McCruter v. Travelers Home & Marine Ins. Co.
| Citation | 168 N.E.3d 1 |
| Decision Date | 22 February 2021 |
| Docket Number | NO. 2019-L-167,2019-L-167 |
| Parties | Shonda MCCRUTER, as Mother of L.J., Plaintiff-Appellant, v. The TRAVELERS HOME AND MARINE INSURANCE COMPANY, Defendant/Third Party Plaintiff-Appellee, v. Veronica Maldonado Arias, Third Party Defendant. |
| Court | United States Court of Appeals (Ohio) |
{¶1} Appellant, Shonda McCruter ("Ms. McCruter"), as mother of L.J., appeals the judgment of the Lake County Court of Common Pleas granting summary judgment to appellee, The Travelers Home and Marine Insurance Company ("Travelers"), and denying her motion for summary judgment.
{¶2} This matter involves a supplemental complaint Ms. McCruter filed on behalf of L.J. against Travelers seeking to recover a judgment in the amount of $16,780.68 entered against Veronica Maldonado Arias ("Ms. Arias") for injuries that L.J. incurred from Ms. Arias’ dog.
{¶3} Travelers insured Ms. Arias under a homeowners’ policy. However, Travelers and Ms. Arias entered into letter agreement in which Ms. Arias purportedly declined coverage for the occurrence and Travelers purportedly disclaimed its duties of defense and indemnification.
{¶4} Ms. McCruter argues that the trial court erred by granting Travelers’ motion for summary judgment, where the trial court found there are no genuine issues of material fact that Ms. Arias violated terms of the policy and that such violations prejudiced Travelers and relieved it of its duty to pay Ms. McCruter's judgment against Ms. Arias. Ms. McCruter also argues that the trial erred by denying her motion for summary judgment.
{¶5} After a careful review of the record and pertinent law, we find that neither party is entitled to summary judgment. We find the trial court erred as a matter of law to the extent it found Ms. Arias violated a policy provision that imposes no duties upon her. We also find that genuine issues of material facts exist regarding whether Travelers waived the policy's notice requirement and whether Travelers was prejudiced by late notice. With respect to Ms. Arias’ alleged violations of the policy's cooperation requirements, we find there are genuine issues of material fact as to whether (1) the parties colluded to impair Ms. McCruter's rights under the policy, (2) the letter agreement constitutes an improper cancellation of the policy under Ohio law, (3) Ms. Arias violated the cooperation requirements, and (4) Travelers waived these requirements.
{¶6} Thus, we affirm in part, reverse in part, and remand this matter for further proceedings consistent with this opinion. Upon remand, Ms. McCruter's claims against Travelers, as well as the determination of Travelers’ damages with respect to its default judgment against Ms. Arias, remain pending.
{¶7} In August 2017, Ms. McCruter, as the mother of L.J., a minor, filed a complaint in the Lake County Court of Common Pleas against Ms. Arias, a resident of Georgia. Ms. McCruter alleged that in July 2017, L.J. was walking in Fairport Beach Park with her mother and other family members. Ms. Arias was walking her pit bull in the same general vicinity, when the dog lunged at L.J. and "bit and/or clawed" her face, causing an approximately one-inch laceration beneath L.J.’s left eye.
{¶8} At the time of the incident, Ms. Arias and her husband were insured through a homeowners’ policy issued by Travelers. Ms. Arias apparently did not want to involve Travelers in the matter. Instead, she retained an Ohio attorney, Jason L. Carter ("Attorney Carter"), to defend her in the lawsuit. She did not notify Travelers regarding the incident or Ms. McCruter's lawsuit.
{¶9} On May 14, 2018, Ms. McCruter's counsel, George R. Oryshkewych ("Attorney Oryshkewych"), sent a letter to Travelers at its home office in Connecticut, notifying Travelers of the incident and his client's pending lawsuit against Ms. Arias, enclosing a copy of the complaint, and requesting that the matter be assigned to a claims adjuster. Travelers received the letter on May 18. On May 22, Travelers opened a claim and assigned it to Anthony Shell ("Mr. Shell"), an adjuster in Traveler's Indiana office. Travelers also communicated with the insurance agent regarding the underlying facts of the incident and the status of the lawsuit.
{¶10} On May 23, Ms. Arias spoke to a colleague of Mr. Shell by telephone and indicated she did not want Travelers involved in the lawsuit.
{¶11} On May 24, Mr. Shell and Ms. Arias exchanged email correspondence. Ms. Arias confirmed that she was not filing a claim with Travelers and was handling the matter herself. Mr. Shell responded that he would need to review to determine whether Travelers could avoid involvement. Internally, Travelers engaged in coverage analysis.
{¶12} On May 25, Mr. Shell and Ms. Arias exchanged further email correspondence. Mr. Shell requested information about the dogs Ms. Arias owns, stating that he "must have at least this information" since Travelers cannot "unknow" that which it became aware. He wrote that he would move forward with closing the claim and that Travelers may require her to sign a document in the presence of a notary public. Ms. Arias responded with the requested information. She also provided information regarding the circumstances of the incident.
{¶13} During June 2018, Travelers general counsel conducted a legal review of Ms. Arias’ request to waive coverage and handle the matter herself.
{¶14} On July 3, 2018, Attorney Oryshkewych sent a follow up letter to Travelers’ home office in Connecticut. He advised Travelers that after Ms. McCruter obtained a judgment against Ms. Arias, she intended to file a supplemental complaint against Travelers pursuant to R.C. 3929.06(A)(2) unless Travelers paid the judgment in full within 30 days.
{¶15} On July 9, Mr. Shell sent an email to Ms. Arias in which he stated that for Travelers to withdraw, she must acknowledge that Travelers will not be able to assist her with the claim any longer at any point, including if an award was made against her. He attached a letter from himself on Travelers letterhead for Ms. Arias’ review. He requested that she and any other policy holder sign the acknowledgment contained on the last page in the presence of a notary public and return it to him.
{¶16} In the letter, Mr. Shell acknowledged receipt of Ms. McCruter's lawsuit and the presentment of a claim under the policy. He also memorialized Travelers’ understanding that Ms. Arias wished to proceed with defending the lawsuit on her own without Travelers’ assistance. He wrote that before Travelers could agree, it must discuss her rights and what she would be giving up if she decided to proceed as she had requested. Mr. Shell then set forth duplicated portions of Ms. Arias’ policy regarding Travelers’ contractual duties.
{¶17} A section of the letter entitled, "Your Request," states as follows:
{¶18} "Your Travelers Homeowners Policy was written to cover certain general liability expousres [sic] associated with home ownership, including dog bite(s). In your policy, coverage for defense is included, as is indemnity and medical payments. However, both are under the sole discretion of Travelers when they are involved in the defense of our insured. You have made a specific request for Travelers not to be involved in this case * * *. To date, you have retained your own counsel, when [sic] you have paid at your sole expense, and have been defending this case per your direction. Travelers was only put on notice by the Plaintiff's counsel directly, something that you did not want to occur. Even though your application for insurance lacked acknowledgment of dogs on your premises or that you owned [sic], that in itself would not preclude coverage based on our review as pitt [sic] bulls are not presently an excluded breed of dogs on a Georgia homeowner's application with Travelers.
{¶19}
{¶20} Mr. Shell requested that Ms. Arias sign the last page of the letter in the presence of a notary public. This page states as follows:
{¶21}
{¶22} Two days later, Mr. Shell and Ms. Arias engaged in further email communication. Ms. Arias acknowledged Mr. Shell's prior email and stated she would have the letter agreement completed as soon as possible. They also discussed Attorney Oryshkewych's attempts to involve Travelers in the claim. Mr. Shell noted his receipt of two letters from Attorney Oryshkewych and stated he would not respond until Ms. Arias signed the letter agreement. On July 18, Ms. Arias and her husband signed the letter agreement in the presence of a notary public, and Ms. Arias emailed it to Mr. Shell.
{¶23...
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