Hoskins v. Liberty Mutual Group, Inc.

Decision Date01 July 2021
Docket Number2:19-cv-5441
PartiesCARLA HOSKINS, et al., Plaintiffs, v. LIBERTY MUTUAL GROUP, INC., Defendant.
CourtU.S. District Court — Southern District of Ohio

Kimberly A. Jolson Magistrate Judge



Currently pending before the Court are two motions in this insurance coverage dispute. First is Defendant Liberty Mutual Insurance Company's[1] Motion for Summary Judgment on all claims of Plaintiffs Carla Hoskins and Ray Bloodwyn. (ECF No. 16). Plaintiffs responded to that Motion and filed their own Cross Motion for Summary Judgment on Liability Only for All Claims in Plaintiffs' Complaint as well as on Liberty's Counterclaim for declaratory judgment. (ECF No. 21). Liberty then filed a combined Reply in Support of its Motion and Memorandum in Opposition to Plaintiffs' Cross-Motion. (ECF No. 22). Both Motions became ripe for consideration when Plaintiffs filed their Reply in Support of their Cross-Motion. (ECF No. 23).


Plaintiffs Carla Hoskins and Ray Bloodwyn, along with non-party Larry Hoskins, co-own the property located at 7452 County Road 121 in Fredericktown, Ohio (the “Property”). (ECF No 21-1, Hoskins Decl. ¶¶ 2, 3, PageID 432; ECF No. 21-2, Bloodwyn Decl. ¶¶ 2, 3, PageID 435). At all times relevant to this case, Mr. Bloodwyn lived at the Property. (ECF No. 21-2, Bloodwyn Decl. ¶ 4, PageID 436). The Property was destroyed by a fire on December 9, 2016. (ECF No. 21-1, Hoskins Decl. ¶ 18, PageID 432).

A. The Insurance Policies

An application for homeowner's insurance was made to Liberty identifying Carla Hoskins as the insured in October 2014 (“the 2014 Application”). (ECF No. 16, Ex. A, PageID 570-572.) The Application was signed by Ms. Hoskins and Mr. Bloodwyn; both signatures are dated October 24, 2014. (Id.) This application states a policy number (H35-281-213275-40) and states that the policy would be effective from October 14, 2014 to October 14, 2015. (Id.) Effective October 26, 2014, Liberty issued an insurance policy that identified only Ms. Hoskins as the insured; as reflected on the application, this policy was given policy number H35-281-213275-40 and had a policy period of October 14, 2014 to October 14, 2015 (the “Hoskins Policy”). (ECF No. 21-4, PageID 442-445).

The parties tell different stories about what happened next. According to Plaintiffs, in February 2015, Liberty advised Ms. Hoskins that the named insured must reside at the Property - meaning that she could not be the named insured and a new policy had to be issued to Mr. Bloodwyn as the only person residing there. (ECF No. 21-1, Hoskins Decl. ¶ 13, PageID 432). Mr. Bloodwyn says he then spoke to a Liberty representative and agreed to have a policy issued in his name, with him as the named insured. (ECF No. 21-2, Bloodwyn Decl. ¶ 8, PageID 436). Liberty, on the other hand, says that the homeowner's policy was “re-issued . . . to list only Ray Bloodwyn as the Named Insured” at Plaintiffs' request in February 2015. (ECF No. 16-1, Marrangoni Aff. ¶ 7, PageID 575).

Regardless of how the change happened, the Hoskins Policy was cancelled by Liberty effective February 11, 2015. (ECF No. 21-4, Ex. 4, PageID 441). Policy Number H35-281-247968-40 was then issued for the Property identifying only Mr. Bloodwyn as the insured; this policy had a different premium, a new policy number, and a different policy period (the “Bloodwyn Policy”). (ECF No. 21-6, Policy Declarations, PageID 450; ECF No. 21-2, Bloodwyn Decl. ¶ 9, PageID 436.) Mr. Bloodwyn did not complete a new application for this policy. (ECF No. 21, Memo Contra, PageID 419; ECF No. 21-2, Bloodwyn Dec. ¶¶ 12-14). The Bloodwyn Policy was subsequently renewed for a policy period of February 11, 2016 to February 11, 2017. (ECF No. 21-7, Policy Declarations, PageID 454; ECF No. 21-8, Renewal Notice, PageID 501-503).

B. Rescission of the Bloodwyn Policy

The 2014 Application contained eleven “yes” or “no” questions. (ECF No. 16-1, Ex. A, PageID 571). Relevant here, Question 8 asked: “Have you had any insurance declined, canceled or non-renewed in the past 12 months” to which the response was a checkmark in the box for “No.” (Id.) The Application then warned against false statements:

Signing this form does not bind the applicant to complete the insurance, but it is agreed that this form and the answers provided by you to questions as part of the application process shall be the basis of the contract should a policy be issued. In the event that any material misrepresentations, omissions, concealment of facts and/or incorrect statements are made by or on behalf of the insured during the application process, we may exercise whatever legal remedies may be available to us under the laws and regulations of this state.

(Id. at PageID 572 (emphasis added)).

The parties did not submit a copy of the Hoskins Policy, only the Hoskins Policy Declaration (see, ECF No. 21-4, PageID 444-445), but the Bloodwyn Policy as renewed[2] contained a warning regarding false statements:

The application for this policy is incorporated herein and made a part of this policy. When we refer to the policy, we mean this document, the application, the Declarations page, and any applicable endorsements. The Insured agrees that all of the statements in the application for this policy are his or her statements, and constitute warranties. The Insured agrees that this policy is issued in reliance upon the truth of the Insured's warranties in the application. If it is determined that any warranty made in the application is incorrect, this policy shall be void ab initio (void back to the date of inception) upon return of the policy premium.

(ECF No. 16-1, Bloodwyn Policy, PageID 614 (emphasis added)).

After Mr. Bloodwyn filed an insurance claim for the fire in December 2016, Liberty investigated. During that investigation, Liberty learned that Mr. Bloodwyn had a prior homeowner's insurance policy that was cancelled for non-payment by Patrons Buckeye Mutual Insurance Company on August 2, 2014, less than three months before the 2014 Application was submitted. (ECF No. 16-1, Bartlett Aff. ¶ 5, PageID 630). Liberty determined that this meant that the Plaintiffs had made a false statement on the 2014 Application and rescinded the Bloodwyn Policy, returning premium payments of $2, 485.00. (Id. ¶¶ 6-7).

Plaintiffs acknowledge that Mr. Bloodwyn was previously insured by Patrons Buckeye Mutual Insurance Company from June 30, 2014 to August 2, 2014. (ECF No. 16-1, Interrogatory Response No. 11, PageID 660). That insurance policy was canceled for non-payment of premium. (ECF No. 16-1, Patrons Buckeye Policy, PageID 674).

On the grounds that it had rescinded “the Policy, ” Liberty denied Plaintiffs' insurance claim for the fire on February 3, 2017. (ECF No. 21-9, Recission Letter, PageID 508; ECF No. 16-1, Bartlett Aff. ¶ 7, PageID 630).

C. Procedural Background

On November 14, 2019, Ms. Hoskins and Mr. Bloodwyn filed suit against Liberty in the Court of Common Pleas of Knox County, asserting claims for Breach of Contract, Breach of the Implied Covenant of Good Faith and Fair Dealing, Tortious Breach of the Implied Covenant of Good Faith and Fair Dealing, Bad Faith, and Unfair Trade Practices. (ECF No. 3).

Liberty timely removed the action to this Court pursuant to 28 U.S.C. § 1441(a) on the grounds that there is complete diversity of citizenship; Plaintiffs are citizens of Ohio, Liberty is incorporated in and maintains its principal place of business in Massachusetts, and the amount in controversy is more than $75, 000 exclusive of costs and interest. (ECF No. 1). Liberty then filed its Answer and asserted a Counterclaim for Declaratory Judgment. (ECF No. 4). Summary

Judgment briefing followed.

A. Standard of Review

Summary judgment is appropriate when “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The movant has the burden of establishing there are no genuine issues of material fact, which may be achieved by demonstrating the nonmoving party lacks evidence to support an essential element of its claim. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Barnhart v. Pickrel, Schaeffer & Ebeling Co., 12 F.3d 1382, 1388-89 (6th Cir.1993). The burden then shifts to the nonmoving party to “set forth specific facts showing that there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986) (quoting Fed.R.Civ.P. 56). When evaluating a motion for summary judgment, the evidence must be viewed in the light most favorable to the non-moving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970).

A genuine issue exists if the nonmoving party can present “significant probative evidence” to show that “there is [more than] some metaphysical doubt as to the material facts.” Moore v. Philip Morris Cos., 8 F.3d 335, 339-40 (6th Cir. 1993). In other words, “the evidence is such that a reasonable jury could return a verdict for the non-moving party.” Anderson, 477 U.S. at 248; see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (concluding that summary judgment is appropriate when the evidence could not lead the trier of fact to find for the non-moving party).

B. The Breach of Contract Claim

The Court begins with a review of the rules of insurance policy interpretation. Under Ohio law, [3] insurance contracts are construed like any other written contract. Scott v Allstate Indem. Co., 417 F.Supp.2d 929, 932 (N.D. Ohio 2006). “The court's role in interpreting a contract is to give effect to the intent of the parties.” Fujitec Am., Inc. v. AXIS Surplus Ins. Co., 458...

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