James Hindall v. WINTERTHUR INTERNATIONAL and TRAVELERS INDEMNITY CO. OF ILLINOIS

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RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2003 FED App. 0249P (6th Cir.)
File Name: 03a0249p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
JAMES HINDALL,
Plaintiff-Appellant,
v.
WINTERTHUR
INTERNATIONAL and
TRAVELERS INDEMNITY CO.
OF ILLINOIS,
Defendants-Appellees.
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No. 01-3414
Appeal from the United States District Court
for the Northern District of Ohio at Toledo.
No. 00-07429—James G. Carr, District Judge.
Argued: June 12, 2003
Decided and Filed: July 25, 2003
Before: KEITH, MOORE, and GIBBONS, Circuit Judges.
_________________
COUNSEL
ARGUED: Matthew C. Huffman, GOODING, HUFFMAN,
KELLEY & BECKER, Lima, Ohio, for Appellant. Laura M.
A. Faust, ROETZEL & ANDRESS, Akron, Ohio, Henry A.
2 Hindall v. Winterthur Int’l et al. No. 01-3414
Hentemann, DAVIS & YOUNG, Cleveland, Ohio, for
Appellees. ON BRIEF: Matthew C. Huffman, GOODING,
HUFFMAN, KELLEY & BECKER, Lima, Ohio, for
Appellant. Laura M. A. Faust, ROETZEL & ANDRESS,
Akron, Ohio, Henry A. Hentemann, DAVIS & YOUNG,
Cleveland, Ohio, for Appellees.
_________________
OPINION
_________________
KAREN NELSON MOORE, Circuit Judge. The plaintiff
James Hindall (“Hindall”) appeals the district court’s grant of
summary judgment to Winterthur International (“Winterthur”)
and Travelers Indemnity Co. of Illinois (“Travelers”) as well
as the district court’s denial of his summary judgment motion.
Hindall was injured in a motor vehicle accident caused by the
negligence of an underinsured driver. At the time of the
accident, Hindall was an employee of Philips Display, a
subsidiary of Philips Electronics North America, which had
contracted for insurance with both Winterthur and Travelers.
Hindall claims that he is an insured under these policies and
is entitled to uninsured/underinsured (“UM/UIM”) coverage
under both of them.
The district court premised its grant of summary judgment
to the defendants on its belief that Philips Display, Hindall’s
employer, was validly offered and had validly rejected
UM/UIM coverage, and that the Winterthur and Travelers
policies therefore did not cover the injuries Hindall sustained.
In light of the Ohio Supreme Court’s recent decision in
Kemper v. Michigan Millers Mutual Insurance Co., 781
N.E.2d 196 (Ohio 2002), however, we are bound to hold that
the offer and rejection of UM/UIM coverage here were
invalid, and that UM/UIM coverage therefore arises by
operation of law under both the Travelers and Winterthur
policies. We therefore REVERSE the district court’s grant
of summary judgment to Winterthur and Travelers, VACATE

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No. 01-3414 Hindall v. Winterthur Int’l et al. 3
the district court’s denial of summary judgment to Hindall,
and REMAND the case for further proceedings consistent
with this opinion.
I. BACKGROUND
On May 1, 1999, Hindall was involved in a motor vehicle
accident in Findlay, Ohio, when a car driven by Mandy
Klinger struck Hindall’s motorcycle. Although Klinger’s
insurance company paid Hindall the limit of Klinger’s
liability policy, Hindall’s damages exceeded the amount paid.
At the time of the accident, Hindall was an employee of
Philips Display Components, Inc. (“Philips Display”), in
Ottawa, Ohio, a subsidiary of Philips Electronics North
America (“Philips Electronics”). Philips Electronics, at that
time, was the named insured on two insurance policies.
The first of the policies was issued by Travelers. The
Travelers policy provided primary commercial automobile
liability coverage in the amount of $2 million per accident or
loss. The policy purported to cover subsidiaries of Philips
Electronics, including Philips Display. The Travelers policy
was agreed upon for Philips Electronics by John Esile, Philips
Electronics’s Risk Manager. On December 31, 1998, Esile
filled out and signed a UM/UIM coverage rejection/selection
form associated with the Travelers policy. The form briefly
summarized the nature of UM/UIM insurance, and then
provided a series of boxes, which allowed Esile either to
accept or to reject UM/UIM coverage. Esile checked the box
rejecting UM/UIM coverage. Esile was given the authority
to waive UM/UIM coverage by Thomas Hassett, Philips
Electronics’s Director of Risk Management. However, while
the form provided a brief description of UM/UIM coverage,
it did not specify the premiums for UM/UIM coverage.
Moreover, although the form listed Philips Electronics as an
insured, it did not mention Philips Display. Lastly, there is no
evidence in the record that Esile and Hassett (both officers of
Philips Electronics) were given written authority by anyone
4 Hindall v. Winterthur Int’l et al. No. 01-3414
within Philips Display to reject UM/UIM coverage on Philip
Display’s behalf.
The second policy considered here is the commercial
umbrella policy issued by Winterthur to Philips Electronics.
The Winterthur policy, as an excess policy, provides an
additional layer of insurance for occurrences resulting in
losses exceeding the coverage limits of the Travelers policy.
The Winterthur policy was also in effect at the time of
Hindall’s accident and had liability limits of $12 million. The
only discussion of UM/UIM coverage in the policy is a terse
statement that UM/UIM coverage is provided only to the
extent it is provided in the Travelers policy. There is no
evidence of a written offer or rejection of UM/UIM coverage
with regard to the Winterthur policy. This is consistent with
the remarks of John Esile, who testified in his deposition that
he was not responsible for purchasing or rejecting umbrella or
excess insurance, and that he was unaware of anyone
specifically rejecting UM/UIM coverage under the Winterthur
policy.
On July 17, 2000, Hindall filed a complaint in the United
States District Court for the Northern District of Ohio seeking
UM/UIM coverage under the Travelers and Winterthur
policies. All of the parties moved for summary judgment, and
the district court issued an opinion denying Hindall’s motion
for summary judgment and granting Winterthur’s and
Travelers’s motions. The district court concluded that Esile’s
written rejection of UM/UIM coverage with regard to the
Travelers policy was valid and sufficed to show that there was
a valid offer of UM/UIM coverage as well. The district court
therefore held that UM/UIM coverage did not arise by
operation of law under the Travelers policy. Since the
Winterthur policy only provided coverage for liabilities
covered by the Travelers policy, the district court concluded
that the Winterthur Policy also provided no coverage for
Hindall. Hindall filed a timely notice of appeal.

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No. 01-3414 Hindall v. Winterthur Int’l et al. 5
II. ANALYSIS
A. Jurisdiction
The district court had jurisdiction over this diversity case
pursuant to 28 U.S.C. § 1332, because Hindall’s citizenship
is diverse from the insurance companies’ citizenships. See
Lee-Lipstreu v. Chubb Group of Ins. Cos., 329 F.3d 898, 899-
900 (6th Cir. 2003) (holding that federal courts have
jurisdiction over actions by an insured against his or her own
insurance company if the two are of diverse citizenship
because such actions are not direct actions within the meaning
of 28 U.S.C. § 1332(c)(1)). We have jurisdiction over the
district court’s final judgment pursuant to 28 U.S.C. § 1291.
B. Standard of Review
This court reviews a district court’s grant of summary
judgment de novo. Gen. Elec. Co. v. G. Siempelkamp GmbH
& Co., 29 F.3d 1095, 1097 (6th Cir. 1994). A district court’s
decision to deny a party’s motion for summary judgment is
usually considered an interlocutory order and thus not
appealable, see Phelps v. Coy, 286 F.3d 295, 298 (6th Cir.
2002), cert. denied, 123 S. Ct. 866 (2003), but “when the
appeal from a denial of summary judgment is presented
together with an appeal from a grant of summary judgment,
we have jurisdiction to review the appropriateness of the
district court’s denial,” see Thomas v. United States, 166 F.3d
825, 828 (6th Cir. 1999). We review a district court’s denial
of summary judgment based purely on legal grounds de novo.
Id. Summary judgment is proper only if there is no genuine
issue as to any material fact and the moving party is entitled
to a judgment as a matter of law. Fed. R. Civ. P. 56(c).
C. The Travelers Policy
Former Ohio Revised Code § 3937.18 required insurance
companies, when they made an offer of motor vehicle liability
insurance, also to offer UM/UIM coverage in an amount
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1The Ohio legislature has subsequently amended the UM/UIM law
to eliminate any requirement that insurers offer UM /UIM cove rage. See
OH IO REV. CODE AN N. § 3937.18(A) (2002). The uncodified law
accompanying this revision explains that a major purpose of the
amendment was to “[e]liminate the possibility of uninsured motorist
coverage, underinsured motorist coverage, or both . . . being implied as
a matter of law in any insurance policy.” Id.
However, “[f]or the purpose of determining the scope of coverage of
an underinsured motorist claim, the statutory law in effect at the time of
entering into a co ntract for automobile liability insurance controls the
rights and duties of the contracting parties.” Ross v. Farmers Ins. Group
of Cos., 695 N.E.2d 732, 732 syllabus para. 1 (Ohio 1998). As the
relevant policies in this case were agreed upon (and became effective) on
December 31, 1998 , the 200 2 amendments to this statute do not apply —
although H.B. 261, which amended the statute in 1997, does. Its impact
will be discussed later.
equal to the liability limits of the policy.1 If an insurance
company did not offer UM/UIM coverage in such an amount,
UM/UIM coverage was deemed to arise by operation of law
in the full amount of the policy limits. Gyori v. Johnston
Coca-Cola Bottling Group, Inc., 669 N.E.2d 824, 827 (Ohio
1996). Ohio courts stressed that “[t]he purpose of the
requirement is to protect persons injured in automobile
accidents from losses which, because of the tort-feasor’s lack
of liability coverage, would otherwise go uncompensated,”
and therefore held that the “statute should be construed
liberally in order to effectuate [this] legislative purpose.” Id.
at 826 (quotations omitted). As a result, “rejection of UM
coverage [had to] be made expressly and knowingly,” and it
was the “insurance companies [that bore] the burden of [this]
showing.” Id. (quotation omitted).
In order to minimize the problems of proof in these
UM/UIM cases, the Ohio Supreme Court in Gyori interpreted
the statute (as it was written before it was amended in 1997
by H.B. 261) to require both a written offer of UM/UIM
coverage and a written rejection of that offer. Id. at 827. In
a later decision (again interpreting the pre-H.B. 261 statute),
the Ohio Supreme Court expanded upon those requirements.

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No. 01-3414 Hindall v. Winterthur Int’l et al. 7
See Linko v. Indem. Ins. Co. of N. Am., 739 N.E.2d 338 (Ohio
2000). In Linko, the court explained that the written offer of
UM/UIM coverage had to include “a brief description of the
coverage, the premium for that coverage, and an express
statement of the UM/UIM coverage limits.” Id. at 342. The
Linko court also made it clear that a parent corporation could
only reject insurance on behalf of its separately incorporated
subsidiary corporations if certain safeguards were met. The
Linko court required that “[s]eparately incorporated named
insureds must each be listed in a rejection form” and that
“[o]nly with a subsidiary’s written authorization may a parent
corporation reject UM/UIM coverage on the subsidiary’s
behalf.” Id. at 341. The Linko court also made clear that
extrinsic evidence could not be used to show that there was a
valid offer or a valid rejection of UM/UIM coverage. Instead,
“the four corners of the insurance agreement control in
determining whether the waiver was knowingly and expressly
made . . . . [T]he issue of whether coverage was offered and
rejected should be apparent from the contract itself.” Id. at
343. All of these conditions applied both to primary
insurance policies as well as to umbrella policies. Gyori, 669
N.E.2d at 826 (“The mandates of R.C. 3937.18 apply to
providers of excess coverage as well as providers of primary
liability coverage.”).
In 1997, the Ohio legislature passed H.B. 261, which made
several changes to § 3937.18. Although it was initially
uncertain how the passage of H.B. 261 would affect the Linko
requirements, it is now clear that the Linko requirements still
apply to offers and rejections of UM/UIM coverage even after
H.B. 261. See Kemper v. Michigan Millers Mut. Ins. Co., 781
N.E.2d 196 (Ohio 2002); see also Roberts v. Universal
Underwriters Ins. Co., __ F.3d __, 2003 WL 21503211, at *5
(6th Cir. July 2, 2003) (explaining that Kemper makes it
“unmistakably clear that the Linko requirements still apply to
policies after H.B. 261 went into effect”). With this point
established, Travelers has no defense to Hindall’s claim — as
8 Hindall v. Winterthur Int’l et al. No. 01-3414
2Travelers has never disputed this key po int. Throughout this
litigation, Travelers’s only argument has been that the Linko requirements
no longer apply after H.B. 261; it has never argued that the Linko
requirements were satisfied under the facts of this case.
3There are two other violations of Linko here, although the failure of
Travelers to put the premiums in writing is sufficient to render T ravelers’s
offer of UM/UIM coverage invalid. First, Linko requires that
“[s]eparately incorporated named insureds must each be listed in a
rejection form to satisfy the offer requirement of R.C. 3937.18.” Linko
v. Indem. Ins. Co. of N. Am., 739 N.E.2d 338, 341 (Ohio 2000). The
Linko court later exp lained that “[a]n offer to the parent does not per se
constitute an offer to the subsidiary. Without the name of the entity on
the selection form, no offer of UM/UIM coverage has been made to that
entity.” Id. at 342. Here, the rejection form does not list Philips D isplay;
it only names P hilips Electronics. Although Travelers argues that Philips
there is simply no question here that the offer in this case does
not comport with the Linko requirements.2
The most apparent violation of Linko in this case is that the
written offer contains no discussion of the price of UM/UIM
premiums, which was something Linko explicitly required.
Linko, 739 N.E.2d at 342 (“We agree with the following
required elements for written offers imposed by Ohio
appellate courts: a brief description of the coverage, the
premium for that coverage, and an express statement of the
UM/UIM coverage limits.”). The lack of premium
information makes the written offer in this case deficient in
exactly the same respect as the written offer in Roberts, which
was held legally inadequate because it similarly failed to state
the required premium information. Under Roberts, we must
hold the written offer of UM/UIM coverage in this case to be
fatally defective. See Roberts, __ F.3d at __, 2003 WL
21503211, at *5 (pointing out that this “holding is consistent
with numerous Ohio intermediate appellate court decisions
that have held offers invalid under Kemper solely for not
containing premium information”). We therefore conclude
that Travelers’s offer of UM/UIM coverage was not validly
made, and therefore was not validly rejected.3 See Gyori, 669

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No. 01-3414 Hindall v. Winterthur Int’l et al. 9
Display was clearly incorporated into the agreem ent via p art of a separate
endorsem ent, Linko plainly requires that the separately incorporated
named insureds each be listed on th e selection form itself, not that they
just appear within the offer. Our conclusion that the offer and rejection
is therefore invalid under Linko is consistent with a post-Kemper Ohio
intermediate court that considered this sam e issue. See Inlow v. Da vis,
No. CA20 02-08-071, 20 03 W L 2137 3154, at *4 (Ohio C t. App.–1 2th
Dist. June 16, 2003) (holding that because “[t]he written rejection simply
fails to nam e Bigg’s [the subsidiary] as an insured,” it is therefore
defective under Kem per because “a rejection of UM/U IM co verage on
behalf of Bigg’s cannot be inferred from Supervalu’s [the parent
company’s] rejection”).
Second, Linko “require[d] that a subsidiary’s authorization to a parent
corporation to waive UM /UIM coverage benefits on its behalf must be in
writing and must be incorporated into the contract.” Linko, 739 N.E.2d
at 343 ; see also id. at 341 (“O nly with a sub sidiary’s written authorization
may a parent corporation reject UM /UIM coverage o n the sub sidiary’s
behalf.”). This requirement also has not been satisfied. There is no
evidence in the record that anyone at Philips Display authorized the
waiver of UM /UIM coverage in writing. In fact, according to John Esile,
the risk manager o f Philips Electronics, no one at Philips Disp lay would
even have known about the offer of UM /UIM coverage, as it was Philips
Electronics that was responsible for procuring insurance. T his is another
indisputable violation of Linko.
N.E.2d at 827 & n.3 (noting that there must be a valid offer
before there can be an express, knowing rejection). UM/UIM
coverage therefore arises by operation of law in the amount of
the policy limits. Id. at 826 (noting that there is “only one
way to avoid the requirement that UM coverage be provided
— an express, knowing rejection of UM coverage by the
customer” preceded by a valid offer). We therefore reverse
the grant of summary judgment to Travelers and vacate the
district court’s denial of Hindall’s motion for summary
judgment against Travelers.
D. Winterthur Policy
Having concluded that the Travelers policy was defective
under Linko and Kemper, we now turn to the Winterthur
10 Hindall v. Winterthur Int’l et al. No. 01-3414
4The district court granted summary judgme nt to W interthur because
the Winterthur policy specified that it only provided coverage when the
underlying policy also provided cove rage. Since there was no liability
under the Travelers policy, the district court concluded that there could be
no liability under the Winterthur policy. We, however, have concluded
that UM/UIM coverage did arise by operation of law under the Travelers
policy, and therefore cannot affirm the grant of summ ary judgment to
W interthur on that basis.
policy and find it similarly defective.4 As an umbrella policy,
the Winterthur policy is subject to the same Gyori and Linko
requirements as a primary insurance policy. See Gyori, 669
N.E.2d at 826 (“The mandates of R.C. 3937.18 apply to
providers of excess coverage as well as providers of primary
liability coverage.”); see also Scott-Pontzer v. Liberty Mut.
Fire Ins. Co., 710 N.E.2d 1116, 1120 (Ohio 1999) (noting the
Supreme Court holdings requiring that “excess liability
insurance must comport with R.C. 3937.18 and thus
uninsured (and underinsured) motorist coverage must be
tendered” and that “failure by the insurer to offer such
coverage results in the provision of such coverage by
operation of law”).
The Witherthur policy is clearly defective as regards
UM/UIM coverage under Linko and Kemper. John Esile
testified in deposition that there was never any written
rejection of UM/UIM coverage pursuant to the Winterthur
policy, and the record similarly contains no evidence of a
written rejection. See Linko, 739 N.E.2d at 343 (“By
requiring an offer and rejection to be in writing, this court
impliedly held in Gyori that if the rejection is not within the
contract, it is not valid. In doing so, this court greatly
simplified the issue of proof in these types of cases — the
offer and rejection are either there or they are not.”).
Winterthur’s only defense was that its policy, as an
umbrella “follow-form” policy, excluded coverage whenever
the underlying policy also excluded coverage. As a result,
Winterthur’s brief was devoted to arguing that the Travelers

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No. 01-3414 Hindall v. Winterthur Int’l et al. 11
policy did not provide UM/UIM coverage and that
Winterthur’s “follow-form” exclusion (which stated that
Winterthur would only provide coverage when the underlying
policy also provided coverage) was valid. Having
determined, however, that implied UM/UIM coverage was
created under the Travelers policy, we believe that it is
inescapable that coverage should exist under the Winterthur
policy as well to the extent that Hindall’s damages exceed the
Travelers policy’s limits.
III. CONCLUSION
For the foregoing reasons, we REVERSE the district
court’s grant of summary judgment to the defendants on the
ground that the Travelers and Winterthur policies did not
contain UM/UIM coverage, as we hold that both of these
policies did in fact provide UM/UIM coverage as a matter of
law. For the same reason, we VACATE the district court’s
denial of summary judgment to Hindall. We REMAND the
case to the district court for further proceedings consistent
with this opinion.

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