James R. Soda, Inc. v. United Liberty Life Insurance

Wright, J. This is a case of first impression in our state. Here the policy provided that it became effective upon payment of the first premium and delivery of the policy to the insured. The insured’s employer chose to pay the premium annually. The inception of United’s liability or the date its risk attached was the date the premium was paid. The general and well-settled rule is that in the absence of a statutory or contractual provision to the contrary, once an insurer’s legal risk has attached, the premium is not apportionable, and the insured is not entitled to a return of any part of the premium paid. 6 Couch on Insurance (2 Ed. 1985) 856, Section 34:9, states, “This rule is based upon just and equitable principles, for the insurer has, by taking upon himself the peril, become entitled to the premium, and although the rule may result in profit to the insurer, it is just compensation for the dangers or perils assumed, besides the danger incurred may be greater in any one moment than during the entire remaining period and it would be difficult, to say the least, to fairly apportion the risk.” Accord 43 American Jurisprudence 2d (1982) 951, Insurance, Section 918; Fleetwood Acres, Inc. v. Federal Housing Admin. (C.A. 2, 1948), 171 F. 2d 440, 442. [190] The general rule must yield to any statutory or contractual exception. The corporation’s claim for return of the “unearned” portion of the annual premium paid to United is not based on any contractual provision. Neither by statute nor by contract is there any authority for refund of a portion of the insurance premium by United. In view of the foregoing, we hold that the corporation is not entitled to a refund of a portion of its annual premium paid to United on July 25, 1983. United’s alternate proposition of law is that a trial court is not authorized under Civ. R. 56 to enter summary judgment in favor of a non-moving party. This proposition is correct. In the instant case, the trial court erroneously awarded the corporation summary judgment even though it had not filed such a motion. This action is contrary to the Rules of Civil Procedure. See Marshall v. Aaron (1984), 15 Ohio St. 3d 48. Accordingly, we hold that the trial court erred in granting summary judgment for the corporation and affirm the judgment of the court of appeals. Judgment affirmed. Celebrezze, C.J., Sweeney and Holmes, JJ., concur. Locker and C. Brown, JJ., dissent with opinion. Douglas, J., dissents.