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Case Law Alerts

As a Result of Plaintiff's Unauthenticated Exhibits and Premature Filing of Suit, Court Sided with Defendant and Strengthened Case Law for Insurance Carriers Looking to Dismiss Lawsuits Filed Primarily to Obtain Attorney Fees

At Home Auto Glass, LLC a/a/o James Franks v. State Farm Mutual Auto. Ins. Com., County Court, 9th Judicial Circuit in and for Orange County, Case No. 2020-SC-002807-O, Mar. 20, 2023

July 1, 2023

This suit involved a potential confession of judgment due to the insurance carrier issuing a partial payment on the claim after suit was filed. 

After receiving the complaint with the plaintiff’s $2,259.79 invoice attached, State Farm issued a payment in the amount of $433.98, representing the coverage amount of the windshield, along with interest. As a result of said payment, the plaintiff filed its motion for partial summary judgment/confession. The motion had three exhibits attached: an estimate, a computer screen image, and a copy of State Farm’s check to the plaintiff. All three exhibits were unauthenticated. 

The plaintiff argued that the computer screen image was undisputed evidence that the invoice had been submitted pre-suit. The court found that the image was nothing more than an unauthenticated, incomplete computer screen image from an unknown source and did not identify when it was created or by whom. The invoice was checked on the computer screen, but the plaintiff had not provided a copy of the invoice. The screen image also referenced an e-mail that had previously been sent, but the plaintiff did not provide a copy of the e-mail. Accordingly, the court found that the plaintiff had not established that State Farm ever had to pay the plaintiff for an insured loss under the insured’s policy prior to the filing of the lawsuit. 

In opposition to plaintiff’s motion, State Farm argued that they had only first learned of the repair when they received the plaintiff’s complaint and that they had been unable to locate an e-mail or any other communication from the plaintiff prior to suit being filed. Accordingly, the court ruled that there was a genuine issue of material fact and denied plaintiff’s motion. 

As part of its analysis, the court looked at Fla. Stat. § 627.428 and relevant case law related to this statute. The court held that an insured would only be entitled to fees if they presented an opportunity for the insurer to pay the claim as opposed to being the one who won the race to the courthouse. In citing People’s Tr. Ins. Co. v. Polanco, Fla. 4th DCA Jan. 11, 2023, the court held that the first sign of a disagreement between the plaintiff and the defendant in the instant case was at the filing of the complaint. 

Because the plaintiff could not demonstrate that it needed to bring suit in order to obtain the payment under the policy, the court ruled that a fee recovery was not warranted. The court also highlighted that, had the plaintiff provided a pre-suit notice of the invoice, it may have received payment without the need to bring suit. 

This case demonstrates that courts are not likely to grant fees when the primary purpose of the lawsuit appears to be nothing more than a mechanism to obtain attorney fees. I believe this order is significant as there has been a recent trend in personal injury protection litigation where plaintiffs have been filing declaratory actions that do not require a pre-suit demand, as opposed to a breach of contract action under 627.736(10), thus depriving insurance carriers of the ability to cure a potential underpayment on demand and prior to attorney fees becoming owed. I believe that this case may be used to bolster the position that such declaratory actions warrant a dismissal at the outset as they appear to be filed with the sole intent of generating attorney fees, as opposed to curing potential underpayments, similar to the case at hand.
 

Case Law Alerts, 3rd Quarter, July 2023 is prepared by Marshall Dennehey to provide information on recent developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2023 Marshall Dennehey, all rights reserved. This article may not be reprinted without the express written permission of our firm.

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Two Tracks, No Preclusion: Ohio Supreme Court Preserves Separate Damages Claims After Chapter 2506 Appeals

The Supreme Court of Ohio has clarified that an administrative appeal under Ohio Revised Code Chapter 2506 does not bar a separate action for damages and declaratory relief that could not have been pursued in the administrative appeal. The Ohio Supreme Court considered Sheetz, Inc. v. Centerville (2026-Ohio-3531) as a result of a certified question from the Southern District of Ohio. The question was whether Sheetz, the gas station/convenience store brand, was barred from seeking damages in a separate action since damages were not sought in their administrative appeal. Ultimately, the Ohio Supreme Court ruled that res judicata does not bar a separate action for damages after ruling on an administrative appeal because R.C. Chapter 2506 is limited to judicial review and cannot grant affirmative relief. The case arose after Centerville’s city council rejected a site plan proposed by Sheetz, Inc. that had received unanimous approval from the City’s planning commission. Sheetz filed an administrative appeal pursuant to R.C. 2506 in the Montgomery County Court of Common Pleas, and two months later filed a complaint for damages and declaratory relief under 42 USC § 1983 as a takings action with the city, city council, and other objectors as improper takings and a violation of due process, as well as interference with business and contractual relationship. The city and city council removed the § 1983 action for damages to federal court. Montgomery County Court of Common Pleas reversed the city council’s denial, and allowed the Sheetz project to move forward. Upon that ruling, the federal court issued a show-cause order questioning whether the § 1983 action was barred by the doctrine of res judicata via claim preclusion (which includes all theories of recovery).  Sheetz argued that Ohio courts of common pleas do not have authority to award damages or declaratory relief as party of the R.C. Ch. 2506 appeal, therefore res judicata could not be triggered to apply to the § 1983 action. Additionally, Sheetz moved to certify the issue to the Ohio Supreme Court, citing differing results between the second and sixth districts on this same issue. Centerville approached the question, not from a claim preclusion standpoint, but from the holding in Grava v. Parkman, Twp which states that a final judgment rendered on the merits bars all subsequent action based on the same transaction or occurrence.  In yet another approach, an objector argued that claim preclusion was satisfied because Sheetz could have raised its damages claims in the administrative appeal – Sheetz disagrees. In their analysis, the Supreme Court of Ohio broke down the elements of a claim preclusion analysis: 1) a prior final, valid decision on the merits by a court of competent jurisdiction; (2) a second action involving the same parties, or their privies, as the first; (3) a second action raising claims that were or could have been litigated in the first action; and (4) a second action arising out of the transaction or occurrence that was the subject matter of the previous action. The Court held that R.C. Ch. 2506 does not permit a party to argue damages as R.C. Ch. 2506 limits the common pleas jurisdiction as if it were sitting on appeal, and therefore can only affirm, reverse, vacate, or modify the appealed order, or can remand the case to the administrative body. Further, the Court held that Grava’s conclusion that a final judgment precludes additional litigation for different relief is inapplicable under this fact pattern because it was meant only to apply to those matters in which the plaintiff brings the exact same case twice, but for new relief. The Court found Grava was inapplicable because Sheetz could have requested damages or declaratory relief in the R.C. 2506 appeal. Therefore, Grava would be nothing more than dicta if it even did apply. Going further, the Ohio Supreme Court disavowed Sixth Circuit precedent which, in reliance on Grava and other district court decisions, permitted an owner to seeking relief under 42 U.S.C. § 1983 alongside an administrative appeal. See Moore v Hiram Twp., 988 F.3d 353 (6th Cir.2021). The Ohio Supreme Court found that the Sixth Circuit had disregarded a critical decision in Community Concerned Citizens, Inc. v. Union Twp. Bd. of Zoning Appeals, 1993-Ohio-115, which clearly held that a R.C. Ch. 2506 appeal cannot be combined with a complaint seeking other claims for relief. Id. at ¶ 11. To that end, the Ohio Supreme Court has determined that the decisions Moore relied on (outside of Grava) are no longer good law, and that Moore was wrongly decided. The decision draws a clear procedural boundary: Chapter 2506 provides judicial review of an administrative decision, not a forum for independent claims seeking affirmative relief. Although Grava may place claims arising from a single transaction within the potential scope of claim preclusion, those claims are not barred unless the complete claim-preclusion test is satisfied. Because Sheetz could not have pursued damages or declaratory relief in its Chapter 2506 appeal, the separate action was not precluded. The remaining question for practitioners looking to apply or defend against this exception is when does the statute of limitations begin to run on damages and declaratory relief claims related to an administrative decision on appeal? A takings action in federal court has a 2-year statute of limitations, or as a state claim, 4 years (like the other tortious claims raised therein). Correlating this case with others, an administrative appeal will not likely toll the statute of limitations on claims based on a final decision by a municipal authority. Therefore, practitioners should look for these cases to be brought simultaneously.

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