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Whittaker v. Allstate Property & Casualty Insurance Co.

United States District Court, S.D. Ohio, Eastern Division

June 9, 2017

WOODROW WHITTAKER, et al., Plaintiffs,
v.
ALLSTATE PROPERTY & CASUALTY INSURANCE COMPANY Defendant.

          Deavers Magistrate Judge.

          OPINION & ORDER

          ALGENON L. MARBLEY UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on Defendant Allstate Property & Casualty Insurance Company's (“Allstate”) Motion for Certification of Question to the Supreme Court of Ohio. (Doc. 32.) For the reasons stated herein, the Court DENIES the motion.

         I. BACKGROUND

         The relevant background is as follows. Plaintiffs, Woodrow and Carolyn Whittaker, own the home located at 4128 Trumbull Street, Bellaire, Ohio 43906. Plaintiffs bought a homeowner's insurance policy from Allstate, and Allstate insured the property from 2007 through July 31, 2014. On June 7, 2014, a fire caused substantial damage to the property. An investigator had determined the cause of the fire to be “incendiary in nature, ” most probably “the result of a human act.” (Doc. 34-5 at 6.) The Whittakers filed a claim with Allstate, which Allstate denied “based on an exclusion in its policy which precludes coverage for acts of vandalism and/or malicious mischief if the property has been vacant for more than 30 days prior to the act.” (Doc. 32 at 2.)

         The Whittakers sued Allstate on June 4, 2015 in the Belmont County Court of Common Pleas for breach of the insurance contract. (Doc. 3.) The Whittakers claim that they are covered by the insurance policy because: (1) the fire was not an “act of vandalism and/or malicious mischief” (Doc. 3 at ¶ 9); and (2) their property was “under construction, ” which caused it to fall into an exception to the vacancy exclusion (id. at ¶ 8). Allstate removed the case to federal court on July 7, 2015. (Doc. 1.) On October 26, 2017, before filing an answer, Allstate moved to certify the following question to the Ohio Supreme Court: “[i]s ‘arson' considered an act of ‘malicious mischief' or ‘vandalism' with respect to a vacancy exclusion in a standard homeowner's policy?” (Doc. 34 at 1.) The Whittakers opposed the motion, which is now ripe for review.

         Also relevant is the fact that in 2015, the Northern District of Ohio certified a very similar question to the Ohio Supreme Court in connection with an Allstate home insurance policy: “is ‘arson' a subset of ‘fire' or an act of ‘malicious mischief or vandalism' when neither the ‘fire' nor ‘malicious mischief or vandalism' provisions in an insurance contract expressly include ‘arson?'” (Wells Fargo Bank N.A. v. Allstate Insurance Co., No. 4:15-cv-239 (“Wells Fargo”), Doc. 21, reproduced in Doc. 34-1 at 2.) After oral argument, on May 18, 2016, the Ohio Supreme Court sua sponte dismissed the certified question of state law as “improvidently accepted for review.” (Doc. 34-4.)

         II. STANDARD OF REVIEW

         Under Ohio Supreme Court Rule of Practice 9.01, “[t]he Supreme Court may answer a question of law certified to it by a court of the United States. This rule is invoked if the certifying court, in a proceeding before it, issues a certification order finding there is a question of Ohio law that may be determinative of the proceeding and for which there is no controlling precedent in the decisions of this Supreme Court.” Ohio S.Ct. Prac. R. 9.01(A). Certification's purpose “is to apply the same rules of state law to litigants in federal court as would apply in state court.” Scott v. Bank One Trust Co., N.A., 62 Ohio St.3d 39, 46 (1991). Through certifying questions to the state Supreme Court, a district court “faced with a novel state-law question [may] put the question directly to the State's highest court, reducing the delay, cutting the cost, and increasing the assurance of an authoritative response.” Jones v. Coleman, 848 F.3d 744, 750 (6th Cir. 2017) (internal quotations omitted). The decision to certify a question to a state supreme court “rests in the sound discretion of the federal court.” Lehman Bros. v. Schein, 416 U.S. 386, 391 (1974).

         III. ANALYSIS

         For the Court to certify a question to the Ohio Supreme Court, the Court must find: (1) the question “may be determinative of the proceeding;” and (2) “there is no controlling precedent in the decisions of [the Ohio] Supreme Court.” Ohio S.Ct. Prac. R. 9.01(A). The parties agree that there is no controlling precedent in the decisions of the Ohio Supreme Court, particularly in light of the fact that it recently certified, but then declined to answer, a nearly identical question about an Allstate homeowners' insurance policy.

         The Ohio Supreme Court recently faced the certified question whether “arson” in a vacant home was a “fire” or whether it was instead “vandalism” or “malicious mischief.” (Id. at 1.) The homeowners' insurance policy in Wells Fargo, like the policy in this case, did not define “arson, ” “fire, ” “vandalism, ” or “malicious mischief.” While the Ohio Supreme Court ultimately did not answer the question, the oral argument illuminated some of the justices' thought processes. If the Ohio Supreme Court determined that “arson” fell within the category of “fire” and did not fall within the categories of “vandalism” or “malicious mischief, ” then the insurance contract would likely cover the damage at issue. If the Court determined instead that “arson” is “vandalism” or “malicious mischief” but not “fire, ” then the insurance contract would likely exclude coverage.

         The Court did not indicate, however, what coverage implications would follow if it determined that “arson” was both “fire” and “vandalism” or “malicious mischief.” Wells Fargo (effectively, the insured) argued that this outcome would create an ambiguity, which should be construed against the drafter (Allstate). Allstate argued that vandalism is a specific exclusion in an all-risk policy, so if “arson” falls within the specific exclusion, then it is not covered. Both parties pointed to other parts of the insurance contract to bolster their positions. At least one Justice pointed out that this question appeared to be one of contract interpretation-an exercise that trial courts, rather than the Ohio Supreme Court, undertake in the first instance. Ultimately, for reasons unknown, the Ohio Supreme Court dismissed the certified question as “improvidently accepted for review.” (Doc. 34-4.)

         Allstate argues that this Court should re-certify this question, but omitting the question of whether “arson” falls within the category of “fire.” According to Allstate, the Supreme Court “should reconsider based on this court's wording of the question, which is more in line with what the issue is[.]” (Doc. 32 at 4-5.) Moreover, Allstate worries about potentially ...


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