Fraley v. Estate of Oeding
138 Ohio St. 3d 250
| Ohio | 2014Background
- Fraley (Ohio resident) sued Indiana residents J & R and the estate of Timothy Oeding and their insurer Auto-Owners after a 2008 Indiana collision; only Fraley’s claim for loss of use (caused by Auto-Owners’ five-month investigatory hold on the truck) remained in dispute.
- Fraley served defendants in Indiana and conceded he could not bring a direct action against Auto-Owners under Ohio law. He argued Auto-Owners’ contacts with Ohio could be imputed to the nonresident insureds, creating personal jurisdiction over J & R and Oeding.
- Trial court dismissed for lack of personal jurisdiction; the Twelfth District reversed, holding insurer conduct could be imputed to the insureds and that jurisdiction comported with due process.
- Ohio Supreme Court granted review to decide whether an Ohio court may exercise in personam jurisdiction over a nonresident solely on the basis of the nonresident’s insurer’s conduct.
- The Ohio Supreme Court reversed the court of appeals: holding insurer conduct alone cannot subject a nonresident insured to Ohio long-arm jurisdiction, and asserting jurisdiction here would violate due process.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an insurer’s conduct in Ohio can be imputed to a nonresident insured to satisfy R.C. 2307.382(A)(4) | Fraley: Auto-Owners acted as agent/personal representative for J & R and Oeding; Auto-Owners’ business in Ohio satisfies the statute so its acts can be imputed to insureds | Appellants: Insurer’s conduct cannot be imputed; J & R and Oeding had no contacts with Ohio and thus are not subject to long-arm statute | No — insurer’s conduct alone cannot subject a nonresident insured to Ohio long-arm jurisdiction; the insured must itself ‘‘regularly do or solicit business’’ in Ohio |
| Whether Auto-Owners qualified as a personal representative under R.C. 2307.381 | Fraley: ‘‘other personal representative’’ includes insurer acting for insured | Appellants: ‘‘personal representative’’ refers to executor/administrator-type roles, not ordinary insurer-insured contracts | Insurer is not a personal representative for purposes of the statute; statutory text and canons limit the catchall to similar relationships |
| Whether an agency relationship existed (so insurer acts "by an agent") | Fraley: Auto-Owners acted as agent when it held the truck and negotiated | Appellants: No evidence insureds controlled or had right to control insurer’s investigation/settlement decisions | No prima facie agency shown; insurance companies typically control defense/settlement and act to protect their contingent liability, not under insured’s control |
| Whether asserting jurisdiction would satisfy due process (minimum contacts) | Fraley: Auto-Owners’ license and communications with Ohio create sufficient contacts to permit jurisdiction over insureds | Appellants: Attributing insurer contacts to a nonresident insured offends minimum-contacts and fair-play principles | Due process bars jurisdiction: each defendant must have minimum contacts; insureds had none and cannot be haled into Ohio merely because their insurer operates there |
Key Cases Cited
- International Shoe Co. v. Washington, 326 U.S. 310 (sets the minimum-contacts due-process standard)
- Rush v. Savchuk, 444 U.S. 320 (insurer’s forum contacts do not alone establish jurisdiction over nonresident insured)
- Griffey v. Rajan, 33 Ohio St.3d 75 (insurer’s neglect imputable to insured for relief-from-judgment context)
- Peyko v. Frederick, 25 Ohio St.3d 164 (insurer conduct relevant to discovery and pretrial matters where court already has jurisdiction)
- Kauffman Racing Equip., L.L.C. v. Roberts, 126 Ohio St.3d 81 (procedural standards for Civ.R. 12(B)(2) and prima facie showing of jurisdiction)