Stith v. Milwaukee Guardian Ins., Inc. , 44 Ohio App. 3d 147 ( 1988 )

The defendant appeals from the trial court's decision granting plaintiff's summary judgment motion. We reverse.

On September 22, 1982, defendant, Milkaukee Guardian Insurance, Inc. ("Guardian"), issued plaintiff, Joseph J. Stith, a six-month renewable automobile insurance policy. Stith continued to renew the Guardian policy through the March 22, 1985 to September 22, 1985 period. However, not having received a premium payment for the succeeding period, Guardian sent Stith notice on September 24, 1985 that if payment was not received by October 5, 1985, the policy would terminate. On September 28, 1985, Stith's son, Gary M. Stith, was killed in an automobile accident involving an uninsured driver. Stith filed a claim with Guardian.

Subsequent to authorizing medical payments on Stith's claim, Guardian learned that Stith had purchased an insurance policy from Nationwide Insurance that became effective September 23, 1985, five days prior to Gary Stith's death. Guardian notified Stith denying coverage pursuant to the following clause in its insurance contract:

"If other insurance is obtained on your insured car, any similar insurance afforded under this policy for that car will cease on the effective date of the other insurance."

Stith filed an action for declaratory judgment requesting that the court find that the Guardian policy was in force on September 28, 1985, the date of the accident. Stith argued in his summary judgment motion that the "automobile termination" clause, under which Guardian denied coverage, is in direct conflict with the policy's "other insurance" clause, which reads in part:

"If there is other applicable auto liability insurance on a loss covered by this Part, we will pay our proportionate share as our limits of liability bear to the total of all applicable liability limits. * * *"

Stith referred the trial court to Pooler v. Shelby Mut. Ins.Co. (Dec. 23, 1985), Montgomery App. No. 9407, unreported, a case factually similar to the cause sub judice, and in which the policy there in question contained nearly identical provisions to those contained in the Guardian policy. In Pooler, the appellate court agreed with the trial court's holding that the "automatic termination" and "other insurance" clauses were ambiguous and that "* * * `an average person could reasonably conclude that Shelby Mutual would provide coverage for its proportionate share where another policy is purchased. * * *" (Quoting the trial court.)

Relying on Pooler, the trial court found the provisions in the Guardian policy to be ambiguous and granted Stith's summary judgment motion. Guardian appeals.

Assignment of Error "The court erred as a matter of law in granting summary judgment for the plaintiff. The automobile termination clause of the subject insurance policy is valid and enforceable, is unambiguous, and does not violate the Financial Responsibility Act."

The first question is whether the two provisions create an ambiguity in the Guardian policy. We do not believe they do.

We are cognizant of the rule that in construing an insurance contract, such construction must be given as will harmonize and give effect to all its provisions, and that no provision is to be wholly disregarded as inconsistent with other provisions unless no other reasonable construction is possible. German Fire Ins.Co. v. Roost (1897), 55 Ohio St. 581, 45 N.E. 1097. We believe that the provisions in the Guardian policy may be read clearly and unambiguously. Guardian cites cases in other jurisdictions in which a policy included "automatic termination" and "other insurance" clauses and where the court construed the policy as a whole and found it to be clear and umambiguous. Taxter v. SafecoIns. Co. (1986), 44 Wash. App. 121, 721 P.2d 972; Songer v.State Farm Fire Cas. Co. (1980), 91 Ill. App. 3d 248,414 N.E.2d 768; Allstate Ins. Co. v. Republic Ins. Co. (1974),78 Misc. 2d 668, 357 N.Y. Supp. 2d 630. The Taxter court explained that, despite the "automatic termination" provision, the "other insurance" provisions apply "* * * to all other insurance which covers an accident, not just the insured's, e.g., a passenger injured in an accident is covered by his own policy, the driver's policy, and perhaps by the policy carried by the driver of the other vehicle. * * *" Taxter, supra, at 129, 721 P.2d at 976.

Thus, in situations where the "automatic termination" clause does apply, the "other insurance" clause is simply inoperative. We agree with this rationale and hold that these clauses may be read in a clear and unambiguous fashion.

Stith argues that despite the "automatic termination" provision in the policy, Guardian could not cancel his insurance without the appropriate written notice required by R.C. 3937.31 et seq. We do not agree that R.C. 3937.31 et seq. governs the method of cancellation in all situations. It is apparent that the purpose of this statute is to provide the insured with adequate notice of an impending cancellation, thus affording the opportunity to obtain other automobile insurance. However, when the automobile insurance cancellation is predicated upon the insured's purchase of other insurance, the purpose of the statute remains unimpaired. See Taxter, supra. We hold, therefore, that such an automatic termination provision is valid.

The assignment of error is sustained.

Judgment reversed.

BAIRD, P.J., and GEORGE, J., concur.