Agic v. Natl. Union Fire Ins., Co of Pittsburgh

2014 Ohio 4205

• Court: Ohio Court of Appeals
• Decided: September 25, 2014
• Docket: 100679
• Status: Published

Opinion

[Cite as Agic v. Natl. Union Fire Ins., Co of Pittsburgh, 2014-Ohio-4205.]

Court of Appeals of Ohio EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA

JOURNAL ENTRY AND OPINION No. 100679

EDIN AGIC PLAINTIFF-APPELLANT

vs.

NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, ET AL. DEFENDANTS-APPELLEES

JUDGMENT: AFFIRMED

Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-12-798311

BEFORE: McCormack, J., Boyle, A.J., and Rocco, J.

RELEASED AND JOURNALIZED: September 25, 2014 ATTORNEYS FOR APPELLANT

Kenneth C. Podor Wesley Alton Johnston The Podor Law Firm, L.L.C. 33565 Solon Road Solon, Ohio 44139

ATTORNEYS FOR APPELLEES

For National Union Fire Insurance Co.

Steven G. Janik Crystal Lynn Maluchnik Janik, L.L.P. 9200 South Hills Boulevard Suite 300 Broadview Heights, Ohio 44147

For Consolidated Benefits Resources, L.L.C.

Jay Clinton Rice Mark D. Thompson D. John Travis Gallagher Sharp 6th Floor - Bulkley Building 1501 Euclid Avenue Cleveland, Ohio 44115 TIM McCORMACK, J.:

{¶1} Plaintiff-appellant, Edin Agic, appeals the judgment of the common pleas

court granting summary judgment in favor of defendants-appellees, National Union Fire

Insurance Company of Pittsburgh (“National Union”) and Consolidated Benefits

Resources, L.L.C. (“CBR”). After a careful review of the record and relevant case law,

we affirm the trial court’s judgment.

I. Factual and Procedural History

{¶2} On January 3, 2008, while operating his tractor trailer in the course and scope

of his employment, appellant was involved in a motor vehicle accident in Seattle,

Washington. Following the accident, appellant made a claim for temporary total

disability and medical expense benefits under policy No. TRK 0009102454 (the “Policy”)

issued by National Union. CBR served as the third-party administrator with respect to

appellant’s claims. Appellant’s claims were initially paid under the Policy, however, in a

letter dated July 21, 2008, appellant was informed that he was no longer entitled to

ongoing benefits. The letter stated that the decision to terminate his insurance benefits

was supported by an investigation and an independent medical evaluation by Dr. John

Dunne, which found that “[appellant] no longer suffers from any injuries associated with

the motor vehicle accident which would prevent him from his return from gainful

employment.”

{¶3} On January 21, 2011, appellant filed a personal injury action in the Superior

Court of King County, Washington (Case No. 11-2-03851), against two drivers involved in the January 3, 2008 accident. Prior to trial, one of the drivers, Timothy Coy, admitted

that his negligence was the cause of the accident. Thus, the sole issue of whether Coy’s

negligence was the proximate cause of any injury to appellant was tried to a jury on

February 13, 2013. At the conclusion of the trial, the jury found that appellant sustained

no injuries as a result of the January 3, 2008 accident and awarded no damages.

{¶4} On February 11, 2011, appellant filed a complaint in Cuyahoga County

(Cuyahoga C.P. No. CV-11-774339) asserting causes of action for declaratory judgment,

breach of contract, bad faith, civil conspiracy, and intentional and/or negligent infliction

of emotional distress. The original lawsuit named 11 defendants, including National

Union and CBR. On December 23, 2011, appellant filed a voluntary dismissal pursuant

to Civ.R. 41(A). On December 28, 2012, more that one year after the voluntary

dismissal, appellant refiled his complaint against National Union and CBR for declaratory

judgment, breach of contract, bad faith, civil conspiracy, and intentional and/or negligent

infliction of emotional distress. On March 1, 2013, he voluntarily dismissed his claims

against National Union and CBR for intentional and negligent infliction of emotional

distress. Thus, his remaining claims against defendants were for declaratory judgment,

breach of contract, bad faith, and civil conspiracy.

{¶5} On August 26, 2013, National Union moved for partial summary judgment on

appellant’s claims for bad faith and civil conspiracy, asserting that such claims were

“barred as having been filed beyond the statute of limitations.” On August 28, 2013, CBR

moved for partial summary judgment on the same basis. {¶6} On September 4, 2013, CBR moved for summary judgment on appellant’s

claims for breach of contract, bad faith, and civil conspiracy, asserting that such claims

were barred by the doctrine of collateral estoppel. On September 6, 2013, National

Union moved for summary judgment on the same basis.

{¶7} On November 5, 2013, the trial court entered summary judgment in favor of

National Union and CBR on all of appellant’s claims. The trial court found that because

appellant “failed to refile the case within the confines of the savings statute, [his] breach

of the duty of good faith and fair dealing claim is defeated by the statute of limitations.”

The court further ordered, “[a]s [appellant]’s sole tort claim is dismissed, [his] claim for

conspiracy must also fail.”

{¶8} Moreover, the trial court held that appellant’s claims for bad faith and breach

of contract were collaterally estopped by the previously adjudicated negligence suit in

Washington. The court explained that appellant was estopped from claiming that

defendants treated him in bad faith or breached their contract by denying benefits under

the Policy where a jury had previously determined that appellant did not suffer any injury

as a result of the accident.

{¶9} Finally, the trial court sua sponte ruled that “although [appellant]’s claims fail

on their merits, this court also finds that there are insufficient minimum contacts for

jurisdiction to be proper in Ohio for Defendant CBR.”

{¶10} Appellant now brings this timely appeal, raising four assignments of error

for review: I. The trial court committed prejudicial error in granting motions for summary judgment because there are genuine issues of material fact and defendants are not entitled to judgment as a matter of law.

II. The trial court committed prejudicial error in determining that appellant’s bad faith and conspiracy claims are barred by the statute of limitations.

III. The trial court erred in determining that appellant’s claims are collaterally estopped by the previously adjudicated negligence suit.

IV. The trial court erred in determining that personal jurisdiction was lacking over defendant CBR.

{¶11} Furthermore, CBR raises alternative grounds for judgment as a matter of

law in the following four cross-assignments of error:

I. The trial court should have further held that appellant’s claims for breach of contract and declaratory judgment claims against CBR fail as a matter of law.

II. The trial court should have held that appellant’s bad faith claim against CBR fails as a matter of law.

III. The trial court should have further held that appellant’s civil conspiracy claim is barred by the statute of limitations and otherwise fails as a matter of law.

IV. The trial court’s advisory opinion provides alternative grounds for the dismissal of CBR: there are insufficient minimum contacts for jurisdiction to be proper in Ohio.

II. Law and Analysis

{¶12} In his first assignment of error, appellant broadly argues that the trial court

committed prejudicial error in granting motions for summary judgment in favor of

National Union and CBR because there are genuine issues of material fact in dispute as to

whether he was injured in the January 3, 2008 accident. {¶13} An appellate court reviews a trial court’s decision on a motion for summary

judgment de novo. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241

(1996). Summary judgment is appropriate when, construing the evidence most strongly

in favor of the nonmoving party, (1) there is no genuine issue of material fact; (2) the

moving party is entitled to judgment as a matter of law; and (3) reasonable minds can

come to but one conclusion, that conclusion being adverse to the nonmoving party.

Zivich v. Mentor Soccer Club, Inc., 82 Ohio St.3d 367, 369-370, 696 N.E.2d 201 (1998),

citing Horton v. Harwick Chem. Corp., 73 Ohio St.3d 679, 653 N.E.2d 1196 (1995),

paragraph three of the syllabus.

{¶14} In challenging the trial court’s judgment, appellant argues more specifically

in his third assignment of error that the trial court committed prejudicial error in finding

that he was collaterally estopped from pursuing his claims based on the previously

adjudicated negligence suit in Washington.

{¶15} Based on the following, we agree with the trial court and find that

appellant’s claims for bad faith, breach of contract, and civil conspiracy are barred by

collateral estoppel.

A. Collateral Estoppel

{¶16} The doctrine of res judicata consists of two branches: (1) “claim

preclusion,” also known as “estoppel by judgment,” and (2) “issue preclusion,” also

known as “collateral estoppel.” Chibinda v. Depositors Ins., 12th Dist. Butler No.

CA2012-04-073, 2013-Ohio-526, ¶ 34. Claim preclusion or estoppel by judgment bars the relitigation of the same cause of action between the same parties. Id. Issue

preclusion or collateral estoppel precludes a party from relitigating issues of fact or law

that have been actually and necessarily litigated and determined in a different cause of

action. Id.

{¶17} Offensive use of collateral estoppel occurs when the plaintiff seeks to

prevent the defendant from relitigating a fact or issue that the defendant has previously

litigated unsuccessfully in another action. Id., citing Providence Manor Homeowners

Assn., Inc. v. Rogers, 12th Dist. Butler No. CA2011-10-189, 2012-Ohio-3532, ¶ 40.

Defensive use of collateral estoppel occurs when the defendant seeks to prevent the

plaintiff from relitigating a fact or issue that the plaintiff has previously litigated

unsuccessfully in another action. Id.

{¶18} To successfully assert collateral estoppel, a party must show that (1) the fact

or issue in question was passed upon and determined by a court of competent jurisdiction,

(2) there was a final judgment on the merits in the previous case after a full and fair

opportunity to litigate the fact or issue in question, (3) the fact or issue in question was

either admitted or actually tried and decided and was necessary to the final judgment, (4)

the fact or issue in question is identical to the fact or issue involved in the prior suit, and

(5) there is a “mutuality of parties.” See Rogers at ¶ 43. Mutuality of parties exists

when all parties or their privies to the present proceedings were bound by the prior

judgment. Therefore, in order to preclude either party from relitigating an issue, a judgment must be preclusive upon both. Goodson v. McDonough Power Equip., Inc., 2

Ohio St.3d 193, 195-196, 443 N.E.2d 978 (1983).

{¶19} However, relevant to the case at hand, the Ohio Supreme Court indicated in

Goodson that the mutuality requirement could be relaxed “where justice would

reasonably require it.” Id. at 199. A number of appellate courts, relying on language in

Goodson, have relaxed the mutuality requirement and allowed the nonmutual defensive

use of collateral estoppel when a party against whom the doctrine is asserted previously

had his day in court and was permitted to fully litigate the “specific issue” sought to be

raised in the later action. Rogers at ¶ 40, citing Hoover v. Transcontinental Ins. Co., 2d

Dist. Greene No. 2003-CA-46, 2004-Ohio-72, ¶ 17; Frank v. Simon, 6th Dist. Lucas No.

L-06-1185, 2007-Ohio-1324, ¶ 12; Michell v. Internatl. Flavors & Fragrances, Inc., 179

Ohio App.3d 365, 2008-Ohio-3697, 902 N.E.2d 37 (1st Dist.); see also Michaels Bldg.

Co. v. Akron, 9th Dist. Summit No. 13061, 1987 Ohio App. LEXIS 9881, *9 (Nov. 25,

1987) (“[N]onmutuality of parties has been acceptable where it is shown that the party

seeking to avoid collateral estoppel clearly had his day in court on the specific issue

brought into litigation within the later proceeding”).

{¶20} In the instant case, the trial court applied the doctrine of defensive collateral

estoppel and determined that, although National Union and CBR were not parties to the

litigation in Washington, appellant was “estopped from claiming that defendants treated

him in bad faith or breached their contract by denying disability payments under his employer’s policy for an occupational injury arising out of the same occurrence.” We

agree.

{¶21} Here, appellant brought causes of action for breach of contract, bad faith,

and civil conspiracy against National Union and CBR, alleging that defendants

improperly terminated his insurance benefits under the Policy. In support of his claims,

appellant contends that he is entitled to disability and medical benefits under the Policy

based on the injuries he sustained as a result of the January 3, 2008 accident.

{¶22} The Policy provides, in pertinent part:

Temporary Total Disability Benefit

If Injury to the Insured Person results in Temporary Total Disability * * * the Company [National Union] will pay the Temporary Total Disability Benefit specified below * * * the Temporary Total Disability Benefit shall be payable, retroactively, from the date that disability began, provided the Insured Person remains Temporarily Totally Disabled.

***

Continuous Total Disability Benefit

If Injury to the Insured Person, resulting in Temporary Total Disability, subsequently results in Continuous Total Disability, the Company will pay the Continuous Total Disability specified below * * *.

Accident Medical Expense Benefit

If an Insured Person suffers an Injury that requires him or her to be treated by a physician * * * the Company will pay the Usual and Customary Charges incurred for Medically Necessary Covered Accident Medical Services received due to that Injury * * *. {¶23} Relevant to the arguments raised herein, the term “injury” is defined in the

Policy as “bodily injury to an Insured Person caused by an Occupational accident while

coverage is in force under this Policy * * * .” (Emphasis added.) “Occupational” means

“that activity, accident, incident, circumstance or condition [that] occurs or arises out of

or in the course of the Insured performing services within the course and scope of

contractual obligations for the Policyholder, while under Dispatch.”

{¶24} Thus, in order to receive disability and medical benefits, the clear and

unambiguous language of the Policy requires appellant to have suffered an injury caused

by an occupational accident. Accordingly, the “specific issue” in dispute in this case is

whether the January 3, 2008 occupational accident caused the injuries that appellant

argues entitle him to benefits under the Policy.

{¶25} After a careful review of the record, we find that the issue of causation has

already been determined by a court of competent jurisdiction. In his 2011 personal

injury lawsuit in the Superior Court of King County, Washington, appellant alleged that

he suffered injuries and damages proximately caused by the negligence of Timothy Coy.

However, the jury returned a verdict finding that appellant’s alleged injuries were not

proximately caused by the accident. Based on the jury’s resolution of causation in his

personal injury suit, appellant cannot now relitigate the issue of whether his injuries were

caused by the accident, a finding that is necessary for entitlement to benefits under the

Policy. {¶26} While National Union and CBR were not parties to the Washington

litigation, the issue of causation was “actually and directly litigated” in a court of

competent jurisdiction, and appellant had the opportunity to fully litigate the issue while

represented by competent counsel. Because the requirements for defensive collateral

estoppel have been satisfied, the trial court correctly determined that National Union and

CBR were entitled to judgment as a matter of law on appellant’s claims that they acted in

bad faith and breached the contract by denying coverage under the Policy.

{¶27} For these same reasons, defendants were entitled to judgment as a matter of

law on appellant’s civil conspiracy claim. Generally, “[a] claim for conspiracy cannot be

made [the] subject of a civil action unless something is done which, in the absence of the

conspiracy allegations, would give rise to an independent cause of action.” Ford Motor

Credit Co. v. Jones, 8th Dist. Cuyahoga No. 92428, 2009-Ohio-3298, ¶ 24. Because we

have already held that appellant’s bad faith and breach of contract claims are barred by

the doctrine of collateral estoppel, we find that the trial court properly determined that

there was no longer an independent cause of action to which the conspiracy claim could

be coupled. Therefore, appellant’s civil conspiracy claim fails as a matter of law.

III. Conclusion

{¶28} Based on the foregoing, the trial court did not err in granting summary

judgment in favor of National Union and CBR. Appellant’s first and third assignments

of error are overruled. We further find that, because our resolution of appellant’s first and third assignments of error are dispositive, appellant’s remaining assignments of error

and CBR’s cross-assignments of error are moot.

{¶29} Judgment affirmed.

It is ordered that appellees recover from appellant costs herein taxed.

The court finds there were reasonable grounds for this appeal.

It is ordered that a special mandate be sent to the common pleas court to carry this

judgment into execution.

A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of

the Rules of Appellate Procedure.

TIM McCORMACK, JUDGE

MARY J. BOYLE, A.J., CONCURS; KENNETH A. ROCCO, J., DISSENTS WITH SEPARATE OPINION

KENNETH A. ROCCO, J., DISSENTING:

{¶30} I disagree with the majority’s determination that Agic is collaterally

estopped from bringing the instant lawsuit. According to the majority, the jury’s special

verdict form establishes that the issue in the instant case was actually and directly litigated

in the Washington state case. The issue in the instant case is whether Agic sustained an

injury in the accident. The special verdict form in the Washington case read, “was

[Defendant’s] fault the proximate cause of the injury to * * * Agic?” The jury answered “no.” In my view, this does not conclusively establish that Agic did not sustain an injury

in that accident.

{¶31} While it is true that the Policy covers only those injuries “caused by an

occupational accident,” the special verdict form in the Washington case merely

established that one of the defendants in that lawsuit was not the proximate cause of

Agic’s injury. Washington courts “recognize[] two elements of causation: cause in fact

(sometimes called “actual” or “but for” cause); and legal cause (sometimes called

“proximate” cause).” (Citations omitted.) State v. Bauer, 180 Wn.2d 929, 329 P.3d 67

(2014), ¶ 13, fn. 5. Unlike other jurisdictions, Washington refers to both elements

together as “proximate cause.” Id. While “cause in fact” refers to “the physical

connection between an act and an injury,” whether a defendant is the “legal cause” of an

injury “depends on mixed considerations of logic, common sense, justice, policy, and

precedent.” (Internal citations omitted.) Id. at ¶ 14.

{¶32} Given the multitude of considerations that go into determining proximate

cause, we cannot know why the jury determined that one of the defendants was not the

proximate cause of Agic’s injuries. But it is certainly possible that the jury could find

that Agic was injured in the accident and also find that this one defendant was not the

proximate cause of Agic’s injury. Further muddying the waters is the fact that the

accident involved multiple vehicles, but the special verdict form pertains only to one

driver. {¶33} Because the jury was not called upon to determine whether Agic was injured

in the accident, that issue was not actually and directly litigated in the previous case.

Because injury is the pivotal issue in the instant case, I would hold that collateral estoppel

does not bar Agic from bringing his claims. I would, therefore, sustain the third

assignment of error and would go on to reach the remaining assignments of error. For

the aforementioned reasons, I respectfully dissent.