State Farm Mutual Automobile Insurance v. Webb

Wright, J.

This case requires a review of the proper construction to be given to the phrase “legally entitled to recover” as used in R.C. 3937.18(A), as well as the phrase within the policy here, “legally entitled to collect.” We hold that since Webb is not legally entitled to recover from Creekmore due to the fellow-employee immunity provided by R.C. 4123.741, Webb may not recover upon the uninsured motorist provisions of the policy issued him by State Farm. Thus, we must reverse the judgment of the court of appeals and overrule our prior holding in Thiel.

Prior to the court’s opinion in Thiel, this court decided York v. State Farm Fire & Cas. Co. (1980), 64 Ohio St. 2d 199, 18 O.O. 3d 412, 414 N.E. 2d 423. In York, the plaintiffs were injured when a city-owned fire truck, responding to an emergency call, collided with their vehicle. The insurers of the city and the driver of the fire truck denied legal liability for plaintiffs’ claims pursuant to former R.C. 701.02, which granted immunity to members of the fire department while responding to an emergency. The plaintiffs’ insurers also denied a claim filed by plaintiffs for uninsured motorist coverage based upon policies containing language almost identical to the language of Webb’s policy. We held that the insurers were not liable because the city’s immunity was dispositive of the case. In York, we stated that “* * * [t]he uninsured motorist coverage is to apply only in those situations in which the ‘lack of liability insurance’ is the reason the claim goes uncompensated, and not when the claim goes uncompensated because of the lack of liability due to the substantive laws of Ohio.” (Emphasis deleted.) Id. at 202, 18 O.O. 3d at 414, 414 N.E. 2d at 425.

In Thiel, supra, the majority asserted two questionable rationales to explain why the holding in York would *63not be applicable. First, it maintained that there is a difference between the immunity provided in York under former R.C. 701.02(B), which the court labeled “absolute immunity” and the immunity provided under workers’ compensation per R.C. 4123.741, which the majority labeled as “conditional immunity.” The second rationale given by the majority in Thiel for their holding was that R.C. 3937.18(F), which provides that the “coverages required by this section shall not be made subject to an exclusion or reduction in amount because of any workers’ compensation benefits payable as a result of the same injury or death,” must be read in pari materia with R.C. 4123.741, which would prevent the transfer of the fellow-employee immunity from the negligent co-worker to the uninsured motorist coverage carrier.

We reject the reasoning in Thiel as to both points noted above. First, we restate and adopt the language of Justice Holmes’ dissent in Thiel that “[t]he claimed dichotomy between the so-called absolute immunity in York and the ‘conditional immunity’ under R.C. 4123.741 is surely a distinction without any difference. All statutory immunities are, at some point, ‘conditioned' upon the actions of the parties. In York, there needed to be some determination that the city vehicle was indeed on an emergency run before the issue of immunity was foreclosed as a matter of law by R.C. 701.02(B). Likewise, in the case here, immunity under R.C. 4123.741 is ‘conditioned’ upon a determination that the co-employee is entitled to workers’ compensation. At the point when the immunity is obtained, there is nothing at all conditional about it. Any claim filed after such immunity is established is ineffective against the party so protected. * * *” Thiel, supra, at 113, 23 OBR at 271, 491 N.E. 2d at 1125.

Second, the majority in Thiel erred in its analysis of the effect of the fellow-employee immunity statute, R.C. 4123.741, upon the phrase “legally entitled to recover” of R.C. 3937.18(A)(1), by the in pari materia reading of the provisions of R.C. 3937.18(F),3 which provides that the amount of uninsured motorist coverage to be paid to a party is not subject to an exclusion or reduction because of workers’ compensation benefits. The rule of statutory construction of in pari materia is applicable only when the terms of a statute are ambiguous or its significance is doubtful. The language of R.C. 4123.741 is simply not ambiguous and requires no construction. The words in their common and ordinary sense have but one reasonable meaning — that one fellow employee is not entitled to recover damages from another arising out of injuries received at the work place in the course of their employment.

In putting to rest the Thiel majority’s in pari materia analysis of R.C. 3937.18(F), we must again refer to the language of the dissent in Thiel:

“In order to observe ‘a fundamental rule of statutory construction,’ we are invited, via the majority’s in pari materia analysis, to conclude that R.C. 3937.18(F) ‘expressly prohibits the exclusion or reduction of benefits payable’ due to a workers’ compensation award. It is immediately apparent that the majority treats subsection (F) *64as a general prohibition, in conflict with the express grant of immunity provided in R.C. 4123.741. The only means found of reconciliation is to broadly strip insurers of the immunities which they, through subrogation, have a legal right to depend upon. Unfortunately, there was never any conflict between the two statutes or their underlying legislative intent.
“R.C. 3937.18 applies, in clear, precise terms, to ‘automobile liability or motor vehicle liability policies] of insurance * * * [which are] delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state * * *.’ What follows are provisions to be included in the policies so issued, i.e., uninsured and underinsured motorist coverages. The subsections (B), (F) and (G) clearly apply to such policies and not to statutory immunities. That this is so is evidenced by their references to ‘coverages’ mandated to be provided in policies of insurance by R.C. 3937.18.
“The phrase ‘shall not be made subject to an exclusion or reduction in amount’ in R.C. 3937.18(F) also indicates the legislative intent to apply this subsection to insurance provisions only. The term ‘immunity’ is utilized to describe the protections which statutorily withhold liability and thereby protect a particular class, whether under workers’ compensation or a particular tort theory. Neither of the terms ‘exclusion’ or ‘reduction’ is ever utilized to describe such statutory protections. No statute anywhere provides for a ‘reduction’ in insurance on account of a workers’ compensation recovery. On the other hand, in the context of insurance policies, the term ‘exclusion’ is commonly utilized and readily understood to refer to limitations on the scope of coverage in a particular policy. The same may be said for the term ‘reduction in amount.’ Therefore, the meaning of this statute, plain upon its face, is that there can be no provision in uninsured or underinsured coverages which creates an exclusion to, or reduction in, amount of coverage because of a workers’ compensation award. This has nothing whatsoever to do with the immunity provided under R.C. 4123.741.” Id. at 113-114, 23 OBR at 271-272, 491 N.E. 2d at 1125.

In that the reasons given by the Thiel majority to distinguish York are inapplicable, it follows that the reasoning in York sets the appropriate legal standards. Those standards are appropriately noted in Kaiser v. Strall (1983), 5 Ohio St. 3d 91, 93, 5 OBR 143, 144-145, 449 N.E. 2d 1, 2, where we stated that “* * * [t]he applicable statutory provisions] * * * [are] neither ambiguous nor confusing. It is not, therefore, this court’s duty to interpret the statute[s]; we need only apply * * * [their] explicit decree. * * *”

There is an additional significant problem with the holding in Thiel. The ‘ ‘ conditioned’ ’-“ absolute” immunity dichotomy was not only arbitrary, but undermined the traditional principles of subrogation which have long-been recognized as an insurer’s derivative right. It is a universal legal maxim that an insurance company must be able to assert the same defenses as the party for whose injurious action it is requested to provide compensation. There is no reason why carriers should be refused the right to assert the very same rights and defenses available to the person whose alleged negligence they are required to indemnify. See Nobles v. Wolf (Apr. 10, 1989), Sandusky App. No. S-88-18, unreported, affirmed today in 54 Ohio St. 3d 75, 562 N.E. 2d 144, where the court of appeals chose to treat the majority holding in Thiel as an aberration.

*65Appellant has been placed in a position that would require it to provide compensation to its insured pursuant to uninsured motorist coverage despite the fact that the tortfeasor’s insurance carrier, Grange, appears to have successfully raised the fellow-employee immunity doctrine as a defense. The carrier would thus be prohibited from pursuing its subrogation rights against the wrongdoer. Such results are contrary to uninsured motorist coverage, and substantially impair the contractual relation between appellant and its insured.

Accordingly, we hold that an insurer is not liable to its insured on an uninsured motorist claim where the claim arises from an accident in which the tortfeasor motorist causing the insured’s injuries has liability insurance but is immune pursuant to the statutory fellow-employee doctrine, because the insured is not legally entitled to a recovery from the tortfeasor.

For all of the foregoing reasons, we hereby overrule Thiel v. Allstate Ins. Co. (1986), 23 Ohio St. 3d 108, 23 OBR 267, 491 N.E. 2d 1121, reverse the judgment of the court of appeals, and enter judgment for appellant.

Judgment reversed.

Moyer, C.J., Holmes and H. Brown, JJ., concur. Resnick, J., concurs in part and dissents in part. Sweeney and Douglas, JJ., dissent.

R.C. 3937.18(F) provides:

“The coverages required by this section shall not be made subject to an exclusion or reduction in amount because of any workers’ compensation benefits payable as a result of the same injury or death.”