2020 Ohio 3973
Ohio Ct. App.2020Background
- Lindsey Williams-Diggins insured a 2006 Chevrolet Impala under a Private Passenger Auto (PPA) policy issued by Permanent General.
- After a March 19, 2018 collision the car was declared a total loss; a vendor valued the fair market value at $2,968 and Permanent General paid $1,431 after salvage and deductible adjustments; Williams-Diggins accepted payment and kept the vehicle.
- Williams-Diggins filed a putative class action alleging breach of contract because Permanent General did not pay sales tax, title, and registration fees as part of the vehicle’s actual cash value.
- Permanent General moved to dismiss under Civ.R. 12(B)(6), arguing (inter alia) lack of standing (insured did not replace the vehicle) and that the Policy did not require payment of taxes/fees.
- The trial court dismissed, concluding the Policy defined “actual cash value” as fair market value at time of loss, which does not include sales tax and fees; the appellate court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether “actual cash value” in the Policy includes sales tax, title, registration fees | "Actual cash value" should be read to include replacement costs (replacement cost minus depreciation), so taxes/fees are covered | Policy defines actual cash value as fair market value at time of loss, which does not include taxes/fees | Court: Definition is unambiguous; fair market value excludes sales tax/fees; no duty to pay them |
| Whether the Policy language is ambiguous re: valuation method | Fair market value raises factual issues and can include replacement-cost-minus-depreciation; ambiguity precludes dismissal | Policy expressly defines actual cash value as fair market value; no ambiguity | Court: No ambiguity; Ohio precedent and the Policy definition control; Civ.R.12(B)(6) dismissal appropriate |
| Whether other Policy clauses (insuring clause; fee-exclusion clause) imply coverage for replacement taxes/fees | Insuring clause and the exclusion’s wording imply necessary replacement costs (like taxes/fees) are covered | Fee clause applies only if insurer repairs/replaces; insurer elected to pay cash, so clause inapplicable | Court: Clause does not obligate insurer to pay taxes/fees when it elects cash settlement |
| Whether indemnity/make-whole principles require payment of taxes/fees | Indemnity principle requires insured be made whole, including costs to replace (taxes/fees) | Indemnity limited to policy terms; insurer’s liability is only what the contract requires | Court: Indemnity applies only as defined by policy; insurer not required to pay taxes/fees; Allgood supports insurer’s contractual-limits approach |
Key Cases Cited
- Perrysburg Twp. v. Rossford, 103 Ohio St.3d 79 (Ohio 2004) (standard of de novo review for Civ.R. 12(B)(6))
- O'Brien v. Univ. Community Tenants Union, 42 Ohio St.2d 242 (Ohio 1975) (complaint should not be dismissed unless no set of facts entitles plaintiff to relief)
- Byrd v. Faber, 57 Ohio St.3d 56 (Ohio 1991) (on motion to dismiss, factual allegations taken as true)
- Davis v. Loopco Indus., Inc., 66 Ohio St.3d 64 (Ohio 1993) (unambiguous contract terms are construed as a matter of law)
- Wray v. Stvartak, 121 Ohio App.3d 462 (Ohio Ct. App. 1997) (fair market value defined as price between willing buyer and seller and does not generally include sales tax/fees)
- Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216 (Ohio 2003) (presumption that parties’ intent is reflected in policy language)
- Lager v. Miller-Gonzalez, 120 Ohio St.3d 47 (Ohio 2008) (ambiguity exists only when provision is susceptible to more than one reasonable interpretation)
- Allgood v. Meridian Sec. Ins. Co., 836 N.E.2d 243 (Ind. 2005) (insurer’s indemnity obligation is limited by unambiguous policy terms; insurer may choose to repair/replace or pay actual cash value)