Jay v. Massachusetts Cas. Ins. Co., 2008 Ohio 846 (Ohio App. 2/27/2008)
| Decision Date | 27 February 2008 |
| Docket Number | Consolidated with 2007CA00243.,Consolidated with 2006CA00229.,No. 2006CA00201.,2006CA00201. |
| Citation | 2008 Ohio 846 |
| Parties | David E. Jay, Plaintiff-Appellee, v. Massachusetts Casualty Insurance Company, et al., Defendants-Appellant. |
| Court | Ohio Court of Appeals |
Appeal from the Stark County Court of Common Pleas Case No. 2004CV00843.
Affirmed in Part; Reversed in Part; Final Order Entered.
Michael A. Roberts, John B. Pinney, Katherine M. Lasher, 511 Walnut Street, Suite 1900, Cincinnati, OH 45202, for Plaintiff-Appellee.
Andrew S. Pollis, Aubrie A. Knight, 200 Public Square, Suite 3300, Cleveland, OH 44114-2301, for Defendants-Appellant.
William R. Ellis, Jeffrey P. Mcsherry, 600 Vine Street, Suite 2500, Cincinnati, OH 45202-2491, for Defendants-Appellant.
Before: Hon. Patricia A. Delaney, P.J., Hon. W. Don Reader, V.J., Hon. John F. Boggins, V.J. (Sitting by Supreme Court Assignment).
{¶1} Defendant-Appellant Massachusetts Casualty Insurance Company ("MCIC") appeals the judgments of the Stark County Court of Common Pleas, entered in favor of the Plaintiff-Appellee David E. Jay ("Jay"). In the first phase of the trial based upon breach of contract, the trial court entered judgment on a jury verdict in favor of Jay. The trial proceeded to the second phase on Jay's bad faith claim and the trial court entered judgment on a jury verdict in favor of Jay. The trial court then overruled MCIC's motions for directed verdict, new trial, judgment notwithstanding the verdict, and remittitur. The trial court also granted declaratory judgment in favor of Jay.
{¶2} Since the 1980's, Jay was a successful attorney in Canton, Ohio. He owned his own practice and worked as a litigator as well as maintained business clientele. Because he was a sole practitioner, his insurance agent recommended that Jay purchase disability insurance in order to protect his business and himself in the event Jay would no longer be able to practice as an attorney. Beginning in 1980, Jay purchased five individual disability income policies and one professional overhead expense policy from MCIC. The policies are labeled as "own occupation" policies in which "total disability" is defined as ***" Jay's disability policies also contain a "Residual Disability" rider which covers the insured in the event that he maintains an ability to perform some but not all the important duties of his work due to injury or sickness.
{¶3} In 1994, Jay was diagnosed with Type 2 diabetes. He continued his practice and managed his diabetes with medication until the diabetes became uncontrolled in 1998. He began treating with Dr. Smith, who recommended that Jay take some time off work to gain control over his blood sugar levels. Dr. Smith observed that while Jay was working, Jay could not effectively manage his diabetes. He also observed Jay was under stress and recommended that Jay contact Dr. Sadeghian, a psychologist, for stress management. Jay started treating with Dr. Sadeghian in May 1998.
{¶4} At that time, Jay realized that he could not maintain his practice. He merged his practice with another law firm where Jay would serve "of counsel," but effectively Jay no longer actively practiced as an attorney.
{¶5} On May 29, 1998, Jay contacted MCIC to file a claim under his disability policies. MCIC sent Jay forms to complete in order to process his claim. From May to December 1998, Jay and his treating physicians provided information to MCIC regarding his disability claim. In December 1998, Jay began treating with Dr. Nadas, a psychiatrist.
{¶6} Based upon its investigation, MCIC found that Jay suffered from a manageable diabetic condition and it also found Jay did not suffer from any psychiatric disorder that would render him totally disabled. On December 10, 1998, MCIC denied Jay's claim for total disability under his policies. MCIC did provide Jay total disability benefits from May 29, 1998 to October 28, 1998 in the interests of resolving the matter.
{¶7} In January 1999, Jay contacted Art Fries, a disability claims consultant. Jay paid Fries a retainer to investigate his disability claim with MCIC. Jay subsequently underwent heart bypass surgery and did not follow up with Fries until November 2000. Fries subsequently submitted a letter to MCIC regarding Jay's disability claim.
{¶8} In January 2001, MCIC reopened Jay's disability claim based upon Fries' letter. Jay had since then retained legal counsel to assist with the processing of his disability claim. Jay's counsel and MCIC repeatedly corresponded regarding information MCIC required in order to investigate Jay's claim.
{¶9} Because of a three-year limitations period set out in his disability policies, Jay filed a lawsuit against MCIC in April 2001 claiming breach of contract, bad faith, and conspiracy to defraud (Case No. 2001CV01080). Jay also requested declaratory judgment and punitive damages. The case was assigned to Judge Lioi and set for trial on March 24, 2003.
{¶10} During the pendency of the lawsuit, MCIC continued to process Jay's claim. Discovery obtained for the lawsuit was also used to investigate the claim. MCIC denied Jay's disability claim again on December 18, 2002.
{¶11} Jay voluntarily dismissed his lawsuit against MCIC and refiled the suit on March 5, 2004 (Case No. 2004CV00843). The matter was originally assigned to Judge Lioi, but the matter was transferred to a visiting judge. The trial was set for November 7, 2005. Because of the overwhelming nature of the case, the visiting judge was unable to proceed with the case. The lawsuit was assigned to a second visiting judge. The matter proceeded to jury trial on November 7, 2005 but ended in a mistrial on November 17, 2005. The case was then assigned to a third visiting judge and went to trial on January 30, 2006.
{¶12} The trial proceeded in two phases, breach of contract and bad faith. On February 14, 2006, the jury found in favor of Jay on his claim of breach of contract and awarded Jay $429,400 in damages. After the second phase of the trial, the jury found in favor of Jay on his claim of bad faith and awarded Jay $1,130,000 in damages. The jury went on to award Jay $3,000,000 in punitive damages. On March 20, 2006, the trial court entered judgment upon the verdict in the amount of $4,559,400 and granted declaratory judgment in favor of Jay. On July 5, 2006, the trial court granted Jay's motion for prejudgment interest and attorney fees.1 The trial court also overruled MCIC's motions for directed verdict, new trial, judgment notwithstanding the verdict, and remittitur.
{¶13} It is from these decisions MCIC now appeals. MCIC raises ten Assignments of Error:
{¶14} "I. THE TRIAL COURT ERRED IN THE JURY CHARGE BY: (A) REFUSING TO IDENTIFY JAY'S OBLIGATIONS UNDER THE CONTRACT; (B) INSTRUCTING THAT MCIC BORE THE BURDEN OF PROVING JAY'S FAILURE TO PERFORM; (C) INSTRUCTING THAT MCIC BORE THE BURDEN OF ESTABLISHING PREJUDICE AS A RESULT OF JAY'S FAILURE TO PERFORM; AND (D) INCLUDING A ONE-SIDED INSTRUCTION THAT MCIC'S BREACH EXCUSED JAY'S PERFORMANCE BUT NOT CLARIFYING THAT THE CONVERSE WAS ALSO TRUE.
{¶15} "II. THE TRIAL COURT ERRED BY SUBMITTING TO THE JURY A MISLEADING INTERROGATORY SUGGESTING THAT A `CONCURRENT DISABILITY' WAS AN INDEPENDENT CONTRACTUAL BASIS FOR RECOVERING BENEFITS.
{¶16} "III. THE TRIAL COURT ERRED IN PERMITTING JAY TO TESTIFY ABOUT DISCOVERY REQUESTS MCIC SERVED ON HIM IN THE LITIGATION.
{¶17} "IV. THE TRIAL COURT ERRED IN DENYING MCIC'S MOTIONS FOR DIRECTED VERDICT AND FOR JUDGMENT NOTWITHSTANDING THE VERDICT ON THE CLAIM OF BAD FAITH AND FOR PUNITIVE DAMAGES.
{¶18} "V. THE TRIAL COURT ERRED IN PERMITTING JAY TO PRESENT MISLEADING EXPERT TESTIMONY FROM MARY FULLER, ESPECIALLY AFTER JAY HAD FALSELY REPRESENTED IN SUMMARY JUDGMENT BRIEFING THAT FULLER WAS `FINALIZING' HER OPINIONS WHEN SHE HAD NEVER EVEN BEEN RETAINED.
{¶19} "VI. THE TRIAL COURT ERRED IN FAILING TO INTERVENE DURING JAY'S IMPROPER CLOSING ARGUMENT.
{¶20} "VII. THE TRIAL COURT ERRED IN PERMITTING EXPERT TESTIMONY FROM ARTHUR FRIES THAT LACKED PROPER FOUNDATION.
{¶21} "VIII. THE TRIAL COURT ERRED IN PERMITTING JAY TO PRESENT EVIDENCE OF A CARDIAC AILMENT THAT WAS NO LONGER AN ISSUE IN THE CASE.
{¶22} "IX. THE TRIAL COURT ERRED IN PERMITTING JAY TO PRESENT EVIDENCE OF COMPENSATORY DAMAGES THAT HAD NOT BEEN PROVIDED IN DISCOVERY.
{¶23}
{¶24} MCIC's Assignments of Error I through IX challenge the trial court's rulings on the motions for directed verdict, judgment notwithstanding the verdict and new trial. For purposes of simplicity, we will discuss the law regarding these motions in general before addressing the specific Assignments of Error.
{¶25} Civ. R. 50(A) states in pertinent part:
{¶26} "When a motion for directed verdict has been properly made, and the trial court, after construing the evidence most strongly in favor of the party against whom the motion is directed, finds that upon any determinative issue reasonable minds could come but to one conclusion upon the evidence submitted and that conclusion is adverse to such party, the court shall sustain the motion and direct a verdict for the moving party as to that issue."
{¶27} Civ. R. 50(B) governs motions for judgment notwithstanding the verdict. It provides:
{¶28} ...
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