Chateau Estate Homes, L.L.C. v. Fifth Third Bank
2017 Ohio 6985
| Ohio Ct. App. | 2017Background
- Chateau Estate Homes LLC and Todd Clifford engaged Fifth Third Bank in July 2007 to broker key-man life insurance on Joseph Fiore.
- Fifth Third procured a $2 million policy issued September 28, 2007 listing Fiore as owner and Mary Fiore (his wife) as sole beneficiary; an October 7, 2007 amendment confirmed those terms.
- Chateau alleges Fifth Third mishandled the application so the policy was issued individually instead of as key-man insurance benefitting Chateau per its operating agreement.
- Fiore died February 13, 2012; the policy proceeds were paid entirely to Mary Fiore rather than being split with Chateau.
- Chateau sued Fifth Third for negligence, breach of contract, and breach of fiduciary duty, but the trial court granted summary judgment for Fifth Third as the claims were time-barred. Chateau appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Which statute of limitations governs the breach-of-contract claim (6-year contract vs. 4-year tort)? | The contract claim is separate and governed by the 6-year contract limitations. | The contract claim is a restatement of tort claims; the gist is tort so R.C. 2305.09(D) 4-year tort limitation applies. | The court held the gist of the complaint is tort; the 4-year statute for negligence applies to all claims. |
| When did the cause of action accrue (policy issuance in 2007 vs. damage upon Fiore’s death in 2012)? | Accrual occurred when Chateau suffered actual damage — i.e., when proceeds were paid in 2012 (delayed-damages rule). | Accrual occurred when the allegedly negligent act was committed (by October 2007); discovery or delayed-damage rules do not delay accrual for professional negligence under precedent. | The court held the cause of action accrued no later than October 2007; the delayed-damages rule does not apply here, so claims were time-barred. |
Key Cases Cited
- Kunz v. Buckeye Union Ins. Co., 1 Ohio St.3d 79 (Ohio 1982) (applied the delayed-damages rule in an insurance-agent context: accrual upon actual loss)
- Velotta v. Leo Petronzio Landscaping, Inc., 69 Ohio St.2d 376 (Ohio 1982) (describes delayed-damages rule: negligence cause accrues when injury occurs)
- Investors REIT One v. Jacobs, 46 Ohio St.3d 176 (Ohio 1989) (rejected discovery rule for professional-negligence claims against accountants; accrual at negligent act)
- Grant Thornton, Inc. v. Windsor House, 57 Ohio St.3d 158 (Ohio 1991) (reaffirmed Investors REIT One principle for professional negligence)
- Flagstar Bank, F.S.B. v. Airline Union’s Mtge. Co., 128 Ohio St.3d 529 (Ohio 2011) (held professional-negligence claims accrue when the negligent act is committed; refused to apply discovery or delayed-damages rules)
- Hater v. Gradison Div. of McDonald & Co. Sec., 101 Ohio App.3d 99 (1st Dist. 1995) (applied Investors REIT One logic to brokerage/appraisal professional-negligence claims)