Nationwide Mut. Fire Ins. Co. v. Delacruz , 2010 Ohio 6068 ( 2010 )

[Cite as Nationwide Mut. Fire Ins. Co. v. Delacruz, 2010-Ohio-6068.]
IN THE COURT OF APPEALS OF OHIO
THIRD APPELLATE DISTRICT
HANCOCK COUNTY
NATIONWIDE MUTUAL FIRE
INSURANCE COMPANY,
PLAINTIFF-APPELLANT, CASE NO. 5-10-17
v.
ALFREDO J. DELACRUZ, JR., OPINION
DEFENDANT-APPELLEE.
Appeal from Findlay Municipal Court
Trial Court No. 09-CVE-1216
Judgment Affirmed
Date of Decision: December 13, 2010
APPEARANCES:
Steven J. Zeehandelar for Appellant
Bret A. Spaeth for Appellee
Case No. 5-10-17
WILLAMOWSKI, P.J.
{¶1} Plaintiff-appellant, Nationwide Mutual Fire Insurance Company
(“Nationwide”), appeals the judgment of the Findlay Municipal Court granting
summary judgment in favor of defendant-appellee, Alfredo J. Delacruz, Jr.
(“Delacruz”). The trial court found that Nationwide’s claim for indemnification
against Delacruz was time-barred by the statute of limitations and that Nationwide
was not entitled to recovery on the basis of unjust enrichment. For the reasons set
forth below, we affirm.
{¶2} On February 24, 2001, Delacruz and Nationwide’s insured, Joyce
Alt (“Alt”), were involved in an automobile accident. Delacruz suffered from
injuries as a result of the accident. Delacruz was insured by Guide One (“Guide
One”), which paid his medical expenses in the amount of $5,000.00. On February
8, 2003, Guide One submitted a subrogation claim to Nationwide for the
$5,000.00 it paid on Delacruz’ behalf. Both Nationwide and Guide One are
members of Arbitration Forums, Inc., a private organization used to settle claims
between insurers through arbitration. Arbitration Forums requires its members to
forego litigation and arbitrate any medical payment subrogation claims through
Arbitration Forums.
{¶3} Delacruz filed a civil suit against Alt in the Hancock Court of
Common Pleas (case number 2006-CV-203) within the two-year statute of
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limitations for bodily injury claims. The arbitration between Nationwide and
Guide One was placed in deferment until the resolution of the civil action between
Delacruz and Alt. Prior to trial, Nationwide settled Delacruz’ claim against Alt for
$15,000.00. Nationwide maintains that the settlement amount included
reimbursement of the $5,000.00 in medical expenses paid by Guide One on
Delacruz’ behalf.
{¶4} On March 19, 2007, Delacruz signed a “Receipt and Release” in
exchange for Nationwide’s payment of the $15,000.00 settlement. The “Receipt
and Release” provided, in pertinent part:
It is expressly understood and agreed that this Release includes,
but is not limited to, a release of all claims for property damage
and personal injuries sustained by Alfred DeLaCruz arising
from the [February 24, 2001] accident, including but not limited
to, * * * all third party subrogation claims, including, but not
limited to J.W. Hutton, Inc. for Wassau Benefits, Inc., Guide
One Insurance, and Therapy Works, and any and all further
expenses and damages of whatsoever nature sustained by the
undersigned, or on his behalf, or by anyone asserting a
derivative claim, as a result of the aforementioned accident.
***
It is further expressly understood and agreed that the
undersigned agrees to indemnify and hold harmless forever
[Joyce Alt], his [sic] agents, heirs, executors, administrators,
successors, insurers and assigns, and every other related person,
firm and corporation, against loss from any and all such further
claims, demands or actions, in law or in equity, that may
hereinafter be made or brought by the undersigned, or by
anyone on his behalf, or by anyone asserting a derivative claim
or third party claim for subrogation against [Joyce Alt] or any
other related person, firm and corporation, for the purpose of
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enforcing a further claim for damages of any kind sustained by
the undersigned in consequence of the aforementioned collision.
(Emphasis added).
{¶5} After Nationwide and Delacruz reached a settlement, the arbitration
of Guide One’s subrogation claim against Nationwide was placed into active
status. On April 3, 2007, an arbitration decision was rendered in favor of Guide
One in the amount of $5,000.00, the amount of Guide One’s purported subrogated
interest.1 On May 28, 2008, over a year later, Nationwide paid the full $5,000.00
arbitration award to Guide One.
{¶6} On May 27, 2009, Nationwide filed this action, seeking
reimbursement of the $5,000.00 from Delacruz. Nationwide’s complaint alleged
that Delacruz had breached the terms of the “Receipt and Release” by failing to
indemnify Nationwide for its payment of Guide One’s subrogation claim.2
Nationwide also argued that it was entitled to recovery against Delacruz under the
theory of unjust enrichment. Delacruz timely answered the complaint.
{¶7} The parties filed cross-motions for summary judgment. On May 14,
2010, the trial court denied Nationwide’s motion for summary judgment and
1
It should be noted that record before us contains no information regarding the specific details of the inter-
company arbitration between Guide One and Nationwide. Specifically, we have no indication as to
whether Nationwide attempted to raise the defense that it already paid Guide One’s subrogation interest
when it paid the $15,000.00 settlement amount to Delacruz or what factors were considered by the
arbitrator in reaching the decision.
2
We note that Delacruz contends that Nationwide never made a formal request for indemnification prior to
filing this lawsuit.
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granted Delacruz’ motion for summary judgment. The trial court ultimately
concluded that Delacruz did not breach the terms of the “Receipt and Release.”
Specifically, the trial court found that Guide One’s filing for inter-company
arbitration failed to preserve its claim against Nationwide because it did not
constitute a commencement of an action required to toll the two-year statute of
limitations. The trial court held that because Guide One’s subrogation claim was
not timely filed within the statute of limitations, Nationwide’s claim for
indemnification against Delacruz based on that claim was time-barred. In
addition, the court found that Nationwide was not entitled to recover from
Delacruz on the basis of unjust enrichment because an express contract existed
between the parties.
{¶8} It is from this judgment that Nationwide appeals, asserting the
following two assignments of error for our review.
First Assignment of Error
The trial court erred when it found that the filing of inter-
company arbitration by Defendant/Appellee’s insurer, Guide
One, failed to preserve its subrogation claim against
Plaintiff/Appellant.
Second Assignment of Error
The trial court erred when it found that the Defendant/Appellee
was not unjustly enriched by his failure to reimburse
Plaintiff/Appellee [sic] for the arbitration award
Plaintiff/Appellee [sic] was required to pay Defendant/Appellee’s
insurer, Guide One.
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{¶9} When reviewing a motion for summary judgment, courts must
proceed cautiously and award summary judgment only when appropriate. Franks
v. The Lima News (1996), 109 Ohio App.3d 408, 672 N.E.2d 245. “Civ.R. 56(C)
provides that before summary judgment may be granted, it must be determined
that (1) no genuine issues as to any material fact remains to be litigated; (2) the
moving party is entitled to judgment as a matter of law; and (3) it appears from the
evidence that reasonable minds can come to but one conclusion, and viewing the
evidence most strongly in favor of the nonmoving party, that conclusion is adverse
to the nonmoving party.” State ex rel. Howard v. Ferreri (1994), 70 Ohio St.3d
587, 589, 639 N.E.2d 1189. When reviewing the judgment of the trial court, an
appellate court reviews the case de novo. Franks, supra.
First Assignment of Error
{¶10} In its first assignment of error, Nationwide argues that the trial court
erred in granting summary judgment in favor of Delacruz based on its finding that
Guide One’s subrogation claim against Nationwide was barred by the statute of
limitations. Specifically, Nationwide argues that Guide One preserved its
subrogation claim against Nationwide when Guide One submitted the claim to
inter-company arbitration within the applicable two-year statute of limitations.
{¶11} In rendering its decision to overrule Nationwide’s motion for
summary judgment and to grant Delacruz’ motion for summary judgment, the trial
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court relied, in large part, on Nationwide Mutual Fire Insurance Company v.
Buckley, 9th Dist No. 06CA0013-M, 2006-Ohio-5362. The facts in Buckley are
similar to the case sub judice. Buckley was involved in an automobile accident
with a party named Cessna, who was insured by Nationwide. Id. at ¶ 2. Buckley
was insured by Farmers Insurance Company which paid some of Buckley’s
medical expenses. Id. Buckley then civilly sued Cessna, but eventually settled the
matter with Nationwide prior to the trial for $10,000.00. Id.
{¶12} In the settlement, Buckley signed a release which stated that “[i]t is
agreed that distribution of the above sum [$10,000.00] shall be as Payees see fit,
but must include all subrogation claims, including but not limited to Farmers
Insurance.” Id. at ¶ 3. The release also contained the following language. “We
further understand and agree that we will release and indemnify [Cessna] and
Nationwide Mutual Insurance Company of any and all subrogation claims that
may exist as a result of any and all medical and all hospital claims including, but
not limited to, Farmers Insurance.” Id.
{¶13} Despite the language in the release, Buckley refused to reimburse
Farmers for the money it paid on Buckley’s behalf. Id. at ¶ 4. Almost six years
after the collision, Farmers filed for inter-company arbitration against Nationwide
and was ultimately awarded the amount of its subrogated interest. Id. Nationwide
then sued Buckley for breach of contract and indemnification. Id. at ¶ 5.
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{¶14} The Ninth District Court of Appeals held that Nationwide’s claim
was barred by the statute of limitations noting that “where an insured’s tort claim
is subject to a statute of limitations, so too is the insurer’s subrogation claim.” Id.
at ¶14 citing United States Fid. And Guar. Co. v. Buckeye Union Ins. Co. (Sept.
30, 1986), 6th Dist. No. L-85-377; see, also, Nationwide Mut. Ins. Co. v.
Zimmerman, 5th Dist. No. 2004 VA 2007, 2004-Ohio-7115, at ¶ 16. The court in
Buckley noted that “the release agreement provided only that Buckley would
indemnify Nationwide for Farmer’s subrogation claims that may exist.” Id. at ¶
17. The court reasoned that at the execution of the release and when Farmers
sought reimbursement from Nationwide, Farmers’ subrogation claim no longer
existed because the statute of limitations had run and, therefore, Nationwide was
not entitled indemnification from Buckley.
{¶15} In the case sub judice, the trial court relied on the same reasoning as
the court in Buckley when it determined that Nationwide’s claim against Delacruz
was time-barred. On appeal, Delacruz’ contends that the trial court reliance on
Buckley was misplaced stating that “[n]one of the factors that led to the court’s
decision in Buckley are present in the case at hand.” (App. Brief at 10). We agree
with Nationwide that some of the facts present in this case are distinguishable
from the facts in Buckley. Specifically, unlike in Buckley, Guide One submitted its
subrogation claim for inter-company arbitration within the statute of limitations.
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Therefore, the essential question in this case is whether Guide One’s filing for
inter-company arbitration preserved its claim to toll the statute of limitations.
{¶16} Section 2305.10 of the Revised Code sets forth the statute of
limitations for causes of actions based on bodily injury and provides that “an
action for bodily injury or injuring personal property shall be brought within two
years after the cause of action accrues.” R.C. 2305.10. The statute further states
that “a cause of action accrues under this division when the injury or loss to person
or property occurs.” Id. It is undisputed by the parties that the accident giving rise
to this suit occurred on February 24, 2001, and that Guide One submitted its
subrogation claim against Nationwide to inter-company arbitration on February 8,
2003—within the two-year timeframe.
{¶17} However, as noted by the trial court, R.C. 2305.17 expressly defines
what constitutes a commencement of an action within the statute of limitations for
claims based on bodily injury and provides:
An action is commenced within the meaning of sections 2305.03
to 2305.22 and sections 1302.98 and 1304.35 of the Revised Code
by filing a petition in the office of the clerk of the proper court
together with a praecipe demanding that summons issue or an
affidavit for service by publication, if service is obtained within
one year.
(Emphasis added).
{¶18} Here, Guide One did not file a petition with the office of the clerk of
courts as required by the statutory language cited above. Rather, Guide One filed
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notice with a third-party private organization, Arbitration Forums, Inc., to provide
Nationwide notice of its subrogation claim. In addition, Nationwide cites us to no
authority in support its contention that Guide One’s submission of its subrogation
claim to inter-company arbitration constitutes a commencement of an action
within the meaning of R.C. 2305.17. To the contrary, at least one court has found
that a presentment of a creditor’s claim to an estate does not constitute a
commencement of an action within the meaning of R.C. 2305.10 to toll the statute
of limitations. Nationwide Mut. Ins. Co. v. Zimmerman, 5th Dist. No. 2004 VA
2007, 2004-Ohio-7115, at ¶ 18.
{¶19} Based on the reasoning articulated by the court in Buckley, the trial
court concluded that Delacruz did not breach the terms of the “Receipt and
Release.” Because that statute of limitations had expired, the trial court concluded
that Guide One’s claim for subrogation against Nationwide did not constitute an
action in law that “may hereafter be made or brought * * * by anyone asserting a
third party claim for subrogation” under the terms of the “Receipt and Release.”
Therefore, the court concluded that Nationwide was not entitled to indemnification
from Delacruz pursuant to the release.
{¶20} In light of the statutory authority cited above, we find no error in the
trial court’s conclusion that Guide One’s filing for inter-company arbitration failed
to preserve its subrogation claim after the expiration of the statute of limitations.
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Accordingly, we also find no error in trial court’s conclusion that Delacruz was
entitled to summary judgment as a matter of law. Nationwide’s first assignment of
error is overruled.
Second Assignment of Error
{¶21} In its second assignment of error, Nationwide argues that it is
entitled to recovery from Delacruz under the theory of unjust enrichment. Unjust
enrichment is an equitable doctrine, not based on contract law but upon quasi-
contract. Homan, Inc. v. A1 AG Serv., L.L.C., 175 Ohio App.3d 51, 2008-Ohio-
277, 885 N.E.2d 253, at ¶ 21, citing Campana v. Ford Motor Co., 8th Dist. No.
88616, 2007-Ohio-4040, 2007 WL 2269504, at ¶ 18. Liability in quasi-contract
“arises out of the obligation cast by law upon a person in receipt of benefits which
he is not justly entitled to retain.” Bickham v. Standley, 183 Ohio App.3d 422,
2009-Ohio-3530, ¶ 14, 917 N.E.2d 330 quoting Hambleton v. R.G. Barry Corp.
(1984), 12 Ohio St.3d 179, 183, 12 OBR 246, 465 N.E.2d 1298. However, the
doctrine of unjust enrichment cannot apply when an express contract exists.
Bickman at ¶ 14, citing Aultman Hosp. Assn. v. Community Mut. Ins. Co. (1989),
46 Ohio St.3d 51, 55, 544 N.E.2d 920. See also Davidson v. Davidson, 3d Dist.
No. 17-05-12, 2005-Ohio-6414, 2005 WL 3274853, at ¶ 19, citing Ullmann v.
May (1947), 147 Ohio St. 468, 479, 34 O.O. 384, 72 N.E.2d 63.
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{¶22} Nationwide erroneously argues that trial court found that the terms
of the “Receipt and Release” did not apply in this case and contends that it is
entitled to recover from Delacruz under a quasi-contract theory. However,
Nationwide obfuscates the trial court’s ruling regarding the first assignment of
error. The trial court did not find that the “Receipt and Release” was not a valid
contract between the parties. On the contrary, the trial court concluded that Guide
One’s subrogation claim did not constitute an action for indemnification under the
terms of the “Receipt and Release.” As previously discussed, the basis for the trial
court’s decision was that the statute of limitations had expired on Guide One’s
claim for subrogation against Nationwide, therefore, it was not action in law that
“may hereafter be made or brought * * * by anyone asserting a third party claim
for subrogation” under the terms of the “Receipt and Release.”
{¶23} In reviewing the trial court’s decision, it is apparent that the trial
court found a valid contract existed between the parties. The trial court simply
held that Nationwide was not entitled to identification from Buckley under the
terms of the agreement. Accordingly, because an express contract existed between
the parties, Delacruz was entitled to summary judgment on Nationwide’s claim for
unjust enrichment.
{¶24} Finally, we also note that Nationwide emphatically argues that
Delacruz “cannot and should not be allowed to escape his obligation to reimburse
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[Nationwide] for medical expenses that he incurred and for which Nationwide had
now paid twice.” (Reply Brief, at 2). However, Nationwide was the only party
present at both the settlement and the arbitration proceedings. Therefore,
Nationwide was the party in the best position to assert the defense that it should
not be required to pay Guide One’s subrogation claim because it had already paid
that amount to Delacruz.
{¶25} Based on all the above, Nationwide’s second assignment of error is
overruled.
{¶26} Having found no error prejudicial to the appellant herein in the
particulars assigned and argued, we affirm the judgment of the trial court.
Judgment Affirmed
ROGERS and PRESTON, J.J., concur.
/jlr
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