Bad Faith - Ohio Court of Appeals Affirms Dismissal of Bad Faith Claim and Raises Sua Sponte Possibility of Sanctions Against Plaintiffs
The Ohio Court of Appeals, Eighth District, recently affirmed a grant of summary judgment in favor of an insurer in Siemientkowski v. State Auto Mutual Insurance Co., No. 87299, 2006 WL 2299358 (Aug. 10, 2006). The court
not only upheld the dismissal of the claims for breach of contract and bad faith against the insurer, but also raised sua sponte the possibility of sanctions against the plaintiffs for pursuing a frivolous appeal.
This matter arose from a claim for coverage made by the plaintiffs under a policy of homeowners insurance issued by State Auto Mutual Insurance Company. The plaintiffs had been sanctioned in a prior lawsuit for filing a frivolous
claim and requested that their homeowners insurer cover the sanction of approximately $30,000 plus associated legal expenses. When the insurer declined coverage, the plaintiffs filed a lawsuit alleging breach of contract and
bad faith denial of coverage. The trial court granted summary judgment in favor of State Auto.
On appeal, the court first held that the trial court had correctly determined that the claim was not covered under State Auto’s policy as a matter of law. The court then went on to state that, even though State Auto
had not filed a motion for sanctions, the court itself had concluded that the plaintiffs’ appeal was frivolous. The court further commented that the plaintiffs “need to take a step back and stop making a mockery
of the American civil justice system.” Noting that sanctions should not be imposed lightly or without notice and an opportunity to be heard, the court ordered State Auto to submit a statement of the fees and costs it
had incurred on appeal and granted plaintiffs fourteen days to file a memorandum in response.