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Ohio State Supreme Court Cases
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 administrator 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 it before or during trial. If a defendant fails to do so, he or she 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. 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 than 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-to-a-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 and went left of center, colliding head on with the plaintiff’s car, causing injuries to him. The jury awarded $500,000 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 May’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. 13 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 once 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 bind 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 his or her 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 produce 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.