In Lager, the Ohio Supreme Court reviewed a situation wherein Sara Lager died in a motor vehicle accident while her boyfriend was driving her car. At issue was an exclusion in her parents’ insurance policy which was described in paragraph 9 of the Court’s opinion as follows:

 

            “The Lagers’ policy also contained an ‘other owned auto’ exclusion that is critical to our analysis. That exclusion states that ‘coverage does not apply to anyone for bodily injury or derivative claims: ... 3. While any insured operates or occupies a motor vehicle: a) owned by; b) furnished to; or c) available for the regular use of: you or a relative, but not insured for Auto Liability coverage under this policy.’”

 

            Sara Lager’s parents had their own motor vehicle which was insured by Nationwide under a separate policy of insurance. Sara’s car was not listed on her parents’ liability coverage. For the purposes of this case, there was no debate that the deceased daughter qualified as a “relative” under the parents’ policy. Therefore, the key issue was whether or not the language contained in the insurance policy prevented recovery under the parents’ policy. 

 

            The position of Nationwide Insurance Company was summarized in paragraph 25 of the Court’s opinion wherein it was stated the following:

 

            “As Nationwide conceded at oral argument, by operation of the UM endorsement, the Lagers’ policy would have afforded them that coverage because they and Sara were insureds who suffered losses because of bodily injury, i.e. Sara’s death, caused by an underinsured driver. But the Lagers’ policy also contained a valid exclusion that disclaimed coverage to anyone for bodily injury or derivative claims while an insured was operating or occupying a vehicle owned by the Lagers or a relative that was not insured for liability coverage under the policy.”

 

            The Ohio Supreme Court, in paragraphs 31-32 of its opinion upheld the exclusion at issue and explained its rationale by stating the following:

 

            “The purpose of UM insurance is to put an injured policyholder in the same position he would have been in if the tortfeasor had carried sufficient liability insurance. (Citations omitted.) To permit coverage in circumstances like those presented here would improperly allow ‘a person who owns more than one motor vehicle to choose not to insure one vehicle and bear no financial risk for the decision because he will be deemed to have in effect purchased liability coverage for the vehicle he decided not to insure if he is struck by another uninsured motorist..’ Martin, id.

 

            We therefore answer the certified question in the negative and hold that the other-owned-auto exclusion clearly and unambiguously applied to this claim and that Nationwide’s motion for summary judgment should have been granted on that basis.”

 

 

 

 

            The Ohio Supreme Court recently dealt with the question of whether or not the Court’s ruling in Temple v. Wean United, Inc. (1977), 50 Ohio St.2d 317 should be applied retroactively to products sold before Temple was decided in 1977.  Temple v. Wean was the seminal case establishing strict liability on non-manufacturing sellers of defective products. In DiCenzo, the plaintiff had been employed at Wheeling-Pittsburgh Steel Corporation from the 1950s until 1993 and had been exposed to products containing asbestos. Mr. DiCenzo subsequently filed an action against a non-manufacturer (Hamilton) as a result of his development of mesothelioma. The allegation against the non-manufacturer (Hamilton), who had supplied the insulation products containing the asbestos, was based in part upon strict liability. The supplier filed a motion for summary judgment arguing that it was not strictly liable for supplying asbestos products prior to 1977 which was the date in which Temple v. Wean United, Inc. was decided. 

 

            The Ohio Supreme Court began its analysis by citing to the controlling case in the area of prospective application of the law. In paragraph 2 of its syllabus, the Court stated the standard:

 

            “An Ohio court has discretion to apply its decision only prospectively after weighing the following considerations: (1) whether the decision establishes a new principle of law that was not foreshadowed in prior decisions, (2) whether retroactive application of the decision promotes or retards the purposes behind the rule defined in the decision, and (3) whether retroactive application of the decision causes an inequitable result. (Chevron Oil Co. v. Huson (1971), 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296, adopted and applied.)”

 

            The Ohio Supreme Court applied the facts to the Chevron test and concluded that Temple v. Wean applied prospectively only and so stated in paragraphs 47-48 of its opinion as follows:

 

            “As we noted in section I. above, Temple, which was decided in 1977 marked the first time this court had held that a nonmanufacturing seller of a product could be held liable for injuries caused by a defective product. Thus, nonmanufacturing sellers of asbestos, such as Hamilton, could not have foreseen that these products, distributed from the 1950s to the 1970s, could decades later result in Hamilton’s being liable for injuries caused by that product. Imposing such a potential financial burden on these nonmanufacturing suppliers years after the fact for an obligation that was not foreseeable at the time would result in a great inequity.

 

            Thus, the answers to the questions posed in Chevron Oil collectively indicate that our decision in Temple should be applied prospectively only. Therefore, we hold that Temple v. Wean applies only prospectively.”

 

            In the dissent, it was strenuously argued that Ohio law had previously allowed retroactive application of a court decision unless specifically prohibited in the opinion. In paragraphs 49-50, the dissent argued that the majority had abandoned this long standing rule and stated the following:

 

            “What the majority does today is unheard of. It revisits a case decided over 30 years ago, declares that that case’s holding should be applied prospectively only, and thereby exempts an entire class of defendants from strict tort liability. Today’s holding is an affront to stare decisis, runs contrary to our own case law, and makes a mockery of the Chevron Oil test while ostensibly applying it. More importantly, today’s decision leaves Ohioans asking, ‘What is the law?’

 

            Before today, a simple rule applied regarding the applicability of this court’s decisions: ‘In the absence of a specific provision in a decision declaring its application to be prospective only, ... the decision shall be applied retrospectively as well.’”

 

            The dissent strongly argued that this decision was an abandonment of prior legal principles but only two justices joined in the dissent.

 

 

 

 

            Wally Pattison commenced a wrongful termination case against W.W. Grainger, Inc. Two specific counts were set forth including age discrimination and wrongful termination in violation of public policy. The trial court granted summary judgment but the Eighth District Court of Appeals found that the motion for summary judgment only addressed the age discrimination claim and not the public policy claim. On that basis, the Court of Appeals dismissed the appeal inasmuch as the trial court summary judgment did not represent a final appealable order.

 

            The plaintiff thereafter sought to dismiss the public policy claim without prejudice, thus making ripe his appeal on the age discrimination claim. It should parenthetically be noted that the lower court had not included O.R.C.P. 54(B) language as it pertains to the age discrimination claim. 

 

            The Court summarized the issue at hand and stated at paragraph 10 of its opinion, the following:

 

            “In a case where a plaintiff has asserted multiple claims against a single defendant and some of those claims have been ruled upon but not converted into a final order with Civ.R. 54(B), can the plaintiff create a final order by voluntarily dismissing pursuant to Civ. R. 41(A) the remaining claims asserted against that defendant?”

 

            As will be more fully developed, the Court answered that question in the negative. 

 

            The Court began its reasoning with a clear policy consideration to avoid multiple litigation. In paragraph 19 of its opinion, the Court stated the following:

 

            “As recognized by the Eighth District Court of Appeals, other appellate districts faced with this question have found that dismissal of a single claim among others against the same defendant is not permitted by Civ. R. 41. These holdings have been based on the text of the rule itself, as well as the general policy against piecemeal litigation. ... ‘A plain reading of Civ. R. 41(A) reveals that it allows a plaintiff ‘to dismiss all claims’ asserted against a defendant, but contains no mechanism for the dismissal of a single claim.’”

 

            The Ohio Supreme Court unequivocally rejected partial dismissals of a claim against one defendant and held, in paragraph 20 of its opinion, the following:

 

            “Civ.R. 41(A) allows for a dismissal of all claims against particular defendants. The lower court’s position regarding judicial economy and the need to streamline cases suffers in that, were Civ.R. 41(A) to be used to dismiss fewer than all of the claims against a certain defendant, a plaintiff could create a final and appealable order as to one issue under Civ.R. 41(A) while still saving the dismissed claim to be refiled later. To allow a partial Civ.R. 41(A) dismissal is potentially prejudicial to defendants. In cases in which all claims against a party are dismissed without prejudice, there still is the risk of the action being refiled, but the amount of potential litigation that a defendant is subjected to is the same. When an individual claim against a defendant is dismissed without prejudice, however, the defendant is forced to go through the appeal process and may perhaps still be subjected to the dismissed claim upon refiling. The defendant in that situation is vulnerable to an increased overall burden due to the Civ.R. 41 dismissal.”

 

            The case does place a plaintiff in a difficult position when multicounts of a case are filed and the dissent aptly articulated this dilemma in paragraph 24 of the opinion:

 

            “The majority’s holding leaves a plaintiff in a conundrum. In order to appeal an adverse judgment on one or more claims of a multicount complaint, a plaintiff must dismiss with prejudice all other unresolved claims. This requirement forces the plaintiff to give up potentially meritorious claims.   Alternatively, a plaintiff must proceed on the remaining unresolved claims, which may be so weak or peripheral that the parties and the court are forced to waste their time.”

 

            Based upon this decision, in a multicount situation, where a court has not issued a O.R.C.P. 54(B) order, the plaintiff would be required to dismiss any unadjudicated with prejudice in order to perfect their appeal. 

 

 

 

 

            Curtin & Associates is privileged to perform S.I.U. work for many of our clients and oftentimes the question arises as to whether or not an insured is required to produce financial records and what is the operative effect of their refusal to produce those records. In Savage v. Am. Family Ins. Co., (2008) 178 Ohio App.3d 154, the Tenth District Court of Appeals reviewed the granting of summary judgment in favor of American Family Insurance based, in part, upon the plaintiff’s failure to produce all requested documentation and the failure to do so resulted in the court issuing the following order set forth in paragraph 32 of its opinion:

 

            “The trial court’s decision granting summary judgment in favor of AFI disposed of this issue. The trial court stated as follows:

 

            ‘The relevant insurance contract provisions required both plaintiffs to submit to examinations under oath and to provide documents. Because plaintiffs failed to do so, the court concludes that AFIC had no contractual obligation to provide the plaintiffs with insurance coverage at the time this lawsuit was filed.’”

 

            The Tenth District upheld the lower court’s decision and reviewed several cases that support the requirement that an insured must produce requested records. In paragraphs 19 through 24, the court reviewed existing case law and stated the following:

 

            “In Moore v. State Farm Fire & Cas. Co. (citation omitted), an arson case, the court of appeals concluded that tax returns are material and admissible as a defense to liability in order to clarify the insured’s financial situation and to shed light on a possible motive. However, each case must be decided on its own merits, and there must be a determination as to whether a willful failure to produce the returns rises to a substantial and material breach of the policy’s cooperation clause resulting in prejudice to the insurer.

 

            In Ameduri v. Buckeye Union Ins. Co. (citation omitted), the insured reported that his home had been burglarized and personal property stolen. The insurance company denied the claim, and the matter proceeded to trial. The court of appeals affirmed the verdict in favor of the insurance company and concluded that the insured’s failure to furnish copies of his income tax returns violated the cooperation clause of the policy.

 

            In Gabor v. State Farm Mut. Auto. Ins. Co. (citation omitted), the insurer suspected arson and denied a claim for an automobile that had been destroyed by fire. The policy owner refused to provide his income tax returns. The court ruled that when an insured party fails to comply with a cooperation clause, ‘the insurer may be relieved of further obligation with respect to a claim with which the insured did not cooperate.’ Whether the insurer is relieved of further obligation depends on the prejudice to the insurer resulting from the information that is withheld.

 

            In FT Mtge., another arson case, the insured refused to submit to an examination under oath, citing her Fifth Amendment right against self-incrimination, or to provide financial records, claiming they were all destroyed by the fire. The court ruled that the insurance company had no obligation to pay her claim because of her refusal to cooperate.

 

            Turning to the present case, we note that although the Savages questioned the need to provide their tax returns, it is clear that under the clause quoted above, submitting to an examination under oath and providing relevant financial records were conditions of the contract. ‘A condition is an event, not certain to occur, which must occur, unless its non-occurrence is excused, before performance under a contract becomes due.’

 

            The requested tax returns were relevant to assessing the Savages’ financial condition and to clarify the large discrepancy between the personal property in their possession at the time of bankruptcy versus their personal property at the time of the burglary. (Citation omitted.) Therefore, AFI was not obligated to perform under the contract until the Savages satisfied the conditions precedent by providing their tax returns and by Rebecca Savage submitting to an examination under oath. Consequently, the Savages were unable to prevail on their breach-of-contract claim, and summary judgment in favor of AFI was appropriate.”

 

            Several key practice consideration must be briefly reviewed which include the following:

 

1.      In the instance of a request for financial records, the records must be material. All of the cases cited above include the requirement that the failure to produce the records must be prejudicial to the insurance company.

 

2.      If the requested information is material, it is the opinion of Curtin & Associates, LLP that the claim should not be denied for non-production of the requested materials. Instead, a letter should be directed to the insured indicating that no further action can be taken with regard to the claim until such time as the insured has been compliant with the request to produce certain records and/or appear for an examination under oath.