MacDonald v. Auto-Owners
2012 Ohio 5949
Ohio Ct. App.2012Background
- MacDonalds owned a Spencerville home later vacant for extended periods prior to June 2010 loss.
- Policy issued by Auto-Owners excluded water damage if the property had been vacant for more than 60 days before loss.
- Home was vacant from July 2009 until the loss; water damage occurred June 23, 2010.
- Owners’ agent Burden allegedly misrepresented coverage, leading MacDonalds to authorize repairs and demolition.
- Repairs and mold-remediation were performed by contractors; substantial demolition occurred.
- Trial court held equitable estoppel precluded the vacancy exclusion and granted declaratory judgment in MacDonalds’ favor; Appellate Court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether equitable estoppel can override the vacancy exclusion | MacDonalds relies on agent misrepresentation to estop enforcement. | Waiver/estoppel cannot expand policy coverage beyond express terms. | Equitable estoppel may override vacancy exclusion; coverage affirmed |
| Whether damages are excluded by express policy terms despite estoppel | Estoppel permits recovery for covered losses despite vacancy clause. | 60-day vacancy exclusion bars water-damage recovery. | Vacancy exclusion overridden; damages covered under policy |
Key Cases Cited
- Hybud Equip. Corp. v. Sphere Drake Ins. Co., Ltd., 64 Ohio St.3d 657 (Ohio 1992) (equitable estoppel limits on insurance coverage where appropriate)
- Hartory v. State Auto. Mutual Ins. Co., 50 Ohio App.3d 1 (11th Dist.1988) (waiver/equitable estoppel generally not allowed to expand coverage)
- Cohen v. Estate of Cohen, 23 Ohio St.3d 90 (Ohio 1986) (constructive fraud standard for equitable estoppel)
- State ex rel. Ryan v. Teachers Retirement Sys., 71 Ohio St.3d 362 (Ohio 1994) (equitable estoppel elements and reliance considerations)