Nurenberg, Paris, Heller & McCarthy Published cases
Ohio State Supreme Court
Ferrando v. Auto-Owners Mut. Ins. Co.,
98 Ohio St.3d 186 (2002)
This case changed the law in Ohio as to when a person who is an insured under
an automobile insurance policy with uninsured/underinsured motorist (“UM/UIM”) coverage
can recover despite the fact that he/she technically breached a provision of the
policy requiring the insured to protect the insurer’s subrogation rights. Bringing
Ohio law in line with the majority rule in the United States, the Ohio Supreme Court
in Ferrando adopted the actual prejudice rule for breaches of notice and subrogation
provisions in insurance policies.
Prior to Ferrando, in the case of Bogan v. Progressive Cas. Ins. Co. (1988), 36
Ohio St.3d 22, the Supreme Court had held that the breach of a subrogation provision
(which requires an insured to take all necessary measures to protect the insurer’s
subrogation rights against the tortfeasor and/or to seek the UM/UIM carrier’s permission
before settling with the tortfeasor”, automatically destroyed the insured’s right
to UM/UIM coverage under the policy. In other words, if the insured settled his
claim with the tortfeasor without notifying the UM/UIM carrier of his claim, or
otherwise violated the insurer’s subrogation right against the tortfeasor, the insured
would be automatically precluded from seeking UM/UIM coverage under his policy,
even if the insurer’s subrogation right was valueless or illusory because the tortfeasor
had no assets worth pursuing. In Ferrando, the Ohio Supreme Court overruled that
aspect of the holding in Bogan, and held instead that the insured’s destruction
of the insurer’s subrogation rights without its consent would not void coverage
unless the insurer was actually prejudiced thereby.
Under Ferrando, if the insurer claims its subrogation right was breached, the court
is to engage in a two-step analysis. First, the court asks whether a breach occurred;
second, the court asks whether the insurer was prejudiced thereby. If the subrogation
provision was breached, a presumption of prejudice arises. However, the insured
may introduce evidence to rebut this presumption, thus creating an issue of fact
as to whether the insurer was actually prejudiced. Ferrando also clarified the law
as to breach of notice provisions, applying the same two-step analysis to determine
whether the breach would void UM/UIM coverage. Subsequent to Ferrando, numerous
cases on appeal have been reversed and remanded for the lower courts to engage in
what has come to be known as the “Ferrando” analysis.
Baughman v. State Farm Mut. Auto Ins.
Co., 88 Ohio St.3d 480 (2000)
The Baughmans purchased uninsured/underinsured motorist (UM) coverage through five
motor vehicle insurance policies with State Farm. From the time the policies were
originally purchased until October 5, 1994, it was necessary for policyholders to
purchase the coverage under each policy to ensure coverage for themselves and their
resident relatives for collisions involving any policy of the household’s vehicles.
On October 5, 1994, however, the Supreme Court issues an opinion that changed Ohio
insurance law. The court’s decision in Martin v. Midwestern Group Ins. Co. made
purchasing the coverage under multiple policies unnecessary. State Farm, nonetheless,
continued to collect premiums from the Baughmans and other policyholders for the
coverage under all of their policies. State Farm never disclosed that premiums for
UM coverage need only be paid on one household car (instead of all household cars)
in order to afford protection to all family members living in the home. The Baughmans
did not learn of the Martin decision until they filed a claim with State Farm following
their son’s death in an April 1995 motorcycle crash. In August 1995, the couple
sued State Farm to recover the excess premiums they paid. They continued, however,
to purchase the coverage through multiple policies because they did not trust that
they would be covered otherwise. The Summit County Common Please Court eventually
certified the Baughman’s case as a class action on behalf of all State Farm policyholders
in Ohio who purchased UM coverage under multiple policies after the Martin decision
was issued. The court of appeals reversed the decision, finding that the Baughmans
were not typical of the rest of the class, which was made up of those who continued
to purchase multiple policies because they were unaware of the Martin decision.
On May 24, 2000, a unanimous Supreme Court reversed allowing the case to proceed
as a Class Action.
Harp v. City of Cleveland Heights.,
87 Ohio St.3d 506 (2000)
Ruth Brewer was driving her car southbound on Lee Blvd. in the City of Cleveland
Heights when, without warning, a 43-to-45 foot section of a black cherry tree crashed
through her windshield, causing her death. The tree, which grew some 16-30 feet
from the curb of Lee Blvd., was located in a wooded area called Forest Hills Park,
owned and maintained by the City of Cleveland Heights. The administratrix of Ms.
Brewer’s estate filed a wrongful death action against the City on the ground that
the tree constituted a nuisance to the motoring public which the City knew or should
have known about, and which the City should have gotten rid of prior to this accident.
The evidence revealed that the tree limb fell due to a rotting condition in the
v-crotch which had been progressing for more than two years and the City’s forestry
department workers had inspected this tree six months prior to the accident and
marked it for a “priority prune.” The plaintiff’s expert witness testified that,
at the time of that inspection, the City forestry workers should have detected the
condition that caused the limb to fall, and should have removed it so that Ms. Brewer’s
death never would have occurred. Despite this evidence, the trial court granted
the City’s motion for summary judgment on the ground that the City was “immune”
from liability because a deteriorating tree that does not affect traffic on the
roadway prior to the time it comes crashing down cannot constitute a “nuisance”
for purposes of the governing statute, Ohio Revised Code 2744.02 (B) (3). On appeal
to the Supreme Court, the Supreme Court reversed. The Supreme Court found that a
damaged or diseased tree limb that overhangs the roadway and presents a hazard to
the motoring public can constitute a nuisance for which a municipality may be liable
if it fails to remove it within a reasonable time after it discovers, or should
have discovered, the hazardous condition. Carrel v. Allied Products Corp., 78 Ohio
St.3d 284, 677 N.E.2d 795 (1997) Carrel injured his hand in a defectively designed
stamping press and sued the press manufacturer. The Ohio Legislature had recently
passed a restrictive Product Liability Statute. Nurenberg, Paris successfully argued
that long established common law theories such as negligent design are not abrogated
by the new statute. The case also established that a worker who is required to encounter
certain risks while performing his normal job duties will not be found to have assumed
the risk of his injuries. Therefore, the worker cannot have his jury award reduced
or barred completely because he was injured while using a dangerous machine at work.
Gallagher v. Cleveland Browns Football Co., 74 Ohio St.3d 427, 659 N.E.2d 1232 (1996).
Gallagher was a sportscaster who was operating a video camera at a Browns game.
The Browns required him to kneel while shooting his video making it impossible for
him to avoid a collision with two football players in the end zone. Gallagher broke
his jaw, underwent multiple surgeries and became disabled from his occupation. The
jury found the Browns negligent and assumption of the risk contributed to his own
injuries in the amount of 35%. The verdict in Gallagher’s favor was for $800,000,
after which the defendant tried to raise a new defense theory. The Supreme Court
held that when a defendant wants to rely on a defense, they must raise if before
or during trial. If a defendant fails to do so, they cannot raise the defense later.
The Court prevented the defendants from raising the defense and upheld the jury
verdict for Gallagher.
Pitts v, Mobile Tank Car Services, Inc., 72 Ohio St.3d 49,
647 N.E.2d 476 (1995) Illinois
Controls, Inc. v. Langham,
70 Ohio St.3d 512, 639
N.E.2d 771 (1994) Langham, the inventor of a cross-slope monitor, entered into a
contract with Balderson, Inc. to form Illinois Controls, Inc. for the purpose of
manufacturing and marketing the device to road grader manufacturers. Balderson,
Inc. and its president Clark Balderson breached the contract, by not putting forth
effort to market the device. Balderson, through Illinois Controls, sued Langham.
Langham countersued and the jury returned a verdict in his favor in the amount of
$2,776,000.00. The Supreme Court upheld the verdict, stating that Balderson and
Illinois Controls had a duty to use reasonable efforts to market Langham’s product.
Clark Balderson, as promoter of Illinois Controls, could be personally liable for
the breach of the pre-incorporation contract. Illinois Controls, who had knowledge
of the contract and benefited from it, could also be liable for the breach of contract.
Brennaman v. R.M.I. Co.,
70 Ohio St.3d 460, 639 N.E.2d 425 (1994) Bechtel Corp.
built a titanium metal plant for R.M.I. in 1958. In 1986 a valve began to leak and
Brennaman and others died while trying to repair it. Brennaman’s estate and others
sued Bechtel for negligent design and construction. The defendant corporation convinced
the trial court and the Court of Appeals that this case should be dismissed. This
was based on a statute, which bars suits against designers and engineers of improvements
to real property, which are filed more that 20 years after the design or construction
is completed. Nurenberg, Paris successfully argued, and the Supreme Court held,
that the ten-year architect’s and engineers’ statute of repose for improvements
to real property was unconstitutional; it violated the right-toa- remedy by depriving
the plaintiff and other Ohio citizens of the right to sue before they knew or could
have known about their injuries.
Lunar v. City of Cleveland,
69 Ohio St.3d 673,
635 N.E.2d 357 (1994) For years, the City of Cleveland failed to inspect and clean
its storm sewers at its western boundary of State Route 2. As a result, after moderate
rains, tremendous puddling would occur in that area. A motorist hydroplaned on the
puddle, went left of center colliding head on with the plaintiff’s car causing injuries
to him. The jury awarded $500,000.00 and the trial judge awarded pre-judgment interest
finding that the City failed to make good faith efforts to settle the case and failed
to rationally evaluate its risks. The Supreme Court upheld the award of prejudgment
interest, which amounted to over $400,000, based on its recent decision in Moskovitz
v. Mt. Sinai Med. Ctr.
Cyrus v. Henes,
70 Ohio St.3d 640, 640 N.E.2d 810 (1994)
May v. Tandy Corp.,
69 Ohio St.3d 415, 633 N.E.2d 810 (1994) Mr. May was injured
while making a delivery to a customer’s store. The jury found the customer negligent
in maintaining a hazardous condition that caused Mary’s injury. The jury awarded
damages and the defendant asked the Court to reduce the verdict by the amount of
workers compensation benefits May had received to date and was reasonably certain
to receive into the future. The defendant’s request for this reduction was based
on recently enacted “tort reform” legislation. The trial court refused to make the
deduction finding the statute to be unconstitutional. The Supreme Court upheld the
trial court based on its recent decision in Sorrell which held that the statute
requiring the trial court to deduct from the total jury award any collateral benefits
which had been or would be received by the plaintiff was unconstitutional. Statute
violated the right to trial by jury, due process, equal protection, right to open
courts, and right to a meaningful remedy.
Ford v. Talley Mach. Corp.,
68 Ohio St.3d
473, 628 N.E.2d 1351 (1994) Decision of the U.S. Supreme Court, which held that
Ohio’s statute tolling the statute of limitations against out-of-state defendants
was unconstitutional, was not retroactively applicable. Retroactive application
of this decision would violate the right-to-a-remedy provision of the Ohio constitution
inasmuch as it would deprive plaintiffs of their cause of action even though they
reasonably relied on the tolling statute.
State ex rel. Ford Motor Co. v. Indus.
Comm. Of Ohio (Joan Kane),65 Ohio St.3d 17, 599 N.E.2d 261 (1992)
Tracy v. Merrell
Dow Pharmaceuticals, Inc., 58 Ohio St.3d 147, 569 N.E.2d 875 (1991). Tracy participated
in an investigational drug study of nicorette. The doctor and the written patient
materials warned Tracy not to smoke or drink while taking the nicorette, but Tracy
continued. Tracy died of cardiac arrest and brought a products liability claim.
Jury was instructed on unavoidably unsafe drugs and the learned intermediary doctrine.
Returned verdict for Merrell Dow.
Abraham v. National City Bank Corp.,
50 Ohio St.3d
175, 553 N.E.2d 619 (1990). Abraham misplaced her passbook and did not tell the
bank that it was lost. Thirteen years later, she found the passbook and asked the
bank about the status of her savings account. The bank said that they had no records
of her account and that it must have been closed at least 6 years before the suit
was filed. Abraham sued the bank. The trial court dismissed the case holding that
O.R.C. Sec. 1101.08 contains a 6-year statute of limitations. The Supreme Court
agreed and held that 1101.08 permits banks to destroy certain records after 6 years
and that the bank is protected from liability one the records have been destroyed.
Motorist Mut. Ins. Co. v. Handlovic,
23 Ohio St.3d 179, 492 N.E.2d 417 (1986). Handlovics
were in a car accident with Ballantyne who was only insured for $25,000. Handlovics
sued Ballantyne and received a jury verdict in their favor. Handlovics sought additional
compensation under their own underinsured coverage with limits of $100,000. Motorist
Mutual rejected this demand. The Supreme Court held that if an insured (Handlovics)
prosecutes a lawsuit against a motorist who is underinsured (Ballantyne) with the
knowledge of the insured’s insurance company (Motorist Mutual), both the insured
and the insurance company are bound by the final judgment rendered. This decision
permits Ohio citizens to try their case once in Court and forever bid the wrongdoer
and all insurance companies that have issued underinsurance coverage applicable
to the collision.
Paugh & Farmer, Inc. v. Menorah Home for Jewish Aged, 15 Ohio
St.3d 44, 472 N.E.2d 704 (1984) Paugh & Farmer agreed to build an apartment
facility to be operated by Menorah Home. An argument arose between the parties over
water leakage problems, and Menorah Home withheld payment. After the repairs were
completed, Menorah Home still refused to pay. Paugh & Farmer sued Menorah Home.
The defendant identified his expert witness and his opinions only one week before
trial. The plaintiff argued that the expert should not be permitted to testify as
this presented an unfair surprise. The trial court agreed. The jury returned a verdict
for Paugh & Farmer in the amount of the retained funds. The Supreme Court found
that Paugh & Farmer was entitled to the retained funds, and held that the trial
court was correct in barring defendant’s expert for reasons of tardiness.
State
ex. rel. Petros v. Connor,
12 Ohio St.3d 176, 465 N.E.2d 1295 (1984)
Karabin v.
State Auto. Mut. Ins. Co.,
10 Ohio St.3d 163, 462 N.E.2d 403 (1984) Karabin was
severely injured by an uninsured driver while he was a pedestrian on a sidewalk.
Karabin had two car insurance policies from Sate Auto and each provided uninsured
motorist coverage in the amount of $50,000. Each policy also contained an anti-stacking
provision stating that State Auto’s maximum liability under both the policies shall
not exceed the highest applicable limit under any one policy. The insurance company
argued that this “anti-stacking” provision prevents an insured from “stacking” the
coverages of each policy so that, in this case, Karabin had $100,000 available to
compensate him for his injuries. State Auto honored Karabin’s claims under one policy,
bur refused to honor those claims under both. Karabin sued State Auto and the Supreme
Court found that the anti-stacking provision was valid and Karabin’s recovery under
his insurance policies was thereby limited to one. Thus, even though he paid a separate
premium for both coverages, the coverage on the second policy confers absolutely
no additional benefit to him.
State ex. Rel. Greater Cleveland Regional Transit
Authority v. Guzzo, 6 Ohio St.3d 270, 452 N.E.2d 1314 (1983).
O’Stricker v. Jim
Walter Corp.,
4 Ohio St.3d 84, 447 N.E.2d 727 (1983) O’Stricker claimed he was injured
by exposure to asbestos products sometime between 1969 and 1979. Defendant stopped
manufacturing asbestos products by 1973. Plaintiff’s cancer was discovered in 1979
and the suit was filed in 1979. The defendants asserted that O’Stricker’s claim
was barred by a two-year statute of limitation, since the last exposure to defendant’s
asbestos was in 1973. The trial court dismissed the case and applied the two-year
statute of limitations. The Supreme Court reversed and adopted a more “liberal”
discovery rule” that stated that when an injury doesn’t manifest itself immediately,
the cause of action arises upon the date on which the plaintiff was informed by
a doctor that he had been injured. Since O’Stricker brought his claim within two
years after his doctor informed him that he had been injured by exposure to asbestos,
his action was not barred.
State ex. Rel. Consol. Rail Corp. v. Gorman, 70 Ohio
St.2d 274, 436 N.E.2d 1357 (1982)
Moss v. Department of Natural Resources,
58 Ohio
St.2d 138, 404 N.E.2d 742 (1980)
Keaton v. Ribbeck,
58 Ohio St.2d 443, 391 N.E.2d
307 (1979) Keaton was a passenger in a car driven by Ribbeck. Ribbeck crashed the
car into a moving freight train, and Keaton died. Keaton’s parents brought a wrongful
death action against Ribbeck, seeking recovery for the loss of society, comfort
and companionship of their son. The court denied this recovery, holding that there
can be no recovery for loss of society, comfort and companionship of the decedent
in a wrongful death action. (*The harsh outcome of this and other like cases finally
motivated the Ohio Legislature to expand the elements of recovery to include loss
of society, comfort, companionship and mental anguish.)
Shearer v. Motorists Mut.
Ins. Co.,
53 Ohio St.2d 1, 371 N.E.2d 210 (1978) Shearer was involved in a car accident
with an uninsured motorist. Shearer was awarded compensation for her injuries under
her own uninsured motorist coverage. Her insurance company attempted to cheat her
by deducting from that award the amount it paid her under her medical payments coverage.
Shearer sued her insurance company for reducing her award. The Supreme Court held
that the insurance company could not reduce the award by the amount already paid
for medical expenses. In other words, Shearer and all Ohio citizens are entitled
to both, their uninsured motorist benefits and their medical payment benefits.
Ranells v. City of Cleveland,
41 Ohio St.2d 1, 321 N.E.2d 885 (1975) Richard and Sandra
Ranells died after being exposed to hazardous chlorine gas which had been emitted
from the city operated water filtration plant across the street from the Ranell’s
home. The Ranells sued the City for negligently and recklessly operating the plant.
The jury returned an award in the amount of $609,000 for Ranells to compensate them
for wrongful death, conscious pain and suffering, and hospital and funeral expenses.
The verdict also included an award of punitive damages in the amount of $750,000.
The Supreme Court affirmed the compensatory damages award, but vacated the punitive
damage award despite evidence of “a continuing hardheartedness toward the residents
of the neighborhood surrounding the Baldwin Filtration Plant. Time and again city
officials were put on notice that a catastrophe was imminent, but those warnings
were ignored to the peril of the citizens of Cleveland.” To this day, punitive damages
are not recoverable against a political subdivision.
Henderson v. Ryan,
13 Ohio
St.2d 31, 233 N.E.2d 506 (1968)
Oechsle v. Hart,
12 Ohio St.2d 29, 231 N.E.2d 306
(1967) Oechsle was severely hurt when he was struck by Hart’s car, which skidded
left of center on a patch of ice into Oechsle’s lane. The trial court held that
skidding on the ice was a “sudden emergency” that excused Hart for driving on the
wrong side of the road and allowed the jury to return a verdict for Hart. The Supreme
Court reversed, holding that a driver has a duty to maintain control over their
car no matter what the weather conditions are. Therefore, skidding on ice is not
a legal exclude for colliding with others left of center, in the rear, etc.
Jacobs
v. Mutual Mortg. & Inv. Co., 6 Ohio St.2d 92, 216 N.E.2d 49 (1966) Jacobs was
a tenant in a building managed by defendant. Jacobs was injured when she caught
her foot in a tear in the carpet and fell. The jury returned a verdict for Jacobs.
The Supreme Court upheld the verdict, holding that the defendant, although not the
owner of the premises, had sufficient control (under the terms of the management
contract) of the premises so as to be liable for Jacob’s injuries.
Richlin v. Gooding
Amusement Co.,
172 Ohio St. 342, 175 N.E.2d 516 (1961)
Poske v. Mergl,
169 Ohio
St. 70, 157 N.E.2d 344 (1959)
Wallace v. Court of Common Please of Cuyahoga County,
170 Ohio St. 123, 163 N.E.2d 44
DiEgidio v. Kealy,
170 Ohio St. 58, 162 N.E.2d 520
(1959)
McFadden v. Elmer C. Breuer Transp. Co., 156 Ohio St. 430, 103 N.E.2d 385
(1952) McFadden and his passengers were killed when their car collided with a roll
of steel that had fallen off of defendant’s truck. The defendant claimed that McFadden
was contributorily negligent because he violated the assured-clear-distance-ahead
statute. The jury returned a verdict for plaintiffs, but the Court of Appeals reversed
and entered judgment for the defendant. The Supreme Court held that defendant failed
to product any evidence that the roll of steel was in the path of McFadden’s car
a sufficient distance ahead of him to have made it possible for him to stop the
car before colliding with it. The Supreme Court reinstated the trial court’s judgment
in favor of plaintiffs.