Scarberry v. W. Res. Group
2015 Ohio 240
Ohio Ct. App.2015Background
- Tammy Scarberry held a homeowners policy with Lightning Rod (Western Reserve) covering 3074 Beltz Road; the relevant loss was a fire on August 26, 2011.
- Scarberry filed suit on June 17, 2013 (declaratory relief, money judgment, and tort claims) after disputed negotiations over covered losses.
- The policy’s prior years contained a one-year suit limitation in the main insuring language; the 2011–2012 renewal’s main form stated a two-year limit but an attached endorsement (HM0139) expressly replaced that with a one-year limit.
- Declarations listed the HM0139 endorsement; a summary changes document sent with the renewal did not mention HM0139.
- Lightning Rod’s counsel and Scarberry’s prior counsel agreed in writing to extend the one-year contractual suit limitation by six months (to February 26, 2013); Lightning Rod also sent appraisal demand and reminder letters referencing the expiration date.
- The trial court granted summary judgment to Lightning Rod, holding Scarberry’s complaint was untimely and she failed to satisfy the appraisement condition precedent; the appellate court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the policy’s contract time limit for suit is ambiguous | Scarberry: endorsement/renewal materials created ambiguity whether the limit was one year or two years; the change (if any) was not clearly disclosed | Lightning Rod: endorsement HM0139 plainly replaced the two-year provision with the longstanding one-year provision; declarations referenced the endorsement | Court: No ambiguity; HM0139 unambiguously imposed a one-year limit (preserved from earlier policies) |
| Whether the suit was timely filed | Scarberry: filing within two years (June 2013) suffices if two-year provision applied or endorsement was ineffective | Lightning Rod: parties agreed to one-year plus six-month extension; deadline was Feb 26, 2013, and suit filed after that | Court: Suit was untimely—filed after agreed extension expired |
| Whether insurer provided required notice of impending contractual deadline | Scarberry: insurer failed to notify re: pending expiration per Ohio Adm.Code 3901-1-54(G)(5) | Lightning Rod: insured was represented by counsel; insurer’s counsel notified counsel and Scarberry by letters including August 21, 2012 letters and Oct. 26, 2012 appraisal letter reiterating Feb 26, 2013 deadline | Court: Notice requirement (if applicable) satisfied by written letters to counsel and insured; no ambiguity from notice failure |
| Whether insured complied with policy condition precedent (appraisement) before filing suit | Scarberry: disputed whether appraisal requirement was satisfied/waived | Lightning Rod: Scarberry refused to appoint an appraiser after insurer demanded appraisal, breaching condition precedent | Court: Failure to participate in appraisal constituted noncompliance with conditions precedent to suit, supporting judgment for insurer |
Key Cases Cited
- Colvin v. Globe Am. Cas. Co., 69 Ohio St.2d 293 (Ohio 1982) (contractual limitation-of-action clauses are enforceable if clear, unambiguous, and reasonable)
- Faruque v. Provident Life & Acc. Ins. Co., 31 Ohio St.3d 34 (Ohio 1987) (insurance contract language reasonably susceptible to more than one meaning is construed for the insured)
- Aultman Hosp. Assn. v. Community Mut. Ins. Co., 46 Ohio St.3d 51 (Ohio 1989) (primary objective in contract construction is to ascertain parties’ intent and give effect to plain language)
- Dominish v. Nationwide Ins. Co., 129 Ohio St.3d 466 (Ohio 2011) (upholding enforceability of insurer’s limitation-of-action clause when clear)