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| by David J. Fagnilli | | August 25, 2011 |
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OHIO SUPREME COURT UPDATE
The Ohio Supreme Court is the Ohio court of last resort. Its role is not to serve as an additional court of appeals on review, but rather to clarify rules of law arising in courts of appeals, and other lower Ohio courts. The majority of the civil cases that are decided by the Ohio Supreme Court come from the twelve appellate districts in the state. These are cases where there is a conflict between the decisions of two or more appellate districts and it is certified to the Ohio Supreme Court for resolution, or cases that the Ohio Supreme Court determines are matters of “great public or general interest."
The typical civil appeal to the Ohio Supreme Court starts out with the parties filing briefs, arguing why the matter is of great public or general interest, and why the Court should or should not accept the appeal. In 2009, the last year for which statistics are available, 1,817 discretionary appeals were filed with the Ohio Supreme Court, and the Court accepted 220 of these appeals for review, a rate of 12 percent.
In 2010, the Ohio Supreme Court decided 101 jurisdictional appeals following a full merit review. This was down from 128 cases in 2009; 156 cases in 2008; 191 in 2007 and 382 cases in 2006. The average number of days that it took from the filing of an appeal in the Ohio Supreme Court to final decision was 455 days in 2010.
The current Justices on the Ohio Supreme Court are:
• Chief Justice Maureen O’Connor; First
elected to the Ohio Supreme Court term
beginning January 2003; elected Chief
Justice in 2010; term expires January 1,
2017. Justice O’Connor was a Summit County
Common Pleas Court Judge and the
prosecuting Attorney in Summit County
before her election to the Ohio Supreme
Court.
• Justice Paul E. Pfeifer; First elected to
the Supreme Court term beginning January
2, 1993; current term expires January 1,
2017. Justice Pfeifer was a former State
Legislator from Bucyrus.
• Justice Evelyn Lundberg Stratton; First
elected to the Ohio Supreme Court term
beginning March 7, 1996; current term
expires January 1, 2015. Justice Stratton
was a former Franklin County Common Pleas
Court Judge.
• Justice Terrence O’Donnell; Appointed to
the Ohio Supreme Court in 2003; his current
term expires December 31, 2012. Justice
O’Donnell was a former Cuyahoga County
Common Pleas Court and 8th District Court
of Appeals Judge.
• Justice Judith Ann Lanzinger; First elected
to the Ohio Supreme Court term beginning
January 1, 2005; current term expires
December 31, 2016. Justice Lanzinger was a
former Lucas County Common Pleas Court
Judge.
• Justice Robert R. Cupp; First elected to
the Ohio Supreme Court term beginning
January 2, 2007; last day of the current
term is January 1, 2013. Justice Cupp is a
former Ohio State Senator and Allen County
Commissioner; he also served on the Court
of Appeals for the 3rd Appellate District
in Northwest and West Central Ohio.
• Justice Yvette McGee Brown; Justice McGee
Brown was appointed by former Governor
Strickland on January 1, 2011 to the
unexpired term that was left open after
Justice O’Connor won the election to be
Chief Justice of the Ohio Supreme Court.
She is a former Judge in the Franklin
County Court of Common Pleas, Domestic
Relations and Juvenile Division.
SUMMARY OF RECENT OHIO SUPREME COURT CASES
In this article, we will briefly review a variety of cases decided by the Ohio Supreme Court in the last year and a half that impact tort and insurance law, and discuss those cases of interest that are currently pending before the Ohio Supreme Court.
TORT CASES
THE VICTIM OF A DOG BITE CAN PURSUE A CLAIM UNDER THE STRICT LIABILITY STATUTE R.C. 955.28 AND A COMMON LAW CLAIM THAT INCLUDES A CLAIM FOR PUNITIVE DAMAGES.
Beckett v. Warren, 124 Ohio St.3d 256, 2010-Ohio-4, 921 N.E.2d 624
January 6, 2010
A child suffered injuries to her head and scalp when she was mauled by a dog owned by the defendant. Suit was filed alleging strict liability under the “dog bite” statute R.C. 955.28. Under that statute, the owner or harborer of the dog that injures a person is strictly liable, unless the owner can show that the injured person was teasing, tormenting, or abusing the dog on the owner’s property. However, only compensatory damages may be recovered. The plaintiff was also seeking punitive damages under a common law claim, alleging that the dog had attacked another person a few weeks earlier and that the dog owner should have known that the dog was dangerous, but failed to take precautions to protect other people. The trial court had ruled that the plaintiff had to elect between the statutory claim or a common law claim. The Supreme Court held that the claims were not mutually exclusive, and that the plaintiff could pursue both a statutory claim and a common law claim, including the claim for punitive damages.
EMPLOYER INTENTIONAL TORT STATUTE R.C. 2745.01 HELD CONSTITUTIOINAL, AND REQUIRES SPECIFIC INTENT TO CAUSE INJURY.
Kaminski v. Metal & Wire Products Co., 125 Ohio St.3d 250, 2010-Ohio-1027, 927 N.E.2d 1066; Stetter v. R.J. Corman Derailment Serv., LLC, 125 Ohio St.3d 280, 2010-Ohio-1029, 927 N.E.2d 1092; and Klaus v. United Equity, Inc., 125 Ohio St.3d 279, 2010-Ohio-1014, 927 N.E.2d 1092
March 23, 2010
In these long awaited decisions, the Court held that the employer intentional tort statute, R.C. 2745.01 is constitutional; that R.C. 2745.01 controls employee injury claims occurring on or after its effective date of April 7, 2005; it does not overrule the common law employer intentional tort, but instead modifies it with respect to injuries occurring after its effective date. Accordingly, Blankenship-Fyffe remains the controlling legal authority for employee injuries occurring prior to April 7, 2005; for injuries occurring after April 7, 2005, the common law employer intentional tort is restricted to the relief provided by R.C. 2745.01; R.C. 2745.01 “permits recovery for employer intentional torts only when an employer acts with specific intent to cause injury.” See e.g. Stetter, at ¶26; Kaminski at ¶104.
Due to their facts, neither case addresses the meaning or perimeters of R.C. 2745.01(C), which provides that “deliberate removal by an employer of an equipment safety guard or deliberate misrepresentation of a toxic or hazardous substance creates a rebuttal presumption that removal or misrepresentation was committed with intent to injure another if injury or an occupational disease or condition occurs as a direct result.” The meaning of this provision will be at the crux of future litigation on employer intentional torts.
WHEN THERE ARE MULTIPLE POTENTIAL CAUSATIVE FACTORS, A PLAINTIFF IS NOT ENTITLED TO A CHARGE ON THE DOCTRINE OF RES IPSA LOQUITUR.
Estate of Hall v. Akron Gen. Med. Ctr., 125 Ohio St.3d 300, 2010-Ohio-1041, 927 N.E.2d 1112
March 24, 2010
In this medical malpractice case, the plaintiff requested a jury charge on res ipsa loquitur, the doctrine that holds that “the thing speaks for itself”. It is a doctrine that allows a jury to draw the inference of negligence from circumstantial evidence. The plaintiff argued that in the ordinary course of events, the death of the plaintiff’s decedent would not have occurred without negligence. The Court held that “a plaintiff must establish two elements for the doctrine of Res Ipsa Loquitor to apply; (1) that the instrumentality causing the injury was, at the time of the injury, or at the time of the creation of the condition causing the injury, under the exclusive management and control of the defendant; and (2) that the injury occurred under such circumstances that in the ordinary course of events it would not have occurred if ordinary care had been observed.” In this case, there was evidence submitted to the jury that there could be non-negligent causes for the plaintiff’s injury. Since there were two equally efficient causes of the injury, res ipsa loquitur was inapplicable.
OHIO’S COLLATERAL SOURCE STATUTE DOES NOT BAR INTRODUCTION AT TRIAL OF EVIDENCE OF WRITE-OFFS ACCEPTED BY MEDICAL SERVICE PROVIDERS THAT REDUCE THE ACTUAL COST OF PLAINTIFF’S MEDICAL TREATMENT TO SHOW THAT THE MEDICAL PROVIDERS ACCEPTED AN AMOUNT LOWER THAN THEIR ORIGINAL BILLED AMOUNT FOR THEIR SERVICES.
Jaques v. Manton, 125 Ohio St.3d 342, 2010-Ohio-1838, 928 N.E.2d 43
May 4, 2010
The Ohio Supreme Court re-affirmed its prior decision in Robinson v. Bates, 112 Ohio St. 3d 17, 2006-Ohio-6362, finding that a defendant may introduce into evidence the amount actually accepted by the medical provider as payment for services rendered, and a jury will then determine the reasonable value of the medical services. The plaintiff’s bar had argued (and many trial courts had agreed) that Robinson v. Bates did not apply to post tort reform cases that were governed by R.C. 2315.20. The Supreme Court accepted this appeal, and clarified this issue. Both the amount billed and the actual amount accepted as payment, are admissible in evidence, and a jury will then decide what amount represents the reasonable value of the plaintiff’s medical services. Of course, there must be competent evidence to submit to the jury on the write-off issue, if the defense intends to have this evidence admitted.
NON-ASBESTOS CLAIMS MAY BE SEVERED AND GO TO TRIAL, EVEN THOUGH ASBESTOS CLAIMS IN THE SAME SUIT ARE DISMISSED.
Riedel v. Consol. Rail Corp., 125 Ohio St.3d 358, 2010-Ohio-1926, 928 N.E.2d 448
May 6, 2010
The Ohio Supreme Court affirmed a ruling from the 8th District Court of Appeals allowing the plaintiff to proceed with non-asbestos claims even though the plaintiff’s asbestos claims had been dismissed for failure to meet the administrative requirements of R.C. 2307.91 through 2307.98. Although the plaintiff could not meet the threshold for making an asbestos related claim, the Court found that the statute did not permit dismissal of his other claims based on alleged exposure to other toxic substances such as diesel exhaust.
OHIO COURTS HAVE JURISDICTION OVER AN OUT-OF-STATE DEFENDANT IN A CASE ALLEGING INTERNET DEFAMATION, WHICH WAS INTENDED TO REACH AN AUDIENCE THAT INCLUDES THE OHIO PLAINTIFF AND ITS OHIO BASED CUSTOMERS.
Kauffman Racing Equip., LLC v. Roberts, 126 Ohio St.3d 81, 2010-Ohio-2551, 930 N.E.2d 784
June 10, 2010
The Ohio Supreme Court looked at the question of whether or not an Ohio court has jurisdiction over alleged internet defamation made by a defendant who never entered Ohio. The plaintiff was an Ohio based company that sold the defendant, an out-of-state resident, a racing engine block over the internet. The defendant wanted to return the engine block to the plaintiff, but the plaintiff would not take it back because it alleged that the block had been altered by the defendant. The defendant was dissatisfied, and began a series of rancorous criticisms of the plaintiff on various websites devoted to automobile racing equipment and related subjects allegedly in a deliberate attempt to get back at the plaintiff for its refusal to take the engine back. This included offering the block for sale on the internet, describing the engine block he bought from the plaintiff as “useless”.
The plaintiff sued the defendant for defamation. The question was whether or not the Ohio Court had jurisdiction over the defendant, since the defendant was never in Ohio. The Court found that there was jurisdiction over the defendant, because the plaintiff had made a sufficient showing that the defendant had allegedly caused tortious injury in Ohio by acts committed outside of Ohio with the purpose of injuring the plaintiff. His communications specifically targeted a known Ohio resident and the cause of action arose from substantial connections instituted by the defendant with an Ohio resident.
A PLAINTIFF HAS NO CLAIM AGAINST A PROPERTY OWNER FOR ASBESTOS RELATED INJURIES ALLEGEDLY RESULTING FROM “TAKE HOME” ASBESTOS.
Boley v. Goodyear Tire & Rubber Co., 125 Ohio St.3d 510, 2010-Ohio-2550, 929 N.E.2d 448
June 10, 2010
The plaintiff alleged that she contracted an asbestos related disease from asbestos that her husband brought home on his work clothes while he was employed at Goodyear Tire & Rubber between 1973 and 1983. The Court found that under the current statute effective in 2005, R.C. 2307.941(A), a property owner is only responsible for asbestos exposure that occurs on the property, not second hand exposure to workers’ family members. The Court also pointed out that the plaintiff could still bring a claim against manufacturers and installers responsible for the asbestos at Goodyear. The only claim that was barred was the claim against the property owner based on the fact that the plaintiff was not exposed to the asbestos on the premises owner’s property.
AN AFFIDAVIT OF A RETAINED NON-PARTY EXPERT, WHICH CONTRADICTS THE FORMER DEPOSITION TESTIMONY OF THAT EXPERT, SUBMITTED IN OPPOSITION TO A PENDING MOTION FOR SUMMARY JUDGMENT, DOES NOT CREATE A GENUINE ISSUE OF MATERIAL FACT UNLESS THE EXPERT SUPPLIES A SUFFICIENT EXPLANATION FOR THE REASONS FOR THE CONTRADICTION.
Pettiford v. Aggarwal, 126 Ohio St.3d 413, 2010-Ohio-3237, 934 N.E.2d 913
July 14, 2010
This was a medical malpractice case against a family practice physician alleging that the doctor failed to diagnose a lung tumor. The defendant doctor moved for summary judgment on the basis that he complied with all applicable standards of care in his treatment of the patient plaintiff. The plaintiff countered with an affidavit of a retained medical expert that the defendant did not comply with the applicable standards of care, but the affidavit did not address proximate cause and damages.
At his deposition, the plaintiff’s expert reiterated his opinion about the deviation from the standard of care, but testified that he could not provide any testimony on causation. Thereafter, the doctor defendant renewed his motion for summary judgment on causation and the plaintiff countered with another affidavit from the medical expert stating that plaintiff’s damages were indeed proximately caused by the negligence of the defendant doctor. The defendant doctor argued that the affidavit was contrary to the medical expert’s deposition testimony and moved to strike the affidavit.
The Supreme Court majority held that the affidavit of a retained, non-party expert contradicting the former deposition testimony of that expert and submitted in opposition to a pending motion for summary judgment does not create a genuine issue of material fact, unless the expert sufficiently explains the reason for the contradiction. This opinion clarifies and builds on the Ohio Supreme Court’s early decision in Byrd v. Smith, 110 Ohio St. 3d 24, 2006-Ohio-3455, 850 N.E.2d, which provides that a party may not submit an Affidavit contradicting his prior deposition testimony in an effort to create an issue of fact.
WHEN PARTIES TO A TORT CLAIM HAVE EXECUTED A SETTLEMENT AGREEMENT AND CONSENT JUDGMENT ENTRY, ONE PARTY MAY NOT SUBSEQUENTLY INSTITUTE A SEPARATE CAUSE OF ACTION FOR FRAUD IN THE INDUCEMENT OF THE SETTLEMENT AGREEMENT WITHOUT SEEKING RELIEF FROM THE CONSENT JUDGMENT AND RESCINDING THE SETTLEMENT AGREEMENT.
Berry v. Javitch, Block & Rathbone, LLP, 127 Ohio St.3d 480, 2010-Ohio-5772, 940 N.E.2d 1265
December 2, 2010
The plaintiffs sued their former attorney alleging legal malpractice. A settlement was reached, whereby the law firm agreed to a consent judgment, with a down payment, and periodic payments. After the settlement was reached, and the agreed judgment entry was filed with the court, the plaintiffs alleged that they learned of additional insurance coverage that was available to the defendant, which had not been earlier disclosed. The plaintiff then alleged that the defendant had made misrepresentations in discovery responses, and that the plaintiff had relied on these misrepresentations in entering into the settlement. Importantly, the plaintiff did not seek relief from judgment under Civil Rule 60(B). By the time the claim was asserted, the one year time limit for filing a 60(B) motion had passed. The Supreme Court held that the action alleging “fraud in the inducement” could not be brought unless the plaintiff was successful in seeking relief from the consent judgment and rescinding the settlement agreement.
DAMAGES FOR EMOTIONAL DISTRESS STEMMING DIRECTLY FROM A PHYSICAL INJURY ARE TO BE CONSIDERED IN A TRADITIONAL MEDICAL MALPRACTICE CLAIM – EMOTIONAL DISTRESS STEMMING DIRECTLY FROM A PHYSICAL INJURY IS NOT A BASIS FOR AN INDEPENDENT CAUSE OF ACTION FOR THE NEGLIGENT INFLICTION OF EMOTIONAL DISTRESS.
Loudin v. Radiology & Imaging Servs., Inc., 128 Ohio St.3d 555, 2011-Ohio-1817, 948 N.E.2d 944
April 20, 2011
This was a medical malpractice claim for alleged delayed diagnosis of cancer. The Supreme Court reversed the lower court’s decision to grant summary judgment in favor of the defendant on the medical malpractice claim, finding that although an earlier diagnosis would not have prevented the plaintiff from contracting the disease, or prevented her from undergoing treatment for the disease, it reduced her chances for a favorable outcome from the disease, and therefore was a cognizable claim. The Court further found that there was sufficient evidence of a physical injury, and therefore the plaintiff had the right to seek damages for negligent infliction of emotional distress. However, this was not a separate claim for negligent infliction of emotional distress, but an element of damages in the medical malpractice claim.
INSURANCE CASES
A PRIOR CONVICTION OF ARSON BASED ON A NO CONTEST PLEA IS NOT ADMISSIBLE IN A DECLARATORY JUDGMENT ACTION FOR AN INSURANCE COVERAGE ARISING OUT OF THE SAME INCIDENT.
Elevator Mutual Insurance Co. v. J. Patrick O’Flaherty’s, Inc., 125 Ohio St.3d 362, 2010-Ohio-1043, 928 N.E.2d 685
March 24, 2010
Plaintiff, Elevator Mutual Insurance Company brought an action for declaratory judgment against its insured, J. Patrick O’Flaherty’s, Inc., alleging that the owners and officers of O’Flaherty’s, Richard A. Heyman and Jan N. Heyman, had burned their bar down, and were therefore not entitled to the insurance proceeds. Richard Heyman was charged with arson, and pled no contest. He was found guilty of intentionally starting the fire.
Elevator Mutual wanted to use this evidence of the conviction in its declaratory judgment action against Heyman. The Supreme Court found that since the conviction was based on his plea of no contest, it was inadmissible in the civil case. The Court’s decision was based on Evid. R. 410 and Crim. R. 11(B)(2).
AN EXCLUSION IN A HOMEOWNER'S INSURANCE POLICE FOR CLAIMS ARISING OU OF A PREMISES OWNED BY THE INSURED OTHER THAN INSURED LOCATION, EXCLUDES COVERAGE FOR PREMISE BASE LIABILITY CLAIMS. MOREOVER, ALTHOUGH THE EXCLUSION DOES NOT BAR COVERAGE OF CLAIMS THAT ARISE FROM THE INSURED'S ALLEGED NEGLIGENCE, IF THE NEGLIGENCE IS UNRELATED TO THE QUALITY OR CONDITION OF THE PREMISES, IT DOES EXCLUDE COVERAGE FOR CLAIMS BASED UPON THE INSURED'S OWNERSHIP OF THE PROPERTY UPON WHICH THE INJURY OCCURRED.
Westfield Insurance Co. v. Hunter, 128 Ohio St.3d 540, 2011-Ohio-1818, 948 N.E.2d 931
April 20, 2011
This case was decided by a three Justice plurality lead opinion, one concurrence in the syllabus and judgment, and three full or partial dissents. Westfield insured the Hunters for their home which was located in Hamilton, Ohio. The Hunters also owned a farm in Indiana. That property was insured by Grinnell Mutual Reinsurance Company. The Hunters minor grandchild was injured while riding on an ATV on the farm property. The grandchild and his parents brought suit against the driver of another ATV, and the Hunters.
Westfield brought a declaratory judgment action against Grinnell and the Hunters seeking a declaratory judgment that it had no duty to defend or indemnify the Hunters for the claims in the Terrell’s lawsuit. Grinnell answered in a counterclaim asserting that both insurers were obligated to provide coverage to the Hunters on a pro rata basis. The Supreme Court found that the record was insufficiently developed to make a determination as to whether or not Westfield had a duty to defend or indemnify. The Court found that if the claim was based on condition at the farm property (which Westfield did not insure), or the insured’s ownership of the property, then the claim would be barred.
PUBLIC POLICY DOES NOT PREVENT AN INSURANCE COMPANY FROM COVERING ATTORNEYS’ FEES ON BEHALF OF AN INSURED, EVEN WHEN THEY ARE AWARDED SOLELY AS A RESULT OF AN AWARD FOR PUNITIVE DAMAGES.
Neal-Pettit v. Lahman, 125 Ohio St.3d 327, 2010-Ohio-1829, 928 N.E.2d 421
May 4, 2010
In this case, the plaintiff sued the Allstate insured alleging compensatory and punitive damages arising out of a motor vehicle accident where the tortfeasor was intoxicated. After a jury trial, Allstate agreed to pay the compensatory damages, but refused to pay the plaintiff’s claim for attorneys’ fees, on the basis that the attorneys’ fees were awarded as a result of punitive damages. The insurance company argued that public policy as expressed in R.C. 3937.182(B), and the specific language in the policy barred recovery of the attorneys’ fees under the policy as part of the punitive damages award. The Ohio Supreme Court disagreed, finding that the attorneys’ fees, although clearly dependent upon the award of punitive damages, were actually compensatory damages, and therefore recoverable under the Allstate policy, unless otherwise specifically excluded. The punitive damages were not recoverable under the insurance policy, but the attorneys’ fees awarded to the plaintiff were recoverable because they were not specifically excluded by the policy.
EQUITABLE CONTRIBUTION AMONG MULTIPLE INSURERS.
Pennsylvania Gen. Ins. Co. v. Park-Ohio Industries,126 Ohio St.3d 98, 2010-Ohio-2745, 930
N.E.2d 800.
June 22, 2010
Park-Ohio Industries faced an asbestos claim in California and placed one of its insurers, Pennsylvania General, on notice to the claim as a targeted insurer pursuant to the Ohio Supreme Court’s decision in Goodyear Tire & Rubber Co. v. Aetna Casualty & Surety Co., 95 Ohio St.3d 512, 2002-Ohio-2842 demanding defense and indemnity under policies issued by Pennsylvania General in the 1960s. Park-Ohio then went on to settle the asbestos claim. When asked by Pennsylvania General, Park-Ohio resisted producing information regarding other insurance policies applicable to the claim for two years. Ultimately, Pennsylvania General settled the insurance coverage claims of Park-Ohio, obtained other insurance information and placed the other applicable insurers on notice of the claim and Pennsylvania General’s demand for contribution. Two of the three other insurers, however, denied Pennsylvania General’s contribution claim on the basis that they were not provided notice of the underlying asbestos claim until after it had been settled. Litigation then ensued between the insurers.
The Supreme Court of Ohio held:
(1) Goodyear continues to be the law of Ohio. An insurer may select a “targeted” insurer to pay “all sums” applicable under a given policy period up to the policy limits, and then the targeted insurer has a right of contribution against other triggered non-targeted insurers.
(2) The targeted insurer’s contribution claim is an independent cause of action that belongs to the insurer, not the insurers mutual insured.
(3) When the targeted insurer requests other insurance information from the insured, the insured has a duty to cooperate with the targeted insurer’s request.
(4) When non-targeted insurers are not timely notified of an insurance claim, they may avoid a contribution claim where they have been actually prejudiced by the delay. However, prejudice does not include abstract notions, such as not being able to select the counsel, investigate the claim, determine litigation strategy and the like, because the “all sums” approach envisioned by Goodyear pre-supposes that non-targeted insurers will not be in control of the defense of the underlying tort case. Rather, prejudice must be actual prejudice.
(5) In this case, the record demonstrates that the non-targeted insurers were not prejudiced by the settlement of the underlying asbestos claims and, therefore, Pennsylvania General’s contribution claims were valid and enforceable.
*Rich Garner from Davis & Young represented the successful appellee Pennsylvania General Ins. Co. in this case before the Ohio Supreme Court.
A POST-JUDGMENT SUPPLEMENTAL COMPLAINT BROUGHT BY A SUCCESSFUL PLAINTIFF AGAINST THE TORTFEASOR’S INSURER, IS NOT BARRED BY A DECLARATORY JUDGMENT ACTION BROUGHT BY THE INSURER AGAINST THE INSURED FINDING THAT THE INSURER HAS NO DUTY TO DEFEND OR INDEMNIFY, IF THE PLAINTIFF WAS NOT A PARTY TO THE DECLARATORY JUDGMENT ACTION.
Estate of Heintzelman v. Air Experts, Inc., 126 Ohio St.3d 138, 2010-Ohio-3264, 931 N.E.2d 548
July 15, 2010
The plaintiff in this case brought a supplemental complaint pursuant to R.C. 3929.06, to collect on an insurance policy issued to the defendant, after having first obtained a judgment against the defendant. The insurer had previously sought a declaratory judgment action against its insured, and obtained a ruling that it was not obligated to defend or indemnify its insured for this action. That declaratory judgment had been obtained by default, and the plaintiff in the underlying tort case was not a party to the declaratory judgment action.
The Supreme Court found that a declaratory judgment in an action that finds no coverage for the insured is only binding on the claimant if the declaratory judgment action was brought by the insured (as opposed to the insurer), or if the injured plaintiff was a party to the action, and had an opportunity to be heard. For this reason, the plaintiff, who had obtained a judgment against the tortfeasor, was not bound by the default declaratory judgment obtained by the insurer against its insured, and could bring a supplemental complaint to collect the judgment against the tortfeasor from the insurer.
AN INSURED DOES NOT HAVE STANDING TO MAINTAIN AN ACTION AGAINST HIS INSURANCE COMPANY FOR COVERAGE OF AN ALLEGED LOSS WHEN HE DID NOT FILE A CLAIM FOR THE LOSS OR GIVE ANY NOTICE TO THE INSURER OF THE LOSS BEFORE FILING THE COMPLAINT.
Kinkaid v. Erie Insurance Co., 128 Ohio St.3d 322, 2010-Ohio-6036, 944 N.E.2d 207
December 16, 2010
In a 4-3 decision, the Supreme Court held that an insured may not preemptively sue its insurer for coverage under an insurance policy when the insured has not previously submitted the claim to the insurer, the insurer has not denied the claim and the insured has not provided notice of the claim to the insurer. Such an insured has no standing to sue.
This decision effectively ended a waive of class actions brought to recover supplementary payments to insureds associated with appearing in court, attending depositions, postage costs, etc. The insurers had argued that they had never denied these claims, so the class action lawsuits against them were premature. Based on these arguments, the court found that the insureds must first submit such a claim to the insurer for reimbursement.
*In this case Rich Garner from Davis & Young filed a brief with the Ohio Supreme Court on behalf of amicus curiae Ohio Association of Civil Trial Attorneys.
A BUS DRIVER QUALIFIES AS AN INSURED UNDER THE OMNIBUS CLAUSE IN AN INSURANCE POLICY ISSUED TO THE LESSEE OF A BUS.
Federal Ins. Co. v. Executive Coach Luxury Travel, Inc., 128 Ohio St.3d 331, 2010-Ohio-6300, 944 N.E.2d 215
December 28, 2010
This was a 4-1-2 decision by the Ohio Supreme Court resolving a multi-million dollar insurance coverage question surrounding the tragic 2007 Bluffton University baseball team bus crash in Atlanta. The issue for resolution was whether the bus driver qualified as an insured under insurance policies issued to Bluffton. The majority opinion authored by Justice Pfeifer and joined by then Chief Justice Brown, Justice O’Connor, and visiting Judge Cannon (from the 11th District) found that the bus driver clearly qualified as an insured under a provision extending insured status to “anyone else while using with your permission a covered auto you own, hire or borrow.” The Court stated “on its face, it is clear to us that the omnibus clause applies to the case before us.” Id at ¶8.
In so holding, the majority rejected the insurers’ argument that such coverage was not intended as “disingenuous” based upon the breadth of the omnibus clause and the existence of several exceptions to the broad grant of coverage. The majority also noted that if the insurers intended the bus driver to be excepted from the broad definition, they could have included policy provisions that would effectively do so.
Justice Lanzinger concurred with the judgment, but did not join the majority opinion. Justices Stratton and O’Donnell dissented, explaining that they would have affirmed the lower Court decisions finding in favor of the insurers on the basis that the insurers did not intend such broad coverage and the majority opinion “unreasonably extends coverage to a third-party.”
AS APPLIED TO AN INSURANCE POLICIES INTENTIONAL ACT EXCLUSION, THE DOCTRINE OF INFERRED INTENT APPLIES ONLY IN CASES IN WHICH THE INSUREDS INTENTIONAL ACT AND THE HARM CAUSED ARE INTRINSICALLY TIED SO THAT THE ACT HAS NECESSARILY RESULTED IN THE HARM.
Allstate Insurance Company v. Campbell, 128 Ohio St.3d 186, 2010-Ohio-6312, 942 N.E.2d 1090
December 30, 2010
This case involved the issue of insurance coverage for bodily injury and property damage arising from a single vehicle accident caused by teenage pranksters placing a Styrofoam target deer in the middle of a roadway at night to startle motorists using the roadway. Not surprisingly, a serious accident occurred with one vehicle leading to multiple lawsuits. The teenage pranksters denied intending to hurt anyone. The principal question was whether intent to harm should be inferred as a matter of law, despite their denial of specific intent to harm.
The Justices were fractured in their approach to resolving this case. The Court affirmed the holding of the lower appellate court that genuine issues of material fact precluded summary judgment for several of the insurers with respect to application of their intentional act exclusions. However, one of the insurers’ (American Southern) intentional act exclusion was deemed so much broader than the others, and was applied to preclude coverage as a matter of law. That insurer’s exclusion provided in pertinent part, that coverage does not apply to “bodily injury or property damage which results directly or indirectly from an intentional act of any insured.” The Court explained that such language was triggered by an intentional act as opposed to an intentional injury. All seven Justices agreed that inferred intent is applicable beyond sexual molestation and murder cases, but were sharply divided on application of the doctrine in this particular case. Five Justices emphasized the contractual nature of insurance coverage and held that insurers may draft clear and unambiguous exclusions that can preclude coverage for intentional acts – not just intentional injury. This suggests that some of the problems inherent in the Court’s prior decision in Safe Co. v. White may be resolved by amending policy provisions.
The Court wrestled with the issue of when to infer intent in insurance context as a matter of law despite the existence of direct evidence that the insureds did not intend to cause injury. This is, and should be the high standard. The Court was fractured on whether the standard was met in this case, but all members of the Court agreed that when such a standard is met, intent to harm will be inferred as a matter of law.
OHIO SUPREME COURT REFUSES TO ANSWER A CERTIFIED QUESTION FROM A U.S. DISTRICT COURT ON THE ISSUE OF WHETHER THE OHIO SUPREME COURT WILL RECOGNIZE THE “REASONABLE EXPECTATIONS DOCTRINE” IN AN ALL RISK INSURANCE POLICY.
Honeybaked Foods, Inc. v. Affiliated FM Insurance Co., Supreme Court Case No. 2011-0391
May 25, 2011
In this case, a U.S. District Judge, after determining that an insurance policy issued by the defendant to the plaintiff, barred coverage for the plaintiff’s claims, certified a question to the Ohio Supreme Court pursuant to Rule XVIII. The action was a diversity case brought in federal court under Ohio law, and the issue was whether or not the all risk property and business interruption policy issued by Affiliated FM to Honeybaked provided coverage for its loss. After finding that there was no coverage under the clear terms of the policy, the district court judge certified to the Supreme Court the question of Ohio law; whether Ohio law would recognize a reasonable expectations argument to defeat the policy’s clear and unambiguous language if the insured “reasonably expected when purchasing the policy, that the policy would cover the loss at issue.”
On behalf of Affiliated FM, David Fagnilli from Davis & Young argued that the Ohio Supreme Court had twice visited the issue of the “reasonable expectations” doctrine, and on each occasion rejected it. Therefore, there was no reason for the Court to review this issue again. The Ohio Supreme Court then declined to accept the certified question from the district court, and declined to accept briefing on the merits on the issue of the “reasonable expectations” doctrine under Ohio law.
LANGUAGE IN A COMMERCIAL LIABILITY INSURANCE POLICY STATING THAT INSURANCE DOES NOT APPLY TO BODILY INJURY RESULTING FROM AN ACT THAT IS “DETERMINED” TO HAVE BEEN COMMITTED BY AN INSURED WITH THE BELIEF THAT AN INJURY IS SUBSTANTIALLY CERTAIN TO OCCUR, DOES NOT REQUIRE A FINAL DETERMINATION BY A FACT FINDER BEFORE THE INSURER CAN REFUSE TO DEFEND A CLAIM ALLEGING A SUBSTANTIAL CERTAINTY EMPLOYER INTENTIONAL TORT.
Ward v. United Foundry’s, Inc., Slip Opinion No. 2011-Ohio-3176
July 6, 2011
The Ohio Supreme Court in this case addressed the issue of insurance coverage for employer intentional torts in a way that could have a substantial impact on Ohio law in this area for post-tort reform cases. Ward involved a pre-tort reform (prior to 2005) employer intentional tort case. The employer was sued for an employer intentional tort under the Fyffe “substantial certainty” standard. While the employer had purchased a “stop gap” endorsement to provide some kind of employer liability coverage, the stop gap endorsement included an exclusion that purported to exclude both deliberate intent torts and “substantial certainty torts.” Based upon the exclusion, the employer’s insurer denied coverage for the employer intentional tort suit.
The Supreme Court of Ohio found that the insurer’s exclusion was “plain, unambiguous and not misleading.” The high Court further held that the stop gap endorsement was not elusory because it provided “some benefit to the insured from the face of the endorsement”. The coverage was not as broad as what the employer thought it was purchasing; the Court reasoned that “this is an argument for the [employer] to assert against the insurance agency and broker who procured the policy, not against the insurer.” Accordingly, the insurer did not have to defend or indemnify either deliberate intent or “substantial certainty” torts under the stop gap endorsement, because “there is no set of facts under which the employer would be covered because all potential claims fall with the exclusion.”
Although the decision involved a pre R.C. 2745.01 tort, it could have a substantial impact on post R.C. 2745.01 torts because it suggests that:
(1) The Ohio Court is disinclined to engage in the illusory coverage theories embraced by earlier courts;
(2) The high Court will uphold exclusions of coverage for deliberate intent torts in post R.C. 2745.01 cases, even though such a finding would severely limit the benefit of coverage most employers will claim then intended to receive from purchasing such coverage; and
(3) The high Court will not be sharply fractured on such issues if or when they arise.
CASES PENDING BEFORE THE OHIO SUPREME COURT
There are a number of currently pending cases before the Ohio Supreme Court, the outcome of which may be of interest to parties involved in tort and insurance practice. These cases include the following:
EXPERT TESTIMONY AND INFORMED CONSENT.
White v. Leimbach, 126 Ohio St.3d 1581, 2010-Ohio-4542, 934 N.E.2d 354, appeal from the Franklin County Court of Appeals accepted on September 29, 2010.
This is a medical malpractice case, and the issue is whether expert testimony is needed to prove a case of alleged lack of informed consent. The trial court granted a directed verdict in favor of the doctor. The court of appeals reversed the finding that expert testimony was not necessary in a lack of informed consent case like this. The Ohio Supreme Court has accepted jurisdiction to hear the doctor defendant’s appeal.
UNINSURED/UNDERINSURED MOTORIST COVERAGE – LIMITATION PERIOD FOR SUITS BY INSURED.
Barbee v. Allstate Insurance Co., 128 Ohio St.3d 1507, 2011-Ohio-2578, 947 N.E.2d 1212, appeal from the Lorain County Court of Appeals, accepted September 29, 2010.
The plaintiffs in this case were injured in an automobile accident. They notified their own insurance company promptly, and filed suit against the tortfeasor. They did not sue their own insurer for UM/UIM benefits. Ultimately, they were awarded an amount in excess of the tortfeasor’s policy limits, and attempted to collect that from their own insurer. The insurer denied the claim on the basis that the suit was not brought against the insurer for UM/UIM benefits within three years as required by the policy. The question on appeal is whether the three year limitation of action clause, when read in conjunction with the exhaustion provision in the policy, is ambiguous.
INSURANCE – LIMITATION OF ACTION CLAUSE – WAIVER.
Dominish v. Nationwide Insurance Co., 127 Ohio St.3d 1480, 2010-Ohio-6370, 938 N.E.2d 1040, appeal from the Lake County Court of Appeals, accepted December 27, 2010.
This case involves a claim made under a homeowners’ insurance policy for damage from a violent storm. The storm occurred on July 28, 2006. Nationwide sent partial checks for payment, and a partial denial letter. Suit was not filed until July 25, 2008. The court of appeals found that the insurer had waived the limitation of action clause in the policy and that, as used in the policy, the terms “action” and “started” were ambiguous. The Ohio Supreme Court has accepted jurisdiction to hear the insurer’s appeal.
WRONGFUL TERMINATION – PUBLIC POLICY – WORKPLACE SAFETY.
Dohme v. Euranda, Inc., 2010-1621, appeal from the Montgomery County Court of Appeals, accepted on January 19, 2011.
Appellee, Randall Dohme, worked for appellant, Euranda America, Inc. as an engineering supervisor. He alleges that during his employment he notified his employer about various plant safety, personnel, and management issues and concerns, but that his supervisors instructed him to keep the issues “confidential.” When
an insurance company representative came to the premises for a review, the employees were instructed to direct all other contact with the insurance representative through specific company employees. The plaintiff disregarded this directive, and spoke directly with the insurance representative about certain safety issues. He was fired for failure to follow company directives. The plaintiff filed a wrongful discharge suit, and the Trial Court granted summary judgment. The Court of Appeals reversed and remanded on the basis that workplace safety is a sufficient, clear, public policy issue.
The Ohio Supreme Court has accepted the appeal by the employer.
SOVEREIGN IMMUNITY – FAILURE TO KEEP ROAD “IN REPAIR” EXCEPTION.
Sanderbech v. Medina County, 128 Ohio St.3d 1510, 2011-Ohio-2674, 948 N.E.2d 447, appeal from the Medina County Court of Appeals, accepted on January 19, 2011.
The plaintiff’s decedent was killed in a one car accident when the car that she was riding in left the roadway and flipped over in a culvert. The driver of the car that she was riding in was convicted of aggravated vehicular homicide. The estate sued the county, alleging that the county had failed to keep the road in repair, which is an exception to immunity under R.C. 2744.02(B)(3).
The plaintiff’s claim is based on the allegation that road surface was deteriorating, and this caused an increase in the number of accidents. The county defended on the basis that the roadway is in good repair, and that the plaintiff’s expert relies solely on skid resistance of the road surface for his conclusions. The trial court found that there was an issue of fact, and the court of appeals affirmed. The Ohio Supreme Court has accepted the issue for review, and will determine whether or not skid resistance, as alleged by the plaintiff, is sufficient to put a claim within the exception to immunity for failure to keep roads in repair.
DENIAL OF A MOTION TO BIFURCATE PUNITIVE DAMAGES.
Flynn v. Fairview Village Retirement Community, Ltd., 128 Ohio St.3d 1555, 2011-Ohio-2905, 949 N.E.2d 42, appeal from the Cuyahoga County Court of Appeals, accepted on February 2, 2011.
Plaintiffs filed suit against defendant, Fairview Village Retirement Community, alleging compensatory and punitive damages. The defendant filed a motion to bifurcate the punitive damages based on R.C. 2315.21(B). The trial court denied the motion, and the court of appeals dismissed their appeal as lacking a final appealable order. The issue before the Ohio Supreme Court is whether the failure to grant a motion to bifurcate punitive damages is a final appealable order subject to review before there has been a decision on the merits in the underlying case.
SOVEREIGN IMMUNITY - FAILURE TO MAINTAIN A SEWER SYSTEM.
Essman v. Portsmouth, 127 Ohio St.3d 1545, 2011-Ohio,647; 941 N.E.2d 803, appeal from Scioto County, accepted February 16, 2011.
The plaintiffs are residents of the City of Portsmouth, who have damages as a result of sewage backups in their homes. The trial court denied the City’s motion for summary judgment on immunity grounds. The court of appeals reversed. The Ohio Supreme Court has accepted the appeal of the plaintiffs. The issue is whether the failure to update the sewer system is a failure to maintain, which is an exception under R.C. 2744.01(C), and whether it falls under the granting of governmental immunity for planning, design, construction, or reconstruction of a sewer system.
MISCELLANEOUS
These brief summaries of cases are for informational purposes only, and not intended as a substitute for legal research or review of the Court’s entire opinion. Always read the full opinion and research the applicable legal issues before reaching a conclusion or attempting to apply the law.
The full text of the opinions in all of the above cases are available from the Ohio Supreme Court’s website at no charge. The URL for the Ohio Supreme Court’s opinions link on its website is http://www.sconet.state.oh.us/rod/newpdf/. Related useful information is also available at Davis & Young’s website at www.davisyoung.com and by clicking on the “helpful links” button on the left side of the D & Y homepage. For more information or questions about these cases, please contact any of our lawyers at Davis & Young. |
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