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Worley v. Ohio Mut. Ins. Assn./United Ohio Ins. Co.12/16/1991
BROGAN, Judge.
This appeal concerns the issue of whether an insurance company in providing underinsurance motorist coverage may validly limit the time for bringing an action by its insured on such contract to a period of one year.
The appellant, Robert Worley, filed a complaint for declaratory judgment in the common pleas court, seeking a declaration of his rights under a certain policy of insurance with appellee United Ohio Insurance Company, which provided underinsurance coverage to appellant. The insurance policy contained the following provision:
"No suit or request for arbitration may be brought against the company unless you have complied with all terms of this policy and unless action is filed within twelve (12) months after the date of the accident." (Emphasis added.)
In the complaint appellant alleged he and his wife, Zelia, were involved in an automobile accident with Ralph Corbin on June 17, 1987, and that they settled their claim against Corbin on April 13, 1990 for Corbin's insurance policy limits of $35,000. Appellant further alleged in the complaint that he purchased underinsurance coverage from the appellee in the amount of $500,000.
The appellant further alleged that he and his wife sustained injuries in excess of Corbin's policy limits and he made a demand upon the appellee for payment of benefits under the underinsurance provision of his policy with the appellee. When the appellee refused payment because the appellant had failed to bring suit or request arbitration within one year of the accident, appellant brought this declaratory judgment action.
The trial court granted summary judgment for the appellee and found that the one-year limitation found in the insurance contract was a reasonable one and thus was enforceable, citing Colvin v. Globe Am. Cas. Co. (1982), 69 Ohio St.2d 293, 23 O.O.3d 281, 432 N.E.2d 167. Since it was undisputed that the appellant failed to bring suit or seek arbitration within one year of the accident, the trial court granted the appellee summary judgment in its favor. From that judgment, the appellant has timely appealed and raised two assignments of error:
"The trial court erred by its ruling that there is no difference between uninsured and underinsured [insurance], as it pertains to the twelve-month arbitration clause.
"The court below erred in ruling that an ambiguity did not exist when construing conflicting terms within the insurance contract."
Generally, in the absence of a controlling statute to the contrary, a provision in a contract may validly limit, as between the parties, the time for bringing an action on such contract to a period less than that prescribed in a general statute of limitations, provided the shorter period is a reasonable one. Order of United Commercial Travelers of Am. v. Wolfe (1947), 331 U.S. 586, 67 S.Ct. 1355, 91 L.Ed. 1687; Appel v. Cooper Ins. Co. (1907), 76 Ohio St. 52, 80 N.E. 955 (upholding a six-month limitation clause).
The Ohio Supreme Court held in Colvin that as a general rule a period of one year provided by the insurance contract entered into by the parties is not an unreasonable period of time with which to bring an action against the company on the uninsured motorist provision of the policy. The court noted that R.C. 3937.18, providing for the mandatory offering of uninsured motorist coverage, has no statute of limitations, and thus a clear, unambiguous, and reasonable period in the insurance contract may provide for the time to bring an action under the policy.
The court noted that "although there may be presented some additional difficulties in a
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