Carpenter v. Scherer-Mountain Ins. Agency

• Decision Date: 19 October 1999
• Docket Number: No. 98CA39.,98CA39.
• Citation: 733 NE 2d 1196,135 Ohio App.3d 316
• Parties: CARPENTER et al., Appellants, v. SCHERER-MOUNTAIN INSURANCE AGENCY et al., Appellees and Cross-Appellants; Board of Commissioners of Lawrence County, Appellees.
• Court: Ohio Court of Appeals

135 Ohio App.3d 316

733 NE 2d 1196

CARPENTER et al., Appellants, v. SCHERER-MOUNTAIN INSURANCE AGENCY et al., Appellees and Cross-Appellants; Board of Commissioners of Lawrence County, Appellees.^*

No. 98CA39.

Court of Appeals of Ohio, Fourth District, Lawrence County.

Decided October 19, 1999.

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Marty J. Stillpass, for appellants.

Bannon, Howland & Dever Co., L.P.A., Steven M. Willard and Sherry D. Davis, for appellees and cross-appellants.

Lambert & McWhorter and Randall L. Lambert, for cross-appellee.

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HARSHA, Judge.

Plaintiffs Robert and Charlene Carpenter sued defendants Scherer-Mountain Insurance Agency and Richard Mountain ("Scherer-Mountain") after a flood damaged their home. The Carpenters alleged that Scherer-Mountain negligently issued an inadequate flood insurance policy and misrepresented the extent of the policy's coverage. Scherer-Mountain filed a third-party complaint against the Lawrence County Board of Commissioners, alleging that any damages the Carpenters had suffered were due to the commissioners' failure to properly implement policies under the National Flood Insurance Program ("NFIP"). The trial court granted summary judgment in favor of Scherer-Mountain on the Carpenters' complaint and in favor of the commissioners on the third-party complaint. The Carpenters appeal and raise a single assignment of error:

"The court below erred in granting summary judgment in favor of the defendants and third-party plaintiffs, Scherer-Mountain Insurance Agency, et al., against the plaintiff-appellants, Robert L. Carpenter and Charlene Carpenter."

In turn, Scherer-Mountain appeals the summary judgment granted to the commissioners on its third-party complaint. Scherer-Mountain raises a single error:

"The trial court improperly granted third-party defendant-appellee's motion for summary judgment, as there are genuine issues of material fact which preclude the entry of summary judgment as a matter of law."

We hold that the trial court erred in part in granting Scherer-Mountain's motion for summary judgment against the Carpenters, as genuine issues of material fact remain concerning the Carpenters' causes of action for misrepresentation. However, the trial court correctly granted summary judgment on the third-party complaint, as the commissioners are immune from liability for the acts alleged by Scherer-Mountain.

I

The facts giving rise to the litigation in this case are largely undisputed. In 1993, the Carpenters entered into a real estate purchase contract to buy a home in Proctorville, Ohio for $64,500. The contract was conditioned upon the Carpenters obtaining a conventional loan of at least $35,000 secured by a mortgage on the property. The Carpenters were to pay the remainder of the purchase price in cash on the date of closing. After signing the real estate purchase contract, the Carpenters obtained a $35,000 loan from the National City Mortgage Company ("National City") to finance their purchase of the home. According to the Carpenters, National City required them to obtain flood insurance for the home as a condition to the loan. The Carpenters were aware that the home was located in an area susceptible to flooding and had already contemplated purchasing flood insurance.

Prior to the closing date for the purchase of the property, the Carpenters contacted Scherer-Mountain to obtain flood insurance. Scherer-Mountain quoted a yearly premium of $220 for the $75,000 of coverage desired by the Carpenters. Scherer-Mountain also told the Carpenters that further paperwork was necessary before it could issue a permanent policy. According to Scherer-Mountain, it explained to the Carpenters that all applications were subject to approval by the NFIP.

On the closing date, the Carpenters paid $220 to Scherer-Mountain to secure a flood insurance policy on their home. Scherer-Mountain accepted this payment and gave the Carpenters a copy of the flood insurance application, which defendant Mountain had signed and completed. The application stated that the Carpenters were requesting coverage of $75,000 with an annual premium of $220. The application also noted that the policy period for the insurance applied for was from October 28, 1993 to October 28, 1994. Several months after the Carpenters applied for the policy, Scherer-Mountain discovered that the Carpenters' property was located in a flood area requiring a higher annual premium for the same level of coverage. Scherer-Mountain informed the Carpenters that the annual premium was $7,000 and not the $220 they had paid in 1993. The $7,000 premium was apparently the amount that Scherer-Mountain should have quoted when the Carpenters initially requested flood insurance coverage.

After Scherer-Mountain informed the Carpenters of the correct premium, the Carpenters filed their lawsuit in October 1994. The complaint alleged causes of action for negligence, misrepresentation, and breach of contract, as well as a cause of action entitled "detrimental reliance." The gravamen of the Carpenters' allegations was that Scherer-Mountain negligently and/or fraudulently quoted a $220 premium for $75,000 in flood insurance coverage when the $220 premium actually entitled them to only $3,700 in coverage. If not for the erroneous insurance quote, the Carpenters claim that they would not have purchased the insurance and would not have proceeded with closing their contract to purchase the property. In 1997, during the pendency of this case, a flood that caused $15,000 in uninsured losses to the Carpenters occurred.

After the Carpenters commenced their lawsuit, Scherer-Mountain filed a third-party complaint against the commissioners. The third-party complaint alleged that the commissioners had failed to devise, implement, and enforce programs required of them by the NFIP. As a result, Scherer-Mountain alleged that the commissioners were liable for any damages suffered by the Carpenters.

Scherer-Mountain moved for summary judgment on the Carpenters' complaint. The commissioners also moved for summary judgment on Scherer-Mountain's third-party complaint, claiming that they were immune from liability under R.C. Chapter 2744. The trial court granted the commissioners' summary judgment motion, finding that the commissioners were immune from liability under R.C. 2744.02(A)(1) and R.C. 2744.03. The trial court also granted Scherer-Mountain's motion, finding that the Carpenters could establish neither negligence, misrepresentation, nor breach of contract as a matter of law. Both the Carpenters and Scherer-Mountain appealed.

II

The Carpenters' assignment of error contends that the trial court erroneously granted summary judgment to Scherer-Mountain. When reviewing a grant of summary judgment, we apply the same standard used by the trial court, affording no deference to the trial court's decision. Evans v. S. Ohio Med. Ctr. (1995), 103 Ohio App.3d 250, 253, 659 N.E.2d 326, 328; Karmasu v. Hughes (1995), 100 Ohio App.3d 434, 436, 654 N.E.2d 179, 180. Summary judgment under Civ.R. 56(C) is appropriate when (1) no genuine issue of 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, when viewed most strongly in favor of the nonmoving party, that reasonable minds can come only to a conclusion in favor of the moving party. Bostic v. Connor (1988), 37 Ohio St.3d 144, 146, 524 N.E.2d 881, 883-884; 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 party moving for summary judgment bears the burden of showing that no genuine issue of material fact exists. Mitseff v. Wheeler (1988), 38 Ohio St.3d 112, 115, 526 N.E.2d 798, 801-802. To survive summary judgment, the nonmoving party must produce evidence showing that a genuine issue of fact exists, including any issue for which the nonmoving party bears the burden of proof. See Civ.R. 56(E); see, also, Mitseff, 38 Ohio St.3d at 115, 526 N.E.2d at 801-802. In determining whether a triable issue of fact exists, a court should not pass upon the credibility of witnesses or weigh the relative value of their testimony. McGee v. Goodyear Atomic Corp. (1995), 103 Ohio App.3d 236, 243, 659 N.E.2d 317, 321-322. For ease of analysis, we will review the trial court's grant of summary judgment by looking at each cause of action pleaded in the Carpenters' complaint.¹

A

The Carpenters' complaint alleged a breach-of-contract claim against Scherer-Mountain arising out of an alleged written agreement to provide flood insurance. The complaint alleged the existence of "a written agreement between the plaintiffs and Richard C. Mountain and Scherer-Mountain Insurance that the latter would provide flood insurance * * * in the amount of $75,000 * * * and that the cost of said insurance would be a $220.00 annual premium." The complaint further alleged that Scherer-Mountain breached this agreement by failing to provide this insurance.

Significantly, none of the parties in this case has included a copy of any flood insurance policy issued by Scherer-Mountain to the Carpenters. Scherer-Mountain argues that there was no contract at all because it only gave the Carpenters a "tentative quote" for a $220 insurance premium. Scherer-Mountain also argues that all flood insurance applications were subject to final approval by the NFIP before issuance.² However, the record contains an application for flood insurance that recites a $220 premium for $75,000 in coverage. It is also undisputed that the Carpenters paid $220 to Scherer-Mountain and that Scherer-Mountain noted on a receipt that the payment was for an "Annual Premium—Flood Insurance." The Carpenters point to this document as evidence of the flood insurance contract's existence. Even...