Horn v. Ohio Dept. of Ins.
2017 Ohio 231
| Ohio Ct. App. | 2017Background
- Anthony Horn sought to act as a surety bail bond agent for Indiana Lumbermens Mutual (ILM) but lacked sufficient collateral for a direct appointment; ILM referred him to American Bonding Company (ABC) which agreed to supervise him.
- Horn, ILM, and Underwriters Surety executed a Supervised Representative’s Bail Bond Agreement (approved by ABC) requiring Horn to remit premiums to ABC, Underwriters, and ILM per the Bond Payment Terms.
- A dispute arose after Horn paid $1,000 but failed to remit the remaining premium (about $3,141.50) and other obligations; ILM terminated Horn and withheld his B.U.F. until obligations were satisfied.
- ABC filed a complaint with the Ohio Department of Insurance; after an administrative hearing the hearing officer found Horn failed to remit premiums and recommended a 180-day suspension plus conditions for reinstatement (pay ILM and fines/costs).
- The Superintendent adopted the recommendation but modified the reinstatement condition to require proof of payment to ILM (not ABC); Horn appealed to the Lorain County Court of Common Pleas, which affirmed; Horn appealed to this court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether agency order suspending Horn’s license was supported by reliable, probative, and substantial evidence | Horn argued he did not owe premiums to ILM because ABC lacked authority to collect premiums in Ohio and any contract with ABC was void | Department argued the Supervised Representative Agreement (approved by ABC) required Horn to remit premiums ultimately payable to ILM; Horn benefitted from the arrangement and forfeited affirmative defenses by not raising them at hearing | Court held decision was supported by reliable, probative, and substantial evidence and in accordance with law; Horn failed to remit premiums to ILM |
| Whether Horn could assert ABC’s lack of capacity as an affirmative defense on appeal | Horn maintained ABC was not licensed to collect premiums in Ohio, so premiums were not owed to ABC/ILM under statute | Department maintained Horn forfeited this affirmative defense by failing to raise it at the administrative hearing and Horn benefited from the contract (quantum meruit/course of dealing) | Court accepted Superintendent’s reasoning that Horn forfeited the defense and that the contractual scheme required remittance to ILM; defense not persuasive |
| Whether the common pleas court could substitute its factual judgment for the agency | Horn urged the trial court should have reweighed facts and reversed or modified the sanction | Department urged deference to agency factfindings; common pleas court’s role is hybrid review but not to substitute its judgment for the agency | Court affirmed that the common pleas court did not abuse discretion in deferring to agency findings |
| Whether Henry’s Café precedent should be overruled to allow broader trial-court review | Horn argued Henry’s Café should be overruled because it is impractical and allows agencies too much finality | State argued this court lacks authority to overrule Ohio Supreme Court precedent | Court declined to overrule Henry’s Café and held it lacked authority to do so |
Key Cases Cited
- Univ. of Cincinnati v. Conrad, 63 Ohio St.2d 108 (1980) (common pleas court must review the entire administrative record for reliable, probative, and substantial evidence)
- Our Place, Inc. v. Ohio Liquor Control Comm., 63 Ohio St.3d 570 (1992) (defines reliable, probative, and substantial evidence)
- Pons v. Ohio State Med. Bd., 66 Ohio St.3d 619 (1993) (appellate review of common pleas’ administrative review is limited to abuse-of-discretion)
- Blakemore v. Blakemore, 5 Ohio St.3d 217 (1983) (standard for abuse of discretion)
- Henry’s Café v. Bd. of Liquor Control, 170 Ohio St. 233 (1959) (limits common pleas courts’ power to substitute judgment for administrative agencies)