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Dicken v. Statutory Agent for Allstate Insurance Co.

Court of Appeals of Ohio, Fifth District

July 12, 2013

ELLEN C. DICKEN Plaintiff-Appellant
v.
STATUTORY AGENT FOR ALLSTATE INSURANCE CO., ET AL Defendants-Appellees

Civil appeal from the Fairfield County Court of Common Pleas, Case No. 2010 CV 01400

For Plaintiff-Appellant DANIEL FRUTH CHARLES M. ELSEA

For Defendants-Appellees RICK MARSH Lane, Alton & Horst, LLC

Hon. W. Scott Gwin, P.J. Hon. William B. Hoffman, J. Hon. Sheila G. Farmer, J.

OPINION

Gwin, P.J.

{¶1} Appellant appeals the August 31, 2011 judgment entry of the Fairfield County Common Pleas Court denying her motion for summary judgment and the October 25, 2012 judgment entry finding appellee was not in breach of contract and finding for appellee on an estoppel claim.

Facts & Procedural History

{¶2} In May of 2005, appellant Ellen Dicken f.k.a. Hamilton and her husband Rick, who subsequently passed away in 2008, procured a homeowner's insurance policy with appellee Allstate Insurance Company ("Allstate") through her local agent Rutter Insurance Company. The policy had an initial period of May 5, 2005 to May 5, 2006. The named insured on the policy was listed as Rick Hamilton and the location of the property was listed as 8060 State Route 312, Logan, Ohio. AMC Mortgage Services, Inc. ("AMC Mortgage") was listed as the mortgagee on the insurance policy. Appellant testified she paid the insurance on a monthly basis and paid the monthly premium in person either by cash or check. When she would bring the payment in each month, an employee at the local agency would write her a handwritten receipt. Appellant testified she had previously been late on her insurance payments, but always paid the bill within the grace period when she received the cancellation notice stating it had to be paid by a certain date.

{¶3} Appellant's payment for her October 2006 coverage on the homeowner's insurance policy was due on September 5, 2006. On September 15, 2006, appellee issued appellant a Homeowner's Policy Cancellation Notice. The notice stated, in pertinent part, "If you want your insurance to continue and do not want it to cancel, please make sure we receive the Minimum Amount Due by the end of the day (midnight) on October 4, 2006 or your policy will cancel at 12:01 a.m. Standard Time on October 5, 2006." The minimum amount due was stated at $107.93 and the "pay in full" amount was $407.13 to pay the full balance due on the May 5, 2006 to May 5, 2007 policy period. Appellant testified she never received the notice of cancellation, though she had no problems getting her mail and the notice was addressed correctly. Appellant stated she received all correspondence from appellee except for the September 15, 2006 notice of cancellation. Kathy Collard ("Collard"), a senior field support representative for Allstate and an Allstate employee for thirty-five years, reviewed the records in appellee's account to determine if the notice of cancellation had been returned to Allstate. The notice had not been returned to them.

{¶4} On October 12, 2006, appellant's home and personal belongings were destroyed in an accidental fire caused by an unattended kerosene heater. Appellant testified she knew she had made the September 2006 homeowner's insurance payment. Appellant stated she called appellee's claims reporting number the night of the fire and that she called her local insurance agent, Marla Rutter ("Mrs. Rutter"), the morning of October 13, 2006. Mrs. Rutter disputes appellant called her the morning of October 13th and indicates the first she knew of the fire was when appellant showed up at her office the day after the fire and attempted to make the overdue premium payment. Mrs. Rutter testified when she attempted to put the payment into the system, she noticed it was an overdue payment and the policy had canceled. Mrs. Rutter stated after she attempted to put the payment into the system, appellant informed her about the fire and asked her for the Allstate claims reporting phone number. Mrs. Rutter told appellant she would have to check with the district manager to see if she could accept the late payment. Appellee told Mrs. Rutter to refuse to accept the late payment. Mrs. Rutter testified she later mailed the check to appellant after appellant refused to take it back on October 13th and that she did not give appellant a receipt on October 13th. Appellant testified Mrs. Rutter accepted the check and gave her a handwritten receipt for the check. Appellant again attempted to pay the premium on October 26, 2006, but Mrs. Rutter refused the check.

{¶5} Collard testified it is appellee's policy to allow a lienholder to protect their interest in the property by giving them a window of opportunity to pay the premium so the lienholder's interest is protected even after the policy is canceled as to the homeowner. Accordingly, on October 10, 2006, appellee issued a Homeowner's Policy Cancellation Notice to the lienholder on appellee's home, AMC Mortgage. The notice stated, in pertinent part, "If you want your insurance to continue and do not want it to cancel, please make sure we receive the Minimum Amount Due by the end of the day (midnight) on October 29, 2006 or your policy will cancel at 12:01 a.m. Standard Time on October 30, 2006." Again the minimum payment was stated at $107.93 and with a "pay in full" amount of $407.13. AMC Mortgage made a payment to appellee on October 26, 2006 in the amount of $407.13. Collard testified the mortgage holder has an interest in the property to the extent of the mortgage only. She further stated that, at the time of the fire, appellee's policy was not in effect as to appellant because it had lapsed on October 5, 2006.

{¶6} Appellee issued a Reinstatement Notice on October 31, 2006 to AMC Mortgage with a copy to appellant that stated:

"Your policy was cancelled effective at 12:01 a.m. Standard Time on October 5, 2006. Your policy was reinstated at 12:01 a.m. Standard Time on October 30, 2006. A payment was credited to your policy in the amount of $407.13. If this payment was by check, draft, or other remittance which is not honored upon presentation to your financial institution, this notice is void, and your policy cancelled as of 12:01 a.m. Standard Time on October 5, 2006."

{¶7} Jimmy Rutter ("Mr. Rutter"), the local insurance agent, testified about the principle of insurable interest and stated for there to be an insurable interest, a home has to actually exist. In this case, once the home burned down, there was nothing left of the structure to insure after October 12, 2006. Mr. Rutter went through all the receipt books in the office after the fire and determined appellant had not paid the premium due September 5, 2006.

{¶8} Appellant proffered a claim to appellee and appellee refused the claim. AMC Mortgage did not make a claim under appellee's policy. Appellant testified that after the fire, SafeCo. Insurance Company notified her there was a blanket insurance policy on the loan that would pay off the property. Appellant learned that AMC Mortgage took out their own policy on appellant's property and this policy, held by SafeCo., paid off appellant's mortgage of $78, 000. In addition, SafeCo. issued appellant a check for $38, 000. On November 15, 2006, appellee refunded to appellant the amount of $39.00, an amount Collard testified was a lapsed credit which represented the portion of the premium when the policy lapsed from October 5, 2006 to October 30, 2006.

{¶9} Appellant filed a complaint on November 5, 2010 against appellee alleging breach of contract, declaratory judgment, promissory estoppel, and bad faith. Appellant alleged appellee insured her losses related to the fire per hazard insurance contract. Appellee maintained it did not owe coverage to appellant because she did not pay her premium and her policy was canceled as to her interest at the time of the fire. Both appellant and appellee filed motions for summary judgment. The trial court denied both appellant and appellee's motions for summary judgment. Appellee's motion to bifurcate the claims of bad faith and punitive damages was granted by the trial court. A trial to the court was held on January 24, 2012. On March 31, 2012, the trial court issued a judgment entry finding in favor of appellee, concluding the insurance policy was not in effect at the time of the fire and thus appellee was not in breach of contract. After this court dismissed appellant's first appeal because the entries at issue were not final ...


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