Toledo Fair Hous. Ctr. v. Nationwide Mut. Ins. Co.

• Citation: 704 N.E.2d 667,94 Ohio Misc.2d 151
• Decision Date: 11 August 1997
• Docket Number: No. CI93--1685,CI93--1685
• Parties: TOLEDO FAIR HOUSING CENTER et al. v. NATIONWIDE MUTUAL INSURANCE COMPANY et al. *
• Court: Court of Common Pleas of Ohio

Page 151

94 Ohio Misc.2d 151

704 N.E.2d 667

TOLEDO FAIR HOUSING CENTER et al. v. NATIONWIDE MUTUAL INSURANCE COMPANY et al. ^*

No. CI93--1685.

Court of Common Pleas of Ohio,

Lucas County.

Decided Aug. 11, 1997.

Cooper, Walinski & Cramer, Stephen Dane, Janet Hales and Margaret Lockhart, Toledo; Washington Lawyers Committee for Civil Rights Under Law, and John P. Relman, Washington, DC; Richard J. Ritter; William Howard Lynch; Hall, Patterson & Charne, S.C., and Gretchen Elizabeth Miller, Milwaukee, WI, for plaintiffs

Fox & Grove, Jeffrey Goldman, Allison Blakely, Joel Rice, Chicago, IL, and Diane Cifuentes Gerew, Chicago, IL; Fuller & Henry, and Martin J. Witherell, Toledo, for defendants.

FREDERICK H. McDONALD, Judge.

This class action case is before the court upon the following motions: (1) a motion for summary judgment filed by defendants Nationwide Mutual Insurance Company and Nationwide Mutual Fire Insurance Company (collectively "Nationwide") as to plaintiffs' claims for classwide relief, (2) a motion for partial summary judgment filed by the plaintiffs, and (3) a motion for summary judgment as to the individual plaintiffs' claims filed by Nationwide. Upon consideration of the pleadings, the record, the written arguments of counsel, and the applicable law, I find that Nationwide's motions should be denied and that the plaintiffs' motion should be denied.

I

The plaintiffs are the Toledo Fair Housing Center and several individual plaintiffs. Many of the individual plaintiffs represent a class of homeowners who, since 1979, have owned a home in an "African-American" neighborhood. ¹ The plaintiffs allege that Nationwide engages in redlining in its offering of homeowner's insurance in violation of R.C. 4112.02(H)(4). ² Particularly, for purposes of Nationwide also moves for summary judgment, arguing that, as a matter of law, the following guidelines do not have a disparate impact on African-American neighborhoods: (1) the minimum insurance amount, (2) the maximum dwelling age, and (3) the consideration of the ratio of market value to replacement cost in determining whether a risk should be written and, if so, on what policy form. Additionally, Nationwide moves for summary judgment on the plaintiffs' claims that (1) Nationwide's failure to alter certain underwriting practices is evidence of intentional discrimination, and (2) Nationwide's target marketing practices intentionally discriminate against African-American neighborhoods. Nationwide also moves for summary judgment on the individual plaintiffs' claims. The plaintiffs oppose Nationwide's motions.

                the plaintiffs' motion, the plaintiffs argue that two of Nationwide's underwriting guidelines, the minimum insurance amount and maximum dwelling age, 3 have a disparate impact on homeowners in African-American neighborhoods.  The plaintiffs now move for summary judgment on these disparate-impact issues.  In support of their motion, the plaintiffs have offered excerpts of certain deposition testimony as well as a report prepared by Dr. Samuel Attoh and James R. Weaver, Jr.  ("the Attoh report.")   Nationwide opposes the plaintiffs' motion
                

II

The general rules governing motions for summary judgment filed pursuant to Civ.R. 56 are well established. In Harless v. Willis Day Warehousing Co. (1978), 54 Ohio St.2d 64, 66, 8 O.O.3d 73, 74, 375 N.E.2d 46, 47, the Supreme Court of Ohio stated the requirements that must be met before a motion for summary judgment can be granted:

"The appositeness of rendering a summary judgment hinges upon the tripartite demonstration: (1) that there is no genuine issue as to any material fact; (2) that the moving party is entitled to judgment as a matter of law; and (3) 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, who is entitled to have the evidence construed most strongly in his favor.

"The burden of showing that no genuine issue exists as to any material fact falls upon the moving party in requesting a summary judgment."

A party who claims to be entitled to summary judgment on the ground that a nonmovant cannot prove its case bears the initial burden of (1) specifically The Sixth District Court of Appeals has consistently held that summary judgment should be granted with caution in order to protect the nonmoving party's right to trial. As stated by the court in Viock v. Stowe-Woodward Co. (1983), 13 Ohio App.3d 7, 14-15, 13 OBR 8, 16, 467 N.E.2d 1378, 1386:

                identifying the basis of its motion, and (2) identifying those portions of the record that demonstrate the absence of a genuine issue of material fact regarding an essential element of the nonmovant's case.  Dresher v. Burt (1996), 75 Ohio St.3d 280, 293, 662 N.E.2d 264, 273-274;  see, also, Dresher, 75 Ohio St.3d at 299, 662 N.E.2d at 277-278 (Pfeifer, J., concurring in judgment only).  The movant satisfies this burden by calling attention to some competent summary judgment evidence of the type [704 N.E.2d 670] listed in Civ.R. 56(C), affirmatively demonstrating that the nonmovant has no evidence to support his or her claims.  Id.  Once the movant has satisfied this initial burden, the burden shifts to the nonmovant to set forth specific facts, in the manner prescribed by Civ.R. 56(E), indicating that a genuine issue of material fact exists for trial.  Dresher, 75 Ohio St.3d at 293, 662 N.E.2d at 273-274.   Accord Mitseff v. Wheeler (1988), 38 Ohio St.3d 112, 114-115, 526 N.E.2d 798, 800-802
                

"We recognize that summary judgment, pursuant to Civ.R. 56, is a salutary procedure in the administration of justice. It is also, however, a procedure which should be used cautiously and with the utmost care so that a litigant's right to a trial, wherein the evidentiary portion of the litigant's case is presented and developed, is not usurped in the presence of conflicting facts and inferences. It is settled law that '[t]he inferences to be drawn from the underlying facts contained in the affidavits and other exhibits must be viewed in the light most favorable to the party opposing the motion, * * * ' which party in the instant case is appellant. Hounsell v. Am. States Ins. Co. (1981), 67 Ohio St.2d 427, 433 [21 O.O.3d 267, 271, 424 N.E.2d 311, 315]. It is imperative to remember that the purpose of summary judgment is not to try issues of fact, but rather to determine whether triable issues of fact exist." (Citations omitted.)

III

A. Disparate Impact

Both the plaintiffs and Nationwide move for summary judgment on the question of whether the minimum insurance amount or the maximum dwelling age guidelines have a disparate impact on African-American neighborhoods. Therefore, these motions will be treated as cross-motions on those disparate-impact questions.

1. Applicability of Disparate-Impact Analysis

As to these cross-motions, the first major issue is whether the instant case is appropriate for disparate-impact analysis. Nationwide argues that the disparate-impact First, I find that the disparate-impact approach does not unduly undermine the business of selling insurance. Assuming, as Nationwide argues, that the insurance industry is based on "fair" risk discrimination, the disparate-impact approach will not impede such fair discrimination if the insurer can show a business necessity. See, e.g., Griggs v. Duke Power Co. (1971), 401 U.S. 424, 432, 91 S.Ct. 849, 854, 28 L.Ed.2d 158, 164-165; Section 2000e-2(k)(1)(A)(i), Title 42, U.S.Code.

approach should not be applied in this case because (1) it undermines the insurance business, (2) it conflicts with the Ohio Insurance Code, (3) it interferes with the Ohio FAIR Plan, and (4) disparate-impact analysis is preempted by a federal statute, the Urban Property Protection and Reinsurance Act of 1968, Section 1749bbb-1749bbb-21, Title 12, U.S.Code ("UPPRA"). ⁴

Second, the disparate-impact approach does not conflict with Ohio insurance law, R.C. Chapter 3901. The cases cited by Nationwide do not support the proposition that the Ohio legislature intended the Superintendent of Insurance to have primary jurisdiction over cases such as this. R.C. Chapter 3901 addresses the minutia of running an insurance company; it does not deal with such broader topics as the civil rights implications of offering certain types of insurance to certain groups of people. And, though R.C. 3901.21(M) makes it an unfair trade practice to engage in unfair discrimination in offering insurance, it does not deal with the specific situation of race discrimination in the offering of homeowner's insurance. See R.C. 4112.02(H)(4) (prohibiting, inter alia, race discrimination in the sale of homeowner's insurance).

Third, the disparate-impact approach does not interfere with the Ohio FAIR Plan. The Ohio FAIR Plan exists to help homeowners who have been Finally, UPPRA does not preempt enforcement of R.C. Chapter 4112 through use of the disparate-impact approach. According to the United States Supreme Court, within constitutional limits, Congress may preempt state law either expressly or implicitly. Pacific Gas & Elec. v. State Energy Resources Conservation & Dev. Comm. (1983), 461 U.S. 190, 203-204, 103 S.Ct. 1713, 1721-1722, 75 L.Ed.2d 752, 765. If Congress' intent to preempt is not expressly stated, an intent to completely preempt state law on a given topic may be found from "a ' "scheme of federal regulation * * * so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it," because "the Act of Congress may touch a field in which the federal interest is so dominant that the federal system will be assumed to preclude enforcement of state laws on the same subject," or because "the object sought to be obtained by the federal law and the character of obligations imposed by it may reveal the same purpose." ' Fidelity Federal Savings & Loan Assn. v. De la Cuesta, 458 U.S. 141, 153 [102 S.Ct. 3014, 3022, 73...