Beagle v. Walden

[This opinion has been published in Ohio Official Reports at 

78 Ohio St.3d 59

.]




BEAGLE, PETITIONER, v. WALDEN ET AL.; STATE FARM MUTUAL AUTOMOBILE
                        INSURANCE COMPANY, RESPONDENT.
                     [Cite as Beagle v. Walden, 

1997-Ohio-234

.]
Insurance—Motor vehicles—Mandatory offering of uninsured and underinsured
        motorist coverage—Amended R.C. 3937.18(A)(2) is constitutional.
   (No. 95-2409—Submitted November 12, 1996—Decided March 26, 1997.)
ON ORDER from the United States District Court for the Northern District of Ohio,
     Eastern Division, Certifying a Question of State Law, No. 5:95CV1146.
                                  __________________
        Jeffrey S. Wilkof, for petitioner.
        Buckingham, Doolittle & Burroughs and David W. Hilkert; Meyers,
Hentemann, Schneider & Rea and Henry A. Hentemann, for respondent.
        Clark, Perdue, Roberts & Scott, Edward L. Clark and Glen R. Pritchard, in
support of petitioner, for amicus curiae Ohio Academy of Trial Lawyers.
        Vorys, Sater, Seymour & Pease, John J. Kulewicz and William D. Kloss, in
support of respondent, for amicus curiae Ohio Insurance Institute.
                                  __________________
        COOK, J.
        {¶ 1} The United States District Court for the Northern District of Ohio,
Eastern Division, has certified the following question to this court pursuant to
S.Ct.Prac.R. XVIII:
        “Is Ohio Revised Code § 3937.18(A)(2) unconstitutional on any grounds
under the facts of this case, including those stated by Plaintiff[?]”
        {¶ 2} We respond to the certified question as follows: We do not find R.C.
3937.18(A)(2) unconstitutional on any ground argued by the plaintiff.
                             SUPREME COURT OF OHIO




       {¶ 3} The statement of facts as presented to this court in the federal district
court’s certification order follows:
       “This case involves a claim by Plaintiff, Jason Beagle, for benefits under an
insurance policy issued by Defendant, State Farm Mutual Automobile Insurance
Company.
       “On November 23, 1994, Plaintiff was operating a motor vehicle on I-76,
eastbound, in Westfield Township, Medina County, Ohio.               As Jason was
proceeding on the interstate, a motor vehicle driven by Katherine Walden crossed
the median and collided with the Beagle vehicle head-on. Mr. Beagle sustained
serious injuries. To date, the medical bills for Jason Beagle are in excess of One
Hundred Thousand Dollars ($100,000.00).
       “Katherine Walden was insured by Farmers Insurance Company with One
Hundred Thousand Dollars ($100,000.00) per person and Three Hundred Thousand
Dollars ($300,000.00) per accident liability coverage. Jason was an insured under
automobile liability policies issued by Defendant State Farm, which policies
provided for uninsured/underinsured limits of One Hundred Thousand Dollars
($100,000.00) per person and Three Hundred Thousand Dollars ($300,000.00) per
accident.
       “Under the provisions of amended Ohio Revised Code 3937.18(A)(2),
effective October     [20], 1994, Jason Beagle would not be entitled to any
underinsured motorist proceeds.”
       {¶ 4} The petitioner raises several grounds for finding that the amendment
violates the Ohio Constitution. Petitioner argues that R.C. 3937.18(A)(2) invades
the judiciary’s exclusive province (Section 1, Article IV) and violates the “one-
subject” rule (Section 15[D], Article II), the Right to a Remedy Clause (Section 16,
Article I) and the Equal Protection and Privileges and Immunities Clauses (Section
2, Article I) of the Ohio Constitution.




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                                 January Term, 1997




        {¶ 5} In addressing the petitioner’s arguments, we adhere to two well-
established legal principles. The first requires that “[s]tatutes are presumed to be
constitutional unless shown beyond a reasonable doubt to violate a constitutional
provision.” Fabrey v. McDonaldPolice Dept. (1994), 

70 Ohio St.3d 351, 352

, 

639 N.E.2d 31, 33

. The second cautions that “[t]he legislature is the primary judge of
the needs of public welfare, and this court will not nullify the decision of the
legislature except in the case of a clear violation of a state or federal constitutional
provision. Williams v. Scudder (1921), 

102 Ohio St. 305

, 

131 N.E. 481

, paragraphs
three and four of the syllabus.” Savoie v. Grange Mut. Ins. Co. (1993), 

67 Ohio St.3d 500, 515

, 

620 N.E.2d 809, 820

 (Moyer, C.J., dissenting).
                               The One-Subject Rule
        {¶ 6} The amendment to R.C. 3937.18(A)(2) in question was accomplished
by the enactment of Am.Sub.S.B.No. 20, 145 Ohio Laws, Part I, 204, 210 (“Senate
Bill 20”). The bill as originally introduced did not affect R.C. 3937.18. Its scope
was limited to Revised Code sections dealing with financial responsibility law. It
was only after the bill had been passed by the Senate and considered by the House
on several occasions that this court announced its decision in Savoie, and that
Senate Bill 20 was amended to include a legislative response.
        {¶ 7} Petitioner and his amicus curiae urge that the late amendments to
Senate Bill 20 constitute legislative logrolling -- the practice that the one-subject
provision is intended to eliminate. Hoover v. Franklin Cty. Bd. of Commrs. (1985),

19 Ohio St.3d 1, 6

, 19 OBR 1, 5, 

482 N.E.2d 575, 580

. Specifically, petitioner
contends that the amendments related to uninsured/underinsured motorist coverage
do not share the required commonality with the financial responsibility
amendments of the Act to satisfy the one-subject rule.
        {¶ 8} In determining whether Senate Bill 20 passes muster under the one-
subject rule, we follow State ex rel. Dix v. Celeste (1984), 

11 Ohio St.3d 141

, 11
OBR 436, 

464 N.E.2d 153

. In Dix, this court stressed the directory nature of the




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one-subject rule, holding that a judicial finding of unconstitutionality is proper only
when a violation of the rule is manifestly gross and fraudulent. 

Id. at 145

, 11 OBR
at 440, 

464 N.E.2d at 157

. In order to find a legislative enactment violative of the
one-subject rule, a court must determine that various topics contained therein lack
a common purpose or relationship so that there is no discernible practical, rational
or legitimate reason for combining the provisions in one Act. 

Id.

       {¶ 9} No doubt, Senate Bill 20 addresses multiple topics. A common
thread, however, ties each of these topics together. Each amendment works as part
of a legislative scheme to reduce the dangers posed by uninsured and underinsured
motorists.    This court recognized the nexus between financial responsibility
requirements and the availability of uninsured/underinsured motorist coverage in
Savoie, 

67 Ohio St.3d at 507-508

, 

620 N.E.2d at 815

, wherein the majority noted:
       “This interpretation of R.C. 3937.18(G) is consistent with the concerted
effort of the General Assembly to force all motorists to maintain liability insurance
coverage on motor vehicles being operated within the state of Ohio. The Financial
Responsibility Act requires that all motorists have the ‘ability to respond in
damages for liability,’ and provides severe penalties for failure to comply. R.C.
4509.01(K).
       “Regrettably, the General Assembly has not succeeded in its effort to force
every motorist to maintain liability insurance coverage. *** The purchase of full
uninsured/underinsured coverage is the only possible means for responsible
motorists to protect themselves and their families.”
       {¶ 10} Accordingly, we conclude that there exists a common relationship
among the topics contained in Senate Bill 20, and, therefore, combination of those
topics does not offend the one-subject rule.
                               Separation of Powers
       {¶ 11} Petitioner argues that by legislatively overruling this court’s decision
in Savoie, the General Assembly usurped the exclusive province of the judiciary.




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                                January Term, 1997




Contrary to the petitioner’s assertions, however, the Savoie court did not rely upon
constitutional considerations in reaching its conclusions. Instead, the Savoie court
interpreted the legislative purpose behind R.C. 3937.18.
       {¶ 12} Interpretation of the state and federal Constitutions is a role
exclusive to the judicial branch. In the absence of a constitutional concern,
however, the judiciary’s function is to interpret the law as written by the General
Assembly. “‘[T]he legislature is the final arbiter of public policy, unless its acts
contravene the state or federal Constitutions.’” State v. Smorgala (1990), 

50 Ohio St.3d 222, 224

, 

553 N.E.2d 672, 675

, quoting State v. Kravlich (1986), 

33 Ohio App.3d 240, 246

, 

515 N.E.2d 652, 657-658

 (Markus, C.J., concurring).
       {¶ 13} The interpretation of R.C. 3937.18(A)(2) advanced in Savoie did not
meet with legislative approval. It was the General Assembly’s prerogative to
redress its dissatisfaction with new legislation. See Hearing v. Wylie (1962), 

173 Ohio St. 221

, 223, 

19 O.O.2d 42

, 43, 

180 N.E.2d 921

, 923, overruled on other
grounds in Village v. Gen. Motors Corp. (1984), 

15 Ohio St.3d 129, 131

, 15 OBR
279, 280, 

472 N.E.2d 1079, 1081

.
                                 Equal Protection
       {¶ 14} Petitioner alleges that R.C. 3937.18(A)(2) violates the Equal
Protection Clause of the Ohio Constitution because it denies “certain insurance
consumers the benefit of the underinsured coverage they had purchased, while
permitting others access to those benefits.” Again, we disagree.
       {¶ 15} The standard for determining violations of equal protection is
essentially the same under the state and federal law. Beatty v. Akron City Hosp.
(1981), 

67 Ohio St.2d 483, 491

, 

21 O.O.3d 302, 307

, 

424 N.E.2d 586, 591-592

.
       {¶ 16} The preliminary step in analyzing an equal protection challenge
involves scrutiny of classifications created by the legislation. “[W]here there is no
classification, there is no discrimination which would offend the Equal Protection
Clauses of either the United States or Ohio Constitutions.” Conley v. Shearer




                                         5
                              SUPREME COURT OF OHIO




(1992), 

64 Ohio St.3d 284, 290

, 

595 N.E.2d 862, 868

. Moreover, “[o]nly when it
is shown that the legislation has a substantial disparate impact on classes defined in
a different fashion may analysis continue on the impact of those classes.” Califano
v. Boles (1979), 

433 U.S. 282

, 294, 

99 S.Ct. 2767, 2774

, 

61 L.Ed.2d 541, 551

.
        “‘[W]henever the law operates alike on all persons and property, similarly
situated, equal protection cannot be said to be denied.’” Union Sav. Assn. v. Home
Owners Aid, Inc. (1970), 

23 Ohio St.2d 60, 63

, 

52 O.O.2d 329, 330

, 

262 N.E.2d 558, 560

, quoting Walston v. Nevin (1888), 

128 U.S. 578, 582

, 

9 S.Ct. 192, 193

, 

32 L.Ed. 544, 546

. Insureds carrying identical policy limits are treated the same under
R.C. 3937.18(A)(2). The only classifications of insureds treated differently under
R.C. 3937.18(A)(2) are those who, by contract, have chosen different policy limits.
        {¶ 17} Insureds purchase their levels of protection. If an insured purchases
uninsured/underinsured motorist coverage in the amount of $100,000 per accident
and $300,000 per occurrence, the insured is guaranteed total recovery for an
accident up to those policy limits, regardless of the tortfeasor’s insurance status. If
the insured purchases higher or lower policy limits, those limits will dictate the total
recovery available stemming from an accident with an uninsured or underinsured
tortfeasor.
        {¶ 18} Differences in treatment based on the individual contract between
the insurer and the insured do not impinge upon a fundamental right or burden a
suspect class. Moreover, a rational basis undeniably supports giving effect to the
policy limits bargained for by the parties.
                                 Right to a Remedy
        {¶ 19} Petitioner claims that R.C. 3937.18(A)(2) destroyed a remedy
created by Savoie. Savoie, however, did not create a remedy. The Savoie court
interpreted what coverage R.C. 3937.18(A)(2) then mandated.                The Savoie
controversy involved the amount which the insureds were entitled to receive in
accordance with insurance contracts which were subject to the requirements of R.C.




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                                January Term, 1997




3937.18. Savoie was not based on constitutional or common-law principles of full
recovery in tort.
       {¶ 20} R.C. 3937.18 results from legislative policymaking. Coverage in
accordance with R.C. 3937.18 is not a common-law right. Any contractual right
to coverage prescribed under R.C. 3937.18 does not, therefore, come within the
protection of Section 16, Article I of the Ohio Constitution. Fabrey v. McDonald
Police Dept., 

70 Ohio St.3d at 355

, 

639 N.E.2d at 35

; Mominee v. Scherbarth
(1986), 

28 Ohio St.3d 270, 291-292

, 28 OBR 346, 364-365, 

503 N.E.2d 717

, 733-
734 (Douglas, J., concurring). To the extent that the legislature may exercise its
policymaking authority to alter the contractual relationship between insurer and
insured to provide greater protection to the insured, it may also limit or remove
those protections once given. See Byers v. Meridian Printing Co. (1911), 

84 Ohio St. 408

, 422, 

95 N.E. 917

, 919; see, also, Mominee v. Scherbarth, 

28 Ohio St.3d at 292

, 28 OBR at 365, 

503 N.E.2d at 734

 (Douglas, J., concurring).
                            Privileges and Immunities
       {¶ 21} R.C. 3937.18 places a statutory obligation on all motor vehicle
liability insurers to offer uninsured/underinsured motorist coverage. To this extent,
the parties’ freedom to contract is superseded in furtherance of important public
policy concerns. In placing this obligation on insurers, the General Assembly
dictates the terms of the mandatory offering of uninsured/underinsured motorist
coverage. Petitioner takes issue with those portions of Senate Bill 20 that limit an
insurer’s statutory obligation, claiming that those limitations violate the Privileges
and Immunities Clause of the Ohio Constitution.
       {¶ 22} Because the obligation to offer uninsured/underinsured motorist
coverage is rooted in public policy and imposed by the legislature, the legislature
is free to delimit the obligation. By obligating all motor vehicle liability insurers
in a like manner, the General Assembly does not grant special privileges or




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immunities. Accordingly, the Privileges and Immunities Clause is inapplicable to
this case.
                                        Conclusion
        {¶ 23} In accordance with the foregoing analysis, we determine that R.C.
3937.18(A)(2) survives each of petitioner’s constitutional challenges.
        MOYER, C.J., and LUNDBERG STRATTON, J., concur.
        PFEIFER, J., concurs in part.
        DOUGLAS and F.E. SWEENEY, JJ., dissent.
        RESNICK, J., dissents and finds the statute unconstitutional.
                               __________________
        PFEIFER, J., concurring in part.
        {¶ 24} I concur in the answer to the certified question given in the lead
opinion with respect to the one-subject rule. I express no opinion on the other parts
of the answer to the certified question given in the lead opinion.
        {¶ 25} Section 15(D), Article II of the Constitution states that “[n]o bill
shall contain more than one subject, which shall be clearly expressed in its title.”
The Constitution does not state that all provisions of a bill must affect the same
chapter of the Revised Code. The Constitution does not prohibit legislative
logrolling, whatever exactly that is. Rather, the Constitution requires a bill to
contain no more than one subject.
        {¶ 26} Am.Sub.S.B.No. 20, 145 Ohio Laws, Part I, 204 is titled: “An Act:
To amend sections 3301.07, 3937.18, *** 4509.102, 4509.103, 4509.104, and
4513.022 of the Revised Code to revise the Financial Responsibility Law relative
to the maintenance and demonstration of proof of financial responsibility and to the
law’s administration, enforcement, and sanctions; *** to permit automobile
liability insurance policies to preclude all stacking of coverages; to declare that
underinsured motorist coverage is not excess coverage ***.” Senate Bill 20
diminishes the protection provided by underinsured motorist coverage and is




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                                   January Term, 1997




logically inconsistent with the General Assembly’s ongoing attempt to ensure that
all drivers in this state are covered by insurance. Nevertheless, using “one subject”
in its commonsense meaning compels the conclusion that Senate Bill 20’s
amendment of R.C. 3937.18(A)(2) does not violate the one-subject rule. To
conclude otherwise would put legislation through too fine a strainer and result in a
less responsive General Assembly, if not a paralyzed one.
        {¶ 27} This is not to say that the process of enactment used by the General
Assembly in this instance was not distasteful. R.C. 3937.18 (A)(2) was amended
without due deliberation and as a last-minute change at the end of the legislative
session, even though the decision to be superseded had been decided nearly a year
earlier. Further, the General Assembly’s supersedure of a decision of this court by
name is highly unusual. See Am.Sub.S.B.No. 20, Sections 7, 9 and 10, 145 Ohio
Laws, Part I, 238-239. However ugly the process may have been, it was not
unconstitutional.
        {¶ 28} An unduly narrow interpretation of the one-subject rule would lead
to insuperable problems. States that have an extremely narrow interpretation of
their versions of the one-subject rule are deluged with thousands of legislative
proposals to amend statutes each year. The resulting profusion of legislation
necessarily means that little attention can be paid to each matter. Often, in those
states, as many as fifty different bills are presented and voted on as a single package.
This practical response to an untenable situation defeats the purpose of a narrow
interpretation of “one subject.”
        {¶ 29} A narrow interpretation of “one subject” could lead the General
Assembly to contemporaneously enact multiple amendments, creating attendant
problems. See State v. Wilson (1997), 

77 Ohio St.3d 334

, ___ N.E.2d ___.
        {¶ 30} I continue to believe that the common understanding of the term
“underinsured motorist coverage” encompasses all damages not covered by the
tortfeasor’s liability insurance, up to the independent limit of the underinsured




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                             SUPREME COURT OF OHIO




motorist coverage. To expect purchasers of underinsured motorist coverage to
comprehend the technical import of the language of their insurance contracts, not
to mention the impact of R.C. 3937.18, is not realistic. As a possible solution to
the inherent confusion concerning the meaning of “underinsured motorist
coverage,” I recommend a new term, for the consideration of the General Assembly
and liability insurers, as a substitute for “underinsured motorist coverage”:
“combined motorist coverage.”
       {¶ 31} “Combined motorist coverage” means logically what the General
Assembly has defined “underinsured motorist coverage” to mean. This term could
be readily understood by judges, lawyers and insurance agents, not to mention the
insurance-consuming public. Though it may be anathema to some, I believe
purchasers of insurance should be able to understand the extent of their coverage
without the intercession of an attorney.
       {¶ 32} Senate Bill 20 returns Ohio to the state of confusion concerning
underinsured motorist coverage that reigned until Savoie v. Grange Mut. Ins. Co.
(1993), 

67 Ohio St.3d 500

, 

620 N.E.2d 809

, was decided. Much of the confusion
has been generated by the failure to appreciate the difference between uninsured
and underinsured. These terms represent two distinctly different concepts and
should be treated differently.
       {¶ 33} Pursuant to the current version of R.C. 3937.18(A)(2), underinsured
motorist coverage applies only when the tortfeasor’s liability coverage does not
provide as much coverage as the victim’s underinsured motorist coverage.
According to the statute, “underinsured motorist coverage” is always less than the
dollar amount listed on the policy and the billing to the insured. In fact, to collect
the full stated amount of underinsured motorist coverage, the insured has to collect
under his or her uninsured motorist coverage.
       {¶ 34} Until R.C. 3937.18(A)(2) is amended to put consumers on notice as
to what is actually being purchased, the ongoing viability of R.C. 3937.18(A)(2),




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                             January Term, 1997




on grounds other than the one-subject rule challenge rejected today, will be in
question.
                            __________________




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