Freedom Banc Mtge. Servs., Inc. v. Cincinnati Ins. Co.
2014 Ohio 226
Ohio Ct. App.2014Background
- Freedom Banc Mortgage Services insured by Cincinnati Insurance Company under a commercial property policy.
- Policy requires suit within two years after the date of the direct physical loss (contractual limitation).
- Alleged direct physical loss began August 8, 2010 and peaked August 18, 2010, causing inoperability of Freedom's servers and computers.
- Loss allegedly resulted in business disruption; Freedom ceased operations by December 2010.
- Freedom filed suit on September 18, 2012; Cincinnati moved for judgment on the pleadings asserting the two-year limit had expired.
- Trial court granted the motion; on appeal, the issue is whether the loss date for the limitation period is August 18, 2010.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Freedom filed within the contractual two-year period | Freedom argued losses extended to December 2010 and suit was timely. | Loss occurred August 18, 2010, so suit filed September 18, 2012 was time-barred. | Complaint time-barred; affirmed judgment on pleadings. |
Key Cases Cited
- Bethel Village Condominium Assn. v. Republic-Franklin Ins. Co., 2007-Ohio-546 (10th Dist. 2007) (contractual 2-year loss/damage period enforced)
- Figetakis v. Owners Ins. Co., 2006-Ohio-918 (9th Dist. 2006) (loss accrual tied to the date of damage)
- Angel v. Reed, 2008-Ohio-3193 (Sup. Ct. 2008) (two-year contractual limitations upheld)
- Sarmiento v. Grange Mut. Cas. Co., 106 Ohio St.3d 403 (2005-Ohio-5410) (contractual limitations valid if reasonable)
- Miller v. Progressive Cas. Ins. Co., 69 Ohio St.3d 619 (1994) (enforceability of shorter contractual limitations period)
- Colvin v. Globe Am. Cas. Co., 69 Ohio St.2d 293 (1982) (policy terms interpreted according to plain meaning)
- Santana v. Auto Owners Ins. Co., 91 Ohio App.3d 490 (6th Dist. 1993) (principles of contract interpretation in insurance disputes)