Hicks v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 04 August 2017
• Docket Number: NO. 27103,27103
• Citation: 95 N.E.3d 852,2017 Ohio 7095
• Parties: James HICKS, Plaintiff–Appellant v. STATE FARM MUTUAL AUTOMOBILE INSURANCE CO., Defendant–Appellee
• Court: Ohio Court of Appeals

95 N.E.3d 852

2017 Ohio 7095

James HICKS, Plaintiff–Appellant

v.STATE FARM MUTUAL AUTOMOBILE INSURANCE CO., Defendant–Appellee

NO. 27103

Court of Appeals of Ohio, Second District, Montgomery County.

Rendered on August 4, 2017

DOUGLAS D. BRANNON, Atty. Reg. No. 0076603 and KEVIN A. BOWMAN, Atty. Reg. No. 0078223, 130 W. Second Street, Suite 900, Dayton, Ohio 45402, Attorneys for Plaintiff–Appellant

NICHOLAS E. SUBASHI, Atty. Reg. No. 0033953 and ANNE P. KEETON, Atty. Reg. No. 0076811, The Greene Town Center, 50 Chestnut Street, Suite 230, Dayton, Ohio 45440, Attorneys for Defendant–Appellee

OPINION

WELBAUM, J.

{¶ 1} In this case, Defendant–Appellant, James Hicks, appeals from a judgment granting summary judgment to State Farm Mutual Automobile Insurance Company ("State Farm"). In support of his appeal, Hicks contends that the trial court erred in finding that Hicks was collaterally estopped from obtaining coverage under the State Farm policy.

{¶ 2} We conclude that the trial court's judgment was correct. Accordingly, the judgment of the trial court will be affirmed.

I. Facts and Couse of Proceedings

{¶ 3} The pertinent facts in this case are not disputed. On May 24, 2010, Danny Norman, Sr. ("Norman") rented a 1997 Dodge Intrepid from Miami Valley Motors, dba Rent a Heap, for use by his son, Danny Norman, Jr. ("Danny, Jr.") Shortly thereafter, on June 5, 2010, the Intrepid was involved in a single-car accident on Interstate 70. At the time, Roy Crackle, III, was driving the Intrepid and Danny, Jr. was a passenger. James Hicks was also a passenger, and sustained serious injuries as a result of the accident. When the accident occurred, Norman was the named insured under an automobile insurance policy issued by State Farm; Danny, Jr. was not listed as a named insured on the policy.

{¶ 4} In April 2014, Hicks filed a personal injury action against Norman, Crackle, and Larry Abbott, dba Miami Valley Motors. See Hicks v. Crackle , Montgomery C.P. No. 2014–CV–1964 ("Hicks I ").¹ The complaint in Hicks I alleged that Norman had negligently entrusted and/or rented the Intrepid to Crackle. In that action, Norman filed a motion for summary judgment, claiming that he had not entrusted the Intrepid to Crackle.

{¶ 5} On October 20, 2015, the trial court in Hicks I sustained Norman's motion for summary judgment. In granting summary judgment to Norman on the negligent entrustment claim, the court concluded that "Mr. Norman did not entrust the car to Mr. Crackle." Doc. # 11, Ex. A., p. 5.² The court also found that Hicks could not recover from Norman based upon Danny, Jr.'s "downstream entrustment" of the rental vehicle to Mr. Crackle. Id. at pp. 5–8.

{¶ 6} Concerning the latter claim, the trial court noted Norman's acknowledgment that he had entrusted the vehicle to Danny, Jr. However, the court found no evidence to support Hicks' claim that Danny, Jr. was an incompetent, inexperienced, or reckless driver. The court, thus, concluded that Norman's original entrustment to his son was not negligent, and, by necessary implication, that the requirements for "downstream entrustment" liability had not been established.

{¶ 7} Subsequently, Hicks filed the current lawsuit (Hicks II ) against State Farm. Hicks sought a declaratory judgment that Crackle was an insured under Norman's State Farm automobile insurance policy, and claimed that State Farm was contractually obligated to indemnify Crackle for his negligence while operating the Intrepid. Hicks further alleged that he was a third-party beneficiary of the insurance contract under which Crackle was insured. Based on these allegations, Hicks sought $88,587, plus interest and attorney fees, from State Farm.

{¶ 8} The amount of damages relates to the fact that the trial court held a damages hearing in Hicks I on November 17, 2015, and awarded Hicks $88,587 for his economic and non-economic damages. The parties agreed on these facts. See Doc. # 1, ¶ 18; Doc. # 9, ¶ 11. The parties also agreed that a judgment entry reflecting the damages award was filed in Hicks I on December 7, 2015. Id.

{¶ 9} In its answer, State Farm denied that Hicks was entitled to the requested relief. State Farm also asserted thirteen specific defenses, including that: (1) "Danny Norman, Sr. did not permit, authorize, or otherwise consent to Roy K. Crackle, III operating the Dodge Intrepid"; (2) "Roy K. Crackle, III is not an insured under the automobile insurance policy that the State Farm issued to Danny Norman, Sr."; (3) "The ‘collateral attack’ doctrine bars the Plaintiff's claims"; and (4) "the doctrines of res judicata, claim preclusion, collateral estoppel, and/or issue preclusion bar the Plaintiff's claims." Doc. # 9, p. 3.

{¶ 10} When State Farm filed its answer, it also filed a motion for summary judgment. In the motion, State Farm claimed that collateral estoppel and the "collateral attack doctrine" barred Hicks' claims, and that Hicks lacked standing to bring the declaratory judgment action. Concerning collateral estoppel, State Farm argued that the trial court in Hicks I had already decided that Norman did not give Crackle " ‘permission and authority’ " to operate the Intrepid. Doc. # 11, p. 6. State Farm equated permission with consent, and, therefore, argued that Hicks had already litigated whether Norman gave "consent" for Crackle to drive the vehicle.

{¶ 11} On April 11, 2016, the trial court granted State Farm's motion for summary judgment, concluding that "collateral estoppel bars Mr. Hicks from litigating the issue of whether Mr. Crackle qualifies as an insured party under the Policy" and that State Farm was entitled to judgment as a matter of law. Doc. # 19, p. 7.

{¶ 12} Hicks appeals from the trial court's judgment.

II. Did the Court Err in Granting Summary Judgment to State Farm?

{¶ 13} Hicks' sole assignment of error states that:

The Trial Court Erred in Granting Summary Judgment in Favor of Defendant [State Farm] Based on the Principal [sic] of Collateral Estoppel from a Prior Claim against Its Insured.

{¶ 14} As support for this assignment of error, Hicks raises the following issues: (1) whether negligent entrustment and operation within the "scope of consent" involve different issues for purposes of collateral estoppel; and (2) if the parties are not identical, whether collateral estoppel prevents litigation of issues that were not actually litigated in the prior action.

{¶ 15} Before addressing these issues, we will first discuss applicable standards of review. It is well established that under " Civ.R. 56(C), summary judgment is appropriate when (1) there is no genuine issue of material fact, (2) the moving party is entitled to judgment as a matter of law, and (3) reasonable minds can come to but one conclusion and that conclusion is adverse to the nonmoving party, said party being entitled to have the evidence construed most strongly in his favor." Zivich v. Mentor Soccer Club, Inc. , 82 Ohio St.3d 367, 369–370, 696 N.E.2d 201 (1998), citing Horton v. Harwick Chem. Corp., 73 Ohio St.3d 679, 653 N.E.2d 1196 (1995), paragraph three of the syllabus. For summary judgment purposes, "the moving party bears the initial burden of demonstrating that there are no genuine issues of material fact concerning an essential element of the opponent's case." (Emphasis omitted.) Dresher v. Burt , 75 Ohio St.3d 280, 292, 662 N.E.2d 264 (1996).

{¶ 16} After "the moving party has satisfied its initial burden, the nonmoving party then has a reciprocal burden" and "may not rest upon the mere allegations or denials of the party's pleadings * * *." Dresher at 293, 662 N.E.2d 264 ; Civ.R. 56(E). Instead, the nonmoving party must respond, with affidavits or as otherwise permitted by Civ.R. 56, setting "forth specific facts showing that there is a genuine issue for trial." Civ.R. 56(E). Throughout, the evidence must be construed in favor of the nonmoving party. Zivich at 369–370, 696 N.E.2d 201 ; Civ.R. 56(C).

{¶ 17} Our review of trial court rulings on summary judgment motions is de novo. (Citation omitted.) Schroeder v. Henness , 2d Dist. Miami No. 2012-CA-8, 2013-Ohio-2767, 2013 WL 3356564, ¶ 42. In de novo review, we apply "the same standard that the trial court should have used, and we examine the evidence to determine whether, as a matter of law, no genuine issues exist for trial." Ward v. Bond , 2d Dist. Champaign No. 2015-CA-2, 2015-Ohio-4297, 2015 WL 6110247, ¶ 8, citing Brewer v. Cleveland City Schools Bd. of Edn. , 122 Ohio App.3d 378, 383, 701 N.E.2d 1023 (8th Dist. 1997). (Other citation omitted.) Consequently, we do not defer to the trial court's findings. (Citations omitted.) Id.

{¶ 18} As was noted, Hicks alleges that the trial court erred in applying collateral estoppel. "The doctrine of res judicata involves both claim preclusion (historically called estoppel by judgment in Ohio) and issue preclusion (traditionally known as collateral estoppel)." (Citations omitted; italics sic.) Grava v. Parkman Twp. , 73 Ohio St.3d 379, 381, 653 N.E.2d 226 (1995). Under res judicata, "[a] valid, final judgment rendered upon the merits bars all subsequent actions based upon any claim arising out of the transaction or occurrence that was the subject matter of the previous action." Id. at syllabus.

{¶ 19} The case before us involves the issue preclusion (collateral estoppel) aspect of res judicata. In issue preclusion, "a fact or a point that was actually and directly at issue in a previous action, and was passed upon and determined by a court of competent jurisdiction, may not be drawn into question in a subsequent action between the same parties or their privies, whether the cause of action in the two actions be identical or different." (Citations omitted.) Fort Frye Teachers Assn., OEA/NEA v. State Emp. Relations Bd. , 81 Ohio St.3d 392, 395, 692 N.E.2d 140 (1998).

{¶ 20} After reviewing the record, we conclude that Hicks is precluded from recovering against State Farm, based on the application of collateral estoppel and the facts...