Court of Appeals for the Second Appellate District recently decided that negligent performance of a contract is not a valid claim. Bolin v. Allstate Property and Casualty Ins. Co. (2018-Ohio-3396) (2018-2016-sc-000572-dg). We had the privilege of representing Allstate in this complicated multi-claim/multi-policy action. Allstate issued a dwelling policy and several vehicle policies to Plaintiffs. A June 4, 2015 fire originated in a boat sitting on a trailer parked in the driveway adjacent to an RV and a pickup truck. The fire damaged the dwelling, the boat, the trailer, and the vehicles. Plaintiffs also alleged someone broke into the house after the fire and stole personal property, and presented a theft loss claim.
Allstate determined none of the relevant policies provided coverage. Plaintiffs filed suit on July 11, 2016 alleging causes of action for (I) declaratory judgment, (II) breach of contract, (III) negligence, (IV) bad faith, and (V) punitive damages.
Plaintiffs appealed the trial court’s ruling in favor of Allstate. The primary issues on appeal were:
Ohio, like most states, follows the rule that a breach of contract is not a tort. Yet Plaintiffs continue to force insurance companies to defend non-existent tort (negligence) claims because of the dearth of applicable appellate case law. This case provides important guidance on this point. The Court of Appeals agreed with Allstate and determined that Plaintiff’s negligence claim failed to state a claim upon which relief could be granted. We are hopeful this decision will clarify Ohio law on this issue, and allow courts to dismiss legally unsupportable allegations and more efficiently address the issues genuinely in dispute.
The decision also highlights an important inconsistency in how Ohio appellate districts interpret the application of policy suit limitation provisions to non-contract claims. The Second Appellate District does not apply an insurance policy’s suit limitation provisions to claims for bad faith (and instead applies the statutory 4-year limitation). Yet there are multiple decisions from other Ohio appellate districts upholding a trial court’s decision granting an insurance company’s motion to dismiss all causes of action (including bad faith and fraud) where plaintiffs failed to file suit within the deadline imposed by the policy. This distinction is important to keep in mind when evaluating claims and initially assessing your litigation strategy.
Please contact us if you would like more information about the attached Opinion or any of the issues addressed above.
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