Crawford v. Am. Family Ins. Co.

2024 Ohio 5345, 257 N.E.3d 1095

• Court: Ohio Court of Appeals
• Decided: November 8, 2024
• Docket: 30157
• Status: Published

Opinion

[Cite as Crawford v. Am. Family Ins. Co., 2024-Ohio-5345.]

IN THE COURT OF APPEALS OF OHIO SECOND APPELLATE DISTRICT MONTGOMERY COUNTY

LESLIE CRAWFORD : : Appellant : C.A. No. 30157 : v. : Trial Court Case No. 2019 CV 05973 : AMERICAN FAMILY INSURANCE : (Civil Appeal from Common Pleas COMPANY ET AL. : Court) : Appellees :

...........

OPINION

Rendered on November 8, 2024

JOHN A. SMALLEY, Attorney for Appellant

JONATHON L. BECK & NATALIE M.E. WAIS, Attorneys for Appellees

.............

WELBAUM, J.

{¶ 1} Plaintiff-Appellant, Leslie Crawford, appeals from a summary judgment

granted in favor of Defendant-Appellee, American Family Insurance Company (“AFIC”). -2-

In a single assignment of error, Crawford contends the trial court erred in granting AFIC

summary judgment because genuine issues of material fact exist concerning whether

AFIC acted in bad faith in handling Crawford’s uninsured motorists (“UM”) claim.

Additionally, Crawford maintains there are genuine issues of material fact concerning her

claim for punitive damages.

{¶ 2} After reviewing the record, we agree with Crawford and will sustain her sole

assignment of error. The judgment therefore will be reversed, and this cause will be

remanded to the trial court for further proceedings.

I. Facts and Course of Proceedings

{¶ 3} This is the second time Crawford’s case has been before us. See Crawford

v. Am. Family Ins. Co., 2023-Ohio-1069 (2d Dist.). As noted there:

This action arose from an automobile accident that occurred

between Crawford and Tonna Marilee Brown on August 10, 2018. On

December 16, 2019, Crawford filed a complaint against AFIC and Brown,

alleging that Brown was an uninsured driver at the time of the accident and

had negligently caused Crawford damage and injury. In a second claim for

relief, Crawford alleged that she was insured for uninsured motorists (“UM”)

coverage with AFIC and that she had complied with all policy provisions.

However, AFIC had refused to pay under the terms of the policy. The third

claim for relief alleged that AFIC had acted in bad faith in adjusting

Crawford's claim. -3-

On February 6, 2020, AFIC filed an answer to the complaint and a

cross-claim for subrogation against Brown. After learning that the party

who had been served with the complaint had insurance and had not been

involved in the accident, Crawford filed an amended complaint on February

26, 2020, naming the correct Tonna Brown at the address listed in the

accident report, which was on Gettysburg Avenue in Dayton, Ohio. AFIC

then filed an amended answer and cross-claim against Brown on March 11,

2020. However, service attempts at the Dayton address and at a North

Carolina address for Brown were unsuccessful.

On March 20, 2020, AFIC asked the court to bifurcate the bad faith

claim and stay discovery on bad faith issues until the contract claim was

resolved. In response, Crawford agreed to bifurcation but asked the court

not to delay discovery. Subsequently, on April 9, 2020, the court granted

the motion to bifurcate. However, the court also said it would not stay

discovery at that time.

Crawford was finally able to perfect service on Brown and filed a

motion for default judgment against her on July 28, 2020. The court then

granted a default judgment against Brown on July 29, 2020.

After holding a pretrial conference, the court issued a pretrial order

setting a November 1, 2021 jury trial and a summary judgment deadline of

August 3, 2021. The case was also referred to mediation, which was held

on June 17, 2021, but mediation was unsuccessful. Then, on the joint -4-

request of the parties for a continuance, the trial was continued until July

25, 2022, and the summary judgment deadline was extended to April 26,

2022.

On April 5, 2022, AFIC filed a motion seeking to exclude testimony

from Crawford's expert, Matthew Bruder, because he was a member of the

law firm representing Crawford and therefore had a financial stake in the

outcome of the case. Crawford did not respond to this motion, and there

is no record in the file of a court decision on the matter.

On April 29, 2022, Crawford filed a motion asking the court to release

documents that had been submitted under seal, and the court, finding the

documents discoverable, ordered their release on May 2, 2022. The

parties later entered into an agreed protective order stipulating that

documents AFIC designated as confidential would be kept confidential.

The order also outlined various conditions and provisions related to these

documents. On the same day, the court continued the July 25, 2022 trial

date and granted AFIC until June 1, 2022, to file a motion for summary

judgment.

On June 1, 2022, AFIC filed its motion for summary judgment, and

Crawford responded on June 22, 2022. Subsequently, on June 24, 2022,

the parties filed an entry of settlement and partial dismissal, indicating that

Crawford's first and second claims for relief in the amended complaint had

been settled and that the bad faith claim remained pending. On August 5, -5-

2022, AFIC filed a reply memorandum in support of summary judgment.

On September 8, 2022, the trial court filed a decision granting

summary judgment to AFIC on the bad faith claim. The court's decision

was based solely on the conclusion that “the question of whether American

Family acted in bad faith is one that requires expert testimony to answer.”

Decision, Order and Entry Sustaining Motion for Summary Judgment (Sept.

8, 2022) (“Decision”), p. 4. Because Crawford had not offered expert

testimony, the court found that summary judgment was proper.

Crawford, 2023-Ohio-1069, ¶ 4-12.

{¶ 4} On appeal from that judgment, Crawford raised a single assignment of error

alleging the trial court erred in requiring expert testimony for bad faith claims as a matter

of law. Id. at ¶ 14-15. We agreed, noting first that the parties had not raised the issue

in the trial court; instead, the court had independently raised it and not given Crawford a

chance to respond. In addition, AFIC had specifically said in the trial court that Crawford

did not need a bad faith expert, which was inconsistent with the position it was then taking

on appeal. Id. at ¶ 19-20. On the merits, we discussed the law on bad faith and

concluded that a blanket rule was inappropriate, since laypersons might easily

understand some cases. In other complex cases, an expert could be needed. Id. at

¶ 21-31. As relevant to the case then before us, we remarked that the adjuster who had

handled the case had, in fact, testified during his deposition about the claims process, the

meaning of various insurance terms, and standards that apply in evaluating cases. Id.

at ¶ 32-35. -6-

{¶ 5} As an alternate basis for affirming summary judgment in its favor, AFIC

argued on appeal that “it had a reasonable basis for its valuation of the claim, and

Crawford cannot establish that its decision was ‘totally arbitrary.’ ” Id. at ¶ 37. We

declined to decide that matter, however, because the trial court had issued a blanket

ruling on expert testimony and had not considered any of the evidence presented,

including nearly 2,000 pages of the claims file. Id. at ¶ 42-44. We reversed the

summary judgment and remanded the case to the trial court. Our opinion was issued in

late March 2023.

{¶ 6} Following remand, the court set an April 8, 2024 trial date, as well as new

deadlines for various matters, including disclosing experts, completing discovery, and

filing summary judgment motions. AFIC then filed a motion for summary judgment on

January 9, 2024, asserting the same arguments that it had on appeal. The motion was

supported by the AFIC insurance policy issued to Crawford; an affidavit from the adjuster

who handled the claim (Brian Dooley); and an affidavit and September 2, 2021 letter from

a legal expert stating that AFIC had reasonable justification for its positions and the

claim’s value was “fairly debatable,” After Crawford responded, the trial court again

granted summary judgment to AFIC. This timely appeal followed.

II. Propriety of Granting Summary Judgment

{¶ 7} Crawford’s sole assignment of error states that:

The Trial Court Erred in Granting the Defendants-Appellees’ Motion

for Summary Judgment. -7-

{¶ 8} Crawford contends the trial court failed to construe the evidence in her favor

as required in deciding summary judgment motions. Consequently, Crawford argues

that, even if AFIC presented various points in its favor, a jury could reasonably find AFIC

acted in bad faith. In this regard, Crawford points to several matters, including: the

adjuster, Dooley, failed to take a statement from Crawford for about nine months, even

after one was offered; Dooley used incorrect information that was inconsistent with

medical records he possessed; Dooley made no change in his evaluation after finally

taking a statement and disregarded new information; and Dooley chose to undervalue the

medical expenses for purposes of paying UM benefits while crediting AFIC for a much

larger amount it had used in paying the same expenses under the Medical Payments

(“med-pay”) coverage.

{¶ 9} In contrast, AFIC argues summary judgment was proper because Crawford

cannot prove that AFIC “had absolutely no reasonable basis to evaluate her claim in the

manner it did, and . . . had actual knowledge there was no basis for said evaluation.”

AFIC Brief, p. 8. According to AFIC, the case before us simply involves a dispute over

the claim’s value, which was fairly debatable. Id. at p. 10.

{¶ 10} Before discussing these arguments, we will consider the law pertinent to

our review.

A. Summary Judgment

{¶ 11} Ohio law is well-settled concerning summary judgment and applicable

review standards. “The procedure set forth in Ohio Civ.R. 56 is modeled after the federal

rule that authorizes summary judgment in appropriate cases.” Byrd v. Smith, 2006-Ohio- -8-

3455, ¶ 10. “ ‘Rule 56 must be construed with due regard not only for the rights of

persons asserting claims and defenses that are adequately based in fact to have those

claims and defenses tried to a jury, but also for the rights of persons opposing such claims

and defenses to demonstrate in the manner provided by the Rule, prior to trial, that the

claims and defenses have no factual basis.’ ” Id. at ¶ 11, quoting Celotex Corp. v.

Catrett, 477 U.S. 317, 327 (1986).

{¶ 12} “Summary judgment is appropriate if (1) no genuine issue of any material

fact remains, (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

construing the evidence most strongly in favor of the nonmoving party, that conclusion is

adverse to the party against whom the motion for summary judgment is made.” State ex

rel. Duncan v. Mentor City Council, 2005-Ohio-2163, ¶ 9, citing Temple v. Wean United,

Inc., 50 Ohio St.2d 317, 327 (1977). “ ‘As to materiality, the substantive law will identify

which facts are material. Only disputes over facts that might affect the outcome of the

suit under the governing law will properly preclude the entry of summary judgment.’ ”

Turner v. Turner, 67 Ohio St.3d 337, 340 (1993), quoting Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 248 (1986).

{¶ 13} In considering summary judgment decisions, appellate courts apply a de

novo standard of review. A.J.R. v. Lute, 2020-Ohio-5168, ¶ 15. In this type of review,

an appellate court independently reviews evidence without deferring to the trial court's

findings. Smathers v. Glass, 2022-Ohio-4595, ¶ 30, citing Wilmington Savs. Fund Soc.,

FSB v. Salahuddin, 2020-Ohio-6934, ¶ 20 (10th Dist.). Thus, a reviewing court -9-

“examines the evidence available in the record, including deposition or hearing

transcripts, affidavits, stipulated exhibits, and the pleadings, see Civ.R. 56(C), and

determines, as if it were the trial court, whether summary judgment is appropriate.” Id.,

citing Wilmington at ¶ 19.

B. Applicable Law on Bad Faith

{¶ 14} “ ‘It is well established in Ohio that an insurer has a duty to act in good faith

in the settlement of a third-party claim.’ ” Crawford, 2023-Ohio-1069, at ¶ 22, quoting

Hoskins v. Aetna Life Ins. Co., 6 Ohio St.3d 272, 275 (1983). “The reasons for this

include an insured party's lack of a voice in policy preparation; the parties’ economic

disparity; and a claimant’s vulnerability and susceptibility to oppression due to his or her

grim financial straits at the time of the claim.” Id. While the case before us involves

AFIC’s own insured rather than a third-party claim against its insured, the duty here is no

different, since insurers must also act in good faith with respect to their own insured

parties. Id. “A breach of this duty gives rise to a cause of action in tort against the

insurer and can include punitive damages in certain circumstances.” Id., citing Hoskins

at paragraphs one and two of the syllabus.

{¶ 15} In the context of lack of good faith in claims handling: “An insurer fails to act

in good faith where it denies a claim and such denial is not predicated upon circumstances

that furnish reasonable justification therefor.” Zoppo v. Homestead Ins. Co., 71 Ohio

St.3d 552 (1994), paragraph one of the syllabus. “A lack of reasonable justification exists

where an insurer refuses to pay a claim in an arbitrary or capricious manner.” Nationwide -10-

Mut. Fire Ins. Co., 2008-Ohio-174, ¶ 45 (10th Dist.), citing Nationwide Ins. Ent. v.

Progressive Specialty Ins. Co., 2002-Ohio-3070, ¶ 19 (10th Dist.). See also Sutter v.

Am. Family Ins. Co., 2021 WL 630825, *4 (S.D. Ohio Feb. 28, 2021) (outlining Ohio law

on this subject).

{¶ 16} In the context of bad faith, courts have equated the terms “arbitrary” and

“capricious,” stating “[t]he term ‘arbitrary’ means ‘without fair, solid, and substantial cause

and without reason given; without any reasonable cause; * * * fixed or done capriciously

or at pleasure; without adequate determining principle; not founded in the nature of things;

nonrational; not done or acting according to reason or judgment; depending on the will

alone; absolutely in power; capriciously; tyrannical; despotic.’ ” Captain v. United Ohio

Ins. Co., 2010-Ohio-2691, ¶ 30 (4th Dist.), quoting 4D Investments, Inc. v. Oxford, 1999

WL 8357, *2 (12th Dist. Jan. 11, 1999). (Other citation omitted.)

{¶ 17} With these standards in mind, we will consider the parties’ arguments.

C. Discussion

{¶ 18} As a preliminary point, we disagree with AFIC’s claim that Crawford must

“produce evidence to establish ‘as a matter of law’ that AFIC had absolutely no

reasonable basis to evaluate her claim in the manner it did.” AFIC Brief at p. 8. This is

not the standard for summary judgment. As we stressed in our prior opinion in this case,

there is a “difference between summary judgment consideration and trial in bad faith

cases.” Crawford, 2023-Ohio-1069, at ¶ 44. Here, Crawford was the non-movant and

was not required to “prove” her case as a “matter of law” on summary judgment; she was -11-

only required to “set forth specific facts showing that there is a genuine issue for trial.”

Civ.R. 56(E). Furthermore, the party opposing summary judgment is “entitled to have

the evidence or stipulation construed most strongly in the party's favor.” Civ.R. 56(C).

{¶ 19} AFIC also exaggerates in its assertion that an insured party must show the

insurer acted “ ‘totally arbitrarily’ ” and had “absolutely no reasonable basis” for

questioning a claim. AFIC Brief at p. 9, citing Helmick v. Republic-Franklin Ins. Co., 39

Ohio St.3d 71 (1988), and Tokles & Son, Inc. v. Midwestern Indemn. Co., 65 Ohio St.3d

621 (1992). These cases do not use such terms.

{¶ 20} Furthermore, the language upon which AFIC relies appears to have been

taken from a comment in Tokles, in which the court said that “a cause of action for the

tort of bad faith exists: ‘ * * * when an insurer breaches its duty of good faith by intentionally

refusing to satisfy an insured's claim where there is either (1) no lawful basis for the refusal

coupled with actual knowledge of that fact or (2) an intentional failure to determine

whether there was any lawful basis for such refusal.” Tokles at 629, quoting Motorists

Mut. Ins. Co. v. Said, 63 Ohio St.3d at 699-700. Compare AFIC Brief at p. 9 (which cites

Tokles at 629-630, and stresses that “the insured has the burden to produce evidence

there was absolutely no basis to question the claim and the insurer knew it in order to

avoid summary judgment on bad faith”).

{¶ 21} Referring back to the decision in Said, the language used at p. 699-700 is

also contained in the second paragraph of the syllabus in Said. See Said at 691.

However, Said was overruled in Zoppo, 71 Ohio St.3d 552, which held that “actual intent

is not an element of the tort of bad faith.” Id. at 554. Specifically, in Zoppo, the court -12-

stated that:

Until Said, the element of intent had been notably absent from this

court's definition of when an insurer acts in bad faith. In fact, with the

exception of Said and the four-to-three decision of Slater v. Motorists Mut.

Ins. Co. (1962), 174 Ohio St. 148 . . ., over the past forty-five years this court

has consistently applied the “reasonable justification” standard to bad faith

cases. According to this standard, first announced in 1949 in the case of

Hart v. Republic Mut. Ins. Co. (1949), 152 Ohio St. 185 . . . , and reaffirmed

in Hoskins v. Aetna Life Ins. Co. (1983), 6 Ohio St.3d 272 . . ., and Staff

Builders, Inc. v. Armstrong (1988), 37 Ohio St.3d 298 . . . , “an insurer fails

to exercise good faith in the processing of a claim of its insured where its

refusal to pay the claim is not predicated upon circumstances that furnish

reasonable justification therefor.” Id. at 303, . . . . Intent is not and has

never been an element of the reasonable justification standard. Hence, in

deciding Said, supra, and in relying upon the erroneous Slater decision, this

court departed from forty-five years of precedent. By expressly overruling

Said and Slater, we will be following the logical progression of case law that

has developed over the years.

Zoppo, 71 Ohio St.3d at 554-555. Research indicates that the Supreme Court of Ohio

has not changed the approach it followed in Zoppo. Consequently, the standard AFIC

describes is simply incorrect.

{¶ 22} Turning now to the trial court’s decision, the factual discussion briefly -13-

mentioned two paragraphs of Dooley’s affidavit and several pages of Dooley’s deposition,

from which the court found no genuine issue of material fact about whether AFIC had

acted in bad faith. Decision, Order, and Entry Sustaining Motion for Summary Judgment

(“Decision”) (May 1, 2024), p. 4-5. In particular, the court noted that: “Not only did Mr.

Dooley testify that he agrees these types of claims cannot be evaluated using a ‘cookie-

cutter’ method, but he set forth credible detail regarding the review of Plaintiff’s claim,

including the facts and circumstances unique to Plaintiff’s specific injuries, pain, and

treatment.” Id. at p. 5.

{¶ 23} Notably, in deciding summary judgment motions, “a court must not ‘consider

either “the quantum” or the “superior credibility” of evidence.’ ” Natl. City Real Estate

Servs. LLC v. Frazier, 2018-Ohio-982, ¶ 25 (4th Dist.), quoting McGee v. Goodyear

Atomic Corp., 103 Ohio App.3d 236 (4th Dist. 1995). “ ‘The purpose of summary

judgment is not to try issues of fact, but rather to determine whether triable issues of fact

exist. . . . Thus, a court should not pass upon the credibility of witnesses or weigh the

relative value of their testimony in rendering summary judgment.’ ” Id., quoting McGee

at 242-243. See also Hickory Grove Investors, Ltd. v. Jackson, 2008-Ohio-6428, ¶ 28

(10th Dist.) (same); Allstate Ins. Co. v. Pittman, 2015-Ohio-699, ¶ 22 (2d Dist.) (a trial

court’s primary function “ ‘in reviewing a motion for summary judgment is to determine

whether triable issues of fact exist, not the sufficiency of those facts’ ”).

{¶ 24} In considering this matter, we have reviewed the entire factual record,

including: the affidavits submitted with AFIC’s summary judgment motion; the depositions

of Leslie Crawford and the AFIC claims adjuster, Brian Dooley; and the voluminous claims -14-

file (labeled AmFam000044 – AmFam002379). Construing the facts in Crawford’s favor,

as required, we note the following facts.

{¶ 25} On August 10, 2018, Crawford was involved in an auto accident when an

uninsured driver in the opposing lane of travel abruptly turned left in front of Crawford’s

car. As a result of the collision, the airbags deployed, and Crawford’s vehicle was

severely damaged. Crawford hit her hands and ankle on something in the car; her left

hand hit the windshield and her right ankle hit the brake. She was taken to the hospital

in an ambulance and reported chest pain, left hand pain, and bilateral knee pain. X-rays

were normal. When it came time to leave the hospital, Crawford discovered she could

not walk. As a result, her right ankle was wrapped and she was discharged in a

wheelchair, with a prescription for Motrin. AmFam000121-000123, 000142-000143,

000149, and 000191; Dooley Deposition, 28-29; and Crawford Deposition, 13.

{¶ 26} The accident occurred on a Friday morning as Crawford was traveling to

work, and she did not go to work that day. At the time, Crawford was employed as a

teacher and was involved in training before school started. While she returned to work

the Monday after the accident, she was on light duty and other teachers helped in setting

up her classroom. Crawford was on crutches for a week and then began to be able to

put weight on her ankle. She did not have a family doctor at that time, so there was

some delay in getting an appointment. On August 23, 2018, Crawford saw a nurse

practitioner and complained of rib pain and that her left thumb felt jammed and in pain.

Crawford also said her right ring finger and hand hurt, her right ankle hurt, and her chest

hurt from the airbag being deployed. The August 23, 2018 physical exam showed -15-

decreased range of motion and tenderness in the right and left wrist and left foot, and

decreased range of motion, tenderness, and swelling in the right ankle. Low back and

neck pain was also documented. The nurse practitioner prescribed medication and

ordered x-rays of the right ankle and right hand, as well as a physical therapy consultation.

AmFam000125, 000150, 000262-000266, and 001900.

{¶ 27} On September 4, 2018, Dooley took a recorded statement from Crawford,

during which Crawford discussed the accident and issues she was having at that time.

The interview lasted about ten minutes. Previously, on the day of the accident, another

AFIC adjuster had done a recorded interview of about the same duration and had

obtained some preliminary details. On September 13, 2018, the scheduled x-rays were

taken of Crawford’s right hand and ankle. There were no fractures, but there was soft

tissue swelling along the left medial aspect of the ankle. The previous day, Crawford’s

attorneys had sent Dooley notice that they were representing her; Dooley acknowledged

this in a September 17, 2018 letter. At that time, Dooley sent employment and medical

information authorizations for Crawford to sign. He also asked for complete medical

records and itemized bills. Id. at 000147-000152, 000139-000146, 000195, 000198,

000270, 002344-002348, and 002349-002351.

{¶ 28} At the time of the accident, Crawford’s insurance policy with AFIC had policy

limits of $10,000 for med-pay coverage and $25,000 for UM coverage. Id. at 00154.

Crawford made claims under both coverages. Under the insuring agreement for UM

coverage, AFIC agreed to “pay compensatory damages for bodily injury which an insured

person is legally entitled to recover from the owner or operator of an uninsured motor -16-

vehicle.” (Emphasis in original.) Id. at 000174. The section entitled “Limits of Liability”

for UM coverage also stated that:

4. This insurance shall be excess over, and shall not pay again, any

medical expenses already paid under the Medical Expenses coverage of

this policy.

5. No insured person will be entitled to receive duplicate payments

for the same elements of loss. Any amount we pay under this coverage to

or for an insured person will be reduced by any payment made to that

person under any other coverage of this policy.

(Emphasis in original.) AmFam000175.

{¶ 29} Concerning med-pay coverage, AFIC agreed to pay for “usual and

customary medical expenses . . . incurred . . . because of bodily injury sustained to an

insured person as the result of an accident.” (Emphasis in original.) Id. at 000179.

Regarding liability limits for med-pay, the policy further stated that:

3. No one will be entitled to duplicate payments for the same

elements of loss. Any amount we pay to or for an injured person applies

against any other coverage applicable to the loss so that there is no

duplication of payment. In no event shall a coverage limit be reduced

below any amount required by law.

(Emphasis in original.) Id.

{¶ 30} In October 2018, the med-pay adjuster indicated to various medical

providers that med-pay payments had been “pended” at the request of Crawford’s -17-

attorney. E.g., AmFam001060-001064 and 1070-1089.

{¶ 31} As noted, Crawford was referred for therapy, which occurred at Miami

Valley Hospital (“MVH”). There was a slight delay in beginning therapy, as Crawford

lacked transportation. For more than four months, Crawford attended physical therapy

for her neck, ankle, and back and occupational therapy for her hands. This period was

from October 11, 2018, through February 26, 2019. Id. at 000124, 000278-000320,

000325-000415, 000420-000512, 000516-000523, 000528-000535, 000540-000555,

000560-000566, 000568-000580, and 001303-001334. Without discussing in detail the

therapy records (which are voluminous), we note that Crawford described her pain on a

scale of one to 10 when therapy began as follows: (1) 0/10 pain in the neck at rest but

stiffness and pain of 3-4/10 at worst; (2) 0/10 pain in the right lateral trunk at rest and 6/10

low back pain at worst; (3) 3-4/10 pain in the right ankle at rest and 5-6/10 pain at worst;

(4) 0/10 pain for the right thumb and left 4th finger at rest, and 3-4/10 pain at worst. Id.

at 000280.

{¶ 32} At the end of January 2019, Crawford reported pain in her right ankle at

4/10 at that time and 6/10 at worst. The physical therapy testing at that time indicated

70% functionality in the ankle with limited range of motion and strength. Id. at 000540

and 000542-000543. At the last physical therapy session for the right ankle on February

26, 2019, the pain and testing were essentially unchanged, with pain being 3-4/10 at that

time and at worst still 6/10. At that session, Crawford still had limited range of motion

and strength and 70% function, and most therapy goals had not been met. Crawford

had two authorized visits left from her health insurer and declined further treatment. Id. -18-

at 001321-001326. During physical therapy, Crawford did report by December 17, 2018,

that she had no pain in her back and neck. Id. at 000490.

{¶ 33} In December 2018, Crawford also began occupational therapy on her

hands, with the goal of being able to comb her hair and open doors without pain.

Physical findings were made, including first compartment tenderness on the right hand,

pain on the ulnar side of the left hand, mostly in the IV compartment, and right-hand

weakness in grip and strength. Crawford was given a splint and was scheduled for more

therapy. AmFam000522. During treatment, Crawford continued to wear the splint and

experienced a decrease in pain. By the time treatment ended at Crawford’s request on

February 26, 2019, she was independent with “ADL and work tasks,” was to continue to

wear the splint as needed, and was to see a hand surgeon if problems persisted. Id. at

001327-001334.

{¶ 34} On April 18, 2019, Crawford’s attorney, Matthew Bruder, sent Dooley a

settlement package. The settlement summary included $23,208.01 in medical expenses

and $235 in lost wages, and the demand was for $25,000 (the policy limits). Among

other things, the medical expenses included the $5,043.62 emergency room bill from

MVH. AmFam 000201 and 000206; Dooley Depo. at 43-44. After receiving the

package, Dooley asked Bruder for the MVH therapy records from February 11 through

February 26, 2019, as they had not been included. Bruder sent the records to Dooley,

along with a letter, on May 22, 2019. AmFam 001299-001300. In addition, Bruder

included Anthem’s $1, 243 medical lien for the MVH emergency room treatment. In this

regard, Bruder stated in the letter: -19-

I have also attached the medical lien we received from Anthem

relative to this matter. Medical expenses, which are clearly a part of a

reasonable good faith evaluation, can be evaluated based on the billed

amount, the paid amount or any amount in between. The goal is to

determine whether the billed amount, the paid amount or amount in

between would reflect a reasonable cost for the services rendered. Thus,

an evaluation for Leslie’s claim would either consider medical expenses in

the amount of $22,409.34 which was billed or $17,088.43 which was paid

by Leslie, her health insurance carrier, and through medical payments

coverage. Obviously, American Family could also run these bills through

its medical bill review software to determine what a usual and customary

charge would be for the services in this geographical area. Certainly, just

deciding to always use the lowest number would be in the company's best

interest if the company desired to offer as little an offer as could be

justifiable. To the contrary, accepting the billed amount as the reasonable

cost of medical expenses is both permitted by the presumption available

under statute in Ohio and would be of the most benefit to your insured in

allowing a justification of a higher payout

AmFam001300. At that point, AFIC had paid only $920.65 of the total $10,000 available

med-pay coverage. Id.

{¶ 35} On June 24, 2019, Dooley made a settlement offer of $21,622.51. This

included medical specials of $18,307.26, minus the current med-pay offset of $920.65, -20-

for total medical specials of $17,386.61. Dooley then added $235.90 in wage loss and

$4,000 in general damages. Id. at 1338.1 When Dooley made this offer, his settlement

range reserve was $$21,620 to $22,622, which included a range of $4,000 to $5,000 for

pain and suffering. The range was based on Dooley’s September 2018 interview with

Crawford (which he had not updated), and his review of the accident report, vehicle

damage, and medical records and bills. Dooley Depo. at 63.

{¶ 36} Dooley calculated the reserve on Crawford’s claim by using Casualty Caddy

Injury Reserve Template, which was a tool AFIC used to set reserves or adjust reserves

on claim files. For this purpose, Dooley inputted: “chest, right ankle/knee, left hand

contusion/soft tissue” into the caddy and also typed in “possible 16 to 18 weeks soft tissue

injuries.” During his deposition, Dooley stated that Crawford’s first treatment was on

August 10, 2018, and her last treatment was on February 26, 2019. However, he could

not recall why he used the 16-18 week figure as opposed to the 30-week figure Crawford’s

attorney calculated. Id. at 64-65 and 69-70.2

{¶ 37} On June 27, 2019, Bruder replied to the offer, questioning the accuracy of

the medical expense amount. In addition, Bruder asked Dooley to discuss with Crawford

the six months of treatment she had undergone and the impact the accident had had on

her life. AmFam001913. Dooley replied the same day, noting, in particular, that he had

used a $1,172 figure for the $5,043.62 amount that MVH had originally billed for the

emergency room treatment. Dooley also suggested having a phone interview with

1 The various offers reveal a few pennies difference in the amount of medical expenses

quoted by Dooley, but this is irrelevant for purposes of our review. 2 The time frame for the dates in question is about 28-and-a-half weeks. -21-

Crawford due to logistics. (He did not live in Ohio.) Id. at 001915-001916.

{¶ 38} In early July 2019, AFIC’s med-pay adjuster paid the remaining amount of

the $10,000 med-pay coverage. Of relevance here, on July 9, 2019, the adjuster paid

MVH $4,239.46 for the emergency room charges incurred on the date of Crawford’s

accident. This was the “allowed” amount of the original $5,043.62 bill. See AmFam

001216-001220. On July 9, the med-pay adjuster also notified Crawford’s attorneys that

med-pay benefits had been exhausted. Id. at 001221. Thereafter, this adjuster rejected

a number of previously-submitted medical bills for that reason. E.g., id. at 001149-

001153.

{¶ 39} On July 30, 2019, Dooley conducted another recorded interview of

Crawford, this time with her attorney present. During the interview, Crawford discussed

the accident and its immediate impact, as well as continuing issues she had with her ankle

and hands even after therapy had ended. AmFam000120-000129. On August 6, 2019,

Bruder contacted Dooley to inquire whether Dooley had been able to reevaluate his offer.

Dooley responded the next day with a total offer of $13,543.80. This offer included:

allowed medical specials of $8,307.90 (after offsetting the $10,000 in payments under the

med-pay coverage); wage loss of $235.90; and $5,000 in general damages. Id. at

001904-1905; see also Dooley Depo. at 77. While this offer was $1,000 more than

Dooley’s prior offer for general damages, it was within the original evaluation of general

damages, and Dooley had not changed his evaluation value. Id. at 77-78. The total

amount allotted for medical expenses remained the same as before. The only difference

was that more money (the total $10,000 med-pay amount) was deducted. -22-

{¶ 40} On October 18, 2019, another attorney from Crawford’s law firm (John

Smalley) contacted Dooley to indicate the matter had been referred to him for the purpose

of filing litigation. Smalley rejected Dooley’s August 6 offer, stating it was without

reasonable justification, and requested the $25,000 policy limits. Dooley apparently did

not respond. On December 5, 2019, Smalley resent the letter to Dooley and inquired

what further information or investigation would be helpful. In response, Dooley increased

the offer on December 6 by $1,000, to $14,543.80. Dooley sent a further email that day

saying he did not need additional information. See AmFam001901-001903. On

December 11, 2019, Smalley sent a letter to Dooley in a final attempt to avoid litigation.

Id. at 000590-000591.

{¶ 41} In the December 11 letter, Smalley made a number of remarks about

Dooley’s conduct, including Dooley’s method of calculating the amount of medical

expenses. Specifically, after commenting about alternative methods for valuation,

Smalley stated:

In this case, the billed amount of medical expenses is $22,377.34.

According to your analysis which gave rise to your initial offer on June 24,

you accepted $18,307.26 as the reasonable cost of medical expenses. In

determining the number to be used as the reasonable value of care, you

chose to accept $1,172.00 as the reasonable cost of the emergency room

bill at Miami Valley Hospital on August 10, 2018. This is what was paid on

the bill by the client’s health insurer.3 However thereafter, this bill was sent

3 Anthem’s lien was slightly higher at $1,243, but the discrepancy is not relevant for

purposes of this appeal. Both sides referenced the $1,172 amount in discussing -23-

to American Family for evaluation pursuant to your client’s medical

payments coverage. Your Medical Payments Department apparently ran

this bill through the building [sic] review service and determined that the

reasonable charge for this service was $4,239.46. The Medical Payments

Review Department assumedly used the medical billing review service that

the company accesses routinely to evaluate bills in the med pay

department. The medical payments department approved the billed

amount as the reasonable cost of rendered medical care and paid this

amount pursuant to the medical payments coverage of the insured’s policy.

Then, when you re-evaluated the case following additional medical

payments being made, you again determined that the reasonable value of

medical expenses was still $18,307.20. Keeping this number as the

reasonable cost ignores what the company’s own medical bill review service

determined the reasonable cost of the emergency room bill to have been.

Being objective about the case, the reasonable value of your medical

expenses should have been re-calculated to include that amount which was

determined by your Medical Payments Department with the conclusion that

reasonable medical expenses were in the total amount of $21,374.02.

Unfortunately, you continued to use the smallest amount possible to value

medical expenses by focusing on the Anthem payment rather than the

greater valuation given by your Med Pay Department. Then, to compound

settlement figures. -24-

the problem, you reduced your UIM offer by the full $10,000 in medical

payments coverage so you are reducing the amount of your evaluation by

the amount of the emergency room bill that you didn’t even find to be

reasonable itself in your initial evaluation.

(Footnote added.) AmFam000590.

{¶ 42} After commenting on other issues about the valuation, Smalley stated that

he would not further reduce the prior request for $25,000, and that if Dooley were content

that AFIC had made a final good-faith offer, he would tell Crawford she had no alternative

but to file suit. Id. at 000591. Dooley’s response was that he believed a good-faith

offer had been made, and he reiterated the $14,543 offer. Id. at 001340. Smalley then

sent Dooley a courtesy copy of the lawsuit on December 16, 2019, which included bad

faith claims and a request for punitive damages. Id. at 000594-000598. As indicated,

the lawsuit was filed on December 16.

{¶ 43} During his deposition, Dooley stated that under both med pay and UM

coverage, AFIC adjusters owe the reasonable cost of necessary medical expenses. He

explained that to calculate these expenses, AFIC uses a tool called Decision Point, where

adjusters “plug in” a bill and come up with reasonable and customary expenses.

Decision Point is a software program which can decide things based on a provider’s

location, what is an average or reasonable amount of costs in that area, and whether the

codes are being billed properly in conjunction with each other. The program then uses

an 85% rate of what providers in the area are charging. Dooley Depo. at 15-19. Dooley

noted that the med-pay department had used Decision Point to calculate the MVH -25-

emergency room bill on Crawford’s claim. Id. at 54-55.

{¶ 44} According to Dooley, in considering the reasonable cost of medical

expenses incurred, he could consider the billed cost of emergency services in this case,

which was $5,043.62, or the amount arrived at by Decision Point, which was $4,239.46,

or the amount that was paid by Anthem plus copays and deductibles. Id. at 57. Dooley

chose the lowest of these three numbers and then took an offset for the total $10,000 that

med-pay had paid on the claim. Id. at 58. In this context, the following exchange

occurred:

Q. Okay. So if we assume that that $10,000 was paid with an

allocation of $4,239.46 to the ER, you are giving a value of only a thousand

and change to the bill but taking a credit of 4,000 and change against your

value. Do you understand my point, Mr. Dooley?

...

A. I understand.

Q. Okay. When you valued the claim, why didn’t you use the billed

amount, which would certainly be better for your insured and increase your

evaluation?

A. I used the lower amount of what was paid by the health insurer

and what was adjusted off because I was allowed to use it.

Dooley Depo. at 58-59.

{¶ 45} The following further exchange also occurred during Dooley’s deposition:

Q. . . . Now, the issue with regard to how much the emergency room -26-

was valued by Med-Pay versus what you had valued it as is relevant

because you’re taking an offset against what Med-Pay paid against a lesser

value that you use.

Do you understand what I’m saying, Mr. Dooley, or is that not

understandable to you?

A. I only understand that $10,000 was paid out on the medical

specials that were submitted, and in my evaluation I took the offset on those

medical bills.

Q. Yeah. But you’re taking an offset of $4,300 against a bill that you

only valued at $1,200. Do you understand that?

A. No, sir, I don’t.

Q. All right. This same issue, you understand that I brought it up

to you in a letter, don’t you?

A. Yes, I recall you brought it up in a letter.

Q. Did you send me a letter to me and say, Mr. Smalley, I don’t

understand?

A. No, sir, I didn’t send you a letter stating that I didn’t understand.

Q. No, you didn’t.

You agree that it’s your responsibility to treat your insured -27-

fairly, don’t you, Mr. Dooley?

A. Yes, sir, I do.

Dooley Depo. at 78-79.

{¶ 46} As noted, Crawford argues that Dooley’s conduct creates a genuine issue

of material fact concerning whether AFIC acted in bad faith in processing her claim. We

agree. In its decision, the trial court stated that “although the parties clearly disagree as

to the value of Plaintiff’s claim, the language of the policy, as well as the records regarding

Plaintiff’s treatment and injuries, provides a reasonable justification for Defendant’s

evaluation of the claim, and does not constitute arbitrary or capricious conduct on the part

of Defendant.” Decision at p. 5.

{¶ 47} There is no question that the policy provisions allowed Dooley to offset

payments under med-pay coverage against what was ultimately paid to Crawford under

the UM provision. However, that is all the policy says; it says nothing about the

procedure used here, which was: (1) to disregard the reasonable valuation of the same

expense that another adjuster arrived at by using the company’s software; (2) use the

lowest possible number for the same expense; and (3) offset the higher amount from the

amount to be paid on the insured’s UM claim. The trial court did not consider these facts.

{¶ 48} Dooley was an experienced insurance adjuster. When Dooley made the

offer to Crawford, he had been working as an adjuster handling bodily injury claims for

nearly 20 years, almost all of that time with AFIC. Dooley Depo. at 6 and 9. Dooley had

also been handling UM claims for AFIC since around 2002 and had handled claims in

Ohio since 2011-2012. In addition, he had received training in bad faith. Id. at 11-12. -28-

Under the circumstances, Dooley’s professed lack of understanding about the effect of

his actions is inexplicable. Furthermore, Dooley’s assertion that he used a lower value

because he could do so lacks any sound reasoning and is arbitrary.

{¶ 49} While the amount differential is not substantial (i.e., $4.329 minus $1,172

equals $3,157), that has nothing to do with whether bad faith existed. For example, at

the time of his deposition, Dooley had about 137 open injury claims. Id. at 24.

Assuming for the sake of argument that Dooley followed the same approach on these

claims and reduction amounts were similar, that would result in about $432,509 of

underpayment. Of course, this amount could have been greater. For example, in a

situation where an insured had $100,000 in UM coverage and a larger med-pay amount,

a discrepancy could be quite large. Furthermore, Crawford’s attorney explained in detail

in the December 11, 2019 letter why Dooley’s method was inappropriate, but Dooley

ignored this.

{¶ 50} In remanding this case previously, we included statements that we found

“instructive concerning the difference between summary judgment consideration and trial

in bad faith cases.” Crawford, 2023-Ohio-1069, at ¶ 44. In this regard, we quoted from

another case, in which the court of appeals had said:

Although Colonial [the insurer] presents various good points in support of

its position, this court concludes judgment cannot be granted as a matter of

law in this case. As to the “fairly debatable” precedent, the case does not

merely state: “Where a claim is fairly debatable the insurer is entitled to

refuse the claim * * *;” the law continues: “as long as such refusal is -29-

premised on a genuine dispute over either the status of the law at the time

of the denial or the facts giving rise to the claim.” Motorists Mut. Ins. Co.

v. Said, 63 Ohio St.3d 690, 700 . . . (1992). A failure to reasonably

investigate before arriving at a legal or factual position can give rise to

liability. Zoppo v. Homestead Ins. Co., 71 Ohio St.3d 552, 554 . . . (1994)

(finding evidence from which the jury could conclude the insurer failed to

conduct an adequate investigation on cause of fire and was not reasonably

justified in denying the insured's claim).

Furthermore, the applicable test for a judge or jury to apply at trial is

not purely applicable at the summary judgment stage. The ultimate issue

for trial is whether the insurer's handling of the claim or refusal to pay the

claim was done in good faith, meaning whether it was “predicated upon

circumstances that furnish reasonable justification therefor.” Zoppo, 71

Ohio St.3d at 554 . . . At the summary judgment stage, the issue is not

whether Colonial proved it handled the claim in good faith and had

reasonable justification for its conduct throughout the handling of its

insured's claim.

If the insured moved for summary judgment, the issue would be

whether some reasonable mind could find the insurer did not handle the

claim in good faith, i.e. whether some reasonable mind could find the

insurer's conduct was not reasonably justified. See Civ.R. 56(C). Surely,

reasonable minds could find the claim was fairly debatable and the refusal -30-

was premised on a genuine dispute over either the status of the law at the

time of the denial or the facts giving rise to the claim. However, Appellant

[the insured] was not seeking summary judgment; he was the non-movant.

Considering the combination of acts and omissions, it cannot be said

the record is devoid of any evidence tending to show a lack of good faith.

See, e.g., Mentor Chiropractic Ctr., Inc. v. State Farm Fire & Cas. Co., 139

Ohio App.3d 407, 411, . . . (11th Dist.2000) (“Summary judgment is

appropriately granted to the defendant on a claim of bad faith where the

record is devoid of any evidence tending to show a lack of good faith on the

part of the defendant.”). Even if certain circumstances would not

individually qualify as bad faith conduct, the overall circumstances are

relevant and must be viewed in the light most favorable to Appellant.

Rational inferences must be drawn and doubts must be resolved in

Appellant's favor. See, e.g., Jackson v. Columbus, 117 Ohio St.3d 328,

2008-Ohio-1041, . . . ¶ 11; Leibreich v. A.J. Refrig., Inc., 67 Ohio St.3d 266,

269, . . . (1993); Dupler v. Mansfield Journal Co., 64 Ohio St.2d 116, 121,

. . . (1980) (a court “may not weigh the proof or choose among reasonable

inferences.”). Upon doing so, this court concludes some rational trier of

fact could find a lack of good faith in some aspects of Colonial's claim

handling in this case.

Crawford, 2023-Ohio-1069, at ¶ 44, quoting Marshall v. Colonial Ins. Co., 2016-Ohio-

8155, ¶ 80-84 (7th Dist.). -31-

{¶ 51} Contrary to AFIC’s contention, the dispute here is not just a disagreement

about the claim’s value; instead, a rational trier of fact could find there was no reasonable

justification and a lack of good faith in some aspects of Dooley’s handling of this case.

Along with the acts we have already discussed is the fact, as noted by Crawford, that

Dooley used a 16-18 week figure in calculating general damages. Dooley’s testimony

on this point was equally devoid of sound or explicable reasoning. As we indicated

earlier, Dooley stated the treatment period was August 10, 2018, to February 26, 2019 (a

period of more than 28 weeks). However, Dooley inputted 16 to 18 weeks into the

company’s software and could not recall why he used the lower amount. Dooley Depo.

at 64-65 and 69-70. Obviously, this would result in a lower reserve and calculation of

damages. Thus, this is not a disagreement over the value of the claim; it is an issue with

the method of calculation used. Again, a reasonable trier of fact could find a lack of good

faith on this point. Accordingly, Crawford’s assignment of error has merit.

{¶ 52} In responding to Crawford’s arguments, AFIC has also asked us to affirm

the trial court’s judgment as to the punitive damages claim because there was no

evidence AFIC acted fraudulently or with actual malice. AFIC Brief at p. 14. According

to Crawford, there are genuine issues of material fact concerning whether Dooley acted

with actual malice or fraud. The trial court did not discuss punitive damages, other than

dismissing that claim because of its conclusion that AFIC did not act in bad faith.

Decision at p. 5. Nonetheless, we will consider the issue, since this case was filed nearly

five years ago and has now been before our court twice. The parties have also briefed

the issue. -32-

{¶ 53} “The purpose of punitive damages is not to compensate a plaintiff, but to

punish and deter certain conduct.” Moskovitz v. Mt. Sinai Med. Ctr., 69 Ohio St.3d 638,

651 (1994). “Punitive damages may be recovered against an insurer [that] breaches [its]

duty of good faith in refusing to pay a claim of its insured upon proof of actual malice,

fraud or insult on the part of the insurer.” (Brackets in original.) Staff Builders, 37 Ohio

St.3d 298, at paragraph two of the syllabus, approving and following Hoskins, 6 Ohio

St.3d 272. See also Dardinger v. Anthem Blue Cross & Blue Shield, 2002-Ohio-7113,

¶ 174-190 (affirming punitive damages award against insurer for conduct in claims

handling but ordering remitter of award from $49 million to $30 million).

{¶ 54} “Actual malice, necessary for an award of punitive damages, is (1) that state

of mind under which a person's conduct is characterized by hatred, ill will or a spirit of

revenge, or (2) a conscious disregard for the rights and safety of other persons that has

a great probability of causing substantial harm.” Preston v. Murty, 32 Ohio St.3d 334

(1987), paragraph two of the syllabus. Accord Zoppo, 71 Ohio St.3d at 558; Sivit v.

Village Green of Beachwood, L.P., 2015-Ohio-1193, ¶ 7. This is not a conjunctive

requirement; the disregard can be for either rights or safety. Chapel v. Wheeler Growth

Co., 2023-Ohio-3988, ¶ 12 (1st Dist.) (discussing Preston’s own clarification of this point

at page 336 of its decision). “ ‘Actual malice is necessary for an award of punitive

damages, but actual malice is not limited to cases where the defendant can be shown to

have had an “evil mind.” ’ ” Buckeye Union Ins. Co. v. New England Ins. Co., 87 Ohio

St.3d 280, 286 (1999), quoting Cabe v. Lunich, 70 Ohio St.3d 598, 601 (1994). “The

presence of actual malice need not be expressed but ‘may be inferred from conduct and -33-

surrounding circumstances.’ ” Staff Builders at 304, quoting Columbus Finance, Inc. v.

Howard, 42 Ohio St.2d 178, 184 (1975).

{¶ 55} In light of our previous discussion, we agree with Crawford that genuine

issues of material fact exist regarding the punitive damages issue. Dooley need not have

had an “evil mind,” but there are genuine issues of material fact concerning whether his

conduct showed a conscious disregard for Crawford’s rights with a great probability of

causing substantial harm. That issue should not be decided on summary judgment.

{¶ 56} Based on the preceding discussion, Crawford’s sole assignment of error is

sustained.

III. Conclusion

{¶ 57} Crawford’s sole assignment of error having been sustained, the judgment

of the trial court is reversed, and this cause is remanded for further proceedings.

LEWIS, J. and HUFFMAN, J., concur.