Jordan v. United Ohio Ins. Co.
2021 Ohio 2170
| Ohio Ct. App. | 2021Background
- The Jordans owned a rental property insured by United Ohio; a fire damaged the property and the Jordans claimed property damage and lost rental income under Coverage D.
- Property-damage portion was settled pre-suit; the lost-rent claim remained in dispute and prompted a declaratory-judgment and breach-of-contract suit filed Jan. 7, 2020.
- United Ohio moved for summary judgment, arguing it had paid three months of lost rent per the policy and that the Jordans failed to mitigate and materially breached via neglect; the trial court granted summary judgment for United Ohio on Nov. 17, 2020.
- Facts: United Ohio initially issued valuation payments (Jan. 25, 2018 and Feb. 9, 2019); the Jordans invoked the contractual appraisal process (April 6, 2018). Appraisal was delayed because the parties’ appraisers disputed an umpire; court intervention was required and an umpire ultimately awarded $52,000 in Aug. 2019, which United Ohio paid.
- The Jordans contend the insurer’s actions (adjuster delay and seeking court appointment of an umpire) prolonged the period the premises were unfit and thus increased lost-rent exposure; United Ohio contends it paid the full contractual amount (three months).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether insurer may rely on failure-to-mitigate defense | Jordans: insurer cannot rely; summary judgment precluded because insurer’s conduct increased damages | United Ohio: Jordans failed to mitigate and breached policy duties | Court: Insurer waived failure-to-mitigate defense by not pleading it; trial court erred to base judgment on that defense |
| Whether Jordans materially breached policy (neglect exclusion / failure to protect property) | Jordans: they took reasonable steps; no undisputed evidence of neglect | United Ohio: insured didn’t take all reasonable means to save/preserve property, so coverage barred | Court: Policy language is reasonably read as a narrow neglect exclusion (save/preserve property); no undisputed fact of neglect—trial court erred to find material breach as a matter of law |
| Scope of "period reasonably required to make the insured premises fit for use" (lost-rent coverage) | Jordans: "reasonably required" can include the time lost while valuation/appraisal dispute was pending and delayed by insurer/appraisal process | United Ohio: term is clear; Jordans conceded three months and insurer paid that amount | Court: Construing ambiguity for insured, a genuine issue remains whether the appraisal/dispute period is part of the "reasonably required" period; summary judgment improper |
Key Cases Cited
- Doe v. Shaffer, 90 Ohio St.3d 388 (2000) (standard of de novo review for summary judgment)
- Laboy v. Grange Indem. Ins. Co., 144 Ohio St.3d 234 (2015) (insurance-policy interpretation; ambiguities construed for insured)
- Sharonville v. Am. Emp. Ins. Co., 109 Ohio St.3d 186 (2006) (insurance policy is a contract whose interpretation is a matter of law)
- Alexander v. Buckeye Pipe Line Co., 53 Ohio St.2d 241 (1978) (ordinary words given ordinary meaning in contracts)
- Inland Refuse Transfer Co. v. Browning-Ferris Indus. of Ohio, 15 Ohio St.3d 321 (1984) (ambiguity in contract may make intent a factual issue)
- Nationwide Mut. Fire Ins. Co. v. Guman Bros. Farm, 73 Ohio St.3d 107 (1995) (de novo review applies to contract interpretation)
- Young v. Frank's Nursery & Crafts, Inc., 58 Ohio St.3d 242 (1991) (failure-to-mitigate is an affirmative defense waived if not pleaded)