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Ohio Appeals Court Holds Professional Liability Policy's 'Each Person Limit' Is Enforceable Under State Law

 
 

HLD, v. 31, n. 3 (March 2003)

Ohio Appeals Court Holds Professional Liability Policy's "Each Person Limit" Is Enforceable Under State Law

Dr. James Thomson and his medical corporation, Camden Medical Building, Inc. (CMB), sought a declaration in state trial court regarding the rights of several parties with respect to a professional liability insurance policy issued by OHIC Insurance Company (OHIC) after he was sued for medical malpractice by a patient, John M. Watkins, and for loss-of-consortium by Watkins' wife and son. The trial court found the policy's "Each Person Limit" provision, which limited coverage to one million dollars for all claims arising out of Thomson's alleged malpractice, was unenforceable under Schaefer v. Allstate Ins. Co., 76 Ohio St.3d 553 (1994) (holding that "[e]ach person who is covered by an uninsured motorist policy and who is asserting a claim for loss of consortium has a separate claim subject to a separate per policy limit"). According to the court, a statutory provision expressly allowing insurance policies to treat all claims arising from bodily injury to one person as a single claim applied only to motor vehicle policies. See Ohio Rev. Code Ann. � 3937.44. The trial court also concluded that, if Watkins died from his injuries after the expiration of the policy year in which he brought his malpractice claim and his wife and son brought their loss of consortium claims, the policy would not provide new limits of coverage for any wrongful death action brought in the subsequent policy year. OHIC and the Watkinses appealed.

After consolidating the appeals, the Ohio Court of Appeals reversed in part and affirmed in part the trial court's judgment. First, the appeals court reversed as to the trial court's conclusion that the "Each Person Limit" provision was unenforceable and that � 3937.44 did not apply to professional liability policies. Under the policy's express terms, Watkins' wife and son were not entitled to separate per-person limits of coverage for their loss-of-consortium claims, the appeals court noted. Section 3937.44, which was enacted after the Schaefer decision, states that it applies to "[a]ny liability policy of insurance including, but not limited to, automobile liability or motor vehicle liability insurance." The plain meaning of this language, the appeals court said, is at odds with the Watkinses' contention and the trial court's finding that the statute applies only to motor vehicle liability insurance policies. The appeals court also rejected the Watkinses' argument that medical malpractice did not fall under the definition of "accident" as used in � 3937.44. Applying the common law definition of accident, the appeals court noted that Watkins' injuries were "unintended and unexpected" from the standpoint of all parties concerned. Thus, the appeals court held that the policy's "Each Person Limit" provision was enforceable and that the Watkins' wife and son were not entitled to separate per-person limits of coverage for their loss-of-consortium claims.

Next, the appeals court affirmed the trial court's determination that, if Watkins died from his injuries after the policy year in which the malpractice and loss-of-consortium claims were brought, the policy would not provide new limits of coverage for any wrongful death action brought in that subsequent policy year. In so holding, the appeals court disagreed with the Watkinses' argument that separate liability limits should apply during each "claims made" policy period, even when the claims arose from the same act of alleged medical malpractice. Quoting the trial court's decision, the appeals court noted the policy "only covers claims for professional negligence that are made during the policy years in which the insured first gave written notice of incidents or circumstances which may result in a claim." The appeals court refused to find the policy's plain, unambiguous terms unenforceable and therefore affirmed the trial court's judgment on this issue.

Thomson v. OHIC Ins. Co., 780 N.E.2d 1082 (Ohio Ct. App. Dec. 2, 2002) (13 pages).

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