Brezovar v. American Family Insurance

{¶ 15} In Berrios v. State Farm Ins.Co., 98 Ohio St. 3d 109, 2002-Ohio-7115, 781 N.E.2d 149, the court determined that the insurer could not enforce a subrogation clause because the subrogation clause was in derogation of the policy and purpose of the statute providing for UM/UIM coverage. Berrios at ¶ 29, quotingGrange Mut. Cas. Co. v. Lindsey (1986),22 Ohio St. 3d 153, 155, 22 OBR 228, 489 N.E.2d 281. Thus, the holding ofBerrios is applicable to those cases that fall within the "separate world of UM/UIM coverage." Berrios at ¶ 43.

{¶ 16} However, in the instant matter, we do not consider a case that involves UM/UIM coverage; thus,Berrios is distinguishable from this case. Brezovar has argued that in light of Berrios, Ohio law does not allow a subrogation clause to dilute coverage for medical expenses that was separately contracted for and for which Brezovar paid a separate premium. However, it would be more correct to state that Brezovar's contention is supported not by virtue of the specific holding of Berrios, but rather, by the dicta in Berrios.

{¶ 17} The Berrios court stated:

In addition to the public-policy reasoning behind Shearer was a more practical issue-that people who pay separate premiums for separate coverages should get what they pay for: "`[A] policy provision which the insured considers to be additional protection and for which he pays a premium with such extra protection in mind cannot be transposed by the insurer into a reduction of the mandatory minimum coverage.'"

Berrios at ¶ 26, quoting Shearer v. Motorists Mut.Ins. Co. (1978), 53 Ohio St. 2d 1, 8, 7 O.O.3d 1,371 N.E.2d 210, quoting Bacchus v. Farmers Ins. GroupExchange (1970), 106 Ariz. 280, 282-53, 475 P.2d 264.

{¶ 18} Likewise, in Shearer, the court also stated: *Page 787

"The medical payment coverage part of the policy is independent of the uninsured motorist coverage and should be treated the same as if it were carried with a different company."

Shearer, 53 Ohio St.2d at 7, 7 O.O.3d 1,371 N.E.2d 210, quoting Bacchus, 106 Ariz, at 282-283,475 P.2d 264.

{¶ 19} Thus, Shearer andBerrios are founded upon a central legal premise, namely, that the medical-payment coverage portion of the policy constitutes an independent policy for which the policy holder has paid an extra premium, and thus, the policyholder should be permitted to get the benefit of her bargain without any dilution. This makes sense since the policyholder has purchased a separate policy with an expectation that she will receive additional protection in a specific amount for medical expenses. Berrios at ¶ 26. To permit the insurer to retrieve sums it paid out from the funds the policyholder receives from the tortfeasor essentially undercuts the entire purpose of buying separate coverage and relieves the insurer of the fulfillment of its promise to pay under the policy. Here, Brezovar contracted for and expected to receive the benefit of a $2,000 medical-payment coverage policy, yet must now part with the additional protection she separately contracted for and paid for.

{¶ 20} In light of the above legal underpinnings of both Berrios and Shearer, it makes little sense to hold that a person may get the benefit of her bargain when she is struck by an uninsured or underinsured motorist, but she may not get the benefit of her bargain when she is struck by a motorist who is fully insured. Thus, I respectfully dissent.