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Sarimento et al. v. Grange Mutual Casualty Company, 106 Ohio St.3d 403 (2005)

Facts:

Appellants (six individuals, including two minors) were driving in New Mexico when they were struck by a motor vehicle driven by an uninsured motorist. The Appellant’s truck was insured under an insurance contract with Apellee that was entered into in the state of Ohio. The insurance contract provided for uninsured and underinsured motorist coverage as long as the claim was brought within two years of the date of the accident. Appellants brought the claim exactly three years after the accident, within New Mexico’s statute of limitations for personal injury claims. The trial court dismissed Appellant’s claim on the basis that they missed the agreed upon two-year limitation.

On appeal, Appellant’s argued that the two-year limitation period was unreasonable and unenforceable because it was shorter than New Mexico’s personal injury statute of limitations Additionally, Appellant’s argued that even if the limitation was enforceable, it was tolled as to the claims of two minors under R.C. 2305.16. The appellate court determined Ohio law applied to the contract and that the two-year statute of limitations was reasonable, but determined that Ohio’s tolling statute applied to the minor Appellants and remanded for further proceedings. A discretionary appeal was accepted.

Issues Presented:

  1. Whether a two-year contractual limitation period for filing uninsured- and underinsured-motorist claims is reasonable and enforceable when the underlying tort claim is governed by the laws of another state, whose statute of limitations for the claim is longer than two years.
  2. Whether an insured who is a minor is bound by the terms and conditions of an insurance policy, including a two-year contractual limitation period for commencing a Uninsured/Underinsured Motorist claim, or whether R.C. 2305.16 applies to toll the limitations provision during the period of minority.

Rule:

  1. . A two-year contractual limitation period for filing uninsured- and underinsured-motorist claims is reasonable and enforceable, regardless of whether the foreign state in which the accident occurred provides a longer statute of limitations for the underlying tort claim.

  2. R.C. 2305.16 does not toll the limitation period in an insurance contract for persons who are minors at the time the cause of action accrues.

Analysis:

  1. First, the Court identifies that an insurance policy is a contract and an uninsured motorist claim sounds in contract, not tort. Since the insurance contract was entered into on Ohio, was issued to an Ohio resident, and covered vehicles primarily garaged in Ohio, Ohio law applies to the claim. Here, the insurance contract’s plain language clearly gives a two-year limitation and time limiting clauses are valid under Ohio law as long as they are clear and unambiguous. 

    Next, the Court uses two cases, Miller v. Progressive, 69 Ohio St.3d 619 (1994) and Lane v. Grange Mut. Cos., 45 Ohio St.3d 63 (1989), to explain that the clause is reasonable. Lane held that a clause that permitted uninsured motorists claims to be brought “within the time period allowed by the applicable statute of limitations for bodily injury or death actions in the state where the accident occurred,” was unclear and ambiguous. Lane, 45 Ohio St.3d at 64. Thus, the court reasoned that contract provisions do not have to be as long as personal injury statute of limitations. In Miller, a contractual one-year limitation period for uninsured motorist claims was unreasonable and void. Miller, 69 Ohio St.3d at 623-24. However, the court in Miller held that a two-year provision would be reasonable. Id. at 624-25. Thus, the two-year provision provided by Appellee was reasonable and Appellant’s had no reason why they couldn’t bring the claim within that time frame.

  2. To determine the applicability of the R.C. 2305.16, the Court looks at the plain language of the tolling statute. R.C. 2305.16 applies only to certain statutes of limitations created by law in “sections 1302.98, 1304.35, and 2305.04 to 2305.14 . . ..” R.C. 2305.06 is one of the applicable statutes and states that, “a[] . . . contract . . . in writing shall be brought within fifteen years after the cause thereof accrued.” As stated above, Ohio has already determined that limiting the statutes of limitations in an insurance contract is allowed as long as it is reasonable and unambiguous. Thus, the tolling statute only applies to contracts with fifteen-year statute of limitations as provided under R.C. 2305.06 and if minors agree otherwise, they will be taken out of the statute and are bound to the agreement. The court verifies this result by stating that there are a number of areas of the law in which we do not toll a statute of limitations for minors, such as wrongful death claims or worker’s compensation.

Dissent:

The dissent does not believe that the majority properly interpreted Miller when they determined that it created a reasonable limitation period that would apply in every case. They claim Miller stood for the proposition that the plaintiff’s right to a claim could not be diluted or eliminated by the agreed upon time frame. Here, lowering the plaintiff’s right to the insurance claim from three years under New Mexico tort law to 2 years under Ohio contract law was improper and diluted the right.

About the Authors: Sawan & Sawan is a multi-generational, family owned law firm practicing law in the areas of car accidents, truck accidents, insurance claims, personal injury, litigation and more. Our firm practices law in Ohio (Toledo, Columbus), Georgia, Michigan and Florida

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