As a service to our clients, our office will electronically mail summaries of recent cases decided by Ohio courts that may impact our clients. If you have any questions regarding any of the reported cases, please feel free to contact one of our attorneys. 

 

 

            The Ohio Supreme Court decided a case of significance in the arena of prejudgment interest. The issue and holding of the court was summarized in paragraph 1 of the court’s opinion wherein it stated the following:

 

            “Today we decide an issue that has caused much consternation among the trial and appellate courts in this state. Does a motion for prejudgment interest pursuant to R.C. 1343.03(C) require the trial court to conduct an evidentiary hearing before rendering a ruling? For the reasons that follow, we hold that a trial court must set a date certain for an evidentiary hearing before ruling on an R.C. 1343.03(C) motion for prejudgment interest. Consequently, courts of appeals do not have the authority to rule on a motion for prejudgment interest when the trial court has ruled on the motion without setting a date certain for an evidentiary hearing.”

 

            A casual review of the case could leave the reader with the impression that the Supreme Court’s holding is that the trial court must complete an oral evidentiary hearing prior to issuing a ruling on prejudgment interest. However, a more careful reading of the opinion leads to the conclusion that the Ohio Supreme Court has mandated only the establishment of a evidentiary hearing date but would permit, in the opinion of Curtin & Associates, the prejudgment interest issue to be decided by oral hearing or evidence in the form of briefs and evidence attached to the briefs. Alternatively phrased, the case appears to stand for the proposition that an oral hearing is not mandatory and briefing could be accepted in lieu of an oral hearing providing that a date certain had been established for the evidentiary hearing and the trial court could limit its decision to evidence in the form of exhibits to the brief, i.e. non-oral hearing.

 

            The court began its discussion on the topic by noting that the prejudgment interest statute does require a “hearing” as codified in O.R.C. 1343.03(C). However, in paragraph 8 it noted that there is no definition of the term “hearing”:

 

            “The Revised Code does not define ‘hearing’ as it relates to prejudgment interest. ‘In the absence of a statutory definition, we must apply the ordinary and common understanding of the term ... (citation omitted.)”

 

            The court’s opinion reflected the desire that an evidentiary hearing must at least be scheduled but discretion would be conferred upon the trial court as it pertains to the specifics of the evidentiary hearing. Alternatively phrased, the court would not mandate an oral hearing per se inasmuch as the trial court could assemble evidence without a formal oral hearing, i.e. briefs with evidence attached. The foregoing was discussed by the Ohio Supreme Court in paragraphs 12 and 13 of its opinion wherein it stated the following:

 

            “Although the court may rely in part on its own participation during the pretrial and trial proceedings to aid in its ruling on the motion (citation omitted), the parties have the right to a date certain for an evidentiary hearing. The trial court, however, has the discretion to determine the nature of the evidentiary hearing to be held, as it is in the best position to select the kind of evidence necessary to make the findings required by R.C. 1343.03(C) and determine whether an award of prejudgment interest is proper.

 

            Having conducted case-management conferences, pretrials, settlement conferences, and the trial, a court in some instances may decide that presentation of evidence by affidavits, depositions, and other documents is sufficient; at other times, the trial court may decide that an oral evidentiary hearing is more appropriate.” (emphasis added).

 

            The case has profound significance in light of the fact that a plaintiff may attempt to utilize the prejudgment interest statute to invade the entire claims file under the guise of seeking relevant evidence on the issue of prejudgment interest. Accordingly, it would be reasonable to anticipate that the plaintiffs’ bar would likely read this particular case for the proposition that oral hearings are always required and attempt to require the claims adjuster to appear with the entire claims file in what many would view as a “fishing expedition,” all in the pursuit of alleged compliance with the oral hearing requirement. However, as previously noted, the case appears to stand not for the proposition of mandating any oral hearing but, instead, does clearly reflect the Ohio Supreme Court’s requirement that a date certain for an evidentiary review must be established. It is apparent the Supreme Court does want a date to be scheduled by a trial court but vests with the trial court the ability to decide the type of hearing that is necessary and the case should not be read for the proposition that an oral hearing is always required. 

 

            In paragraph 14 of the opinion, the court supported the assertion that the trial court has discretion with respect to the type of hearing and indicated in its opinion, the following:

 

            “Regardless of the type of hearing selected by the trial court, the court can then use its discretion to rule on the motion based upon the evidence submitted. A trial judge, therefore, is required to schedule a date certain for the evidentiary review and/or oral hearing upon the filing of a motion for prejudgment interest. By providing this notice to the parties, the trial court respects their right to an evidentiary hearing while imposing a deadline. The trial court, however, does not have discretion to rule on a motion for prejudgment interest based solely on the motion and briefs unless the court previously has ordered a date certain for the submission of evidentiary materials, because the plain terms of the statute require that a hearing be held.”

 

            The opinion also reflected the Ohio Supreme Court’s frustration with lower courts abandonment of a hearing requirement which likely was in situations where the trial court was intending to deny a motion for prejudgment interest. Accordingly, another facet of this case is that even in a situation wherein a motion for prejudgment interest is very weak or untenantable, the Ohio Supreme Court has stated that an evidentiary hearing must at least be set. The Ohio Supreme Court’s position was articulated in paragraph 19 of their opinion wherein they stated the following:

 

            “Although we are sympathetic with Ohio’s trial courts in their struggle with their crowded dockets and realize that the distinction drawn by some courts of appeals likely was meant to promote the laudable interest of judicial economy (citation omitted), this is a public-policy argument that we should not be addressing. Trial courts may not dispense with an evidentiary hearing unless the General Assembly has granted them the discretion to do so. By the explicit terms of R.C. 1343.03(C)(1), trial courts do not have discretion to decide whether a hearing must be held. The language is quite clear that trial courts must conduct a hearing, and, for the reasons outlined above, the hearing must be an evidentiary hearing.”

 

            This case is carefully reviewed and analyzed for the Newsletter in light of its importance to the insurance community due to the fact that the plaintiffs’ bar may consider it an opportunity to seek the deposition of a claims adjuster even in cases wherein the plaintiff’s attorney loses at trial!

 

 

 

 

            In Johnson, the Tenth District Court of Appeals heard a case involving an insured who had submitted a claim under a home owner’s policy and eventually, the home owner’s insurance carrier denied any additional payments predicated upon the fact that the insured had overstated the value of the property loss. The Ohio Department of Insurance was subsequently involved in this matter and, after exhaustion of the appellate process through that administrative agency, the home owner’s insurance carrier was vindicated with regard to its decision not to make any additional payments to the insured under the home owner’s policy. 

 

            The insured thereafter appealed the findings of the Ohio Department of Insurance to the Court of Common Pleas. The basic issue for resolution was what deference was the trial court required to apply when reviewing the decision of the Department of Insurance. The trial court’s answer to that question was summarized in paragraph 5 of the opinion wherein the court stated the following:

 

            “In the present case, the trial court noted in its order that it may ‘reverse, vacate, modify or otherwise substitute its judgment for that of the Superintendent’s. Wherefore weighing the overwhelming evidence of direct testimony pleadings and interrogatories against the Defendant (appellant), this court finds (for appellees).’ This is an incorrect statement of the trial court’s standard of review of an order from the Department of Insurance.”

 

The trial court having found in favor of the insured and basically reversing the Department of Insurance’s decision, was itself reversed by the Tenth District Court of Appeals. The court began its analysis by noting that the standard of review of an administrative order is a question of law, which is reviewed de novo. However, the analytical tools utilized clearly reflect a high degree of deference to the administrative agency. The foregoing assertion is buttressed by reference to paragraph 6 of the opinion wherein the court stated the following:

 

            “When reviewing an order of an administrative agency under R.C. 119.12, a trial court must affirm the order if it is supported by reliable, probative and substantial evidence and is in accordance with the law. R.C. 119.12. Although the trial court may, to a limited extent, substitute its judgment for that of the agency, the trial court must give due deference to the agency’s resolution of evidentiary conflicts. (citations omitted.) The agency’s findings of fact are presumed to be true and must be deferred to unless the trial court determines that they are inconsistent, impeached, rest upon improper inferences, or are otherwise unsupportable.”

 

            The Tenth District Court of Appeals found that the wrong standard had been applied by the trial court and, in fact, the trial court had failed to give deference to the agency’s factual determinations and, therefore, had errantly found in favor of the insured. Based upon the foregoing, the decision of the trial court was reversed.

 

 

 

 

            The Ninth District Court of Appeals reviewed the granting of summary judgment in favor of a mortgage company as it relates to plaintiff’s claim of negligent hiring. In its motion for summary judgment, the employer/defendant had argued that the plaintiff failed to establish a claim of negligent hiring and retention solely on the basis of fiduciary duty. At the trial court level, the employer successfully argued that the plaintiff had failed to establish a fiduciary duty running between the employer and the aggrieved plaintiff and, thus, the negligent hiring claim must fail on a summary judgment basis. The trial court, having agreed with that proposition, the Court of Appeals reversed the lower court and stated in paragraph 8 of its opinion, the elements of a negligent hiring and retention claim:

 

            “To prove a claim of negligent hiring and retention, a plaintiff must show ‘(1) the existence of an employment relationship; (2) the employee’s incompetence; (3) the employer’s actual or constructive knowledge of such incompetence; (4) the employee’s act or omission causing the plaintiff’s injuries; and (5) the employer’s negligence in hiring or retaining the employee as the proximate cause of plaintiff’s injuries.’”

 

            The court continued its analysis by finding that the imputation of a fiduciary duty analysis, in the context of negligent hiring and retention was incorrect. In paragraph 9 of its opinion, the court stated the following:

 

            “In its motion for summary judgment, Summertyme challenged the Zannis’ claim of negligent hiring and retention solely on the basis of fiduciary duty. Summertyme argued that it was entitled to summary judgment because the Zannis had failed to show that Summertyme owed the Zannis any fiduciary duty. Yet the Zannis did not plead breach of fiduciary duty in their complaint. The existence of a fiduciary relationship bore no relation to their claim of negligent hiring, retention, or supervision. (citation omitted.) Accordingly, the argument that Summertyme promulgated in its motion bore no relationship to the Zannis’ claim. Therefore, the trial court incorrectly awarded summary judgment to Summertyme on the Zannis’ claim of negligent hiring, retention, or supervision.”