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Bad faith judgment reversed in underinsured motorist suit
TRACEY BLAIR
Legal News Reporter
Published: January 9, 2017
Nationwide Insurance Company acted in bad faith when handling an underinsured motorist claim, according to the 7th District Court of Appeals.
Thomas G. Marshall and his wife, Cheryl, appealed a Mahoning County Common Pleas Court decision granting summary judgment to Colonial Insurance Company of California (a.k.a. Nationwide).
According to case summary, Marshall was injured in a car crash on July 18, 1997. He was diagnosed with neck sprain and arthritis in the cervical spine. The accident was caused by Anthony Grundy in Trumbull County.
Neurosurgeons later found evidence of spinal cord compression and recommended surgery to avoid the future risk of paralysis.
Marshall’s surgeon said it was likely that the appellant’s symptoms were caused by Marshall having three motor vehicle accidents dating back to 1974. Physical therapy records showed Marshall reported neck pain before the 1997 car crash.
In the most recent accident, Marshall – who had $100,000 in underinsured motorist coverage with Colonial – provided evidence of more than $26,000 in medical bills.
In 1999, a claims adjuster set the reserve at $50,000 due to an issue with a pre-existing condition. The tortfeasor’s liability insurer offered $15,000.
Marshall then filed a claim in Trumbull County Common Pleas Court against Colonial and the tortfeasor.
He later amended his complaint to add Kemper Insurance Company, his employer’s insurance carrier, which had $1 million in underinsured motorist coverage.
Marshall refused to sign broad medical releases.
In 2001, Marshall’s medical experts stated although there was a history of neck complaints, surgery was necessary due to the 1997 car crash.
In 2002, Marshall demanded Colonial settle for $85,000. The insurance company did not respond and reassigned the claim to a different adjuster.
In 2003, Kemper was dismissed from the suit after the Ohio Supreme Court found an employee is not covered by the employer’s policy unless the loss was sustained within the course and scope of employment.
In 2004, Colonial ordered another internal medical review, which found the last car accident was an aggravation of a pre-existing condition. Colonial offered to settle for $15,000.
In 2005, arbitrators awarded Marshall $65,000. Marshall then filed a bad faith action in Mahoning County, as the insurance company’s office was located in Canfield.
Marshall claimed the company failed to timely extend a settlement offer, refused to produce employees for deposition and failed to resolve the claim because other coverage may have existed.
Colonial filed a motion for summary judgment, arguing that the Ohio Administrative Code does not provide a basis for a bad faith claim.
Colonial also claimed Marshall was unreasonable by not negotiating the $15,000 offer, as well as delaying signing medical authorizations and choosing an arbitrator.
Marshall countered that he was justified in refusing to sign overly broad medical authorizations. However, the trial court granted summary judgment.
In a 3-0 decision, the 7th District panel reversed and remanded the case.
Writing for the court, appellate Judge Carol Ann Robb found Marshall’s expert opinion created a genuine issue of material fact regarding Nationwide’s handling of the claim.
Seventh District judges Gene Donofrio and Cheryl L. Waite concurred.
The case is cited Marshall v. Colonial Ins. Co., 2016-Ohio-8155.