 32 Ohio St.3d 360, 363, overruled on other grounds, State Farm Auto Ins. Co. v. Alexander (1992), 62 Ohio St.3d 397.
The declarations page of the policy at issue provides for an "each occurrence limit" of $ 300,000, and a "general aggregate limit" of $ 1,000,000. "Occurrence" is defined under the policy as an "accident." Under a policy section entitled "How Much We Pay," the policy provides:
"The limits, shown on the Declarations and subject to the following conditions, are the most we pay regardless of the number of:
"a. Insureds under the Commercial Liability Coverage;
"b. persons or organizations who sustain injury or damage; or
"c. claims made or suits brought.
"2. The General Aggregate is the most we will pay during a policy period for the sum of:
"a. all damages under Coverage L [liability], except damages due to injury or damage included in the Products/Completed Work Hazard; and
"4. The Each Occurrence Limit, subject to the General Aggregate Limit and the Products/Completed Work Hazard Limit, is the most we will pay for the total of:
"a. damages under coverages L and N,
"b. medical expenses under coverage M,
"due to all bodily injury and property damage arising out of a single occurrence."
Appellant asserts that a lack of specificity in the first paragraph of the "How Much We Pay" provision can lead to multiple interpretations, under which the policy can reasonably be read as providing a maximum of $ 300,000 in coverage for each of the two horse owners, for a total of $ 600,000 available to the plaintiffs, or a maximum of $ 300,000 for each wrongful death claimant up to the aggregate of $ 1,000,000. We disagree.
The $ 300,000 occurrence limit is defined by the policy as the largest amount paid regardless of the number of insureds or number of persons sustaining injury. The accident which lead to Leo Curtis Stumbo's death was a single occurrence. We find that the "per occurrence limit" applies, and that recovery by all plaintiffs is limited to a total of $ 300,000 under the policy. We find that the policy contains no ambiguity on the issue of whether the "per occurrence limit" applies to events, as opposed to insureds or claimants; the trial court therefore correctly concluded that the $ 300,000 per occurrence limit unambiguously applies.
Appellant relies upon the Ohio Supreme Court's holding in Savoie v. Grange Mutual Ins. Co. (1993), 67 Ohio St.3d 500, to support the argument that multiple single-occurrence limits should apply to a single accident based upon the number of claimants. We do not believe that Savoie is apposite to this case, because Savoie dealt with a "split limit" policy, providing for a lower "per person" limit, and a higher "per accident" limit upon multiple application of the per person limit. In contrast, the policy before us involves, essentially, a "per accident" limit without reference to the number of persons injured, and an aggregate limit upon the total amount paid for multiple occurrences during the policy period. The per occurrence/aggregate limit dichotomy in the policy before us bears no relation to the per person/per accident dichotomy in Savoie. Even without considering the impact of the recent enactment of amended substitute S.B. 20, legislatively overruling certain aspects of Savoie, that case has no application to the case before us.
In accordance with the foregoing, appellant's assignment of error is overruled and the judgment of the Franklin County Court of Common Pleas is affirmed.
Return to Top of This Page
Return to Insurance Page