Ballard v. Nationwide Ins. Co.

2013 Ohio 2316

• Court: Ohio Court of Appeals
• Decided: May 30, 2013
• Docket: 11 MA 122
• Status: Published

Opinion

[Cite as Ballard v. Nationwide Ins. Co., 2013-Ohio-2316.] STATE OF OHIO, MAHONING COUNTY

IN THE COURT OF APPEALS

SEVENTH DISTRICT

LATIA BALLARD, et al. ) CASE NO. 11 MA 122 ) PLAINTIFFS-APPELLANTS ) ) VS. ) OPINION ) NATIONWIDE INSURANCE CO. ) ) DEFENDANT-APPELLEE )

CHARACTER OF PROCEEDINGS: Civil Appeal from the Court of Common Pleas of Mahoning County, Ohio Case No. 10 CV 1132

JUDGMENT: Affirmed.

APPEARANCES: For Plaintiff-Appellant, Latia Ballard: Atty. Angela Mikulka Atty. Thomas Mikulka The Mikulka Law Firm 134 Westchester Drive Youngstown, Ohio 44515

For Plaintiff-Appellant, James Glenn: Atty. Joseph Moro Heller, Maas, Moro & Magill 54 Westchester Drive Youngstown, Ohio 44515

For Defendant-Appellee, Nationwide: Atty John Pfau Pfau, Pfau & Marando 3722 Starrs Centre Drive, Suite A Canfield, Ohio 44406-8038

JUDGES: Hon. Cheryl L. Waite Hon. Gene Donofrio Hon. Joseph J. Vukovich Dated: May 30, 2013 [Cite as Ballard v. Nationwide Ins. Co., 2013-Ohio-2316.] WAITE, J.

{¶1} Plaintiffs-Appellants Latia Ballard and James Glenn appeal the

judgment of the trial court granting summary judgment against them and in favor of

Defendant-Appellee Nationwide Insurance Company (“Nationwide”), in an action for

breach of contract for failure to pay medical claims following an automobile accident.

Appellants are insureds under a policy underwritten by Nationwide. On appeal,

Appellants contend that the trial court erred in determining that Appellants' settlement

with the tortfeasor defeated their breach of contract claims against Nationwide as a

matter of law. We have held in Snider v. Nationwide Assur. Co., 7th Dist. No. 07 BE

35, 2009-Ohio-1026, that an insured's full and final settlement (including medical

expense claims) with a tortfeasor extinguishes a claim for medical expenses brought

against the insured's own insurance company. Because Appellants completely

settled their claims with the tortfeasor, they have extinguished the damage element

necessary to prevail in a breach of contract action. Therefore, the trial court properly

granted summary judgment in favor of Nationwide on Appellants' breach of contract

claims and the judgment of the trial court in that regard is affirmed

Facts and Procedural History

{¶2} Appellant Glenn was involved in a rear-end collision with another

vehicle on February 6, 2011. Appellant Ballard was a passenger in Glenn's vehicle

at the time of the crash. Glenn was insured by Nationwide. Ballard, as a passenger,

was also an insured pursuant to the policy. The policy contains a “medical benefit”

provision, contained within the “family compensation coverage,” which provides that -2-

Nationwide will pay “usual, customary and reasonable charges - not to exceed

$5,000 - for medically necessary services.” (11/17/10 Nationwide's MSJ, Exh. A.)

{¶3} The policy contains the following provision with regard to subrogation:

SUBROGATION

We have the right of subrogation under the:

a) Physical Damage;

b) Auto Liability;

c) Medical Payments;

d) Family Compensation; and

e) Uninsured Motorists;

coverages in this policy. This means that after paying a loss to you or

others under this policy, we will have the insured's right to sue for or

otherwise recover such loss from anyone else who may be liable. Also,

we may require reimbursement from the insured out of any settlement

or judgment that duplicates our payments. These provisions will be

applied in accordance with state law. Any insured will sign such

papers, and do whatever else is necessary, to transfer these rights to

us, and will do nothing to prejudice them. (Emphasis deleted.)

(11/17/10 Nationwide's MSJ, Exh. A.)

{¶4} Appellants each submitted medical-pay claims to Nationwide. Both

claims were denied. Nationwide contended that the Appellants' claimed medical

expenses were not related to the accident. -3-

{¶5} The current appeal involves the second breach of contract action filed

against Nationwide. Appellants originally filed suit for breach of contract and bad

faith in 2003, but voluntarily dismissed their complaint in April of 2009, shortly before

trial was to commence on the breach of contract claims.

{¶6} Appellants then separately sued the tortfeasor, Marie Dockrey. Both

Appellants settled separate personal injury claims against Dockrey. Appellant Glenn

settled all claims for his past, present and future medical expenses for $10,000.

(11/17/10 Nationwide's MSJ, Exh. C.) Glenn indicated that he received full

compensation for all of his claimed medical expenses from Dockrey. (11/17/10

Nationwide's MSJ, Exh. B; Glenn Depo. pp. 16-18.)

{¶7} Appellant Ballard received medical payment benefits from her separate

insurance carrier, Sentry Insurance. (Ballard Depo., p. 14.) She subsequently

settled all claims with Dockrey for $11,000 and out of the proceeds of this settlement

reimbursed Sentry for its $5,801 medical payment. (11/17/10 Nationwide's MSJ,

Exh. C; Ballard Depo. p. 14.)

{¶8} Appellants refiled their complaint against Nationwide on March 22,

2010. The complaint included claims for breach of contract and bad faith denial of

coverage. Upon Nationwide's motion, the trial court bifurcated the bad faith claims

from the breach of contract claims.

{¶9} Nationwide filed a motion for summary judgment regarding the breach

of contract claims on November 17, 2010, in which it argued that in light of

Appellants' full settlement with the tortfeasor, they could not establish damages. -4-

Therefore, Nationwide was entitled to judgment as a matter of law. Appellants filed a

brief in opposition on January 18, 2011, to which Nationwide filed a reply.

{¶10} On April 21, 2011, the magistrate issued a decision accompanied by

findings of fact and conclusions of law. In it, the magistrate granted Nationwide's

motion for summary judgment with respect to the breach of contract claims.

Appellants filed timely objections and Nationwide responded. On July 18, 2011, the

trial court issued a judgment entry overruling Appellants' objections and granted

summary judgment to Nationwide on the breach of contract claims. The trial court

noted that the bad faith claims remained pending, and the judgment entry included

“no just cause for delay” language pursuant to Civ.R. 54(B). This timely appeal

followed.

Standard of Review

{¶11} Appellants' assignments of error deal with the trial court's decision to

grant summary judgment to Nationwide. An appellate court conducts a de novo

review of a trial court's decision to grant summary judgment, using the same

standards as the trial court as set forth in Civ.R. 56(C). Grafton v. Ohio Edison Co.,

77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996). Before summary judgment can be

granted, the trial court must determine that (1) no genuine issue as to any material

fact remains to be litigated, (2) the moving party is entitled to judgment as a matter of

law, and (3) it appears from the evidence that reasonable minds can come to but one

conclusion, and viewing the evidence most favorably in favor of the party against

whom the motion for summary judgment is made, the conclusion is adverse to that -5-

party. Temple v. Wean United, Inc., 50 Ohio St.2d 317, 327, 364 N.E.2d 267 (1977).

When a court considers a motion for summary judgment, the facts must be taken in

the light most favorable to the nonmoving party. Id.

{¶12} “[T]he moving party bears the initial responsibility of informing the trial

court of the basis for the motion, and identifying those portions of the record which

demonstrate the absence of a genuine issue of fact on a material element of the

nonmoving party's claim.” (Emphasis deleted.) Dresher v. Burt, 75 Ohio St.3d 280,

296, 662 N.E.2d 264 (1996). If the moving party carries its burden, the nonmoving

party has the reciprocal burden of setting forth specific facts showing that there is a

genuine issue for trial. Id. at 293. In other words, when presented with a properly

supported motion for summary judgment, the nonmoving party must produce some

evidence that suggests that a reasonable factfinder could rule in that party's favor.

Brewer v. Cleveland Bd. of Edn., 122 Ohio App.3d 378, 386, 701 N.E.2d 1023 (8th

Dist.1997).

Breach of Contract Claims

{¶13} Appellants' two assignments of error both challenge the trial court's

ruling on their breach of contract claims against Nationwide and therefore will be

discussed together. They assert, respectively:

The Trial Court erred in finding as a matter of law that

Plaintiffs/Appellants suffered no damages as a result of

Defendant/Appellee's breach of contract. -6-

The Trial Court erred in applying the holding of Snider v. Nationwide

Assurance Company, as neither Plaintiff-Appellant was alleged to have

breached any contract provision, nor was either accused of failing to

cooperate.

{¶14} The elements of a breach of contract claim are not in dispute. “In order

to recover on a claim of breach of contract, the plaintiff must prove (1) the existence

of a contract, (2) performance by the plaintiff, (3) breach by the defendant, and (4)

damage or loss to the plaintiff.” Price v. Dillon, 7th Dist. Nos. 07-MA-75, 07-MA-76,

2008-Ohio-1178, ¶44.

{¶15} Here, the trial court concluded, based on our holding in Snider v.

Nationwide Assur. Co., 7th Dist. No. 07 BE 35, 2009-Ohio-1026, that Appellants

failed to prove the element of damages since their medical claims were completely

satisfied by virtue of their settlements with the tortfeasor.

{¶16} In Snider, the plaintiffs were involved in an accident that was entirely

the fault of the other driver. They presented a medical payments claim to their

insurance carrier, which was denied. They then filed suit against their insurance

carrier for breach of contract and bad faith. The bad faith claim was bifurcated and

the breach of contract claim proceeded to trial. Shortly before trial, the insurance

company learned that the plaintiffs had settled their claims with the tortfeasor. The

insurance company moved for a directed verdict, claiming that plaintiffs' medical

payments claim was moot because plaintiffs had been fully compensated by the -7-

tortfeasor. The trial court denied the motion and the jury awarded $1,000.00 in

damages to the plaintiffs.

{¶17} On appeal we reversed the trial court judgment, concluding that the

plaintiffs’ complete settlement with the tortfeasor negated the essential element of

damage or loss as part of a breach of contract claim. Snider at ¶30, following Jayne

v. Wayne Mutual Ins. Co., 4th Dist. No. 04CA9, 2004-Ohio-6934.

{¶18} The instant case is very similar to Snider. Here, Appellants completely

settled their personal injury claims with the tortfeasor, including their claims for

medical expenses. By accepting this settlement, Appellants agreed that they had

been reimbursed for their medical expenses. If there are no medical expenses to

reimburse, there are no damages that exist in the breach of contract claim alleging

failure to pay medical expenses.

{¶19} Nonetheless, Appellants attempt to distinguish Snider by noting that the

insurance company in Snider claimed that the policyholders had failed to cooperate

in submitting the claims, whereas in the present case there had been no contention

that Appellants failed to cooperate. It appears, however, this is a distinction without a

difference. The insurance company in Snider did allege the defense of failure to

cooperate as an attempt to justify their non-payment of the insureds' medical claims.

Importantly, however, the outcome in Snider did not turn on that defense. Rather, we

held that the plaintiffs could not prevail on their breach of contract claim seeking

medical payments coverage where the plaintiffs had already received full

compensation from the tortfeasor for their injuries. Snider at ¶34. -8-

{¶20} Appellants also argue that Nationwide's subrogation rights were

extinguished due to its alleged bad faith in denying Appellants’ claims. Therefore,

they allege, their settlement with the tortfeasor should not affect their medical

payments claims against Nationwide. It appears this argument is also meritless as it

was raised by the insureds and rejected by us in Snider:

In an effort to avoid a Pyrrhic victory, Appellees contend that

Nationwide waived its rights under the subrogation and trust provisions

of the insurance contract by effectively denying Appellee's medical

payments claim. Essentially, Appellees argue that they should be

permitted a “double recovery” as a result of Nationwide's bad faith.

However, as earlier stated, Appellees' bad faith claim was not an issue

at trial and is not currently before us. Consequently, while the bulk of

Appellees' arguments go towards their efforts at asserting evidence of

bad faith, by law, this cannot save their breach of contract claim. The

breach of contract claim must fail because Appellees' own actions have

extinguished their “damage” portion of this claim, an essential element.

Snider at ¶32.

{¶21} Thus, Nationwide is correct that the issue of whether or not it retained

any subrogation rights is not material to the breach of contract claim on review in this

appeal. Obviously, subrogation would be an important issue if Nationwide was trying

to recover from the tortfeasor medical expenses that it had paid to the insureds, only

to find that the insureds had independently settled with the tortfeasor. Nationwide’s -9-

subrogation rights, by contractual language, are triggered on its payment of a claim.

Nationwide, however, did not pay any medical claims, here. In this breach of contract

action, the issue before us is whether the insurer breached the insurance contract

because it did not pay the medical claims. Only if a breach occurred would it be

relevant to inquire of Nationwide as to whether any defense exists that would explain,

defeat, mitigate or offset this breach. One possible defense might then be that the

insureds had acted to extinguish Nationwide’s subrogation rights. But the issue of

subrogation rights is not relevant unless and until it can be legally determined that

breach occurred. Again, in order for Appellants to prove breach, they must prove not

only that Nationwide was obligated to pay, they must also prove that they have

sustained damages. They allege they were damaged by the non-payment of medical

expenses. However, they admit that these damages were, in fact, already paid by

the tortfeasor. Hence, their “damages” do not exist. Since Appellants cannot

establish this necessary element of their claim of breach of contract, we cannot and

do not even reach the issue of subrogation rights, as it never becomes relevant.

{¶22} Appellants cite a number of additional cases in an apparent attempt to

demonstrate that our holding in Snider was either erroneous or inconsistent with

established precedent. They assert that an insurance carrier's denial of benefits

somehow waives or terminates its right to subrogation or reimbursement as a matter

of law. Aside from the obvious problem with this assertion, the cited cases either do

not stand for that proposition or are readily distinguishable from the present case. -10-

{¶23} In Dietrich v. Peters, 28 Ohio App. 427, 162 N.E. 753 (8th Dist.1928), a

man's car was stolen from a garage. The complaint alleged breach of an oral

bailment agreement, not breach of an insurance contract. The bailor's insurance

company was mentioned in the case because it had paid the claim, and the bailee

argued that the insurance company’s payment should have defeated the bailment

claim. The court held that the payment was “a matter entirely between the insurance

company which paid the loss and [the plaintiff]. The insurance company, if it

chooses, may claim subrogation to the benefit of the judgment which the [plaintiff]

obtained in this case, but the payment of the claim by the insurance company does

not inure to the benefit of the [defendant bailee].” Id. at 433-434. The instant appeal

does not present the question of whether an insurance recovery inures to the benefit

of a bailee, or a tortfeasor, or some other third party. It involves a question as to

whether the insureds can establish the element of damages following settlement with

the tortfeasor, which is a completely different issue.

{¶24} Yates v. Allstate Ins. Co., 5th Dist. No. 04 CA 39, 2005-Ohio-1479,

centered on the issue of whether seven months was an unreasonable delay in

notifying the insurance company of an uninsured/underinsured motorist claim. It is

wholly inapplicable to Appellants' claim in the case at bar.

{¶25} Sanderson v. Ohio Edison Corp., 69 Ohio St.3d 582, 635 N.E.2d 19

(1994), concerned the insurance company's duty to defend and the extent of the

insured's rights when the insurance company fails to defend a claim against the

insured. In Sanderson, the insurer was given notice that a suit was filed against its -11-

insureds but took the position that coverage was not available under the policies.

The insurer refused either to defend the suit or participate in any settlement

negotiations. The insured litigated the action on his own. He eventually entered into

a settlement in which it was agreed that the insured was damaged in the amount of

$79,000 and that he would seek payment from his own insurance company for the

damages rather than from the other party to the suit. Id. at 584. Thus, in Sanderson,

the settlement agreement established that there were outstanding unpaid damages,

in contrast to the settlement agreement in the instant appeal which reflects that all of

the damages were paid.

{¶26} Aufdenkamp v. Allstate, 9th Dist. No. 98CA007269, 2000 WL 59849

(Jan. 19, 2000), again involved an underinsured motorist case. Here, the settlement

agreement did not resolve all claims, but merely determined that the tortfeasor was

liable and that one insurance company owed its full policy limit of $100,000. The real

issue in the case is whether underinsured motorist coverage is excess insurance to

the tortfeasor's insurance coverage used to pay the claim. Again, none of these

questions are involved in the instant appeal. Again, a settlement agreement that on

its face resolves all existing and future claims is different from an agreement that

solely establishes liability.

{¶27} Appellants’ reliance on Bakos v. Insura Prop. & Cas. Ins. Co., 125 Ohio

App.3d 548, 709 N.E.2d 175 (8th Dist.1997), is likewise inapposite, as it regards yet

another dispute over uninsured motorist coverage rather than a claim for medical

payments. Further, there was no settlement of claims in the case. The court -12-

awarded the insured $350,000 in damages, which the plaintiff tried to collect from his

father's insurance company. These are completely different factual and legal issues

than those on review in the instant appeal.

{¶28} Finally, in their reply brief, Appellants assert for the first time that, at

minimum, they are entitled to statutory interest pursuant to R.C. 1343.03(A) on the

amount of medical payment benefits they allege were wrongfully withheld from them

by Nationwide. A litigant's failure to raise an argument in the trial court waives the

right to raise the issue on appeal. Shover v. Cordis Corp., 61 Ohio St.3d 213, 220,

574 N.E.2d 457 (1991), overruled on other grounds in Collins v. Sotka, 81 Ohio St.3d

506, 692 N.E.2d 581 (1998); Maust v. Meyers Prods., Inc., 64 Ohio App.3d 310, 581

N.E.2d 589 (1989) (failure to raise an issue in the trial court waives a litigant's right to

raise that issue on appeal).

{¶29} Moreover, the case Appellants cite in support, Hammond v. Grange

Mut. Cas. Co., 10th Dist. No. 93APE11-1620, 1994 WL 521193 (Sept. 20, 1994),

does not stand for the proposition that an insured is entitled to statutory interest

where there are no actual contract damages due to a full settlement with the

tortfeasor.

{¶30} In sum, we agree with the trial court that our holding in Snider is directly

applicable to this case. Because Appellants completely settled their claims with the

tortfeasor, including payment of their medical bills, they cannot prove the element of

damages in their breach of contract claim against Nationwide. Therefore, the trial

court properly granted summary judgment in favor of Nationwide on Appellants' -13-

breach of contract claims. Both of Appellants' assignments of error are meritless,

and the judgment of the trial court regarding the breach of contract claim is affirmed.

We note that Appellants’ bad faith denial of coverage claim remains pending with the

trial court.

Donofrio, J., concurs.

Vukovich, J., concurs.