Case Law Summary - 2016: January – March
Insurance – Automobile – Medical-payment coverage
Laboy v. Grange Indemn. Ins. Co., 144 Ohio St.3d 234, 2015-Ohio-3308.
- Grange Mutual Casualty Company issued an automobile policy to Mr. Laboy. Part of the policy stated that Grange would provide up to $5,000 in medical care for each person injured in any one accident. Mr. Laboy and 3 other insureds under the policy were involved in an automobile accident, which required them to seek medical treatment. They submitted some of these bills to Grange, as well as their health-insurance provider. Grange did not deny any part of their claim, the Laboys did not use all of their medical payment coverage, and they not pay any money out-of-pocket towards their medical bills from this accident.
- The Laboys reached a settlement with the tortfeasor responsible for their car accident. Grange then attempted to exercise their right of subrogation against the Laboys. The Laboys objected, however, and argued that Grange had overpaid the medical providers. The policy provided in part, that Grange agreed to pay the lesser of:
- 1. Reasonable expenses incurred by the insured for necessary medical and funeral services because of bodily injury; or
- 2. Any negotiated reduced rate accepted by a medical provider.
- Grange paid discounted rates, less than the actual medical bills, for services to 2 of the insureds. Medical Mutual paid even less than Grange for the same bills. The Laboys argued that they would have been entitled to a greater settlement amount if Grange had paid the lower rates available to Medical Mutual.
- The Supreme Court of Ohio found for Grange, stating that Grange did not have a contractual right to pay the negotiated rates. Because Grange did not have any right or access to the negotiated reduced rates, they were not required to pay them. Grange is only required to pay reduced rates when the rates have been negotiated between the medical provider and Grange, or when Grange has access to the negotiated reduced rates through a separate contract with a medical-bill review company for certain providers.
Labor and Employment – Workers’ Compensation
State ex rel. Armstrong Steel Erectors, Inc. v. Indus. Comm., 144 Ohio St.3d 243, 2015-Ohio-4525.
- Mr. Seidita was an ironworker working on top of the concrete pier when he lost his balance and fell to the ground. He sustained several injuries, for which he received workers’ compensation. Two years later, he applied for and was granted an additional award for the employer’s violation of a specific safety requirement (“VSSR”). His employer, Armstrong Steel Erectors, challenged that award.
- Mr. Seidita was not using personal protective equipment at the time he fell; however, a hearing officer concluded that it would have been impractical under the circumstances. The Ohio Administrative code states that where the use of safety lines or safety belts or harnesses is impractical, safety nets must be provided if the workplace is more than 25 feet above the ground. Therefore, Armstrong did violate a specific safety requirement by failing to install safety nets around the bridge.
- In order for the award to be overturned, it must be shown that the commission’s decision was an abuse of discretion. An abuse of discretion will not be found as long as there as some evidence to support the order. Because evidence was provided at the hearing to show that it was impractical for Mr. Seidita to use a safety harness or belt, there was at least some evidence to support the VSSR order. Therefore, the additional award for VSSR was not an abuse of discretion.
Litigation – Class Actions
Safi v. Cent. Parking Sys. of Ohio, Inc., 2015-Ohio-5274.
- Mr. Safi was towed from a private tow-away zone within a parking garage. The parking company’s policy was to ticket unauthorized parked cars and tow on the fourth unpaid violation. He alleged that the parking company systematically overcharged vehicle owners who were towed from the garage, and sought class-action status.
- There are several requirements which must be proven in order for a party to receive class-action certification. One of the requirements is that “the representative parties must fairly and adequately protect the interests of the class.” All class members must benefit from the relief sought in order to ensure that the interests of the absent members are protected along with the interests of the representative class.
- A significant issue in this case was that the class would consist of people who, if towed, had technically trespassed within the garage four times. Each of these occurrences of trespass was a violation which could result in contract and/or tort damages for the offenders. Therefore, becoming members such a certified class could expose them to liability to the parking company.
- The First District Court of Appeals found that there was a potential conflict of interest between the interests of the representative and absent members of the class, as well as potential exposure to liability, so the case was not appropriate for class certification.
Insurance – Duty to Defend
Wayne Mut. Ins. Co. v. McNabb, 2016-Ohio-153.
- Mr. McNabb and his wife had a farmowners insurance policy from Wayne Mutual. At a time when this policy was effective, Mrs. McNabb’s former employer filed a complaint against the McNabbs. There were several causes of action, but the company primarily alleged that Mrs. McNabb had engaged in theft and forgery throughout her time as bookkeeper. The company sought compensatory damages, administrative costs, liquidated damages, reasonable attorney fees, and punitive damages. Mrs. McNabb is serving a prison sentence of 3 years for felony theft.
- Wayne Mutual sought judgment that it would not be obligated to extend liability coverage or provide a defense or indemnification for Mr. McNabb in the case. The insurance company asserted that it had no duty to defend Mr. McNabb or provide him with indemnity because the complaint involved theft and intentional misconduct, and asserted a claim of restitution, which did not fall within the definition of damages. Mr. McNabb countered that the claims in the complaint were covered under his policy, and that the definition of damages does include restitution.
- The court found that the only complaint against Mr. McNabb was for unjust enrichment. Because Mr. McNabb’s conduct was not intentional, it was not excluded from the policy’s coverage as an intentional act. Finally, the Fourth District Court of Appeals held that damages would include unjust enrichment. Therefore, the Court held that Wayne Mutual had a duty to defend Mr. McNabb because the complaint against him included allegations of unjust enrichment which could be covered by the policy.
Government – Immunity
Risner v. Ohio Dept. of Transp., 145 Ohio St.3d 55, 2015-Ohio-4443.
- Mr. and Mrs. Risner sued the Ohio Department of Transportation (“ODOT”) after their daughter was killed in a motor vehicle collision on a public highway. The Risners alleged that ODOT was negligent in its design and maintenance of the intersection at which the accident occurred. They also alleged that ODOT was negligent in choosing to install flashing red and yellow lights, rather than a different traffic control device.
- Case law from the Ohio Supreme Court has created several principles regarding these types of discretionary improvements to highways. First, whether or not to improve a highway at all is a protected decision. Additional protected decisions include what type of improvement to make and when to implement the improvements.
- The Ohio Supreme Court therefore held that ODOT is immune from liability for damages which arise from its decisions on which particular areas of a highway to improve and what specific improvements will be made. Further, ODOT’s decision to improve a specific area does not create a duty to improve other areas of the highway.
***These case summaries were adapted from the Ohio State Bar Association's official reports. All cases appear on the OSBA website at www.ohiobar.org, as well as in the OSBA Report Online.***Construction/
Accidents Motor Vehicle Accidents: Auto, Truck, Bus, Motorcycle Accidents Bicycle/Racing
Claims Premises Liability:
Slip & Fall
and Safety Claims
Death Claims General Negligence
General Civil Litigation Pedestrian
Injuries/Accidents Animal Claims
and Dog Bites
Contract Disputes Appellate
Practice Mediation and