As Passed by the House 1
123rd General Assembly 4
Regular Session Sub. H. B. No. 58 5
1999-2000 6
REPRESENTATIVES WOMER BENJAMIN-TAYLOR-TIBERI- 8
TERWILLEGER-OLMAN-BUCHY-CALLENDER-WILLAMOWSKI- 9
SALERNO-MOTTLEY-KRUPINSKI-GOODMAN-DePIERO 10
_________________________________________________________________
A B I L L
To amend sections 2721.01, 2721.02, 2721.03, 12
2721.04, 2721.06, 2721.07, 2721.08, 2721.09, 14
2721.10, 2721.11, 2721.12, 2721.13, 2721.14,
2721.15, 2907.36, and 3709.99, to enact new 15
section 3929.06 and section 2721.16, and to
repeal section 3929.06 of the Revised Code to 17
prohibit an award of attorney's fees under the
Declaratory Judgments Law unless a statute 18
expressly authorizes the award in connection with 19
a claim for declaratory relief under that Law or 20
unless an award of attorney's fees is authorized
by the Frivolous Conduct Law, the Civil Rules, or 21
an award of punitive or exemplary damages, to 23
prohibit injured parties or their legal
representatives from commencing a declaratory 24
relief action or another type of civil action 25
based on liability insurance coverage against an
insurance company until a judgment for damages 26
has been awarded against an insured tortfeasor, 27
to specify the binding legal effect of a judgment 29
rendered in a declaratory relief action between 30
an insured and an insurance company relative to
the coverage of a liability insurance policy upon 31
the insured's assignees and certain judgment 32
creditors, and to permit insurance companies to 33
assert against certain judgment creditors
2
coverage defenses generally available against 34
insureds under liability insurance policies. 35
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 37
Section 1. That sections 2721.01, 2721.02, 2721.03, 39
2721.04, 2721.06, 2721.07, 2721.08, 2721.09, 2721.10, 2721.11, 40
2721.12, 2721.13, 2721.14, 2721.15, 2907.36, and 3709.99 be 41
amended and new section 3929.06 and section 2721.16 of the 43
Revised Code be enacted to read as follows:
Sec. 2721.01. As used in sections 2721.01 to 2721.15, 52
inclusive, of the Revised Code THIS CHAPTER, "person" means any 53
person, partnership, joint-stock company, unincorporated 55
association, society, municipal corporation, or other
corporation. 56
Sec. 2721.02. Courts (A) SUBJECT TO DIVISION (B) OF THIS 66
SECTION, COURTS of record may declare rights, status, and other 67
legal relations whether or not further relief is or could be 68
claimed. No action or proceeding is open to objection on the 69
ground that a declaratory judgment or decree is prayed for UNDER 70
THIS CHAPTER. The declaration may be either affirmative or 71
negative in form and effect. Such THE declaration has the effect 72
of a final judgment or decree. 74
(B) A PLAINTIFF WHO IS NOT AN INSURED UNDER A PARTICULAR 77
POLICY OF LIABILITY INSURANCE MAY NOT COMMENCE AGAINST THE 78
INSURER THAT ISSUED THE POLICY AN ACTION OR PROCEEDING UNDER THIS 79
CHAPTER THAT SEEKS A DECLARATORY JUDGMENT OR DECREE AS TO WHETHER 80
THE POLICY'S COVERAGE PROVISIONS EXTEND TO AN INJURY, DEATH, OR 81
LOSS TO PERSON OR PROPERTY THAT A PARTICULAR INSURED UNDER THE 82
POLICY ALLEGEDLY TORTIOUSLY CAUSED THE PLAINTIFF TO SUSTAIN OR 83
CAUSED ANOTHER PERSON FOR WHOM THE PLAINTIFF IS A LEGAL 85
REPRESENTATIVE TO SUSTAIN, UNTIL A COURT OF RECORD ENTERS IN A 86
DISTINCT CIVIL ACTION FOR DAMAGES BETWEEN THE PLAINTIFF AND THAT 87
INSURED AS A TORTFEASOR A FINAL JUDGMENT AWARDING THE PLAINTIFF 88
3
DAMAGES FOR THE INJURY, DEATH, OR LOSS TO PERSON OR PROPERTY 89
INVOLVED.
(C) IN AN ACTION OR PROCEEDING FOR DECLARATORY RELIEF THAT 92
A JUDGMENT CREDITOR COMMENCES IN ACCORDANCE WITH DIVISIONS (A) 94
AND (B) OF THIS SECTION AGAINST AN INSURER THAT ISSUED A 96
PARTICULAR POLICY OF LIABILITY INSURANCE, THE INSURER HAS AND MAY 97
ASSERT AS AN AFFIRMATIVE DEFENSE AGAINST THE JUDGMENT CREDITOR 98
ANY COVERAGE DEFENSES THAT THE INSURER POSSESSES AND COULD ASSERT 99
AGAINST THE HOLDER OF THE POLICY IN AN ACTION OR PROCEEDING UNDER 100
THIS CHAPTER BETWEEN THE HOLDER AND THE INSURER. 101
IF, PRIOR TO THE JUDGMENT CREDITOR'S COMMENCEMENT OF THE 104
ACTION OR PROCEEDING FOR DECLARATORY RELIEF, THE HOLDER OF THE 105
POLICY COMMENCES A SIMILAR ACTION OR PROCEEDING AGAINST THE
INSURER FOR A DETERMINATION AS TO WHETHER THE POLICY'S COVERAGE 106
PROVISIONS EXTEND TO THE INJURY, DEATH, OR LOSS TO PERSON OR 107
PROPERTY UNDERLYING THE JUDGMENT CREDITOR'S JUDGMENT, AND IF THE 108
COURT INVOLVED IN THAT ACTION OR PROCEEDING ENTERS A FINAL 109
JUDGMENT WITH RESPECT TO THE POLICY'S COVERAGE OR NONCOVERAGE OF 110
THAT INJURY, DEATH, OR LOSS, THAT FINAL JUDGMENT SHALL BE DEEMED 111
TO ALSO HAVE BINDING LEGAL EFFECT UPON THE JUDGMENT CREDITOR FOR 112
PURPOSES OF THE JUDGMENT CREDITOR'S ACTION OR PROCEEDING FOR 113
DECLARATORY RELIEF AGAINST THE INSURER. THIS DIVISION SHALL 114
APPLY NOTWITHSTANDING ANY CONTRARY COMMON LAW PRINCIPLES OF RES 115
JUDICATA OR ADJUNCT PRINCIPLES OF COLLATERAL ESTOPPEL. 116
Sec. 2721.03. Any SUBJECT TO DIVISION (B) OF SECTION 125
2721.02 OF THE REVISED CODE, ANY person interested under a deed, 127
will, written contract, or other writing constituting a contract, 128
or ANY PERSON whose rights, status, or other legal relations are 130
affected by a constitutional provision, statute, rule as defined
in section 119.01 of the Revised Code, municipal ordinance, 131
township resolution, contract, or franchise, may have determined 132
any question of construction or validity arising under such THE 133
instrument, constitutional provision, statute, rule, ordinance, 135
resolution, contract, or franchise and obtain a declaration of 136
4
rights, status, or other legal relations thereunder UNDER IT. 137
The testator of a will may have the validity of the will 139
determined at any time during his THE TESTATOR'S lifetime 140
pursuant to sections 2107.081 to 2107.085 of the Revised Code. 141
Sec. 2721.04. A SUBJECT TO DIVISION (B) OF SECTION 2721.02 150
OF THE REVISED CODE, A contract may be construed by a declaratory 151
judgment OR DECREE either before or after there has been a breach 153
thereof OF THE CONTRACT.
Sec. 2721.06. Sections 2721.03 to 2721.05, inclusive, of 162
the Revised Code do not limit or restrict the exercise of the 164
general powers conferred in BY DIVISION (A) OF section 2721.02 of 166
the Revised Code in any ACTION OR proceeding where IN WHICH 167
declaratory relief is sought, UNDER THIS CHAPTER AND in which a 168
judgment or decree will terminate the controversy or remove an 170
uncertainty.
Sec. 2721.07. Courts of record may refuse to render or 179
enter a declaratory judgment or decree when such UNDER THIS 180
CHAPTER IF THE judgment or decree would not terminate the 181
uncertainty or controversy giving rise to the ACTION OR 182
proceeding IN WHICH THE DECLARATORY RELIEF IS SOUGHT. 183
Sec. 2721.08. All orders, judgments, and decrees under 192
sections 2721.01 to 2721.15, inclusive, of the Revised Code, THIS 194
CHAPTER may be reviewed ON APPEAL as ARE other orders, judgments, 196
and decrees are reviewed OF THE COURT OF RECORD INVOLVED. 197
Sec. 2721.09. Whenever SUBJECT TO SECTION 2721.16 OF THE 206
REVISED CODE, WHENEVER necessary or proper, A COURT OF RECORD MAY 207
GRANT further relief based on a declaratory judgment or decree 210
previously granted may be given UNDER THIS CHAPTER. The 211
application therefor FOR THE FURTHER RELIEF shall be by petition 212
to A COMPLAINT FILED IN a court having OF RECORD WITH 213
jurisdiction to grant the FURTHER relief. If the application is 215
sufficient, the court shall, on reasonable notice, SHALL require 216
any adverse party, whose rights have been adjudicated by the 217
declaratory judgment or decree, to show cause why THE further 219
5
relief should not be granted forthwith. 221
Sec. 2721.10. When a AN ACTION OR proceeding IN WHICH 230
DECLARATORY RELIEF IS SOUGHT under sections 2721.01 to 2721.15, 231
inclusive, of the Revised Code, THIS CHAPTER involves the 233
determination of an issue of fact, such THAT issue may be tried 235
and determined in the same manner as issues of fact are tried and 236
determined in other civil actions in the court in which the
ACTION OR proceeding is pending. 237
Sec. 2721.11. In any ACTION OR proceeding IN WHICH 246
DECLARATORY RELIEF IS SOUGHT under sections 2721.01 to 2721.15, 247
inclusive, of the Revised Code THIS CHAPTER, the court may make 248
such AN award of COURT costs as is equitable and just. 249
Sec. 2721.12. When (A) SUBJECT TO DIVISION (B) OF THIS 259
SECTION, WHEN declaratory relief is sought UNDER THIS CHAPTER IN 260
AN ACTION OR PROCEEDING, all persons shall be made parties who 262
have or claim any interest which THAT would be affected by the 263
declaration SHALL BE MADE PARTIES TO THE ACTION OR PROCEEDING. 264
No EXCEPT AS PROVIDED IN DIVISION (B) OF THIS SECTION, A 266
declaration shall NOT prejudice the rights of persons WHO ARE not 268
MADE parties to the ACTION OR proceeding. In any ACTION OR 269
proceeding which THAT involves the validity of a municipal 271
ordinance or franchise, the municipal corporation shall be made a
party and shall be heard, and, if any statute or the ordinance or 272
franchise is alleged to be unconstitutional, the attorney general 274
ALSO shall also be served with a copy of the COMPLAINT IN THE 276
ACTION OR proceeding and shall be heard. In any ACTION OR 277
proceeding which THAT involves the validity of a township 278
resolution, the township shall be made a party and shall be 279
heard.
(B) A DECLARATORY JUDGMENT OR DECREE THAT A COURT OF 282
RECORD ENTERS IN AN ACTION OR PROCEEDING UNDER THIS CHAPTER 283
BETWEEN AN INSURER AND A HOLDER OF A POLICY OF LIABILITY 284
INSURANCE ISSUED BY THE INSURER AND THAT RESOLVES AN ISSUE AS TO 285
WHETHER THE POLICY'S COVERAGE PROVISIONS EXTEND TO AN INJURY, 286
6
DEATH, OR LOSS TO PERSON OR PROPERTY THAT AN INSURED UNDER THE 287
POLICY ALLEGEDLY TORTIOUSLY CAUSED SHALL BE DEEMED TO HAVE THE 288
BINDING LEGAL EFFECT DESCRIBED IN DIVISION (C)(2) OF SECTION 290
3929.06 OF THE REVISED CODE AND TO ALSO HAVE BINDING LEGAL EFFECT 293
UPON ANY PERSON WHO SEEKS COVERAGE AS AN ASSIGNEE OF THE 294
INSURED'S RIGHTS UNDER THE POLICY IN RELATION TO THE INJURY, 295
DEATH, OR LOSS INVOLVED. THIS DIVISION APPLIES WHETHER OR NOT AN 296
ASSIGNEE IS MADE A PARTY TO THE ACTION OR PROCEEDING FOR 297
DECLARATORY RELIEF AND NOTWITHSTANDING ANY CONTRARY COMMON LAW 298
PRINCIPLES OF RES JUDICATA OR ADJUNCT PRINCIPLES OF COLLATERAL 299
ESTOPPEL.
Sec. 2721.13. Sections 2721.01 to 2721.15, inclusive, of 308
the Revised Code THE PROVISIONS OF THIS CHAPTER are remedial, and 310
shall be liberally construed and administered.
Sec. 2721.14. Sections 2721.01 to 2721.15, inclusive, of 319
the Revised Code THE PROVISIONS OF THIS CHAPTER shall be so 320
interpreted and construed as to effectuate their general purpose 321
to make the law of this state uniform with the law of those 322
states which THAT enact similar sections, PROVISIONS and to 324
harmonize, as far INSOFAR as possible, with federal laws and 326
regulations on the subject of declaratory judgments and decrees. 327
Sec. 2721.15. With the exception of sections 2721.02 and 336
2721.03 of the Revised Code, sections 2721.01 to 2721.15, 337
inclusive, of the Revised Code THE PROVISIONS OF THIS CHAPTER are 338
independent and severable, and the invalidity of any part of 339
sections 2721.01 and 2721.04 to 2721.15, inclusive, of the 341
Revised Code THOSE PROVISIONS does not affect or render the 343
remainder of such sections THOSE PROVISIONS invalid or 344
inoperative.
Sec. 2721.16. (A) A COURT OF RECORD SHALL NOT AWARD 347
ATTORNEY'S FEES TO ANY PARTY ON A CLAIM FOR DECLARATORY RELIEF 348
UNDER THIS CHAPTER UNLESS A SECTION OF THE REVISED CODE 351
EXPLICITLY AUTHORIZES A COURT OF RECORD TO AWARD ATTORNEY'S FEES 353
ON A CLAIM FOR DECLARATORY RELIEF UNDER THIS CHAPTER OR UNLESS AN 355
7
AWARD OF ATTORNEY'S FEES IS AUTHORIZED BY SECTION 2323.51 OF THE 356
REVISED CODE, BY THE CIVIL RULES, OR BY AN AWARD OF PUNITIVE OR 357
EXEMPLARY DAMAGES AGAINST THE PARTY ORDERED TO PAY ATTORNEY'S
FEES. REFERENCES IN ANOTHER SECTION OF THE REVISED CODE TO AN 360
AWARD OF COSTS OR EXPENSES INCURRED IN CONNECTION WITH AN ACTION 361
OR PROCEEDING DOES NOT AUTHORIZE AN AWARD OF ATTORNEY'S FEES FOR 362
PURPOSES OF THIS DIVISION. 363
(B) CONSISTENT WITH SECTION 2721.13 OF THE REVISED CODE, 367
THE PROVISIONS OF THIS SECTION ARE REMEDIAL IN NATURE. 368
NOTWITHSTANDING ANY PROVISION OF THE REVISED CODE IN EXISTENCE ON 370
THE DAY IMMEDIATELY PRIOR TO THE EFFECTIVE DATE OF THIS SECTION, 371
NOTWITHSTANDING ANY JUDICIAL CONSTRUCTION PRIOR TO THE EFFECTIVE 372
DATE OF THIS SECTION OF A STATUTORY PROVISION OF THAT NATURE, 374
NOTWITHSTANDING THE HOLDING IN ANY DECISION OF A COURT OF THIS 375
STATE THAT AUTHORIZED AN AWARD OF ATTORNEY'S FEES TO A PARTY TO A 376
CIVIL ACTION OR PROCEEDING BASED ON COMMON LAW GROUNDS RATHER 377
THAN A STATUTORY AUTHORIZATION OF THE GENERAL ASSEMBLY, 378
REGARDLESS OF THE DATE UPON WHICH A CAUSE OF ACTION ACCRUED THAT 379
PERTAINS TO AN ACTION OR PROCEEDING IN WHICH DECLARATORY RELIEF 380
IS SOUGHT UNDER THIS CHAPTER, AND REGARDLESS OF WHO IS THE 381
PLAINTIFF OR THE DEFENDANT IN AN ACTION OR PROCEEDING IN WHICH 382
DECLARATORY RELIEF IS SOUGHT UNDER THIS CHAPTER, DIVISION (A) OF 384
THIS SECTION SHALL APPLY IN CONNECTION WITH BOTH OF THE 385
FOLLOWING:
(1) AN ACTION OR PROCEEDING THAT IS COMMENCED ON OR AFTER 388
THE EFFECTIVE DATE OF THIS SECTION AND THAT SEEKS DECLARATORY 389
RELIEF UNDER THIS CHAPTER;
(2) AN ACTION OR PROCEEDING THAT WAS COMMENCED PRIOR TO 391
THE EFFECTIVE DATE OF THIS SECTION, THAT IS PENDING IN A COURT OF 393
RECORD ON THAT DATE, AND THAT SEEKS DECLARATORY RELIEF UNDER THIS 394
CHAPTER.
Sec. 2907.36. (A) Without limitation on the persons 403
otherwise entitled to bring an action for a declaratory judgment 404
pursuant to sections 2721.01 to 2721.15 CHAPTER 2721. of the 406
8
Revised Code, involving the same issue, the following persons 407
have standing to bring such an A DECLARATORY JUDGMENT action to 408
determine whether particular materials or performances are 410
obscene or harmful to juveniles:
(1) The chief legal officer of the jurisdiction in which 412
there is reasonable cause to believe that section 2907.31 or 413
2907.32 of the Revised Code is being or is about to be violated; 414
(2) Any person who, pursuant to division (B) of section 416
2907.35 of the Revised Code, has received notice in writing from 417
a chief legal officer stating that particular materials or 418
performances are obscene or harmful to juveniles. 419
(B) Any party to an action for a declaratory judgment 421
pursuant to division (A) of this section is entitled, upon his 422
THE PARTY'S request, to trial on the merits within five days 423
after joinder of the issues, and the court shall render judgment 424
within five days after trial is concluded. 425
(C) An action for a declaratory judgment pursuant to 427
division (A) of this section shall not be brought during the 428
pendency of any civil action or criminal prosecution, when the 429
character of the particular materials or performances involved is 430
at issue in the pending case, and either of the following apply 431
APPLIES: 432
(1) Either of the parties to the action for a declaratory 434
judgment is a party to the pending case;. 435
(2) A judgment in the pending case will necessarily 437
constitute res judicata as to the character of the materials or 438
performances involved. 439
(D) A civil action or criminal prosecution in which the 441
character of particular materials or performances is at issue, 442
brought during the pendency of an action for a declaratory 443
judgment involving the same issue, shall be stayed during the 444
pendency of the action for a declaratory judgment. 445
(E) The fact that a violation of section 2907.31 or 447
2907.32 of the Revised Code occurs prior to a judicial 448
9
determination of the character of the material or performance 449
involved in the violation, does not relieve the offender of 450
criminal liability for the violation, even though prosecution may 451
be stayed pending the judicial determination. 452
Sec. 3709.99. (A) Whoever violates section 3709.20, 461
3709.21, or 3709.22 of the Revised Code or any order or 462
regulation of the board of health of a city or general health 463
district adopted in pursuance of such THOSE sections, or WHOEVER 464
interferes with the execution of such an order or regulation OF 466
THAT NATURE by a member of the board or person authorized by the 468
board, shall be fined not more than one hundred dollars or 469
imprisoned not more than ninety days, or both. No person shall 470
be imprisoned for the first offense, and the prosecution shall 471
always be for a first offense unless the affidavit upon which the 472
prosecution is instituted contains the allegation that the 473
offense is a subsequent offense.
(B) Except in case of an emergency endangering the public 475
health caused by an epidemic, an infectious or a communicable 476
disease, or a disaster emergency condition or event, no 477
prosecution for A violation of any regulation or order adopted 478
pursuant to section 3709.20, 3709.21, or 3709.22 of the Revised 479
Code shall take place until twenty days after such THE board of 480
health OF A CITY OR GENERAL HEALTH DISTRICT has notified the 481
person subject to such THE regulation or order of the specific 484
violation alleged. Any person notified by the board of a 485
violation of any such regulation or order OF THAT NATURE may file 486
an action for declaratory judgment pursuant to sections 2721.01 487
to 2721.15, inclusive, CHAPTER 2721. of the Revised Code, to have 489
determined whether such THE regulation or order is unreasonable 490
or unlawful. No such prosecution OF THAT NATURE shall be 492
commenced when, within such THE twenty-day period DESCRIBED IN 494
THIS DIVISION, the violation has been corrected. No such 495
prosecution OF THAT NATURE shall be commenced until such a 496
declaratory judgment OF THAT NATURE has been given. 497
10
Sec. 3929.06. (A)(1) IF A COURT IN A CIVIL ACTION ENTERS 500
A FINAL JUDGMENT THAT AWARDS DAMAGES TO A PLAINTIFF FOR INJURY, 501
DEATH, OR LOSS TO THE PERSON OR PROPERTY OF THE PLAINTIFF OR 502
ANOTHER PERSON FOR WHOM THE PLAINTIFF IS A LEGAL REPRESENTATIVE 503
AND IF, AT THE TIME THAT THE CAUSE OF ACTION ACCRUED AGAINST THE 504
JUDGMENT DEBTOR, THE JUDGMENT DEBTOR WAS INSURED AGAINST 505
LIABILITY FOR THAT INJURY, DEATH, OR LOSS, THE PLAINTIFF OR THE 506
PLAINTIFF'S SUCCESSOR IN INTEREST IS ENTITLED AS JUDGMENT 507
CREDITOR TO HAVE AN AMOUNT UP TO THE REMAINING LIMIT OF LIABILITY 508
COVERAGE PROVIDED IN THE JUDGMENT DEBTOR'S POLICY OF LIABILITY 509
INSURANCE APPLIED TO THE SATISFACTION OF THE FINAL JUDGMENT. 510
(2) IF, WITHIN THIRTY DAYS AFTER THE ENTRY OF THE FINAL 512
JUDGMENT REFERRED TO IN DIVISION (A)(1) OF THIS SECTION, THE 514
INSURER THAT ISSUED THE POLICY OF LIABILITY INSURANCE HAS NOT 515
PAID THE JUDGMENT CREDITOR AN AMOUNT EQUAL TO THE REMAINING LIMIT 517
OF LIABILITY COVERAGE PROVIDED IN THAT POLICY, THE JUDGMENT 518
CREDITOR MAY FILE IN THE COURT THAT ENTERED THE FINAL JUDGMENT A 519
SUPPLEMENTAL COMPLAINT AGAINST THE INSURER SEEKING THE ENTRY OF A 520
JUDGMENT ORDERING THE INSURER TO PAY THE JUDGMENT CREDITOR THE 521
REQUISITE AMOUNT. SUBJECT TO DIVISION (C) OF THIS SECTION, THE 522
CIVIL ACTION BASED ON THE SUPPLEMENTAL COMPLAINT SHALL PROCEED 523
AGAINST THE INSURER IN THE SAME MANNER AS THE ORIGINAL CIVIL 524
ACTION AGAINST THE JUDGMENT DEBTOR. 525
(B) DIVISION (A)(2) OF THIS SECTION DOES NOT AUTHORIZE THE 529
COMMENCEMENT OF A CIVIL ACTION AGAINST AN INSURER UNTIL A COURT 530
ENTERS THE FINAL JUDGMENT DESCRIBED IN DIVISION (A)(1) OF THIS 531
SECTION IN THE DISTINCT CIVIL ACTION FOR DAMAGES BETWEEN THE 532
PLAINTIFF AND AN INSURED TORTFEASOR AND UNTIL THE EXPIRATION OF 533
THE THIRTY-DAY PERIOD REFERRED TO IN DIVISION (A)(2) OF THIS 535
SECTION.
(C)(1) IN A CIVIL ACTION THAT A JUDGMENT CREDITOR 538
COMMENCES IN ACCORDANCE WITH DIVISIONS (A)(2) AND (B) OF THIS 540
SECTION AGAINST AN INSURER THAT ISSUED A PARTICULAR POLICY OF 541
LIABILITY INSURANCE, THE INSURER HAS AND MAY ASSERT AS AN 542
11
AFFIRMATIVE DEFENSE AGAINST THE JUDGMENT CREDITOR ANY COVERAGE 543
DEFENSES THAT THE INSURER POSSESSES AND COULD ASSERT AGAINST THE 544
HOLDER OF THE POLICY IN A DECLARATORY JUDGMENT ACTION OR 545
PROCEEDING UNDER CHAPTER 2721. OF THE REVISED CODE BETWEEN THE 548
HOLDER AND THE INSURER. 549
(2) IF, PRIOR TO THE JUDGMENT CREDITOR'S COMMENCEMENT OF 551
THE CIVIL ACTION AGAINST THE INSURER IN ACCORDANCE WITH DIVISIONS 553
(A)(2) AND (B) OF THIS SECTION, THE HOLDER OF THE POLICY 555
COMMENCES A DECLARATORY JUDGMENT ACTION OR PROCEEDING UNDER 556
CHAPTER 2721. OF THE REVISED CODE AGAINST THE INSURER FOR A 558
DETERMINATION AS TO WHETHER THE POLICY'S COVERAGE PROVISIONS 559
EXTEND TO THE INJURY, DEATH, OR LOSS TO PERSON OR PROPERTY 560
UNDERLYING THE JUDGMENT CREDITOR'S JUDGMENT, AND IF THE COURT 561
INVOLVED IN THAT ACTION OR PROCEEDING ENTERS A FINAL JUDGMENT 562
WITH RESPECT TO THE POLICY'S COVERAGE OR NONCOVERAGE OF THAT 563
INJURY, DEATH, OR LOSS, THAT FINAL JUDGMENT SHALL BE DEEMED TO 564
HAVE BINDING LEGAL EFFECT UPON THE JUDGMENT CREDITOR FOR PURPOSES 566
OF THE JUDGMENT CREDITOR'S CIVIL ACTION AGAINST THE INSURER UNDER 567
DIVISIONS (A)(2) AND (B) OF THIS SECTION. THIS DIVISION SHALL 569
APPLY NOTWITHSTANDING ANY CONTRARY COMMON LAW PRINCIPLES OF RES 570
JUDICATA OR ADJUNCT PRINCIPLES OF COLLATERAL ESTOPPEL. 571
Section 2. That existing sections 2721.01, 2721.02, 573
2721.03, 2721.04, 2721.06, 2721.07, 2721.08, 2721.09, 2721.10, 574
2721.11, 2721.12, 2721.13, 2721.14, 2721.15, 2907.36, and 3709.99 575
and section 3929.06 of the Revised Code are hereby repealed. 576
Section 3. The General Assembly hereby declares that, in 578
enacting section 2721.16 of the Revised Code in this act and in 579
making conforming amendments to sections 2721.01, 2721.02, 580
2721.06, 2721.07, 2721.08, 2721.09, 2721.10, 2721.11, 2721.12, 581
2721.13, 2721.14, 2721.15, 2907.36, and 3709.99 of the Revised 582
Code in this act, it is the intent of the General Assembly to do 583
all of the following: 584
(A) To supersede the effect of the holding in Motorists 586
Mut. Ins. Co. v. Brandenburg (1995), 72 Ohio St. 3d 157, and in 589
12
its progeny, including Landis v. Grange Mut. Ins. Co. (1998), 82 590
Ohio St. 3d 339, 342-343, that the "whenever necessary or proper" 592
and "further relief" language in section 2721.09 of the Revised 593
Code, as it existed prior to the effective date of this act, 594
reflected the General Assembly's conferral of authority upon an 595
Ohio trial court to award "attorney's fees based on a declaratory 596
judgment issued by the court";
(B) To recognize the dissent's accurate construction in 598
Brandenburg of the "whenever necessary or proper" and "further 600
relief" language in section 2721.09 of the Revised Code, as it 601
existed prior to the effective date of this act;
(C) To recognize the holding of the Ohio Supreme Court in 603
Sorin v. Bd. of Edn. (1976), 46 Ohio St. 2d 177, and its progeny 605
that Ohio follows the "American Rule" under which an award of 606
attorney's fees to a prevailing party in a civil action or 607
proceeding generally must be based on an express authorization of 608
the General Assembly;
(D) To recognize, consistent with the "American Rule," 610
that authority to grant an award of attorney's fees in connection 611
with an action or proceeding in which declaratory relief is 612
sought under Chapter 2721. of the Revised Code must be expressly 613
conferred by the General Assembly upon the courts of this state 614
and has not been so conferred prior to the effective date of this 616
act.
Section 4. The General Assembly declares that, in enacting 618
divisions (A) and (B) of new section 3929.06 and new division (B) 620
of section 2721.02 of the Revised Code in this act, in outright 621
repealing existing section 3929.06 of the Revised Code in this 622
act, and in making conforming amendments to sections 2721.03 and 623
2721.04 of the Revised Code in this act, it is the intent of the 624
General Assembly to supersede the effect of the holding of the 625
Ohio Supreme Court in Krejci v. Prudential Prop. and Cas. Ins. 626
Co. (1993), 66 Ohio St. 3d 15, Broz v. Winland (1994), 68 Ohio 627
St. 3d 521, 524-525, and Mezerkor v. Mezerkor (1994), 70 Ohio St. 629
13
3d 304, 308, that existing section 3929.06 of the Revised Code 630
does not preclude the commencement of a civil action under that 631
section or a declaratory judgment action or proceeding under 632
Chapter 2721. of the Revised Code against an insurer that issued 633
a policy of liability insurance until a court of record enters in 634
a distinct civil action for damages between the plaintiff and an 635
insured tortfeasor a final judgment awarding the plaintiff 636
damages for the injury, death, or loss to person or property 637
involved.
Section 5. The General Assembly declares that, in enacting 639
new division (C) of section 2721.02, new division (B) of section 640
2721.12, and division (C) of new section 3929.06 of the Revised 641
Code in this act and in making conforming amendments to division 642
(A) of section 2721.12 of the Revised Code in this act, it is the 643
intent of the General Assembly to supersede the effect of the 644
holding of the Ohio Supreme Court in Broz v. Winland (1994), 68 646
Ohio St. 3d 521, and its progeny relative to the lack of binding 647
legal effect of a judgment or decree upon certain persons who 648
were not parties to a declaratory judgment action or proceeding 649
between the holder of a policy of liability insurance and the 650
insurer that issued the policy. 651