2023 Ohio 1069
Ohio Ct. App.2023Background
- On August 10, 2018 Crawford was injured in an automobile collision and alleged the other driver was uninsured; she sued the driver and her insurer, American Family Insurance Company (AFIC), asserting breach of contract (UM coverage) and a bad faith claim for refusal to pay.
- AFIC sought bifurcation of the bad-faith claim; the court bifurcated but did not stay discovery; the underlying coverage claims were later settled and the bad-faith claim remained.
- AFIC moved to exclude Crawford’s designated expert (an attorney who had handled the claim) on conflict grounds; no written ruling appears in the record.
- AFIC moved for summary judgment arguing (and the trial court held) that expert testimony is required as a matter of law to prove bad faith; the court granted summary judgment solely on that basis without citing controlling authority or referencing the submitted evidentiary materials.
- On appeal the Second District concluded the trial court erred in imposing a blanket expert requirement for bad-faith claims, observed AFIC had taken an inconsistent position below, found the adjuster’s deposition supplied standards of conduct, and remanded because the trial court failed to consider sealed claims-file materials submitted in opposition to summary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether expert testimony is required as a matter of law in an insurer bad-faith claim | Crawford: no blanket rule; lay jurors can assess bad faith when facts and standards are in evidence; AFIC adjuster’s deposition supplied standards | AFIC: expert testimony is required in all cases (analogizing to professional-negligence claims against agents) | Reversed trial court. No blanket rule; need depends on circumstances; expert not required where lay testimony (e.g., adjuster deposition) supplies standards |
| Whether AFIC’s valuation/decision was "fairly debatable" such that summary judgment for insurer should be affirmed | Crawford: genuine issues of material fact exist about bad faith and adequacy of investigation/valuation | AFIC: insurer had reasonable basis for its valuation; refusal was fairly debatable | Court declined to affirm on this ground because trial court did not appear to have considered all submitted evidence (sealed claims file); remanded for further proceedings |
| Whether an insurer’s claims adjuster should be treated as a “professional” necessitating expert proof of standards | Crawford: adjusters are not professionals for this purpose; no Ohio authority classifying adjusters as such | AFIC: standards-of-care proof (via expert) is required, relying on decisions in agent negligence contexts | Court: adjuster not shown to be a professional whose conduct is beyond lay understanding; no basis to extend a blanket professional-expert rule to bad-faith claims |
| Whether appellate court may affirm on alternative basis when trial court failed to review all summary-judgment materials | Crawford: trial court did not review sealed materials and therefore appellate de novo review is improper to supply missing trial-court analysis | AFIC: appellate court may affirm on any proper basis (including "fairly debatable") | Court: declined to affirm because record shows trial court did not consider all evidence; remand required |
Key Cases Cited
- Hoskins v. Aetna Life Ins. Co., 6 Ohio St.3d 272, 452 N.E.2d 1319 (Ohio 1983) (recognizing insurer's duty to act in good faith and tort liability for breach)
- Slater v. Motorists Mut. Ins. Co., 174 Ohio St. 148, 187 N.E.2d 45 (Ohio 1962) (defining bad faith to include more than negligence and involving dishonest purpose or conscious wrongdoing)
- Zoppo v. Homestead Ins. Co., 71 Ohio St.3d 552, 644 N.E.2d 397 (Ohio 1994) (endorsing the "reasonable justification" standard and clarifying intent is not required)
- Motorists Mut. Ins. Co. v. Said, 63 Ohio St.3d 690, 590 N.E.2d 1228 (Ohio 1992) (discussing fairly debatable standard and insurer justification)
- Furr v. State Farm Mut. Auto. Ins. Co., 128 Ohio App.3d 607, 716 N.E.2d 250 (Ohio Ct. App. 1998) (allowing an industry expert to testify about claims-handling standards under Evid.R. 702)
- Murphy v. Reynoldsburg, 65 Ohio St.3d 356, 604 N.E.2d 138 (Ohio 1992) (appellate limits when trial court fails to consider summary-judgment materials)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (summary-judgment standard requiring that disputes over material facts preclude judgment)