Schumacher et al v. State Automobile Mutual Insurance Company et al

Filing 29

OPINION AND ORDER granting in part and denying in part 8 Motion to Dismissof Defendants State Automobile Mutual Insurance Company, State Auto Financial Corporation, and State Auto Property and Casualty Insurance Company. Defendant State Auto Fina ncial Corporation is DISMISSED from this litigation. Plaintiffs Mary Carmen Evans and Calvin and Gabrielle Hendryx-Parker are DIMISSED WITHOUT PREJUDICE from this litigation. Plaintiffs' common law claims for breach of contract (Count V) and b reach of the duty of good faith and fair dealing (Count VI) are DISMISSED. In all other respects, Defendants' Motion to Dismiss is DENIED. Pursuant to the case management overview discussed at the conclusion of oral argument, the following pre trial deadlines are now in place: discovery will be completed by 6/1/2015; dispositive motions will be filed by 7/1/2015; a final pretrial conference will be held on 9/29/2015 at 2:00 p.m., with a five-day jury trial scheduled for 10/20/2015, on an on-deck basis. Signed by Judge S Arthur Spiegel on 9/18/2014. (km1)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION

MARK SCHUMACHER AND ANDREA
SCHUMACHER, et al.,

:
:
:
:
:
:
:
:
:
:
:
:
:

Plaintiffs,

v.

STATE AUTOMOBILE MUTUAL
INSURANCE CO., et al.,
Defendants.

No. 1:13-cv-00232

OPINION AND ORDER

This matter is before the Court on the Motion to Dismiss by
Defendants State Automobile Mutual Insurance Company, State Auto
Financial

Corporation,

and

State

Auto

Property

and

Casualty

Insurance Company (doc. 8); Plaintiffs’ response in opposition
(doc. 15); Defendants’ reply (doc. 16); and Plaintiffs’ surreply (doc. 23), filed with the Court’s permission (doc. 22).
Oral argument was heard on August 29, 2013.

For the reasons

that follow, Defendants’ motion is GRANTED IN PART AND DENIED IN
PART.
I.

Background
Plaintiffs

Mark

and

Andrea

Schumacher,

residents

of

Kentucky, filed the original Class Action Complaint in this case
against
Company,

three
State

Defendants,
Auto

State

Financial

1

Automobile
Corporation

Mutual
and

Insurance

State

Auto

Property and Casualty Insurance Company (see doc. 1).

The First

Amended Class Action Complaint names the same three defendants
but adds five more Plaintiffs:

Mary Carmen Evans, a resident of

Ohio (doc. 7 ¶ 2); Mary and Arthur Maier, also residents of Ohio
(id. ¶ 3); and Calvin and Gabrielle Hendryx-Parker, residents of
Indiana (id. ¶ 4).
By way of background, the standard homeowners policy sold
in the United States is referred to as an “HO0003” and includes
the

following

coverages:

Coverage

A

(for

the

dwelling),

Coverage B (other structures), Coverage C (personal property)
and Coverage D (loss of use).
are:

Coverage

B

(10%

of

The customary levels of coverage
Coverage

A),

Coverage

Coverage A) and Coverage D (20% of Coverage A).

C

(50%

of

If an insured’s

policy limits for the dwelling and other structures (Coverage A
and Coverage B) equals 80% of the structures’ full replacement
cost, under policy HO0003 the insured is entitled to payment of
full replacement costs for damaged or destroyed property up to
policy limits. (Id. ¶¶ 26-32.)1

Through an endorsement known as

its “Defender Coverage,” State Auto markets another product to
its

customers

replacement

cost

that

professes

coverage.”

outright
Its

1

levels

to
of

provide
coverage

“100%
are:

State Auto markets a slightly different version of policy
HO0003, known as Securgard. The only variation is that Coverage
D limits are 30% (rather than 20%) of Coverage A. (Doc. 7 ¶
34.)
2

Coverage B (10% of Coverage A), Coverage C (70% of Coverage A)
and Coverage D (30% of Coverage A).2

(Id. ¶ 35.)

Policyholders

with the Defender Endorsement give State Auto full authority to
adjust the Coverage A (the dwelling) limit and corresponding
premium in accordance with property evaluations made by State
Auto and any increases in inflation (id. ¶ 38).
According

to

Plaintiffs,

use

of

the

catch-phrase

“100%

replacement cost coverage” in the Defender Endorsement creates
an

impression

endorsement

that

in

a

order

to

homeowner
be

needs

adequately

to

purchase

this

insured

(id.

36).

¶

However, as long as the structures are insured at 80% of their
full replacement cost, policy HO0003 provides that protection
(id. ¶ 32).
as

insureds

Beginning in 2009, State Auto advised Plaintiffs,
with

the

Defender

Endorsement,

that

it

was

introducing its “Insurance-to-Value” Program (“ITV program”) for
the purpose of re-evaluating the replacement cost of their homes
(id. ¶ 52 & Exh. 1).

Plaintiffs claim that, under the guise of

this program, State Auto improperly raised their premiums to
offset

underwriting

losses

incurred

because

of

an

increased

number of climatic events such as hurricanes, tornados, floods
and earthquakes (id. ¶¶ 40-42).

Specifically, Plaintiffs allege

2

The Defender Endorsement also purports to provide an additional
amount of insurance, up to 25% of the Coverage A limits, if
losses under Coverage A exceed the liability limit (doc. 7 ¶
37).
3

that State Auto has increased coverage limits for Coverage A far
in excess of the actual value of their property (id. ¶ 43).

An

increase in coverage limits, of course, means an increase in the
premiums paid by them.

Plaintiffs contend that, because the

replacement cost of their homes would be well below the inflated
amount

of

the

additional

risk

coverage
yet

limit,

received

State
more

Auto

in

has

assumed

no

And

by

premiums.

increasing Coverage A limits, in turn the coverage limits for
Coverage B, Coverage C and Coverage D also were increased as
they are calculated as a percentage of Coverage A.
Moreover,

these

unilateral

increases

in

(Id. ¶¶ 45.)

Coverage

A

limits

effectively eliminated any chance that State Auto ever would be
required to provide the 25% bonus guaranteed by the Defender
Endorsement, rendering illusory the bargained-for benefit (id.
¶¶ 37, 44).
For example3, the Schumacher Plaintiffs purchased their new
construction home, located in Campbell County, Kentucky, in 2001
for $234,500 (id. ¶ 72).

Their independent insurance agent sold

them a homeowners policy issued by State Auto with its Defender
Endorsement (id. ¶¶ 72, 73).
made

any

trigger

a

significant
substantial

Since 2001, Plaintiffs have not

improvements
increase

3

in

to

their

property

home

that

value,

but

would
have

For purposes of deciding the matter before us, it is unnecessary
for the Court to recite the particular facts attendant to each
named Plaintiff.
4

instead engaged in normal maintenance only (id. ¶ 77).
value

of

their

property

has

not

otherwise

The

materially

appreciated, but has remained basically stagnant (id. ¶¶ 75-76).
The builder from whom Plaintiffs bought their home continues to
construct

and

sell—for

a

comparable

price—homes

in

their

neighborhood that are similar to the one they own (id. ¶ 78).
For the period 10/19/2010 to 10/19/2011, State Auto increased
the limits for Plaintiffs’ dwelling (Coverage A) to $339,500,
more than $100,000 in excess of the original purchase price.

In

turn,

to

their

Coverage

C

limits

(70%

of

Coverage

A)

rose

$237,650 even though they had no unusual person property or
collections.

Their total premium was $889.

(Id. ¶¶ 79-81 &

Exh. 3.)

For the period 10/19/2011-10/19/2012, State Auto again

increased

the

$408,400,

even

occurred.

In turn, again, their Coverage C limits rose to $285,

880.

limits

for

though

Plaintiffs’

no

material

Their total premium was $1,090.

dwelling,
changes

this

to

the

time

to

property

(Id. ¶¶ 82-84 & Exh. 4.)

For the period 10/19/2012-10/19/2013, State Auto continued its
pattern,

increasing

503,600,

with

premium

was

the

Coverage

$1,381.

limits
C

(Id.

for

rising
¶¶

to

85-87

Plaintiffs’

dwelling

$352,520.

Their

&

Exh.

5.)

to

total

Plaintiffs

contend that, in three year time period, State Auto raised their
coverage limits over 48%, and, in turn, their premiums more than
55%, all purportedly because of the need to provide adequate
5

replacement

cost

coverage

(id.

¶

88).

Plaintiffs

further

contend, in the Commonwealth of Kentucky alone, in the wake of
the

ITV

program,

State

Auto

increased

its

revenues

from

homeowner policy premiums by $1,130,636 for the period 201020124, yet had 7,158 fewer policyholders in this time band5.
Thus, State Auto realized a 3.4% increase in premiums on 20.4%
fewer properties.

(Id. ¶ 66.)

Plaintiffs have pled six causes of action on behalf of
themselves and the putative class:

tortious breach of the duty

of good faith and fair dealing (doc. 7 ¶¶ 183-201 (Count I));
negligent misrepresentation and fraud (doc. 7 ¶¶ 202-219 (Count
II)); violation of the Ohio Deceptive Trade Practices Act (doc.
7 ¶¶ 220-227 (Count III)); fraudulent inducement (doc. 7 ¶¶ 228238 (Count IV)); breach of contract (doc. 7 ¶¶ 239-245 (Count
V)); and breach of the duty of good faith and fair dealing (doc.
7 ¶¶ 246-251 (Count VI)).
Defendants’ 12(b)(6) motion asks the Court to dismiss all
six claims.

In the alternative, Defendant State Auto Financial

Corporation asks to be dismissed because it is not alleged to
have insured any of the Plaintiffs.

Also in the alternative,

Defendants ask that Plaintiffs Mary Carmen Evans and Plaintiffs
4

State Farm collected $34,351,476 in premium revenue from its
Kentucky insureds in 2012 as compared to $33,220,840 in 2010.

5

State Farm had only 35,045 Kentucky insureds in 2012, as
compared to 42,203 in 2010.
6

Calvin

and

Gabrielle

Hendryx-Parker

be

dismissed

because

the

declaration pages attached to the First Amended Class Action
Complaint show that they were not insured by the Defendants
specifically named in this action.
II.

Applicable Standard Under Rule 12(b)(6)

In
retired

Bell
the

Atlantic

Corp.

half-century-old

v.

Twombly,

pleading

the

Supreme

standard

of

Court

Conley

v.

Gibson that a claim should not be dismissed “unless it appears
beyond doubt that the plaintiff can prove no set of facts in
support

of

his

claim

which

would

entitle

him

to

relief.”

Twombly, 550 U.S. 544, 546 (2007) (citing Conley v. Gibson, 355
U.S. 41, 45-46 (1957) (emphasis added)).
Procedure

8(a)(2)

“demands

more

Federal Rule of Civil

than

an

defendant-unlawfully-harmed-me accusation.”

unadorned,

the

Kline v. Mortgage

Electronic Security Systems, 659 F. Supp. 2d 940, 945 (S.D. Ohio
2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).
pleading

is

insufficient

if

it

only

offers

“a

A

formulaic

recitation of the elements of a cause of action” or tenders
nothing more than “labels and conclusions.”
at 555.

Twombly, 550 U.S.

A complaint must “state a claim to relief that is

plausible on its face” or risk dismissal under Fed. R. Civ. P.
12(b)(6).
570).

Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at

While a court must accept as true all of the factual

allegations of the complaint, it is not so bound with regard to
7

legal

conclusions,

Iqbal,

556

U.S.

particularly

at

678-79

when

(citing

couched

Twombly,

as

the

550

former.

U.S.

at

555

(citing Papasan v. Allain, 478 U.S. 265, 286 (1986))).
III. Discussion
A. Which State’s Law Governs?
As

earlier

Complaint

catalogued,

contains

a

total

the
of

First

six

Amended

causes

of

Class

Action

action:

three

sounding in tort, two in contract, and one based on an Ohio
statute.

A preliminary issue we must resolve is which state’s

law governs.
Plaintiff’s

Defendants maintain that the law from each named
home

state

should

govern

the

common

law

claims.

Thus, in their view, Kentucky law applies to the claims of the
Schumacher Plaintiffs, Ohio law to the claims of the Evans and
Maier

Plaintiffs,

Plaintiffs.

and

Indiana

Plaintiffs,

on

law
the

to

the

other

Hendryx-Parker

hand,

urge

that,

regardless of the state in which any named Plaintiff resides,
Ohio law is applicable.
with

diversity

Both sides agree that a federal court

jurisdiction

must

apply

rules of the state in which it sits.

the

conflict

of

laws

See Sky Tech. Partners,

LLC v. Midwest Research Inst., 125 F. Supp. 2d 286, 295 (S.D.
Ohio 2002) (citing Klaxon Co. v. Stentor Elec. Mfg. Co., 313
U.S. 487, 496 (1941)).

This Court quite obviously sits in Ohio,

and Ohio courts confronted with a conflicts of law question
apply the analysis set forth in the Restatement (Second) of
8

Conflict of Laws.

Macurdy v. Sikov & Love, P.A., 894 F.2d 818,

820-22 (6th Cir. 1990) (citing Morgan v. Biro Mfg. Co., Inc., 15
Ohio St. 3d 339, 474 N.E.2d 286 (1984) (tort claims); Gries
Sports Enterprises, Inc. v. Modell, 15 Ohio St. 3d 284, 473
N.E.2d

807

(1984)

(contract

claims)).

As

detailed

below,

we

conclude that the law of the state in which each of the named
Plaintiffs resides applies to their respective contract claims,
but Ohio law applies to all claims sounding in tort.6
B. Contract Claims
Section 188 provides:
(1) The rights and duties of the parties with respect to an
issue in contract are determined by the local law of the
state which, with respect to that issue, has the most
significant relationship to the transaction and the parties
under the principles stated in § 67.
6

See Lewis v. Horace Mann Ins. Co., 410 F. Supp. 2d 640, 653
(N.D. Ohio 2005) (“[O]ne state's law need not be applied to all
of the claims.” (citing Cheaham v. Thurston Motor Lines, 654 F.
Supp. 211, 215 (S.D. Ohio 1986) (Rice, J.))).
7

Section 6 provides:

(1) A court, subject to constitutional restrictions, will follow
a statutory directive of its own state on choice of law.
(2) When there is no such directive, the factors relevant to the
choice of the applicable rule of law include
(a) the needs of the interstate and international systems,
(b) the relevant policies of the forum,
(c) the relevant policies of other interested states and
the relative interests of those states in the determination
of the particular issue,
9

(2) In the absence of an effective choice of law by the
parties (see § 1878), the contacts to be taken into account

(d) the protection of justified expectations,
(e) the basic policies underlying the particular field of
law,
(f) certainty, predictability and uniformity of result, and
(g) ease in the determination and application of the law to
be applied.
Restatement (Second) of Conflict of Laws § 6 (1971).
8

Section 187 provides:
(1) The law of the state chosen by the parties to govern
their contractual rights and duties will be applied if the
particular issue is one which the parties could have
resolved by an explicit provision in their agreement
directed to that issue.
(2) The law of the state chosen by the parties to govern
their contractual rights and duties will be applied, even
if the particular issue is one which the parties could not
have resolved by an explicit provision in their agreement
directed to that issue, unless either
(a) the chosen state has no substantial relationship
to the parties or the transaction and there is no
other reasonable basis for the parties' choice, or
(b) application of the law of the chosen state would
be contrary to a fundamental policy of a state which
has a materially greater interest than the chosen
state in the determination of the particular issue and
which, under the rule of § 188, would be the state of
the applicable law in the absence of an effective
choice of law by the parties.
(3) In the absence of a contrary indication of intention,
the reference is to the local law of the state of the
chosen law.

Restatement (Second) of Conflict of Laws § 187 (1971).
10

in applying the principles of § 6 to determine the law
applicable to an issue include:
(a) the place of contracting,
(b) the place of negotiation of the contract,
(c) the place of performance,
(d) the location of the subject matter of the
contract, and
(e) the domicil, residence, nationality, place of
incorporation and place of business of the parties.
These contacts are to be evaluated according to their
relative importance with respect to the particular issue.
Restatement (Second) of Conflict of Laws § 145 (1971) (emphasis
added).

When read together, sections 6 and 188 provide, at

best, “‘a broad general framework for the resolution of choice
of law issues . . . .’”

Medical Mut. Of Ohio v. deSoto, 245

F.3d 561, 571 (6th Cir. 2001) (quoting International Ins. Co. v.
Stonewall Ins. Co., 86 F.3d 601, 606 (6th Cir. 1996), aff’g 863
F. Supp. 599 (S.D. Ohio 1994) (Spiegel, S.J.)).
state’s

law

applies

is

far

more

an

art

Deciding which

than

a

science.

International Ins. Co., supra, 86 F.3d at 606 (“Within that
framework, a judge must balance principles, policies, factors,
weights,
which,

and

in

emphases

all

precision.”).

to

honesty,

reach

result,

not

does

a

proceed

the
with

derivation

of

mathematical

Thus, we proceed.

Contact (e) is divided equally between the home states and
Ohio, State Auto’s principal place of business.

11

Contacts (a)

and (b) plainly favor each named Plaintiff’s home state, but in
the context of the facts alleged, these contacts are relatively
unimportant.

See generally Jamhour v. Scottsdale Ins. Co., 211

F. Supp. 2d 941, 949-50 (S.D. Ohio 2002) (Sargus, J.).

None of

the homeowners’s “negotiated” their policies in the true sense
of

the

word.

Most

significant

we

believe,

contrary

to

Plaintiffs’ argument, are contacts (c) and (d), both of which
greatly favor the home states.

The crux of Plaintiffs’ theory,

as the Court understands it, is that they could never realize
the benefit of their “bargain” with their insurer because they
overpaid their premiums, ostensibly tied to inflated replacement
values.
value,

A residential home’s replacement value, like its market
is

very

much

tied

to

its

physical

location.

This

inextricable bond weighs heavily in favor of the home states.
Hence,

we

will

assess

whether

the

contract

claims

alleged

survive Defendants’ motion to dismiss by applying Kentucky law
to the claims of the Schumacher Plaintiffs, Ohio law to the
claims of the Evans and Maier Plaintiffs, and Indiana law to the
Hendryx-Parker Plaintiffs.
as

a

practical

matter,

The Court recognizes, however, that,

these

may

be

distinctions

without

a

difference considering that the common law elements of breach of
contract are nearly identical in Kentucky, Ohio and Indiana.
To state a breach of contract claim, in Ohio and elsewhere,
essentially four elements are required:
12

(1) a binding agreement

between two parties; (2) performance by the non-breaching party;
(3) a failure to fulfill its obligation (without legal excuse)
by the breaching party; and (4) consequent damages incurred by
the non-breaching party.

See Maxey v. State Farm Fire & Cas.

Co., 689 F. Supp. 2d 946, 950 (S.D. Ohio 2010) (Spiegel, S.J.).
Clearly

the

parties

entered

into

a

binding

agreement.

Defendants argue, however, that Plaintiffs have not identified—
indeed cannot identify—any terms of their respective insurance
policies that have been breached.
hand,

refer

policies

to

that

REPLACEMENT

the

declaration

contain

COST

the

INCREASES,

Plaintiffs, on the other

sheets

associated

statement,

“DUE

SECTION

COVERAGES

I

TO

with
REPAIR
HAVE

their
AND
BEEN

INCREASED BY 5.5%”,9 yet maintain that their Coverage A limits
(the controlling coverage in Section I) actually increased far
more than 5.5%.

Defendants counter that their pre-formation

representation concerning the annual inflation adjustment cannot
be “breached” by increasing the Coverage A limit as part of the
ITV program, the explanation for which Plaintiffs received in a
separate notice (see doc. 7 Exh. 2).
This Court agrees with Defendants.

An act or omission that

occurs before a contract is formed cannot later be evidence of a
alleged breach.

See Walker v. Dominion Homes, Inc., 164 Ohio

9

The “5.5%” figure is but one example, drawn from the declaration
sheet associated with the policy issued to the Schumacher
Plaintiffs for the period 10/19/12-10/19/13 (see doc. 7 Exh. 5).
13

App. 3d 385, 397, 2005-Ohio-6055, 842 N.E.2d 570, 580, ¶ 35.

It

follows, therefore, that neither can it be evidence of a failure
of the duty to act in good faith.

See Bryan v. Bank of Am. Home

Loans Serv., LP, No. 3:10 CV 959, 2011 WL 5526071, at *3 (N.D.
Ohio Nov. 14, 2011) (Katz, J.) (“Plaintiffs assert a separate
claim

for

bad

faith

breach

of

contract;

however,

Ohio

law

incorporates bad faith into a normal contract claim.” (citations
omitted)).10

Accordingly,

Counts

V

and

VI

are

appropriately

DISMISSED.
C. Tort Claims
Section 145 provides:
(1) The rights and liabilities of the parties with respect
to an issue in tort are determined by the local law of the
state which, with respect to that issue, has the most
significant relationship to the occurrence and the parties
under the principles stated in § 6.
(2) Contacts to be taken into account in applying the
principles of § 6 to determine the law applicable to an
issue include:
(a) the place where the injury occurred,
(b) the place where the conduct causing the injury
occurred,
(c) the domicile, residence, nationality, place of
incorporation, and place of business of the parties,
and

10

Bad faith is one form of breach that may allow for extra
remedies, namely attorney’s fees. Bryant, supra, 2011 WL
5526071, at *3 (citing LEH Properties v. Pheasant Run Ass’n,
No. 10CA009780, 2011 WL 378783, 2011-Ohio-516, at ¶ 22 (Ohio
Ct. App. 9 Feb. 7, 2011).
14

(d) the place where the relationship, if any, between
the parties is located.
These contacts are to be evaluated according to their
relative importance with respect to the particular issue.
Restatement (Second) of Conflict of Laws § 145 (1971) (emphasis
added).

On balance, we conclude that Ohio law should apply to

all tort claims.
Plaintiffs have alleged a broad-ranging scheme ostensibly
conceived

by

principal

place

substantial

Defendants
of

at

business

underwriting

their
in

losses

national

Columbus,
caused

headquarters
Ohio.

by

To

claims

and

recoup

paid

to

homeowners in the wake of a variety of natural disasters, State
Auto put in place a six-step “Homeowners Remediation” plan (see
doc.

7

¶¶

48-49).

It

included

the

earlier-described

ITV

program, a feature that, once added to the Defender Endorsement,
permitted State Auto to unilaterally adjust their policyholders’
Coverage A limits, which, in turn, automatically adjusted the
limits for Coverage B, Coverage C and Coverage D, as all three
are dependent on Coverage A.

These upward adjustments naturally

resulted in higher premiums being paid.
the

collection

of

increased

revenue

Further, it allowed for
without

taking

the

more

transparent step of raising premium rates, an approach to which
policyholders
Plaintiffs,

are

State

characteristically
Auto

intentionally

averse.
overstated

According

to

the

to

costs

rebuild their homes, such that they were charged for a benefit
15

that they did not need, and, in the event of an occurrence,
would never realize.

Execution of this purported ruse likewise

is based in Columbus, Ohio, as the framework supporting it—
correspondence, policies and declaration sheets distributed by
insurers

to

their

insureds—issues

from

State

headquarters and principal place of business.

Auto’s

national

Contacts (c) and

(d), then, favor Ohio, as do contacts (a) and (b), because the
supposed injury to Plaintiffs originated with the large-scale
implementation of this program.

Thus, Ohio law will govern

Plaintiffs’ tort claims and inform the Court’s decision as to
whether they survive Defendants’ motion.11
Defendants are correct that, under Ohio law, an insurance
company’s duty of good faith and fair dealing toward its insured
is

not

settling

limitless.
a

claim

It

is

covered

owed
under

in
the

the

classic

policy.

instance

See

Zoppo

of
v.

Homestead Ins. Co., 71 Ohio St. 3d 552, 644 N.E.2d 397 (1994).
Yet it appears to not be owed in the decision of whether to
offer a renewal policy.

See The Andersons, Inc. v Factory Mut.

Ins. Co., No. 3:01-CV-7620, 2003 WL 25875557, at *4 (N.D. Ohio
11

Defendants rely on Pilgrim v Universal Health Card, LLC, 660
F.3d 943 (6th Cir. 2011) in support of their position that the
law of each Plaintiff’s home state should apply. However, in
Pilgrim, the healthcare discount program at issue “did not
operate the same way in every State and the plaintiffs suffered
distinct injuries as a result.” Id. at 947-48. Here, though,
the ITV program described by Plaintiffs is formulaic in nature
and therefore does operate in the same way in every state.
Thus, we consider Pilgrim inapposite.
16

Sept. 3, 2003) (Katz, J.).

The facts alleged by Plaintiffs in

their complaint, however, are not so basic.

They contend that

Defendants concocted a plot—in the form of the ITV component of
their “Homeowners Remediation” plan—to sizably increase their
premium revenue by selling an overpriced and superfluous product
to their insureds, particularly those with whom they have had an
on-going relationship.

As a result these insureds were denied

the benefit of their bargain, and citing to Greenberg v. The
Life

Ins.

Co.

of

Virginia,

177

F.3d

507

(6th

Cir.

1999)12,

Plaintiffs argue that this conduct constitutes a breach of the
duty of good faith and fair dealing.

This Court agrees that

these allegations plausibly state such a claim.
556 U.S. at 678.

Iqbal, supra,

Accordingly, Defendants’ motion to dismiss

Count I is DENIED.

12

In Greenberg, two sisters owned three paid-up policies on the
life of their father. An agent persuaded them that it would be
to their financial advantage to surrender these policies and
then purchase new ones that would require only a “singlepremium” payment. Within a year, however, the sisters
discovered that considerable extra payments would be needed to
keep these policies in force. Id. at 510-11. The Sixth Circuit
concluded that Ohio law would recognize that the sisters stated
a claim for a breach of the duty of good faith and fair dealing
“because they did not receive the benefits that they reasonably
believed would flow from their policies.” Id. at 520 (citing
Buckeye Union Ins. Co. v. State Farm Mutual Automobile Ins. Co.,
Nos. C-960282, A-9100556, 1997 WL 180278, at *7 (Ohio App. 1
Dist. Apr. 16, 1997)).
17

We also find the separate claims of fraud13 and negligent
misrepresentation14,
pled.

combined

in

Count

II,

each

sufficiently

Fraud claims must be pled with “particularity” under Fed.

R. Civ. P. 9(b).

Yet despite this heightened standard, trial

courts must avoid too exacting a review.

Michaels Bldg. Co. v.

Ameritrust Co., N.A., 848 F.2d 674, 680 (6th Cir. 1988) (“Rule
9(b) does not require omniscience; rather, the Rule requires
that

the

circumstances

of

the

fraud

be

pled

with

enough

specificity to put defendants on notice as to the nature of the
claim.”).
of

time,

A plaintiff must supply “sufficient detail—in terms
place

and

content,

the

nature

of

a

defendant's

fraudulent scheme, and the injury resulting from the fraud—to

13

To prevail on a fraud claim in Ohio, a plaintiff must prove
these elements: (1) a representation; (2) material to the
transaction; (3) made falsely, with knowledge of falsity; and
(4) with the intention of misleading another into relying on it.
He or she also must prove (5) justifiable reliance on the
representation; and (6) an injury proximately caused by said
reliance. Burr v. Bd. of Cnty. Commr’s, 23 Ohio St. 3d 69, 491
N.E.2d 1101, 1102, syl. ¶ 2 (1986).
14
A claim for negligent misrepresentation requires proof of the
following:
One who, in the course of his [or her] business, . . .
supplies false information for the guidance of others in
their business transactions, is subject to liability for
pecuniary loss caused to them by their justifiable reliance
upon the information, if he [or she] fails to exercise
reasonable care or competence in obtaining or communicating
the information.
Gutter v. Dow Jones, Inc., 22 Ohio St. 3d 286, 288, 490 N.E.2d
898, 900 (1986) (quoting Restatement (Second) of Torts § 552
(1977)).
18

allow the defendant to prepare a responsive pleading[.]”

See

United States ex rel. SNAPP, Inc. v. Ford Motor Co., 532 F.3d
496, 504 (6th Cir. 2008) (citing United States ex rel. Bledsoe v.
Cmty. Health Sys., Inc., 501 F.3d 493, 506 (6th Cir. 2007)).
require

more,

however,

would

invite

unduly

harsh

To

results

inconsistent with Fed. R. Civ. P. 8(a)(2)’s touchstone “notice
pleading”.

Michaels, supra, 848 F.2d at 679-80.

Upon consideration, we believe that the allegations within
the

First

Amended

Complaint

adequately

satisfy

“who, what, where, when, and why” survey.
“State

Auto

Defendants

Insurance
State

Auto

Companies”—the
Mutual

and

the

Plaintiffs identify

trade-name

State

idiomatic

Auto

under

which

Property

Casualty15 operate—as the maker of the statements.

and

This name

appears prominently on all of the forms and letters issued to
Plaintiffs from Defendants’ national headquarters, as well as on
the “Agency Bulletin” describing the ITV program.
¶¶

pinpoint

the

statements they believe to be material misrepresentations:

the

need

184-85

for

&

them

Exhs.

to

1-16.)

add

the

Plaintiffs

Defender

also

(See doc. 7

Endorsement

in

order

to

receive full replacement cost coverage (doc. 7 ¶¶ 203-04, 229);
the need to increase their coverage limits in order to receive
full replacement cost coverage (id. ¶¶ 205-07, 230); and the
15

As discussed infra, even though it, too, operates under this
same trade-name, State Auto Financial Corporation is correctly
dismissed from this litigation.
19

percentage
increased

amount
over

Plaintiffs

by

the

which

their

preceding

year

allege

coverage

that

further

(id.

limits
208-10,

¶¶

actually
231-33).

Defendants

knew

their

representations were false and were made with the express intent
of increasing premium revenue without increasing underwriting
risk.

(See, e.g., id. ¶¶ 32, 36, 213-16, 234-35.)

Plaintiffs

specify their alleged injuries in the form of excessive premiums
paid and proximately-caused anxiety and emotional distress (id.
¶¶ 218, 237).
Defendants

contend

misrepresentations

were

therefore not actionable.

that

the

merely

so-called

opinions,

not

material
facts,

and

See Ohio Police & Fire Pension Fund

v. Standard & Poor’s Fin. Servs., LLC, 700 F.3d 829, 842-44 (6th
Cir. 2012 ) (credit rating not an actionable misrepresentation).
The Court believes otherwise.
event

of

a

calamity

is

The cost to replace a home in the

indeed

an

estimate,

but

it

is

one

grounded in actual brick-and-mortar expense that is “susceptible
of

knowledge”.

See

id.

at

842

(quotations

and

citations

omitted).

It simply is not dependent upon subjective opinion.

Moreover,

Plaintiffs

superior

knowledge

of

quite

properly

premiums

to

relied

support

on

Defendants’

reconstruction,

an

integral part of their underwriting process, as they are in the
business of paying to have homes rebuilt when disaster strikes.
Finally,

that

Plaintiffs

had

the
20

ability

to

cancel

their

policies

at

any

time

and

receive

premiums paid offers no cure.
not

compensate

Plaintiffs

a

pro

rata

refund

of

the

Any refunds received still would

for

that

portion

of

the

purported

fraudulently-inflated premiums retained by Defendants.
Plaintiffs have satisfied the standard of pleading required
by Rule 9(b).

To borrow from our colleague Judge Frost, “to

conclude

otherwise

would

‘gotcha’

litigation

in

context

nor

with

encourage

which

attention

a

a

disingenuous

pleading

to

the

is

game

of

neither

in

Jennings

v.

read

obvious.”

Bodrick, No. 2:09-cv-208, 2009 WL 1607711, at *4 (S. D. Ohio
June

9,

2009)

standard
claim

of

of

(Frost,

pleading

negligent

J.).

They

required

by

also

Rule

misrepresentation,

merits separate treatment.

have

8(a)

satisfied

concerning

which,

under

the

their

Ohio

law,

See Rheinfrank v. Abbot Labs., No.

1:13-cv-144, 2013 WL 4067826, at *3-4 (S.D. Ohio Aug. 12, 2013)
(Dlott,

C.J.).

Plaintiffs

contend

they

bargained

for,

and

understood they were paying, premiums necessary to assure 100%
replacement

coverage.

In

Defendants,

Plaintiffs

aver

fact,
that

however,
they

paid

on

the

advice

inflated

of

premium

amounts tied to coverage limits that patently exceeded the cost
to rebuild their homes.
collected

more,

the

They paid more, but could never have
victims

of

the

enhancing

effect

of

Defendants’ ITV program vis-à-vis their Defender Endorsement.

21

These allegations are more than adequate to survive a motion to
dismiss.
Lastly, having determined that Plaintiffs’ fraud claim can
advance, we similarly decide that their fraud in the inducement
claim (Count IV) may as well.
nature

of

the

contract

While the former speaks to the
itself,

the

latter

concerns

misrepresentations that persuaded a party to agree to it in the
first place.

See ABM Farms, Inc. v. Woods, 81 Ohio St. 3d 498,

502, 692 N.E.2d 574, 578 (1998) (quoting Haller v. Borror Corp.,
50 Ohio St. 3d 10, 14, 552 N.E.2d 207, 210 (1990)).

Thus, with

their focus on discrete periods in the business relationship,
these claims are not necessarily redundant and can proceed in
tandem.

Their elements, however, are fundamentally the same,

see Inhalation Plastics, Inc. v. Medex Cardio-Pulmonary, Inc.,
No. 2:07-cv-116, 2011 WL 2293228, at *3 (S.D. Ohio June 8, 2011)
(Smith,

J.)

(citing

Stegawski

v.

Cleveland

Anesthesia

Group,

Inc., 37 Ohio App. 3d 78, 83-84, 523 N.E.2d 902, 908-09 (Ohio
App. Dist. 8 1987)), and thus no further analysis is necessary.
Accordingly, Defendants’ motion to dismiss Counts II and IV is
denied.
D. Ohio Deceptive Trade Practices Act Claim
Defendants argue that they are entitled to judgment as a
matter

of

law

on

Plaintiffs’

claims

brought

under

the

Ohio

Deceptive Trade Practices Act (ODTPA), Ohio Rev. Code §§ 4165.01
22

et

seq.,

because,

bring suit.

as

consumers,

Plaintiffs

lack

standing

to

The Ohio Supreme Court has not yet resolved the

issue of whether a consumer may pursue a claim under the ODTPA16;
thus, we must do our best to anticipate how it might rule.

See

Mazur v. Young, 507 F.3d 1013, 1016-17 (6th Cir. 2007).
There is a split of authority between the Northern and
Southern

Districts

District,

on

the

of

Ohio,

and
Our

colleague

subject.

even

within
in

the

Southern

the

Western

Division, the Honorable Walter H. Rice, has determined that a
consumer

can

bring

a

cause

language of the statute.

of

action,

relying

on

the

plain

Bower v. Int’l Bus. Machs., Inc., 495

F. Supp. 2d 837, 842-44 (S.D. Ohio 2007) (Rice, J.).

The ODTPA

states in relevant part, “A person who is injured by a person
who commits a deceptive trade practice . . . may commence a
civil action . . . .”
added).

Ohio Rev. Code § 4165.03(A)(2) (emphasis

A “person” is defined as:

an
individual,
corporation,
government,
governmental
subdivision or agency, business trust, estate, trust
partnership, unincorporated association, limited liability
company, two or more of any of the foregoing having a joint
common interest, or any other legal or commercial entity.

16

In McKinney v. Bayer Corp., Judge O’Malley certified to the
Ohio Supreme Court the question of a consumer’s standing under
the ODTPA. 744 F. Supp. 2d 733, 749-752 (N.D. Ohio 2010). But
because the plaintiff dismissed his ODTPA claim, this issue
never was addressed by the Court. Robins v. Global Fitness
Holdings, LLC, 838 F. Supp. 2d 631, 650 n.3 (N.D. Ohio 2012)
(Polster, J.).
23

Ohio Rev. Code § 4165.01(D) (both emphases added).

Judge Rice

reasoned that Section 4165.01(D) provides a “long list” of all
those considered a “‘person’” under the statute, and the words
at the end of that long list—prefaced by “‘any other’”—serve to
expand, not contract, its scope.
statute

is

otherwise

silent

Id. at 843.

with

regard

to

He noted that the
any

mention

of

“consumers,” and there is no limit expressed within the statute
“on the type of individuals who can pursue a claim[.]”

Id.

Accordingly, he rejected the argument that the ODTPA applies
only to commercial entities and not to consumers.

Id. at 844.

In so ruling, Judge Rice rejected the result reached in two
unreported cases out of the Northern District of Ohio as being
“of limited precedential value in deciding the intent of the
Ohio State Legislature in enacting the [O]DTPA.”

Id. at 842

(construing Chamberlain v. American Tobacco Co., No. 1:96-CV02005-PAG, 1999 WL 33994451, at *18 (N.D. Ohio Nov. 19, 1999)
(Gaughan, J.) and Glassner v. R. J. Reynolds Tobacco Co., No.
5:99CV076, 1999 WL 33591006, at *6 (N.D. Ohio June 29, 1999)
(Dowd, J.)).
Since

Judge

Rice’s

decision

in

Bower,

various

district

judges within the Northern District have been presented with the
question of whether consumers have standing to sue under the
ODTPA, and they have consistently (and much more comprehensively
than

in

Chamberlain

and

Glassner)
24

ruled

that

they

do

not.

Phillips v. Philip Morris Cos., Inc., 290 F.R.D. 476, 482-85
(N.D. Ohio 2013) (Lioi, J.); Robins v. Global Fitness Holdings,
LLC, 838 F. Supp. 2d 631, 649-50 (N.D. Ohio 2012) (Polster,
J.).17

Judge Lioi, for example, relied largely on Blankenship v.

CFMOYO Powersports, Inc., 161 Ohio Misc.2d 5, at ¶¶ 21-29, 2011Ohio-948,

944

N.E.2d

769,

778

(Clermont

Co.

Com.

Pl.).

Blankenship criticized Bower for failure to acknowledge that the
ODTPA is “‘substantially similar to the federal Lanham Act,’”
and that “[a]t least half of the [federal] circuit[ courts of
appeals] hold (and none of the others disagree) that . . . the
Lanham Act[] . . . bars a consumer from suing under the act.”
Blankenship, 161 Ohio Misc.2d 5, at ¶¶ 21, 22 (quoting Dawson v.
Blockbuster, Inc., No. 86451, 2006-Ohio-1240, 2006 WL 1061769,
¶¶ 21-26 (Ohio App. 8 Dist. Mar. 16, 2006) (emphasis added in
Blankenship))18.
In

the

Southern

District,

Judge

Smith,

of

the

Eastern

Division, also has disagreed with conclusion reached by Judge
Rice in Bower, observing “[s]imply because the statute does not
expressly place any limitation on the type of individuals who

17

A district court in California also has come to this conclusion.
See In re Oreck Corp. Halo Vacuum & Air Purifiers Mktg. & Sales
Practices Litig., No. ML 12-2317 CAS (JEMx), 2012 WL 6062047, at
*11 (C.D. Cal. Dec. 3, 2012).
18
See Made in the USA Found. v. Phillips Foods, Inc., 365 F.3d
278, 280 (4th Cir. 2004) (Second, Third, Fourth, Fifth, Seventh,
Ninth and Tenth Circuit Courts of Appeal deciding consumers lack
standing under the Lanham Act).
25

can pursue a claim does not mean that none exists.”

Gascho v.

Global Fitness Holdings, LLC, 863 F. Supp. 2d 677, 698 (S.D.
Ohio 2012) (Smith, J.).19
acknowledge

that

“Ohio

He, too, remarks that Bower fails to
courts

look

to

[how

federal

circuit

courts of appeals construe] the Lanham Act when adjudicating
claims

under

the

[O]DTPA.”

Id.

at

698

(citing

Chandler

&

Assocs., Inc. v. Am.’s Heathcare Alliance, Inc., 125 Ohio App.
3d 572, 580, 709 N.E.2d 190, 195 (1997)).
Smith

highlights

Dawson,

supra,

decided

presumptively illustrative authority.

To this end, Judge
pre-Bower,

Id. at 698-99.

as

a

Judge

Frost, also of the Eastern Division, similarly has disagreed
with

the

Bower

holding,

twice

in

fact.

Allen

v.

Andersen

Windows, Inc., 913 F. Supp. 2d 490, 513 (S.D. Ohio 2012) (Frost,
J.); In re Porsche Cars N. Am., Inc., 880 F. Supp. 2d 801, 87375 (S.D. Ohio 2012) (Frost, J.).

So, too, has Judge Sargus.

Lester v. Wow Car Co., Inc., No. 2:11-cv-850, 2014 WL 2567087,
at *11-12 (S.D. Ohio June 6, 2014) (Sargus, J.).

And, relying

on

the

Gasco

and

In

re

Porsche,

our

Division, Judge Barrett, has as well.

19

colleague

in

Western

Smith v. Smith & Nephew,

While Defendants failed to cite Gascho, they did cite
Citimortgage, Inc. v. Crawford for the proposition that a
consumer lacks standing to sue under the ODTPA. No. 1:11-cv714, 2013 WL 1225387, at *6 (S.D. Ohio Mar. 26, 2013) (Black,
J.). We note, however, that the defendants conceded that the
lacked standing to pursue counterclaims under the ODTPA, and
thus our colleague Judge Black did not actually reach the issue.
26

Inc., --- F. Supp. 2d ---, No. 1:13-cv-289, 2014 WL 934541, at
*2 (S.D. Ohio Mar. 10, 2014) (Barrett, J.).
Our own research reveals that another Ohio appellate court
recently has ruled that consumers lack standing to file suit
under the ODTPA.
1118,

2014

WL

Hamilton v. Ball, No. 13CA3533, 2014-Ohio-

1339634,

at

¶¶

29-33

(Ohio

App.

4

Dist.).

Moreover, that portion of the decision in Holbrook v. LouisianaPacific Corp., No. 3:12CV484, 2012 WL 3801725, at *4-5 (N.D.
Ohio

Aug.

12,

2012)

(Carr,

S.J.),

cited

by

Judge

Lioi

in

Phillips for the proposition that the “[O]DTPA is not available
to consumers[,]” was affirmed by the Sixth Circuit on July 12,
2013, some two months prior to oral argument on the instant
motion to dismiss.

Holbrook v. Louisiana-Pacific Corp., 533

Fed. App’x 493, 497-98 (6th Cir. 2013).

The analysis of this

issue at the district court and appellate levels is sparse,
however, and the Sixth Circuit’s decision is unpublished and
therefore lacks binding precedential value.

S.J. v. Hamilton

County, 374 F.3d 416, 423 n.5 (6th Cir. 2004); Smith v. Grady,
960 F. Supp. 2d 735, 753 (S.D. Ohio 2013) (Barrett, J.).
Upon consideration, this Court concludes that Judge Rice
has engaged in the better statutory analysis and we adopt it as
our

own.

The

limited

number

of

Ohio

lower

courts

to

have

considered this issue immediately jump to a comparison of the
ODTPA with the Lanham Act without first considering the actual
27

language of the ODTPA.

That language plainly provides that a

“person” may “commence a civil action” against another “person”
who has committed a “deceptive trade practice[,]” and included
within the statutory definition of “person” is an “individual”
along with a litany of legal or commercial entities, with the
catch-all phrase “or any other legal or commercial entity[]” at
the end.
might

See Ohio Rev. Code §§ 4165.01(D), 4165.03(A)(2).

well

ask

the

question

why

the

word

One

“individual”

was

included in the definition had the Ohio General Assembly not
intended to give individual consumers the standing to sue under
the

ODTPA.

See

State

ex

rel.

General

Elec.

Supply

Co.

v.

Jordano Elec. Co., 53 Ohio St. 3d 66, 71, 558 N.E.2d 1173, 1177
(1990) (“‘In determining intent, it is the duty of this court to
give effect to the works used, not to delete words used or
insert words not used.’” (citation omitted)).

An “individual”

is an “indivisible entity . . . relating to a single person or
thing,

as

opposed

“organization

(such

to
as

a
a

group”
business.

identity apart from its members.”
843 (9th ed. 2009).

while
.

.

an
)

“entity”
that

has

is
a

an

legal

Black’s Law Dictionary 612,

Therefore, as Judge Rice before us, we

construe that catch-all phrase “or any other legal or commercial
entity[]” to modify all the other “entities” listed before it,
with

no

dedication

to

restrict

“individual.”
28

the

ordinary

definition

of

Having

decided

that

an

individual

consumer

does

have

standing to sue under the ODTPA, we address next Defendants’
argument that Plaintiffs have failed to specify which of the
thirteen deceptive trade practices listed they allegedly have
committed.

See Ohio Rev. Code § 4165.02(A)(1)-(13).

memorandum

contra,

subsections,

Plaintiffs

contending

that

respond

by

Defendants’

In their

referring

scheme

to

two

violated

the

prohibitions against “[r]epresent[ing] that goods or services
have sponsorship, approval, characteristics, ingredients, uses,
benefits, or quantities that they do not have . . . ” and
[a]dvertis[ing] goods or services with intent not to sell them
as advertised[.]”
respectively.

See id. §§ 4165.02(A)(7) and 4165.02(A)(11),

The Court is satisfied with these references.

Accordingly, Defendants’ motion to dismiss Count III is DENIED.
E. Defendant
Dismissed

State

Auto

Financial

Corporation

Should

Be

Defendant State Auto Financial Corporation seeks dismissal
from

this

lawsuit

because

there

are

no

allegations

that

it

contracted with, or made any representations to, any of the
named Plaintiffs.
Exhibits

3

through

None of the declaration pages attached as
17

to

the

First

Amended

Class

Action

Complaint reference the Financial Corporation, and the Amended
Complaint itself recites simply that it is “a subsidiary of
Defendant

State

Automobile

Mutual

29

Insurance

Company[.]”

See

doc. 7 ¶ 7.
the

Lacking privity with any of the named Plaintiffs,

Financial

Corporation

asserts

it

cannot

be

subject

to

liability.

See, e.g., Justice v. Nationwide Ins. Co., No. 98AP-

1083,

WL

1999

333242,

at

*4

(Ohio

Ct.

App.

May

27,

1999).

Plaintiffs’ response is nominal, maintaining that the Financial
Corporation operates under the trade-name “State Auto Insurance
Companies” just as the other two Defendants (State Auto Mutual
and State Auto Property and Casualty) do and, thus, is “liable
for

the

acts

performed

and

the

liability

incurred

in

that

name[]” (see doc. 15 at 20).
We disagree.

The Court finds well-taken the position that

distinct companies do not lose their independence even though
operating through trade names.

See generally Sportscare of Am.,

P.C. v. Multiplan, Inc., No. 2:10-cv-04414, 2013 WL 1661018, at
*15-16

(D.N.J.

Apr.

17,

2013);

Nextfood,

Inc.

v.

Healthcare

Foodservice Sourcing Advantage, Inc., No. 09-CV-2148 EFM/KMH,
2011 WL 346080, at *2 (D. Kan. Feb. 2, 2011).

Accordingly,

Defendant State Auto Financial Corporation is properly DISMISSED
from this litigation.
F. The Evans and Hendryx-Parker Plaintiffs Should Be Dismissed
Defendants ask that Plaintiffs Mary Carmen Evans and Calvin
and

Gabrielle

declaration

pages

Hendryx-Parker
attached

as

be

dismissed

Exhibits

6

because

through

9

and

the
14

through 17 to the First Amended Class Action Complaint show that
30

they were insured by State Auto Insurance Company of Ohio and
Meridian Security Insurance Company, respectively, and neither
insurer has been named a defendant in this action.

Plaintiffs

respond that Ms. Evans and Mr. and Mrs. Hendryx-Parker are in
privity with Defendants because their insurers operate under the
trade-name “State Auto Insurance Company.”

In the alternative,

Plaintiffs request leave to amend their Amended Complaint to
rectify any deficiency.
Defendants reply that we should dismiss the First Amended
Class

Action

Complaint

“due

to

Plaintiffs’

basic

failure

observe corporate formalities alone[]” (doc. 16 at 19).

to

They

further argue that it would be an abuse of our discretion to
grant

leave

to

amend

in

this

instance.

Wade

Utilities Bd., 259 F.3d 452 (6th Cir. 2001).
incorrect.

v.

Knoxville

Defendants are

The list of factors set forth by the Sixth Circuit

are as follows:
Undue delay in filing, lack of notice to the opposing party,
bad faith by the moving party, repeated failure to cure
deficiencies by previous amendments, undue prejudice to the
opposing party, and futility of amendment are all factors
which may affect the decision.
Delay by itself is not
sufficient reason to deny a motion to amend.
Notice and
substantial prejudice to the opposing party are critical
factors in determining whether an amendment should be granted.
Id. at 458-59 (emphasis added).

Defendants assert, with little

elaboration, that “[e]ssentially all” of these factors weigh in
their favor, but the Court reaches just the opposite conclusion.

31

There is no evidence of undue delay.

The Schumacher Plaintiffs

filed the original complaint on April 8, 2013, and the amended
complaint

was

filed

on

May

17,

2013.

Defendants

filed

the

instant motion to dismiss on June 10, 2013, with Plaintiffs
filing

their

memorandum

in

opposition,

which

they

alternatively ask for leave to amend, on July 2, 2013.

This

time-line hardly bespeaks undue delay.

in

There has only been one

previous amendment, which was filed within six weeks of the
original complaint and before Defendants were required to answer
or otherwise plead under the civil rules.

This circumstance is

not representative of “repeated failure to cure deficiencies.”
Inasmuch as we are denying Defendants’ motion to dismiss the
common law claims sounding in tort as well as the claims brought
pursuant to the ODTPA, an amendment for the purpose of naming
additional defendants would not be futile.
attach

as

Finally,

there
any

disingenuous.

are

cry

no
of

Review

case
lack
of

management
of

the

dates

notice
First

No prejudice can

would

Amended

yet

in

be
Class

place.

slightly
Action

Complaint reveals the following allegation:
State Automobile Mutual Insurance Company, the corporations it
owns, and is subsidiaries, such as . . . State Auto Insurance
of Ohio, . . . [and] Meridian Security Insurance Co., . . .
are collectively known as “State Auto Insurance Companies,” a
registered trade name of State Automobile Mutual Insurance
Company.

32

(Doc. 7 ¶ 11 (emphasis added).)
Insurance

Company

clearly

Defendant State Auto Mutual

was

on

notice

of

the

alleged

involvement of its various subsidiaries, including the two at
issue.

But even though State Auto Ohio and Meridian operated

under the trade-name “State Auto Insurance Companies,” they are
separate corporate entities and thus they should have been named
as party defendants when Ms. Evans and Mr. and Mrs. HendryxParker were added as named Plaintiffs upon the filing of the
First Amended Class Action Complaint.

Accordingly, the Evans

and Hendryx-Parker Plaintiffs are DIMISSED WITHOUT PREJUDICE.
The Court, however, will favorably entertain a motion for leave
to file a second amended complaint, with a proposed complaint
attached, that would return Ms. Evans and Mr. and Mrs. HendryxParker as named Plaintiffs and add State Auto Insurance Company
of

Ohio

and

Meridian

Security

Insurance

Company

as

named

Defendants.
IV.

Conclusion

To summarize, the Motion to Dismiss by Defendants State
Automobile

Mutual

Corporation,
Company

and

(doc.

Defendant

this litigation.
Gabrielle

State

8)

State

Insurance
Auto

is

Company,

GRANTED

Auto

Property
IN

Financial

PART

State
and
and

Corporation

Auto

Financial

Casualty

Insurance

DENIED
is

IN

DISMISSED

PART.
from

Plaintiffs Mary Carmen Evans and Calvin and

Hendryx-Parker

are

DIMISSED
33

WITHOUT

PREJUDICE

from

this litigation.

Plaintiffs’ common law claims for breach of

contract (Count V) and breach of the duty of good faith and fair
dealing

(Count

VI)

are

DISMISSED.

In

all

other

respects,

Defendants’ Motion to Dismiss is DENIED.

Pursuant to the case

management

conclusion

overview

discussed

at

the

of

oral

argument, the following pretrial deadlines are now in place:
discovery will be completed by June 1, 2015; dispositive motions
will be filed by July 1, 2015; a final pretrial conference will
be held on September 29, 2015 at 2:00 p.m., with a five-day jury
trial scheduled for October 20, 2015, on an on-deck basis.
SO ORDERED.
Date:

September, 18, 2014

s/S. Arthur Spiegel________________
S. Arthur Spiegel
United States Senior District Judge

34