The Supreme Court of Ohio has ruled that when read in context with other policy language, a provision in a homeowner’s insurance policy requiring that “any action” against the insurer “must be started” within one year of a loss is not ambiguous as it relates to the filing of a lawsuit against the company.
In Dominish v. Nationwide Ins. Co., the Court also held that a letter sent by the insurer more than one year after the policyholder’s loss occurred did not waive the enforceability of the one-year time limit.
The 7-0 decision, which reversed a ruling by the 11th District Court of Appeals, was authored by Justice Paul E. Pfeifer.
The case involved an insurance claim filed by Dennis Dominish of Lake County in July 2006 under a homeowner’s policy issued by Nationwide Insurance Co. The claim sought coverage for damage to the roof and interior of a home owned by Dominish that he alleged had been caused by a tree that fell on the house during a thunderstorm.
After investigating the claim, in September 2006 Nationwide sent Dominish a “partial denial” letter stating that the damage to his roof, contents of the home and mold damage were not covered losses under the policy, and enclosed a check for $6,741.96 as payment for damages to the interior of the home.
Dominish voided the check and returned it to Nationwide, indicating that it was insufficient to cover the damages he had suffered.
Nationwide later sent Dominish a second letter, reiterating its partial denial of coverage, and again enclosing a check for $6,741.96 for damage to the interior of the home.
Dominish again voided the check and returned it to Nationwide.
On July 25, 2008, almost two years after the tree fell, Dominish filed suit against Nationwide. Nationwide argued that the lawsuit was barred by a clause in the insurance contract that stated:
“Suit Against Us. No action can be brought against us unless there has been full compliance with the policy provisions. Any action must be started within one year after the date of loss or damage.”
The trial court agreed and granted Nationwide’s motion for summary judgment.
Dominish appealed, and the 11th District Court of Appeals reversed, concluding that the policy language was ambiguous, and, in any event, that Nationwide, by its actions, had waived its right to enforce the one-year limitation clause. Nationwide sought and was granted Supreme Court review of the 11th District’s ruling.
Writing for the Court in the current decision, Justice Pfeifer observed that while the language of the limitations clause in the Nationwide policy issued to Dominish could have been clearer, when read in context the provision is not ambiguous.
He wrote: “This court has long adhered to the principle that ambiguous language in an insurance contract is construed against the insurance company. … In isolation, any word or phrase in the contested policy language may be ambiguous. When considered as a whole, however, the provision is unambiguous. … The policy states in language clear enough to be plainly understood that any lawsuit by an insured against Nationwide must be commenced within one year of the loss or damage sustained. We conclude that the policy language is not ambiguous.”
The Court also rejected the 11th District’s holding that Nationwide had waived the enforceability of the limitations clause by responding to a letter from Dominish after the one-year lawsuit deadline had expired.
Justice Pfeifer wrote: “To be deemed to have waived its right to enforce a limitation-of-action clause pursuant to our holding in Hounshell (v. American States Ins. Co, 1981), an insurance company must have recognized liability or held out a reasonable hope of adjustment and by doing so, induced the insured to delay filing a lawsuit until after the contractual period of limitation had expired. … Nationwide clearly stated that it was not liable beyond the amount of the check that it twice proffered to Dominish.”
Dominish v. Nationwide Ins. Co.; Slip Opinion No. 2011-Ohio-4102; Lake App. No. 2009-L-116, 2010-Ohio-3048.
Source: Supreme Court of Ohio
Topics Lawsuits Ohio Homeowners
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