Owen v. United Ohio Ins., 2006 Ohio 5170 (Ohio App. 9/29/2006)

• Decision Date: 29 September 2006
• Docket Number: No. 2005-L-194.,2005-L-194.
• Citation: 2006 Ohio 5170
• Parties: Brenda Owen, et al., Plaintiffs-Appellants, v. Ms. Joy Bennett, Defendant, United Ohio Insurance Co., Defendant-Appellee.
• Court: Ohio Court of Appeals

Page 1

2006 Ohio 5170

Brenda Owen, et al., Plaintiffs-Appellants, v. Ms. Joy Bennett, Defendant United Ohio Insurance Co., Defendant-Appellee.

No. 2005-L-194.

Court of Appeals of Ohio, Eleventh District, Lake County.

September 29, 2006.

Civil Appeal from the Court of Common Pleas, Case No. 05 CV 001464.

Affirmed.

Judson J. Hawkins, Center Plaza South, 35350 Curtis Boulevard, #350, Eastlake, OH 44095 (For Plaintiffs-Appellants).

James L. Glowacki and James J. Imbrigiotta, 510 Leader Building, 526 Superior Avenue, East, Cleveland, OH 44114 (For Defendant-Appellee).

OPINION

CYNTHIA WESTCOTT RICE, J.

{¶1} This appeal arises from the dismissal of a declaratory judgment action filed by appellant, Brenda Owen ("Owen"), against appellee, United Ohio Insurance Co. ("United"). For the reasons that follow, we affirm.

{¶2} On November 26, 2001, Howard Barnes ("Barnes") was operating a vehicle owned by Joy Bennett ("Joy"). Matthew Bennett ("Matthew"), Joy's son, was a passenger in the vehicle with Barnes. It is unclear whether Joy gave Matthew permission to take Joy's vehicle. It is equally unclear why Barnes was driving Joy's vehicle.¹ On that night and while operating Joy's vehicle, Barnes struck a vehicle operated by Owen. As a result of the collision, Owen claims she sustained injuries.

{¶3} At the time of the collision, United was Joy's auto-insurance carrier. Pursuant to United's policy, Matthew was excluded as a covered driver.² Owen previously filed suit against Barnes, Matthew and United in the Lake County Court of Common Pleas via case number 01 CV 001402. Owen settled with Barnes and Matthew for their policy coverage limits. Following this settlement, Owen dismissed her claim against United without prejudice pursuant to Civ.R. 41(A).

{¶4} On June 27, 2005, and relative to this appeal, Owen filed a complaint for declaratory judgment against United in the Lake County Court of Common Pleas. The complaint indicates on its face that it is a "refiling (01 CV 001402)." Through this declaratory judgment action, Owen sought a "declaratory judgment in favor of [Owen] and to order [United] *** to pay [Owen] compensatory damages, punitive damages, pre-judgment interest, costs of this action, reasonable attorney fees and such other awards and damages as the court finds proper." Owen asserted in the body of its complaint for declaratory judgment that United's policy issued to Joy "conferred rights and status upon [Owen] sufficient to enable her to recover some of the compensation necessary to make [Owen] whole." Owen claimed in her complaint that despite her demands for such compensation, United has refused to pay Owen for said losses and has denied coverage under the circumstances.

{¶5} United filed a Motion to Dismiss on July 22, 2005 alleging Owen had failed to state a claim upon which relief can be granted pursuant to Civ.R. 12(B)(6). On November 3, 2005, the trial court granted United's motion to dismiss.³ As this judgment entry was not dispositive of the entire pending litigation, the trial court advised there was no just reason for delay, making its decision a final appealable order.

{¶6} Owen assigns three propositions of law for this court to consider. Although assigning propositions of law does not comport with App.R. 16, we will nevertheless interpret Owen's propositions as assignments of error and address the same. Owen asserts the following errors:

{¶7} "[1.] A declaratory judgment action is permitted to determine the question of coverage between an insured's carrier and the insured's permissive user.

{¶8} "[2.] The trial court improperly dismissed the declaratory judgment action to determine the coverage issue between Appellee and its insured's son, Matthew Bennett.

{¶9} "[3.] Assuming Section 2721.02(B) [sic] of the Ohio Revised Code prohibits a declaratory judgment action unless, and until, an actual determination of liability against a particular insured under the policy by a finder of fact it is in violation of the Ohio Constitution and void."

{¶10} At the outset, it is important to note that generally, an appellate court reviews declaratory judgment actions under an abuse of discretion standard. Bilyeu v. Motorists Mut. Ins. Co. (1973), 36 Ohio St.2d 35, syllabus, Indiana Ins. Co. v. M.D.O. Homes, Inc., 11th Dist No. 2000-L-167, 2001-Ohio-8760. However, the instant appeal arises from the trial court's grant of a motion to dismiss pursuant to Civ.R. 12(B)(6). "A motion to dismiss for failure to state a claim upon which relief can be granted is procedural and tests the sufficiency of the complaint." Hodge v. Cleveland (Oct. 22, 1998), 8th Dist. No. 72283, 1998 Ohio App. LEXIS 4963, 6. Therefore, we review the trial court's decision de novo. DeSenco, Inc. v. Akron (1999) 84 Ohio St.3d 535, 5375-38, citing Vail v. The Plain Dealer Publishing Co. (1995), 72 Ohio St.3d 279; see, also, Shockey v. Fouty (1995), 106 Ohio App.3d 420, 424, see, also, Hamrick v. DaimlerC-hrysler Motors, 9th Dist. No. 02CA008191, 2003-Ohio-3150, at ¶5.

{¶11} In Owen's first assignment of error, she challenges the trial court's judgment entry dismissing the complaint against United. In reviewing dismissals pursuant to Civ.R. 12(B)(6), all reasonable inferences are to be made in favor of the nonmoving party. Fahnbulleh v. Strahan (1995), 73 Ohio St.3d 666, 667. "For a court to dismiss a complaint for failing to state a claim upon which relief can be granted, it must appear beyond a reasonable doubt that the allegations in the complaint can prove no set of facts which when construed most favorably to the plaintiff would entitle him to relief." Zuber v. Dept. of Ins. of Ohio (1986), 34 Ohio App.3d 42, syllabus; see, also, O'Brien v. University Community Tenants Union, Inc. (1975), 42 Ohio St.2d 242, syllabus. Facts alleged in the complaint must be considered to be true and construed in favor of the plaintiff. Byrd v. Faber (1991), 57 Ohio St.3d 56, 60, see, also, Mitchell v. Lawson Milk Co. (1988), 40 Ohio St.3d 190, 192. However, legal conclusions are not entitled to the same presumption. "Unsupported conclusions of a complaint are not considered admitted, and are not sufficient to withstand a motion to dismiss." State ex rel. Hickman v. Capots (1989), 45 Ohio St.3d 324, 324.

{¶12} Declaratory judgment actions are governed by R.C. 2721.01, et seq. "There are only two reasons for dismissing a complaint for declaratory judgment pursuant to Civ.R. 12(B)(6): (1) where there is no real controversy or justiciable issue between the parties, or (2) where the declaratory judgment will not terminate the uncertainty or controversy [sic], under R.C. 2721.07. Otherwise, the court is required to issue a judgment declaring the rights or legal relations, or both, of the parties, and the court errs when it dismisses the complaint for failure to state a claim under Civ.R. 12(B)(6)." Fioresi v. State Farm (1985), 26 Ohio App.3d 203, syllabus; see, also, Indiana Ins. Co. v. Forsmark, 160 Ohio App.3d 277, 2005-Ohio-1635.

{¶13} The requirement of an actual controversy is a strict pre-requisite to a declaratory judgment action. Bilyeu, supra. "A controversy exists for purposes of declaratory judgment when there is a genuine dispute between parties having adverse legal interests of sufficient immediacy and reality to warrant an issuance of a declaratory judgment." Wagner v. Cleveland (1988), 62 Ohio App.3d 8, 13. The premise behind the actual controversy requirement is to prevent the issuance of advisory opinions. M.D.O. Homes, Inc., supra, at 4-5.

{¶14} United asserts that the trial court's dismissal was proper as there is no actual controversy between United and Owen. In support of its theory, United points to the fact that there has been no determination on the negligent entrustment issue between Joy and Matthew. In other words, it is premature to bring the declaration action when it has yet to be determined whether or not Joy negligently entrusted her vehicle to Matthew and whether coverage would attach for that negligent entrustment. Until such determination, according to United, no damages can be paid to Owen under Joy's policy.

{¶15} In regard to the existence or non-existence of controversy, this case is analogous to Bilyeu, supra. In Bilyeu, the Ohio Supreme Court upheld the denial of declaratory relief sought by Judy L. Bilyeu regarding uninsured motorist coverage. Unlike in this case though, the parties agreed that Bilyeu was covered under her father's auto insurance policy. The parties further agreed that in the event the arbitrator made an award beyond the policy limits of the other insureds, then Bilyeu's insurance coverage would attach. However, the court held that the denial of declaratory relief was appropriate due to the fact that those facts and circumstances, i.e. the arbitrator awarding damages beyond the policy limits of the other coverage, had not yet occurred. "In our opinion, it was not unreasonable for the lower courts to decide that the events which could arise from this controversy may never happen. The controversy might be settled by the parties, or the arbitrator's award might be less than $10,000. Those are possibilities which the courts below no doubt considered in determining that a declaratory judgment action did not lie." Id. at 37.

{¶16} Just as in Bilyeu, there are circumstances in the present case that have not yet occurred which preclude the maintenance of the underlying declaratory judgment action. First and foremost, Matthew may or may not be covered under Joy's insurance policy. The second outstanding issue is whether or not Joy negligently entrusted her vehicle to Matthew. The third outstanding issue, as in Bilyeu, is a determination of compensation. Even if it is determined that Joy did negligently entrust her vehicle to Matthew, and even if it is determined that coverage does attach to Matthew as a driver and by proxy, Barnes as a driver, the issue still remains as to compensation. Has...