Trego et al v. Allstate Indemnity Company
Filing
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ORDER denying 55 Motion in Limine; granting 56 Motion in Limine; finding as moot 57 Motion in Limine; finding as moot 60 Motion for Extension of Time; deferring ruling on 61 Motion ; granting 62 Motion in Limine. Signed by Judge Algenon L. Marbley on 2/1/2013. (cw)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
RICHARD TREGO, et al.,
Plaintiffs,
v.
ALLSTATE INSURANCE COMPANY
Defendant.
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Case No. 2:09-CV-0806
JUDGE ALGENON L. MARBLEY
Magistrate Judge Mark R. Abel
OPINION & ORDER
I. INTRODUCTION
There are six motions pending before this Court related to the trial scheduled to begin
February 4, 2013. They are: (A) Defendant’s Motion to Present Testimony of Bruce Smith Via
Deposition (Doc. 61); (B) Defendant’s Motion for Extension of Time to Designate Portions of
Deposition of Bruce Smith (Doc. 60); (C) Defendant’s Motion to Exclude Witnesses Listed in
Plaintiffs’ 26(a)(1) Disclosure; (D) Defendant’s Motion to Prevent Anticipated Hearsay at Trial
(Doc. 56); (E) Defendant’s Motion to Define Available Contractual Damages (Doc. 55); and (F)
Defendant’s Motion to Preclude Application of the “Innocent Spouse” Rule (Doc. 62). A review
of each motion and the Court’s rulings follow.
II. BACKGROUND
On August 23, 2008, Plaintiffs’ house, located in Lancaster, Ohio, burned to the ground.
Plaintiffs held a homeowner insurance policy with Defendant on the house (“the Policy”).
Plaintiffs submitted a claim for the loss which, following an investigation, Defendant denied.
The investigation revealed two fires started in the house more or less simultaneously and that
both were incendiary in nature. The cause of the fires is not dispute. Defendant asserted
Plaintiffs had participated in the fire loss and misrepresented their activities and whereabouts
prior to the fire, as well as their financial status.
Plaintiffs subsequently brought this action alleging the denial of their claim was a breach
of the insurance contract and in bad faith. This Court already dismissed the bad faith claim.
Doc. 42. The sole claim remaining at trial is for breach of contract. With trial scheduled to
begin on February 4, 2013, there are currently six motions pending.
III. LAW AND ANALYSIS
A. Defendant’s Motion for to Present Testimony of Bruce Smith Via Deposition
Defendant moves to present testimony of Bruce Smith via deposition as the witness was
thought to be unavailable on the trial date. Defendant’s counsel has since discovered Bruce
Smith will be available to testify in open court. This Motion is, thus, HELD INABEYANCE.
If Bruce Smith is indeed unavailable for trial, the Court will rule on this Motion at that time.
Plaintiff has had the opportunity to depose Bruce Smith.
B. Defendant’s Motion for Extension of Time to Designate Portions of Smith’s Deposition
Defendant requests the Court grant an extension of its time to designate the portions of
Bruce Smith’s deposition it would introduce at trial. Since Bruce Smith will testify in open
court, this Motion is, MOOT.
C. Defendant’s Motion to Exclude Witnesses Listed in Plaintiffs’ 26(a)(1) Disclosure
Defendant moves to exclude from testifying individuals identified by Plaintiffs’ in their
Rule 26(a)(1) Disclosures. At the Final Pretrial Conference, Plaintiffs stated that their only
witnesses are Plaintiffs themselves. Since Plaintiffs will not call the individuals listed in their
Disclosures, this Motion is GRANTED as MOOT.
D. Defendant’s Motion to Prevent Anticipated Hearsay at Trial
Defendant moves to prevent Plaintiffs from introducing at trial statements of David
Shonk. Since Plaintiffs are calling themselves as their only witnesses, there is no concern that
Shonk’s testimony would be introduced directly. Nevertheless, Defendant is concerned
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Plaintiffs may attempt to indirectly introduce Shonk’s previous statements through their own
testimony. This Court has already ruled on this issue. On February 23, 2011, the Court ruled
that “any statement of Mr. Shonk, whether presented directly or indirectly, is not admissible
evidence and will not be considered.” Order Granting in Part and Denying in Part Motion to
Strike, Doc. 42. That ruling remains the law of the case and Plaintiffs failure to comply with
Rule 26 provided good cause for the Court to exclude Shonk’s statements. Thus, this Motion is
GRANTED. Any statement of Mr. Shonk is not admissible evidence and will not be considered.
E. Defendant’s Motion to Define Available Contractual Remedies
Defendant moves the Court to rule as a matter of law that the contractual damages
available to Plaintiffs at trial are limited to $92,879.63. Defendant and Plaintiffs both stipulate
that the total policy limit is $500,019.55. Parties also stipulate that Defendant has already paid
out, under the policy, a total of $236,877.48 to Plaintiffs, mortgagees, and Fairfield County, for
past due taxes. After deducting those payments, $263,122.52 remains on the policy before the
limit is reached. Nevertheless, Defendant argues the Court should cap the amount recoverable
by Plaintiff at $92,879.63 because that is the Actual Cash Value of Plaintiffs’ losses.
By the terms of Defendant’s Policy it pays out the Actual Cash Value for Building
Structure Reimbursement and Personal Property Reimbursement. Defendant’s Policy does,
however, allow policy holders to “make claim for additional payment . . . if [policy holders]
repair or replace the damaged, destroyed or stolen covered property within 180 days of the actual
cash value payment.” Doc. 55 at 4. The sole claim remaining for trial is the breach of contract
claim against Defendant. Defendant correctly states that in such a case, the measure of damages
“is the amount that an insurer would have owed under the policy.” Andrade v. Credit Gen. Ins.
Co., 2000 WL 1751304 (Ohio Ct. App. Nov. 20, 2000). In the Andrade case, however, there was
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no issue of actual cash value as opposed to replacement cash value. The court merely found the
plaintiff “bound by the subject insurance policy limits.” Id.
In the absence of Ohio case law directly on point, the Court has no cause to restrict
further the damages available to Plaintiffs. If a jury finds Defendant has, indeed, breached its
insurance policy contract with Plaintiffs, the question of damages is also for the jury. A jury
could find Defendant underestimated the Actual Cash Value of Plaintiffs’ loss, which would
potentially entitle Plaintiffs to a greater amount than Defendant’s proposed cap. Defendant has
cited no case law which supports so limiting the discretion of the jury. Defendant’s Motion is,
thus, DENIED.
F. Defendant’s Motion to Preclude Application of the “Innocent Spouse” Rule
Defendant moves to preclude application of the “innocent spouse” rule in the instant case.
In Ohio, whether the wrongful conduct of one spouse under an insurance contract frustrates
recovery by the other spouse depends on “whether the parties intended joint or several
coverage.” Wagner v. Midwestern Indem. Co (1998)., 83 Ohio St.3d 287, 290. If the Court finds
the coverage is joint, the culpable spouse’s misdeeds prevent the innocent spouse’s recovery. In
Ohio, “[w]here provision of a contract of insurance are reasonably susceptible of more than one
interpretation, they will be construed strictly against the insurer and liberally in favor of the
insured.” King v. Nationwide Ins. Co. (1988), 35 Ohio St.3d 208.
There is no question here that coverage is joint as the Policy explicitly states “[t]his
policy imposes join obligation on the Named Insured(s) listed on the Policy Declarations as the
insured and on that person’s resident spouse.” Doc. 62 at 6. There is no ambiguity.
This leaves the question of whether the joint obligations apply to Plaintiffs. The Policy
here does not “cover any loss or occurrence in which any insured person has concealed or
misrepresented any material fact or circumstance.” (emphasis in original) Id. at 5. Furthermore,
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it does not cover “intentional or criminal acts of or at the direction of any insured person . . .
regardless of whether or not the insured person is actually charged with, or convicted of, a
crime.” (emphasis in original) Id. The Policy defines “insured person” as “the person listed
under Named Insured(s)” and “that person’s resident spouse.” Id. In case of confusion, the
Policy goes on to clarify that an “insured person” is “any relative” and “any person under the age
of 21 in [Named Insured’s] care” if such person is “a resident of [Named Insured’s’ household.”
Id.
Here, the inquiry need go no further than to observe that both Richard Trego and Carla
Trego are Named Insureds on the Policy. Since they are both insured persons and the Policy
does not cover a loss if “any insured person concealed or misrepresented a fact” or if “any
insured person” committed or directed to be committed “intentional or criminal acts.” If one of
the Plaintiffs violated the “Intentional Acts” or “Material Misrepresentation” provisions quoted
herein, the other Plaintiff cannot recover under the Policy. Defendant’s Motion to Preclude
Application of the Innocent Spouse Rule is, thus, GRANTED.
IV. CONCLUSION
In summary, Defendant’s Motion to Present Testimony of Bruce Smith Via Deposition is
HELD IN ABEYANCE. Defendant’s Motion for Extension of Time to Designate Portions of
Deposition of Bruce Smith is MOOT. Defendant’s Motion to Exclude Witnesses Listed in
Plaintiffs’ 26(a)(1) Disclosure is GRANTED as MOOT. Defendant’s Motion to Prevent
Anticipated Hearsay at Trial is GRANTED. Defendant’s Motion to Define Available
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Contractual Damages is DENIED. Defendant’s Motion to Preclude Application of the Innocent
Spouse Rule is GRANTED.
IT IS SO ORDERED.
DATED: February 1, 2012
s/ Algenon L. Marbley
ALGENON L. MARBLEY
UNITED STATES DISTRICT JUDGE
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