[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
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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.
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{¶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.
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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
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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.
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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
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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.
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{¶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
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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.
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{¶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
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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
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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'
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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.