Wolfe, Appellant, v. Wolfe et al.; Colonial Penn Insurance Company, Appellee, 88 Ohio St. 3d 246

Douglas, J. This court is called upon yet again to resolve issues involving automobile insurance policies and provisions of uninsured and underinsured motorist coverage. In this matter we are asked by the parties to interpret R.C. 3937.31(A). Specifically we must decide what effect R.C. 3937.31(

A) has in determining the applicable law governing appellant’s underinsured motorist claim. For the reasons that follow, we find that the trial court and the court of appeals erred in their respective resolutions of this matter. R.C. 3937.31 provides in part: “(

A) Every automobile insurance policy shall be issued for a policy period of not less than two years or guaranteed renewable for successive policy periods totaling not less than two years. Where renewal is mandatory, ‘cancellation,’ as used in sections 3937.30 to 3937.39 of the Revised Code, includes refusal to renew a policy with at least the coverages, included insureds, and policy limits provided at the end of the next preceding policy period.

No insurer may cancel any such policy except pursuant to the terms of the policy, and in accordance with sections 3937.30 to 3937.39 of the Reyised Code * * *.” Appellant contends that, as a matter of law, all automobile liability insurance policies issued in this state must have, at a minimum, a guaranteed two-year policy period. Appellant interprets R.C. 3937.31(

A) to require that the policy period be at least two years regardless of the number of one month, six-month, or yearly renewals. Appellant further argues that R.C. 3937.31(

A) establishes the existence of successive two-year policy periods. In contrast, appellee claims that the “guarantee period” set forth in R.C. 3937.31(

A) applies only to the first two years after an insurance company initially issues coverage to an insured. Since the statutory provision at issue is subject to varying

interpretations, it is fair to say that it is ambiguous. Therefore, R.C. 3937.31(

A) must be construed to give effect to the legislative intent. Harris v. Van Hoose (1990), 49 Ohio St.3d 24, 26, 550 N.E.2d 461, 462, citing Cochrel v. Robinson (1925), 113 Ohio St. 526, 149 N.E. 871, paragraph four of the syllabus. It is a cardinal rule of statutory

interpretation that a court must first look to the language of the statute itself to determine legislative intent. Provident Bank v. Wood (1973), 36 Ohio St.2d 101, 105, 65 O.O.2d 296, 298, 304 N.E.2d 378, 381. In addition, R.C. 1.49 provides that if a statute is ambiguous, the court, in determining the intention of the legislature, may consider, among other matters, both the objective of the statute and the consequences of any particular construction. We conclude initially that the language of the statute does not support appellee’s position. R.C. 3937.31(

A) provides that “[e]very automobile insurance policy shall be issued for a policy period of not less than two years or guaranteed renewable for successive policy periods totaling not less than two years.” (Emphasis added.) In promulgating R.C. 3937.31(A), the General Assembly, in its wisdom, decided not to choose language that would limit any guarantee policy period solely and entirely to the first two years following the insurer’s original offering of coverage. Had the General Assembly intended otherwise, it could easily have said so. In addition, R.C. 3937.31(B), construed with R.C. 3937.31(A), contemplates successive two-year policy periods. R.C. 3937.31(

B) establishes that “[sections 3937.30 to 3937.39 of the Revised Code do not prohibit: * * * (4) [a]n insurer’s refusing for any reason to renew a policy upon its expiration at the end of any mandatory period, provided such nonrenewal complies with the procedure set forth in

section 3937.34 of the Revised Code.” (Emphasis added.) There is no question that the “mandatory period” of R.C. 3937.31(B)(4) refers to the two-year period set forth in R.C. 3937.31(A). According to appellee, there can be only one two-year mandatory period, i.e., the two-year period after the insurance company first issues coverage to the insured. However, by obvious implication, use of the word “any” to modify “mandatory period” suggests that the statute contemplates successive, mandatory policy periods. Clearly, R.C. 3937.31(

B) provides support for the proposition that the General Assembly, by enacting R.C. 3937.31(A), intended to provide for mandatory two-year periods beyond the first two years following initiation of coverage. To interpret R.C. 3937.31(B)(4) any other way would render the language of R.C. 3937.31(

A) inoperative. Moreover, the objective sought by the General Assembly in promulgating the statutory scheme involved herein would be defeated should we reach any other conclusion. One of the purposes behind R.C. 3937.31 is to ensure that consumers of automobile liability insurance are able to maintain the level of coverage and policy limits that they had originally contracted for. See R.C. 3937.31(A) (“ ‘cancellation,’ * * * includes refusal to renew a policy with at least the coverages, included insureds, and policy limits provided at the end of the next preceding policy period”).

See, also, R.C. 3937.31(B)(3) (policy modifications that do not effect a withdrawal or reduction in the initial coverage or policy limits are permitted). Second, the statute is intended to protect insureds from unilaterally being left without the protections that automobile insurance coverage affords by requiring that insurers provide an adequate method of notification when canceling insurance policies. See R.C. 3937.31(A) (grounds for cancellation limited), 3937.31(B)(4) (cancellation permitted at end of any mandatory period), 3937.32 (notice of cancellation required), and 3937.33 (procedures for cancellation).

It is clear that the public policy of this state, as gleaned from the Acts of the General Assembly, is to ensure that all motorists maintain some form of liability coverage on motor vehicles operated within Ohio. R.C. 3937.31(

A) is designed to further that policy. In DeBose v. Travelers Ins. Cos. (1983), 6 Ohio St.3d 65, 67, 6 OBR 108, 110, 451 N.E.2d 753, 755-756, this court stated that “[i]t is beyond reasonable dispute that R.C. 3937.30 et seq. are primarily designed to protect the public from the dangers which uninsured motorists pose. R.C. 3937.31(

A) attempts to ameliorate this threat by mandating that insureds whose policies have been in effect for less than two years receive notice of any planned cancellation of their policies in time for them to secure new coverage.” In addition, the. public policy is buttressed by R.C.

Chapter 4509, Ohio’s Financial Responsibility Act. Thus, restricting the guarantee period in R.C. 3937.31(

A) solely to the first two years of initial coverage defeats, rather than advances, the laudatory objectives of the General Assembly. Accordingly, we hold that, pursuant to R.C. 3937.31(A), every automobile liability insurance policy issued in this state must have, at a minimum, a guaranteed two-year policy period during which the policy cannot be altered except by agreement of the parties and in accordance with R.C. 3937.30 to 3937.39. We further hold that the commencement of each policy period mandated by R.C. 3937.31(

A) brings into existence a new contract of automobile insurance, whether the policy is categorized as a new policy of insurance or a renewal of an existing policy. Pursuant to our decision in Ross v. Farmers Ins. Group of Cos. (1998), 82 Ohio St.3d 281, 695 N.E.2d 732, the statutory law in effect on the date of issue of each new policy is the law to be applied. Finally, the guarantee period mandated by R.C. 3937.31(

A) is not limited solely to the first two years following the initial institution of coverage. Rather, the statute applies to every new automobile insurance policy issued, regardless of the number of times the parties previously have contracted for motor vehicle insurance coverage. Applying the foregoing to the case at bar, the parties agree that the original issuance date of appellant’s automobile liability insurance policy was December 12, 1983. Counting successive two-year policy periods from that date, appellant’s last guaranteed policy period would have run from December 12, 1993 to December 12, 1995.

Am.Sub.S.B. No. 20 was enacted on October 20, 1994, approximately fourteen months before the end of appellant’s two-year guaranteed policy period. Therefore, those provisions of the statute intended to supersede our decision in Savoie, 67 Ohio St.3d 500, 620 N.E.2d 809, could not have been incorporated into the contract of insurance until the mandatory policy period had expired on December 12, 1995 and a new guarantee period had begun. A final contention is made regarding our decision in Ross, supra, and our reliance therein on Benson v. Rosler (1985), 19 Ohio St.3d 41, 19 OBR 35, 482 N.E.2d 599.

Appellee contends that our decisions in Benson and Ross resolve this matter in its favor. We disagree. In Benson, a majority of this court held that “statutes pertaining to a policy of insurance and its coverage, which are enacted after the policy’s issuance, are incorporated into any renewal of such policy if the renewal represents a new contract of insurance separate from the initial policy.” (Emphasis added.) Id. at 44, 19 OBR at 37, 482 N.E.2d at 602, citing 12 Appleman, Insurance Law and Practice (1981) 166,

Section 7041. A majority of the court in Benson went on to determine, notwithstanding the provisions of R.C. 3937.31(A), that the policies at issue therein, written for six-month durations, were considered new polices at their renewal. Id. Given the language of R.C. 3937.31(A), that determination in Benson is confusing at best and flat-out wrong at its worst. When we relied on Benson in Ross, we did so without consideration of the R.C. 3937.31(

A) question which, of course, was not before us in Ross. Ross, 82 Ohio St.3d at 288-289, 695 N.E.2d at 737. We now believe that in Benson the majority misconstrued R.C. 3937.31(A). The discussion of R.C. 3937.31(

A) in the Benson court’s per curiam opinion could be described as cursory at best. The Benson majority failed to consider the statute’s proper application, as well as the public policy behind the enactment, to contracts of automobile liability insurance issued in this state. In effect, the majority’s final determination in Benson renders the language of R.C. 3937.31(

A) meaningless. Moreover, Benson, as well as Ross, could not be dispositive of the matter before us without also considering the mandatory requirements of R.C. 3937.18(A). Pursuant to R.C. 3937.18(A), insurers are required to offer uninsured and underinsured motorist coverage with every motor vehicle policy delivered or issued in this state. Failure to do so results in the insure.d’s acquiring such coverage by operation of law. Gyori v. Johnston. Coca-Cola Bottling Group, Inc. (1996), 76 Ohio St.3d 565, 567, 669 N.E.2d 824, 826. Were we to adopt appellee’s argument, insurance companies would have the unenviable task of complying with R.C. 3937.18(

A) every time a renewal constituted a new policy of insurance. Thus, we conclude that certain aspects of the court’s decision in Benson are contradictory to the language and statutory purpose of R.C. 3937.31(A). We, therefore, limit the holding of Benson and reject those portions of the Benson opinion to the extent that they conflict with R.C. 3937.31(A). Accordingly, we reverse the judgment of the court of appeals and remand this matter to the trial court for final determination consistent with this opinion. Judgment reversed and cause remanded. Moyer, C.J., Resnick, F.E. Sweeney and Pfeifer, JJ., concur. Cook and Lundberg Stratton, JJ., dissent.