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Breech v. Liberty Mutual Fire Insurance Co.

Court of Appeals of Ohio, Fifth District, Stark

December 21, 2017

LOIS BREECH Plaintiff-Appellant
v.
LIBERTY MUTUAL FIRE INSURANCE COMPANY, ET AL. Defendant-Appellee

         Appeal from the Stark County Court of Common Pleas, Case No. 2016CV00348

          For Plaintiff-Appellant: RAYMOND V. VASVARI, JR.

          For Defendant-Appellee: JOHN G. FARNAN MONICA L. FRANTZ

          Hon. Patricia A. Delaney, P.J. Hon. William B. Hoffman, J. Hon. Earle E. Wise, Jr., J.

          OPINION

          Delaney, P.J.

         {¶1} Plaintiff-Appellant Lois Breech appeals the December 22, 2016 judgment entry of the Stark County Court of Common Pleas.

         FACTS AND PROCEDURAL HISTORY

         {¶2} On April 27, 2014, a storm damaged the home of Plaintiff-Appellant Lois Breech. Defendant Liberty Mutual Insurance Company insured her home.

         {¶3} Charles Lusher, Breech's grandson, was granted a power of attorney by Breech. Lusher retained the services of Defendant Finnicum Adjusting Company, Inc. to assist Breech in presenting a claim to Liberty Mutual.

         {¶4} Lusher hired Defendant-Appellee First Response Restoration to put a tarp on the roof of Breech's home. While the tarp was on the roof, a dispute arose between Breech's representatives and Liberty Mutual as to the coverage for the property damage and value.

         {¶5} The parties were unable to resolve the claim for property damage to Breech's home. On April 22, 2015, Breech filed a complaint against Liberty Mutual in the Hamilton County Court of Common Pleas. The complaint was removed to federal court and dismissed. On February 12, 2016, Breech filed a complaint in the Stark County Court of Common Pleas against Defendants Liberty Mutual, Stephen Johnson, Finnicum, Steven Hillman, James Garrity, and First Response. Breech alleged First Response negligently applied the roof tarp to her home. Breech claimed breach of contract and bad faith against Liberty Mutual and employees. As to Finnicum and its employees, Breech claimed breach of contract, fraud, negligence, breach of fiduciary duty, civil conspiracy, and violations of the Fair Debt Collections Practices Act.

         {¶6} The trial court set the matter for mediation on August 25, 2016. In the Stark County Court of Common Pleas, a court mediator conducts the mediation. Lusher and counsel represented Breech at the mediation. Breech was unable to resolve her claims against Liberty Mutual and Finnicum. As to First Response, the "Report of Mediation" stated, "A mediation conference took place on the 25th day of August, 2016. The result of the conference is as follows: 1. Case settled CONTINGENT on the following terms: CONFIDENTIAL."

         {¶7} On October 17, 2016, First Response filed a Motion to Enforce the Settlement Agreement. In the motion, First Response provided details of its understanding of the settlement negotiations between Breech and First Response. First Response stated that at the mediation, Breech agreed to settle her claims and release First Response in exchange for a confidential amount of money to be paid by Crum & Forster Insurance Company on behalf of its insured, First Response. The adjuster for Crum & Forster participated in the mediation via telephone. After the mediation, counsel for First Response emailed counsel for Breech a draft settlement release. Counsel for Breech objected to the draft release because it failed to include a confidentiality clause. Counsel for First Response agreed to include confidentiality language. Breech did not sign the release. Counsel for the parties spoke again and counsel for Breech requested additional changes to the release. The changes included revised language as to the release of Crum & Forster. Counsel for Breech stated his client would not agree to release Crum & Forster from liability due to concerns that Crum & Forster insured another party, currently unknown, involved in Breech's cause of action. Counsel for First Response offered to draft a release that would release Crum & Forster only in its capacity as the insurer to First Response. Counsel for Breech stated his client would not sign the release document that included language releasing Crum & Forster of its liability.

         {¶8} Breech responded on October 24, 2016. Breech argued that at mediation, Breech agreed only to release First Response. Crum & Forster was not a party to the action merely because it was the insurer of First Response.

         {¶9} The trial court held an oral hearing on November 10, 2016. William Harter, counsel for Liberty Mutual, testified first on behalf of First Response. He had no knowledge of the terms of the alleged settlement agreement between Breech and First Response. He testified that based on his experience in insurance defense work, it was customary for the insurer to be released when the insurer pays a settlement on behalf of the insured.

         {¶10} John Farnan, counsel for First Response, testified over the objection of Breech. Farnan was present at the mediation as counsel for First Response. He testified that it was understood and accepted as common practice in litigation that the client and the entity paying the money were released after a settlement. He recalled the negotiations between counsel for Breech and himself:

So we spent hours, Mr. Seebohm and I, going back and forth negotiating; and I tried to tailor it as narrowly as possible to accommodate the concerns that he expressed as relayed by Mr. Lusher, her POA.
So for that reason we offered to limit it to this claim, this insured, on this claim only.
* * * We are only asking the Court to confirm that * * * he is releasing First Response Restoration and the paying insurer in its capacity as the insurer of this particular claim that we have been sued on. Nothing else.
I am willing to limit it to that and that's it.
For that reason I am here because I couldn't get that agreement.

(T. 23-25).

         {¶11} Farnan was asked by counsel for Breech, "Did we at any time during the [mediation] discuss Crum & Forster being released from this case?" Farnan answered, "We did not discuss who was going to be released at all is my recollection. * * We also didn't discuss whose names were going to be on the release. * * * We didn't discuss the timing of the payment. All those things were understood between ...


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