United States District Court, N.D. Ohio
[Copyrighted Material Omitted]
For Teresa McCurdy, Plaintiff: Michael D. Rossi, Sr., LEAD ATTORNEY, Guarnieri & Secrest, Warren, OH.
For Hanover Fire & Casualty Insurance Company, Defendant: Margo Stoffel Meola, Davis & Young - Vienna, Vienna, OH; David Cooper Comstock, Jr., Comstock, Springer & Wilson, Youngstown, OH.
MEMORANDUM OF OPINION AND ORDER [Regarding ECF Nos. 38; 40]
Benita Y. Pearson, United States District Judge.
This matter is before the Court upon the partial summary judgment and summary judgment motions filed by Plaintiff Teresa McCurdy and Defendant Hanover Fire & Casualty Insurance Co. (" Hanover" ), respectively. ECF Nos. 38; 40. The parties responded (ECF Nos. 42; 43) and Hanover replied (ECF No. 43). For the reasons that follow, the Court denies Plaintiff's motion, denies Hanover's motion in part and grants Hanover's motion in part.
Plaintiff filed breach of contract and bad faith denial of insurance claims against Hanover seeking to recover insurance proceeds following a fire loss at property she owned. ECF No. 1-1 at 2-3. The fire occurred on or around June 18, 2011 at rental property located at 672 Fifth Street, SW, Warren, Ohio. ECF No. 1-1 at 2. A renter, Tamika Simmons, resided at the house.
Prior to the fire, on March 8, 2011, Plaintiff's husband Robert McCurdy, an insured party under the policy, contacted Nikolaides Insurance Agency (" Nikolaides" ) about obtaining an insurance policy and spoke to Donna Kramer, a customer service representative. ECF Nos. 40 at 4; 35 at 6, 8, 11, 17; 33 at 18-19. During and following the telephone conversation with Robert McCurdy, Ms. Kramer filled out the application and the resultant application listed, under the heading " list all losses incurred in the last five years," " none."  ECF Nos. 37-1 at 2; 33 at 20-22; 35 at 17-18. When Plaintiff came into the office to sign the application, she does not recall reading it before signing.
ECF Nos. 32 at 20-21; 35 at 21-22. It was later discovered that Plaintiff had a disputed number of losses within the last five years. ECF Nos. 40 at 5; 42 at 3.
At the time of the fire, the McCurdys were in New York City, and Tamika Simmons was not at the house. ECF No. 40 at 4. The McCurdys learned of the fire early in the morning on June 18, 2011, and drove home from New York later that day, as originally planned. ECF No. 33-1 at 11. The cause of the fire was later determined to be arson. ECF No. 40-8 at 1.
Plaintiff submitted a claim to Hanover pursuant to the policy. ECF No. 40 at 4. After conducting an investigation, including questioning the McCurdys via Examinations Under Oath (" EUO" ), Hanover denied the claim based upon common law fraud. ECF No. 40 at 8. In its denial letter, Hanover explained its reasons as follows: 1) that its investigations revealed two prior fire losses and a theft claim by Plaintiff in the last five years, in contrast to her insurance application stating no prior losses; 2) material misrepresentations by the McCurdys during Hanover's investigation into the loss; and 3) that the fire was intentionally set, and evidence suggested it was done so by the McCurdys or at their direction. ECF No. 40-5 at 1-4. This action followed.
II. Legal Standard
Summary judgment is proper if " there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). EJS Properties, LLC v. City of Toledo, 698 F.3d 845, 855 (6th Cir. 2012). A party seeking summary judgment always bears the initial responsibility of informing the court of the basis for its motion, and identifying those portions of " the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any," which it believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Entry of summary judgment is appropriate " against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id . at 322-23.
When reviewing a summary judgment motion, the Court must view all the facts, evidence and any inferences that may permissibly be drawn from the facts, in favor of the nonmoving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1985). The Court must determine whether " the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The purpose of the procedure is not to resolve factual issues, but to determine if there are genuine issues of fact to be tried. Id . at 250; Lashlee v. Sumner, 570 F.2d 107, 111 (6th Cir. 1978). Thus, the Court's duty is to determine only whether sufficient evidence has been presented to make the issue of fact a proper question for the jury; it does not weigh the evidence, judge the credibility of witnesses, or determine the truth of the matter. Liberty Lobby, 477 U.S. at 249;
Weaver v. Shadoan, 340 F.3d 398, 405 (6th Cir. 2003). The existence of a " mere scintilla of evidence in support of the [nonmoving party's] position is insufficient; there must be evidence on which the jury could reasonably find for the [nonmoving party]." Liberty Lobby, 477 U.S. at 252. The nonmoving party must present " significant probative evidence" to demonstrate more than " some metaphysical doubt as to the material facts." Moore v. Phillip Morris Companies, Inc., 8 F.3d 335, 340 (6th Cir. 1993) (internal citations omitted).
A. Breach of Contract
Plaintiff alleges that Hanover's failure to pay its claim breached the insurance contract. ECF No. 1-1 at 2. She asserts that she has presented a prima facie case for recovery under the policy and should be awarded partial summary judgment. ECF No. 38 at 1. Hanover argues that, with respect to Plaintiff's motion, she merely clarified the parties' burdens in presenting a case. ECF No. 43 at 1. Hanover further asserts that there is no genuine issue of material fact that the policy was obtained through common law fraud and that material misrepresentations were made during the post-loss investigation, thereby entitling Hanover to deny Plaintiff's claim and, further, to an award of summary judgment. ECF No. 40 at 1.
1. Alleged Misrepresentations in the Policy Application 
To the extent Hanover alleges that the policy is void because of alleged misrepresentations in the insurance application ( see ECF No. 40-5 at 2), this argument is unavailing. The Ohio Supreme Court has determined the circumstances under which a misstatement by an insured in an application for an insurance policy renders the policy void ab initio. SeeAllstate Ins. Co. v. Boggs, 27 Ohio St. 2d 216, 271 N.E.2d 855, 858 (Ohio 1971). " If the statement is a warranty, a misstatement of fact voids the policy ab initio . However, if the statement is a representation, a misstatement by the insured will render the policy voidable, . . ., but it does not void the policy ab initio ." Id . If the policy is merely voidable, " an insurer cannot rescind a policy after becoming liable on it." Fifth Third Mortgage Co. v. Chicago Title Ins. Co., ...