Curtin & Associates is pleased to announce that Stephan and Heather Wright are proud parents of twin girls!
The Ohio Supreme Court handed two complex decisions in the context of insurance coverage and both of those cases are reviewed herein.
Collateral Estoppel – Ineffective If The Original Order Was Not A Final Appealable Order
Glidden Co. v. Lumbermens Mut. Cas. Co., (2006) 112 Ohio St.3d 470:
In Glidden Co. v. Lumbermens Mut. Cas. Co., the Ohio Supreme Court handed down one of two extremely detailed and complicated decisions analyzing a host of issues. For the purposes of brevity, one interesting aspect of this decision was the court’s limitation of the Doctrine of Collateral Estoppel.
Curtin & Associates has fielded questions on the topic of application of collateral estoppel in the context of multiple litigation where one case is favorably resolved in favor of a party. Oftentimes, the thought process is that, as it pertains to additional lawsuits or claims, the Doctrine of Collateral Estoppel can be invoked so as to prevent those claims. The Ohio Supreme Court’s decision added an interesting wrinkle by strictly limiting application of Collateral Estoppel to a case involving a final order.
The Court summarized this issue in paragraph 46 of its opinion and stated the following:
“In Denham v. New Carlisle (1999) 86 Ohio St.3d 594, 597, this court held that all prior interlocutory orders are dissolved after a dismissal, in that ‘a Civ. R. 41(A) dismissal nullifies the action only with respect to those parties dismissed from the suit.’ This analysis applies here. The summary judgment in the prior Ohio action never became a final order because the entire action was nullified with the settlement and dismissal. The doctrine of collateral estoppel cannot be invoked when there is no final order.”
The case is instructive inasmuch as oftentimes liability insurance carriers are faced with the situation of potentially making a nuisance payment so as to avoid future litigation costs. Imagine a situation wherein summary judgment is granted in favor of a defendant and a plaintiff threatens an appeal but offers a de minimis amount in a settlement demand in order to resolve the case. If a liability insurance carrier paid the monies, thereby entering into a settled and dismissed entry, the potential exists that the same liability insurance carrier could face subsequent litigation, as it pertains to the identical issue, inasmuch as the summary judgment never became a “final appealable order” by virtue of the dismissal. Therefore, in multiple litigation or multiple claims, a favorable ruling must be left undisturbed at the trial court level.
Anti-Assignment Clause – Corporation May Sell The Right Of
Indemnification To A Subsequent Purchaser
Pilkington N. Am., Inc. v. Travelers Cas. & Sur. Co., (2006) 112 Ohio St.3d 482:
In Pilkington N. Am., Inc. v. Travelers Cas. & Sur. Co., the Ohio Supreme Court dealt with three issues that had been certified by the United States District Court for the Northern District of Ohio. Space constraints limit analysis as pertains to all three questions but, one of the interesting aspects of the opinion dealt with the anti-assignment provision contained in the policy.
In a nutshell, Pilkington North America, Inc. purchased LOF Glass’s business in 1986. Pilkington subsequently became involved in multiple claims as a defendant and filed a lawsuit against the insurers of LOF Glass claiming that those insurers owed Pilkington a duty of defense and indemnity for the claims at issue.
This case involved a commercial general liability insurance policy and the second certified question was articulated in paragraph 30:
“Whether the anti-assignment provisions in the insurance policies apply. All of the policies contain language prohibiting the assignment of any interest under the policy without the insurers’ consent.”
The court described the policy considerations underlying this principle and stated in paragraph 38 of its opinion the following:
“Risk characteristics of the insured determine whether the insurer will provide coverage, and at what rate. An assignment could alter drastically the insurer’s exposure depending on the nature of the new insured. ‘No assignment’ clauses protect against any such unforeseen increase in risk.”
The court, however, did not conclude its analysis by strict application of the “no assignment” provision. By contrast, it focused upon the issue of whether or not the assignment occurred before or after the occurrence of a loss. If it is after, the court did permit the sought after transfer. This was explained in paragraphs 39 and 40 of the court’s opinion wherein it was stated as follows:
“Any assignment of the rights after the losses would be, on its face, in direct contravention of this provision. It would seem that the analysis should end at this point under the plain-language approach Hybud Equip. Corp., 64 Ohio St.3d at 665.
Insurance contracts receive unique treatment post-loss, however. Insurance policies are generally construed such that assignment of an interest is valid after the occurrence of the loss insured against, and the assignment is then regarded as a transfer of the chose in action, even in the face of an anti-assignment provision.”
The court noted in paragraph 6 of its opinion its holding with regard to this second certified question:
“As to the second question, we answer that such a chose in action is transferable despite the existence of an anti-assignment provision contained in the policy as to the duty to indemnify. We are unable to answer definitively whether such a chose in action is transferable as to the duty to defend.”
The case involved a highly complicated set of facts and may very well be limited to those facts but is illuminating in light of the fact that traditional concepts dealing with an anti-assignment provision serving as an absolute bar to an insured’s effort to assign rights under an insurance policy was not absolute.
Summary Judgment Upheld – Customer Had No
Cause Of Action For Wrongful Arrest
Brown v. Helzberg Diamonds, (2006) 168 Ohio App.3d 438:
The Sixth District Court of Appeals dealt with the situation wherein plaintiff had purchased a diamond bracelet from Helzberg Diamonds and approximately eight hours later, two individuals entered the store, purchased a diamond bracelet but, on this occasion, used stolen credit cards.
The police requested to see a security tape from the store’s activities on August 2, 2002 and the person who was working that day turned the tape over and went on vacation. The investigating detective took the tape to several area television stations. The portion of the tape was played but showed pictures of the individuals who had made the earlier legitimate purchase of a diamond bracelet. Essentially, inasmuch as the store employee had been away on vacation, he had never known that the wrong individual had been identified, i.e. the honest purchasers of the diamond bracelet earlier in the morning as a thief in the televised videotape.
A person who saw the videotape identified Mr. Brown (honest purchaser) and he was subsequently arrested by the police based upon the tip. Mr. Brown filed a lawsuit against the store. In upholding the granting of summary judgment in favor of the store, the Sixth District Court of Appeals stated the following:
“Test for foreseeability, for purposes of negligence claim, is whether a reasonably prudent person would have anticipated that an injury was likely to result from the performance or nonperformance of an act; foreseeability of harm usually depends on the defendant’s knowledge.”
To impose liability on a private citizen for a wrongful arrest or false imprisonment, the arrest by the officer must be so induced or instigated by the defendant that the arrest is made by the officer, not of his own volition, but to carry out the request of the defendant; no liability is incurred if a person merely gives information to an officer tending to show a crime has been committed.”
Uninsured Motorist Provisions – Limitation Of Enforceability
Lightning Rod Mut. Ins. Co. v. Grange Mut. Cas. Co., (2006) 168 Ohio App.3d 505:
The Ninth District Court of Appeals handed down a decision that succinctly summarized the basic premise necessary in any analysis of uninsured motorist coverage. First, there must be a determination that the vehicle was insured and, second, that the individual claiming benefits is an insured under the policy.
The court summarized the foregoing in paragraphs 1 through 3 of its opinion wherein it stated the following:
“1. The uninsured motorist provision is intended to protect persons, not specific vehicles, but only for persons insured thereunder and when the claimant is an insured.
2. Nothing in uninsured motorist insurance statute prohibits the parties to an insurance contract from defining who is an insured person under the policy, as means of limiting those persons who are entitled to uninsured motorist coverage under the policy.
3. Motorist was not an ‘insured’ under car owner’s insurance policy, and thus, car owner’s insurer did not provide uninsured motorist coverage for damages sustained by motorist in accident while driving owner’s car; policy definition of ‘insured’ excluded other persons occupying the vehicle who had uninsured motorist coverage under another policy, and motorist’s automobile insurance policy provided uninsured/underinsured motorist coverage.”
This factual scenario oftentimes arises and the case is of particular interest to individuals with litigation pending in the Ninth District Court of Appeals. An effort to apply the “other insurance” language in a policy was rejected as not dispositive of the determination of primacy of insurance coverages.
Curtin and Associates will continue to electronically transmit cases of interest to the insurance industry. Please visit our website at www.curtinlawfirm.com. For your convenience, we will post these cases on our website in the “Newsletter” link.
The information contained in this Newsletter is not a legal opinion and is for informational purposes only. Specific questions should be directed to an attorney for a legal opinion.
Curtin & Associates is pleased to announce that Stephan and Heather Wright are proud parents of twin girls!
The Ohio Supreme Court handed two complex decisions in the context of insurance coverage and both of those cases are reviewed herein.
Collateral Estoppel – Ineffective If The Original Order Was Not A Final Appealable Order
Glidden Co. v. Lumbermens Mut. Cas. Co., (2006) 112 Ohio St.3d 470:
In Glidden Co. v. Lumbermens Mut. Cas. Co., the Ohio Supreme Court handed down one of two extremely detailed and complicated decisions analyzing a host of issues. For the purposes of brevity, one interesting aspect of this decision was the court’s limitation of the Doctrine of Collateral Estoppel.
Curtin & Associates has fielded questions on the topic of application of collateral estoppel in the context of multiple litigation where one case is favorably resolved in favor of a party. Oftentimes, the thought process is that, as it pertains to additional lawsuits or claims, the Doctrine of Collateral Estoppel can be invoked so as to prevent those claims. The Ohio Supreme Court’s decision added an interesting wrinkle by strictly limiting application of Collateral Estoppel to a case involving a final order.
The Court summarized this issue in paragraph 46 of its opinion and stated the following:
“In Denham v. New Carlisle (1999) 86 Ohio St.3d 594, 597, this court held that all prior interlocutory orders are dissolved after a dismissal, in that ‘a Civ. R. 41(A) dismissal nullifies the action only with respect to those parties dismissed from the suit.’ This analysis applies here. The summary judgment in the prior Ohio action never became a final order because the entire action was nullified with the settlement and dismissal. The doctrine of collateral estoppel cannot be invoked when there is no final order.”
The case is instructive inasmuch as oftentimes liability insurance carriers are faced with the situation of potentially making a nuisance payment so as to avoid future litigation costs. Imagine a situation wherein summary judgment is granted in favor of a defendant and a plaintiff threatens an appeal but offers a de minimis amount in a settlement demand in order to resolve the case. If a liability insurance carrier paid the monies, thereby entering into a settled and dismissed entry, the potential exists that the same liability insurance carrier could face subsequent litigation, as it pertains to the identical issue, inasmuch as the summary judgment never became a “final appealable order” by virtue of the dismissal. Therefore, in multiple litigation or multiple claims, a favorable ruling must be left undisturbed at the trial court level.
Anti-Assignment Clause – Corporation May Sell The Right Of
Indemnification To A Subsequent Purchaser
Pilkington N. Am., Inc. v. Travelers Cas. & Sur. Co., (2006) 112 Ohio St.3d 482:
In Pilkington N. Am., Inc. v. Travelers Cas. & Sur. Co., the Ohio Supreme Court dealt with three issues that had been certified by the United States District Court for the Northern District of Ohio. Space constraints limit analysis as pertains to all three questions but, one of the interesting aspects of the opinion dealt with the anti-assignment provision contained in the policy.
In a nutshell, Pilkington North America, Inc. purchased LOF Glass’s business in 1986. Pilkington subsequently became involved in multiple claims as a defendant and filed a lawsuit against the insurers of LOF Glass claiming that those insurers owed Pilkington a duty of defense and indemnity for the claims at issue.
This case involved a commercial general liability insurance policy and the second certified question was articulated in paragraph 30:
“Whether the anti-assignment provisions in the insurance policies apply. All of the policies contain language prohibiting the assignment of any interest under the policy without the insurers’ consent.”
The court described the policy considerations underlying this principle and stated in paragraph 38 of its opinion the following:
“Risk characteristics of the insured determine whether the insurer will provide coverage, and at what rate. An assignment could alter drastically the insurer’s exposure depending on the nature of the new insured. ‘No assignment’ clauses protect against any such unforeseen increase in risk.”
The court, however, did not conclude its analysis by strict application of the “no assignment” provision. By contrast, it focused upon the issue of whether or not the assignment occurred before or after the occurrence of a loss. If it is after, the court did permit the sought after transfer. This was explained in paragraphs 39 and 40 of the court’s opinion wherein it was stated as follows:
“Any assignment of the rights after the losses would be, on its face, in direct contravention of this provision. It would seem that the analysis should end at this point under the plain-language approach Hybud Equip. Corp., 64 Ohio St.3d at 665.
Insurance contracts receive unique treatment post-loss, however. Insurance policies are generally construed such that assignment of an interest is valid after the occurrence of the loss insured against, and the assignment is then regarded as a transfer of the chose in action, even in the face of an anti-assignment provision.”
The court noted in paragraph 6 of its opinion its holding with regard to this second certified question:
“As to the second question, we answer that such a chose in action is transferable despite the existence of an anti-assignment provision contained in the policy as to the duty to indemnify. We are unable to answer definitively whether such a chose in action is transferable as to the duty to defend.”
The case involved a highly complicated set of facts and may very well be limited to those facts but is illuminating in light of the fact that traditional concepts dealing with an anti-assignment provision serving as an absolute bar to an insured’s effort to assign rights under an insurance policy was not absolute.
Summary Judgment Upheld – Customer Had No
Cause Of Action For Wrongful Arrest
Brown v. Helzberg Diamonds, (2006) 168 Ohio App.3d 438:
The Sixth District Court of Appeals dealt with the situation wherein plaintiff had purchased a diamond bracelet from Helzberg Diamonds and approximately eight hours later, two individuals entered the store, purchased a diamond bracelet but, on this occasion, used stolen credit cards.
The police requested to see a security tape from the store’s activities on August 2, 2002 and the person who was working that day turned the tape over and went on vacation. The investigating detective took the tape to several area television stations. The portion of the tape was played but showed pictures of the individuals who had made the earlier legitimate purchase of a diamond bracelet. Essentially, inasmuch as the store employee had been away on vacation, he had never known that the wrong individual had been identified, i.e. the honest purchasers of the diamond bracelet earlier in the morning as a thief in the televised videotape.
A person who saw the videotape identified Mr. Brown (honest purchaser) and he was subsequently arrested by the police based upon the tip. Mr. Brown filed a lawsuit against the store. In upholding the granting of summary judgment in favor of the store, the Sixth District Court of Appeals stated the following:
“Test for foreseeability, for purposes of negligence claim, is whether a reasonably prudent person would have anticipated that an injury was likely to result from the performance or nonperformance of an act; foreseeability of harm usually depends on the defendant’s knowledge.”
To impose liability on a private citizen for a wrongful arrest or false imprisonment, the arrest by the officer must be so induced or instigated by the defendant that the arrest is made by the officer, not of his own volition, but to carry out the request of the defendant; no liability is incurred if a person merely gives information to an officer tending to show a crime has been committed.”
Uninsured Motorist Provisions – Limitation Of Enforceability
Lightning Rod Mut. Ins. Co. v. Grange Mut. Cas. Co., (2006) 168 Ohio App.3d 505:
The Ninth District Court of Appeals handed down a decision that succinctly summarized the basic premise necessary in any analysis of uninsured motorist coverage. First, there must be a determination that the vehicle was insured and, second, that the individual claiming benefits is an insured under the policy.
The court summarized the foregoing in paragraphs 1 through 3 of its opinion wherein it stated the following:
“1. The uninsured motorist provision is intended to protect persons, not specific vehicles, but only for persons insured thereunder and when the claimant is an insured.
2. Nothing in uninsured motorist insurance statute prohibits the parties to an insurance contract from defining who is an insured person under the policy, as means of limiting those persons who are entitled to uninsured motorist coverage under the policy.
3. Motorist was not an ‘insured’ under car owner’s insurance policy, and thus, car owner’s insurer did not provide uninsured motorist coverage for damages sustained by motorist in accident while driving owner’s car; policy definition of ‘insured’ excluded other persons occupying the vehicle who had uninsured motorist coverage under another policy, and motorist’s automobile insurance policy provided uninsured/underinsured motorist coverage.”
This factual scenario oftentimes arises and the case is of particular interest to individuals with litigation pending in the Ninth District Court of Appeals. An effort to apply the “other insurance” language in a policy was rejected as not dispositive of the determination of primacy of insurance coverages.
Curtin and Associates will continue to electronically transmit cases of interest to the insurance industry. Please visit our website at www.curtinlawfirm.com. For your convenience, we will post these cases on our website in the “Newsletter” link.
The information contained in this Newsletter is not a legal opinion and is for informational purposes only. Specific questions should be directed to an attorney for a legal opinion.