Case Information
*1 BEFORE: CLAY and GIBBONS, Circuit Judges, and STEEH, District Judge. [*]
CLAY, Circuit Judge. Plaintiff, Augustine Torres, appeals the district court’s dismissal, pursuant to Federal Rule of Civil Procedure 12(b)(6), of Plaintiff’s state law claims against Defendant insurance companies. Plaintiff’s claims allege illegal and tortious conduct under Kentucky state law during the mediation of an underlying tort claim against the owners, builders, and sellers of a pool in which Plaintiff was injured. Plaintiff’s suit alleges causes of action for 1) unfair claim settlement practices under the Kentucky Unfair Claims Settlement Practices Act (“UCSPA”), 2) bad faith, 3) fraud, 4) outrageous conduct, and 5) intentional or negligent infliction of emotional distress. For the reasons set forth below, this Court AFFIRMS the district court’s dismissal of all claims for failure to state a claim upon which relief can be granted. See Fed. R. Civ. P. 12(b)(6).
BACKGROUND
I. Substantive Facts
This case has its origins in a separate tort action brought by Plaintiff after he sustained injuries, including quadriplegia, when diving into a private swimming pool. Plaintiff brought an action in Kentucky’s Clark County Circuit Court on August 4, 2000, charging negligence by pool owners Allen and Pamela Willoughby. (Compl. ¶¶ 1-8, Torres v. Willoughby et al. , No. 00-CI- 00362 (Ky. Cir. Ct. Clark County filed Aug. 4, 2000)).
Plaintiff subsequently amended his complaint in the underlying tort action to add defendants Tri-Star Pool Construction, the builder and installer of the pool; SPC Pool Corporation, South Central Pool Supply, Inc., and SCP Distributors, LLC, (collectively, “SCP”), the manufacturers and sellers of the component parts of the pool; and S. R. Smith, LLC, the manufacturer and seller of the pool slide. (First Amended Compl.¶¶ 2-13, Torres , No. 00-CI-00362.) In a second amended complaint, Plaintiff added as defendants Cookson Plastic Molding Corporation and Pacific Industries, alleging that “either” of them had manufactured the vinyl liner of the pool and other component parts of the pool, and Kentucky Pool & Supply, Inc. and CENTE’ Industries, Inc., the sellers of the pool slide and other component parts of the pool. (Second Amended Compl.¶¶ 2-10, Torres , No. 00-CI-00362.)
Defendants in the instant case are all insurance companies with whom the underlying tort defendants had policies or coverage. Defendant American Employers’ Insurance Company (“AEIC”) insured Cookson Plastic and Pacific Industries for $1,000,000 per occurrence for personal injury. (Def. Br. at 5.) Defendant One Beacon Insurance Company (“One Beacon”) is the parent company of AEIC. ( Id .) Defendant Fireman’s Fund Insurance Companies (“Fireman’s Fund”) insured Cookson Plastic and Pacific Industries for $10,000,000 excess liability. ( Id .) Defendant Zurich American Insurance Company (“Zurich”) insured SCP for $1,000,000 primary liability, and Defendant Chubb National Insurance Company (“Chubb”) was contracted to provide $10,000,000 in excess liability for SCP. ( Id .)
When reviewing a Rule 12(b)(6) motion, we take as true all allegations in Plaintiff’s
complaint.
See Ricco v. Potter
,
The discovery period for the underlying tort action took place over the course of approximately 16 months. Plaintiff first learned of SCP’s and Cookson/Pacific’s primary liability insurance and limits in September 2002 in responses to interrogatories and requests for production of documents (Compl. ¶ 12.) Over the course of the next year, Plaintiff’s counsel and counsel for SCP and Cookson/Pacific exchanged correspondence and requests over the details of insurance coverage, in particular the existence and extent of any excess liability insurance coverage. ( Id. ¶ 13- 24.) Plaintiff repeatedly requested information on any excess liability coverage. ( )
In September 2003 counsel for Cookson/Pacific revealed $10,000,000 in excess liability insurance with the Fireman’s Fund. ( Id. ¶ 20.) In November 2003 counsel for SCP disclosed SCP’s $10,000,000 excess liability policy with Chubb. ( Id. ¶ 21.) Also in November 2003 counsel for SCP stated that he had “now received correspondence from both [Zurich] and Chubb confirming that they have not raised any coverage defenses or reservation of rights . . . regarding the subject litigation.” [1] ( Id. ¶ 23.) That same month, “[Pacific] admitted there were no coverage defenses, reservation of rights or any other coverage questions between Pacific and [AEIC] and Fireman’s Fund Insurance Companies.” [2] ( Id. ¶ 24.) Cookson also “admitted there were no coverage defenses, reservation of rights or any other coverage questions between Cookson and [AEIC] and Fireman’s Fund Insurance Companies.” ( Id. )
The underlying tort case was scheduled for mediation on March 13, 2004. ( Id. ¶ 25.) Plaintiff’s mother drove Plaintiff, a quadriplegic, to the mediation. ( Id. ¶ 28.) Plaintiff’s counsel presented a summary of Plaintiff’s case. ( ) After a recess, defendants returned to the mediation session and counsel for SCP and Cookson/Pacific informed the mediator and Plaintiff that “there were insurance coverage questions between or among the insurance companies, SCP and/or Cookson/Pacific and that the mediation was being terminated.” [3] ( Id. ) The mediation was terminated. ( Id. )
According to the district court, “the parties to the underlying tort action were able to resolve all claims (except the instant causes of action against the insurance companies) during a second mediation on April 9, 2004.” Torres v. One Beacon Ins. Co. , No. 04-191-KSF (E.D. Ky Sept. 24, 2004). The settlement reached in the underlying tort action remains confidential, but Plaintiff stated during oral argument that under the settlement Plaintiff reserved the right to pursue the current action; Defendants’ counsel did not argue otherwise.
II. Procedural History
On April 4, 2004, Plaintiff brought the instant action against Defendants One Beacon, AEIC, Fireman’s Fund, Zurich, and Chubb, also in Clark Circuit Court. (Compl. at 1.) Plaintiff alleges that Defendants’ conduct 1) violated Kentucky’s Unfair Claims Settlement Practices Act, Ky. Rev. Stat. Ann. § 304.12-230 (2004); 2) constituted bad faith; 3) constituted fraud, willful misrepresentation, negligent misrepresentation, and/or concealment; 4) constituted outrageous conduct; and 5) constituted intentional and/or negligent infliction of emotional distress. ( Id. ¶ 29-33.) Plaintiff alleges “severe emotional distress, mental anguish, and unnecessary expense” and seeks compensatory and punitive damages. ( ¶ 34-35.) Defendants removed the case to the United States District Court for the Eastern District of Kentucky on April 23, 2004. Notice of Removal, Torres v. One Beacon Ins. Co. , No. 04-CI-00192 (E.D.Ky. April 23, 2004) (subsequently renumbered as No. 04-191-KSF).
In May 2004, all Defendants moved to dismiss the complaint. Torres , No. 04-191-KSF, at 1. The district court granted Defendants’ motions, in their entirety, on September 24, 2004 and dismissed Plaintiff’s complaint with prejudice. at 20. On the same day, Plaintiff filed his notice of appeal to this Court.
ANALYSIS
I. STANDARD OF REVIEW
This Court reviews
de novo
a district court's dismissal of a complaint under Federal Rule of
Civil Procedure 12(b)(6).
PR Diamonds, Inc. v. Chandler
,
In considering whether a complaint fails to state a claim upon which relief can be granted,
this Court construes “the complaint in the light most favorable to the plaintiff, accept[s] all factual
allegations [of the plaintiff] as true, and determine[s] whether the plaintiff undoubtedly can prove
no set of facts in support of his claims that would entitle him to relief.”
Ricco v. Potter
, 377 F.3d
599, 602 (6th Cir. 2004) (internal quotations and citations omitted). Although this is a liberal
pleading standard, it requires more than the bare assertion of legal conclusions. Rather, the
complaint must contain either direct or inferential allegations respecting all the material elements
to sustain a recovery under some viable legal theory.
In re DeLorean Motor Co.
,
II. THE CLAIM UNDER THE KENTUCKY UNFAIR CLAIMS SETTLEMENT
PRACTICES ACT
Plaintiff’s claim under the Kentucky UCSPA hinges on the threshold matter of whether the UCSPA applies to conduct by insurance companies taken after litigation commences. Because we find that the UCSPA does not apply, we affirm the district court’s dismissal of Plaintiff’s UCSPA claim.
1. Plaintiff’s Claim Under the UCSPA
Plaintiff charges that Defendants violated § 1 of the UCSPA “in that these companies misrepresented pertinent facts or insurance policy provisions relating to coverages at issue,” and § 14 “in that these companies failed to promptly provide a reasonable explanation of the basis in the insurance policy for denial of claims or for the offer of a compromise settlement.” [4] (Compl. ¶ 29.) These claims are apparently rooted in the allegation that Defendants first denied that there were any coverage defenses or coverage questions, only to raise such issues during the first attempt at mediation in March 2004, which caused that mediation session to be terminated.
2.
The District Court’s Dismissal of Plaintiff’s UCSPA Claim
The district court agreed with Defendants’ argument that conduct occurring after the
commencement of litigation could not form the basis of a UCSPA claim and therefore dismissed
Plaintiff’s claim under the UCSPA .
Torres
, No. 04-191-KSF, at 9, 11. In reaching this conclusion,
the district court recognized that “there is no published Kentucky decision directly on point,” but
essentially adopted the reasoning of an unpublished Kentucky Court of Appeals decision,
Knotts v.
Zurich Insurance Co. Torres,
No. 04-191-KSF, at 5-11 (analyzing
Knotts v. Zurich Ins. Co.
,
No.2002-CA-001846-MR,
The Supreme Court of Kentucky granted discretionary review in the Knotts case on February 9, 2005. See Knotts v. Zurich Ins. Co. , No. 2004-SC-0400-DG (Ky. Feb. 9, 2005 (order granting discretionary review). The Court noted in the grant of discretionary review that “[i]ssues in this case include whether the Kentucky Unfair Claims Settlement Practices Act applies to conduct which occurs after the commencement of litigation or is limited to conduct during the claims adjustment period.” Supreme Court of Kentucky, Discretionary Review Granted (Pending Cases Only) 18, http://www.kycourts.net/Supreme/documents/discretionarygranted.pdf. As of this writing, the Supreme Court of Kentucky has not issued a decision in the case.
3. The District Court Correctly Concluded That the UCSPA Does Not Apply Once Litigation Begins.
We agree with the district court’s analysis of the UCSPA. The district court properly looked
to the statutory provision as a whole and understood the provision to make distinct use of the terms
“litigation” and “claim.”
[5]
This analysis comports with direction from the Supreme Court of
Kentucky that courts “in construing an extant act may refer to prior acts or sections of the statute
relating to the same subject in ascertaining the meaning of the law under consideration.”
Burbank
v. Sinclair Prairie Oil Co.
,
UCSPA uses “claim” in the context of a law regulating the insurance industry. The common understanding of “claim” with reference to insurance is a demand for insurance payment under the terms of the insurance contract. Moreover, the statute uses “claim” as distinct from “litigation,” evidencing the Kentucky legislature’s intent to distinguish between the claims adjustment phase and a litigation phase. As further evidence, all the usages of “claim” in section 301.12-230 are (13) Failing to promptly settle claims, where liability has become reasonably clear, under one (1) portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage; (14) Failing to promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement; or
(15) Failing to comply with the decision of an independent review entity to provide coverage for a covered person as a result of an external review in accordance with KRS 304.17A-621, 304.17A-623, and 304.17A-625.
Ky. Rev. Stat. Ann. § 304.12-230 (2004).
consistent with the common understanding of “insurance claim,” while not all usages are consistent with an understanding of “claim” to encompass a legal claim or cause of action, see, e.g. , § 301.12- 230(10).
Most persuasively, the Kentucky Court of Appeals has found that the UCSPA does not address litigation behavior. See Knotts v. Zurich Ins. Co. , No. 2002-CA-001846-MR, 2004 Ky. App. LEXIS 22, at *14 (Ky. Ct. App. 2004). While Plaintiff correctly points out that while under a pending review by the Supreme Court of Kentucky the Knotts decision is not deemed final (see Pl. Br. at 5-7), that should not and does not deter this Court from taking that opinion into consideration when there are no published decisions on point, or, alternatively, from considering the court’s reasoning. The Knotts’ court points out that the impetus behind the UCSPA was not to exercise control over insurance litigation, but to exercise control over the claims adjustment process such that litigation occurred less frequently. Knotts , 2004 Ky. App. LEXIS 22, at *9-10. We find the Kentucky Court of Appeals’ reasoning persuasive.
Plaintiff points to a prior Kentucky Court of Appeals decision which held that the UCSPA
did
apply during litigation. (Pl. Br. at 11,
citing Am. Physicians Assur. Corp. v. Schmidt
, No. 2002-
CA-001292-MR, 2003 WL 22927781 (Kt. Ct. App. Dec. 12, 2003). The court’s treatment in
Schmidt
, however, consisted entirely of a conclusory statement that the argument that the UCSPA
did not apply in litigation was “without basis in fact and is clearly contradicted by the language of
the law, and the relevant case law.” This stands in direct contrast to the same court’s treatment
in
Knotts
, which took several pages to analyze the statute, its policy, and the relevant law.
Knotts
,
Because we find that the UCSPA does not address behavior after the commencement of litigation, this Court need not opine on Defendants’ arguments that interpreting the statute to apply once litigation begins would violate the Kentucky state constitution. Accordingly, this Court affirms the district court’s dismissal of Plaintiff’s UCSPA claim.
III. THE COMMON LAW BAD FAITH CLAIM
The district court correctly interpreted Kentucky law to require that before a third party claimant can bring a common law bad faith claim against an insurer, the third party claimant must plead that the first party insured has assigned his rights as against the insurer to the third party claimant. Because Plaintiff did not (and apparently could not) make any such pleading in this case, the district court was correct in its dismissal of Plaintiff’s common law bad faith claim.
1. Plaintiff’s Common Law Bad Faith Claim
Plaintiff charged in Count II of his complaint that the conduct of Defendants “constitutes bad faith in violation of their duty to exercise good faith and act reasonably to fairly handle Torres’ claims.” (Compl. ¶ 30.) In summary, the complaint in its entirety alleges facts contending 1) that defendants’ counsel in the underlying case initially informed Plaintiff that Defendant insurance companies had not raised any coverage defenses or reservation of rights ( id. ¶¶ 21, 24), 2) that at the first mediation, counsel for defendants in the underlying case informed Plaintiff that “there were insurance coverage questions between or among the insurance companies, SCP and/or Cookson/Pacific” ( id. ¶ 28), and 3) that as a result, the mediation was terminated ( id. ).
Nowhere does the complaint allege that the defendants in the underlying action have assigned their rights against Defendant insurance companies to Plaintiff. Plaintiff’s brief concedes that there was no assignment in this case. (Pl. Br. at 20.)
2. Kentucky Law Requires a Third Party Claimant to Plead and Prove Assignment
The Supreme Court of Kentucky has addressed common law bad faith claims in the context of insurance contracts in a number of cases spanning the past three decades. A proper synthesis of these cases produces an undeniable understanding that Kentucky common law bad faith arises in the insurance context only when a privity relationship exists between claimant and the insurance company.
In
Manchester Insurance & Indemnity Co. v. Grundy
,
While Kentucky law has evolved since the
Grundy
decision to permit tort damages for bad
faith on the part of an insurer, the Supreme Court of Kentucky has not extended insurance company
liability to third party claimants lacking an insured’s assignment of rights. A 1989 decision,
Curry
v. Fireman’s Fund Insurance Co.
, overruled a previous decision of the court and permitted punitive
damages for an insurance company’s bad faith.
In
Wittmer v. Jones
,
In
Davidson v. American Freightways
,
Plaintiff insists that Wittmer , as interpreted by Davidson , eliminates the requirement set forth in Grundy that a third-party claimant attempting to recover from an insurer receive an assignment of rights from the first-party insured. According to Plaintiff, Wittmer and Davidson mean that the three elements common to all bad faith claims are all that any claimant is required to show. (Pl. Br. at 20.) Plaintiff’s argument is unpersuasive. The district court correctly determined that while Wittmer set forth the three elements necessary in any bad faith claim, it did not do away with the requirement that a third party may only bring a bad faith action against the insurer in a derivative capacity, as the assignee of the insured.
The Wittmer court never announced that it was eliminating the assignment requirement set forth in Grundy ; rather, it confined itself to a discussion of the elements common to all bad faith claims. Likewise, in summarizing the evolution of bad faith law in Kentucky, the Davidson court certainly did not explicitly eradicate the Grundy requirement. Moreover, in a case decided after Wittmer , Motorists Mutual Insurance Co. v. Glass , 996 S.W.2d 437, 451-52 (Ky. 1997), the Supreme Court of Kentucky endorses the distinction between first and third-party bad faith claims, see id. at 451-52 (discussing the evolution of bad faith law in Kentucky and repeatedly distinguishing between first and third-party actions).
The
Davidson
case itself does not support Plaintiff’s argument when we view the case in its
entirety. The
Davidson
court opined that the
Wittmer
decision was a restatement of Kentucky law
as it existed prior to the mid 1980s elimination of punitive damages for an insurer’s bad faith, “that
a cause of action for bad faith arises out of a
breach of contract
‘so great that it would constitute
tortious conduct on the part of the insurance company.’”
Davidson
,
3. The District Court Correctly Concluded That Plaintiff Failed to State a Common Law Bad Faith Claim Under Kentucky Law Plaintiff did not allege that the underlying defendants assigned their rights against the instant Defendants to collect for monies or damages due under the relevant insurance contracts, and Plaintiff’s brief concedes that there was no assignment in this case. (Pl. Br. at 20.) Because the Supreme Court of Kentucky has never abolished the requirement of an assignment of rights to a third-party claimant attempting to sue an insurance company for bad faith, and instead has appeared to endorse the continuing viability of that requirement, the district court correctly concluded that Plaintiff has failed to state a common law bad faith claim under Kentucky law.
IV. THE FRAUD CLAIM
Plaintiff contends that the Complaint, taken in its entirety, pleads particular facts sufficient to sustain a cause of action for fraud. (Pl. Br. at 22-23.) Defendants and the district court disagree. Plaintiff fails to demonstrate to this Court, however, that Plaintiff has even pled all six elements of the tort of fraud under Kentucky law as a threshold matter.
1. Fraud Claims Under Kentucky Law
Pursuant to both the Federal and Kentucky Rules of Civil Procedure, “[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity.” Fed. R. Civ. P. 9(b); Ky. R. Civ. P. 9.02(c). Moreover, under Kentucky law, fraud consists of six elements:
1) material representation
2) which is false
3) known to be false or made recklessly
4) made with inducement to be acted upon
5) acted in reliance thereon and
6) causing injury.
United Parcel Service Co. v. Rickert
,
2. The District Court Properly Dismissed Plaintiff’s Fraud Claim The district court dismissed Plaintiff’s fraud claim for failure to state a claim upon which relief could be granted. Torres , No. 04-191-KSF, at 16. The court determined that Plaintiff had failed to allege sufficient facts to satisfy the elements of a fraud claim under Kentucky law, and that Plaintiff had failed to plead facts with sufficient particularity to meet the requirements of the civil procedure rule. Id. The court specifically found “insufficient allegations regarding which representations were known to be false or made recklessly, that they were made with the inducement to be acted upon, or that [Plaintiff] somehow acted in reliance thereon.” The court also noted that “the representations of which he complains, that there were no coverage disputes, reservations of rights or coverage questions prior to the March Mediation, were made by counsel for the defendants in the underlying tort action,” and not by Defendant insurance companies. Id.
A complaint must contain either direct or inferential allegations respecting all the material
elements to sustain a recovery under some viable legal theory. If it fails to do so, the claim may be
dismissed pursuant to Rule 12(b)(6), as it was in this case.
In re DeLorean Motor Co.
,
In the view of this Court, Plaintiff’s allegations—that counsel for the underlying defendants denied that there were any coverage disputes, and that such disputes arose at the mediation only after Plaintiff’s counsel had made a presentation of his evidence at trial—do not suffice to meet the elements of a Kentucky fraud claim. As the district court pointed out, the complaint contains no allegations in support of the third, fourth, and fifth elements of a fraud claim: that the statements made were known to be false, or are made recklessly, that they were made with inducement to be acted upon, and that they were acted in reliance upon. Although the district court presumed that the statements alleged to be false were those made by the underlying defendants’ counsel, to the effect that there were no coverage disputes, this is not alleged anywhere in the complaint with particularity, as required by the civil procedure rules, and, in any event, Defendants are not liable for statements made by others. Therefore, this Court affirms the district court’s dismissal of Plaintiff’s fraud claim. V. THE OUTRAGEOUS CONDUCT AND INTENTIONAL INFLICTION OF
EMOTIONAL DISTRESS CLAIMS
Although Plaintiff alleges outrage and intentional infliction of emotional distress in two
separate counts of his complaint, they are the same tort under Kentucky law.
See Banks v. Fritsch,
The Supreme Court of Kentucky recognized the tort of outrage, or intentional infliction of
emotional distress, in
Craft v. Rice
,
The elements of an outrageous conduct claim are: “[1)] [t]he wrongdoer's conduct must be
intentional or reckless; [2)] the conduct must be outrageous and intolerable in that it offends against
the generally accepted standards of decency and morality; [3] there must be a causal connection
between the wrongdoer's conduct and the emotional distress and [4)] the distress suffered must be
severe.”
Osborne v. Payne
,
As a threshold matter, Plaintiff fails to plead conduct that at least approaches “truly
outrageous, intolerable” behavior necessary for this tort.
See id.
;
see also DeLoach v. American Red
Cross
,
This Court agrees with the district court. Plaintiff has failed to allege conduct even arguably capable of “bringing one to his knees.” We affirm the district court’s dismissal of this claim. VI. THE NEGLIGENT INFLICTION OF EMOTIONAL DISTRESS CLAIM
While Plaintiff phrases the issue in this appeal as “[w]hether the District Court’s dismissal
of all claims” was proper, Plaintiff has failed to argue in his brief that the lower court’s dismissal
of Plaintiff’s negligent infliction of emotional distress claim was improper. Accordingly, Plaintiff
has waived this argument.
See Kocsis v. Multicare Mgt., Inc.
,
CONCLUSION
For the foregoing reasons, we AFFIRM the district court’s dismissal of Plaintiff’s claims.
Notes
[*] Honorable George Caram Steeh, United States District Judge for the Eastern District of Michigan, sitting by designation.
[1] The sentence reads in full: “Please be advised that I have now received correspondence from both Zurich Insurance Company and Chubb confirming that they have not raised any coverage defenses or reservation of rights relative to the insurance coverage issued to South Central Pool Supply, Inc. regarding the subject litigation.” Letter from Neal Smith (Smith, Atkins & Thompson, PLLC) (counsel for SCP) to Joe Savage (Savage, Garmer, Elliott & O’Brien, PLLC) (counsel for Plaintiff) (November 21, 2003).
[2] The Complaint paragraph addressing Pacific and Cookson’s admissions with respect to coverage issues actually states that these statements took place on November 6, 2002. Given the rest of Plaintiff’s timeline, this Court will grant Plaintiff the benefit of the doubt and presume Plaintiff meant that these admissions took place in November 2003 . In any event, the apparent typographic error has no effect on this Court’s analysis.
[3] This quotation comes from the language of the complaint and is not a quotation from the mediation session itself.
[4] The language of the complaint tracks the language of the statute itself. The UCSPA states: It is an unfair claims settlement practice for any person to commit or perform any of the following acts or omissions: (1) Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue; . . . (14) Failing to promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement. Ky. Rev. Stat. Ann. § 304.12-230 (2004).
[5] The UCSPA provision reads in full: It is an unfair claims settlement practice for any person to commit or perform any of the following acts or omissions: (1) Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue; (2) Failing to acknowledge and act reasonably promptly upon communications with respect to claims arising under insurance policies; (3) Failing to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies; (4) Refusing to pay claims without conducting a reasonable investigation based upon all available information; (5) Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed; (6) Not attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear; (7) Compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by such insureds; (8) Attempting to settle a claim for less than the amount to which a reasonable man would have believed he was entitled by reference to written or printed advertising material accompanying or made part of an application; (9) Attempting to settle claims on the basis of an application which was altered without notice to, or knowledge or consent of the insured; (10) Making claims payments to insureds or beneficiaries not accompanied by statement setting forth the coverage under which the payments are being made; (11) Making known to insureds or claimants a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration; (12) Delaying the investigation or payment of claims by requiring an insured, claimant, or the physician of either to submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss forms, both of which submissions contain substantially the same information;
[6] Ohio has similarly adopted the Restatement (Second) of Torts on the tort of outrageous conduct.