Keny v. Ohio State Univ.

[Cite as Keny v. Ohio State Univ., 2016-Ohio-3475.]
JAMES M. KENY, Exec., et al. Case No. 2013-00711
Plaintiffs Judge Dale A. Crawford
v. DECISION
THE OHIO STATE UNIVERSITY
Defendant
{¶1} This cause comes to be heard on Defendant’s January 26, 2016 Motion for
Summary Judgment pursuant to Civ.R. 56(B). On February 9, 2016, Plaintiffs filed a
memorandum contra, and on February 16, 2016, Defendant filed a motion for leave to
file a reply along with the reply. Upon review, Defendant’s motion for leave is
GRANTED. The Motion for Summary Judgment is now before the Court.
{¶2} This case concerns the disbursement of decedent Galia Keny’s (Galia)
group life insurance policy provided by Anthem Life Insurance Company (Anthem) and
entitled to her as a former employee of Defendant, The Ohio State University. Plaintiffs,
James Keny (executor of Galia’s estate), Tara Keny, Cory Keny, Mason Keny, and
Audrey Keny (Galia’s children), filed their complaint against Defendant claiming breach
of contract and negligence based on allegations that Defendant improperly permitted life
insurance proceeds to be disbursed to Galia’s surviving husband, William L. Brown, Jr.
(Brown), rather than to Galia’s children. Plaintiffs argue that the disbursement was
improper because Galia allegedly filed a beneficiary designation two months prior to her
death. Plaintiffs further allege that Galia was entitled to an amount of $182,000 as an
employee benefit and that Defendant improperly informed Anthem, the benefits
administrator, that Galia did not have any beneficiary designations on file.
Case No. 2013-00711 -2- DECISION
{¶3} Defendant asserts that it did not have a beneficiary designation on file and
that it conveyed accurate information to Anthem, which chose to pay the insurance
proceeds to Brown as provided in the terms of the Certificate of Coverage. Defendant
has filed its Motion for Summary Judgment alleging that there are no material issues of
fact and that it is entitled to judgment as a matter of law. Pursuant to Civ.R. 56(E),
Defendant provides the affidavits of Jody Gilkerson (Gilkerson), Defendant’s Program
Manager, Jamie Dupler (Dupler), Defendant’s Short Term Disability/Life Coordinator,
and Kristie Henneman (Henneman), Defendant’s Interim Associate Director of
Employee and Labor Relations. Defendant has also provided the decisions of both the
Delaware County Common Pleas Court and Fifth District Court of Appeals disposing of
the connected action Plaintiffs filed against Anthem for the same causes of action. The
Court will take judicial notice of these decisions.
{¶4} Under Civ.R. 56(C), summary judgment is proper “if the pleadings,
depositions, answer to interrogatories, written admissions, affidavits, transcripts of
evidence, and written stipulations of fact, if any, timely filed in the action, show that
there is no genuine issue as to any material fact and that the moving party is entitled to
judgment as a matter of law.” Thus, in order to determine whether Defendant is entitled
to judgment as a matter of law pursuant to Civ.R. 56(C), the Court must ascertain
whether the evidentiary materials presented by Defendant show that there is no genuine
issue as to any material fact involved in the case. In making this determination it is
necessary to analyze the landmark Ohio Supreme Court decision which addresses the
“standards for granting summary judgment when the moving party asserts that the
nonmoving party has no evidence to establish an essential element of the nonmoving
party’s case.” Dresher v. Burt, 75 Ohio St. 3d 280, 285 (1996); see also Saxton v.
Navistar, Inc., 10th Dist. Franklin No. 11AP-923, 2013-Ohio-352, ¶ 7.
Case No. 2013-00711 -3- DECISION
{¶5} In Dresher, the Ohio Supreme Court held:
{¶6} “[T]he moving party bears the initial responsibility of informing the trial court
of the basis for the motion, and identifying those portions of the record before the trial
court which demonstrate the absence of a genuine issue of fact on a material element
of the nonmoving party’s claim. * * * [T]he moving party bears the initial burden of
demonstrating that there are no genuine issues of material fact concerning an essential
element of the opponent’s case. To accomplish this, the movant must be able to point
to evidentiary materials of the type listed in Civ.R. 56(C) that a court is to consider in
rendering summary judgment. * * * The assertion must be backed by some evidence of
the type listed in Civ.R. 56(C) which affirmatively shows that the nonmoving party has
no evidence to support that party’s claims.” Dresher, supra, at 292-293.
{¶7} In interpreting the United States Supreme Court decision in Celotex v.
Catrett, 477 U.S. 317 (1986), the Dresher Court found no express or implied
requirement in Civ.R. 56 that the moving party support its motion with affidavits or other
similar materials negating the opponent’s claim. Dresher, supra, at 291-292.
Furthermore, the Dresher Court stated that it is not necessary that the nonmoving party
produce evidence in a form that would be admissible at trial in order to avoid summary
judgment. Id. at 289, quoting Celotex, supra. In sum, the Dresher Court held that the
burden on the moving party may be discharged by “showing”–that is, pointing out to the
Court–that there is an absence of evidence to support the nonmoving party’s case. Id.
{¶8} “If the moving party fails to satisfy its initial burden, the motion for summary
judgment must be denied.” Id. at 293. If the moving party has satisfied its initial burden,
the nonmoving party has a reciprocal burden as outlined in Civ.R. 56(E):
{¶9} “When a motion for summary judgment is made and supported as provided
in this rule, an adverse party may not rest upon mere allegations or denials of his
pleadings, but the party’s response, by affidavit or as otherwise provided in this rule,
must set forth specific facts showing that there is a genuine issue for trial. If the party
Case No. 2013-00711 -4- DECISION
does not so respond, summary judgment, if appropriate, shall be entered against the
party.”
{¶10} In its Motion for Summary Judgment, Defendant first argues that Plaintiffs’
claims in this Court are barred by collateral estoppel. “[I]ssue preclusion, [or] collateral
estoppel, holds that a fact or a point that was actually and directly at issue in a previous
action, and was passed upon and determined by a court of competent jurisdiction, may
not be drawn into question in a subsequent action between the same parties or their
privies, whether the cause of action in the two actions be identical or different.” State ex
rel. Davis v. Pub. Emps. Retirement Bd., 120 Ohio St. 3d 386, 392, 2008-Ohio-6254,
899 N.E.3d 975, ¶ 27. The determination of the applicability of collateral estoppel
requires that Plaintiffs had a fair opportunity to “fully litigate and to be ‘heard’ in the due
process sense. Accordingly, an absolute due process prerequisite to the application of
collateral estoppel is that the party asserting the preclusion must prove that the identical
issue was actually litigated, directly determined, and essential to the judgment in the
prior action. * * *” Goodson v. McDonough Power Equip., 2 Ohio St. 3d 193, 200-201,
443 N.E.2d 978 (1983).
{¶11} In the connected action, Plaintiffs had alleged that Anthem improperly
disbursed the policy amount to Brown based upon the inaccurate information that no
beneficiary designations existed for Galia. Plaintiffs also alleged that Defendant
improperly stored or saved the alleged beneficiary designation completed by Galia two
months prior to her death. The Delaware Court of Common Pleas dismissed Plaintiffs’
negligence claim relying on the economic loss doctrine and granted Anthem’s motion for
summary judgment on the breach of contract claim, which completely disposed of the
case. In its motion for summary judgment decision, the common pleas court found that
Anthem did not breach its contract when it paid out Galia’s benefits to Brown based
upon the information from Defendant that Galia had no beneficiary designations in her
file. Plaintiffs appealed the decision and the Fifth District Court of Appeals (Fifth
Case No. 2013-00711 -5- DECISION
District) affirmed the common pleas court’s decision. The Fifth District concluded in its
decision that “[i]t is undisputed that a beneficiary card completed by [Galia] does not
exist” and that they agree with the trial court’s analysis “that undisputedly, a change of
beneficiary designation card was not in existence * * *.”
{¶12} Plaintiffs argue that the issue in the connected action only involved whether
Anthem breached a duty of good faith under the contract and that the issue in this case
is whether Defendant violated its duty to keep proper records and give proper
instruction to Anthem. Plaintiffs further argue that any determination regarding the
existence of the beneficiary card was not essential to the determination of the
connected action.
{¶13} Although Plaintiffs attempt to distinguish the ultimate issue between the
connected action and this case, the Court finds that the courts in the connected action
could not have concluded as they did without making a determination regarding the
existence of the beneficiary designation. Because it was necessary for the courts to
first determine that the designation did not exist before it could conclude that Anthem
did not breach its contract, that determination was essential to the courts’ decisions.
Thus, the Court finds that Plaintiffs’ claims are barred by collateral estoppel.
{¶14} Defendant further argues that even if the claims are not barred by collateral
estoppel, it did not breach its contract with Galia nor was it negligent. In order to
recover for breach of contract, plaintiff must prove the existence of a contact,
performance by plaintiff, breach by defendant, and damages or loss as a result of the
breach. Samadder v. DMF of Ohio, Inc., 154 Ohio App. 3d 770, 2003-Ohio-5340, 798
N.E.2d 1141 (10th Dist). In order to prove negligence, Plaintiffs must prove the
existence of a duty, a breach of such duty, proximate cause and damages. Armstrong
v. Best Buy Co., Inc., 99 Ohio St. 3d 79, 2003-Ohio-2573, 788 N.E.2d 1088.
{¶15} As stated earlier, Plaintiffs claim that Defendant failed to follow the terms of
the Certificate of Coverage provided in Anthem’s life insurance policy and that
Case No. 2013-00711 -6- DECISION
Defendant was negligent in its recordkeeping. Based on the Certificate of Coverage
provided in Anthem’s policy, any change of beneficiary would be effective on the date
the policyholder—Defendant—received a change card from the covered employee.
Anthem Contract, at p. 10. The terms also state that if no beneficiary is named, Anthem
can, at its option, pay the life insurance benefit to the estate, the surviving spouse or
otherwise the surviving children. Accordingly, it was the duty of Defendant to notify
Anthem of the designations it had on file and any disbursement was under the
discretion of Anthem.
{¶16} The affidavits of Gilkerson and Dupler both state that Defendant did not
have a beneficiary listed in Galia’s file and that Defendant was not aware of any
individual other than Brown who notified it of competing claims to Galia’s life insurance
benefits. Although Plaintiffs claim that Galia did change her beneficiary designations,
the only evidence in favor of Plaintiffs are the affidavits of Galia’s ex-husband and
friends, which state that based on their knowledge, Galia had intended to change her
beneficiary designations. Specifically, Jill Warner states that Galia told her she “had
met with Kristie Henneman to change her beneficiary designations.” Warner Affidavit,
at ¶ 3. However, this statement does not allege that she, in fact, made the formal
changes and filled out the proper forms. The statement only asserts that changing
beneficiary designations was Galia’s purpose in meeting with Henneman, not that she
actually made the changes. Furthermore, the Court also notes that the statements in
Plaintiffs’ affidavits contain inadmissible hearsay that are not subject to an exception
pursuant to Ohio Evid. R. 803.
{¶17} Henneman’s affidavit, on the contrary, states that in her capacity as
Defendant’s Interim Associate Director of Employee and Labor Relations, she does “not
have access to [Defendant’s] benefits beneficiary designation information systems, nor
[does she] process any employee requests to change or alter beneficiary designations
on any employee benefit plans. If an employee were to contact [her] regarding a
Case No. 2013-00711 -7- DECISION
change to beneficiary designations, [she] would refer the employee to the [Defendant’s]
benefits office to handle such a request.” Henneman Affidavit, at ¶ 3. Henneman
further averred that she never met with Galia about employee benefits or beneficiary
designations. Id. at ¶¶ 4-5. Because Plaintiffs have not presented any admissible
evidence to contradict the affidavits of Gilkerson, Dupler, or Henneman, the Court finds
that there is no issue of material fact regarding the nonexistence of any beneficiary
designation for Galia.
{¶18} Furthermore, Plaintiffs’ negligence claims are also barred by the economic
loss doctrine. “The well-established general rule is that a plaintiff who has suffered only
economic loss due to another’s negligence has not been injured in a manner which is
legally cognizable or compensable.” Corporex Dev. & Constr. Mgmt. v. Shook, Inc., 106
Ohio St. 3d 412, 2005-Ohio-5409, 835 N.E.2d 701, ¶ 6. “Thus, where only economic
losses are asserted, damages may be recovered only in contract; there can be no
recovery in negligence due to the lack of physical harm to persons and tangible things.”
RWP, Inc. v. Fabrizi Trucking & Paving Co., 8th Dist. Cuyahoga No. 87382, 2006-Ohio-
5014, ¶ 21 (Sept. 28, 2006). Although Plaintiffs rely on Haddon View Investment Co. v.
Coopers & Lybrand, 70 Ohio St. 2d 154, 436 N.E.2d 212 (1982), to argue that their
negligence claim falls under an exception to the economic loss doctrine because
Defendant negligently misrepresented Galia’s beneficiary designations to Anthem,
Plaintiffs fail to identify a preexisting duty in tort as was present in Hadden. Plaintiffs
also failed to allege a claim for negligent misrepresentation in its original complaint
against Defendant. Moreover, the conclusions of the Delaware Court of Common Pleas
and the Fifth District along with the affidavits of Gilkerson and Dupler demonstrate that
Defendant accurately provided Anthem with the information it had. Accordingly,
Plaintiffs’ negligence claim fails in this regard as well.
{¶19} Therefore, based on the foregoing and viewing this matter in light most
favorable to Plaintiffs, the Court finds that there is no genuine issues of material fact
Case No. 2013-00711 -8- DECISION
regarding the nonexistence of a beneficiary designation for Galia’s children, and
accordingly, Defendant did not breach its contract nor was it negligent with regard to the
beneficiary designation. Defendant’s Motion for Summary Judgment is GRANTED.
DALE A. CRAWFORD
Judge
[Cite as Keny v. Ohio State Univ., 2016-Ohio-3475.]
JAMES M. KENY, Exec., et al. Case No. 2013-00711
Plaintiffs Judge Dale A. Crawford
v. JUDGMENT ENTRY
THE OHIO STATE UNIVERSITY
Defendant
{¶20} A non-oral hearing was conducted in this case upon Defendant’s Motion for
Summary Judgment. For the reasons set forth in the decision filed concurrently
herewith, Defendant’s Motion for Summary Judgment is GRANTED, and judgment is
rendered in favor of Defendant. All previously scheduled events are VACATED. Court
costs are assessed against Plaintiffs. The clerk shall serve upon all parties notice of
this judgment and its date of entry upon the journal.
DALE A. CRAWFORD
Judge
cc:
Susan N. Hayes Peter E. DeMarco
5878 North High Street Stacy L. Hannan
Worthington, Ohio 43085 Assistant Attorneys General
150 East Gay Street, 18th Floor
Columbus, Ohio 43215-3130
Filed May 12, 2016
Sent To S.C. Reporter 6/17/16