Hudson v. P.I.E. Mut. Ins. Co.Hudson v. P.I.E. Mut. Ins. Co.
Rendered on March 1, 2011
Michael DeWine, Attorney General, by Special Counsel Calfee Halter & Griswold LLP, James M. Lawniczak and Tiiara N. A. Patton, for appellee Superintendent of Insurance as Liquidator of the P.I.E. Mutual Insurance Company.
Thomas F. McManamon, pro se.
APPEAL from the Franklin County Court of Common Pleas.
BRYANT, P.J.
WHETHER THE TRIAL COURT ERRED WHEN IT GRA TUITOUSLY INCLUDED A RELEASE OF THE OHIO DE PARTMENT OF INSURANCE IN PARAGRAPH 9 OF THE TRIAL COURT‘S ENTRY AND ORDER GRANTING LIQUI DATOR‘S APPLICATION FOR ORDER TERMINATING LIQUIDATION PROCEEDINGS AND TERMINATING LIQ UIDATION PROCEEDINGS, FILED APRIL 20, 2010.
Because appellant failed to properly preserve through objection in the trial court the issue he assigns as error on appeal, we affirm.
I. Facts and Procedural History
{¶2} Appellant sold his insurance agency in 1994 to a PIE subsidiary, Provider‘s Insurance Agency, Inc., and received in return a multi-year employment contract. McManamon v. Ohio Dept. of Ins., 179 Ohio App.3d 776, 2008-Ohio-6958, ¶2. In 1997, the trial court ordered PIE into rehabilitation under the Insurers Supervision, Rehabilitation and Liquidation Act, but by 1998 the court determined that allowing PIE to continue its business would be hazardous to its policyholders, creditors or the public. Accordingly, on March 23, 1998 the trial court determined PIE was insolvent as defined in
{¶3} During the liquidation process, the trial court ordered Provider‘s Insurance Agency, Inc. to be consolidated into the PIE estate, allowing the court to treat the
{¶4} Appellant followed the Liquidator‘s action with documents filed in the trial court and separate actions filed in the Court of Claims, all stemming from his belief the settlement agreement was void, PIE owed him money under his employment contract, and PIE was not insolvent. He claimed Department of Insurance employees fraudulently induced PIE into liquidation even though other claims for Loss Adjustment Expenses (LAE) existed, including $51 million in LAE reinsurance receivable. McManamon, 2008-Ohio-6958 at ¶4; McManamon v. Ohio Dept. of Ins., Ohio Ct. Cl. No. 2003-08568, 2004-Ohio-1473, ¶4,
{¶5} On November 19, 2009, the Liquidator filed a Motion for Order Approving Liquidator‘s Final Report of Claims, Reserve for Administrative Expenses, and Authorizing Final Distribution of Assets of the P.I.E. Mutual Insurance Company. The motion stated the Liquidator paid the Class 1 claimants in full, the Class 2 claimants each would receive 82.1412 percent pro rata distribution on their claims, and the payout to the Class 2 claimants would extinguish all of the assets in the PIE estate. The court granted the motion.
{¶7} Appellant filed an objection to the Liquidator‘s application on April 14, 2010, stating he was a creditor in these proceedings but also ha[d] been advised that his claim [was] not senior enough to merit payment, given recoveries. (R. 2331.) Appellant asked the court to direct the Calfee Halter & Griswold law firm, serving as special counsel to the Liquidator in these proceedings, to search its records for certain documents and share them with appellant. Appellant also objected to the Liquidator‘s abandoning the $51 million LAE account receivable, stating he offered significant evidence in his 2004 Court of Claims case the $51 million existed and remained recoverable. Appellant advised he planned to re-file his case in the Court of Claims to litigate whether the asset could be collected.
{¶9} As a result of the hearing, the trial court signed the Entry and Order Granting Liquidator‘s Application for Order Terminating Liquidation Proceedings and Terminating Liquidation Proceedings. (R. 2332-33.) The order states that all assets justifying the expense of collection and distribution have been collected and distributed under
II. Assignment of Error- No Objection to Discharge and Release
{¶10} On appeal, appellant asserts the trial court erred in releasing and discharging the Liquidator and her employees.
{¶11} The Liquidator served appellant with her Application for Order Terminating Liquidation Proceedings that also requested the trial court discharge and release the Liquidator and her employees from any claims arising out of or relating to the PIE liquidation. Appellant was served timely with a notice of a special hearing on April 20, 2010 to consider the application for termination. Appellant was present at the April 20, 2010 hearing and, although he voiced concerns about not receiving the documents he requested, he never objected to discharging and releasing the Liquidator, her employees, and the employees of the Department of Insurance; similarly, appellant‘s April 14, 2010 written objection to the Liquidator‘s application did not so object. As a result, even though appellant on appeal claims the trial court‘s order granting such a release and discharge was not statutorily authorized and was improper, appellant did not preserve the issue for appeal.
{¶12} It is well settled that a litigant‘s failure to raise an issue before the trial court waives the litigant‘s right to raise that issue on appeal. Gentile v. Ristas, 160 Ohio App.3d 765, 2005-Ohio-2197, ¶74, citing Estate of Hood v. Rose, 153 Ohio App.3d 199, 2003-Ohio-3268, ¶10. See also State ex rel. Zollner v. Indus. Comm. (1993), 66 Ohio St.3d 276, 278; Stores Realty Co. v. Cleveland (1975), 41 Ohio St.2d 41, 43 (noting
{¶13} The waiver, or forfeiture, rule is tempered somewhat by the doctrine of plain error. S&P Lebos, Inc. v. Ohio Liquor Control Comm., 163 Ohio App.3d 827, 2005-Ohio-5424, ¶12. In civil cases, however, the plain error doctrine is nonetheless disfavored. Lias v. Beekman, 10th Dist. No. 06AP-1134, 2007-Ohio-5737, ¶30, citing Goldfuss v. Davidson (1997), 79 Ohio St.3d 116, syllabus. A court should apply the doctrine of plain error only in the extremely rare case involving exceptional circumstances where error to which no objection was made at the trial court, seriously affects the basic fairness, integrity, or public reputation of the judicial process, thereby challenging the legitimacy of the underlying judicial process itself. Goldfuss at 122-23.
{¶14} The standard announced in Goldfuss was satisfied in S&P Lebos, where an administrative code provision that ordinarily would have applied in a liquor permit proceeding had been declared unconstitutional. S&P Lebos at ¶4, 8. On reconsideration, we applied the plain error doctrine because, even though the appellant did not raise the constitutionality of the administrative code provision in the earlier proceedings in the case, [t]o allow appellee to rely upon a judicially invalidated regulation to impose a penalty
{¶15} Perhaps in an effort to draw his argument under the parameters of S&P Lebos, appellant contends the trial court acted outside the applicable statutory authority when it entered the discharge and release order. Unlike S&P Lebos, which addressed an unconstitutional provision, appellant contends the trial court‘s order falls outside the statutory parameters.
{¶16} The order states the court acted [p]ursuant to
{¶17}
{¶18} Finally, by discharging and releasing the Liquidator and her staff from any suit brought against them regarding the PIE liquidation, the trial court ended the 13-year liquidation of PIE, protected as much as possible the interests of insureds, claimants, creditors and the public generally, and eliminated the uncertainty that would ensue in continuing the litigation surrounding PIE‘s liquidation. See
{¶19} Accordingly, we overrule appellant‘s sole assignment of error and affirm the judgment of the trial court. As a result, appellee‘s motion to dismiss is denied as moot.
Motion to dismiss denied;
FRENCH and CONNOR, JJ., concur.
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