Blue Ash Auto Body, Inc. v. Frank

[Cite as Blue Ash Auto Body, Inc. v. Frank, 2022-Ohio-1292.]
IN THE COURT OF APPEALS
FIRST APPELLATE DISTRICT OF OHIO
HAMILTON COUNTY, OHIO
BLUE ASH AUTO BODY, INC., : APPEAL NO. C-210432
TRIAL NO. 20CV-11674
and :
JONATHAN KERR, : O P I N I O N.
Plaintiffs-Appellants, :
vs. :
ANDREW FRANK, :
Defendant-Appellee. :
Civil Appeal From: Hamilton County Municipal Court
Judgment Appealed From Is: Affirmed
Date of Judgment Entry on Appeal: April 20, 2022
Dennis A. Becker, for Plaintiffs-Appellants,
John P. Carlson, for Defendant-Appellee.
OHIO FIRST DISTRICT COURT OF APPEALS
WINKLER, Judge.
{¶1} Plaintiffs-appellants Blue Ash Auto Body, Inc., (“Blue Ash”) and
Jonathan Kerr appeal the judgment of the Hamilton County Municipal Court in favor
of defendant-appellee Andrew Frank. We find no merit in appellants’ two assignments
of error, and we affirm the trial court’s judgment.
{¶2} The record shows that on September 19, 2018, Kerr and Frank were
involved in an automobile accident in which Frank was allegedly at fault. Kerr took
his vehicle to Blue Ash for repair. In addition to a work-authorization form, Blue Ash
had Kerr sign a document entitled “Assignment of Proceeds,” which stated,
I hereby assign any claim that I may have and/or proceeds that have
accrued or may accrue under my insurance contract or that I may have
and/or be entitled to obtain from the person at-fault in the accident * *
* for the amount [Blue Ash Auto Body], in the exercise of professional
judgment, deemed necessary and proper to repair my vehicle * * *.
{¶3} The repair costs totaled $20,966.86. Frank’s insurance company paid
$11,884.61, leaving a balance due of $9,082.25. A complaint was filed against Frank,
naming both Kerr and Blue Ash as plaintiffs. In count one, appellants sought to
recover the amount of the balance due for the repairs. In count two, they sought to
recover damages of $3,000 for the diminution in the value of the repaired vehicle.
{¶4} Once the repairs were made, Blue Ash never notified Kerr that he owed
additional money for the repairs, that it was going to attempt to recover the additional
funds from Frank, or that he would be responsible for the remaining $9,082.25. Kerr’s
understanding was that the payment from Frank’s insurance company would cover
the entire repair cost for the vehicle.
{¶5} When Kerr was asked if he “knew there was going to be a lawsuit,” he
stated, “I knew that they were asking me * * * if I wanted to participate in the lawsuit
for the recovery of the diminution in value.” When he was asked if Blue Ash had asked
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him if he would like them to seek compensation for the diminution in value, he replied,
“Well, yeah,” but he also stated that he never discussed attempting to recover the
additional cost of repair. Kerr had no further contact with Blue Ash about the costs of
the repairs or the diminution in value. He did not know that his name was on the
complaint until the day his deposition was taken, and he stated that he was not
represented by his own attorney.
{¶6} Frank filed a motion for summary judgment on count one of the
complaint, for the unpaid repair costs, which the trial court granted. It found that Blue
Ash “lacked standing” to maintain that claim. It found that the assignment of proceeds
was ineffective at the time it was executed because liability had yet to be established
and no settlement proceeds existed.
{¶7} As to the diminution-in-value claim in count two, the case proceeded to
a trial before a magistrate. The magistrate found that the evidence as to the loss of
value was “speculative at best.” Appellants filed objections to the magistrate’s
decision. The trial court overruled the objections, adopted the magistrate’s decision,
and granted judgment in favor of Frank, “at Plaintiff’s cost.” It found that appellants
had failed to meet their burden to show the amount of the diminished value. This
appeal followed.
{¶8} In their first assignment of error, appellants contend that the trial court
erred in granting summary judgement in favor of Frank on count one of the complaint.
They argue that genuine issues of material fact exist as to damages on their “chose in
action” for the remainder of the repair costs. This assignment of error is not well
taken.
{¶9} An appellate court reviews a trial court’s ruling on a motion for
summary judgment de novo. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 671
N.E.2d 241 (1996); Chateau Estate Homes, LLC v. Fifth Third Bank, 2017-Ohio-6985,
95 N.E.3d 693, ¶ 10 (1st Dist.). Summary judgment is appropriate if (1) no genuine
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issue of material fact exists for trial, (2) the moving party is entitled to judgment as a
matter of law, and (3) reasonable minds can come to but one conclusion and that
conclusion is adverse to the nonmoving party, who is entitled to have the evidence
construed most strongly in his or her favor. Temple v. Wean United, Inc., 50 Ohio
St.2d 317, 327, 364 N.E.2d 267 (1977); Chateau Estate Homes at ¶ 10.
{¶10} The moving party bears the initial burden of informing the court of the
basis for its motion and demonstrating the absence of any genuine issues of material
fact. Dresher v. Burt, 75 Ohio St.3d 280, 282-293, 662 N.E.2d 264 (1996); Maas v.
Maas, 2020-Ohio-5160, 161 N.E.3d 863, ¶ 14 (1st Dist.). Once the moving party has
met its burden, the nonmoving party has a reciprocal burden to set forth specific
evidentiary facts showing the existence of a genuine issue for trial. Dresher at 293;
Maas at ¶ 14. The nonmoving party cannot rest on conclusory allegations or self-
serving interpretations of the evidence presented. Dresher at 293; Maas at ¶ 14.
{¶11} Appellants rely on Pilkington N. Am., Inc. v. Travelers Cas. & Sur. Co.,
112 Ohio St.3d 482, 2006-Ohio-6551, 861 N.E.2d 121. In that case, the Ohio Supreme
Court held that all contract rights may be assigned, except under three conditions: (1)
if there is clear contractual language prohibiting assignment; (2) if the assignment
materially changes the duty of the obligor, materially increases the insurer’s burden or
risk under the contract, materially impairs the insurer’s chance of securing a return on
performance, or materially reduces the contract’s value; or (3) if assignment is
forbidden by statute or by public policy. Id. at ¶ 36. Blue Ash argues that under
Pilkington, a “chose in action,” a right to bring an action, is assignable when the
covered loss has already occurred. See id. at ¶ 43.
{¶12} In W. Broad Chiropractic v. Am. Family Ins., 122 Ohio St.3d 497, 2009-
Ohio-3506, 912 N.E.2d 1093, the Supreme Court “further clarified its anti-assignment
jurisprudence * * *.” Mercedes-Benz of W. Chester v. Am. Family Ins., 12th Dist.
Butler Nos. CA2009-09-244, CA2009-09-245 and CA2009-09-246, 2010-Ohio-2307,
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¶ 14. In W. Broad Chiropractic, a driver was injured in an automobile accident. To
obtain treatment from a chiropractor, she executed a document assigning her right to
receive compensation from the tortfeasor’s insurance company to the chiropractor.
{¶13} The Ohio Supreme Court held that the assignment was invalid. It
stated, “A person who has been injured in an accident but who has not yet established
liability for the accident and a present right to the settlement proceeds may not assign
the right to future proceeds of the settlement if the right does not exist at the time of
the assignment.” W. Broad Chiropractic at ¶ 5. Because no settlement proceeds
existed at the time of the assignment, and the driver had no right to any funds, she had
no rights to assign. Id. at ¶ 16. In a later case, the Supreme Court stated, “it is only
after a judgment has been secured against an insured that ‘[t]he amount of the policy
to the extent of liability incurred by the insured is deemed to be an asset of the insured.’
” In re all Cases against Saber Corp., 132 Ohio St.3d 5, 2012-Ohio-1444, 967 N.E.2d
1203, ¶ 31, quoting Steffens v. Am. Std. Ins. Co. of Wisconsin, 181 N.W.2d 174, 178
(Iowa 1970).
{¶14} There are slight differences between this case and W. Broad
Chiropractic. Appellants contend that W. Broad Chiropractic is distinguishable
because in that case, the driver was attempting to enforce an assignment for settlement
proceeds against the tortfeasor’s insurance company. In this case, Kerr had assigned
the right to Blue Ash to seek recovery from the tortfeasor, not settlement proceeds
from the insurance policy. Further, in this case Kerr assigned both the claims and the
proceeds to Blue Ash. In W. Broad Chiropractic, the driver 0nly assigned the
proceeds.
{¶15} In this context, we believe these nuances are distinctions without a
difference. The Supreme Court’s ultimate holding in W. Broad Chiropractic is broad.
It states, “A person may not assign the right to the future proceeds of a settlement if
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the right to the proceeds does not exist at the time of the assignment.” W. Broad
Chiropractic, 122 Ohio St.3d 497, 2009-Ohio-3506, 912 N.E.2d 1093, at ¶ 26.
{¶16} In reaching that holding, the court discussed the many public policy
reasons against such an assignment. It noted that such an assignment might
encourage and promote litigation and discourage settlement. An assignee “expects full
payment and lacks interest in negotiating the amount of the debt.” W. Broad
Chiropractic at ¶ 22. The court also stated that “[u]pholding the legality of such
assignments opens the door for other creditors to seek debt protection through
assignments: the pharmacy, the automobile repair shop, other medical providers.”
Id. at ¶ 24.
{¶17} Finally, the court stated, “[W]e disfavor such assignments based upon
their similarities to champertous agreements that are void as a matter of law.” Id. at
25. Champerty is a subset of maintenance. Maintenance is assistance to a litigant in
pursuing or defending a lawsuit provided by someone who does not have a bona fide
interest in the case. Rancman v. Interim Settlement Funding Corp., 99 Ohio St.3d
121, 2003-Ohio-2721, 789 N.E.2d 217, ¶ 10. Champerty is a form of maintenance in
which a nonparty undertakes to further another’s interest in a suit in exchange for a
part of the litigated matter if a favorable result ensues. Id. The assignment in this case
is very similar to these types of “vilified” agreements. See id. at ¶ 11.
{¶18} A number of courts have interpreted W. Broad Chiropractic broadly to
invalidate similar types of assignments. See Three-C Body Shops, Inc. v. Nationwide
Mut. Fire Ins. Co., 2017-Ohio-1462, 81 N.E.3d 499 (10th Dist.); Mercedes-Benz, 12th
Dist. Butler Nos. CA2009-09-244, CA2009-09-245 and CA2009-09-246, 2010-Ohio-
2307. In a case specifically involving Blue Ash and a similar assignment, a federal
district court found that Pilkington was distinguishable and held that the assignment
was invalid. See Blue Ash Auto Body v. State Farm Mut. Ins. Co., S.D.Ohio No. 1:20-
cv-393, 2021 U.S. Dist. LEXIS 44354 (Mar. 20, 2021), affirmed on other grounds, 6th
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Cir. No. 21-3365, 2021 U.S. App. LEXIS 36105 (Dec. 3, 2021). We agree with the
reasoning of these cases.
{¶19} Appellants further contend that even if the trial court’s analysis is
correct, it only applies to Blue Ash. They argue that Kerr is a plaintiff and that the trial
court erred in granting summary judgment against Kerr. The circumstances under
which Kerr became a plaintiff are problematic and could possibly involve conflicts of
interest. But we need not reach those issues.
{¶20} Kerr never established his damages. His truck was repaired to the
manufacturer’s specifications. He testified that he had no complaints about the
repairs and that he uses the truck on a regular basis. He didn’t even know that there
was an outstanding balance for the repairs or that Blue Ash was pursuing a claim for
that balance. In a case with similar facts, the court concluded that the vehicle owners
had failed to establish damages. See Valley Paint & Body v. Ins. Co. of the State of
Pa., 12th Dist. Clermont No. CA2010-08-059, 2011-Ohio-1307, ¶ 18-22.
{¶21} We hold that the trial court correctly found that the assignment was
invalid, and that it properly granted summary judgment in favor of Frank on count
one of the complaint. Consequently, we overrule appellants’ first assignment of error.
{¶22} In their second assignment of error, appellants contend that the trial
court’s finding in favor of Frank after the trial on count two of the complaint was
against the manifest weight of the evidence. They argue that their expert witness’s
testimony established the existence of damages for diminution in value. This
assignment of error is not well taken.
{¶23} Generally, the owner of a damaged motor vehicle may recover the
difference between its market value immediately before and immediately after the
collision. Falter v. Toledo, 169 Ohio St. 238, 158 N.E.2d 893 (1959), paragraph one of
the of the syllabus; Williams v. Sharon Woods Collision Ctr., Inc., 2018-Ohio-2733,
117 N.E.3d 57, ¶ 9 (1st Dist.); Rakich v. Anthem Blue Cross & Blue Shield, 172 Ohio
7OHIO FIRST DISTRICT COURT OF APPEALS
App.3d 523, 2007-Ohio-3739, 875 N.E.2d 993, ¶ 9 (10th Dist.). The owner of a vehicle
may prove and recover the reasonable costs of repairs provided that the recovery may
not exceed the difference immediately before and after the collision. Falter at
paragraph two of the syllabus; Sharon Woods Collision Ctr. at ¶ 9. Thus, when proving
damages to a vehicle with evidence of cost of repairs, the plaintiff is ordinarily also
required to present evidence of the market value of the vehicle before and after the
accident so that the court may ensure that the cost of repairs does not exceed the
difference in market value. Falter at 240; Rakich at ¶ 11.
{¶24} Appellants’ expert witness, Steve Wurtz, the president and owner of
Blue Ash, testified about the cost of the repairs and that the cost was reasonable. But
appellants never presented evidence of the truck’s market value immediately before
and after the accident. Wurtz discussed generally a vehicle’s loss of value after it had
been damaged and repaired, but not specifically as to Kerr’s vehicle. Wurtz did not
know the value of any comparison vehicles in a similar condition to Kerr’s truck.
{¶25} Kerr was not able to testify as to the truck’s fair market value. He
“guessed” that his vehicle was worth “maybe $30,000” after the repairs. He said that
he looked up the Kelly Blue Book figure a year before the trial, but he could not
remember what the figure was. When asked his opinion as to the value of the truck at
the time of the loss if he “had gone to trade it or sell it before the loss,” he stated,
“[P]robably about $5,000 * * * that I would assess it to be.” But he gave no basis for
that determination. Kerr accepted the vehicle after Blue Ash had performed the
repairs, and he testified that he had no plans to sell it.
{¶26} After reviewing the record, we cannot say that the trial court clearly lost
its way and created a manifest miscarriage of justice. Therefore, its decision as to the
diminution-in-value claim was not against the manifest weight of the evidence. See
Eastley v. Volkman, 132 Ohio St.3d 328, 2012-Ohio-2179, 972 N.E.2d 517, ¶ 12-21;
Downtime Rebuild, LLC v. Trinity Logistics, Inc., 2019-Ohio-1869, 135 N.E.3d 1253,
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¶ 12-13 (1st Dist.). We overrule appellants’ second assignment of error and affirm the
trial court’s judgment.
ZAYAS, P.J., and BOCK, J., concur.
Please note:
The court has recorded its own entry on the date of the release of this opinion.
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