Luri v. Nat'l Union Fire Ins. Co. of Pittsburgh

• Decision Date: 18 April 2019
• Docket Number: No. 107412,107412
• Citation: 2019 Ohio 1440,129 N.E.3d 518
• Parties: Ronald LURI, Plaintiff-Appellant v. NATIONAL UNION FIRE INSURANCE CO. OF PITTSBURGH, PA, et al., Defendants-Appellees
• Court: Ohio Court of Appeals

129 N.E.3d 518

2019 Ohio 1440

Ronald LURI, Plaintiff-Appellant

v.NATIONAL UNION FIRE INSURANCE CO. OF PITTSBURGH, PA, et al., Defendants-Appellees

No. 107412

Court of Appeals of Ohio, Eighth District, Cuyahoga County.

RELEASED AND JOURNALIZED: April 18, 2019

Andrew A. Kabat, Daniel M. Connell, Shannon J. Polk, Haber, Polk & Kabat, 1300 West 78th Street, Suite 305, Cleveland, Ohio 44102, ATTORNEYS FOR APPELLANT

Steven G. Janik, Crystal Lynn Maluchnik, Janik, L.L.P., 9200 South Hills Blvd., Suite 300, Cleveland, Ohio 44147, Robert T. Glickman, McCarthy, Lebit, Crystal & Liffman Co., 101 West Prospect Avenue, 1800 Midland Building, Cleveland, Ohio 44115, ATTORNEYS FOR APPELLEES

BEFORE: Keough, J., Boyle, P.J., and Blackmon, J.

JOURNAL ENTRY AND OPINION

KATHLEEN ANN KEOUGH, J.:

{¶1} Plaintiff-appellant, Ronald Luri ("Luri"), appeals from the trial court's judgment granting the motions for summary judgment of defendants-appellees, National Union Fire Insurance Company of Pittsburgh, Pa. ("National Union"), American Home Assurance Company ("American Home"), and American International Group, Inc. ("AIG") (collectively "appellees"). For the reasons that follow, we affirm.

I. Background

A. Underlying Litigation

{¶2} In August 2007, in Cuyahoga C.P. No. CV-07-633043, Luri filed suit against Republic Services, Inc., Republic Services of Ohio Hauling, L.L.C., Republic Services of Ohio I, L.L.C., Jim Bowen, and Ron Krall (collectively "Republic"), alleging wrongful discharge and termination based on his refusal to comply with Republic's directive that he terminate older employees and replace them with younger candidates. The case proceeded to trial, and the jury returned a verdict in favor of Luri, awarding him $ 3,500,000 in compensatory damages and $ 43,108,599 in punitive damages. On July 8, 2008, the trial court entered judgment on the jury's verdict.

{¶3} After filing a supersedeas bond that stayed execution of the judgment, Republic appealed the judgment to this court, arguing that the trial court erred in denying its motion to bifurcate Luri's punitive damages claim under R.C. 2315.21(B)(1), and in not applying the statutory cap on punitive damages. This court affirmed the trial court's denial of Republic's motion to bifurcate punitive damages, but reversed the trial court's award of punitive damages and remanded to the trial court for further proceedings. Luri v. Republic Servs. , 193 Ohio App.3d 682, 2011-Ohio-2389, 953 N.E.2d 859 (8th Dist.).

{¶4} Luri appealed this court's application of punitive damages caps to the Ohio Supreme Court. Republic also appealed based on a certified conflict between this court and the Tenth District regarding the constitutionality of R.C. 2315.21(B)(1).

{¶5} On July 3, 2012, the Ohio Supreme Court reversed this court, and remanded the matter to the trial court for application of Havel v. Villa St. Joseph , 131 Ohio St.3d 235, 2012-Ohio-552, 963 N.E.2d 1270, in which the Supreme Court held that mandatory bifurcation under R.C. 2315.21(B) was constitutional. Luri v. Republic Servs. , 132 Ohio St.3d 316, 2012-Ohio-2914, 971 N.E.2d 944. The Supreme Court further held that Luri's appeal was moot in light of its holding. Id. at ¶ 1.

{¶6} Upon remand, the trial court held that application of Havel required a new trial. This court affirmed on appeal. Luri v. Republic Servs. , 8th Dist., 2014-Ohio-3817, 18 N.E.3d 844. The Ohio Supreme Court subsequently refused to accept jurisdiction of Luri's appeal.

{¶7} On May 21, 2015, the trial court vacated the July 8, 2008 judgment rendered after the first trial. Its journal entry vacating the judgment stated:

Pursuant to the Supreme Court's rejection of plaintiff's appeal on 03/25/15, this court finds that its 10/04/13 ruling entitling [Republic] to a new trial has been affirmed and the judgment underlying defendants' supersedeas bond has thus been vacated.

{¶8} The second trial commenced in June 2016, and Luri settled with Republic after opening statements. Luri's suit was dismissed with prejudice.

B. Luri's Supplemental Complaint

{¶9} At the time of the jury verdict in the underlying litigation, Republic was insured under two indemnity policies: an employment practices liability insurance policy issued by American Home with a policy period of January 27, 2007 to January 27, 2008, and an employment practices liability insurance policy issued by National Union with a policy period of January 27, 2008 to January 27, 2009. Each policy had coverage limits of $ 25 million with retentions of $ 1,000,000.

{¶10} On June 22, 2009, Luri filed a supplemental complaint pursuant to R.C. 3929.06, which authorizes direct actions against the judgment debtor's insurance carrier after a final judgment has been obtained and upon the fulfillment of certain conditions precedent. Luri sought judgment against American Home, National Union, and AIG to "pay at least the policy limits of one policy, $ 25,000,000, and possibly two," in partial satisfaction of the July 8, 2008 judgment, which had been obtained after the jury trial but subsequently vacated by the trial court.¹

{¶11} After briefing, the trial court granted appellees' motions for summary judgment. It ruled that a vacated judgment is a void judgment, and thus, Luri lacked a final judgment as required by R.C. 3929.06 to proceed against American Home, National Union, and AIG. It further found that the vacated judgment was "uninsurable as a matter of law because it constitutes a ‘double recovery’ or windfall that would provide Luri greater coverage than Republic under the policies." Therefore, it concluded that there were no genuine issues of material fact, and National Union, American Home, and AIG were entitled to judgment as a matter of law. This appeal followed.

II. Law and Analysis

{¶12} In his single assignment of error, Luri contends that the trial court erred in granting appellees' motions for summary judgment.

A. Standard of Review

{¶13} We review summary judgment rulings de novo, applying the same standard as the trial court. Grafton v. Ohio Edison Co. , 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996). We accord no deference to the trial court's decision and independently review the record to determine whether summary judgment is appropriate. Id.

{¶14} Under Civ.R. 56, summary judgment is appropriate when (1) there is no genuine issue as to any material fact, (2) the moving party is entitled to judgment as a matter of law, and (3) viewing the evidence most strongly in favor of the nonmoving party, reasonable minds can reach only a conclusion that is adverse to the nonmoving party.

{¶15} On a motion for summary judgment, the moving party has the initial burden of setting forth specific facts that demonstrate its entitlement to summary judgment. Dresher v. Burt , 75 Ohio St.3d 280, 292-293, 662 N.E.2d 264 (1996). If the moving party fails to meet this burden, summary judgment is not appropriate; if the moving party meets this burden, the nonmoving party has the reciprocal burden to point to evidence of specific facts in the record demonstrating the existence of a genuine issue of material fact for trial. Id. at 293, 662 N.E.2d 264. Summary judgment is appropriate if the nonmoving party fails to meet this burden. Id.

B. A Final Judgment

{¶16} R.C. 3929.06 provides in relevant part:

(1) If a court in a civil action enters a final judgment that awards damages to a plaintiff for injury, death, or loss to the person * * * and if, at the time that the cause of action accrued against the judgment debtor, the judgment debtor was insured against liability for that injury, death, or loss, the plaintiff * * * is entitled as judgment creditor to have an amount up to the remaining limit of liability coverage provided in the judgment debtor's policy of liability insurance applied to the satisfaction of the final judgment .

(2) If, within, thirty days after the entry of the final judgment referred to in division (A)(1) of this section, the insurer that issued the policy of liability insurance has not paid the judgment creditor an amount equal to the remaining limit of liability coverage provided in that policy, the judgment creditor may file in the court that entered the final judgment a supplemental complaint against the insurer seeking the entry of a judgment ordering the insurer to pay the judgment creditor the requisite amount. Subject to division (C) of this section, the civil action based on the supplemental complaint shall proceed against the insurer in the same manner as the original civil action against the judgment debtor.

(Emphasis added.)

{¶17} The pertinent provision from the insurance policies at issue reads as follows:

18. Action Against Insurer

Except as provided in Clause 17 of the policy, no action shall lie against the insurer unless, as a condition precedent thereto, there shall have been full compliance with all of the terms of this policy, nor until the amount of the Insured's obligation to pay shall have been fully and finally determined either by judgment against the insured after actual trial or by written agreement of the Insured, the claimant and the Insurer.

{¶18} In his single assignment of error, Luri contends that the trial court erred in granting summary judgment to appellees because the insurance policies permitted collection upon the entry of "judgment against the insured after actual trial" without regard to the outcome of any appellate proceedings, and the "final judgment" precondition to recovery under R.C. 3929.06 was satisfied when the trial court entered the July 8, 2008 final judgment. We find no merit to Luri's arguments.

{¶19} The recovery of a final judgment is a condition precedent to a supplemental action under R.C. 3929.06. Benkoe v. Monsanto Co. , 8th Dist. Cuyahoga No. 57342, 1990 WL 115418, *1 (Aug. 9, 1990), citing Chitlik v. Allstate Ins. Co. , 34 Ohio App.2d 193, 299 N.E.2d 295 (8th Dist.1973), paragraph two of the syllabus; In re All Cases Against Sager Corp. , 132 Ohio St.3d 5, 2012-Ohio-1444, 967...