Kamnikar v. Fiorita

[Cite as Kamnikar v. Fiorita, 2017-Ohio-5605.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
David Kamnikar et al., :
Plaintiffs-Appellants, :
No. 16AP-736
v. : (C.P.C. No. 14CVH07-7708)
Cameron Fiorita et al., : (REGULAR CALENDAR)
Defendants-Appellees. :
D E C I S I O N
Rendered on June 29, 2017
On brief: Law Offices of James P. Connors, and James P.
Connors, for appellants. Argued: James P. Connors.
On brief: Hollern & Associates, and Edwin J. Hollern, for
appellees Cameron, Robert, and Kristin Fiorita.
Argued: Edwin J. Hollern.
On brief: Lane Alton, Rick E. Marsh, and Eric S. Bravo, for
appellee Encompass Home & Auto Insurance Company.
Argued: Rick E. Marsh.
APPEAL from the Franklin County Court of Common Pleas
SADLER, J.
{¶ 1} Plaintiffs-appellants, David and Laurie Kamnikar, and their minor son, Jack
(collectively "Kamnikars"), appeal from a judgment of the Franklin County Court of
Common Pleas in favor of defendants-appellees, Cameron, Robert, and Kristin Fiorita
(collectively "Fioritas") and Encompass Home & Auto Insurance ("Encompass"). For the
reasons that follow, we affirm.
No. 16AP-736 2
I. FACTS AND PROCEDURAL HISTORY
{¶ 2} This case arises out of a minor motor vehicle accident that occurred in the
parking lot of the Chiller Skating Rink ("Chiller") in Dublin, Ohio on January 24, 2014.
On that evening, a Cadillac Escalade operated by Cameron Fiorita and owned by his
father, Robert Fiorita, struck a Toyota Corolla parked in the Chiller lot. David and Laurie
Kamnikar had driven to the Chiller in their Corolla to pick up their son, Jack Kamnikar,
who had been skating at the ice rink. David was driving the Corolla with Laurie in the
passenger seat. Jack left the ice rink and climbed in the back seat. The Kamnikars
remained in the vehicle while Jack texted a friend, who was still in the rink, to see if she
could find a hat that Jack had left at the rink. At or around that same time, Cameron
arrived at the Chiller in the Escalade to pick up two girls, one believed to be his sister.
{¶ 3} At approximately 9:45 p.m., while Jack was texting his friend, Cameron
drove the Escalade into the back of the Corolla. According to the Kamnikars, Cameron
apologized to David and acknowledged he was at fault for hitting a parked vehicle. The
complaint states that Cameron told a Dublin police officer at the scene that he did not see
the Kamnikars' vehicle because he was either "texting, playing with his phone, or not
paying attention." (Compl. at 3.) Because the accident took place in a private parking lot,
the police officer did not make a written report, but he told the parties to exchange
insurance information.
{¶ 4} As David waited in the Chiller lobby to obtain insurance information,
Cameron called his parents. When Cameron returned, he provided David with
information he retrieved from the Escalade identifying Westfield Insurance Company
("Westfield") as the Fioritas' insurance carrier.
{¶ 5} When David contacted Westfield in order to submit a claim, he learned that
Westfield no longer insured the Fioritas' vehicle. A representative of Encompass
subsequently contacted David to inform him that Encompass insured the Fioritas'
Escalade. David orally submitted a claim to Encompass and provided a recorded
statement. On February 11, 2014, the Kamnikars received a letter from Encompass
stating that "[a]fter careful investigation, we have found that our insured was not legally
responsible for the accident. As a result, we will not be able to make any payment for the
No. 16AP-736 3
following reasons: You failed to y[ie]ld the right of way to passing vehicle as you were
backing from a parking spot." (Compl. at 5.)
{¶ 6} According to the complaint, the investigation conducted by Encompass
consisted of speaking with Kristin about the accident and reviewing the report of the
appraiser. The complaint alleges that Encompass failed to interview either Cameron, his
two female passengers, or the Dublin police officer. The complaint states that when David
contacted Encompass to question the denial of his claim, an Encompass representative
told David to file a claim with his own insurance company.
{¶ 7} The Kamnikars subsequently obtained legal counsel who, on February 25,
2014, contacted Encompass seeking to obtain copies of any "investigation materials"
related to the Kamnikars' claim and an explanation of the denial of the claim. (Compl. at
7.) Encompass responded by referring counsel to the February letter denying the
Kamnikars' claim and explaining that Encompass's internal policy was not to share their
investigative materials with claimants. When the Kamnikars' counsel sought to obtain a
copy of the internal policy referred to in the previous communication, he received a
response from an Encompass "supervisor" explaining that internal Encompass policies
are not shared with others and that the investigation into the accident revealed that "[t]he
two drivers are telling opposing stories and, in our opinion, the physical damage favors
our client." (Compl. at 8.)
{¶ 8} On July 24, 2014, the Kamnikars commenced a civil action against
Encompass and the Fioritas. On October 3, 2014, Encompass filed a motion, pursuant to
Civ.R. 12(B)(6), seeking a dismissal of the claims brought against it by the Kamnikars. On
November 24, 2014, the trial court issued a decision and judgment entry granting the
motion to dismiss and dismissing each of the Kamnikars' claims against Encompass with
prejudice.
{¶ 9} On September 24, 2015, the trial court scheduled a jury trial in the matter
for March 16, 2016. On February 22, 2016, during the discovery process, the Kamnikars
produced a videotape recording of the accident captured on the Chiller security camera.
The Fioritas, after viewing the videotape, filed the following stipulation:
Defendant, Cameron Fiorita, by and through counsel, hereby
stipulates that he was negligent and is therefore liable for the
No. 16AP-736 4
damages that are found by the jury to be proximately caused
by his negligence that arise out of the January 24, 2014
accident that is the subject of plaintiffs' Complaint. The issues
of proximate cause and damages, if any, are specifically
reserved for the jury to determine.
(Mar. 6, 2016 Stipulation.)
{¶ 10} On March 10, 2016, the trial court rescheduled the jury trial for August 16,
2016. On August 9, 2016, the Fioritas filed a motion for judgment on the pleadings,
pursuant to Civ.R. 12(C), as to the following claims: negligent misrepresentation and
fraud (Count One of the complaint); bad faith, lack of good faith and fair dealing, and civil
conspiracy (Count Four of the complaint); and negligent entrustment asserted against
Kristin and Robert (Count Three of the complaint). On August 13, 2016, the Kamnikars
moved the trial court, pursuant to Civ.R. 37(C)(2), for legal fees and expenses arising from
the Fioritas' misconduct in failing to admit matters that were the subject of the
Kamnikars' request for admissions.
{¶ 11} On the morning of trial, the trial court heard arguments on the pending
motion for judgment on the pleadings. At the close of those proceedings, the trial court
announced its decision to grant the motion. As a result of the ruling, the only claim
remaining for trial was the negligence claim against Cameron asserted in Count Two of
the complaint and only as to the issue of damages.
{¶ 12} The case was tried to a jury on August 16, 2016. On August 17, 2016, the
jury rendered a verdict in favor of the Kamnikars as to their negligence claim against
Cameron and awarded damages of $3,087.05. On September 21, 2016, the trial court
issued a judgment entry in favor of the Kamnikars and against Cameron in the total
amount of $3,087.05, plus court costs. The trial court denied the Kamnikars' motion for
sanctions on October 6, 2016 in an entry stating "[t]here is no basis in law or fact upon
which the Court would award Plaintiffs legal fees and expenses in this matter." (Oct. 6,
2016 Decision and Entry at 1.)
{¶ 13} On October 21, 2016, the Kamnikars appealed to this court from the
November 24, 2014 decision granting Encompass's motion to dismiss, the August 16,
2016 decision granting the Fioritas' motion for judgment on the pleadings, and the
October 6, 2016 decision denying the Kamnikars' motion for fees and expenses. On
No. 16AP-736 5
January 23, 2017, Encompass filed an App.R. 23 motion for sanctions against the
Kamnikars and their legal counsel alleging that this is a frivolous appeal.
II. ASSIGNMENTS OF ERROR
{¶ 14} The Kamnikars assert the following assignments of error:
I. THE TRIAL COURT ERRED BY DISMISSING THE CASE
AND ALL CLAIMS AGAINST ENCOMPASS PURSUANT TO
CIV.R. 12(B)(6).
II. THE TRIAL COURT ERRED BY GRANTING JUDGMENT
ON THE PLEADINGS AND DISMISSING ALL CLAIMS
AGAINST DEFENDANTS ROBERT AND KRISTIN FIORITA,
AND ALL CLAIMS OTHER THAN FOR NEGLIGENCE
AGAINST CAMERON FIORITA, PURSUANT TO CIV.R.
12(C).
III. THE TRIAL COURT ERRED BY DENYING PLAINTIFFS'
MOTION FOR LEGAL FEES AND EXPENSES FOR
FAILURE TO ADMIT, PURSUANT TO CIV.R. 37(C)(2), AND
BY GRANTING LEAVE TO THE FIORITAS TO RESPOND
TO THE MOTION OUT OF RULE.
III. LEGAL ANALYSIS
A. First Assignment of Error
{¶ 15} In their first assignment of error, the Kamnikars argue that the trial court
erred when it dismissed their claims against Encompass alleging negligent
misrepresentation and fraud (Count One of the complaint), bad faith, lack of good faith
and fair dealing, and negligence (Count Four of the complaint). We disagree.
{¶ 16} Under Civ.R. 12(B)(6), a defendant may move to dismiss a complaint for
failure to state a claim on which relief can be granted. Henton v. Ohio Dept. of Rehab. &
Corr., 10th Dist. No. 16AP-768, 2017-Ohio-2630, ¶ 6, citing Coleman v. Columbus State
Community College, 10th Dist. No. 15AP-119, 2015-Ohio-4685, ¶ 6. " 'A Civ.R. 12(B)(6)
motion to dismiss for failure to state a claim upon which relief can be granted is
procedural and tests the sufficiency of the complaint.' " Henton at ¶ 6, quoting Rudd v.
Ohio State Hwy. Patrol, 10th Dist. No. 15AP-869, 2016-Ohio-8263, ¶ 11.
{¶ 17} In reviewing a motion to dismiss, pursuant to Civ.R. 12(B)(6), the court may
not rely on allegations or evidence outside the complaint. Henton at ¶ 6. "In considering
No. 16AP-736 6
the complaint, the court 'must construe the complaint in the light most favorable to the
plaintiff, presume all factual allegations in the complaint are true, and make all
reasonable inferences in favor of the plaintiff.' " Id. at ¶ 7, quoting Coleman at ¶ 6, citing
Mitchell v. Lawson Milk Co., 40 Ohio St. 3d 190, 192 (1988). "However, the court need
not accept as true any unsupported and conclusory legal propositions advanced in the
complaint." Henton at ¶ 7, citing Rudd at ¶ 12, citing Morrow v. Reminger & Reminger
Co., LPA, 183 Ohio App. 3d 40, 2009-Ohio-2665, ¶ 7 (10th Dist.). "The dismissal of a
complaint for failure to state a claim is proper when it appears, beyond doubt, that the
plaintiff can prove no set of facts entitling him to relief." Henton at ¶ 7, citing Rudd at
¶ 11, citing O'Brien v. Univ. Community Tenants Union, Inc., 42 Ohio St. 2d 242 (1975),
syllabus. An appellate court reviews a trial court's dismissal, pursuant to Civ.R. 12(B)(6),
under a de novo standard of review. State ex rel. Ohio Civ. Serv. Emps. Assn. v. State, 146
Ohio St. 3d 315, 2016-Ohio-478, ¶ 12.
{¶ 18} Both Count One and Four of the complaint allege that Encompass breached
a duty it owed to the Kamnikars by failing to conduct a thorough investigation of the
accident before denying their claim, by failing to share the results of the investigation with
their counsel, and by encouraging the Kamnikars to file an insurance claim with their own
insurance carrier even though such a claim was unsupported by the facts. The trial court's
ruling on the motion to dismiss reads, in relevant part, as follows:
Upon reviewing Encompass's motion, it is clear to the Court
that it must dismiss Plaintiffs' claims against it. While stated
as two separate claims, Plaintiffs' claims against Encompass
are the same. Plaintiffs try to argue that their negligent
misrepresentation/fraud claim against Encompass is distinct,
but that is just not the case. Both of Plaintiffs' claims stem
from Encompass' alleged bad faith in denying Plaintiffs' claim.
It can be stated in different ways and different words can be
used, but a third-party bad faith claim will always be a third-
party bad faith claim. Unfortunately for Plaintiffs, [i]t is well
established that Ohio does not recognize a claim of third-party
bad faith. Since this is so, Plaintiffs' claims against
Encompass must be dismissed.
(Nov. 24, 2014 Decision and Entry at 3.)
No. 16AP-736 7
{¶ 19} We agree with the trial court's analysis and conclusion. Though the
Kamnikars insist that the set of facts alleged in their complaint support relief under
several different legal tort theories, the subjective belief of the party or counsel is not the
standard for determination of whether a pleading states a claim for relief under existing
law or a good-faith extension of existing law. Fed. Natl. Mtge. Assn. v. Schmidt, 10th Dist.
No. 14AP-844, 2015-Ohio-2659.
1. Bad Faith
{¶ 20} "Under Ohio law, an insurer has a duty to act in good faith in the processing
and payment of valid claims of its insured." Beever v. Cincinnati Life Ins. Co., 10th Dist.
No. 02AP-543, 2003-Ohio-2942, ¶ 20, citing Petrone v. Grange Mut. Cas. Co., 9th Dist.
No. 20909, 2002-Ohio-3746. The Supreme Court of Ohio held that "[a]n insurer fails to
exercise good faith in the processing of a claim of its insured where its refusal to pay the
claim is not predicated upon circumstances that furnish reasonable justification therefor."
Zoppo v. Homestead Ins. Co., 71 Ohio St. 3d 552 (1994), paragraph one of the syllabus.
{¶ 21} "If an insurer improperly refuses to pay a valid claim, such failure may
amount to insurance 'bad faith.' " Beever at ¶ 20, citing Stefano v. Commodore Cove E.,
Ltd., 145 Ohio App. 3d 290, 293 (9th Dist.2001). An insurance company's refusal to pay a
valid claim is not conclusive of bad faith, but if the insurer bases its refusal on a belief that
there is no coverage for a particular claim, such belief may not be arbitrary or capricious.
Beever at ¶ 20, citing Petrone at ¶ 12. Pursuant to Zoppo, an insurance company's failure
to properly investigate a claim against its insured may also give rise to a bad-faith claim
against the insurer. Beever at ¶ 41.
{¶ 22} Ohio courts have generally held that the tort of bad faith is " 'independent of
the contract of insurance.' " Id. at ¶ 50, quoting United Dept. Stores Co. No. 1 v.
Continental Cas. Co., 41 Ohio App. 3d 72, 73 (1st Dist.1987). "The liability of the insurer in
such cases does not arise from its mere omission to perform a contract obligation * * *.
Rather, the liability arises from the breach of the positive legal duty imposed by law due to
the relationships of the parties." Hoskins v. Aetna Life Ins. Co., 6 Ohio St. 3d 272, 276
(1983). Ohio law is clear, however, that an insurer's duty to act in good faith runs only
from the insurer to the insured and a third party has no cause of action for bad faith
against the tortfeasor's insurance company. McLynas v. Karr, 10th Dist. No. 03AP-1075,
No. 16AP-736 8
2004-Ohio-3597, ¶ 29, citing Murrell v. Williamsburg Local School Dist., 92 Ohio App. 3d
92, 95 (12th Dist.1993).
{¶ 23} Based on the foregoing, there can be no doubt that the Kamnikars'
complaint fails to state a claim for relief against Encompass for bad faith and lack of good
faith and fair dealing.1 Accordingly, we hold that the trial court did not err when it
dismissed those claims pursuant to Civ.R. 12(B)(6).
2. Negligence
{¶ 24} The Kamnikars argue that the facts alleged in their complaint state a claim
for relief against Encompass sounding in ordinary negligence. We disagree.
{¶ 25} "The economic-loss rule generally prevents recovery in tort of damages for
purely economic loss." Corporex Dev. & Constr. Mgt., Inc. v. Shook, Inc., 106 Ohio St. 3d
412, 2005-Ohio-5409, ¶ 6, citing Chemtrol Adhesives, Inc. v. Am. Mfrs. Mut. Ins. Co., 42
Ohio St. 3d 40, 45 (1989); Floor Craft Floor Covering, Inc. v. Parma Community Gen.
Hosp. Assn., 54 Ohio St. 3d 1, 3 (1990). "The economic-loss rule stems from the principle
that, '[i]n the absence of privity of contract between two disputing parties the general rule
is "there is no * * * duty to exercise reasonable care to avoid intangible economic loss or
losses to others that do not arise from tangible physical harm to persons and tangible
things." ' " Waverly City School Dist. Bd. of Edn. v. Triad Architects, Inc., 10th Dist. No.
08AP-329, 2008-Ohio-6917, ¶ 26, quoting Floor Craft at 3, quoting Prosser & Keeton,
Law of Torts, Section 92, 657 (5th Ed.1984).
{¶ 26} Here, the Kamnikars allege that Encompass's negligence in failing to
adequately investigate their claim against the Fioritas, improperly denying the claim, and
carelessly advising the Kamnikars to file the claim against their own insurance carrier
caused the Kamnikars to incur unnecessary costs and expenses associated with hiring
counsel and pursuing legal action. Because the Kamnikars seek recovery of a purely
economic loss arising from Encompass's alleged negligence, the economic loss rule bars
their negligence claim.
1 The Kamnikars did not move the court for an award of prejudgment interest pursuant to R.C. 1343.03(C).
No. 16AP-736 9
3. Restatement of Law 2d, Torts, Sections 323 and 324A
{¶ 27} The Kamnikars contend that their complaint states a claim for relief against
Encompass under the rule of law expressed in Restatement of the Law 2d, Torts, Section
323 (1965), "Negligent Performance of Undertaking to Render Services," and Restatement
of the Law 2d, Torts, Section 324A (1965), "Liability to Third Person for Negligent
Performance of Undertaking." We disagree.
{¶ 28} Pursuant to Restatement of the Law 2d, Torts, Section 323, "[o]ne who
undertakes, gratuitously or for consideration, to render services to another which he
should recognize as necessary for the protection of the other's person or things, is subject
to liability to the other for physical harm resulting from his failure to exercise
reasonable care to perform his undertaking, if (a) his failure to exercise such care
increases the risk of such harm, or (b) the harm is suffered because of the other's reliance
upon the undertaking." (Emphasis added.) Similarly, Restatement of the Law 2d, Torts,
Section 324A, provides as follows: "One who undertakes, gratuitously or for
consideration, to render services to another which he should recognize as necessary for
the protection of a third person or his things, is subject to liability to the third person for
physical harm resulting from his failure to exercise reasonable care to protect his
undertaking, if (a) his failure to exercise reasonable care increases the risk of such harm,
or (b) he has undertaken to perform a duty owed by the other to the third person, or
(c) the harm is suffered because of reliance of the other or the third person upon the
undertaking." (Emphasis added.)
{¶ 29} As previously stated, Encompass undertook the processing of the
Kamnikars' personal injury and property damage claim for the benefit of their insured,
the Fioritas, pursuant to a contract of liability insurance. The Kamnikars make no claim
that they are a third-party beneficiary to the contract of insurance between Encompass
and the Fioritas. See Chitlik v. Allstate Ins. Co., 34 Ohio App. 2d 193 (8th Dist.1973)
(third-party claimants are merely incidental beneficiaries to a liability insurance
contract). Nor have the Kamnikars cited any Ohio authority holding that a liability
insurer may be held liable to a third-party claimant under Restatement of the Law 2d,
Torts, Sections 323 or 324A. See Bugg v. Am. Standard, Inc., 8th Dist. No. 84829, 2005-
No. 16AP-736 10
Ohio-2613 (insurance defendant assumed no duty to the insured's work force, despite
their knowledge of the risks associated with asbestos within the insured's premises).
{¶ 30} Moreover, liability may be imposed under the rule of law expressed in
Restatement of the Law 2d, Torts, Sections 323 and 324A, only where the tortfeasor's
negligence results in physical harm. See Moore v. Covenant Care Ohio, Inc., 6th Dist. No.
No. L-13-1259, 2014-Ohio-4113, ¶ 50-53 (summary judgment for third-party
pharmaceutical provider reversed and cause remanded where injured nursing home
residents presented evidence that the provider's negligence in failing to properly dispense
and label medications caused physical harm to residents). Pursuant to the complaint, the
harm to the Kamnikars arising from the alleged negligence of Encompass is the additional
expense associated with hiring counsel to pursue their claim with Encompass and to
prosecute this action. The only physical harm alleged in the complaint resulted from the
motor vehicle accident, not the subsequent conduct of Encompass. Thus, the complaint
fails to state a claim for relief against Encompass under the rule of law expressed in
Restatement of the Law 2d, Torts, Sections 323 and 324A.
4. Fraud and Negligent Misrepresentation
{¶ 31} Though the Kamnikars' complaint also alleges claims of fraud and negligent
misrepresentation against Encompass, the Kamnikars' appellate brief contains no
argument in support of those claims. Nevertheless, because our review is de novo, we will
address the dismissal of those claims herein. A prima facie case for fraud includes the
following elements: (1) a representation material to the transaction, (2) made falsely, with
knowledge of its falsity, or with utter disregard and recklessness regarding its truth or
falsity, (3) with the intent to mislead another into reliance, (4) justifiable reliance on the
representation or concealment, (5) and injury proximately resulting from such reliance.
Burr v. Stark Cty. Bd. of Commrs., 23 Ohio St. 3d 69 (1986), paragraph two of the
syllabus. A negligent misrepresentation occurs when " '[o]ne who, in the course of his
business, profession or employment, or in any other transaction in which he has a
pecuniary interest, supplies false information for the guidance of others in their business
transactions, is subject to liability for pecuniary loss caused to them by their justifiable
reliance upon the information, if he fails to exercise reasonable care or competence in
obtaining or communicating the information.' " Delman v. Cleveland Heights, 41 Ohio
No. 16AP-736 11
St.3d 1, 4 (1989), citing 3 Restatement of the Law 2d, Torts, Section 552(1), at 126-27
(1965). Justifiable reliance and damages proximately caused by such reliance are
elements of both torts. Martin v. Ohio State Univ. Found., 139 Ohio App. 3d 89, 104 (10th
Dist.2000).
{¶ 32} The Kamnikars' claims for fraud and negligent misrepresentation allegedly
arise from the conduct of Encompass in representing that Encompass had conducted a
thorough investigation of the accident before denying the Kamnikars' insurance claim and
advising the Kamnikars to file a claim with their own insurance carrier. However, as
noted above, an insurance company's duty to conduct a good-faith investigation of the
claim filed against its insured is a duty the insurer owes to its insured. Zoppo; Beever. It
is not a duty the insurer owes to a third party. Zoppo; Beever. Moreover, the Kamnikars
do not allege that they abandoned their claim against the Fioritas as a result of the
representations made by Encompass or that they filed a claim with their own insurer in
reliance on the advice of Encompass. Rather, the Kamnikars admit that they hired
counsel to pursue their claim against Encompass's insured. Consequently, the complaint
conclusively establishes that the Kamnikars did not rely on the advice provided by
Encompass.
{¶ 33} For the foregoing reason, we hold that the trial court did not err when it
granted Encompass's motion to dismiss the Kamnikars' claims against Encompass.
Accordingly, the Kamnikars' first assignment of error is overruled.
B. Second Assignment of Error
{¶ 34} In the Kamnikars' second assignment of error, the Kamnikars argue that the
trial court erred when it granted the Fioritas' motion for judgment on the pleadings. We
disagree.
{¶ 35} A motion for judgment on the pleadings "has been characterized as a
belated Civ.R. 12(B)(6) motion for failure to state a claim upon which relief can be
granted." Easter v. Complete Gen. Constr. Co., 10th Dist. No. 06AP-763, 2007-Ohio-
1297, ¶ 8, citing Whaley v. Franklin Cty. Bd. of Commrs., 92 Ohio St. 3d 574, 581 (2001).
Pursuant to Civ.R. 12(C), "[a]fter the pleadings are closed but within such time as not to
delay the trial, any party may move for judgment on the pleadings." A motion for
judgment on the pleadings is to be granted when, after viewing the allegations and
No. 16AP-736 12
reasonable inferences therefrom in the light most favorable to the nonmoving party, the
moving party is entitled to judgment as a matter of law. Easter at ¶ 8; Brown v. Wood
Cty. Bd. of Elections, 79 Ohio App. 3d 474, 477 (6th Dist.1992), citing Peterson v.
Teodosio, 34 Ohio St. 2d 161, 165-66 (1973). "A motion for judgment on the pleadings is
specifically intended for resolving questions of law." Easter at ¶ 9, citing Friends of
Ferguson v. Ohio Elections Comm., 117 Ohio App. 3d 332, 334 (10th Dist.1997). Appellate
review of motions for judgment on the pleadings under Civ.R. 12(C) is de novo.
Perrysburg Twp. v. Rossford, 103 Ohio St. 3d 79, 2004-Ohio-4362, ¶ 5.
{¶ 36} The record reveals that the trial court first considered the Fioritas' motion
for judgment on the pleadings with counsel, in chambers, before announcing a decision
from the bench prior to the commencement of the jury trial. Though the Kamnikars claim
that the trial court failed to address all the claims asserted against the Fioritas, our review
of the transcript reveals that the trial court ruled on each of the claims alleged in the
complaint, albeit in a summary fashion. The trial court granted a judgment on the
pleadings in favor of the Fioritas as to the claims for negligent misrepresentation and
fraud, bad faith, negligent entrustment, negligence, and civil conspiracy.
1. Negligent Entrustment
{¶ 37} With regard to the claim of negligent entrustment, we note that in
Williamson v. Eclipse Motor Lines, Inc., 145 Ohio St. 467, 470 (1945), the Supreme Court
explained that "liability may arise where an owner entrusts his motor vehicle, with
permission to operate the same, to a person so lacking in competency and skill as to
convert the vehicle into a dangerous instrumentality." According to the court in
Williamson, "liability in such cases arises from the combined negligence of the owner and
the driver; of the former in entrusting the machine to an incompetent driver, and of the
driver in its operation." Id. at 471. "Liability for negligent entrustment arises 'from the
act of entrustment of the motor vehicle, with permission to operate the same, to one
whose incompetency, inexperience or recklessness is known or should have been known
by the owner.' * * * Not only does the test require the owner to entrust the vehicle to the
driver with permission to drive, but the driver must be one who is known to be
incompetent, inexperienced or reckless." Dowe v. Dawkins, 10th Dist. No 93AP-860
(Dec. 23, 1993), quoting Williamson at paragraph two of the syllabus.
No. 16AP-736 13
{¶ 38} The trial court determined that appellee Kristin Fiorita could not be held
liable to the Kamnikars for negligent entrustment, as a matter of law, because she is not
the titled owner of the Escalade. We agree. "In an action based upon negligent
entrustment, the plaintiff bears the burden of establishing that 'the motor vehicle was
driven with the permission and authority of the owner.' " Fletcher Trucking v. Columbus
Fair Auto Auction, Inc., 10th Dist. No. 94APE09-1394 (June 13, 1995), quoting Gulla v.
Straus, 154 Ohio St. 193 (1950), paragraph five of the syllabus.
{¶ 39} With regard to the claim against Robert Fiorita, the complaint alleges
insufficient facts to satisfy the Williamson test. The complaint alleges that Robert
permitted his son Cameron to drive the Escalade on the night in question, that the vehicle
is an SUV, and that Cameron is a "relatively inexperienced driver." (Compl. at 11.) The
complaint does not reveal Cameron's age on the date of the accident, but the complaint
acknowledges that Cameron is a licensed driver. In our view, the complaint does not
allege facts which would permit a reasonable inference that Cameron's "relative[]
inexperience[]" as a driver renders him so lacking in competency and skill as to convert
the vehicle into a dangerous instrumentality. (Compl. at 11.) Additionally, the facts
alleged in the complaint do not permit an inference that Robert knew that his son was an
incompetent driver notwithstanding his licensure. Accordingly, the trial court did not err
when it granted judgment on the pleadings as to the claim for negligent entrustment.
2. Fraud and Negligent Entrustment
{¶ 40} With regard to the claim for bad faith, the Kamnikars allege that the Fioritas
breached a duty owed to them by "lying to Encompass and others about how the accident
happened, * * * misle[ading] the Kamnikars about the identity of their insurance carrier at
the time of the accident," and "wrongfully direct[ing] the Kamnikars to file a fraudulent
insurance claim" with their insurer. (Compl. at 13.) The complaint also alleges that such
conduct constitutes a violation of R.C. 2913.47(B) defining the criminal offense of
"insurance fraud." The trial court determined that the Kamnikars' complaint failed to
allege facts which would support a finding that they reasonably relied on the
representations of the Fioritas. We agree.
{¶ 41} As noted above, the Kamnikars do not allege that they abandoned their
claim against the Fioritas as a result of the representations made by the Fioritas either as
No. 16AP-736 14
to the identity of their insurance carrier or Cameron Fiorita's negligence. Nor do they
allege that they filed a claim with their own insurance carrier in reliance on the advice of
the Fioritas. Rather, the Kamnikars acknowledge that they hired counsel to pursue their
claim with Encompass and subsequently file this action against the Fioritas. Moreover,
the accident occurred on January 24, 2014. Though the complaint does not state the
exact date the Kamnikars learned that the Fioritas were insured by Encompass, the
complaint alleges that the Kamnikars received a denial letter from Encompass dated
February 5, 2014, less than two weeks after the accident. Thus, the complaint belies the
Kamnikars' claim that they incurred a monetary loss as a result of the Fioritas'
misrepresentation regarding the identity of their insurance carrier. Similarly, with regard
to the alleged violations of R.C. 2913.47(B), we have determined that the Kamnikars'
complaint fails to state a claim for relief against the Fioritas sounding in fraud.2
3. Civil Conspiracy
{¶ 42} Turning to the claim for civil conspiracy, we note that " '[c]ivil conspiracy'
has been defined as 'a malicious combination of two or more persons to injure another in
person or property, in a way not competent for one alone, resulting in actual damages.' "
Kenty v. Transamerica Premium Ins. Co., 72 Ohio St. 3d 415, 419 (1995), quoting LeFort
v. Century 21-Maitland Realty Co., 32 Ohio St. 3d 121, 126 (1987), citing Minarik v. Nagy,
8 Ohio App. 2d 194, 196 (8th Dist.1963). "Civil conspiracy is derivative in that the claim
cannot be maintained absent an underlying tort that is actionable without the
conspiracy." Zhelezny v. Olesh, 10th Dist. No. 12AP-681, 2013-Ohio-4337, ¶ 55, citing
Kenty at 419, citing LeFort at 126. Having determined that the trial court did not err
when it dismissed the claims for relief against Encompass and having further determined
that the Fioritas are entitled to judgment on the pleadings as to the remaining tort claims,
the Kamnikars' complaint fails to allege a claim for relief sounding in civil conspiracy.
{¶ 43} For the foregoing reasons, we hold that the trial court did not err when it
granted the Fioritas' motion for judgment on the pleadings. Accordingly, the Kamnikars'
second assignment of error is overruled.
2The economic loss rule bars the Kamnikars' negligence claim against the Fioritas. Corporex at ¶ 6;
Chemtrol at 45; Floor Craft at 3.
No. 16AP-736 15
C. Third Assignment of Error
{¶ 44} In their third assignment of error, the Kamnikars argue that the trial court
abused its discretion when it granted the Fioritas leave to respond to the Kamnikars'
motion for sanctions, out of rule, and denied the Kamnikars' motion for fees and expenses
allegedly incurred as a result of Cameron Fiorita's failure to admit that he was at fault for
the accident.
{¶ 45} Civ.R. 37(C)(2) provides, in relevant part, as follows:
Failure to admit. If a party fails to admit what is requested
under Civ.R. 36, and if the requesting party later proves * * *
the matter true, the requesting party may move that the party
who failed to admit pay the reasonable expenses, including
attorney's fees, incurred in making that proof. The court shall
so order unless:
(a) The request was held objectionable under Civ.R. 36(A);
(b) The admission sought was of no substantial importance;
(c) The party failing to admit had a reasonable ground to
believe that it might prevail on the matter; or
(d) There was other good reason for the failure to admit.
(Emphasis added.)
{¶ 46} In Salem Med. Arts & Dev. Corp. v. Columbiana Cty. Bd. of Revision, 82
Ohio St. 3d 193 (1998), the Supreme Court characterized the sanctions for a failure to
admit as follows:
A party may deny a request for admissions, but, upon motion
pursuant to Civ.R. 37(C), improper denials may subject the
responding party to sanctions. Whether such denials are
subject to Civ.R. 37(C) sanctions depends upon whether the
proof at trial contradicts the denial. If the matters denied
are proved at trial, then a court shall award sanctions
"unless the request had been held objectionable under Rule
36(A) or the court finds that there was good reason for the
failure to admit or that the admission sought was of no
substantial importance * * * ." Civ.R. 37(C). See Itskin v.
Restaurant Food Supply Co. (1982), 7 Ohio App. 3d 127, 7
Ohio B. Rep. 161, 454 N.E.2d 583.
No. 16AP-736 16
(Emphasis added.) Id. at 195-96.
{¶ 47} Even if we assume that Cameron Fiorita did not have reasonable grounds to
deny fault for the accident, pursuant to Salem Med. Arts & Dev. Corp., sanctions under
Civ.R. 37(C)(2) are available to the Kamnikars only if the Kamnikars were required to
produce evidence at trial contradicting Cameron's denials. The Supreme Court made this
point clear in Salem Med. Arts & Dev. Corp. when it stated:
Requests for admissions, * * * are distinguishable from other
discovery requests. "In reality, [a request for admissions] is
not a discovery procedure but is a procedure used to narrow
the issues and to eliminate unnecessary proof at trial by
obtaining the admission of facts known to the party
requesting the admissions and concerning that upon which
there should be no issue." McCormac, Ohio Civil Rules
Practice (2 Ed.1992) 287, Section 10.56. Civ.R. 37(C)
sanctions are in effect reimbursement for the expense
incurred in forcing issues to be tried that should have been
resolved before trial.
(Emphasis added.) Id. at 197.
{¶ 48} Here, the Fioritas admitted Cameron's negligence prior to trial. The trial
court denied the Kamnikars' motion for sanctions stating "[t]here is no basis in law or fact
upon which the Court would award Plaintiffs legal fees and expenses in this matter."
(Oct. 6, 2016 Decision and Entry.) Because the Kamnikars were not required to produce
evidence at trial contradicting Cameron's denial, the event triggering sanctions under
Civ.R. 37(C)(2) did not occur. Similarly, because the Kamnikars' motion for fees and
expenses was meritless on its face, no prejudice arose from the trial court's decision to
permit the Fioritas to file an untimely response to the motion. Based on the foregoing, we
hold that the trial court did not err when it denied the Kamnikars' motion for fees and
expenses associated with the Fioritas' failure to admit. Accordingly, the Kamnikars' third
assignment of error is overruled.
D. Frivolous Appeal
{¶ 49} Having overruled each of the Kaminikars' assignments of error, we turn to
Emcompass's motion seeking monetary sanctions against the Kamnikars and their
counsel for prosecuting a frivolous appeal.
No. 16AP-736 17
{¶ 50} App.R. 23, entitled "[d]amages for delay," permits this court, in the exercise
of its discretion, to require an appellant to pay reasonable expenses, including reasonable
attorney fees, if we "determine that an appeal is frivolous." In re Christ Hosp., 10th Dist.
No. 93AP-800 (Oct. 18, 1994). "An appeal is frivolous if it presents no reasonable
question for review." Bonn v. Bonn, 10th Dist. No. 14AP-967, 2015-Ohio-3642, ¶ 29,
citing Smith-Evans v. Lavelle, 10th Dist. No. 09AP-787, 2010-Ohio-1074, ¶ 15. This court
has found an appeal to be frivolous where arguments made in support of an assignment of
error are unwarranted under existing law. Cooke v. United Dairy Farmers, Inc., 10th
Dist. No. 05AP-1307, 2006-Ohio-4365, ¶ 57. In determining whether a party or counsel
has engaged in frivolous conduct, the subjective belief of the party or counsel is not the
standard for determination of whether an assignment of error is warranted under existing
law or a good-faith extension of existing law. See Patton v. Ditmyer, 4th Dist. No.
05CA12, 2006-Ohio-7107, ¶ 104.
{¶ 51} Here, Encompass requests attorney fees on the basis that the assignments
of error asserted by the Kamnikars are completely without merit as they pertain to the
dismissal of the claims against Encompass and the motion for fees and expenses filed by
the Kamnikars in the trial court. We have determined that the Kamnikars' assignments of
error are meritless, and we affirmed the trial court's decisions on all matters. However, in
our discretion and considering all the facts and circumstances of this case, we do not
conclude that monetary sanctions are appropriate. See Weinstock v. McQuillen, 10th
Dist. No. 09AP-539, 2010-Ohio-1071, ¶ 15; Nyamusevya v. Nkurunziza, 10th Dist. No.
10AP-857, 2011-Ohio-2614, ¶ 25. Accordingly, we deny Encompass's motion for
sanctions.
IV. CONCLUSION
{¶ 52} Having overruled the Kamnikars' three assignments of error and having
denied Encompass's motion for sanctions, we affirm the judgment of the Franklin County
Court of Common Pleas.
Motion for sanctions denied;
judgment affirmed.
BROWN and HORTON, JJ., concur.
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