2018 Ohio 4386
Ohio Ct. App.2018Background
- James and Barbara Tankersley sought coverage through agent Mark Gottesman/Fogel Insurance for two properties in June 2015; applications listed their P.O. box as the mailing address and warned "DO NOT ASSUME COVERAGE IS BEING PROVIDED."
- Ohio Fair Plan issued a policy and binders for the El Vista property but only a temporary binder for the Ruth Lane property pending inspection and repairs; plaintiffs paid $1,306 to Fogel Insurance as estimated premium.
- Ohio Fair Plan mailed a cancellation notice for the Ruth Lane binder (effective Aug. 31, 2015) and later issued a $447 refund check payable to the Tankersleys; Ohio Fair Plan also emailed Gottesman about the cancellation.
- Plaintiffs say they never received the cancellation notice or refund check; the Ruth Lane property burned on Feb. 18, 2016, and Ohio Fair Plan denied coverage because the policy had been cancelled.
- Plaintiffs sued Ohio Fair Plan, Fogel Insurance, and Gottesman for breach, bad faith, fraud, negligent hiring/retention, respondeat superior, and declaratory relief; trial court dismissed Ohio Fair Plan claims for failure to exhaust administrative remedies and granted summary judgment to Fogel/Gottesman on fraud.
- On appeal, the court reviewed whether administrative remedies were required and whether genuine issues of material fact precluded summary judgment on fraud and agency issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs were required to exhaust Ohio Fair Plan administrative remedies before suing | Tankersleys: not required for declaratory relief or when exhaustion would be futile | Ohio Fair Plan: statute and rule require appeals to Board of Governors then Superintendent before judicial review | Required to exhaust; dismissal proper |
| Whether exhaustion was futile because Ohio Fair Plan could not grant monetary relief | Tankersleys: administrative process could not award the damages sought, so exhaustion would be futile | Ohio Fair Plan: administrative appeals could reverse cancellation and thereby afford the relief sought | Not futile; administrative appeal could provide the requested relief; exhaustion required |
| Whether Gottesman/Fogel were agents of Ohio Fair Plan (respondeat superior/negligent hiring) | Tankersleys: agent accepted premium check and thus acted with authority or apparent authority for Ohio Fair Plan | Defendants: regulation and application warranties expressly disclaim any agency or binding authority | Not agents as a matter of law; claims against Ohio Fair Plan for respondeat superior/negligent hiring dismissed |
| Whether genuine issues of fact precluded summary judgment on fraud (failure to notify, concealment of refund) | Tankersleys: Gottesman/Fogel failed to notify of cancellation and concealed/withheld refund check | Defendants: applications/binders warned coverage not guaranteed; defendants lacked authority to bind Ohio Fair Plan, attempted voicemail notification, no evidence they received or withheld the refund; plaintiffs offered only self‑serving denials | Summary judgment affirmed for Gottesman/Fogel; no actionable misrepresentation, intent, or justifiable reliance shown |
Key Cases Cited
- Nemazee v. Mt. Sinai Medical Ctr., 56 Ohio St.3d 109 (Ohio 1990) (requires exhaustion of administrative remedies unless administrative body lacks authority to grant relief)
- Jones v. Chagrin Falls, 77 Ohio St.3d 456 (Ohio 1997) (failure to exhaust is ordinarily an affirmative defense; limits on 12(B)(6) dismissal for affirmative defenses)
- State ex rel. Teamsters Local Union No. 436 v. Cuyahoga Cty. Bd. of Commrs., 132 Ohio St.3d 47 (Ohio 2012) (declaratory relief does not excuse exhaustion where administrative appeal is available)
- Byrd v. Faber, 57 Ohio St.3d 56 (Ohio 1991) (pleading standard on motion to dismiss — accept allegations as true and draw inferences for nonmoving party)
- Dresher v. Burt, 75 Ohio St.3d 280 (Ohio 1996) (summary judgment burden-shifting framework)