Walburn v. Dunlap

Slip Opinion No. 2009-Ohio-1221, decided March 24, 2009

On March 24, 2009, the Ohio Supreme Court held that an order declaring that an insured is entitled to coverage, but that does not address damages, is not a final appealable order eligible for immediate appellate review. Walburn v. Dunlap, Slip Opinion No. 2009-Ohio-1221.

Walburn v. Dunlap involved a personal injury lawsuit stemming from a vehicle collision that occurred while Plaintiff Walburn was in the scope and course of his employment. The driver who caused the collision was uninsured. In the suit, Plaintiffs sought to recover uninsured motorist ("UM") coverage under both their own liability insurance policy with Ohio Mutual Insurance and Plaintiff's employer's policy with National Union Fire Insurance Company of Pittsburgh ("National Union").

Plaintiffs and Defendant National Union filed cross-motions for summary judgment on the issue of the availability of UM coverage. The trial court denied National Union's motion, and granted Plaintiffs' motion, finding that Plaintiffs were entitled to UM coverage from National Union. The judgment entry included the following Civil Rule 54(B) language: "This is a Final and Appealable order. The Court finds there is no just reason for delay."

National Union filed a motion for reconsideration and appealed. After the trial court granted the motion for reconsideration, National union dismissed its appeal. The Plaintiffs filed a second motion for summary judgment and, once again, the trial court granted the motion, finding that Plaintiffs were entitled to UM coverage from National Union. The judgment entry was almost identical to the one filed months earlier. National Union again appealed.

On appeal, the Fourth District Court of Appeals held that the order finding UM coverage was a final, appealable order under R.C. 2505.02(B)(2) because it was an order that affected a substantial right made in a special proceeding and the trial court included a Rule 54(B) certification that there was no just reason for delay. Walburn, 2007-Ohio-5398, at § 10.

The Ohio Supreme Court determined that a conflict existed with decisions from the Second, Ninth, and Tenth Districts, and ordered the parties to brief the following issue: "In a case involving multiple claims, is a judgment in the declaratory judgment action a final appealable order when the trial court finds that an insured is entitled to coverage, includes a Civil Rule 54(B) certification, but does not address the issue of damages?"

The Court answered no to the certified question. R.C. 2505.02(B)(2) provides that "An order is a final order that may be reviewed, affirmed, modified, or reversed, with or without retrial, when it is * * * [a]n order that affects a substantial right made in a special proceeding * * *." Because Walburn involved a declaratory judgment action, it qualified as a "special proceeding" under R.C. 2505.02(B)(2). However, because the order at issue did not rule on whether the insured was entitled to damages, it did not "affect a substantial right" such that it became a "final order" under R.C. 2505.02(B)(2). The Court held that even though the court ordered National Union to provide UM coverage, Plaintiffs must still establish their damages in order to receive those UM benefits.

Finally, because the UM coverage decision was not a final order, the Rule 54(B) determination of no just reason for delay was of no effect. The trial court's use of this language did not convert an otherwise non-final order into a final, appealable order.

In its analysis, the Court distinguished its previous decision in Gen. Acc. Ins. v. Ins. Co. of N. Am. (1989), 44 Ohio St.3d 17, on the basis that Gen. Acc. Ins. involved a duty to defend, as opposed to entitlement to insurance coverage. Gen. Acc. Ins. held that the duty to defend involves a substantial right for purposes of R.C. 2505.02(B)(2). Thus, even when other claims are still pending, a trial court decision on the duty to defend can be a final appealable order. Walburn makes clear that Gen. Acc. Ins. controls when an insured seeks both a duty to defend and indemnification.

The 6-1 decision was authored by Justice Lundberg Stratton, with Chief Justice Moyer, and Justices O'Connor, O'Donnell, Lanzinger and Cupp concurring. Justice Pfeifer dissented on the grounds that he would dismiss the cause as having been improvidently accepted and certified.