2014 Ohio 5057
Ohio Ct. App.2014Background
- On Feb. 4, 2012 Mark and Kathleen Brown’s home was vandalized; they claimed property damage under a Nationwide homeowner’s policy. Nationwide’s adjuster estimated loss at $155,678.65 using Xactimate.
- Browns had filed bankruptcy in March 2011 and, in their schedules, listed household goods and furnishings at a combined value of $3,100; they signed the petition under penalty of perjury and testified at the bankruptcy trustee hearing the schedules were correct.
- Nationwide discovered the bankruptcy during its investigation and issued a reservation-of-rights letter asserting judicial estoppel might bar recovery of the larger personal-property claim.
- Browns sued Nationwide (June 2013) for breach of contract and bad faith. The trial court stayed bad-faith discovery pending resolution of the breach claim.
- The trial court granted Nationwide summary judgment on breach of contract based on judicial estoppel, limiting recovery to $3,100, and later granted summary judgment to Nationwide on the bad-faith claim. The appellate court affirmed the judicial-estoppel ruling but reversed the bad-faith dismissal and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Browns are judicially estopped from claiming a much larger value for personal property than listed in prior bankruptcy schedules | Browns said the estimate was prepared by Nationwide’s adjuster and denied authorizing the $3,100 valuation in bankruptcy | Nationwide argued Browns took a contrary sworn position in bankruptcy (listed $3,100) and cannot now assert a much larger value | Court held judicial estoppel applies; Browns bound by bankruptcy schedules and limited to $3,100 recovery |
| Whether policy language barring bankruptcy defenses in Liability section prevents Nationwide from invoking judicial estoppel for a Property claim | Browns relied on policy sentence (in Liability Conditions) that bankruptcy/insolvency "will not relieve us of our obligations" | Nationwide noted that sentence appears only in Liability section and does not apply to Property Coverage at issue | Court held policy language inapplicable; cannot create ambiguity to avoid judicial estoppel |
| Whether summary judgment on the breach claim was appropriate (procedural) | Browns sought partial summary judgment; argued Nationwide not entitled to judgment as matter of law | Nationwide cross-moved; trial court granted Nationwide’s motion and denied Browns’ motion based on judicial estoppel | Appellate court affirmed trial court’s grant of summary judgment to Nationwide on breach claim |
| Whether dismissal of bad-faith claim on summary judgment was proper without allowing discovery (Civ.R. 56(F)) | Browns argued summary judgment was premature because discovery on bad-faith (including claim file) was stayed and they needed discovery to oppose motion | Nationwide maintained delay was justified and Browns failed to cooperate; moved for summary judgment | Appellate court held trial court abused its discretion by granting summary judgment on bad-faith without permitting discovery; remanded for further proceedings |
Key Cases Cited
- Greer–Burger v. Temesi, 116 Ohio St.3d 324 (Ohio 2007) (explains judicial estoppel elements and application when prior sworn positions conflict)
- State ex rel. Zimmerman v. Tompkins, 75 Ohio St.3d 447 (Ohio 1996) (reaffirms Civ.R. 56 standards for summary judgment)
- Smiddy v. The Wedding Party, Inc., 30 Ohio St.3d 35 (Ohio 1987) (appellate review standards for summary judgment)
- Temple v. Wean United, Inc., 50 Ohio St.2d 317 (Ohio 1977) (sets forth Civ.R. 56(C) summary-judgment tests)
- Mauzy v. Kelly Servs., Inc., 75 Ohio St.3d 578 (Ohio 1996) (trial court discovery rulings reviewed for abuse of discretion)