Bigler v. Pers. Serv. Ins. Co., CASE NO. 12 BE 10

CourtUnited States Court of Appeals (Ohio)
Writing for the CourtVUKOVICH
Citation2014 Ohio 1467
Docket NumberCASE NO. 12 BE 10
Decision Date31 March 2014

2014 Ohio 1467


CASE NO. 12 BE 10


Dated: March 31, 2014



Civil Appeal from Common Pleas Court,
Case No. 05CV139.



Hon. Joseph J. Vukovich
Hon. Gene Donofrio
Hon. Mary DeGenaro

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For Plaintiffs-Appellees:

Attorney Harry White
(For Biglers)

Attorney James Bordas
(For Coxes)

For Defendants-Appellants:

Attorney Craig Pelini
Attorney Randall Traub
(For Personal Service Insurance Co.)

Attorney Thomas Mulvey
Attorney Lisa Haase
(For Personal Service Insurance Co.)

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{¶1} Defendant-appellant Personal Service Insurance Company appeals after a jury verdict was entered against it in the Belmont County Common Pleas Court based upon the insurance company's denial of coverage and subsequent refusal to defend Kathryn and Donald Cox. Mr. Cox had been sued by the Biglers due to an accident which killed their son and injured Mr. Bigler, and the Biglers obtained a judgment against Mr. Cox after a bench trial. In the third-party portion of the action at issue here, the court ruled that coverage existed as a matter of law, and the jury then found against the insurance company on the bad faith claim.

{¶2} The insurance company sets forth twelve assignments of error. The threshold issue involves the trial court's summary judgment decision that there was coverage as a matter of law because an SR-22 certificate of insurance was filed with the BMV but the insurance company never filed the statutorily required SR-26 notice of cancellation with the BMV. We are asked to determine whether the issuance of a certified policy and an SR-22 certificate of insurance requires the insurer to file with the BMV the statutorily-required SR-26 notice of cancellation where: the insurance agent placed the insured's social security and date of birth but not his name and address on the SR-22, the insured delivered the SR-22 to the BMV at the instructions of the agent and obtained his license, the BMV returned the SR-22 to the insurance company weeks later for correction, the insurance company did not correct the SR-22 because they had already sent a letter to the insured purporting to cancel the policy due to a change of mind about his risk and because the effective date of that cancellation had already passed. For the reasons set forth below, the trial court's decision on the SR-22/SR-26 issue is upheld.

{¶3} The insurance company also urges that the policy was void ab initio because Mr. Cox's prior criminal record was not disclosed on the application. However, the insurance company could not use this doctrine due to a statute stating that the liability of the insurer who issued a certified policy such as this is conclusive when damage occurs and that no statement of the insured or on the insured's behalf shall defeat or void the policy. There are also multiple evidentiary and trial issues

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presented, and a limited weight of the evidence argument is set forth involving Mr. Cox's failure to testify with regard to punitive damages. The insurer also proceeds under principles of cumulative error. These arguments are overruled.

{¶4} The insurance company lastly contends that it was unreasonable to award all of the requested attorneys' fees, which included a 2.0 multiplier, complaining that the time records were reconstructed and were not maintained contemporaneously with the work, that the lowest increment billed was a quarter of an hour, and that $400 is not a reasonable hourly rate. Considering all of the circumstances of this case, we defer to the trial court's discretionary decision made after presiding over this case for many years as we cannot conclude that the court acted unreasonably or that the amount of attorneys' fees is so high as to "shock the conscience."

{¶5} For the reasons explained below, the judgment of the trial court is hereby affirmed.


{¶6} On February 5, 2003, Donald and Kathryn Cox went to Boyle Insurance Agency Inc. to apply for insurance. Insurance agent George Gacek filled out their application. He was informed that Mr. Cox had lost his driver's license due to a 12-point suspension and that he was now eligible to have his license reinstated if he obtained an SR-22 certificate of insurance. The agent did not run an MVR check, leaving that matter for the insurance company. He sold the Coxes a car insurance policy through Personal Service Insurance Company, accepting payment of the initial premium and providing Mr. Cox with an SR-22 certificate of insurance from Personal Service Insurance Company for him to bring to the BMV. Mr. Cox brought this copy to the BMV, and a second copy may have been provided to the BMV thereafter by the agency or the company. Mr. Cox had his driving privileges reinstated and then received a new driver's license.

{¶7} The policy (with a February 5, 2003 effective date) was issued by the insurance company on February 11, 2003. It provided full coverage, including $25,000 per person and $50,000 per accident in liability coverage. The policy stated

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that it could be canceled for any reason within the first 89 days provided the date of cancellation is at least 10 days after notice of cancellation is mailed. The policy was initially going to cancel for the lack of a driver's license and a poor driving record, but Mr. Cox provided the copy of his driving privileges and license and thus only the matter of his poor record remained. The processing department apparently decided to issue the policy with an increased premium (due to Mr. Cox's driving record).

{¶8} In the meantime, the underwriting department had determined that Mr. Cox was an ineligible risk. On March 4, 2003, the insurance company thus sent the Coxes a written notice of cancellation, advising that their insurance policy would cancel on March 19, 2003 because Mr. Cox was an ineligible risk. Also on March 4, the Coxes paid their increased premium.

{¶9} After receiving this further payment from the Coxes, the insurance company sent a second letter on March 11, 2003, advising them that the payment would not affect the March 19, 2003 scheduled cancellation. The letter noted that only $50.80 of the payment would be retained to satisfy the balance due through March 19 and a check would be issued within 15 days for any overpayment. (The overpayment check was issued on April 14, 2003, four days after the accident.)

{¶10} On March 24, 2003, the BMV returned a copy of the SR-22 to the insurance company and asked the company to correct the highlighted areas as the agent had failed to fill in the blanks for Mr. Cox's name and address; although, the agent did provide Mr. Cox's social security number and date of birth. The insurance company did not make the requested corrections.

{¶11} On April 10, 2003, Mr. Cox traveled left of center on State Route 9 in Belmont County and struck the Bigler vehicle. Brian Bigler, the driver, was killed. Brian's father, Howard Bigler, was injured and so was Mr. Cox. The Coxes demanded coverage after the accident, but the insurance company informed them that the policy had been cancelled as of March 19, 2003. The Biglers' attorney likewise asked the Coxes' insurance company to settle for the full policy limits of $50,000 but was told there was no coverage on the date of the loss.

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{¶12} The Biglers' own insurance paid them approximately $12,000 for their vehicle and then filed suit against the Coxes for reimbursement. And, on April 1, 2005, Howard Bigler, Jean Bigler, and the Executor of the Estate of Brian Bigler filed a wrongful death and personal injury suit against Mr. Cox, who then filed a third-party complaint against the insurance company, the insurance agency, and the agency's owner, James Boyle Jr. The claim against the latter two parties entailed an allegation that agents informed the Coxes that the policy was still in effect. Kathryn Cox filed an intervening complaint against these third-party defendants since she was also an insured, hers was the only signature on the application, and she owned the vehicle involved in the accident. Cross-claims were filed between the third-party defendants.

{¶13} The trial court bifurcated the Bigler complaint from the third-party action. The Bigler complaint was tried to the court on November 20, 2007. In a January 28, 2008 judgment entry, the court entered judgment against Mr. Cox, awarding $1 million to each of the three Bigler plaintiffs. These parties entered an assignment and forbearance agreement that gave the Biglers a portion of any judgment recovered from the insurance company in the Coxes' suit. The Biglers then amended their complaint to include the third-party defendants.

{¶14} The insurance company's first motion for summary judgment argued in part that the policy was validly canceled prior to the accident. It was acknowledged that once an SR-22 certificate of insurance is filed with the BMV, the policy cannot be cancelled until 10 days after an SR-26 notice of cancellation is filed in the BMV. It was admitted that no SR-26 notice of cancellation was ever filed with the BMV. However,...

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