Gyori v. Johnston Coca-Cola Bottling Group, Inc.

Cook, J.,

dissenting. I respectfully dissent. Nowhere in the language of R.C. 3937.18 is there a requirement that the insured receive a written offer of UM coverage before an express rejection of UM coverage becomes effective. Further, that statute does not require a written rejection of UM coverage. That the rejection evidence may be controverted is not a reason to impose requirements that are not statutorily supported.

This is a case where a sophisticated commercial buyer actively sought to minimize its insurance costs by making a knowing and express anticipatory rejection of UM coverage. Consistent with company policy, Johnston’s Risk Manager, John Rains, enlisted its insurance broker, Rollins Burdick Hunter of Illinois, Inc., to create bid specifications for insurance rejecting UM coverage where lawful and otherwise opting for the minimum UM coverage permitted. In creating the specifications, Rollins discussed with Rains the coverages available, including UM coverage. Rollins then shopped these specifications to find the best price. Both Lumbermens and National Union issued proposals consistent with the bid specifications.

In order for a rejection of UM coverage to be effective, we have required that it be made expressly and knowingly. Abate v. Pioneer Mut. Cas. Co. (1970), 22 *570Ohio St.2d 161, 51 O.O.2d 229, 258 N.E.2d 429, paragraph one of the syllabus; Ady v. W. Am. Ins. Co. (1982), 69 Ohio St.2d 593, 597, 23 O.O.3d 495, 498, 433 N.E.2d 547, 549-550; R.C. 3937.18(C). While in relation to the average household consumer this more often than not will require an insurance carrier to tender a formal offer explaining the statutory offering requirements and other available options, the same does not hold true for the sophisticated insurance purchaser who solicits bid proposals excluding UM coverage.

With respect to R.C. 3937.18, insurance companies bear “the burden of showing that any rejection was knowingly made by the customer.” Ady at 597, 23 O.O.3d at 498, 433 N.E.2d at 549. In satisfying this burden, the insurance company must show that the customer was aware of the mandatory UM offering, understood the terms to be provided under that offering and expressly rejected UM coverage. See id. Where the insurance company can demonstrate that a formal offering was not required to impart to its customer the requisite knowledge concerning UM coverage, failure to formalize an offer in the face of specifications that plainly decline that coverage should not dictate coverage by default. That is exactly the result in the case subjudice where the majority states that “however express and knowing Johnston’s actions were, they could not constitute a rejection because there was no offer made which Johnston could reject.”

This court need not judicially impose further extrastatutory requirements upon insurers in order to effectuate the spirit of R.C. 3937.18. We have already construed that statute to require a knowing and express waiver in order for an insurance company to avoid UM coverage. Moreover, whether the waiver is made knowingly and expressly is an issue of fact that the insurance company bears the burden of proving. See Abate, 22 Ohio St.2d 161, 51 O.O.2d 229, 258 N.E.2d 429. Where, as here, the facts are undisputed that a customer is aware of UM coverage, understands it and makes an informed and knowledgeable waiver of that coverage, there is no reason to judicially mandate that the waiver be preceded by a written offer of UM coverage and a written rejection. Accordingly, I would affirm the appellate court’s judgment.

Moyer, C.J., and Stratton, J., concur in the foregoing dissenting opinion.