supreme court of ohio clerk of court - filed may 30, 2017 ... the flagstaropinion text must be...
TRANSCRIPT
IN THE SUPREME COURT OF OHIO
FRANK AND LONDONINSURANCE AGENCY,
Appellant,
v.
)) Case No. 16-1307
)) On Appeal from the) Franklin County Court of Appeals,) Tenth Appellate District
))1)
LGR REALTY, INC.,
Appeilee.
MERITS BRIEF OF APPELLANT FRANK AND LONDON INSURANCE AGENCY
Syed S. Ahmad(pro hac vice)HUNTON & WILLIAMS LLP2200 Pennsylvania Ave. NWWashington, DC 20037Phone: (202) 955-1500Fax: (202) 778-2201
Edwin J. Hollern (0040534)HOLLERN& ASSOCIATES77 North State StreetWestewille, Ohio 43081Phone: (614) 839~S700Fax: (614) [email protected]
Samuel G. Casolari, Jr. (0034410)David J. Oberly (0088410)MARSHALL DENNEHEY WARNER COLEMAN& GOGGIN312 Elm Street, Suite 1850Cincinnati, Ohio 45202Phone: (513) 372-6800Fax: (513) [email protected]@mdwcg.com
Counsel ofRecordf0r AppelleeLRG Really, Inc.
Neal J. Barkan (00204S0)BARKAN MEIZLISH, LLP250 E. Broad Street, 10th FloorColumbus, Ohio 43215Phone: (614) 221-4221Fax' (614) [email protected]
Counsel ofRecordfor AppellantFrank and London Insurance Agency OfCounselfor Appellee
LGR Really, Inc.
Supreme Court of Ohio Clerk of Court - Filed May 30, 2017 - Case No. 2016-1307
TABLE OF CONTENTSTable of Authorities .
» ||00OOQ11|90°¢o¢oQ0»\0||o¢
Introduction .. g t | | | | | | | O | | t l l lQ § § ¢ ¢
Statement of Facts.. 1
A. Underlying Cla ims 1
B. Proceedings Below,.
Argument 01 an OllOQQO|Ul||OO|OO| 3
Proposition of Law Number l 2 A cause of action for insurance agent or agency negligenceaccrues for purposes of the four-year R.C. 2305.09(D) statute of limitations when the allegedlywrongful act is committed under Flagstar Bank, FSB. v. Airline Union 's Mortgage Co., 128Ohio St.3d 529, 20i l-Ohio-1961, 947 N.E.2d 672, abrogating the delayed-damages rule appliedin Kunz v. Buckeye Union Insurance Co., i Ohio St.3d '19, 437 N.E.2d H94 (i982).. , 3
A. The Limitations Period Set Forth In Ohio Revised Code Section 2305.09Expressly Bars LGR Realty's Claims Because They Were Filed More Than FourYears After The Allegedly Wrongful Act Was Committed.. 3
1. The Sta tute Of`Limita tions For Profess ional Negligence Claims Is Govemedby R C 2305 09(D) 3
2. Ohio Law Does Not Provide Any Exceptions To The S ta tutory Accrua l PeriodFor LGR's Profes s iona l Negligence Cla im.. , 4
B. The Ohio Supreme Court Has Repeatedly Rejected Kunz's Judicial Exception ToThe Statutory Accrual OfNegligence Claims.. 6
1. The Court's Decision in Kzmz.. O00 ioocooconnt
2. The Court Retreats From The Delayed-Damages Exception In Inves tors REITOne .. OUOOOOOQOQOCQQOOOOll|O||||llI§|lll1||
3. The Court Confirms Its Departure From The Delayed-Damages Exception ForProfess ional Negligence Claims In Windsor House and Flagsmr... 9
c. Even If The Court Has Not Yet Abrogated Kunz's Delayed-Damages Exception,The Court Should Overruke It In This Action.. 14
1. Subsequent Decisions OfThis Court Confirm That Kunz Was WronglyDecided. • l • r l I 14
2. LGR's Desired Rule Would Be Unworkable In Practice . 17
i
Proposition of Law No. 2: Under Rep.Op,R. 2.2 of the Supreme Court Ruies for the Reportingof Opinions, "The law stated in an opinion of the Supreme Couit shall be contained in its text,including its syllabus, ifone is provided, and footnotes"--rnaking a ll pans of the decision co~equal, with no part of the decision taking precedence..
A.
Appendix..
» oe4||||a|1|1e1l111I111enootov
B.
The Court Of Appeals Incorrectly Declined To Follow The Opinion Text InFlags ta r ...... . . . . .
The Fla gs ta r Opinion Te xt Mus t Be Tre a te d As Controlling Authority P ursua ntTo Ohio S upre me Court Re p.Op.R. 2.2 Notwiths ta nding The Na rrowe r HoldingRe fle cte d in The S ylla bus ..
3. Aba ndoning The J udicia lly-Cre a te d Exce ption In Kunz Would Not Cre a teUndue Ha rdship For P olicyholde rs Who Ma y Ha ve Re lie d Upon It. .
| • | U
24
I 23
21
23
29
26
Notice of Appeal to the Ohio Supreme Court(Sept. 2, 2016)....,....... .APP 1
Decision of the Franklin County Court of Appeals(July 21, 2016) ..AP P 5
De cis ion & Entry Gra nting Motion to Dismis s of De fe nda nt Fra nk & LondonInsura nce Compa ny of the Fra nklin County Court of Common P ie a s(Oct. 28, 2015) .AP P 20
R.C. Chapter 2305.. ............AP P 29
ii
TABLE OF AUTHORITIES.
P a ge (s )Cases
Agee v. Russell,92 Ohio St.3d 540, 751 N.E.2d 1043 (2001) 44 .24
Akers v. ServA~P0rtI`on, Inc.,31 Ohio St.3d 78, 508 N.E.2d 964 (1987) rl 24
Alexander Grant & Co, v. Windsor House, Inc.,7th Dist. Mahoning No. 87cAl87, 1989 WL 122538 (Oct. 16, 1989) I|
Az/ckerman v. Rogers,2d Dist. Greene No. 201 1-CA-23, 2012-Ohio-23, 2012 WL 29345 .13,22,25
Austin v. Fulton Ins. Co.,444 P.2d 536 (Alaska 1968).. .7, 8,9, 15
Bell v. Holden Survey, Inc.,7th Dist. Carroll No. 729, 2000 WL 1506494 (Sept. 29, 2000).. .22
Brooks v. Ohio State Univ,,111 Ohio App.3d 342, 676 N.E.2d 162 (10th Dist.l996).. .15
Slate ex rel. Burrows v. Indus. Comm. ofOhio,78 Ohio st.3d '18, 676 N.E.2d 519 (1997) nu .15
Cla rk v. S ca rpe lli,91 Ohio S t.3d 271, 744 N.E.2d 719 (2001) 1. .13
Cosligan v. John Hancock Ins. ,N.D, Ohio No. 5:14CVl002, 2015 WL 1400761 (Mar. 26, 2015).. .22
Czmdall v. U.S. Bank,122 Ohio S t. 3d 188, 2009-Ohio-2523, 909 N.E.2d 1244 O .19
Dancar Properties, Ltd. v. O'Leary-Kienlz, Inc.,lst Dist. Hamilton No. C-030936, 2004-Ohio-6998, 2004 WL 2974067 .20
Doe v. Archdioce s e 0/Cincinna ti,109 Ohio S L3d 491, 2006-Ohio-2625, 849 N.E.2d 268 .3, 5,6, 18
Duck v. Canfoni,4th Dist. Washington No. 11cA20, 2012-0hi0-3519 2013 WL 440699 ul .24, 25
EFCO Corp. v, Advanced Glazing Technology, Inc.,loth Dist. Franklin No. 93ApE10-1377, 1994 WL 194984 (May 19, 1994) 11 .24
iii
.9
Felix v. Ganley Chevrolet, Inc.,145 Ohio St.3d 329, 2015-Ohi0~3430, 49 N.E.3d 12244 .17
Filip v. Block,879 N.E.2d 1076 (Ind. 2008) 14 .18, 20
Flags ta r Bank, FSB. v. Airline Um'on's Mortgage Co.,128 Ohio St.3d 529, 2011-Ohio-1961, 947 n.E.2d 672 . passim
Flagstar Bank, FSB v. Reinhold,125 Ohio St. 3d 1436, 2010-Ohio-2212, 927 N.E.2d 91 .11
Flagslar Eank v. Airline Unions Mortg. Co. ,lst Dist. Hamilton No. A0904164, 2008 WL 8691 101 (Dec. 12, 2008).. .10, 11
Flowe rs v. Wa lke r,63 Ohio S t.3d 546, 589 N.E.2d 1284 (1992) 11 .19
Fritz v. Bruner Cox, L.L.P.,142 Ohio App. 3d 664, 756 N.E.2d 740 (5th Dist.200l).. .11, 12
Gray v. Estate ofBarry,101 Ohio App. 3d 764, 656 n.E.2d 729 (6th Dist. 1995).. .1 I, 12
Green Tree Servicing, L,L.C. v. Olds,9th Dist. Summit No. 27297, 2015-Ohio-3214.. .12
Gudenau & Co. v. Sweeney Ins., Inc.,736 P.2d 763 (Alaska l987).. .8, 15
Ha ll v. G ill,108 Ohio App.3d 196, 670 N.E.2d 503 (lst Dist.1995) .. 117
Hater v. Gradison Div. ofMcDonala' & Co. Secs., Inc.,101 Ohio App. 3d 99, 655 N.E.2d 189 (1 Dist.l995).. .22
Infoeision Mgl. Corp. v. Michael D, Sammy Ins. Agency, Inc.,9th Dist. Summit No. 26939, 20I4~Ohio-4653, 2014 WL 5361492 22
Investors REIT One v. Jacobs,46 Ohio SL3d 176, 181, 546 N.E.2d 206 (1989) nl » passim
James v. Partin,12th Dist. Clermont No. CA20014 1-086, 2002-Ohi0-2602, 2002 WL 1058152 .22
JP Morgan Chase Bank NA v, Lanning,2008-Ohio-8934
iv
Kaufman v. C.L. McCabe & Sons, Inc.,603 A.2d 831 (Del. 1992) nl 19,20
Kirsheman v. Paulin,155 Ohio St. 137, 98 N.E.2d 26 (1951) .9
Kunz v. Buckeye Union Ins. Co.,l Ohio St.3d 79, 437 N.E.2d 1194 (1982) l| I passim
Stale ex rel. Leonard v. White,75 Ohio st,3d 516, 664 N.E.2d 527 (1996) .24
LGR Realty, Inc. v. Frank & London Ins. Agency,2016-Ohio-5044, 58 N.E.3d H79 (loth Dist.) || o passim
Liddell v. SCA Servs. ofOh1'o, Inc.,70 Ohio St.3d 6, 635 N.E.2d 1233 l| . . . . . . . . . . . . . . . . . . . . . . 3
Life Time Fitness, Inc. v. Chagrin Valley Eng., Ltd.,N.D. Ohio No. 1:13CV566, 2014 WL 6879082 (Dec. 4, 20I4).. .22
Lis boa v. Tra me r,S th Dis t. Cuya hoga No. 97526, 2012-Ohio-1549, 2012 WL 1142920... .22
Martino v. McDonald 's Sys., Inc.,86 F.R.D. 145 (N.D. III. l980)................. .17
Motoris ts Mzlt. Ins . Co. v. Tra inor,33 Ohio St.2d 41, 294 N.E.2d 874 (1973) .. l 0 • 0 • • I • I • l
MTD P rods ., Inc. v, Roba tin,61 Ohio S t.3d 66, 572 N.E.2d 661 (1991) .25
Nichols v. Schwendeman,10th Dist. Franklin No. 0'7AP~433, 2007~Ohio-6602, 2007 WL 430571811 .19
O 'S tricke r v. J im Wa lte r Corp.,4 Ohio S t.3d 84, 447 N.E.2d 727 (1983) .3, 4,9
One Beacon Ins. v, Terra Firma Constr. Mgt.. & Gen. Contracting, LLC,S.D.N.Y. No. 02 CIV. 7492(SAS), 2004 WL 369273 (Feb. 26, 2004).. .20
Portage Cty. Bd. ofCommrs. v. Akron,109 Ohio St.3d 106, 2006-Ohio-954, 846 N.E.2d 478 44 .15
Pratte v. Stewart,125 Ohio S t.3d 473, 2010~Ohio-1860, 929 N.E.2d 415 . passim
V
Price v. J & H Marsh & McLennan, Inc.,D. Vt. No. 2:03-CV-292, 2004 WL 3202764 (June 8, 2004) .| .20
RBS Citize ns , NA. v. Zigdon,8th Dis t. Cuyahoga No. 93945, 2010~Ohio-3511 .. .12
Robinson v. Detroit,462 Mich. 439, 613 N.W.2d 307 (2000).. o»ooooco0o9o¢»¢
Ruthe r v. Ka is e r,134 Ohio S t. 3d 408, 20I2~Ohio-5686, 983 N.E.2d 291 .16, 18,21
State ex rel. Savarese v. Buckeye Local School Dist. Bd ofEa'n.,74 Ohio St.3d 543, 660 N.E.2d 463 (1996) »| .15
Scott Hulchinson Ents., Inc. v. Rhodes, Inc.,S.D. Ohio No. C-I-01-776, 2005 WL 2000661 (Aug. 18, 2005) ll .22
Toy v, Melro. Lu"e Ins. Co.,2004 Pa.SL1per. 404, 863 A.2d 1 (2004)..
Vaccariello v. Smith & Nephew Richards, Inc.,94 Ohio st.3d 380, 391-392, 763 N.E.2d 160 (2002) .3
Vinecourr Landscaping, Inc. v. Kleve,l1th Dist. Geauga No. 2013-G-3142, 2013-Ohio~5825, 2013 WL 6875468 42,25
Wes zjie ld Ins . Co. v. Ga la fis ,100 Ohio s t.3d 216, 2003-Ohio-5849, 797 n.E.2d 1256 tl .14, 17, 21
Statutes
R.C. 2305.09 » I passim
R.C. 2913.49
Court and Administrative Rules
Rep.Op.R. i(B)(2)-~ ..,,..,..24, 25
Rep.Op.R. 2.2.. -25
Ohio,.Writing Ma nua l, S ection 19.2(B), (Zd Ed.2013) .. ,.25
Other Authorities
34 Ohio J urisprude nce Zd, Limita tion ofActions , S e ction
vi
I.4
.9
INTRQDUCTION
De fe nda nt-Appe lla nt Fra nk a nd London Ins ura nce Age ncy a ppe a ls the Te nth Dis tric t
Court of Appeals' reversal of the trial court's order dismissing this case. Piaintiff-Appeiiee LGR
Re a lty, Inc . in itia te d th is la ws u it on April 17 , 2015 , a lle g ing tha t F ra nk a nd London ha d
negligently obtained unsatisfactory insurance coverage for LGR's business that took effect on
Ma y 12, 2010. The Court of Common P le a s , Fra nklin County, dismis se d LGR's cla ims a s time -
barred because they were not filed within four years after a negligent act was allegedly
committe d by Fra nk a nd London.
The court of appeals reversed, applying a judicially-created exception to Ohio's statutory
time limita tions on filing ne glige nce a ctions . In doing so, the court of a ppe a ls contra ve ne d the
pla in la ngua ge of the limita tions s ta tute a nd nume rous re ce nt de cis ions of this Count in orde r to
re surre ct LGR's untime ly cla ims , citing a de ca de s -old ruling tha t this Coult ha s s ince a broga te d.
As explained below, courts in this state may not, by judicial Hat, divine exceptions to the
s ta tutory limita tions pe riod. The Court s hould the re fore re ve rs e the court of a ppe a ls ' de cis ion
a nd a ffirm the tria l court's orde r of dismissa l.
§1'ATEM3N.T oF E4CTS
A. UnderlyingClaims
This lawsuit arises out of LGR's purcha s e of ins ura nce prote c tion for its re a l e s ta te
pra ctice . LGR's insura nce a ge nt, Fra nk a nd London, procure d a policy tha t took e ffe ct on Ma y
12, 2010. LGR Realty, Inc. v. Frank & London Ins. Agency, 2016-Ohio-5044, 58 N.E.3d 1179,
113 (10th Dis t.). LGR a sse rts tha t Fra nk a nd London ne glige ntly fa ile d to procure the re que s te d
cove ra ge a nd ne glige ntly mis re pre s e nte d the cove ra ge pla ce d. Id. a t W 2, 3, 5. A cla im wa s
eventualiy made against LGR by February 7, 201 l, and on April 26, 201 I, LGR's insurer denied
cove rage for tha t cla im. Id a t 114. LGR incurred cos ts to de fend itse lf aga ins t the cla im. Id
1
.J
B. Proceedings Below
LGR file d its Compla int a ga ins t Fra nk a nd London on April 17, 2015, more tha n four
years after the alleged negligence occurred-i.e., when the allegedly inadequate insurance policy
wa s is s ue d. Id. a t W 4-5. Fra nk a nd London move d to dis mis s the Compla int, a s s e rting tha t
LGR's cla ims we re time -ba rre d unde r R.C. 2305.09(D). Id. a t 1] 6. The tria l court a gre e d. Id. a t
117.
The Te nth Dis trict Court of Appe a ls re ve rs e d, finding tha t it wa s compe lle d to a pply a
judicially-created delayed» darnages exception to R.C. 2305.09(D) pursuant toKunz v, Buckeye
Union Insurance Co., 1 Ohio St.3d 79, 437 N.E.2d H94 (1982). Id. at 1] 41. The court of appeals
rejected Frank and London's assertion that the delayed-damages exception set forth in Kunz has
been abrogated in subsequent decisions of this Court analyzing the time-of-accrual of claims of
professional negligence, including this Cou1*t's recent decision in Flagsfar Bank, F.S. B. v. Airline
Union 's Mortga ge Co., 128 Ohio S t.3d 529, 201 I-Ohio-1961, 947 N.E.2d 672. See LGR Rea lly,
Inc., 2016-Ohi0-5044, 58 N.E.3d I 179, a t 1141. The court of a ppe a ls a gre e d tha t LGR's cla ims
were for "professional negl igence" within the meaning of Flagsfar, but held that i t was
compelled to follow Kunz because Flagstar does not expressly overrule or completely abandon
Kz/nz. Id. at 111127-29.
2
ARGUMEM
Proposition of Law Nmber 1: A ca_use of action f); insurance age_n_t or agencylggligence accrlgs for purpose_of the fopr-year R.C. 23(}_§.09(D) statu_te_ oflimitations when the allpgglly wrongful act is committed under Flggsfar BankE S R l a ___ _ __N.E.1d 672, abrogaging the delaye_d-damages_ gule applied inUniqn Insurance CQ,1 Ohio St.1_]9. 437 Nl d 1194 (1982_)_.
ATHm I/nion's Mortgage ca,38 Ohio sc-il39. 2011-0hiq.1961. 947Kunz la Iiqckeye
A. The Limitations Period Set Forth In Ohio Rev ised Code Sect ion 2305.09Expressly Bars LGR Realty's Claims Because They Were Filed More ThanFour Years After The Allegedly Wrongful Act Was Committed.
1. The Statute Of Limitations For Professional Negligence Claims IsGoverned by R.C. 2305.09(D).
This Court ha s e xpla ine d tha t, "Through s ta tute s of limita tions , the Ge ne ra l As s e mbly
lim its th e t im e with in wh ic h v a rio u s c la im s m a y b e a s s e iie d in O h io 's c o u rts . " Do e v .
Archdiocese of Cincinnati, 109 Ohio St.3d 491, 493, 2006-Ohio-2625, 849 N.E.2d 268, citing
Vaccariello v. Smith & Nephew Richards, Inc., 94 Ohio St.3d 380, 39I-392, 763 N.E.2d 160
(2002) (Stratton, J., concurring in part and dissenting in part).
The "[s ]ound po licy a rgum e nts " unde rlying s ta tu te s o f lim ita tions a re fourfo ld : "'to
ensure fairness to defendant, to encourage prompt prosecution of causes of action, to suppress
s ta le and fraudulent cla ims, and to avoid the inconvenience engende red by de lay, specifica lly the
difficulties of proof present in older cases."' Liddell v. SCA Servs. ofOhio, Inc., 70 Ohio St.3d 6,
10, 635 N.E.2d 1233, quoting O'S tricke r v. J im Wa lte r Corp., 4 Ohio S t.3d 84, 88, 447 N.E.2d
727 (1983). S trict a dhe re nce to the s e s ta tute s a dva nce s the "a xiom tha t s ta tute s of limita tion
serve a gate-keeping function for courts." Pratfe v. Stewart, 125 Ohio St.3d 473, 20l0-Ohio-
1860, 929 n.E.2d 415, Tl42.
3
He re , the pa rtie s do not dis pute tha t the limita tions pe riod for profe s s iona l ne glige nce
cla ims is gove rned by R.C. 2305.09. Tha t s ta tute provides , in pe rtinent pa rt:
Except as provided for in division (C) of this section,l an action for any of thefollowing causes shall be brought within four years after the cause thereofaccrued:
* * *
(D) F o r a n in ju ry to th e rig h ts o f th e p la in t iff n o t a ris in g o n c o n tra c t n o re nume ra te d in se ctions 130435, 2305.10 to 2305.12, a nd 2305.14 of the Re vise dCode * * *_
R.C. 2305.09(D).
For s uch c la im s , "The ge ne ra l rule is tha t a ca us e of a c tion e xis ts from the tim e the
wrongful a ct is com m itte d." F la gs ta r Ba nk, F S B. , 128 Ohio S t.3d 529, 201I-Ohio-1961, 947
N.E.2d 672, at 1] 13, citing O'Slricker at 87. Accordingly, any claim by LGR for professional
ne glige nce ne e de d to be file d within four ye a rs of Ma y 12, 2010, the da te of ince ption of the
ins ura nce policy tha t LGR a lle ge s wa s ina de qua te . S ince LGR did not file s uit until April l'7 ,
2015, a lmost five ye a rs a fte r the policy wa s issue d, LGR's profe ss iona l ne glige nce cla im is time -
barred .
2. Ohio Law Does Not Provide Any Exceptions To The StatutoryAccrual Period For LGR's Professional Negligence Claim.
The court of a ppe a ls de cline d to follow "[t]he ge ne ra l rule tha t a ca us e of a ction e xis ts
from the time the wrongful a ct is committe d." F la gs ta r Ba nk F S B. a t 1113. Instead, the court of
appeals committed reversible error by applying a judicially-created exception to the statutory
accrua l pe riod tha t has no basis in the unambiguous language of R.C. 2305.09.
Div is io n C o f th is s u b s e c t io n a d d re s s e s c ia im s o f id e n t ity fra u d u n d e rR.C. 2913.49, which a re not a t issue in this action.
1
4
Exceptions to the s trict, s ta tutory accrua l pe riods a re legis la ted by the Gene ra l Assembly.
Inde e d, the Ge ne ra l As s e m bly ha s le gis la te d na rrow e xce ptions to R.C. 2305.09-the s ta tute
applicable to tort claims, including LGR's professional negligence claim. Spccifically, the statute
includes an exception that delays the accrual of a claim unti l the wrongful act is actually
dis cove re d, a s dis tinguishe d from whe n the wrongful a ct is committe d, but only for ce rta in type s
of torts involving tre s pa s s , conve rs ion, a nd fra ud. R.C. 2305.09. None of the s e e xce ptiona l
circumstances are at issue in this action, and that alone necessitates dismissal of LGR's untimely
professional negligence claim.
The Ge ne ra l Asse mbly's de cis ion to a llow a n e xce ption for ce rta in torts , but not othe rs , is
signif icant. As this Court explained in a unanimous decision, inferring an extension of the
accrual period ina ppropria te whe re "the le gis la ture ha s [a lre a dy] cre a te d a spe cific limita tions
period and considered tolling provisions." Pratte, 125 Ohio St.3d 473, 20I0~Ohio-1860, 929
N.E.2d 415, at1I 54; see also Investors REIT One v. Jacobs, 46 Ohio St.3d 176, 181, 546 N.E.2d
206 (1989) ("The legislature's express inclusion of a discovery rule for certain torts arising under
R.C. 2305.09, including fra ud a nd conve rs ion, implie s the e xclus ion of othe r toits a ris ing unde r
the s ta tute , including ne glige nce ."). This principle is s ome time s te s te d whe n litiga nts a s k for
judicial1y~created exceptions to claim accrual periods. In response, this Court has repeatedly
explained that Ohio law "require[s] a legislative response to create an exception to our long-
s ta nding s ta tute s of limita tions * P ra tte a t ii 24, c iting Doe , 109 Ohio S t.3d 491, 2006-**>>
Ohio-2625, 849 N.E.2d 268, a t 115 I |
O ne ke y ra tiona le be h ind s uch jud ic ia l re s tra in t is tha t the jud ic ia ry doe s no t ha ve
"s u ffic ie n t s c ie n tific , e m p iric a l o r o th e r in fo rm a tio n fro m wh ic h to c ra ft a ru le o f la w"'
providing ca te gorica l e xce ptions for ce rta in type s of cla ims . Pratte at 'H 53, quoting Doe a t 1i 53.
is
5
"'The prope r forum to de te rm ine s uch is s ue s is in the Ge ne ra l As s e m bly whe re a ll vie ws , a li
relevant information, all scientific data, and all empirical studies can be presented, reviewed and
deba ted by those who have an inte re s t in the issue ."' Id . , quoting Doe a t1l 53.
S uch judicia l re s tra int re ma ins e sse ntia l e ve n in the most difficult ca se s , a nd e ve n whe re
truly aggrieved parties are unaware of the nature of egregiously wrongful acts. As this Court has
e xpla ine d, e ve n whe re a pla intiff is una wa re of a wrongful a ct through no fa ult of the pla intiff,
that cannot just i fy abandoning longstanding principles of comity and judicial restraint.
See P ra fte , 125 Ohio S t.3d 473, 2010-Ohio-1860, 929 N.E.2d 415, a t 1160 (de clining to e xte nd
limita tions pe riod whe re pla intiffha d re pre sse d me morie s of childhood se xua l a buse ).
Claims against insurance agents are no different. Permitting a new, judicially-created,
exception that extends the accrual period "would invade the province of the legislature and
viola te the se pa ra tion of powe rs * Id. a t 1154. "This court will not e nga ge in such a pra ctice* * os
a nd mus t le a ve it to the Ge ne ra l As s e mbly to re write the s ta tute if it de e ms it ne ce s s a ry." Id.
Affirming the court of a ppe a ls ' ruling "would discount the a xiom tha t s ta tute s of limita tion se rve
a ga te -ke e ping function for courts * * *." Id. a t 1142. "J us tice is not s e rve d in s uch ca s e s ." Id.
Because the unambiguous language of R.C. 2305.09 does not include an exception extending the
a ccrua l pe riod for cla ims of profe ss iona l ne glige nce a ga ins t insura nce a ge nts , this Court should
reverse the court of appeals' decision to create such an exception by judicial enactment.
B. The Ohio Supreme Court Has Repeatedly Rejected Kunz's JudicialException To The Statutory Accrual Of Negligence Claims.
Notwiths ta nding the una m biguous la ngua ge of R.C. 2305.09(D), the court of a ppe a ls
he ld tha t it wa s "c om pe lle d to a pp ly" a jud ic ia lly-c re a te d de la ye d-da m a ge s e xc e p tion to
R.C. 2305.09(D) pursuant to this Court's decision in Kunz v. Buckeye Union Ins. Co., l Ohio
s t.3d 79, 437 N.E.2d 1194 (1982). S e e LGR Re a lty, Inc., 2016-Ohio-5044, 58 N.E.3d l 179, a t
1
6
1[4l. As e xpla ine d be low, this Court ha s re tre a te d from its holding in Kunz in subsequent
decis ions , and therefore the court of appeals erred in concluding that Kunz controls . Accordingly,
this Court should reverse the court of appeals ' ruling and reject its reliance on Kunz.
1. The C0urt's Decision in Kunz.
In Kunz, the pla intiffs brought suit aga ins t the ir insurance agent for negligently fa iling to
provide the bus ines s equipment cove rage they reques ted. The de fendants a s s e rted tha t the
negligence claim was time-barred, pursuant to R.C. 2305.09, because the plaintiffs filed suit
more than four years after the insurance policy was issued. Kunz at 79. The trial court granted
summary judgment in favor of the insurance agent and agency, agreeing that the foulwyear s tatute
of iimitations set forth in R.C. 2305.09 had expired because the statute of limitations began to
run when the policy was issued, or at the lates t, when it was renewed. Id. at 80-81.
The S upre me Court of Ohio re ve rs e d, holding tha t a lthough the four-ye a r s ta tute of
limita tions se t foiih in R.C. 2305.09 applied, pla intiffs ' negligence cla im did not accrue from the
time of the cause of the injury, a s provided under tha t s ta tute . Id. a t 81-82. Ins tead, the Court
found that the plaintiffs' negligence claim accrued ajler the plaintiffs suffered a loss to their
equipment. Id Adopting an analysis employed by the Alaska Supreme Court, the court reasoned
that the tort was not complete until there had been an uninsured loss to the plaintiffs ' equipment,
because until that event occurred, "such protection could avail appellants nothing," Id at 82,
citing Auslin v. Fulton Ins. Co., 444 P.2d 536, 539 (Alaska 1968). The Court indicated that, in
such cases , there mus t be an injury or harm to the pla intiff as a consequence of the defendant's
negligence to serve as a basis for recovery of damages before the tort becomes actionable and
before the period of limitation commences to run. Id.
Nota bly, the Aus tin decis ion was bas ed on a limita tions rule tha t is ma te ria lly diffe rent
from the rule in Ohio. In Alaska , "The s ta tute of limita tions ordinarily begins to run on the da te
7
on which the plaintiff incurs injury." Gudenau & Co. v. Sweeney Ins., Inc., 736 P.2d 763, 766
(Alaska 1987). The Alaska statute is distinguished from Ohio's rule that "a cause of action exists
from the time the wrongful a ct is committe d." F la gs ta r Ba nk, FS E., 128 Ohio S t.3d 529, 201 I~
Ohio-1961, 947 N.E.2d 672, at 11 13. "Older" Alaska cases, includingAustin,applied this rule "to
ba r a ny a c tion in itia te d m ore tha n two ye a rs a fte r the p la in tiff o r h is ins ure d prope rty wa s
tortiously damaged." Gudenau & Co., 736 P.2d at 766. The Ohio rule, however, is materially
different and unambiguous: aside from certain enumerated exceptions, "a cause of action exists
from the time the wrongful act is committed."Flagstar Bank, F.S.B. at1] 13.
2. The Court Retreats From The Delayed-Damages Exception InInvestors REIT One.
Le ss tha n a de ca de la te r, the Court re vis ite d its cons ide ra tion of the time -of-a ccrua l of a
profe s s iona l ne glige nce cla im. Inve s tors REIT One , 46 O hio S t.3d a t 181 , 546 N.E .2d 206 ,
Investors REIT One involved claims of accountant negligence based on a failure "to comply with
generally accepted auditing standards and procedures." Id. at 178. The Court considered whether
R.C. 2305.09's four-ye a r s ta tute of limita tions gove rning such cla ims in a ccounta nt ne glige nce
comme nce d to run whe n the a lle ge dly ne glige nt a ct wa s committe d, or whe n the a cts we re la te r
discove red. Id.
The Court looke d to the te xt o f the s ta tu te to a s c e rta in the le g is la tu re 's in te nde d
a ppiica tion of the lim ita tions pe riod unde r R.C. 2305.09 . In pa nicula r, the Court note d the
statute's exception to the commencement of the statute of Hmitations for cextain causes of action,
such a s fra ud or conve rs ion, in which the pla intiff ha s not imme dia te iy discove re d the wrongful
act. Inve s tors REIT One a t 181. The Court found s ignifica nt tha t ne glige nce c la ims we re not
among the enumera ted toMs for which the s ta tute de lays the running of the limita tions pe riod. Id.
The Court expiained that the legislatui.e's decision not to except negligence claims from the
8
s ta tute of limita tions wa s a s trong indica tion tha t the le gis la ture did not inte nd tha t ne glige nce
claims should escape the general rule that a cause of action accrues at the time the wrongful act
is committe d "The Ge ne ra l Asse mbly's fa ilure to include ge ne ra l ne glige nce cla ims unde r the
discovery rule set out in R.C. 2305.09 argues strongly that it was not the legislature's intent to
apply the discovery rule to such claims." Id., citing Kirsheman v. Paulin, 155 Ohio St. 137, 146,
98 N.E.2d 26, 31 (1951) (explaining the statutory signif icance of the Latin phrase, expressio
unius est exclzzsio alterius), see also O'Slricker, 4 Ohio St.3d at 86-87, 447 N.E.2d 727, quoting
34 Ohio Jurisprudence Qd, Limitation of Actions, Section 8, at 492-493 ("It is well settled in
othe r jurisdictions , a nd it is re cognize d in Ohio, tha t the le gis la ture ha s the powe r to incre a se the
pe riod o f tim e ne c e s s a ry to c ons titu te a Iim ita tion ."). Thus , the Court c onc lude d tha t a n
a ccounta nt ne glige nce ca use of a ction a ccrue s from the time the wrongful a ct is committe d, a nd
not from when the damages a re discovered.
3. The Court Confirms Its Departure From The Delayed-DamagesException For Professional Negligence Claims In Windsor House andFlagstar.
The re a fte r, the S e ve nth Dis trict Court of Appe a ls cons ide re d whe n the limita tions pe riod
c om m e nc e d fo r a c la im a lle g ing p ro fe s s iona l ne g lige nc e in c onduc ting a n a c c oun ting o f
Me dica id re imburse me nts . Ale xa nde r Gra nt & Co. v. Winds or Hous e , Inc., 7th Dis t. Ma honing
No. 87cA187, 1989 WL 122538, at *I (Oct. 16, 1989), rev 'd, Grant Thornton v. Windsor
House, Inc., 57 Ohio St.3d 158, 566 N.E.2d 1220 (1991). Relying on Kunz and Austin two
ca se s which a pplie d the de la ye d-da ma ge s rule to dispute s involving ne glige nt procure me nt of
insurance cove rage the court of a ppe a ls he ld tha t the profe s s iona l ne glige nce ca use of a ction
did not a ccrue until Winds or Hous e wa s notifie d of the Me dica id ove rpa ym e nts tha t re s ulte d
Nom the a lleged profe ss iona l negligence . Id. a t *3.
9
This Court re ve rse d, re lying he a vily on its prior de cis ion in Inve s tors REIT One in which
the Court recognized that the Ohio General Assembly "has not adopted a discovery rule
a pplica ble to ge ne ra l ne glige nce cla ims a ris ing unde r R.C. 2305.09." Inve s tors REIT One , 46
Ohio S t.3d a t 182, 546 N.E.2d 206, Gra nt Thornton a t 160-161. For the se cond time , this Court
e xpla ine d tha t the Ge ne ra l Asse mbly ha s not a fforde d a dis cove ry rule to de la y the running of
R.C. 2305.09's limita tions pe riod in a ccounting profe ss iona l ne glige nce a ctions , a nd thus it wa s
not the Cou1t's role to adopt such a rule.Grant Thornton at 160.
Contrary to this Court's reasoning in Investors REIT One, the opinion in Kunz had not
included in its analysis the legislature's inaction on adopting a discovery rule applicable to
profe s s iona l ne glige nce cla ims . This Court in Inve s tors REIT One found tha t ina ction to be a
"strong[]" indication "that it was not the legis1atu1°e's intent to apply the discovery rule to such
claims." Investors REIT One at 181. This Cou11 then reaffirmed that view inGrant Thornton and
dis re ga rde d Kunz, e mpha s izing tha t Inve s tors REIT One in te rp re te d the la w on a c c rua l o f
professional negligence claims "as it then stood" and "did not create new law * * *." Grant
Thornton a t l6}. Thus , the se de cis ions re cognize the conflict be twe e n the le gis la ture 's inte nde d
a pplica tion of R.C. 2305.09 a nd the a be rra nt ruling in Kunz, a nd de mons tra te tha t a llowing a
delayed-damages exception in negligence cases would contravene the text and intent of the law.
In 2011, this Court for a th ird time re ite ra te d its a broga tion of the de la ye d-da ma ge s rule
in professional negligence claims. Flagsfar Bank, FSB., 128 Ohio St.3d 529, 2011-Ohio~l961,
947 N.E.2d 672, a t 11 26. The Court of Com m on P le a s ha d re je c te d the de la ye d-da m a ge s
e xce ption a nd he ld tha t, following Inve s tors REIT One , "The Court is not a t libe rty to a dopt the
discovery rule with regard to professional negligence claims as urged by Flagstar." Flagstar
Bank v. Airline Unions Mortgage Co., Hamilton C.P. No. A0904164, 2008 WL 8691101
1 0
(Dec. 12, 2008). On appeal, this Court "determine[d] that a contiict exists" among the coums of
appeals regarding the availability of a delayed-damages exception to the accrual date of a
profe s s iona l ne glige nce cla im . ld. The Court note d thre e othe r "conflic t ca s e s ." Id. F irs t, in a
lawsuit alleging negligent tax preparation, the Sixth District Court of Appeals applied a delayed-
da ma ge s e xce ption to hold tha t the limita tions pe riod did not comme nce until the IRS le vie d a
penalty. Gray v. Estate of Barry, 101 Ohio App. 3d 764, 768~69, 656 N.E.2d 729, 731 (6th
Dis t. l995). S e cond, in a la ws uit a lle g ing a ccounta nt ne glige nce , the F ifth Dis tric t Court of
Appe a ls dis tinguishe d Inve s tors REIT One a nd a pplie d a de la ye d-da ma ge s e xce ption to e xte nd
the limitations psriod. Fritz v, Bruner Cox, L.L.P., 142 Ohio App. 3d 664, 668-669, 756 N.E.2d
740, 743-744 (5 th Dis t.200i). Third , in a la ws uit a lle g ing ne g lige nce of a title com pa ny in
recording documents, the Fifth District Court of Appeals again applied a delayed-damages
exception to extend the limitations period. JP Morgan Chase Bank NA v. Lanning, 2008-Ohio-
893,18 19.
To re solve this conflict, the Court in Fla gs ta r cons ide re d the following ce nifie d que s tion :
Unde r R.C. 2305.09(D), does a cause of a ction for profe ss iona l negligence accrueon the da te tha t the ne glige nt a ct is committe d, or on the da te tha t the ne glige ntact causes actual damages?
Flagstar Bank, FSB v. Reinhold, 125 Ohio St. 3d 1436, 2010-Ohio-2212, 927 N.E.2d 9.
In answering the certif ied question, the Court declined to adopt the courts of appeals'
ru lings in Gra y, F ritz, a nd La nning. Ins te a d, the Court pointe d out its own de pa rture from the
delayed-damages exception as part of its reversal of the court of appeals in Grant Thornton. The
Court e xpla ine d tha t:
The [Thornton] court of appeals rel ied on Kunz to reverse the trial cou1t'ssummary judgment in favor of the auditors and hold that the cause of action hadnot accrued until the state demanded repayment of the amount overpaid, becausethere had been no harm to the nursing home until then. We, however, determined
11
tha t Inve s tors R E IT O n e g o v e rn s c la im s fo r p ro fe s s io n a l n e g lig e n c e a n dmalpractice , and thus the four-yea r s ta tute of limita tions ba rred the cla im.
We continue to adhere to the rule of law established in Investors REIT One. Acause ofaclionfor professional negligence accrues whenthe act is committed.
(Empha s is a dde d.) (Cita tion omitte d.) Fla gs fa r Ba nk, FS B. a t W 26-27.
In re a ffirm ing this conclus ion, the Court e mpha s ize d tha t a n injury occa s ione d by the
a lle ge d profe s s iona l ne glige nce occurs a t the time of the wrongful a ct, e ve n if the e xte nt of the
damages were not determined until later. Absent the alleged professional negligence by the
a ppra is e r, the product purcha s e d by the pla intiff-in tha t ca s e , a loa n-"would not ha ve be e n
ma de on the s a me te rms tha t it wa s ." F la gs fa r Ba n/Q FS B. a t 1] 30. "Any ca us e of a ction for
ne glige nce a ccrue d on the da te of the a ppra isa l, a nd the four-ye a r s ta tute of limita tions be ga n to
run the n." Id? The sa me is true he re : LGR ha d sufficie nt informa tion to discove r a ny ne glige ntly
om itte d cove ra ge be ca us e LG R ha d a copy of the ins ura nce policy, a nd the im pa c t of the
omiss ion would ha ve ma nife s te d imme dia te ly be ca use it would ha ve influe nce d the te rms of the
policy and the premium pa id.3
S ubse que nt courts ha ve re je cte d the misunde rs ta nding, re fle cte d in Kunz, G ra y,Fritz, a nd La nning, tha t no injury occurs in profe ss iona l ne glige nce ca se s until the da ma ge s a rea ctua lly dis cove re d. For e xa mple , the Ninth Dis trict Court of Appe a ls re je cte d two re a l e s ta tepurcha se rs ' a rgume nts tha t the discove ry rule tolle d the ir profe ss iona l ne glige nce cla ims a ga ins tthe ir prope rty a ppra is e r until the subje ct prope rty wa s fore close d upon. Gre e n Tree S e rvicing,L.L.C. v. Olds , 9th Dis t. S ummit No. 27297, 2015-Ohio-3214, li 19. The Court e xpla ine d tha t theimpa ct of a ne g] ige nt a ppra isa l tha t wa s re quire d for the ir mortga ge loa n "would ma nife s t itse lfimme dia te ly a s it would ha ve influe nce d the te rms of the mortga ge loa n" a nd the injury wouldha ve be e n discove ra ble ha d the purcha se rs re vie we d the a ppra isa l, Id., s e e a ls o RBS Citize ns ,NA. v. Zigdon , 8th Dis t. Cuya hoga No. 93945, 2010-Ohio-351 i, 1146 (J uly 29, 20i0) (holdingtha t a li informa tion needed to a llege fraud cla im was ava ilable when pa rtie s s igned mortgage andcredit line agreement, and cia irh filed a fte r prope rty was sold five yea rs la te r was time-ba rred).
3 Inde e d, a t the a bsolute la te s t, the injury occurs a t the time the insure d suffe rs a nuninsure d loss or is na me d in a la wsuit for which it e xpe cte d cove ra ge (a nd a lso be gins to incurde fe nse cos ts )-a nd not whe n the insura nce ca rrie r de nie s cove ra ge . S e e Kunz, i Ohio S t.3d a t8i-82, 437 N.E.2d l 194 (ca us e of a ction a ccrue d on "the da te of the job a ccide nt"), Vine courf(Continue d on ne xt pa ge )
2
12
Furthe r confirming the rule of la w s e t forth in Flags ta r is the fa ct tha t, e ve n a fte r
Flagstar, the General Assembly again considered and chose not to extend the accrual period for
professional negligence claims, save for one exception. In 20i4, the General Assembly passed an
amendment to R.C. 2305.09 extending the filing of professional negligence claims against
registered surveyors until four years after the completion of an engagement, regardless of when
the wrongful a c t took p la ce . S e e Bill Ana lys is , 2014 Am. S ub. HB, No. 483 ("The b ill
es tablishes four years from the comple tion of the engagement on which the cause of action is
based as the period within which a professional negiigence action against a registered surveyor
must be commenced. Under existing law, a professional negligence action against a registered
surveyor mus t be commenced within four years after the cause of action accrues ."). "When the
le gis la ture a me nds a n e xis ting s ta tute , the pre s umption is tha t it is a wa re of [the Cour't's ]
decis ions inte rpre ting it." P ra tte , 125 Ohio St.3d 473, 2010-Ohio~l860, 929 N.E.2d 415, a t1] 56,
citing Cla rk v. Sca rpe lli, 91 Ohio St.3d 271, 278, 744 N.E.2d 719 (2001). The General Assembly
did not include a tolling provis ion for pe rs ons filing profe s s iona l ne glige nce cia ims a ga ins t
ins urance agents in this unambiguous enactment, "and it is not [this Court's ] province to add
such a provis ion where one plainly does not exis t."Pratte at 1[ 58.
(Continued from previous page)Landscaping, Inc. v. Kleve, llth Dist. Geauga No. 2013-G-3142, 2013~Ohio-5825, 2013 WL6875468, 1i 26 (cause of action accrued "when they sustained damages as a result of the fire"),Auckerman v. Rogers, 2d Dist. Greene No. 20ll-CA-23, 2012-Ohio-23, 2012 WL 29345, 1149(Grady, P.5., dissenting) (cause of action accrued "when Auckerman was involved in an accidentcaused by a negligent driver and as a result suffered monetary losses"). Although the court ofappeals erred in holding that LGR Realty's cause of action did not accrue until ContinentalCasualty denied coverage, the Count need not address this error because, as explained above, thedelayed-damages exception is inapplicable to professional negligence claims in any event. SeeLGR Really, Inc.,2016-Ohio-5044, 58 N.E.3d 1179, at 1i44.
1 3
Thus, following Investors REIT One, Grant Thornton, and Flagstar Bank; F.S8., the
Ohio Supreme Cou1't's view of the time-of-accrual in professional negligence cases is clear: "A
ca use of a ction for profe ss iona l ne glige nce a ccrue s whe n the a ct is committe d." Fla gs ta r Ea nk,
F S B . , 128 Ohio s t.3d 529, 201 I-Ohio-1961, 947 N.E.2d 672, a t W 26-27. As e xpla ine d a bove ,
this conclusion is consistent with the express language of R.C. 2305.09, and that language has
remained unchanged after other amendments to the statute by the General Assembly. The court
of appeals committed reversible error when it applied a delayed-damages exception that this
Couzt ha s a broga te d in thre e diffe re nt de cis ions . Thus , this Court should-for the fo u rth t i m e -
re je ct the e xce ption a nd hold tha t LGR's c la ims a ga ins t Fra nk a nd London a ccrue d whe n the
insura nce policy wa s de live re d to LGR.
c . Even If The Court Has Not Yet Abrogated I(unz's Delayed-DamagesException, The Court Should Overrule It In This Action.
To the e xte nt Kunz re pre se nts controlling a uthority tha t would not ba r LGR's cla ims he re ,
notwiths ta nding the cle a r ma nda te of the pos t-Kunz a uthority discusse d a bove , the Coult should
ove rrule Kunz. "[A] p rio r de c is ion o f the S upre m e Court m a y be ove rru le d whe re (1 ) the
de c is ion wa s wrongly de c ide d a t tha t tim e , o r cha nge s in c ircum s ta nce s no longe r jus tify
continued adherence to the decision, (2) the decision defies practical workability, and
(3) abandoning the precedent would not crea te an undue ha rdship for those who have re lied upon
it¢ 59We s gfe la ' Ins . Co. v. Ga la tis , 100 Ohio S t,3d 216, 2003-Ohio-5849, 797 N.E.2d 1256, TI 48.
All of the se circumsta nce s e xis t he re a nd jus tify ove rruling Kunz.
1 . Subsequent Decisions Of This Court Confirm ThatKunz WasWrongly Decided.
Kunz was wrongly decided for at least three independent reasons. First, as explained
above, Kunz relied on an Alaska state court decision that was based on Alaska's materially
different limitations statute. In Alaska courts, "The statute of limitations ordinarily begins to run
14
on the date on which the plaintiff incurs injury." Gudenau & Co., 736 P.2d at 766. It is
distinguished from Ohio's rule that "a cause of action exists from the time the wrongful act is
committe d." Fla gs la r Ba nk, F.S .B., 128 Ohio S t.3d 529, 2011-Ohio-1961, 947 N.E.2d 672, a t 11
13. Thus , Kunz's re lia nce on Aus tin wa s mispla ce d, a nd Kunz's conclus ion ca nnot be a pplie d to
Ohio's a pplica ble limita tion s ta tute . S e e Kunz, l Ohio S t.3d a t 81-82, 437 N.E.2d 1194, c iting
Austin v. Fulton Ins. Co., 444 P.2d 536 (Alaska 1968).
Second, as the post-Kunz jurisprudence described above demonstrates: The Kunz Court
did not address the Ohio General Assembly's intended application of the statutory accrual of
profe s s iona l ne glige nce cla ims , a nd should the re fore be ove rrule d. "The pa ra mount goa l in the
interpretation or construction of a statute is to ascertain and give effect to the legislature's intent
in enacting the statute." Erooks v. Ohio State Univ., 111 Ohio App.3d 342, 349, 676 N.E.2d 162
(10th Dis t.i996). To de te rmine le gis la tive inte nt, we mus t firs t e xa mine the pla in la ngua ge of the
statute. State ex rel. Burrows v. Indus. Comm. of Ohio, 78 Ohio St.3d 78, 81, 676 N.E.2d 519
(1997). "[W ]e m us t a pp ly a s ta tu te a s it is writte n whe n its m e a n ing is una m biguous a nd
definite."Porfage Cty. Bd. of Commrs, v. Akron, 109 Ohio St.3d 106, 2006-Ohio-954, 846
N.E.2d 478, 52, citingState ex rel. Savarese v. Buckeye Loca! School Dist. Bd. of Edn., 74'il
Ohio St.3d 543, 545, 660 N.E.2d 463 (1996). An unambiguous statute must be applied in a
manne r cons is tent with the pla in meaning of the s ta tutory language * * *." Id., citing S ta re e x re l.
Burrows at 81 .
The Kunz de cis ion fa ile d to re cognize tha t the la ngua ge of R.C. 2305.09 is cle a r tha t a
tolt c la im mus t be file d within four ye a rs from the da te of the wrongful a ct, s ubje ct to ce rta in
enumera ted exceptions tha t a re not applicable he re . Hence , it should come as no surprise tha t the
la te r O h io S u p re m e C o u rt o p in io n s th a t h a v e a c tu a lly c o n s id e re d th e ra t io n a le b e h in d
15
R.C. 2305.09 ha ve unive rsa lly he ld tha t profe ss iona l ne glige nce cla ims a ccrue from the time the
a lle ge dly wrongful a ct is committe d-a nd not from whe n the da ma ge s a re dis cove re d. See, e .g.,
Investors REIT One, 46 Ohio St.3d at 181, 546 N.E.2d 206 (The Iegislature's "express inclusion
of a discovery rule for certain torts arising under R.C. 2305.09, including fraud and conversion,
implies the exclusion of other torts arising under the statute ."), Grant Thornton, 57 Ohio* * *
S t.3d a t 161, 566 N.E.2d 1220 (The Ohio Ge ne ra l Asse mbly "ha s not a dopte d a discove ry rule
applicable to general negligence claims arising under R.C. 2305.09."), Flagstar Bank FSB. at
'H 29, citing R..C. 2305.09(D) ("The General Assembly exercised its authority to establish a
reasonable time in which to bring a professional-negligence claim by providing four years to do
s o."). The re fore , Kunz is incom pa tible with the la ngua ge a nd le gis la tive inte nt be hind R.C.
2305.09, and the Court should hold that Kunz is no longer binding authority for courts in Ohio.
Compare Ruther v. Kaiser, 134 Ohio St.3d 408, 2012~Ohio-5686, 983 N.E.2d 291 , 1] 26 (holding
tha t Ohio S upre m e Court ca s e wa s wrongly de cide d whe re it did not re cognize tha t Ge ne ra l
Assembly has the right to define the limits of a cause of action).
Third, Kunz, and consequently the court of appeals in this action, incorrectly held that the
profe ss iona l ne glige nce torts we re not "comple te " until a n insura nce cla im wa s de nie d be ca use
the policyholde r did not s us ta in injury until tha t tim e . Kunz, 1 Ohio S t.3d a t 81, 437 N.E.2d
1194, LGR Realty, Inc., 2016~0hio-5044, 58 N.E.3d 1179, at 1143. In fact, the injury occurs at
the time insurance coverage is purchased because , absent the a lleged profess iona l negligence by
the insurance agent, the product purchased by the policyholder "would not have been made on
the s a me te rms tha t it wa s ." Fla gs ta r Ba nk, F S B . , 128 Ohio S t.3d 529, 2011-Ohio-I961, 947
N.E.2d 672, a t 1130.
1 6
This injury is s ufficie nt to "comple te " a pla intiffs profe s s iona l ne glige nce ca us e of
action even if the amount of re s ulting damages remains unce rta in. As this Court expla ined in
address ing the damage-in~fact element of a class certification, the fa cl of damage establishes the
existence of injury-a predicate to liability-whereas the actual value of damages involves the
quantum of injury and the appropria te meas ure of re lie f. Fe lix v. Ganley Chevrole t, Inc., 145
Ohio St.3d 329, 2015-0hi0~3430, 49 N.E.3d 1224, 1] 34, citing Marlino v. McDor1ald's Sys ., Inc.,
86 F.R.D. 145, 147 (N.D. Ill. 1980).4 Thus , the critica l inquiry in de te rmining the da te tha t
LGR's limitation period began to run is not the date on which the source or measure of damages
became known, but the da te on which the fact of damage in the form of a want of reques ted
cove rage -came into be ing. Kunz, and the court of appea ls in this ca s e , imprope rly confla ted
the s e two principle s . Becaus e the want of cove rage occuwed on the da te LGR's policy was
purchased, that is the date that the s tatute of limitations began to run.
Accordingly, because Kunz re lie d on ma te ria lly dis tinguis ha ble a uthority, incorre ctly
disregarded the statutory language and legislative intent of R.C. 2305.09, and misapprehended
the "injury" occasioned by a professional negligence claim, the Court should hold that Kunz was
wrongly decided and is no longer binding authority in Ohio courts .
2. LGR's Desired Rule Would Be Unworkable In Practice.
The Court should overrule Kunz for the additional reason that "the decision defies
practica l workability," especia lly in the context of purchas ing insurance . Weszjield Ins . Co., 100
See a lso Slory Parchment Co. v, Paterson Parchment Paper Co., 282 U.S . 555,562, 51 S .ct. 248, 75 L.Ed, 544 (1931) ("There is a clea r dis tinction be tween the meas ure ofproof necessary to es tablish the fact that petitioner had sustained some damage and the measureof proof nece s s a ry to enable the jury to fix the amount"), Ha ll v. Gill, 108 Ohio App.3d 196,206, 670 N.E.2d 503 (ls t Dis t.l995), c iting Accura te Die Ca s ting Co. v. Cle ve la nd, 2 OhioApp.3d 386, 391, 442 N.E.2d 459 (8th Dis t.l98i) (in profe s s iona l ne glige nce a ction, "[i]t isuncerta inty as to the exis tence of damages , not uncerta inty as to the amount, which precludesre cove ry").
4
17
Ohio St.3d 216, 2003-Ohio-5849, 797 N.E.2d 1256, at 148. As explained above, statutes of
limitations serve a gate-keeping function for courts by "'(l) ensuring fairness to the defendant,
(2) encouraging prompt prosecution of causes of action, (3) suppressing stale and fraudulent
claims, and (4) avoiding the inconveniences engendered by delay specifically, the difficulties
of proof pre s e nt in olde r ca s e s ."' F la gs ta r* Ba nk, FS B., 128 Ohio S t.3d 529, 2011-Ohio-1961,
947 N.E.2d 672, a t 117, quoting P ra tte , 125 Ohio s t.3d 473, 2010-Ohio-1860, 929 N.E.2d 415, a t
1142; Doe , 109 Ohio s t.3d 491, 2006-Ohio-2625, 849 N.E.2d 268, a t 'II 10. The se inte re s ts would
be disserved by the delayed accrual exception that LGR is advocating.
Cla ims unde r a n insura nce policy ca n some time s be ma de ma ny ye a rs a fte r a policy is
procure d. P e rmitting profe s s iona l ne glige nce cla ims to a ccrue we ll into the future ris ks los ing
evidence and perpetuating stale and fraudulent claims. Absent limitations periods, insurance
agents are "left with the possibility of unlimited liability indefinitely." Ruther, 134 Ohio St.3d
408, 2012-Ohio~5686, 983 N.E.2d 291, at 1129; Flagsfar Bank, FSB. at 1] 27 ("[A}ccepting any
sugge s tion tha t the s ta tute of limita tions be re se t for e a ch purcha se of a mortga ge loa n be ca use
the purchase r's damages may be de layed until some point in the future could lead to an unending
s ta tute of limita tions ."). Furthe r, a s the India na S upre me Court re cognize d in cons ide ring s imila r
circumstances, "if we accept the lpoEicyholder's] argument, then insureds become free riders,
pa ying lowe r pre m ium s , pe rha ps for m a ny ye a rs , a nd the n re ta ining the a bility to c la im the
be ne fit of highe r cove ra ge if a los s is incurre d." F ilip v. Block, 879 N.E.2d 1076, 1083-1084
(ind. 2008).
Additiona lly, a dopting a rule tha t re quire s wa iting until a n a ctua l cove ra ge de nia l would
not be workable in many coverage scenarios because insurance carriers often respond to
insurance claims with provisional coverage while reserving their rights to pursue litigation to
18
seek a coverage disclaimer in the future. See Mol0rists Mui. Ins. Co. v. Train0r, 33 Ohio St.2d
41, 45, 294 N.E.2d 874 (1973) (holding tha t a n ins ure r ma y de fe nd a n a c tion purs ua nt to a
unila te ra l re s e rva tion of rights conce rning a ny pote ntia l policy de fe ns e s provide d it give s notice
to the ins ure d). Be ca us e ins ura nce ca rrie rs do not a lwa ys provide a n une quivoca l de nia l of
cove ra ge , the rule a dvoca te d by LGR would ma ke cla im-a ccrua l unce rta in in ma ny ins ura nce
re la tions hips . More ove r, the corolla ry to LGR's propos e d rule would me a n tha t "ins ure ds whos e
ins ura nce a ge nts ha ve ne glige ntly fa ile d to procure cove ra ge , a nd ha ve the re by le ft the ins ure d
exposed to unwanted risk, have no cause of action until some loss occurs for which they are
uncovered." (Emphasis sic.) Kaufman v. C.L. McCabe & Sons, Inc., 603 A.2d 831, 834 (Del.
1992). This would not advance any of the gate-keeping functions that statutes of limitations
s e rve . In contra s t, holding tha t a cla im accrues from the da te of placement of the re levant policy
provides certainty for courts and Iitigants.
F u rth e rm o re , d e la yin g th e a c c ru a l p e rio d is im p ro p e r wh e re th e p la in tiff h a d
"'[c ]ons truc tive knowle dge of fa c ts "' s uppovcing a profe s s iona l ne glige nce c la im, e ve n if a
pla intiff doe s not ha ve "'a ctua l knowle dge of the ir le ga l s ignifica nce * * *."' (Empha s is de le te d.)
Cundall v. US. Bank, 122 Ohio s t.3d 188, 2009-Ohio~2523, 909 N.E.2d 1244, 'H 30, c iting
Flowers v. Walker, 63 Ohio St.3d 546, 549, 589 N.E.2d 1284 (1992). The Kunz Court did not
consider that, in cases alleging negligent procurement of insurance coverage, a polieyholder
ge ne ra lly ha s cons tructive knowle dge of ne glige ntly omitte d cove ra ge be ca us e a policyholde r
has a copy of the insurance policy and a duty to examine the policy and notify the insurance
agent if the coverage is inadequa te . See Nichols v. Schwendeman, 10th Dis t. Fra nklin No. 07AP -
433, 2007-Ohi0-6602, 2007 WL 4305718, 11 24 (holding tha t while a n ins ura nce a ge nt mus t
exercise good faith and reasonable diligence in obtaining insurance its customers request, "the
1 9
ins ure d ha s a corre s ponding duty to e xa mine the policy, know the e xte nt of its cove ra ge , a nd
notify the a ge nt if s a id cove ra ge is ina de qua te ").5 Be ca us e LGR ha d a copy of the ins ura nce
policy and a duty to examine it for de fects in its cove rage a s soon a s the policy was placed, LGR
ha d cons tructive knowle dge of the fa cts unde rlying its profe s s iona l ne glige nce cla im. Like wise ,
re je cting Kz1nz's de la ye d-da ma ge s e xce ption would e ncoura ge policyholde rs to a ppropria te ly
examine the ir cove rages both when they a re purchased and when the known limita tions pe riod is
coming to an end.
Fina lly, LGR's a dvoca te d de la y of the limita tions pe riod is ba se d on a misconce ption of
the purpos e of purcha s ing ins ura nce . "[I]ns ura noe is a bout the s hifting of ris k," ye t a n a ct of
professional negligence by an insurance agent causes a policyholder to "[bear] the risk of loss
from the date the policy was issued," and thus, "their injury from the alleged negligence occurred
a t this point." F ilip , 879 N.E.2d a t 1083.6
S e e a ls o Da nca r P rope rtie s , Ltd v. O 'Le a ry-Kie ntz, Inc . , ls t Dis t. Ha m ilton No.C-030936, 2004-Ohio-6998, 2004 WL 2974067, 11 19 (holding tha t, e ve n a s s uming a rgue ndotha t dis cove ry rule is a va ila ble , policyholde r ha d informa tion "s ufficie nt to a ppris e him of thepos s ibility of wrongdoing" by ins ura nce a ge nt whe n he re ce ive d the quote for flood ins ura ncecove rage ).
6 Inde e d, ma ny courts in othe r s ta te s a gre e tha t a ca use of a ction for profe s s iona lnegligence by an insurance agent a ccrues a t the time the insurance policy is obta ined, even if a llpotentia l damages do not manife s t themse lves until ia te r. See, e .g., Filip, 879 N.E.2d a t 1082 ("Acla im aga ins t an [insurance ] agent for negligent procurement of the wrong cove rage begins a t thes ta rt of cove ra ge if the bre a ch wa s dis cove ra ble a t tha t tim e through ordina ry dilige nce ."),Ka ufma n, 603 A.2d a t 834 (profe s s iona l ne glige nce ca us e of a ction a ga ins t ins ura nce a ge nt"a ccrue d a t the time of de live ry of the policy"), Toy v. Me tro, L Ins . Co., 2004 P a .S uper. 404,it 14 , 863 A.2d l (2004), a ff'd , 593 P a . 20, 928 A.2d 186 (2007) (holding tha t the s ta tute oflim ita tions a ga ins t a ge nt s ta rte d whe n ins ure d re ce ive d ins ura nce policy be ca us e injury wa sdiscove ra ble a t tha t time ), One Be a con Ins . v. Te rra F irma Cons lr. Mgt, & Ge n. Contra c ting,LLC , S .D.N.Y. No. 02 CIV. 7492(S AS ), 2004 WL 369273, a t *3 (Fe b. 26, 2004) (holding tha tne glige nce cla ims "a ga ins t a n insura nce broke r or a ge nt a ccrue l] whe n the wrongdoing occursa nd not whe n the wrongdoing is dis cove re d"), P rice v. J & H Ma rs h & McLe nna n, Inc . , D. Vt .No . 2 :03~ CV-292 , 2004 W L 3202764 , a t *3 (J une 8 , 2004) (a pp lying Ne w York la w) ("In(Continue d on ne xt pa ge )
5
20
For e a ch of the s e re a s ons , contra ry to LGR's a rgume nts a nd the court of a ppe a ls '
re a s on ing , p ra c tica l cons ide ra tions de mons tra te tha t the s ta tu te o f limita tions fo r LGR's
profe s s iona l ne glige nce cla im s hould be gin running from Ma y 12> 2010, the pla ce me nt da te of
the policy, not April 26, 2011, when cove rage was denied.
3. Abandoning The Judicially-Created Exception InKunz Would NotCreate Undue Hardship For Policyholders Who May Have ReliedUpon It.
In considering whether abandoning precedent would create an undue hardship for
litigants who have relied upon a prior decision, "[w]e must ask 'whether the previous decision
has become so embedded, so accepted, so fundamental, to everyone's expectations that to change
it would produce notjus t re a djus tme nts , but pra ctica l re a l-world dis loca tions ." Ruthe r, 134 Ohio
St.3d 408, 2012-Ohio-5686, 983 N.E.2d 291 , at 1? 30, quotingWesuieldlns. Co., 100 Ohio St.3d
216, 2003-Ohio-5849, 797 N.E.2d 1256, a t 11 58; Robinson v. De troit, 462 Mich. 439, 466, 613
n.w.2d 307 (20001
As an initial matter, LGR's desired application of Kunz is predicated on the view that a
policyholder may not be aware that he has a cause of action until a coverage denial. However,
"[i]f one is not aware of a cause of action, one cannot rely on a case that stated it would never be
barred a fte r pas sage of time . Thus , the re would be no undue hardship * * *." Rufhe r a t 11 30. This
alone defeats any undue hardship or reliance.
(Continued from previous page )negligence cla ims aga ins t insurance brokers for fa ilure to procure adequa te insurance coverage ,* * the cause of action accrues when the broker fa ils to procure adequa te coverage .").
*
21
Moreove r, a s expla ined above , it is cle a r tha t Kunz's de layed-damages exception ha s not
be come unive rsa lly a cce pte d, give n tha t it ha s be e n re je cte d a t le a s t a doze n time s by counts in
this s ta te , including s ix times within the past ten yea rs .7
Accordingly, a de pa rture from Kunz would not cre a te a n undue ha rdship for litiga nts who
ma y re ly on the re a soning in Kunz.
* * *
7 See, e .g., Inve s tors REIT One , 46 Ohio S t.3d a t 18] , 546 N.E.2d 206 (re jecting thede la ye d-da ma ge s rule for cla ims of profe ss iona l ne glige nce ), Gra n! Thornton, 57 Ohio S t. 3d a t161, 566 N.E.2d 1220 (sa me ); F la gs fa r Ba nk, F S B. , 128 Ohio S t.3d 529, 2011-Ohio-1961, 947N.E.2d 672, a t ii 29 (s a me ), Infocis ion Mgt. Corp, v. Micha e l D. S a mmy Ins . Age ncy, Ine ., 9 thDis t. S ummit No. 26939, 2014-Ohio-4653, 2014 WL 5361492, a t ii 28 (de la ye d-da ma ge s ruled id no t a pply to c la im s a lle g ing profe s s iona l ne g lige nce by ins ura nce a ge ncy in fa iling toma inta in ve hicle lia bility ins ura nce cove ra ge ), Aucke rma n, 2d Dis t. Gre e ne No. 201 l-CA-23,2012-Ohio-23, 2012 WL 29345, a t 'li 17 (conc luding tha t Fla gs fa r* Ba nk, F .S .B. "im plic itlyove rrule d Kunz with re ga rd to a pplica tion of the de la ye d-da ma ge s rule in ca se s of profe ss iona lne glige nce gove rne d by R.C. 2305.09"), Lis boa v. Tra me r, S th Dis t. Cuya hoga No. 97526, 2012-Ohio-1549, 2012 WL 1142920> a t ii ll, quoting Fla gs ta r Ba nk, F .S .8. a t ii 27 (re cognizing ina ccounting firm ma lpra ctice ca se tha t "'[a ] ca use of a ction for profe s s iona l ne glige nce a ccrue swhe n the a ct is committe d"'), Be ll v. Holde n S urve y, Inc ., 7th Dis t. Ca rroll No. 729, 2000 WL1506494, *5 (S e pt. 29, 2000) (the de la ye d-da ma ge s e xce ption wa s not a pplie d to a c la im forprofe ss iona l ne glige nce a ga ins t a surve yor), J a me s v. P a rtin, 12th Dis t. Cle rm ont No. CA2001-11-086, 2002-Ohio-2602, 2002 WL i058152, a t W 9-13 (the de la ye d-da m a ge s e xce ption isina pplica ble to cla ims of profe s s iona l ne glige nce ), Ha ie r v, Gra dis on Div. ofMcDona Zd & Co.S e cs ., Inc., 101 O hio App . 3d 99 , 1 l0~ lli, 655 N.E ,2d 189 (l Dis t. l995) (re je c ting de la ye d-damages theory in cla ims a lleging negligence of broke r-dea le rs and appra ise rs), Cos figa n v. J ohnHa ncock Ins . , N.D. O h io No . 5 :1 4 C Vl0 0 2 , 2 0 1 5 W L 1 4 0 0 7 6 1 , *9 (Ma r. 2 6 , 2 0 1 5 ), orde rcla ryie d by s ub nom. Cos ligon v. J ohn Ha ncock Life Ins . Co., N.D. Ohio No. 5:l4CVl002, 2015WL 3540175 (J une 4, 2015) (holding tha t "F la gs ta r fore close d the a pplica tion of a dis cove ry[rule ] or a de la ye d-da ma ge s [e xce ption] in ca se s involving profe ss iona l ne glige nce gove rne d byR.C. 2305.09"), Life Time Fitne s s , Inc. v. Cha grin Va lle y Eng., Ltd, N.D. O h io No , l:l3CV566 ,2014 W L 6879082 , *3 (De c . 4 , 2014 ) (ho ld ing tha t F la gs ia r Ba nk, F .S 8 . e s ta blishe d tha tde la ye d-da m a ge s e xce ption to s ta tu te of lim ita tions doe s not a pply to a ny c la im s a lle g ingprofe ss iona l ne glige nce ), S cott Hulchins on Ents ., Inc. v. Rhode s , Inc., S .D. O h io No . C -l-0 l-776, 2005 WL 2000661, *5-6 (Aug. 18, 2005) (holding tha t unde r re a s oning in Inve s tors REITOne , de la ye d-da m a ge s e xce ption to s ta tute of lim ita tions doe s not a pply to c la im s a lle gingprofe ss iona l negligence of enginee r).
22
In s um, the re is no s ound jus tifica tion for tre a ting Kunz a s binding pre ce de nt, a nd it
should be overruled. The Kunz court likely reached an incorrect conclusion because it
dis re ga rde d the la ngua ge a nd le gis la tive inte nt of R.C. 2305.09 a nd re lie d on dis tinguis ha ble
fo re ign a u tho rity e xa min ing a ma te ria lly d iffe re n t s ta tu te . in a dd ition , Kunz 's ho ld ing is
unworkable in practice, including in the insurance context, because insureds have a duty to
e xa mine polic ie s a nd much time ca n pa s s be fore a n ins ura nce ca rrie r une quivoca lly de nie s
cove ra ge , thus cre a ting the pote ntia l for a n une nding limita tions pe riod. Fina lly, give n tha t ma ny
courts in Ohio have already rejected Kunz as abrogated by subsequent authority, there is little
ris k of undue ha rds hip to litigants who may have re lied upon Kunz's reasoning. For each of these
reasons, the Court should defEnitively overrule Kunz and reverse its application to this case by
the court of appea ls .
Proposjtjon of Law 9. 2: Under R_ep.0p.R. 2.2__of the Suprege Court RuLes__forthe_Reporting cj_Opinions, "The law statfgjn an 0p°mion_of the Sggeme Courtsh_a[l be contg_i4ed in its t_q_x_t1 including_its syllabu§_. if one is__[;rovided, angfootnot_es"_--making_ql[ parts of thqudecision co;-equal, with n_o_part of the_d<;cisiontakjpg preceder;c_e._
A. The Court Of Appeals Incorrectly Declined To Follow The Opinion Text InFlagstar.
In Fia gs fa r, this CouM s ta te d in its opinion tha t "A ca us e of a otion for profe s s iona l
ne glige nce a ccrue s whe n the a ct is committe d," irre s pe ctive of the type of profe s s iona l a t is s ue .
Fla gs ta r Ba nk, FS B., 128 Ohio S t. 3d 529, 201 l-Ohio-1961, 947 N.E.2d 672, a t 1] 27. In this
a ction, the court of a ppe a ls he ld tha t LGR's cla ims qua lifie d a s "profe s s iona l ne glige nce " within
the meaning of Flagstar, but declined to adopt the Flagsmr* opinion's blanket rejection of the
delayed-damages rule in professional negligence cases. LGR Really, Inc., 2016-Ohio-5044, 58
N.E.3d 1179, at 111] 27-29. Ins te a d, the court of a ppe a ls re a s one d tha t the Fla gs ta r s yllabus
limited the body-of-decision statement of law to property appraisers, leaving the delayed-
23
damages applicable to the accrual of insurance agent negligence causes of action as suggested by
Kunz. Id at W 28, 40-41 ("{T]he syllabus of`Flagstar Bank was limited to claims of professional
negligence against a property appraiser, and the Supreme Court of Ohio let stand Kunz, an older
case applying the delayed damages rule to a negligence cause of action involving a breach of
duty by an insurance agent who failed to provide proper coverage for a client."). As explained
be low, the court of a ppe a ls e rre d in a s s uming tha t Kunz is s till via ble be ca us e the contra ry
re a s oning conta ine d in the Fla gs la r opinion wa s ne ce s s a rily limite d by the na rrowe r holding
conta ined in the Flagstar* s yllabus .
B. The Flagstar Opinion Text Must Be Treated As Controlling AuthorityPursuant To Ohio Supreme Court Rep.0p.R. 2.2 Notwithstanding TheNarrower Holding Reflected In The Syllabus.
Unde r forme r Re p.op.R. l(B)(2), "if a ny conflic ts e xis te d be twe e n the s ylla bus a nd a
s ta te me nt in a s upre me court opinion, the n the s ylla bus controlle d." Duck v. Ca nfoni, 4th Dis t.
Washington No. I ICA20, 2012-Ohio-351, 2013 WL 440699, 1124, fn. 3, citing Akers v. Se7'v-A-
P ortion, Inc., 31 Ohio S t.3d 78, 79, 508 N.E.2d 964 (1987), fn. 1. Unde r the forme r rule , "'The
syllabus of a Supreme Court opinion states the controlling point or points of law decided in and
necessarily arising from the facts of the specif ic case before the Court for adjudication."
(Emphasis deleted.) Agee v. Russell, 92 Ohio St.3d 540, 546, 751 N.E.2d 1043 (2001), quoting
State ex rel. Leonard v. White, 75 Ohio St.3d 516, 518, 664 N.E.2d 527 (1996). Thus, when the
te xt of s uch a n opinion re a d more broa dly tha n the s ylla bus , the lowe r a ppe lla te court re je cte d
the broader body-of-decision language in favor of the more restrictive syllabus law. First Eank of
Ma rie tta v. Ros lovic & P a rtne rs , Inc., 10th Dis t. Fra nklin No. 03AP -332, 2004-Ohio-2717, 2004
WL 11 '/2885, 1[ 50 , c iting EFCO Corp. v. Adva nce d Gla zing Te chnology, Inc ., 10th Dis t.
Fra nklin No. 93ApE10-1377, 1994 WL 194984 (Ma y 19, 1994) (holding tha t the tria l court's
applica tion of a te s t tha t appea red "in one line of the opinion text" and was s ubs tantia lly broade r
24
than the standard suggested by the syllabus was error because "we are bound to consider the
sylla bus a s s ta ting the controlling points of la w de cide d"); forme r Re p.Op.R. l(B)(2) (sa me ).
Howe ve r, the curre nt ve rs ion of the S upre me Cour1 Rule s for the Re porting of Opinions ,
ma de e ffe ctive J uly I, 2012, doe s not include forme r Re p.Op.R. 1(B)(2). Unde r the ne w rule s ,
"The la w s ta te d in a n opinion of the S upre me Court sha ll be conta ine d in its te xt, including its
syllabus, if one is provided, and footnotes." Rep.Op.R. 2.2. Because the new rules have removed
the protocol for re soiving a ny conflicts tha t ma y e xis t a mong those thre e e le me nts , de cis ions of
Ohio courts a re no longe r limite d a nd controlle d by the la ngua ge in the sylla bus . S ee Duck a t 11
24, fn. 3 (noting the e limina tion of forme r Re p.Op.R. 1(B)(2) a s pa rt of the J uly 2012 a doption of
the Ruies for the Reporting of Opinions).
This Honora ble Court re cognize d the e ffe ct of the Rule cha nge in its Writing Ma nua l,
e xpla ining tha t:
The role of the syllabus in Ohio has changed. The old rule that the syllabus, andonly the syllabus, contains the law of the case has been discarded. The entire textof the opinion contains the law; text from the body of the case, includingfootnotes, may be cited as authority,
The Supreme Court ofOhio, Writing Manual,Section l9.2(B), at 131 (Zd Ed.2013).
Inde e d, s plitting holdings a cros s the s ylla bus a nd the te xt of the opinion a nd a ffording
them va rying leve ls ofprecedentia l force "can only se rve to confuse the bench and ba r, a s we ll a s
working m e n a nd wom e n of Ohio ." MTD P rods . , Inc . v. Roba tin , 61 Ohio S t.3d 66, 70, 572
N.E.2d 661 (1991) (Resnick, J ., dissenting). Accordingly, the court of appea ls -a s we ll a s theI
Vinecourf decision and Auckerman dissent on which the court of appeals relied-should have
followe d the Court's holding s e t forth in the te xt of the Fla gs ta r opinion tha t "A ca use of a ction
for profe ss iona l ne glige nce a ccrue s whe n the a ct is cornmitte d." S e e Fla gs ta r Ba nk, FS B., 128
Ohio S t.3d 529, 2011-Ohio-1961, 947 N.E.2d 672, a t 1127. Be ca use insura nce a ge nt ne glige nce
25
is a ls o "profe s s iona l ne glige nce ," the Couit's opinion in Fla gs fa r necessa rily abroga te s Kzmz's
application of the delayed-damages rule to the accrual of a claim of professional negligence by
an insurance agent.
C O NC LUS IO N
For each of the foregoing reasons, the Court should hold that a cause of action for
insurance agent or agency negligence accrues for purposes of the four-year R.C. 2305.09(D)
s ta tu te of lim ita tions whe n the a lle ge dly wrongfu l a c t is com m itte d , a nd s hould re je c t the
delayed-damages rule applied in Kunz. Here, LGR's cause of action against Frank and London
a ros e on Ma y 12, 2010, m ore tha n four ye a rs be fore LGR initia te d this a c tion. Be ca us e the
Gene ra l Assembly has not legis la ted an exception to the gene ra l time-of-accrua l in the context of
insurance agency negligence , the Couit "should dispose of this ca se with a s trong dose ofjudicia l
re s tra int * * * [u]ntil the Ge ne ra l Asse mbly a cts on the is sue * * *." P ra tre , 125 Ohio S t.3d 473,
2010-Ohio-l860, 929 N.E.2d 415 , a t 1] 22. Accordingly, LGR's cla ims in this a ction a re time -
ba rre d. The Court should re ve rse the court of a ppe a ls ' de cis ion a nd a ffirm the tria l court's orde r
ofdis m is s a l.
Dated: May 30, 2017 Respectfully submitted,
/§ / S ye d S . Ahma d _ _S YE D S , AHMAD pro ha e vie eHUNTON & WILLIAMS LLP2200 P ennsylvania Avenue , NWWa shington, DC 20037Phone : (202) 955~1500Fax: (202) 778-220 IEma il: sa hma d@ hunton.com
26
/s / S a mue l G. Ca s ola ri, J r. _ ..S AMUEL G. CAS OLARI, J R. (0034410)DAVID J . OBERLY (0088410>MARSHALL DEbn~1181~1Ey WARNER COLEMAN &GOGGIN312 Elm S tree t, S uite 1850Cincinna ti, Ohio 45202P hone : (513) 372-6800Fax: (513) 372-680 IEma il: sgca sola ri@ mdwcg.comEma il: djobe rly@ mdwcg.com
Counsel ofRecord.for AppellantFrank and London Insurance Agency
27
CERTIF ME OF SERV_I_CE
I hereby certify tha t on May 30, 2017, a copy of the foregoing Merits Brie f of Frank andLondon Insurance Agency was sent to all parties via electronic mail.
Edwin J . Holle mHO LLE RN & AS S O CIATE S
77 Nolth S ta te S tree tWe s te rville , Ohio 43081
e holle rn@ e jhla w.comCozms e lfor Appe lle e
LGR Re a lty, Inc.
Nea l J . Ba rkanBAR KAN ME IZLIS H, LLP
250 East Broad S tree t, Tenth FloorColumbus , Ohio 43215
nba rkan@barnrne izlish.oomOf C0wvs e lfor Appe lle e
LGR Re a lly, Inc.
/s / Samuel G. Casolari, Jr. ..._... .SAMUEL G. CASOLAR1, JR, (00344101MARSHALL DENNEHEY WARNER COLEMAN &GOGG1N312 Elm Street, Suite 1850Cincinnati, Ohio 45202Phone: (513) 372-6800Fax: (513) 372-6801Email: [email protected]
Counselfor AppellantFrank and London Insurance Agency
28
APPENDIX
29
i
APPENDIX EXHIBIT A:
NOTICE OF APPEAL
APP 1
Supreme Court of Ohio Clerk of Court Filed September 02, 2016 - Case No. 20164307
IN THE SUPREME COURT OF OHiO
LGR REALTY, INC,,
Plaintiff-Appellee, On Appeal from the FranklinCounty Court of Appeals,Tenth Appellate District
FRANK AND LONDONINSURANCE AGENCY,
Court ofAppealsCase No. 15Ap-1072
Defendant~Alope||ant.
NOTICE OF APPEAL OFAPPELLANT FRANK AND LONDON INSURANCE AGENCY
Edwin J. Hollern (0040534)HOLLERN & ASSOCIATES77 North State StreetWesterville, Ohio 43081(614) 839-5700(614) 839-4200 (fax)[email protected] for AppelleeLGR Realty, inc.
Richard A. Williams (0013347)Susan S. R. Petro (0050558)WILLIAMS 8 SCHOENBERGER co., LLC338 South High Street, 2nd FloorColumbus, Ohio 43215(614) 224-0531(614) 224-0553 (fax)rwi||iams@WSlegalfi{[email protected]:T;Counsel for AppellantFrank and London Insurance Agency
Neal J. Barkan (0020450)BARKAN MEIZLISH, LLP250 E. Broad st., 10m FloorColumbus, Ohio 43215(614) 221-422t(614) 744-2300 (fax)nbarkan@bar|<a.nmejzjis_h.comOf counsel for Plaintiff-AppelleeLGR Realty, Inc.
v.
APP 2
Notice of Appeal of Appellant Frank and London Insurance Agency
Appellant Frank and London Insurance Agency hereby gives notice of appeal to
the Supreme Court of Ohio from the judgment of the Franklin County Court of Appeals,
Tenth Appellate District, entered in Court of Appeals Case No. 15AP» 1072 on July 21,
2016.
This case involves a question of pubtic or great general interest pursuant to Article
IV, Section 2(3)(2)(€) of the Ohio Constitution.
Respectfully submitted,
ls/ Riqhard A. Williams_ _ _Richard A. Williams (0013347)Susan s. R. Petro (0050558)WILLIAMS & SCHOENBERGER CO.» L.L.C.338 South High Street, 2nd FloorColumbus, OH 43215(614) 224-0531(614) 224~0553 (fax)BwiEliams@VyQL<;:ga|firm.c9mSpetro@WSlegalfirm._com.Attorney for Defendant-Appeilee,Frank and London Insurance Agency
CERTIFICATE OF SERVICE
I hereby certify that a copy of the foregoing document has been served by regular
U.S. Mail on this _2"" .day of September 2016 on:
Edwin J. HollemHollem 8< Associates77 North State StreetWesterville, OH [email protected] for Plaintiff~AppeIlantLGR Realty, Inc.
2APP 3
Nea! J. BarkanBarkan & Meizlish250 E. Broad St., 10"' FloorColumbus, OH 43215nbarkan@ba[k_a_aj_mgizlish.comOf counsel for PIaintiff~Appe|IantLGR Realty, Inc.
_/s.; Richard A. williams .Richard A. Williams (0013347)
S:\F{LES\15pw058\Supreme Court pleadings\Notlce of AppeaI.docx
3APP 4
APPENDIX EXHIBIT B:
TENTH DISTRICTCOURT OF APPEALS
DECISION & JUDGMENT ENTRY
I
APP 5
OA230 u- S42
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
LGR Realty, Inc.,
Plaintiff-Appellant,NxD I
l No. 15AP -1072(C.P.C. No. 15CV-3305)
0I
v.
Fra nk8; London Insura nce Age ncy,
De fe nda nt-Appe lle e .(REGULAR CALENDAR)
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Rendered on July21, 2016
O n b r ie f: Holle rn 8a As s ocia te s , a nd Edwin J . Holle m, fora ppe lla nt. Ar g u e d : Edwin J . Holle rn .
On brief: Williams 8z Schoenberger, and Richard A.Williams, for appellee. Argued: Susan Pel7'o .
| -ox3 .
E!5.)9mwQ.Q.<3 APPEAL from the Franldin County Court of Common Pleas°:3oL)Qco
TYACK, J.
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{111} P la intiff-a ppe lla nt, LGR Re a lty, Inc. ("LGR"), a ppe a ls from the Octobe r 28,
2015 de cis ion a nd e ntry gra nting the Civ.R. 12(B)(6) motion to dis mis s of dcfcnda nt~
a ppe lle e , Fra nk & London Insura nce Age ncy ("Fra ul< a nd London") on the ba s is tha t the
compla int wa s ba rre d by the s ta tute of limita tions . For the re a sons tha t follow, we re ve rse
the ju dgme nt of the tria l court.
Factual and Procedurd Background
{112.} The following fa cts a re ta ke n from the compla int file d on April 17, 2015.
{1[ 3} Fra nk a nd London wa s LGR's comme rcia l ins ura nce a ge nt. (Apr. 17, 2015
Compl. a t 'H 2, 6.) LGR procured a cla ims-made Rea l Es ta te Agents Errors and Omiss ions
APP 6
0A2.80 - S43
No. 15AP ~1072 2
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Lia bility Ins ura nce P olicy from Contine nta l Ca s ua lty Compa ny ("Contine nta I") through
Fra nk a nd London. {Comp1. a t 1] 7.) The po1icy's e ffe ctive da te s we re Ma y 12, 2010
through Ma y 12, 2011. Id.
{1[ 4} A lia bility cla im wa s ma de a ga ins t LGR within the policy pe riod, a nd LGR
notifie d Contine nta l a nd de ma nde d tha t Contine nta l provide a de fe ns e a nd inde mnity to
LGR purs ua nt to the policy. (Compl. a t 'II 9 , 10.) Howe ve r, Contine nta l de nie d LGR's
de ma nd on April 26, 2011. (Compl. a t 'H 11.) LGR wa s force d to hire its own counse l a nd
incurre d in e xce s s of $420,000 in a ttorne y fe e s a nd e xpe ns e s to de fe nd its e lf in the
subse que nt la wsuit. (Compl. a t ll11, 12.)
{115} LGR Ble d s uit a ga ins t Fra nk a nd London on April 17, 2015, a lle ging two
cla ims : firs t, tha t Fra nk a nd London a cte d ne glige ntly in fa iling to s e cure the a ppropria te
lia bility policy to prote ct LGR from the la ws uit re fe re nce d a bove ; a nd s e cond, tha t Fra nk
a nd London ne glige ntly mis re pre s e nte d tha t the Contine nta l policy would cove r LGR for
the la wsuit re fe re nce d a bove a nd othe r cla ims tha t a rose from the profe s s iona l bus ine s s
activitie s of LGR. (Compl. a t 'll 14, 17,)
{116} Fra nk a nd London move d for dis inis s a l unde r Ctv.R. 12(8)(6), a rguing tha t
the cla ims we re ba rre d by the four-ye a r s ta tute of limita tions unde r R.C. 2305.o9(D). The
tria l court found tha t the pa rtie s a gre e d tha t the four-ye a r s ta tute of limita tions in RC.
23o5.o9(D) a pplie d to LGR's cla ims . Howe ve r, the pa rtie s dis a gre e d a s to the da te the
a pplica ble s ta tute of limita tions be ga n to run. LGR a s s e rte d the s ta tute be ga n to run on
the da te tha t Fra nk a nd London de nie d the c la im unde r the po licy, while Fra nk a nd
London asse rted the s ta tute began to run on the da te the insurance policy was issued.
{117} The tria l court found tha t LGR could not a va il its e lf of the de la ye d da ma ge s
rule tha t would ha ve me a nt the s ta tu te of limita tions d id not be gin to run until LGR's
cla im wa s de nie d. The tria l court found tha t a lthough the S upre me Court of Ohio ha s not
e xpre ss ly ove rrule d Kunz v. Bucke ye Union Ins . Co., 1 Ohio S t.3d79 (1982), the court ha s
a broga te d the ru le in s ubs e que n t de c is ions , a nd the re fo re the four ye a r s ta tu te o f
limita tions began to run 011 Ma y 12, Qoio, the da te the policy wa s is sue d. S ince LGR did
not tile s uit until April 17 , 2015, a lmos t tive years a fte r the policy wa s is s ue d, the tria l
court de te rmine d tha t the cla ims we re time -ba rre d on the fa ce ofthe compla int.
APP 7
OA230 .- S44
No. 15AP ~1o72 3
Assigmnent of Error
HI 8} LGR file d a time ly notice of a ppe a l a s s igning the following a s e rror:
The tria l court e rre d by gra nting de fe nda nt/a ppe lle e s motionto dis mis s .
StandardofReview
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{119} Our review of a judgment on a Civ.R. 12(B)(6) motion to dismiss for failure
to state a claim is de novo. Mason v. Eowman, 1oth Dist. No. o9AP-995, 2o1o-Ohio~
2325, 'Il7. A motion to dismiss for failure to state a claim is procedural and tests whether
the complaint is sufficient. State ex rel, Hanson v. Guernsey Cty. 8d. of Commrs., 65
Ohio St.3d 545, 548 (1992). In considering a Civ.R. 12(B)(6) motion to dismiss, a trial
court may not rely on allegations or evidence outside the complaint.State ex rel. Fuqua v.
Alexander, 79 Ohio St.3d 206, 207 (1997). Rather, the trial court may only review the
complaint and may dismiss the case only if it appears beyond a doubt that the plaintiff can
prove no set of facts entitling the plaintiff to recover. O'Brien v. Univ. Community
Tenants Union, Inc., 42 Ohio St.2d 242 (1975), syllabus. Moreover, the court must
presume that all factual allegations in the complaint are true and draw all reasonable
iiNerences in favor of the non~1noving party. Mitchell v. Lawson Milk Co., 40 Ohio St.3d
19o, 192 (1988).
{1110} A complaint may be dismissed under Civ.R. 12(B)(6) as time-barred under
the statute of limitations if the face of the complaint makes clear that the action is time-
barred. Steiner v. Steiner, 85 Ohio App.3d 513, 518-19 (4th Dist.1993); Charles v.
Conrad, 10th Dist. No. o5AP441o, 2005-Ohio-6106, 'll 24, Mason at ll 8. Only where the
complaint demonstrates conclusively on its face that the action is time-barred should a
Civ.R. 12(B)(6) motion to dismiss based upon the statute of limitations be granted.
Swanson v. Boy Scouts ofAm.,4th Dist. No. o7CA663, 2oo8-Ohio-1692, ii 6. Schultz u.
Univ. of Cincinnati College ofMed.,1oth Dist. No. o9Ap-goo, 2o1o-Ohio-2071, 'll 36. A
motion to dismiss a complaint under Civ.R. 12(B)(6) which is based on the statute of
limitations is erroneously granted where the complaint does not conclusively show on its
face the action is barred by the statute of limitations.
Landscaping, Inc., 69Ohio St.2d376, 378 (1982).
Velotta v. Leo Petronzio
I.
APP 8
OA230 ... S45
No. 15AP -1072 4
Statute of Limitations, Discovery Rule, and Delayed Damages Rule
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{1111} "Statutes of limitations serve a gate-keeping function for courts by '(1)
ensuring fairness to the defendant, (2) encouraging prompt prosecution of causes of
action, (3) suppressing stale and fraudulent claims, and (4) avoiding the inconveniences
engendered by delay~»specitically, the difficulties of proof present in older cases) "
(Citations omitted.) Flagstar Bank, F.S.8. v. Airline UnionS Mtge. Co., 128 Ohio St.3d
529, 2o11~Oi1io-1961, '[1'7. Nevertheless, "statutes of limitations are remedial in nature
and are to be given a liberal construction to permit cases to be decided upon their merits,
after a court induiges every reasonable presumption and resolves all doubts in favor of
giving, rather than denying, the plaintiff an opportunity to iitig,ate." Flagstar at ii 7;
Harris u. Reedus,10th Dist. No. 15AP-181, 2015-Ohio-4962, 'H 11.
{1l 12} LGR's negligence claims against Frank and London are governed by R.C.
23o5.o9(D), which sets forth a general limitations period for tort actions not specifically
covered by other statutory sections. R.C. 23o5.o9(D) provides, in pertinent part, as
follows:
Exce pt a s provide d for in divis ion (C) of this s e ction, a n a ctionfor a ny of the following ca us e s s ha ll be brought within fouryears a fte r the cause thereof accrued:
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(D) For a n in jury to the rights of the p la in tiff not a ris ing oncontra ct nor e nume ra te d in s e ctions 1304 .35 , 2305 .10 to23o5.12, and2305.14 of the Revised Code[.]
{1] 13} The question then becomes when does a cause of action accrue for purposes
of determining when the statute of limitations begins to run? The general rule is that a
cause of action accrues at the time the wrongful act is committed. Flagstar Bank at 'H 13;
Collins u. Sotka,81 Ohio St.3d506, 507 (1998); Harris v. Liston, 86 Ohio St.3d 203, 205
(1999). "However, in situations where the wrongful act does not immediately result in
injury ordamage, strict application of the general rule can lead to an unjust result." Id. at
205-O6.
{1114} The discovery rule and the delayed damages rule are exceptions to the
general rule designed to avoid this type of unjust result. Although somewhat similar in
APP 9
OA230 -, S46
No. 15AP ~1072 5
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concept, one rule tolls the running of the statute of limitations and the other rule adjusts
when the cause of action accrues. The discovery rule does not alter the fact that a cause
of action in tort accrues when the wrongful conduct occurs. Instead, it tolls the running of
the statute of limitations until the plaintiff discovers, or should have discovered, the
negligent act or the resulting injury. Melnyk v. Cleveland Clinic, 32 Ohio St.2d 198
(1972), syllabus ("Where a metallic forceps and a nonabsorbent sponge are negligently
left inside a patient's body during surgery, the running of the statute of limitation
governing a claim therefor is tolled until the patient discovers, or by the exercise of
reasonable diligence shotNd have discovered, the negligent act.")
{1115} The delayed damages ntie alters the general rule as to when a cause of
action in tort accrues, because the Supreme Court of Ohio has ruled that cause of action
does not accrue until actual injury or damage ensues. Velotta at paragraph two of the
syllabus. ("When negligence does not immediately result in damages, a cause of action for
damages arising from negligent construction does not accrue until actual injury or
damage ensues.") In Velotta, the plaintiff alleged that the builder of his new home
negiigentiy installed underground drainage tile. Five years after the tile was installed,
Veiotta began experiencing serious water drainage problems. The Supreme Court of Ohio
held that "where the wrongful conduct complained of is not presently harmful, the cause
Of action does not accrue until actual damage occurs." Id. at 379. In other words, the tort
was not complete until the actual damage occurred. Thus, even though the buiider's
allegedly negligent construction occurred more than four years earlier, the cause of action
did not accrue and the statute of limitations did not begin to run until actual injury or
damage occurred. Id.
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{1116} LGR's argument is premised upon the Supreme Court of Ohio's ruling in
Kunz, another delayed damages case, decided six months after Velotta. In Kunz, the
plaintitfs brought suit against their insurance agent for negiigently failing to provide the
business equipment coverage they requested.
{1117} The policy at issue was purchased in 1970 and renewed in 1973. In 1975, the
equipment, a hydro-crane, was involved in a job site accident, and Buckeye Union denied
coverage. The plaintiffs tiled suit two years after the accident in 1977. The trial court
APP 10
0A230 v4 S47
No. 15AP -1072 6
granted summary judgment in favor of the insurance agent and agency on the basis that
the four-year statute of limitations set forth in R.C. 2305.09 had expired because the
statute of limitations began to run when the policy was issued, or at the latest, when it was
renewed. The Supreme Court of Ohio reversed, applying the delayed damages rule and
holding that the four-year statute of limitations set forth in R.C. 2305.09 applied, but the
cause of action for negligence did not accrue until the plaintiffs suffered a loss to their
equipment. The court reasoned that the tort was not complete until there had been a loss
to the piaintiff's equipment, because until that event occurred, "such protection could
avail appellants nothing." Kunz at 82, The court indicated that, in such cases, there must
be an injury or harm to the plaintiff as a consequence of the defendantS negligence to
serve as a basis for recovery of damages before the tort becomes actionable and before the
period of limitation commences to run. Id.
{1118} Thus, Kunz stands for the proposition that without an invasion of a legally
protected interest resulting in damages, a plaintiff has no valid cause of action for
negligence against an insurer that breached a duty to secure the desired coverage for a
client. Therefore, the statute of limitations for a claim against an insurance agent or
agency for failing to procure appropriate coverage for a client does not begin to run until
the insured suffers a loss that should have been covered by the policy placed by the agent.
{1] 19} The Supreme Court of Ohio has never expressly overruledKurtz. Ordinariiy,
as an intermediate appellate court, we are not free to disregard binding precedent from
the Supreme Court of Ohio on a case that is directly on point. See generally Coniglio v.
State Med. Bd. ofOhio, ioth Dist. No. o7AP~298, 2007-Ohio~5o18, 'll8 (noting that "[w]e,
as an appellate court, are [bound] to follow binding precedent from the Supreme Court of
Ohio"); State v. McCoy, ist Dist. No. C-090599, 2o1o~Ohio-5810, ii 62; State v. Burke,
ioth Dist. No. o4AP~1234, 2005-Ohio» 7o2o, 'li 26.
Frank and London Contend Kunz Implicitly Overruled
{1[20} Frank and London, however, assert that Kunz has been abrogated by
subsequent decisions of the Supreme Court of Ohio in the context of professional
negligence. In particular, Frank and London rely on Flagstar Bank, a certified conflict
question asldng when the statute of limitations begins to run against a property appraiser
in a case involving professional negligence. In that case, the court held that a cause of
APP 11
OA230 .-. S48
No. 15AP -1072 7
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action for professional negligence against a property appraiser accrues on the date that
the negligent act is committed, and the four-year statute of limitations begins to run on
that date. Id. at syllabus. The court 'm Flagsfar Bank explicitly rejected the delayed
damages rule in that case, but stopped short of explicitly ovenWing Kunz.
{1l21} In Flagstar Bank, the court discussed application of the delayed damages
rule and characterized it as a timing issue; when all the elements of a cause of action have
come into existence. Flagsfar Bank at it 19, The Flagstar Bank court cited Kunz for the
proposition that a tort is ordinarily not complete until there has been an invasion of a
legally protected interest of the plaintiff. Id. at 'H 20, citingKunz at 81 .
{'[i 22} The Supreme Court of Ohio then discussed cases from the Fifth and Sixth
District Courts of Appeals that applied the delayed damages rule to claims for professional
negligence involving accountants, negligent tax preparation, and a cause of action against
a title agency for altering and recording a mortgage. Gray u. Estate of8arry, 101 Ohio
App.3d 764 (6th DisL1995)(certified public accountant); Fritz u. Cox, 142 Ohio App.3d
664 (5th Dist.2oo1)(tax preparation); JP Morgan Chase Bank NA v. Lanning, 5th Dist.
No. 2oo7CAoo223, 2oo8~Ohio-893 (title agency).
{1[23} It then contrasted those cases with a case from the First District Court of
Appeals, Hater v. Grczdison Div. of McDonald 8: Co. Sec., 101 Ohio App.3d 99 (ist
Dist.1995) (involving investment dealers, accountants, an appraiser, and a builder), in
which the court declined to apply the delayed damages rule. The Supreme Court of Ohio
mentioned other courts that have rejected application of the delayed damages rule in the
professional negligence context. Riedel v. Houser, '79 Ohio App.3d 546, 549 (3d.
Dist.1992) (certiited public accountants);Schnippel Constr. u. Profift,3d Dist. No. 17-09-
12, 2009-Ohio~59o5 (sale of an employee benefit plan); Fronczalc v. Arthur Andersen,
L.L.P.,124 Ohio App.3d 240, 244 (10th Dist.1997)(accountants); Bellv. Holden Survey,
Inc., 7th Dist. No. 729 (Sept. 29, 2000) (suiveyor); James v. Partin, 12th Dist. No.
CA2oo1-11-086, 2.002-Ohio-2602 (surveyor).
{1124} The court stated that it had implicitly rejected the delayed damages rule in
Thornton v. Windsor House, Inc., 57 Ohio st.3d 158 (1991), a case 'involving alleged
negligence in performing Medicaid audits, Flagstar Barzlc at Tl 26. The court then
APP 12
0A230 ... S49
No. 15AP -1072 8
re ite ra te d the rule in a broa de r fa s hion tha t "[a ] ca us e of a c tion for pre fe s s iona l
negligence accrues when the act is corrnnitted." Id. at 'H27.
{1[ 25} The syllabus of the Flags tar Bank decis ion is written more na rrowly and
s tates that'
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A cause of action for professional negligence against aproperty appraiser accrues on the date that the negligent act iscommitted, and the four-year statute of limitationscommences on that date. (R.C. 23o5.o9(D) and InvestorsREIT One v. Jacobs (1989), 46 Ohio St.3d 176, 546 N.E.2d206, followed.)
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{1[ 26} The ques tion before us is whether Kunz has any continued viability in light
of the decis ion inFlags ta r Bank.
{1[ 27} On the one hand, in Flags ta r Bank, the Supreme Court of Ohio re jected
cas es from various courts of appea ls applying the de layed damages rule to cia ims of
profess ional negligence in various profess ions . The court inserted broad language into its
decis ion tha t "[a ] caus e of action for profes s iona l negligence accrues when the act is
committed." Id. a t 'Il 27.
{1128} On the other hand, the syllabus of Flags tar Bank was limite d to cla ims of
profess ional negligence agains t a property appraiser, and the Supreme Court of Ohio le t
s tand Kunz, an older case applying the delayed damages rule to a negligence cause of
action involving a breach of duty by an ins urance agent who fa iled io provide prope r
coverage for a client.
{1[ 29} In the pres ent cas e , we a re faced with a cla im of negligence aga ins t an
insurance agency for allegedly failing to procure proper coverage for a client. LGR seeks
to dis tingtdsh Flags far Ba nk, arguing that an insurance agent is not a profess ional like a
lawyer or an accountant and therefore its cla im is mere ly one of ordinary negligence to
which the delayed damages rule should apply. LGR's argument is undercut by language
from Kunz itself, in which the court s ta ted, "{t]he ins tant action is roughly analogous to a
malpractice action in which a party claims that his accountant, lawyer, or doctor has failed
to perform the profess ional services that had been contractually bargained for." Kunz a t
APP13
OA230 ,., S50
No. 15AP -1072 g
80. Thus , we be lieve tha t LGR's cla im is one of profe s s iona l negligence aga ins t Frank and
London.
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{1i 30} Fra nk a nd London conte nd tha t the de la ye d da ma ge s rule s hould not be
a pplie d in this ca se be ca use LGR suffe re d imme dia te e conomic da ma ge a t the time the y
purcha s e d the a lle ge dly de fe ctive cove ra ge . Fra nk a nd London re ly on Cha nd le r v.
S chriml, 10th Dis t. No. 99AP -1006 (Ma y 25, 2000), a nd Union S a u. Ba nk v. La wye rs
Title Ins . Corp ., 191 Ohio App.3d 540, 2o1o~O1iio-6396 (10th Dis t.), to s how tha t LGR
sus ta ined immedia te economic damage .
111811 In Cha ndle r, the owne rs of a duple x a nd the s e lie r's re a l e s ta te compa ny
repre sented to the buye r, Chandle r, tha t the prope rty was zoned for dua l family use , but in
re a lity it wa s zone d for s ingle fa mily use . Cha ndle r discove re d the zoning is sue only a fte r
he ha d purcha s e d the duple x a nd la te r a tte mpte d to s e ll his home . He a rgue d tha t his
ca use of a ction did not a ccrue until he a tte mpte d to se ll his home , but this court rule d tha t
he suffe red damages a t the time he bought the duplex because he s ta ted in the compla int
tha t he would not ha ve pa id the price he did ha d he known of the zoning. Thus , from the
time he purcha s e d the duple x, he a ctua lly owne d le s s tha n he be lie ve d he did, a nd the
de layed damages rule was inapplicable .
{1132} In Union S a vings Ba nk, th is court ru ie d tha t a cla im a lle ging ne glige nce
a nd a bre a ch of tiducia ry duty a ga ins t a title compa ny wa s time ba rre d be ca use the ca use
of a ction a ccrue d a t the time the home owne rs close d on the ir loa n a nd the title compa ny
fa ile d to subordina te two mortga ge s , not whe n the prope rty we nt into fore closure a nd wa s
sold a t a she riffs sa le . This court indica ted tha t the pla intifi'~banl< suffe red damages a t the
time of the clos ing whe n it a s sume d a s e cond lie n pos ition due to the de fe nda nt's fa ilure
to s ubordina te two lie ns . The court a ls o s ta te d tha t this court ha s re je cte d the de la ye d
da ma ge s the ory. Id. a t 'H29.
{1i33} Fra nk a nd London a rgue tha t, a t the time LGR purcha s e d its policy, it wa s
pa ying pre miums for cove ra ge tha t did not e xis t. Thus , a ccording to P ra nk a nd London,
LGR owne d le s s tha n it be lie ve d it ha d purcha s e d e ve n though it d id not re a lize the
diminis he d va lue of its purcha s e until ye a rs la te r whe n its cla im wa s de nie d. Fra nk a nd
London cla im tha t LGR pa id for s ome thing of le s s e r va lue tha n wha t the y be lie ve d the y
we re purcha s ing. According to Fra nk a nd London, the fa ct tha t LGR did not re a iize its
APP 14
OA230 - S51
No. 15AP -1o72 10
P
1
zo
injury until much later docs not change the fact that the injury occurred when they
pwrchased a policy of insurance that did not provide a defense and indemnity for certain
lawsuits.
{1134} But prior tio the denial of the claim, what injury did LGR actually suffer?
Perhaps it had an expectancy interest in the difference in premiums between a policy that
covered lawsuits involving Plaza Properties versus the cost of premiums for a policy that
did not cover the cost of lawsuits involving Plaza Properties. However, LGR's claim
against Frank and London does not sound in contract, but in tort. Kunz at 80. A cause of
action premised upon negligence necessitates legal harm. Until LGR suffered a loss, in
this case having to defend a lawsuit at its own expense, the tort was not complete. A cause
of action in negligence is not complete until the plaintiff suffers some actual damage
proximately caused by the defendantS wrongful conduct. We believe any apparent
inconsistency between thiscase, Chandler and Union Savings Eank is distinguishable on
the basis that there was no true economic loss to LGR until the claim was rejected. This
puts the instant case squarely within the framework ofKunz.
Er -
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InsuranceCasesDecided after Flagstar
{1135} Cases decided a fte r Fla gs ta r Ba nk s how e ros ion of the de la ye d da ma ge s
rule but a lso tha t the re is some split of authority a s to whe the r the de layed damages rule is
s till va lid with re s pe ct to c la ims a ga ins t ins me rs fo r fa ilu re to p rocure cove ra ge a s
re que s te d.
{1136} In Infocis ion Mgt. Corp. u, Micha e l D. S a mmy Ins . Age ncy, Inc., 9 th Dis t.
No. 26939, 2014-Ohio-4653, the pla intiffs a lle ge d ne glige nce , bre a ch of tiducia ry duty,
a nd vica rious lia bility a ga ins t the ir ins ura nce a ge ncy for a n a lle ge d fa ilure to ma inta in
vdmicie lia bility ins ura nce cove ra ge for its e mploye e s tra ve ling on compa ny bus ine s s in
le a s e d ve hicle s or pe rs ona l ve hicle s . The Ninth Dis trict Court of Appe a ls rule d tha t e ve n
in d is cove ry ru le a nd de la ye d da ma ge s a s s e rtion s ce na rios , c la ims of p rofe s s iona l
ne glige nce re ma in gove rne d by R.C. 2305.09, a nd mus t be tile d within four ye a rs from the
time the dis pute d a ction is committe d. Id. a t 'li 28, citing Fla gs ta r Ba nk.
{1 i3 '/} In Aucke rma n v. Roge rs , 2d Dis t. No. 2o11~CA~23, 2012-Ohio-23, the
pla intiff brought cla ims of ne glige nce , bre a ch of iiducia iy duty, "de trime nta l re lia nce ,"
a nd "e rrors a nd omi.s s ions " a ga ins t he r ins ura nce a ge nt a lle ging a fa ilure to provide he r
APP 15
OA230 ,- S52
No. 15AP -1072 1 1
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with uninsured/underinsured motorist coverage despite her request for "full coverage" on
her automobiles. The Second District Court of Appeals determined that the Supreme
Court of Ohio no longer applies the discovery rufie or the delayed damages rule to claims
of professional negligence and thereby implicitly overruled Kunz in the Fiagstar Bank
case.Auckerman at ii 17. The Auclcerman court could "see no principled reason why an
insurance agent's professional negligence should be treated differently" than the
appraisers professional negligence in FlagstarEank. Auckerman at 'li 18.
{9138} The dissent inAuckerman argued thatFlagstar did not overniieKunz and
therefore remained good law. Auckerman at 1144. Applying the delayed damages rule,
the dissent contended that the agent's failure to procure the proper coverage became
actionable in tort only when the plaintiff was involved in an accident caused by a negligent
driver and as a result suffered monetary losses. Id. at li49.
{{{ 39} In Vinecourt Landscaping, Inc. v. Kleve,11th Dist. No. 2o13,G~3142, 2013-
Ohio-5825, a landscaping company and its owners brought suit against their insurance
agent and agency for negligence and breach of iiduciaiy duty for failing to recommend
greater insurance coverage for their business when the Vinecourts thought they had full
coverage. The Vinecourts alleged the statute of limitations began to run when a fire in
their warehouse caused significant damage to the building and their business property,
and not when the agent allegedly negligently failed to recommend greater coverage.
{1i 40} The court of appeals acknowledged that, while the Supreme Court has not
expressly overruled Kunz, it has declined to follow its holding in other causes of action
alleging professional negligence. The court also acknowledged the reasoning of the
Second District Court of Appeals in Auckerman. However, the court noted that the
syllabus of Fiagstar Bank was limited to a cause of action for professional negligence
against a property appraiser and, rather than overruiing Kunz, the Flagstar Bank court
cited the case with ostensible approval in the course of discussing the delayed damages
rule. Wnecourt at li 22. The Eleventh District Court of Appeals then declined to
extrapolate an intent to overrule Kunz, and held that the cause of action accrued when the
Vinecourts sustained damages as a result of the tire. Id. at 'li 23, 26.
APP 16
0A23O -. S53
No. 15AP ~1072 12
Conclusion
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{1141} We agree with the reasoning of the majority inVinecourt and the dissent in
Auckerrnan. We do not believe the Supreme Court of Ohio has completely abandoned the
delayed damages rule set forth inKunz, and it is not our role as an intermediate appellate
court to overrule a precedent that the Supreme Court of Ohio cited with approval in the
very case Frank and London asserts abrogates the rule. Given the conflict among districts
in Ohio about the continued validity of the delayed damages rule in the insurance context,
the Supreme Court of Ohio may decide at some point to abandon the rule announced in
Kunz, but today we are compelled to apply it.
{1[42} We also believe there are strong policy reasons for applying the four-year
statute of limitations in the manner set forth in Kunz. Frank and London is asking this
court to consewatively apply the statute of limitations, and the Supreme Court of Ohio in
Flagstar' Bank indicated that statutes of limitations are remedial in nature and are to be
given a liberal interpretation to allow cases to be decided on the merits. Id. at li7.
{1143} In addition, if we were to adopt the position espoused by Frank and
London, the statute of limitations could easily expire in many casesbefore a cause of
action becomes legally actionable.
{1144} Consequently, we hold that LGR's cause of action for negligence against
Frank and London did not accrue until April 26, 2o11 when Continental Casualty denied
LGR's demand for defense and indemnity. Since the lawsuit was tiled on Aprii 17, 2015,
the complaint was timely under the t̀ our~year statute of limitations in R.C. 2305.09 (D).
{1145} The sole assignment of error is sustained, and the judgment of the Franklin
County Court of Common Pieas is reversed and remanded for further proceedings in
accordance with this decision.
mua.»8<:8:soQ::>8'C39JEEcmL.
Judgment reversed;causeremandedforjizrfher proceedings.
HORTON, J ., concurs .DORRIAN, P .J ., concurs in judgme nt only.
APP 17
0A230 - U7
IN THE CO URT O F AP P EALS O F O HIO
TE NTH AP P E LLATE DIS TRICT
4lLGR Realty, Inc.,
Plaintiff-Appellant, *l
NN0 No. 15AP -1072
(C.P.C. No. 15CV-3305)
(REGULAR CALENDAR)
DP'DD3.<-n
I
E
v.
Fra nk8z London Insura nce Age ncy,
De fe nda nt-Appe lle e . Il
1
N
.HJDQMENT ENTRY
For the re a s ons s ta te d in the de cis ion of th is court re nde re d he re in on
July21, 2016, appe l1ant's sole a ss ignment of e rror is sus ta ined, and it is the judgment and
orde r of this court tha t the judgme nt of the Fra nklin County Court of Common P le a s is
reve rsed and the ca se is remanded for furthe r appropria te pro ceedings in accordance with
law consis tent with sa id decis ion. Costs sha ll be assessed aga ins t appe llee .
TYACK & HO RTO N, J J .DO RRIAN, P .J . , concurs in judgm e nt only.
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APP 18
OA230 U8
N
D Tenth District Court of Appeals
Date: 07-21-2016
Cas e Title : LG R RE ALTY INC -VS - F RANK AND LO NDO N INS URANCEAG E NCY
15AP 00107/
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Ca s e Num be r:
Type : J EJ -. J UDGMENT ENTRY9N(b:9J
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/s / Judge G. Gary Tyack
Electronically signed on 2016 Jul 21 page 2 of 2>~o-rC39Jc¥c(0$4.1.
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APP 19
APPENDIX EXHIBIT C:
FRANKLIN COUNTYCOURT OF COMMON PLEAS
DECISION & ENTRY GRANTINGMOTION TO DISMISS
APP 20
OC745E8F6ankIin County Ohio Clerk of Courts of the Common pleas» 2015 Oct 28 10:43 AM-15CV003305
IN THE CO URT O F CO MMO N P LEAS , F RANKLIN CO UNTY, O HIOc1v1L DIVIS ION
LG R RE ALTY, INC. ,
P la intiff,Ca se No. 15CV-3305
Judge BeattyF R ANK & LO NDO N INS UR ANC E
AG E NC Y,
Defendant.
DECISION& ENTRY GRANTING MDTION TO DISMISS OF DEFENDANT FRANK &LONDON INSURANCE AGENCY
De fe nda nt Fra nk 81, London Insura nce Age noy's ("Fra nk & London") fully brie fe d Civ.R.
lZ(B)(6) Motion to Dismiss presents the question of whether the applicable statute of limitations
begins to run on the date an insurance policy is issued or on the date that Frank & London denies
a cla im under the policy. The ana lysis th8t follows presents the Coult's decis ion on the issue .
I. BACKGROUND
Fra nk & London wa s P la jntiffLGR Re a lty, Inc.'s ("LGR") comme rcia l insura nce a ge nt.
(Cmplt. at1] 6). LGR procured a claims-made Real Estate Agents Errors and Omissions Liability
Insura nce P olicy ("P olicy") from Contine nta l Ca sua lty Compa ny ("Contine nta l") through Fra nk
& Loudon, Id. a t 1] 7. The P o1icy's e ffective da te s were May 12, 2010 through May 12, 201 l. Id .
a t W 7~8. LGR notifie d Contine nta l of a lia bility cla im within the policy pe riod a nd "de ma nde d
tha t Continenta l .provide a defense and indemnity to" LGR pursuant to the Policy. Id. at W9~
10. On April 26, 2011, Contine nta l de nie d LGR's de ma nd. Id. a t1[ 11. LGR the n pa id more tha n
$420,000 for attorney's fees to defend the liability claim. Id. at 1] 12.
1
v.
APP 21
OC745E8Fanklin County ohio Clerk ot Courts of the Common Pleas- 2015 Oci 28 10'43 AM-15CV008305
LGR initia te d this a ction on April 17, 2015. LGR's Compla int conta ins two counts~
negligence and negligent misrepresenta tion, LGR firs t a lleges Frank & London breached its duty
to act with reasonable diligence by fa iling to obta in an insurance policy tha t conta ined de fense
and indemnifica tion cove rage . Id. a t 111] 5-14. LGR next a sse rts tha t Frank & London
negligently misrepresented tha t the Policy did conta in such coverage , ld. a t 'i|1[ 15- 21.
Frank & London moves for full dismissai, arguing that the applicable four year statute of
limita tions unde r R.C. § 2305.09(D) expired on May 12, 2014, a lmost a yea r be fore the ins tant
filing, (MTD a t 4). LGR oppose s . S e e Opp.
H . STANDARD OF REVIEW
Civil R, 12(B)(6) te s ts the sufficie ncy of the cla ims a sse rte d in a compla int. Dismissa l of
a complaint pursuant to Civ, R, 12(B)(6) is appropriate only where it appears beyond a doubt
from the four corners of the complaint that the complaining panty can prove no set of facts in
support of the cla im a t issue tha t would entitle him to re lie f. S ee York v. Ohio S la te Highway
P a tro l, 60 Ohio S t.3d 143, 144 (1991). The Court, "in oons truing a compla int upon a motion to
dismiss for failure to state a claim, must presume that all factual allegations of the complaint are
true and make all reasonable inferences in favor of the non-moving party," Mitchell v. Lawson
Milk Co., 40 Ohio S t. 3d 190, 192 (1988). "[T]he tria l court may cons ide r only the s ta tements
and facts conta ined in the pleadings, and may not consider or re ly oN evidence outside the
com pla int." P owe ll v. Vorys , 131 Ohio App. 3d 681, 684 (10th Dis t. 1998).
2
AP P 22
OC745E8Fank|inCounty Ohio Clerk of Courts of the Common Pleas- 2015 Oct 28 10:43 AM-15CV003305
III. ANALYSIS
Both sides agree R.C. §2305.09(D)'s four~year statute of limitations governs this action.1
The disagreement centers upon the date upon which the statute began to run. Frank & London
relies onFlags/a/* Bank v. Airline Union 's Mor.fgage Co., 128 Ohio St.3d 529, 2011 Ohio 1961,
947 N.E.2d 672, to pos it tha t the prope r da y is Ma y IZ, 2010-the da te the P olicy is ma rke d a s
issued. (Mot. a t 4). So, this April 17, 2015 filing is beyond the fou1'~yea1° period and too la te , Id.
According to LGR, however, Kunz v. Buckeye Union Ins. Co. (1982), 1 Ohio St.3d79, 81, 437
N.E.2d l194 establishes that the correct day is April 26, 2011, the date Continental declined to
defend and indemnify LGR. (Opp. at 3). Thus, this case is timely Med.
"General1y, a cause of action aocnles and the statute of limitations begins to run at the
time the wrongful a ct wa s committe d." Collins v. S o!/ra (1998), 81 Ohio S t.3d 506, 507, 1998
Ohio 33 i, 692 N.E.2d 581. LGR relies on delayed-damages rule to argue its proffered date.2
"Unde r the de layed-damages rule , 'whe re the wrongthl conduct compla ined of is not pre sently
harmful, the cause of action does not accrue until actual damage occL1rs."' Cosiigcm v. John
Ha ncock Ins , 2015 US , Dis t. LEXIS 38555, *20 (ND. Ohio Ma r, 26, 2015)(quoting Ve lolla v.
Leo Petronzio Landscaping, 11c. (1982), 69 Ohio St.2d 376, 379, 433 N.E.f2.d l47).3 "In other
words, a cause of action for negligence is not complete, and the statute of limitations does not
begin to run, until there has been an injury." Cos/igcm, 2015 U.S. Dist. LEXIS 38555, *20.
1 LGR states there is "no dispute" a four-year statute of limitations applies, (Opp. at 3). TheCouxt therefore assumes LGR's subsequent citation to R.C. § 2305.07 is a typographical error, asthat section provides for a six~year statute of limitations for actions "upon a contract not inwriting."2 LGR does not assert the discovery rule applies. See Opp.3 Tile parties did not cite to any on-point cases from the Southern Distiict, and the Court couldfind none, Additionally, the Cotut could not find any relevant cases from the Tenth Districteither.
3
APP 23
OC745E8I8ankIin County Ohio Clerk of Courts of the Common Pleas- 2015 Oct 28 10:43 AM-15CV003305
The Ohio Supreme Court applied the delayed damages rule inKzllfz, The Kunz Court
addressed the issue of whether plaintiffs' commercial insurance insurer failed to provide certain
requested coverage . Id, The Court noted "the s ta tute of limita tions a s to torts does not usua lly
begin to run until the tort is complete. A tort is ordinarily not complete until there has been an
inviisiolx of a legally protected interest of the plaiutil`f." Kzmz, 1 Ohio St.3d at 81. As a result, the
Court concluded tha t "the re was no invasion, or int`1fngement upon or impa irment of [a lega lly
protected interest] until there had been a loss to [the plaintiffs'] equipment because until [the fire]
occurre d such prote ction could a va il [the pla intiffs ] nothing. The ir inte re s t wa s in ha ving
protection when it was needeci." Id. a t 81-82,. As a result, LGR argues its inte rest din! not a rise
unde r Kunz until Continenta l declined indemnifica tion and de fense cove rage .
However, Frank & London point out that several cases have since eroded the
a pplica bility ofKzmz. In pa rticula r, Fra nk 8L London re ly on Fla gs M/', whe re in the Ohio
S upreme Court holds "[a ] cause of action for profess iona l negligence aga inst a prope rty
appra iser accrues on the da te tha t the negligent act is committed, and the four~year sta tute of
limitations commences on that date." Flagsmr, 128 Ohio St.3d 529, at syllabus, see also Mot.
generally. In other words, the delayed-damages nlle is inapplicable to professional negligence
ca se s . Id.
The Cosligan Court nicely summarized the viability of Kunz after F/agstar as follows:
Although the Supreme Court has not expressly overruled
Kunz, it has since declined to follow the holding in other causes of
action alleging professional negligence that are governed by R.C.
2305.09 Ni Flagsfar, the Court held that '[a] cause of action
for professional negligence against a property appraiser accrues on
the date that the negligent act is committed, and the four-year
statute of limitations commences on that date' Id. at syllabus. The
Courl in Flagsfar flatly rejected the application of die 'delayed-
damages rule' in the case and expressly overruled several cases
4
l
APP 24
OC745Eganklin CountyOhio Clerk of Courts of the Common PIeas~2015 Oct 28 10:43AM-15CV003805
(othe r than Kunz) applying the rule to profe ss iona l negligence
cases.
{T]he Second District Court of Appeals reviewed theforegoing case law and concluded that theFlagszfar Courtimplicitly overruledKunz with regard to application of thedelayed-damages rule in cases of professional negligence governedby R.C. 2305.09 [.42:cla»rrmctiz v. Rogers,20l2~0liio» 23, ii i7(Zd I)ist.)]. The court pointed out that the Kunz Courtcharacterized a negligent~procurement claim against an insuranceagent as one alleging negligent performance of 'professionalservices,' ... and that 'a cause of action for professional negligenceaecmes when the act is con1mitted.' As a consequence, the[Second District] court reasoned that Flagstar 'foreclosed theapplication of a discovery or a delayed-damages rule in casesinvolving professional negligence governed by R.C. 2305.09.'...The [Second District] acknowledged that, even thoughFlagstal'addressed an appraiser's professional negligence and ImfestorsREIT One addressed accountant negligence, it saw 'no principledreason why an insurance agent's professional negligence should betreated differently'
Cosligan, 2015 U.S. Dist. LEXIS 38555, *21 -25 (ND. Ohio Mar. 2.6, 2015), see also Investors
REH"One v. Jacobs, 46 OhiQ St.3d i76, 182, 546 N.E.2d206 (1989). As a result, the Cosligan
Court concluded "that Flagstar foreclosed the application of a discovery or a delayed-damages
rule in cases involving professional negligence governed by R.C. 2305,09." Id, at *23 .
"W hi le }9?ugs!ar. and InvesfrnrsRET?" One dealt with accouutanis and appraisals, there i s
no reason to limit the Court's miing to those professions." Life 1?me Ffmess, Inc. v. Chagrin
I/kzlley E 1 3 8 LID. , 2 0 1 4 u . s . Dis t . LE XIS 168216, *7 (ND. Ohio De c. 4, 2014). Inde e d,
"Flagslcrr expressly abrogated cases applying the de layed-damages rule in previous cases
involving accountants in Grqy v. Estate ofBar1y, 101 Ohio App.3d 764, 656 N.E.2d 729 (6th
Dist. 1995), and P)'ilz v. Brzmer Cox, L.L.P., 142 Ohio App.3d664, 756 N.E.2d 740 (Sth Dist.
2001), and title companies and loan servicers in JP Mo1'gan Chase Bank NA v. Lcmning, 2008
Ohio 893, 2008 WL 588804 (5th Dis t,)." Id, a t * 23-24. As such, Cos ligcm note d tha t "[a ]lthough
5
an
APP 25
OC745Egganklin County Ohio Clerk of Courts of the Common Pleas- 2015 Oct 28 10:43 AM-15CV003305
the Ohio Supreme Court did not expressly overruleKzmz, the Flagstar Court vacated three
appellate court opinions predicated upon the legal reasoning first articulated in Kunz." Id. at *
24-25.
Accordingly, underFlagsla/', Costigcm, Investors REIT One, Life Time Fitness and
Auckerman, this Court declines to apply the delayed damages rule to this case involving
insurance agents. Because the instant matter was filed more than four years after May 12, 2010,
the case is dismissed as untimely under R,C. § 2235.09(D).
IV. CONCLUSION
Frank &1 London's Motion to Dismiss with prejudice is GRANTED.See Geolge v. Siaie,
2010--Ohio~5262, 'lf 14 (10th il*isL)(holding a Civ.R. l2(B)(6) dismissal is with prqiudice).
IT IS S0 ORDERED.
Copies to:
All counsel (via e-filing)
6
APP 26
0C'745E8Fanklin CountyOhio Clerkof Courts of the Common Pleas- 2015 Oct28 10:43 AM-15CV003305
Type :
Date:
CaseNumber:
Ca s e Title :
E NTR Y
LG R RE ALTY INC -VS - F RANK AND LO NDO N INS URANCEAG E NC Y
15CV003305
10-28-2015
Franklin County Court of Common Pleas
It Is S o Orde red.
4 s *Z
. x.s<l,~n ~."' I1..
"¢
ls/ Judge Laurel A. Beatty
Eiecironically signed on2015.0c!.28 page 7 of 7
APP 27
0c:'14.5E8FankIin County Ohio Clerk of Courts of the CommonPleas- 2015 Ocl 28 10:43 AM-15CV003305
Court Disposition
Case Number: 15CV003805
Case Style: LGR REALTY INC ~VS- FRANK AND LONDONINSURANCE AGENCY
Case Terminated: 08 - Dismissal with/without prejudice
Motion Tie Off information:
1. Motion CMS Document ld: 15cv0033052015-064899970000Document Title: 06-18-2015-MOTION TO DISMISS -
DEFENDANT: FRANK AND LONDON INSURANCE AGENCYDisposition: MOTION GRANTED
APP 28
APPENDIX EXHIBIT D:
OHIO REVISED CODE § 2305.092FOUR-YEAR LIMITATIONS FOR
CERTAIN ACTIONS;FIVE-YEAR LIMITATION
FOR IDENITYFRAUD
APP 29
History
§2305.09 Four-year limitation for certain actions; five-year limitation foridentity fraud.
Page's Ohio Revised Code Annotated > Title 23: Courts -- Common Pleas > Chapter 2305:Jurisdiction; Limitation ofActions > Torts
Current with Legislation passed bv the 132st General Assembly and filed with the Secretary of State through file 5(SB 84).
(D) For an injury to the rights of the plaintiff not arising on contract nor enumerated in sections 1304,35,2305. 10to 2305. 12, and 2305. 74of the Revised Code,
(E) For relief on the grounds of a physical or regulatory taking of rea! property.
Except as provided for in division (C) of this section, an action for any of the following causes shall bebrought within four years after the cause thereof accrued:
(A) For trespassing upon real property;
(B) For the recovery of personal property. or for taking or detaining it,
(C) For reiief on the ground of fraud, except when the cause of action Is a violation of section 2913.49 ofthe Revised Code, in which case the action shaii be brought within five years after the cause thereof8ccrued,
An action for professional negligence against a registered surveyor shalt be commenced within fouryears after the completion of the engagement on which the cause of action Is based.
If the action is for trespassing under ground or injury to mines, or for the wrongful taking of personalproperty, the causes thereof shall not accrue until the wrongdcer is discovered, nor, if it is for fraud,until the fraud is discovered.
,...»-1 w- .. , .
ORC Ann. 2305.09
...»»~».
RS § 4982, S8¢S 541; S&C 948; 51 v 57, § 15, 64 v 145; 81 v 210; GC § 11224,112v 237; Bureau of CodeRevision, 10-1-53, 129 v 13(177) (Eff 7-1-62>, 145 V S 147. Eff 8-19-94, 150V H 161, § 1, eff.5-31-04,.152 V H 451§ 1, eff.9-1-08, 2014 H8 483, § 101.01, eff. Sept.15, 2014.
Page's Ohlo Revised Code AnnotatedCopyright ©2017 Malihew Bender & Company, Inc.. a member of the LexisNexis Group. All rights reserved.
End of Document
David Oberly APP 30