Link v. Wayne Ins. Group
2018 Ohio 3529
Ohio Ct. App.2018Background
- In June 2015 Wayne Insurance issued a homeowners policy to Patience Jackson based on an application in which she denied owning dogs; the policy contained a provision voiding coverage for material misrepresentation.
- In October 2015 Mark Link was attacked by two dogs living with Patience and Douglas Jackson; Links later obtained a $100,000 consent judgment against the Jacksons, who assigned their claim against Wayne to the Links.
- Wayne filed a third-party declaratory-judgment action asserting Patience’s misrepresentation voided the policy; the Jacksons failed to answer and the trial court entered default judgment for Wayne, declaring the policy null and void and that Wayne owed no duty to defend or indemnify.
- The Links moved to reconsider/vacate the default judgment; the trial court denied relief, noting the Links lacked standing to challenge the default judgment entered against the Jacksons and that they failed to show a meritorious defense.
- Wayne then moved for summary judgment against the Links; the trial court granted it, concluding the Links lacked privity/standing under R.C. 3929.06 and produced no specific facts creating a genuine issue on misrepresentation, duty to defend, or bad faith.
- The Links appealed, arguing the trial court abused its discretion in denying reconsideration and erred in granting summary judgment on breach, duty-to-defend, and bad-faith theories.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did trial court abuse discretion by denying Links' motion to reconsider/vacate default judgment? | Links: Court treated motion as only a Civ.R. 60(B) matter and denied relief without allowing Links to respond to the default-motion. | Wayne: Links lack standing to challenge default entered against the Jacksons; Jacksons never answered. | No abuse of discretion; Links lacked third-party standing and court reasonably denied reconsideration. |
| Does Links' assignment of the Jacksons' claim create privity to sue Wayne on the policy? | Links: Consent judgment assigned Jacksons’ chose-in-action to Links, so they can pursue insurer. | Wayne: R.C. 3929.06 prerequisites (final judgment and 30-day wait) were not met; Links filed suit before the final judgment entry. | Assignment did not establish standing/privity; statutory prerequisites unmet, so no coverage claim. |
| Did Wayne have a duty to defend or indemnify despite alleged misrepresentation? | Links: Dispute whether Patience actually had dogs when she applied; factual issue precludes summary judgment. | Wayne: Trial court already declared policy void for material misrepresentation; thus no duty to defend/indemnify. | Court affirmed: declaration that policy was void means no duty to defend/indemnify; Links offered no specific facts creating a genuine dispute. |
| Can a bad-faith claim survive if contract/coverage claim fails? | Links: Bad-faith claim is separate and can survive even if breach fails. | Wayne: Bad faith cannot survive because policy was declared void and no duty existed; Links offer no specific facts of bad faith. | Held for Wayne: under these facts (policy declared null, no duty), Links failed to present specific evidence creating a triable bad-faith claim. |
Key Cases Cited
- Morrow v. Becker, 138 Ohio St.3d 11 (2013) (abuse-of-discretion standard explained)
- State v. Morris, 132 Ohio St.3d 337 (2012) (appellate review of discretionary rulings and deference explained)
- Middendorf v. Middendorf, 82 Ohio St.3d 397 (1998) (competent, credible evidence supports discretionary rulings)
- Murphy v. Reynoldsburg, 65 Ohio St.3d 356 (1992) (summary-judgment standard and doubt resolved for nonmoving party)
- Dresher v. Burt, 75 Ohio St.3d 280 (1996) (party moving for summary judgment bears initial burden; nonmoving must produce specific facts)
- Bullet Trucking, Inc. v. Glen Falls Ins. Co., 84 Ohio App.3d 327 (1992) (bad-faith tort may be separate from contract under certain circumstances)
- Chitlik v. Allstate Ins. Co., 34 Ohio App.2d 193 (1973) (standard liability policy generally not a contract for benefit of third parties)
- Pasipanki v. Morton, 61 Ohio App.3d 184 (1989) (insurer's duty of good faith runs to insured, not third parties)
- Util. Serv. Partners, Inc. v. Pub. Util. Comm'n, 124 Ohio St.3d 284 (2009) (third-party standing doctrine and its limits)
- ProgressOhio.org, Inc. v. JobsOhio, 139 Ohio St.3d 520 (2014) (standing threshold to bring claims)