Yates v. Allstate Ins. Co., 2005 Ohio 1479 (OH 3/28/2005), Case No. 04 CA 39.

CourtUnited States State Supreme Court of Ohio
Writing for the CourtEdwards
Citation2005 Ohio 1479
PartiesJerelyn B. Yates, et al., Plaintiff-Appellant, v. Allstate Insurance Company, Defendant-Appellee.
Docket NumberCase No. 04 CA 39.
Decision Date28 March 2005

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2005 Ohio 1479
Jerelyn B. Yates, et al., Plaintiff-Appellant,
Allstate Insurance Company, Defendant-Appellee.
Case No. 04 CA 39.
Court of Appeals of Ohio, Fifth District, Licking County.
Date of Judgment Entry: March 28, 2005.

Civil Appeal From Licking County Court of Common Pleas Case 03 CV 0474.

Reversed and Remanded.

David R. Kennedy, 4071 South Cleveland-Massillon Road, Norton, OH 44203, for Plaintiff-Appellant.

James R. Gallagher, 471 East Broad St., 19th Floor, Columbus, OH 43215-3872, Counsel for State Farm Insurance, Monical Miller, Rick E. Marsh, 175 South Third St., Suite 700, Columbus, OH 43215-6885, Counsel for Allstate Insurance Co., for Defendant-Appellee.

William B. Hoffman, P.J., Julie A. Edwards, J., John F. Boggins, J.


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{¶1} Plaintiffs-appellants Welden and Loretta Bauer [hereinafter appellants] appeal from the April 14, 2004, Judgment Entry of the Licking County Court of Common Pleas which granted summary judgment in favor of defendant-appellee State Farm Mutual Automobile Insurance Company [hereinafter State Farm].


{¶2} On October 19, 2001, Jenise Connerton was a passenger in a vehicle driven by Rosemarie Sweazy. Rosemarie Sweazy failed to stop at a stop sign and collided with another vehicle. As a result, Jenise Connerton died.

{¶3} Rosemarie Sweazy had an automobile liability insurance policy with Met Life for $100,000.00 per person. Met Life and the Estate of Jenise Connerton settled for $100,000.00 and the settlement was approved by the Summit County Probate Court. The funds were allocated entirely to Jenise's minor son, Neil Connerton.

{¶4} Jenise Connerton had a personal automobile insurance policy with Farmer's Insurance. The policy included uninsured/underinsured motorist coverage benefits. The Estate of Jenise Connerton settled with Farmer's Insurance for $150,000.00. These funds were also allocated to Neil Connerton.

{¶5} Jenise Connerton was survived by her sister Jerelyn Yates and parents Welden and Loretta Bauer. Jerelyn Yates had insurance with Allstate Insurance Company and that policy included uninsured/underinsured motorist coverage. On March 14, 2002, Jerelyn Yates informed Allstate of a potential uninsured/underinsured claim. On April 22, 2003, Allstate denied Yates' claim.

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{¶6} Welden and Loretta Bauer, the appellants herein, had an automobile liability policy with State Farm which included uninsured/underinsured motorist coverage. On May 6, 2002, nearly seven months after the accident, appellants informed State Farm of a potential claim. On March 4, 2003, nearly ten months after receiving notice of the claim, State Farm denied appellants' claim.

{¶7} On August 23, 2003, appellants and Jerelyn Yates filed a complaint in the Licking County Court of Common Pleas. In the complaint, appellants and Yates alleged that State Farm and Allstate had breached their contract and acted in bad faith. Essentially, appellants and Yates each sought uninsured/underinsured motorists coverage from their own automobile liability policies.

{¶8} On February 9, 2004, State Farm filed a motion for summary judgment. That same day, February 9, 2004, appellants filed a motion for summary judgment. Ultimately, on April 14, 2004, the trial court issued a judgment entry in which it granted summary judgment in favor of State Farm and thereby found appellants' motion for summary judgment moot. In granting summary judgment to State Farm, the trial court found that appellants failed to provide any reason for the delay in providing notice of the potential claim to State Farm. For that reason, the trial court concluded that the seven month delay was unreasonable. The trial court further found that appellants had failed to rebut the presumption that the delay caused prejudice to State Farm.

{¶9} It is from the April 14, 2004, Judgment Entry that appellants appeal, raising the following assignments of error:

{¶10} "I. The trial court erred in granting summary judgment to State Farm Ins. Co. on the basis that seven months was an

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unreasonable delay in giving notice of the Bauers' uninsured motorist claim, and on the basis that State Farm was prejudiced as a result.

{¶11} "II. The trial court erred in denying summary judgment to Welden and Loretta Bauer on their breach of contract and bad faith claims."


{¶12} In the first assignment of error, appellants contend that the trial court erred in granting summary judgment to State Farm Insurance Co. on the basis that seven months was an unreasonable delay in giving notice of appellants' uninsured motorist claim. Appellants further contend that the trial court erred in granting summary judgment on the basis that State Farm was prejudiced as a result of the alleged unreasonable notice.

{¶13} This matter reaches us upon a grant of summary judgment. Summary judgment proceedings present the appellate court with the unique opportunity of reviewing the evidence in the same manner as the trial court. Smiddy v. The Wedding Party, Inc. (1987), 30 Ohio St.3d 35, 36, 506 N.E.2d 212. As such, we must refer to Civ.R. 56(C) which provides the following, in pertinent part: "Summary judgment shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, written admissions, affidavits, transcripts of evidence in the pending case and written stipulations of fact, if any, timely filed in the action, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. * * * A summary judgment shall not be rendered unless it appears from such

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evidence or stipulation and only from the evidence or stipulation, that reasonable minds can come to but one conclusion and that conclusion is adverse to the party against whom the motion for summary judgment is made, such party being entitled to have the evidence or stipulation construed most strongly in the party's favor."

{¶14} Pursuant to the above rule, a trial court may not enter summary judgment if it appears a material fact is genuinely disputed. The party moving for summary judgment bears the initial burden of informing the trial court of the basis for its motion and identifying those portions of the record that demonstrate the absence of a genuine issue of material fact. The moving party may not make a conclusory assertion that the non-moving party has no evidence to prove its case. "[B]are allegations by the moving party are simply not enough." Vahila v. Hall, 77 Ohio St.3d 421, 429, 1997-Ohio-259, 674 N.E.2d 1164. The moving party must specifically point to some evidence which demonstrates the moving party cannot support its claim. If the moving party satisfies this requirement, the burden shifts to the non-moving party to set forth specific facts demonstrating there is a genuine issue of material fact for trial. Id. (citing Dresher v. Burt, 75 Ohio St.3d 280, 1996-Ohio-107, 662 N.E.2d 264).

{¶15} Further, trial courts should award summary judgment with caution. "Doubts must be resolved in favor of the non-moving party." Murphy v. Reynoldsburg (1992), 65 Ohio St.3d 356, 604 N.E.2d 138.

{¶16} It is pursuant to this standard that we review appellants' assignment of error.

{¶17} The issue of delays in notice to insurance carriers in uninsured/underinsured motorist coverage cases was addressed by the Ohio Supreme

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Court in Ferrando v. Auto-Owners Mut. Ins. Co., 98 Ohio St.3d 186, 2002-Ohio-7217, 781 N.E.2d 927. The Ferrando Court articulated a two-step approach for determining whether a prompt notice provision was breached, and, if so, whether the breach resulted in prejudice to the extent that uninsured/underinsured motorist coverage is then forfeited. "The two-step approach in late-notice cases requires that the court first determine whether the insured's notice was timely. This determination is based on asking whether the UIM insurer received notice `within a reasonable time in light of all the surrounding facts and circumstances.' Ruby [v. Midwestern Indem. Co. (1988), 40 Ohio St.3d 159, 532 N.E.2d 730], syllabus. If the insurer did receive notice within a reasonable time, the notice inquiry is at an end, the notice provision was not breached, and UIM coverage is not precluded. If the insurer did not receive reasonable notice, the next step is to inquire whether the insurer was prejudiced. Unreasonable notice gives rise to a presumption of prejudice to the insurer, which the insured bears the burden of presenting evidence to rebut." Ferrando, 98 Ohio St.3d at para. 90. (Emphasis original.)

{¶18} The question of whether notice is provided within a reasonable time "is usually a question of fact for the jury." Ormet Primary Aluminum Corp. v. Employers Ins. of Wausau (l999), 88 Ohio St.3d 292, 300, 725 N.E.2d 646. However, "an unexcused significant delay may be unreasonable as a matter of law." Id.

{¶19} In the case sub judice, appellants' policy required an insured to give written notice of an accident or loss "as soon as reasonably possible." Policy, pg. 5. The trial court found that appellants had breached the terms of the policy by failing to provide prompt notice of their UIM claims. Specifically, the trial court based its

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conclusion on appellants' failure to cite, in their Response in Opposition to State Farm's Motion for Summary Judgment, to any surrounding facts and circumstances that make appellants' delay reasonable.1 April 14, 2004, Judgment Entry, pgs. 3-7. The trial court found that appellants' argument that no court has ever found a seven month delay to be unreasonable as a matter of law to be insufficient to demonstrate a genuine issue of material fact. Id.

{¶20} Applying the applicable standard of review, this court must first consider whether State Farm met its burden under Vahila, supra. State Farm bore the initial burden of showing in its motion for summary judgment that there was no genuine...

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