[Cite as Krothe v. Westfield Ins., 2020-Ohio-172.]
COURT OF APPEALS STARK COUNTY, OHIO FIFTH APPELLATE DISTRICT
JUDGES: CHERYL KROTHE, ET AL : Hon. William B. Hoffman, PJ. : Hon. W. Scott Gwin, J. Plaintiffs-Appellants : Hon. John W. Wise, J. : -vs- : : Case No. 2019CA00099 WESTFIELD INSURANCE, ET AL : : Defendants-Appellees : OPINION
CHARACTER OF PROCEEDING: Civil appeal from the Stark County Court of Common Pleas, Case No. 2018CV01925
JUDGMENT: Affirmed
DATE OF JUDGMENT ENTRY: January 22, 2020
APPEARANCES:
For Plaintiffs-Appellants For Defendant-Appellee Westfield
CHRISTOPHER PARKER JAMES DESMITH 50 South Main Street 3521 Whipple Avenue N.W. 10th Floor Canton, OH 44718 Akron, OH 44308-1828 Stark County, Case No. 2019CA00099 2
Gwin, .J.,
{¶1} Appellants appeal the June 4, 2019 judgment entry of the Stark County
Court of Common Pleas granting appellee’s motion for summary judgment.
Facts & Procedural History
{¶2} On October 3, 2018, appellants Cheryl and Alan Krothe filed an
underinsured motorists’ complaint against appellee Westfield Insurance. In the
complaint, appellants allege that on October 7, 2016, tortfeasor Samantha Bragg
(“Bragg”) negligently operated her motor vehicle and collided into a motor vehicle in which
Cheryl Krothe was a passenger, resulting in injuries to Krothe. Appellants further allege
that Cheryl Krothe was insured under a policy of insurance issued by appellee with
underinsured motorists’ coverage and appellee is obligated to compensate her for
damages she incurred as a result of the automobile accident that are not covered by the
tortfeasor’s insurance. The complaint also included Alan Krothe’s claim for loss of
consortium.
{¶3} Appellee filed an answer to the complaint on November 1, 2018 and filed a
motion for summary judgment on January 14, 2019. Appellee argued appellants are not
entitled to underinsured motorists benefits because appellants breached a subrogation-
related provision in their insurance policy. Attached to the motion for summary judgment
are appellants’ responses to appellee’s request for admissions and interrogatories. In the
requests for admission, appellants admit as follows: an agreement between appellants
and Motorists Insurance to accept tortfeasor Samantha Bragg’s liability limits with
Motorists Insurance was reached on September 28, 2018; in exchange for the payment
of Motorists’ policy limits, a release of all claims was signed by appellants on October 6, Stark County, Case No. 2019CA00099 3
2018; and a settlement check representing payment in full of Motorists’ policy limits was
issued to appellants on October 16, 2018.
{¶4} Also attached to the motion for summary judgment is the insurance policy
issued by appellee to appellants. Pertinent to this appeal, the insurance policy requires
the insured to notify the insurer of a potential settlement with an underinsured driver. The
policy provides, “We do not provide Uninsured Motorists Coverage or Underinsured
Motorists Coverage for bodily injury sustained by any insured: 1. If that insured or legal
representative settles the bodily injury claim and such settlement prejudices our rights
to recover payment.” A separate provision of the underinsured endorsement provides as
follows:
ADDITIONAL DUTIES
A person seeking coverage under this endorsement must also promptly:
***
B. Notify us in writing of a tentative settlement between the insured and the
insurer of the underinsured motor vehicle and allow us 30 days to
advance payment to that insured in an amount equal to the tentative
settlement to preserve our rights against the insurer, owner or operator of
such underinsured motor vehicle. However, this paragraph (B), does not
apply if failure to notify us does not prejudice our rights against the insurer,
owner or operator of such underinsured motor vehicle.
{¶5} On April 30, 2019, the trial court denied appellee’s motion for summary
judgment because appellee did not provide an authenticated copy of the release executed Stark County, Case No. 2019CA00099 4
by appellants. The trial court also granted appellee leave to file a supplemental motion
for summary judgment.
{¶6} Appellee filed a supplemental motion for summary judgment on May 10,
2019, again attaching appellants’ responses to appellee’s request for admissions and a
copy of the insurance policy issued by appellee to appellants. Also attached to the
supplemental motion is an authenticated copy of the release executed by appellants on
October 6, 2018. The release is signed by both appellants and notarized by their counsel
and provides,
That the undersigned, being of lawful age, in consideration of the payment
of One Hundred Thousand dollars and 00/00 [sic] ($100,000) Dollars, the
receipt whereof is hereby acknowledged, having released and discharged,
and by these present do for ourselves, our heirs, executors, administrators,
successors, and assigns release and forever discharge PENNY L BRAGG
ROBERT BRAGG et al of and from all claims for interest due and owing,
demands, damages, actions, causes of actions, or suits of law or in equity,
of whatsoever kind or nature, for or because of any manner or thing done,
omitted or suffered to be done by said PENNY L BRAGG ROBERT BRAGG
et al and all other persons, associations and corporations, jointly or
severally liable or claimed to be jointly or severally liable with PENNY L
BRAGG ROBERT BRAGG et al to Cheryl Krothe the undersigned, prior to
and including the date hereof, and particularly on account of all injuries,
known or unknown, to persons or property resulting or to result, from an Stark County, Case No. 2019CA00099 5
accident which occurred on or about the 7th day of October, 2016, at or
near RT 21 LAKE MASSILLON OH.
{¶7} Appellants filed a response to the motion for summary judgment on May 20,
2019. Attached to appellants’ response is a copy of a letter that counsel for appellants
sent to Dawson Insurance dated October 24, 2017. The letter states that the automobile
accident occurred on October 7, 2016, the tortfeasor in this matter has $100,000 worth of
coverage, and “the purpose of this letter is to put you on notice that Ms. Krothe may
exercise her right to underinsured coverage under the above-referenced Westfield policy
as my demand for settlement exceeds Motorists’ policy limits.” The final paragraph of the
letter states, “upon receipt and review, please contact me so that we may discuss. Thank
you for your anticipated cooperation in this matter.”
{¶8} Also attached to appellants’ response is the affidavit of Cheryl Krothe.
Krothe avers as follows: the Westfield insurance policy implicated in this matter was
purchased and procured through Dawson Insurance; she never had any correspondence
or dealt with anyone other than Dawson Insurance with regards to the subject Westfield
policy; she never received or obtained additional or supplemental contact information
from any other representative or agent of Westfield Insurance; and no one from Dawson
Insurance or any other representative of Westfield Insurance ever instructed her to
contact or notify someone other than Dawson Insurance with respect to her underinsured
motorist coverage claim. Appellee filed a reply in support of its supplemental motion for
summary judgment on May 29, 2019.
{¶9} The trial court issued a judgment entry on June 4, 2019, granting appellee’s
supplemental motion for summary judgment. The trial court found the undisputed facts Stark County, Case No. 2019CA00099 6
establish appellants failed to notify appellee in writing of a tentative settlement with
Motorists and failed to allow appellee thirty days to advance payment to preserve
appellee’s subrogation rights as required by the plain terms of appellants’ underinsured
policy endorsement with appellee and, since this failure is presumed prejudicial and
appellants offered no evidence to rebut the presumption, summary judgment is proper.
{¶10} Specifically and in accordance with the two-step inquiry set forth by the Ohio
Supreme Court in Ferrando v. Auto-Owners Mutual Ins. Co., 98 Ohio St.3d 186, 2002-
Ohio-7217, 781 N.E.2d 927, the trial court examined whether there was a breach of a
subrogation-related provision in the Westfield underinsured motorists’ policy
endorsement and whether Westfield was prejudiced such that underinsured motorists
benefits must be forfeited. As to the breach of a subrogation-related provision, the trial
court found it is undisputed that the only notice appellants provided was the initial letter
on October 24, 2017. This letter notified the company an accident had occurred and that
appellants may exercise their rights to underinsured coverage. However, the policy
requires the insured tell the insurer the specifics of a contemplated settlement and the
undisputed facts establish appellants never informed either appellee or Dawson
Insurance that it was contemplating accepting a $100,000 settlement from Motorists in
exchange for a full release of the tortfeasor. The trial court found appellants did not afford
appellee 30 days to advance payment to preserve appellee’s rights against Bragg before
accepting the settlement.
{¶11} As to appellants’ argument that they were prevented from providing such
notice, the trial court found there was no unforeseeable event that prevented appellants
from complying with the notice terms of the policy. The trial court found the undisputed Stark County, Case No. 2019CA00099 7
facts establish that appellants breached a subrogation-related provision of the Westfield
policy.
{¶12} The trial court then analyzed whether appellee was prejudiced such that
underinsured benefits must be forfeited. Pursuant to Ferrando, the trial court began its
analysis with the presumption that appellee was prejudiced by appellants’ failure to put
appellee on notice of the tentative settlement with Motorists. The trial court determined
appellants presented no evidence to rebut the presumption of prejudice and thus there is
no coverage for any of appellants’ claims under the terms of the insurance policy.
{¶13} Appellants appeal the June 4, 2019 judgment entry of the Stark County
Court of Common Pleas and assign the following as error:
{¶14} “I. THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT IN
FAVOR OF DEFENDANT BY FINDING THAT REASONABLE MINDS CAN COME TO
BUT ONE CONCLUSION THAT THERE ARE NO GENUINE ISSUES OF MATERIAL
FACT, AND THAT DEFENDANT IS ENTITLED TO JUDGMENT AS A MATTER OF
LAW.”
Summary Judgment Standard
{¶15} Civil Rule 56(C) provides, in pertinent part:
Summary judgment shall be rendered forthwith if the pleadings,
depositions, answers to interrogatories, written admissions, affidavits,
transcripts of evidence, and written stipulations of fact, if any, timely filed in
the action, show that there is no genuine issue of material fact and that the
moving party is entitled to judgment as a matter of law. No evidence or
stipulation may be considered except as stated in this rule. A summary Stark County, Case No. 2019CA00099 8
judgment shall not be rendered unless it appears from the evidence or
stipulation, and only from the evidence or stipulation, that reasonable minds
can come to but one conclusion and that conclusion is adverse to the party
against whom the motion for summary judgment is made, that party being
entitled to have the evidence or stipulation construed mostly strongly in the
party’s favor. A summary judgment, interlocutory in character, may be
rendered on the issue of liability alone although there is a genuine issue as
to the amount of damages.
{¶16} A trial court should not enter a summary judgment if it appears a material
fact is genuinely disputed, nor if, construing the allegations most favorably towards the
non-moving party, reasonable minds could draw different conclusions from the
undisputed facts. Hounshell v. Am. States Ins. Co., 67 Ohio St.2d 427, 424 N.E.2d 311
(1981). The court may not resolve any ambiguities in the evidence presented. Inland
Refuse Transfer Co. v. Browning-Ferris Indus. of Ohio, Inc., 15 Ohio St.3d 321, 474
N.E.2d 271 (1984). A fact is material if it affects the outcome of the case under the
applicable substantive law. Russell v. Interim Personnel, Inc., 135 Ohio App.3d 301, 733
N.E.2d 1186 (6th Dist. 1999).
{¶17} When reviewing a trial court’s decision to grant summary judgment, an
appellate court applies the same standard used by the trial court. Smiddy v. The Wedding
Party, Inc., 30 Ohio St.3d 35, 506 N.E.2d 212 (1987). This means we review the matter
de novo. Doe v. Shaffer, 90 Ohio St.3d 388, 2000-Ohio-186, 738 N.E.2d 1243.
{¶18} The party moving for summary judgment bears the initial burden of
informing the trial court of the basis of the motion and identifying the portions of the record Stark County, Case No. 2019CA00099 9
which demonstrate the absence of a genuine issue of fact on a material element of the
non-moving party’s claim. Drescher v. Burt, 75 Ohio St.3d 280, 662 N.E.2d 264 (1996).
Once the moving party meets its initial burden, the burden shifts to the non-moving party
to set forth specific facts demonstrating a genuine issue of material fact does exist. Id.
The non-moving party may not rest upon the allegations and denials in the pleadings, but
instead must submit some evidentiary materials showing a genuine dispute over material
facts. Henkle v. Henkle, 75 Ohio App.3d 732, 600 N.E.2d 791 (12th Dist. 1991).
I.
{¶19} In their assignment of error, appellants contend the trial court erred in
granting summary judgment to appellee because there are genuine issues of material
fact as to whether proper notice was given and whether appellee was prejudiced by any
lack of notice. An insurance policy is a contract and the relationship between the insurer
and the insured is purely contractual in nature. Nationwide Mut. Ins. Co. v. Marsh, 15
Ohio St.3d 107, 472 N.E.2d 1061 (1984). An insurance policy is a contract and is
construed in accordance with the same rules applicable to other written contracts. Hybud
Equipment Corp. v. Sphere Drake Ins. Co., Ltd., 64 Ohio St.3d 657, 597 N.E.2d 1096
(1992). It is a well-settled principle of contract law that the parties’ intentions be
ascertained from the contract language. Jackson v. Stocker Dev. Ltd., 5th Dist.
Tuscarawas No. 2008 AP 034 0029, 2008-Ohio-5337. If a contract is clear and
unambiguous, then its interpretation is a matter of law and there are no issues of fact to
be determined. Id. We presume the intent of the parties is reflected in the language of
the contract and we will look at the plain and ordinary meaning of the language used in
the contract. McDonald v. Canton Med. Edn. Found. Inc., 5th Dist. Stark No. Stark County, Case No. 2019CA00099 10
2012CA00240, 2013-Ohio-3659. “Common words appearing in a written instrument will
be given their ordinary meaning unless manifest absurdity results, or unless some other
meaning is clearly evidenced from the face or the overall contents of the instrument.”
Alexander v. Buckeye Pipe Line Co., 53 Ohio St.2d 241, 374 N.E.2d 146 (1978).
{¶20} We find the Ohio Supreme Court’s opinion in Ferrando v. Auto-Owners Mut.
Ins. Co., instructive in this case. 98 Ohio St.3d 186, 2002-Ohio-7217, 781 N.E.2d 927.
In Ferrando, the Supreme Court held that a court evaluating whether a consent-to-settle
or other subrogation-related provision in an underinsured motorists’ policy was breached,
must conduct a two-step inquiry: (1) determine whether a breach of the provision at issue
actually occurred and (2) if a breach occurred, whether the UIM insurer was prejudiced.
Id.
{¶21} Appellants argue there is a question of fact regarding whether the policy
was breached, as they contend they complied with the Westfield policy by providing the
October 24, 2017 letter to Dawson Insurance, and that any additional notice was made
impossible by the acts and omissions of Westfield and their agents in failing to respond
to the October 24, 2017 letter and because no follow-up correspondence or additional
contact information was provided by appellee or Dawson Insurance.
{¶22} In this case, the policy clearly provides that appellants must notify appellee
in writing of a tentative settlement and allow appellee 30 days to advance payment to
preserve its rights. The policy also specifically states that if the insured settles the bodily
injury claim and the settlement prejudices appellee’s right to recover payment, appellee
does not provide underinsured coverage. In this case, appellants admit that an
agreement between appellants and Motorists was reached on September 28, 2018, admit Stark County, Case No. 2019CA00099 11
that in exchange for the payment of Motorists’ policy limits, a release of all claims was
signed by appellants on October 6, 2018, and admit that a settlement check representing
payment in full of Motorists’ policy limits was issued to appellants on October 16, 2018.
{¶23} As to appellants’ argument that they did comply with the policy by providing
the October 24, 2017 letter to Dawson Insurance, the Supreme Court specifically
discussed this type of situation in Ferrando and stated as follows:
It is helpful to point out that there are two different types of ‘notice’
inquiries that actually are possible in the types of cases we consider as
relevant to this case and that should not be confused. One of those inquiries
focuses on a ‘prompt notice’ clause specifically contained in an insurance
policy that requires that an insured promptly give notice of an accident or
claim to the UIM insurer. The other type of notice at issue is the notice
inquiry that can be an inherent part of the question whether a consent-to-
settle clause was complied with. For an insured to obtain consent from a
UIM insurer to a proposed settlement, the insured first must give notice to
the insurer that a settlement is being contemplated.
Id. The letter sent to Dawson Insurance in October of 2017 notified appellee that an
accident occurred and that appellants “may” exercise their rights to underinsured
coverage under the Westfield policy. However, the plain and unambiguous language of
the policy requires appellants to inform appellee of the specifics of a contemplated
settlement agreement. In the October 2017 letter, appellants did not inform appellee or
Dawson Insurance that they were contemplating accepting a $100,000 settlement from
Motorists in exchange for a full release of Bragg and did not notify appellee of the tentative Stark County, Case No. 2019CA00099 12
settlement such that appellee had 30 days to advance payment to preserve appellee’s
rights against Bragg before accepting the settlement.
{¶24} With regards to appellants’ argument regarding impossibility of
performance, impossibility of performance occurs where, after the contract is entered into,
an unforeseen event arises rendering impossible the performance of one of the
contracting parties. Jenkins v. State Farm Fire & Cas. Co., 5th Dist. Perry No. 12-CA-5,
2012-Ohio-6076. Even though appellee and/or Dawson Insurance did not respond to the
October 2017 letter or otherwise contact appellants, this was not an unforeseen even that
rendered it impossible for appellants to send written notice to appellee of the tentative
settlement pursuant to the terms of the policy. The policy itself contains the contact
information for the insurer.
{¶25} Accordingly, we find the trial court did not commit error in determining that
a breach of the UIM provision of the Westfield policy occurred.
{¶26} Appellants also contend summary judgment was inappropriate because
appellee was not prejudiced in any way by appellants’ settlement with Motorists because
appellants settled their case for the full limits of the Motorists’ policy. If the consent-to-
settle or other subrogation-related clause was breached, the second step is to determine
whether the UIM insurer was prejudiced. Ferrando v. Auto-Owners Mut. Ins. Co., 98 Ohio
St.3d 186, 2002-Ohio-7217, 781 N.E.2d 927. “If a breach occurred, a presumption of
prejudice to the insurer arises, which the insured party bears the burden of presenting
evidence to rebut.” Id. In this case, appellants failed to present any competent summary
judgment evidence to rebut the presumption that appellee was prejudiced by appellants’
failure to provide the notice required by the policy. Stark County, Case No. 2019CA00099 13
{¶27} Additionally, in the release signed by appellants on October 6, 2018,
appellants agreed to fully release Bragg “from all claims for interest due and owing,
demands, damages, actions, causes of actions, or suits of law or in equity, of whatsoever
kind or nature” arising out of the accident. Though appellants settled for the full policy
limits of Motorists’ policy, the release signed by appellants forfeits appellee’s right to
pursue a subrogation action.
{¶28} We find the trial court did not commit error in determining appellants
presented no evidence to rebut the presumption of prejudice and in finding there is no
coverage for any of appellants’ claims under the terms of the insurance policy.
{¶29} Based on the foregoing, appellants’ assignments of error are overruled.
There is no genuine issue of material fact that appellants failed to place appellee on notice
of their tentative settlement with Motorists and failed to afford appellee 30 days to advance
payment of the tentative settlement amount in order to preserve its right of subrogation.
Further, appellants failed to produce any competent summary judgment evidence to rebut
the presumption that appellee was prejudiced by their failure to provide the notice
required by the policy. Stark County, Case No. 2019CA00099 14
{¶30} The June 4, 2019 judgment entry of the Stark County Common Pleas Court
is affirmed.
By Gwin, J.,
Hoffman, P.J., and
Wise, John J., concur