Avery et al v. Erie Insurance Company

Filing 21

ORDER granting in part and denying in part 14 Defendant's Motion for Summary Judgment; denying 15 Plaintiff's Motion for Summary Judgment. Signed by Judge Susan J. Dlott on 5/4/18. (wam)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
TRACY AVERY, et al.,
Plaintiffs,
v.
ERIE INSURANCE COMPANY,
Defendant.

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Case No. 1:17-cv-562
Judge Susan J. Dlott
ORDER DENYING PLAINTIFFS’
MOTION FOR SUMMARY
JUDGMENT AND GRANTING IN
PART AND DENYING IN PART
DEFENDANT’S MOTION FOR
SUMMARY JUDGMENT

This matter is before the Court on Defendant’s Motion for Summary Judgment (Doc. 14)
and Plaintiffs’ Motion for Summary Judgment (Doc. 15). Appropriate responses and replies
have been filed (Docs. 16, 17, 18, 20). For the reasons that follow, the Defendant’s Motion is
GRANTED IN PART AND DENIED IN PART, and the Plaintiffs’ Motion is DENIED.
I.

BACKGROUND

A. Facts
The Averys live in a two story, single family home in Hamilton, Ohio. (Jt. Stips., Doc.
13, at ¶ 1.) They purchased homeowners’ insurance from Erie Insurance Company (“Erie”)
effective from November 8, 2014 through November 8, 2017. (Id. at ¶ 3). On August 27, 2016,
a storm damaged part of the Averys’ roof and fence. (Id. at ¶ 5.) Erie’s insurance adjustor
inspected the roof and identified five damaged roof tiles. (Id. at ¶ 6.) Erie offered to pay the
Averys $2,196.50—the amount Erie determined it would cost to replace the damaged roofing
tiles and some fencing. (Id. at ¶¶ 7–8.)
The Averys contacted Tamlin Exteriors (“Tamlin”). (Id. at ¶ 10.) Tamlin determined
that the Averys’ roof tiles contained asbestos, and, therefore, the whole roof should be removed

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and replaced along with some fencing repairs at a total cost of $62,698.96. (Id. at ¶¶ 9–10.) The
Averys submitted Tamlin’s estimate to Erie, and Erie retained Len Rudick to re-inspect the roof.
(Id. at ¶¶ 11–12.) Rudick noted that the cement-asbestos roof tiles were weathered and stained
with algae or moss and, also, three areas had been patched with cement-asbestos tiles different
from those covering the rest of the roof. (Jt. Ex. 5, Doc. 13-5 at PageID 98–99.) While he
denied that there was wind or hail damage to the roof, Rudick found tree-limb damage to one cap
tile and three slope tiles that he believed could be repaired by replacing the damaged tiles. (Id. at
PageID 99.)
After receiving Rudick’s report, Erie denied the Averys’ claim to replace the entire roof,
but again offered to pay $2,196.50 for repairs. (Jt. Ex. 6, Doc. 13-6 at PageID 112–13.) In
refusing to pay for roof replacement, Erie indicated that loss resulting from “wear and tear,”
“faulty or inadequate . . . workmanship; construction . . . [or] maintenance,” and “wet or dry rot”
is specifically excluded from the Averys’ insurance policy. (Id. at PageID 113.) Erie ultimately
cancelled the Averys’ insurance policy effective June 20, 2017, due to “poor conditions/
maintenance of property regarding your failure to complete repairs paid for as a result of your
8/27/16 claim.” (K. Avery Aff., Doc. 15-1 at PageID 198, ¶ 11.)
B. Procedural Posture
The Averys initiated this action alleging three causes of action: breach of the insurance
contract by failing to replace the entire roof; breach of the common law duty to act fairly and in
good faith; and bad faith refusal of their claim under the insurance contract. The parties agree on
the relevant facts in this case. The parties further agree that the Ohio Residential Code (codified
at Ohio Administrative Code Chapter 4101:8) governs repairs to the Averys’ property. (Jt.
Stips., Doc. 13 at PageID 44, ¶ 14.) The issue is how the Ohio Residential Code applies here.
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The Averys contend that because the asbestos-cement roof tiles used on their roof are no
longer manufactured, Erie is unable to match the quality, color or size of their existing roof tiles
as required by the Ohio Administrative Code. According to the Averys, then, Erie must replace
as many of the roof tiles as necessary to result in a reasonably comparable appearance, and—
because the roof tiles are cement-asbestos—Ohio Administrative Code 4101:8-9-01 requires that
Erie remove all old roofing. Thus, they claim, Erie must completely replace the Averys’ roof in
order to comply with Ohio law and the insurance contract.
Not surprisingly, Erie disagrees. According to Erie, the replacement tiles need only be
similar in appearance and quality to those already on the roof—not the exact matching cementasbestos tiles previously used. Also, Erie avers, Ohio Administrative Code 4101:8-9-01
(regarding cement-asbestos roofs) applies only to new construction and entire roof replacement
not to the “minor repairs” required to the Averys’ roof. Finally, Erie contends that the exclusions
in the insurance contract bar the Averys’ claim here. Both the Averys and Erie have moved for
summary judgment (Docs. 14 and 15).
II.

STANDARD OF LAW
Federal Rule of Civil Procedure 56 governs motions for summary judgment. Summary

judgment is appropriate if “there is no genuine issue as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The movant has the burden to
show that no genuine issues of material fact are in dispute. See Matsushita Elec. Indus. Co., Ltd.
v. Zenith Radio Corp., 475 U.S. 574, 585–87 (1986); Provenzano v. LCI Holdings, Inc., 663 F.3d
806, 811 (6th Cir. 2011). The movant may support a motion for summary judgment with
affidavits or other proof or by exposing the lack of evidence on an issue for which the
nonmoving party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317,
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322–24 (1986). In responding to a summary judgment motion, the nonmoving party may not
rest upon the pleadings but must “present affirmative evidence in order to defeat a properly
supported motion for summary judgment.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257
(1986).
A court’s task is not “to weigh the evidence and determine the truth of the matter but to
determine whether there is a genuine issue for trial.” Id. at 249. “[F]acts must be viewed in the
light most favorable to the nonmoving party only if there is a ‘genuine’ dispute as to those facts.”
Scott v. Harris, 550 U.S. 372, 380 (2007) (emphasis added); see also E.E.O.C. v. Ford Motor
Co., 782 F.3d 753, 760 (6th Cir. 2015) (en banc) (quoting Scott). A genuine issue for trial exists
when there is sufficient “evidence on which the jury could reasonably find for the plaintiff.”
Anderson, 477 U.S. at 252; see also Shreve v. Franklin Cnty., Ohio, 743 F.3d 126, 132 (6th Cir.
2014) (“A dispute is ‘genuine’ only if based on evidence upon which a reasonable jury could
return a verdict in favor of the non-moving party.”) (emphasis in original) (citation omitted).
Factual disputes that are irrelevant or unnecessary will not be counted.” Anderson, 477 U.S. at
248. “The court need consider only the cited materials, but it may consider other materials in the
record.” Fed. R. Civ. P. 56(c)(3). “Where the parties have filed cross-motions for summary
judgment, the court must consider each motion separately on its merits, since each party, as a
movant for summary judgment, bears the burden to establish both the nonexistence of genuine
issues of material fact and that party's entitlement to judgment as a matter of law.” In re
Morgeson, 371 B.R. 798, 800–01 (B.A.P. 6th Cir. 2007).
III.

ANALYSIS

A. Ohio Law Does Not Mandate a New Roof

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a. “Minor Repairs” Within the Meaning of Ohio Administrative Code 4101:8-101, § 102.10.2
Erie contends that the Ohio Residential Code allows for minor repairs to the Averys’ roof
rather than replacing the entire roof. The Court agrees.
The Ohio Residential Code applies to “the construction, alteration, movement,
enlargement, replacement, repair, equipment, use and occupancy, location, maintenance, removal
and demolition” of all single, double, or triple family dwellings and related structures. Ohio
Admin. Code (“O.A.C.”) 4101:8-1-01, § 101.2. However, the legislature indicated its intentions
regarding structures already in existence when the Ohio Residential Code was adopted in 2013.
Specifically, the Code provides:
102.7 Existing structures. The provisions of section 113 shall
control the alteration, repair, addition, maintenance, and change of
occupancy of an existing structure.
The occupancy of any structure currently existing on the date of
adoption of this code shall be permitted to continue without change
provided there are no orders of the residential building official
pending, no evidence of fraud, or no serious safety or sanitation
hazard.
O.A.C. 4101:8-1-01, § 102.7 (emphasis in original). Looking to § 113, then, the Code further
provides:
113.6 Replacement and repairs to systems, components and
materials. Replacement of residential building components, and
repairs to existing systems and materials or building components not
otherwise provided for in this section, shall not be required to meet
the provisions for new construction, provided such work is done
in accordance with the conditions of the existing approval in the
same manner and arrangement as was in the existing system, is
not less safe than when originally installed and is approved.
Id., § 113.6 (emphasis added). The Code defines “Repair, Minor” as, “The reconstruction or
renewal of any part of an existing building for the purpose of its maintenance when the work has
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limited impact on access, safety or health.” O.A.C. 4101:8-2, § 202. While the Code
enumerates a number of actions that do not constitute “minor repairs,” none of those items are
relevant here. See id. Section 102.10.2 allows minor repairs to be completed without application
or approval by a residential building official. O.A.C. 4101:8-1-01, § 102.10.2.
In the case at bar, the parties stipulate that the Averys’ residence is an “existing structure”
because it was built prior to 2013. (Jt. Stips., Doc. 13 at PageID 42, ¶ 1.) Therefore, according
to § 113.6, the roof repairs need not meet the standards for new construction as long as the work
is done “in the same manner and arrangement as was in the existing system” and is not less safe.
O.A.C. 4101:8-1-01, § 113.6. Similarly, insurers must “match the quality, color or size of the
item suffering the loss” or replace as much of it “as to result in a reasonably comparable
appearance. O.A.C. 3901-1-54(I)(1)(b). The issue, then, is whether Erie can replace the Averys’
roof tiles “in the same manner and arrangement” as the existing roof and “match the quality,
color or size” of the roof tiles “as to result in a reasonably comparable appearance,” as required
by Ohio Administrative Code 4104:8-1-01, § 113 and O.A.C. 3901-1-54(I)(1)(b).
While this issue has not been addressed directly, two other courts have declined to extend
Ohio Administrative Code 3901-1-54(I)(1)(b) to require replacement rather than repair when
new materials would not match the existing materials. See Wright v. State Farm Fire and Cas.
Co., 555 F. App’x. 575 (6th Cir. 2014) and Zinser v. Auto-Owners Ins. Co., 2017-Ohio-5668,
2017 WL 2838393 (Ohio App. 2017). In Wright, the plaintiffs’ wood shake roof suffered minor
storm damage, and the parties agreed that new wood shakes would not match the color of the
existing weathered wood shakes until eventual exposure to the elements weathered the new
shakes as well. Even though the Wrights’ homeowners’ association required that the roof be
consistent in color, the Sixth Circuit declined to extend § 3901-1-54(I)(1)(b)’s “reasonably
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comparable appearance” language to require roof replacement “‘in the absence of evidence of
special circumstances regarding their particular roof,’ considering that to hold otherwise would .
. . create an extreme blanket rule requiring the entire replacement of any damaged shake roof.”
Wright, 555 F. App’x. at 579. An Ohio appellate court—citing Wright—reached a similar result
concerning storm-damaged siding. Zinser, 2017 WL 2838393 at *6.
The case at bar raises a closer question because—unlike the wood shakes in Wright and
the siding in Zinser—the new tiles used for the repair here will never age to an exact or nearly
exact match. While the Averys’ restoration expert, Rob O’Brien, located tiles similar to the
Greystone Scotch American No. 20 tiles on the Averys’ original roof, the similar tiles lacked
tabs and would need to be installed in a manner that may make them more susceptible to wind
damage. (O’Brien Aff., Doc. 15-2, at PageID 201.)
However, O.A.C. 3901-1-54(I)(1)(b) does not require the new materials to be identical.
It requires only restoring a “reasonably comparable appearance” to “the item suffering loss.” Id.
Similarly, § 113.6 requires only that repairs be made “in the same manner and arrangement as
was in the existing system [and] is not less safe than when originally installed.” O.A.C. 4101:81-01, § 113.6. Here, the Averys’ roof—at the time it suffered the alleged storm damage—had
already been repaired with non-matching, untabbed tiles in several places. (Rudick Affidavit,
Doc. 14-2, Exhibit B-1 at PageID 168 and 173–177.) Therefore, repairing the storm damaged
tiles at issue here with similar, non-matching, untabbed tiles will, indeed, be reasonably
comparable in appearance and consistent in manner and arrangement as the existing roof as long
as it is not less safe than the original roof when installed. Neither party has alleged or introduced
evidence that the repaired roof would be less safe than the original roof. Accordingly,

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appropriate repairs with similar tiles would satisfy the requirements of Ohio Administrative Code
4101:8-1-01, § 113.6 and 3901-1-54(I)(1)(b).
b. Ohio Administrative Code 4101:8-9-01, § 907.3
The Averys contend that Ohio Residential Code § 907.3 requires installation of a new
roof in this case. Ohio Residential Code § 907.3 provides:
907.3 Recovering versus replacement. New roof coverings shall
not be installed without first removing all existing layers of roof
coverings where any of the following conditions exist:
***
2. Where the existing roof covering is wood shake, slate, clay,
cement or asbestos-cement tile.
O.A.C. 4101:8-9-01, § 907.3. However, § 907.3—by its language—applies only to the way in
which “new roof coverings” are installed. It does not require installation of a new roof covering
where—as here—Ohio Administrative Code 4101:8-1-01 permits minor repairs to an existing
roof.
According to the Averys, though, § 907.3 is in conflict with § 113.6 and, therefore, §
102.11 gives precedence to the section that deals specifically with cement-asbestos roof tiles, i.e.,
§ 907.3. However, § 907.3 and § 113.6 do not conflict.
Section 907.3 applies to the manner in which a new roof is installed. In contrast, § 113.6
applies specifically to “[r]epairs to existing systems.” O.A.C. 4101:8-1-01, § 113.6. There is no
conflict between the two sections. By their plain language, § 113.6 applies to repairs made to
roofs in existence when the Code was adopted, and § 907.3 requires roofers installing a new roof

Section 102.1 provides, “General. Where, in any specific case, different sections of this code
specify different materials, methods of construction or other requirements, the most restrictive
shall govern. Where there is a conflict between a general requirement and a specific requirement,
the specific requirement shall be applicable.” O.A.C. 4101:8-1-01, § 102.1.
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or total roof replacement to first remove the existing roof covering (as opposed to placing the
new roof on top of the existing roofing) before installing the new roof, if the current roof is wood
shake, slate, clay, cement or asbestos-cement.2
It is worth noting that the damaged roof at issue in Wright was wood shake, but the Court
did not apply § 907.3 to determine whether the Wrights were entitled to a new roof rather than a
repair. See Wright, 555 F. App’x. at 578–79. Because there is no conflict between these
sections, the Court need not consider § 907.3 in its current analysis. See O.A.C. 4101:8-1, §
102.1.
c. The Erie Insurance Policy
Having concluded that the Ohio Residential Code permits repair rather than replacement
of the Averys’ roof, the Court must now examine the insurance contract policy language.3 Erie
contends that the insurance policy specifically excludes coverage for the Averys’ claim. (Doc.
14 at PageID 120–122.)
The insurance policy provides:
EXCLUSIONS—What We Do Not Cover—Dwelling And Other
Structures Coverages
“We” do not pay for loss resulting directly or indirectly from any of
the following, even if other events or happenings contributed
concurrently, or in sequence, to the loss:
***
5. caused by:
Section 907.3 also applies if the current roof is not adequate as a base for additional roofing, if
the roof already has two or more layers of roofing, or if an asphalt roof is in a high hail exposure
area. O.A.C. 4101:8-9-01, § 907.3(1), (3) and (4). These conditions clearly apply to whether a
roofer is permitted to simply install a new roof on top of an old roof. They are not in conflict
with § 113.6.
3
The Averys contend that the “Ordinance or Law Coverage” policy language requires Erie to
pay them $20,000 toward a new roof because Ohio law requires roof replacement. (Doc. 15 at
PageID 191–193.) As explained above, the Court concludes that Ohio law does not require roof
replacement here so the “Ordinance or Law Coverage” policy language does not apply.
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***
b. mechanical breakdown, deterioration, wear and tear . . .
***
20. by weather conditions if any peril excluded by this policy
contributes to the loss in any way.
21. caused by, resulting from, contributed to or aggravated by faulty
or inadequate:
a. planning, zoning, development;
b. design, development of specifications, workmanship;
construction,
c. materials used in construction; or
d. maintenance
of or related to property whether on or off the “residence premises”
by any person, group, organization or governmental body.
***
24. by “fungi,” wet or dry rot or bacteria, meaning the presence,
growth, proliferation, spread or any activity of “fungi,” wet or dry
rot, or bacteria other than as provided under ADDITIONAL
PAYMENTS, Fungi, Wet Or Dry Rot Or Bacteria Coverage.
(ERIE Policy Number Q59-5802648, Jt. Ex. 1, Doc. 13-1 at PageID 53–55.)
Erie alleges that it is entitled to summary judgment because the Averys’ roof damage was
caused or exacerbated by deterioration, wear and tear, faulty or inadequate construction or
maintenance, or wet or dry rot. (Doc. 14 at PageID 120–122.) However, Erie’s own expert, Len
Rudick, noted only that the roof tiles were weathered and stained with algae and heavy moss
growth. He made no finding that the damage he observed (which he attributed to “tree limb
impact”) was caused or exacerbated by any of the listed exclusions. (Rudick Aff., Doc. 14-2,
Exhibit B-1 at PageID 168 and 169.) In addition, Ms. Avery indicated that the August 27, 2016
storm caused wind and damage to her roof and caused tree limbs to fall on her roof and fence.
(K. Avery Aff., Doc. 15-1 at PageID 197, ¶ 4.) Thus, the record, as it currently stands, contains
no evidence that anything other than wind and falling tree limbs during the storm damaged the
Averys’ roof and fence. Accordingly, the policy language does not exclude the Averys’ claim

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from coverage. Erie’s Motion for Summary Judgment is denied to the extent that Erie claims the
roof repair is excluded by the policy language.
B. The Averys’ Claims for Breach of the Covenant of Good Faith and Fair Dealing and
for Acting in Bad Faith
In addition to the breach of contract claim,4 the Averys allege that Erie’s failure to
provide at least $20,000 toward a new roof breached Erie’s implied duty of good faith and fair
dealing and constituted the tort of acting in bad faith. (Doc. 1.) “When parties enter into
contracts, they are bound to each other by ‘standards of good faith and fair-dealing.’” Laurent v.
Flood Data Serv., Inc., 146 Ohio App.3d 392, 399, 766 N.E.2d 221 (2001) (quoting Bolling v.
Clevepak Corp., 20 Ohio App.3d 113, 121, 484 N.E.2d 1367 (1984)). In addition, because
insurers enjoy a special responsibility toward insureds, “An insurer has a duty to its insured to
act in good faith in the handling and payment of an insured's claims . . . [and] reach conclusions
as a result of ‘the weighing of probabilities in a fair and honest way.’” Dorsey v. Campbell
Hauling, 2003-Ohio-3341, 2003 WL 21469132 at *4, ¶ 19 (Ohio App. 2003) (quoting Motorists
Mut. Ins. Co. v. Said, 63 Ohio St. 3d 690, 590 N.E.2d 1228 (1992), overruled on other grounds,
Zoppo v. Homestead Ins. Co., 71 Ohio St.3d 552, 644 N.E.2d 397 (1994)). However, the insurer,
“is entitled to refuse a claim where the claim is ‘fairly debatable’ and the insurer's refusal is
based on a genuine dispute over either the facts giving rise to the claim or the status of the law at

The parties stipulate that Erie paid the Averys $2,196.50 (the cost of the $2,696.50 roof and
fence repair minus the $500 deductible). (Jt. Stips., Doc. 13 at PageID 43, ¶¶ 7–8.) The Averys’
breach of contract claim rests on the Averys’ claim that they are entitled to a new roof or at least
$20,000 toward a new roof rather than the simple cost of repair. Because the Court determined
above that the Averys are entitled only to the cost of repair, Erie is entitled to Summary
Judgment on the Averys’ breach of contract claim. However, to the extent that the Averys are no
longer able to cash the $2,196.50 check Erie provided them, Erie must issue repayment in that
amount.
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the time the claim was denied.” Id. (quoting Tokles & Son, Inc. v. Midwestern Indemn. Co., 65
Ohio St.3d 621, 630, 605 N.E.2d 936 (1992)).
As explained above, the Averys’ claim was “fairly debatable” as to status of the law and
whether the facts in this case require a replacement roof or simply a repair. In addition, there is
no evidence that Erie breached its duty of good faith and fair dealing here. The Averys and Erie
merely disagree concerning the application of relevant law to the facts at hand. Accordingly,
Erie’s Motion for Summary Judgment must be granted on these claims.
IV.

CONCLUSION
For the foregoing reasons, Erie’s Motion for Summary Judgment (Doc. 14) is

GRANTED IN PART AND DENIED IN PART. The Averys’ Motion for Summary Judgment
(Doc. 15) is DENIED.
IT IS SO ORDERED.
Dated: May 4, 2018

S/Susan J. Dlott_____________________
Judge Susan J. Dlott
United States District Court

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