Oral Argument Previews

2014 Archive | 2013 Archive | 2012 Archive | Calendar
Live Streaming Video Coverage

Wednesday, Feb. 4, 2009

Safeco Insurance Company of America v. Federal Insurance Company and Pacific Indemnity Company, and Benjamin White et al., Case nos. 2008-0304 and 2008-0403
1st District Court of Appeals (Hamilton County)

New 52 Project, Inc. v. Gordon Proctor, Director of the Ohio Department of Transportation, Case no. 2008-0574
10th District Court of Appeals (Franklin County)

Florence Hayes v. The Oakridge Home et al., Case no. 2008-0784
8th District Court of Appeals (Cuyahoga County)

State of Ohio v. Jessica Derov, Case nos. 2008-0853 and 2008-0858
7th District Court of Appeals (Mahoning County)


Does Exclusion of Insurance for ‘Intentional Acts’ Bar Coverage of Parents for Failure to Supervise Child?

Safeco Insurance Company of America v. Federal Insurance Company and Pacific Indemnity Company, and Benjamin White et al., Case nos. 2008-0304 and 2008-0403
1st District Court of Appeals (Hamilton County)

ISSUE: When a homeowners or umbrella insurance policy provides coverage for injuries caused by the negligence of an insured person, but excludes coverage for damages arising from an act that was intended to cause injury, does the policy provide coverage to parents who are sued for negligence based on their alleged failure to supervise a minor child whose intentional, criminal act caused injury to a third party?

BACKGROUND:  In this case, the Whites of Cincinnati were sued for negligence by the Hilmers, who were parents of a 13-year-old who was repeatedly and intentionally stabbed by the Whites’ 17-year-old son. The son pleaded guilty to attempted murder and felonious assault, and was sentenced to 10 years in prison.

A jury found that the victim’s injuries were proximately caused by negligence on the part of the Whites in the supervision of their son, and returned a large damage award against the Whites. At the time of the attack, the Whites were covered by two homeowners’ insurance policies and two “umbrella” policies that provided supplemental coverage beyond the limits of the homeowner policies. One of the homeowner policies and one of the umbrella polices were issued by Federal Insurance Inc. and Pacific Indemnity, both of whom were members of the Chubb Group. The other two policies were issued by Safeco Insurance. 

While the negligence action was still pending, Safeco sought a declaratory judgment that it was not liable either to defend the Whites against the Hilmers’ lawsuit or to cover any damage award against them arising from their son’s criminal conduct based on an exclusion in its policies denying coverage for any injury arising from an act of an insured party that was intended to cause injury.  Safeco also asked the trial court to determine, if it found that Safeco was obliged to cover some part of a damage award against the Whites, what the priority of coverage should be between Safeco and the Chubb companies. The declaratory judgment action was combined with the Hilmers’ underlying negligence suit.

The Hamilton County Court of Common Pleas ruled that the intentional-tort exclusion in the Safeco policies did not preclude coverage for the Hilmers’ claims against the White parents. The court held that a “severability” provision in the policy stating that the policy’s coverage “applies separately to each insured” could be understood to exclude coverage of the son for claims against him arising from his intentional acts while still providing coverage to the parents against the Hilmers’ lawsuit, because the Hilmers suit did not allege that the parents had acted with intent to injure, but rather on a claim that they had acted negligently.  The court also held that Safeco owed coverage on a pro-rata basis with the Chubb policies, and set forth the amounts owed under each policy.

 Chubb entered into an agreement with the Whites, agreeing among other things to defend them in ongoing litigation with Safeco.

Safeco appealed the trial court’s decision to the 1st District Court of Appeals. On review, the 1st District affirmed the judgment of the common pleas court, citing the Supreme Court of Ohio’s 2000 decision in Doe v. Schaffer in which it modified earlier rulings that had held that interpreting an insurance policy to cover injuries caused by intentional criminal acts was contrary to the public policy of the state. In Doe, the 1st District wrote, the Court held that Ohio public policy permits a party to obtain liability insurance coverage for negligence related to intentional conduct when the party seeking coverage does not commit the intentional wrongful act.

 The 1st District certified that its interpretation of the coverage exclusion for intentional conduct and the ambiguity of severability language in the Safeco policy were in conflict with rulings on similar issues by the 3rd and 5th District courts of appeals. The Supreme Court has agreed to review the case to resolve the conflict among appellate districts.

Attorneys for Safeco assert that the Doe decision held only that public policy allows an insurance policy to provide negligence coverage for insured parties arising from the deliberate wrongful act of another, but did not hold that such coverage must be provided, or that the language of the intentional acts exclusion and severability provision in the specific Safeco policy at issue in this case provides such coverage. They suggest that there is an important distinction between the facts of the Doe decision and this case, which is that the party guilty of a criminal act in Doe was an employee of the policyholder not specifically included as an insured person in the policy at issue, while in this case the Whites’ son was an insured as a member of their household, and therefore was subject to the policy’s specific exclusion of coverage for any intentional act “of an insured.”

Attorneys for the Chubb companies, who are seeking to enforce the trial court order apportioning coverage of the Whites’ damages and defense costs between Chubb and Safeco, urge the Court to affirm the lower courts’ decisions. They argue this court’s earlier holding in Doe supports the reasonable understanding by consumers that when they pay premiums for insurance that purports to cover them for damages caused by negligence, and an injured party sues them for negligent failure to supervise a child, coverage will not be denied to the parents based on the fact that the child’s harmful act was intentional.

Contacts
Jay Clinton Rice, 216.241.5310, for the Chubb Insurance Companies.

P. Christian Nordstrom, 937.223.3001, for Safeco Insurance Company of America.

Return to top

Does State ‘Abandon’ Highway Easement if Bypassed Former Roadway Remains Unused for 21 Years?

New 52 Project, Inc. v. Gordon Proctor, Director of the Ohio Department of Transportation, Case no. 2008-0574
10th District Court of Appeals (Franklin County)

ISSUE: Does the administrative process set forth in R.C. 5511.01 provide the only legal means by which the Ohio Department of Transportation (ODOT) can “abandon” a highway easement, or may owners of adjoining property pursue a court action asserting a common law claim that the state has abandoned its easement where a bypassed length of former highway has not been used for the purpose stated in the easement for more than 21 years? 

BACKGROUND: In 1959, the state acquired a perpetual highway easement over land on which it constructed a portion of State Route 52 near Chesapeake.  In 1984 or 1985, the highway was re-routed so that it bypassed a segment of the original roadway and left that segment virtually unused for vehicle traffic. After the bypassed property had been unused as a highway for more than 21 years, an entity identified as New 52 Inc., which had purchased the property on both sides of the bypassed length of road, filed an action in the Franklin County Court of Common Pleas seeking a declaration that under Ohio common law, the state had abandoned its easement on the unused segment of road by virtue of its non-use for 21 years, and use of the property had therefore reverted to the adjacent property owners by operation of law.

The state filed a motion to dismiss the court action, arguing that a common pleas court had no jurisdiction to consider New 52’s claim because R.C. 5511.01 sets forth a mandatory administrative process that must be conducted by the Director of Transportation before any state highway or segment of a state highway can be legally “abandoned.” The trial court granted the motion to dismiss, holding that it did not have jurisdiction to hear or grant New 52’s claim because the requirements of R.C. 5511.01 for legal abandonment of a state highway had not been met.

On review, however, the 10th District Court of Appeals reversed and remanded the case to the trial court for further proceedings. In its opinion, the 10th District found that that language of R.C. 5511.01 provides a process by which ODOT may hand over control of an abandoned or little-used state highway to a local political subdivision, but does not address a common law abandonment claim based on non-use for 21 years, and does not plainly indicate legislative intent to preempt adjoining landowners from pursuing the type of common law claim advanced by New 52 in this case. The state sought and was granted Supreme Court review of the 10th District’s ruling.

Attorneys for the state argue that, in enacting R.C. 5511.01 and R.C. 5511.07, the legislature established a specific and mandatory administrative process that must be followed in order for any state highway or segment of a state highway to be declared abandoned. They assert that the clear purpose of that administrative review process is to allow consideration and balancing of the interests of the public, local political subdivisions and adjoining land owners in a proposed highway abandonment. Under the 10th District’s holding that individual owners of adjacent properties may file private common law abandonment actions, they argue, neither local government units nor other parties whose interests are at stake would be part of the litigation. They also point out that property owners who grant the state highway easements on their land do so “in perpetuity,” and are fully compensated at the time of those agreements. They argue that such owners or their successors have no valid basis to demand a return of control over that property without compensating the state for its return.

Attorneys for New 52 urge the Court to affirm the 10th District’s holding that R.C. 5511.01 does not provide an “exclusive” process for adjoining land owners to regain the use of abandoned highway easements. They point out that the statute refers only to “highways” rather than to highway easements, and that it makes no provision for returning abandoned property to adjoining owners. If the state’s position is adopted, they assert, property owners will be deprived of the common law right to sue for recovery of abandoned easements that is available to grantors of other real property easements, and left with no other legal recourse.

Contacts
Benjamin C. Mizer, 614.466.8980, for the Ohio Department of Transportation.

David R. Dillon, 740.533.2720, for New 52 Project Inc.

Return to top

Is Arbitration Agreement In Nursing Home Contract Substantially and Procedurally ‘Unconscionable?’

Florence Hayes v. The Oakridge Home et al., Case no. 2008-0784
8th District Court of Appeals (Cuyahoga County)

ISSUE:  Is an arbitration agreement prepared by a nursing home and presented to an elderly patient for signature at the time of her admission substantively and procedurally unconscionable (and thus unenforceable) when it induces the patient to agree to binding arbitration of any future malpractice claims and to prospectively give up the rights to a jury trial and to recover attorney fees or punitive damages if she should later assert a malpractice claim against the home?

BACKGROUND: In this case, Stephen Musser, acting as representative of the estate of Florence Hayes, is attempting to pursue a wrongful death lawsuit against the Oakridge Home, a nursing home that provides inpatient care to elderly patients. The suit seeks damages on behalf of Hayes’ estate and surviving family members based on a claim that, while she was a patient at Oakridge, Hayes suffered serious injury in a fall from a wheelchair caused by negligence of the nursing home staff, and that complications from those injuries subsequently resulted in Hayes’ death.

After Hayes’ estate filed suit in the Cuyahoga County Court of Common Pleas, Oakridge entered a motion seeking a stay of all court proceedings on the basis that, at the time of her admission, Hayes had signed a document in which she agreed that any future claims of malpractice she might advance against the home or its staff would be resolved by means of binding arbitration rather than through a civil lawsuit.  The trial court found the arbitration agreement valid and enforceable, and stayed any further action in the case pending the outcome of binding arbitration.

Hayes appealed. On review, the 8th District Court of Appeals reversed the trial court’s ruling and remanded the case to the common pleas court for further proceedings on Hayes’ claims. In a 2-1 majority opinion, the appellate panel held that because of Hayes’ advanced age (94), the unequal positions of the parties and other factors, the arbitration agreement between Hayes and the nursing home was both substantively and procedurally unconscionable, and therefore not enforceable.

Attorneys for Oakridge now ask the Supreme Court to overrule the court of appeals and reinstate the trial court’s ruling that Hayes’ claims must be submitted to binding arbitration. They point out that at the time she was admitted, Hayes had not been found mentally incompetent and must therefore be presumed to have understood and voluntarily assented to the arbitration agreement. They note that a printed explanation included in the arbitration agreement advised Hayes that she was not required to sign it as a condition of being admitted to the home, and that she was free to delete or amend provisions in the agreement to which she did not agree. They also argue that the court of appeals improperly based its decision on presumptions about Hayes’ mental and physical capabilities and lack of business or legal knowledge at the time she signed the arbitration agreement that are not supported by the record.

Attorneys for Hayes respond that in determining whether the arbitration agreement was unconscionable the 8th District correctly considered not only Hayes’ advanced age but also multiple other factors set forth in prior court decisions, including the facts that Oakridge wrote the agreement and presented it to Hayes for signature as part of a multi-document admission “package” immediately after she had arrived at the home by ambulance at a time when she was unable to walk and had no other place to go. While acknowledging that the public policy of the state favors enforcement of arbitration agreements, they assert that court rulings advancing that policy have primarily addressed business-to-business disputes between parties with relatively equal power and sophistication. They cite other decisions in which Ohio courts have declined to enforce arbitration agreements where there was a wide disparity in the relative power and sophistication of the parties. They note that the legislature has recognized the special vulnerability of elderly patients to various kinds of abuse by enacting a nursing home patients “bill of rights,” and cite a joint report by the American Arbitration Association and leading national medical and legal groups opposing the enforcement of medical malpractice arbitration agreements if the agreement was entered into, as in this case, before a malpractice claim arose.

Contacts
Dirk E. Riemenschneider, 216.621.5300, for the Oakhaven Home.

Blake A. Dickson, 215.595.6500, for Stephen Musser & Estate of Florence Hayes.

Return to top

May Results of Portable Breathalyzer Test Be Used to Establish Probable Cause for DUI Arrest?

State of Ohio v. Jessica Derov, Case nos. 2008-0853 and 2008-0858
7th District Court of Appeals (Mahoning County)

ISSUE: In ruling on a defendant’s claim that police did not have probable cause to place her under arrest for DUI, may a trial court rely on the results of a portable breathalyzer test administered by an officer at the scene of a traffic stop as evidence supporting a finding of probable cause?

BACKGROUND:  Jessica Derov of Mahoning County was stopped by a state trooper who noticed that her license plate validation sticker was out of date and subsequently determined that the license plates on her car were registered to a different vehicle. The officer did not observe Derov driving erratically. In the course of the traffic stop, the trooper detected the smell of alcohol in the car and observed that Derov’s eyes appeared red and glassy.  When he asked if Derov had been drinking that evening, she stated that she had consumed one beer.

The officer asked Derov to step out of the car and had her perform standard field sobriety tests, and then administered a blood alcohol test using a portable breathalyzer unit.  Based on the results of these tests, the trooper placed Derov under arrest for DUI and transported her to a highway patrol post where her blood alcohol tested at 0.134 percent, well above the presumptive DUI level of 0.08 percent.

At trial, Derov entered a motion to exclude the results of the blood alcohol test administered at the patrol post and other evidence obtained after her arrest, arguing that the circumstances surrounding the traffic stop and her interactions with the trooper and performance in the field sobriety tests did not establish sufficient probable cause for her arrest for DUI.  The trial court denied the motion to suppress, holding that the trooper had probable cause to place Derov under arrest. She then entered a plea of no contest and was found guilty of DUI.

Derov subsequently appealed the trial court’s denial of her motion to suppress. On review, the 7th District Court of Appeals vacated her conviction. In its opinion, the court of appeals held that errors by the trooper in administering two of the field sobriety tests rendered the results of those tests insufficient to establish probable cause for Derov’s arrest, and held further that the results of portable breath test units have been shown to be so unreliable that they are not only inadmissible at trial as probative evidence of DUI, but also are inadmissible to establish probable cause for a DUI arrest. The 7th District certified that its ruling

on the portable breath test issue was in conflict with a 2005 decision of the 4th District holding that portable breath test results are admissible to establish probable cause for an arrest. 

The Supreme Court has agreed to hear arguments in the case to resolve the conflict among appellate districts.

Attorneys for the state argue that while blood-alcohol evidence presented in a DUI trial must meet strict technical requirements and standards of scientific reliability, the standard for a showing of probable cause to make an arrest is much less demanding. In this case, they assert, the portable breath test results were not the primary basis for the trooper’s conclusion that there was probable cause to arrest Derov, but only reinforced his prior observation of her performance in the field sobriety tests, the smell of alcohol in her car and Derov’s bloodshot eyes to support a reasonable belief that she was driving under the influence.  They point to prior court decisions holding that, under some conditions, an arresting officer can make a valid finding of probable cause for a DUI arrest based only on a defendant’s appearance and actions without performing any field sobriety tests. 

The state also contends that the court of appeals’ improperly rejected the results of a horizontal gaze nystagmus (HGN) sobriety test administered to Derov by the arresting officer based on the amount of time he took to administer it.  They argue that while national testing standards suggest approximate time intervals for the three stages of the HGN test, there is nothing in those guidelines indicating that the test results will be unreliable if the suggested 68-second time parameter is not rigidly followed.

Attorneys for Derov point out that the Ohio Department of Health, the agency authorized by the legislature to set standards of reliability for DUI blood testing, has specifically rejected the results of portable breath testing as unreliable.  They assert that a majority of Ohio courts that have considered the issue have held that the results of portable breath tests are not reliable enough to be admissible either as proof of guilt or as evidence supporting probable cause for a DUI arrest. In this case, they say, the court of appeals properly found no probable cause for Derov’s arrest because the trooper did not observe Derov driving erratically or behaving in an intoxicated manner, and because he based his arrest on incorrectly administered field sobriety tests and unreliable field testing equipment.

With regard to the HGN test, Derov argues that the court of appeals did not apply a strict “68-second rule” for performance of the test, but merely observed that the sum of the recommended times for performing the three stages is 68 seconds, and found that the trooper’s conduct of the entire test in 45 seconds was a significant enough departure that it did not constitute “substantial compliance.”

Contacts
Ralph M. Rivera, 330.740.2330, for the state and Mahoning Court prosecutor’s office.

Robert C. Kokor, 330.448.1133, for Jessica Derov.

Return to top

These informal previews are prepared by the Supreme Court's Office of Public Information to provide the news media and other interested persons with a brief overview of the legal issues and arguments advanced by the parties in upcoming cases scheduled for oral argument. The previews are not part of the case record, and are not considered by the Court during its deliberations.

Parties interested in receiving additional information are encouraged to review the case file available in the Supreme Court Clerk's Office (614.387.9530), or to contact counsel of record.