The opinion
[Cite as Freeland v. Grange Mut. Cas. Co., 2014-Ohio-5044.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
Norwell Freeland :
d.b.a. Mr. Butch's Salon,
:
Plaintiff-Appellant, No. 14AP-206
: (C.P.C. No. 13CV-08-8697)
v.
: (REGULAR CALENDAR)
Grange Mutual Casualty Company,
c/o CT Corporation System, :
Defendant-Appellee. :
D E C I S I O N
Rendered on November 13, 2014
Byron L. Potts, LPA, Byron L. Potts, and Anthony A. Vines, II,
for appellant.
Smith, Rolfes & Skavdahl Company, L.P.A., and William
Scott Lavelle for appellee.
APPEAL from the Franklin County Court of Common Pleas.
BROWN, J.
{¶ 1} Norwell Freeland, plaintiff-appellant, appeals the judgment of the Franklin
County Court of Common Pleas, in which the court granted the motion for summary
judgment filed by Grange Mutual Casualty Company ("Grange"), defendant-appellee.
{¶ 2} Appellant owned a building that he had insured through an insurance policy
issued by Grange. In part of the building, appellant operated a salon and barbershop. On
August 15, 2011, the insured building was destroyed in a fire. Grange declined to cover the
loss under the terms of the insurance policy.
No. 14AP-206 2
{¶ 3} On August 7, 2013, appellant filed a complaint against Grange alleging
breach of contract and unjust enrichment. On September 4, 2013, Grange filed a motion
for summary judgment arguing that it was not required to provide coverage for the loss
based on, in relevant part, appellant's violation of the policy's concealment,
misrepresentation, and fraud provision ("fraud provision").
{¶ 4} On February 12, 2014, the trial court granted Grange's motion for summary
judgment. With regard to appellant's breach of contract claim, the trial court found that
Grange was entitled to summary judgment under the concealment, misrepresentation,
and fraud provision in the policy. The trial court concluded that appellant had made the
following four material misrepresentations to Grange: (1) appellant told the Columbus
Fire Department investigator, Gregg Haggit, that three people had keys to the property,
but then he later testified that three entirely different people actually had keys, (2)
appellant initially told Grange that he had secured a broken window on the building with
a board the day before the fire occurred, but then he later told Haggit that he lied to
Grange about securing the broken window because he did not want to look "stupid" for
not knowing how to board up a window, (3) appellant admitted that he told his own fire
investigator the wrong information about the location of a broken window at the rear of
the property, claiming that he made up the information to get the investigator motivated,
and (4) appellant admitted that the $405,000 replacement cost for the property he
provided in the sworn affidavit attached to his proof of loss form was a "made up" figure.
With regard to appellant's unjust enrichment claim, the trial court found Grange was
entitled to summary judgment because a claim for unjust enrichment cannot be made
when there is an express contract related to the same subject matter. Appellant appeals
the judgment of the trial court, asserting the following assignment of error:
The trial court erred in granting the defendant's summary
judgment motion.
{¶ 5} Appellant argues in his assignment of error that the trial court erred when it
granted summary judgment in favor of Grange. Summary judgment is appropriate when
the moving party demonstrates that: (1) there is no genuine issue of material fact, (2) the
moving party is entitled to judgment as a matter of law, and (3) reasonable minds can
come to but one conclusion when viewing the evidence most strongly in favor of the non-
No. 14AP-206 3
moving party, and that conclusion is adverse to the non-moving party. Hudson v.
Petrosurance, Inc., 127 Ohio St.3d 54, 2010-Ohio-4505, ¶ 29; Sinnott v. Aqua–Chem,
Inc., 116 Ohio St.3d 158, 2007-Ohio-5584, ¶ 29. Appellate review of a trial court's ruling
on a motion for summary judgment is de novo. Hudson at ¶ 29. This means that an
appellate court conducts an independent review, without deference to the trial court's
determination. Zurz v. 770 W. Broad AGA, L.L.C., 192 Ohio App.3d 521, 2011-Ohio-832,
¶ 5 (10th Dist.); White v. Westfall, 183 Ohio App.3d 807, 2009-Ohio-4490, ¶ 6 (10th
Dist.).
{¶ 6} When seeking summary judgment on the ground that the non-moving party
cannot prove its case, the moving party bears the initial burden of informing the trial
court of the basis for the motion and identifying those portions of the record that
demonstrate the absence of a genuine issue of material fact on an essential element of the
non-moving party's claims. Dresher v. Burt, 75 Ohio St.3d 280, 293 (1996). The moving
party does not discharge this initial burden under Civ.R. 56 by simply making a
conclusory allegation that the non-moving party has no evidence to prove its case. Id.
Rather, the moving party must affirmatively demonstrate by affidavit or other evidence
allowed by Civ.R. 56(C) that the non-moving party has no evidence to support its claims.
Id. If the moving party meets its burden, then the non-moving party has a reciprocal
burden to set forth specific facts showing that there is a genuine issue for trial. Civ.R.
56(E); Id. at 293. If the non-moving party does not so respond, summary judgment, if
appropriate, shall be entered against the non-moving party. Id.
{¶ 7} In the present case, appellant argues that the trial court erred when it held
that statements he made during the course of the claim investigation violated the fraud
provision of the insurance policy. The insurance policy entered into between the parties
provided that the policy would be void for fraud if the insured intentionally concealed or
misrepresented a material fact concerning: (1) the policy, (2) the covered property, (3) the
insured's interest in the covered property, or (4) a claim under the policy. " 'The
requirement that a misrepresentation be material is satisfied, in the context of an
insurer's post-loss investigation, if the false statement concerns a subject relevant and
germane to the insurer's investigation as it was then proceeding. Accordingly, false
answers are material if they might have affected the attitude and action of insurer, and
No. 14AP-206 4
they are equally material if they may be said to have been calculated either to discourage,
mislead, or deflect the company's investigation in any area that might seem to the
company, at that time, a relevant or productive area to investigate. * * * Since the purpose
of requiring answers to questions is to protect the insurer against false claims, the
materiality of false answers should be judged at time of the misrepresentation, and not at
time of trial.' " (Footnotes omitted.) Nationwide Mut. Ins. Co. v. Skeens, 2d Dist. No. 07-
CA-29, 2008-Ohio-1875, ¶ 10, quoting 6 Russ & Segalia, Couch on Insurance (3d
Ed.2005), Section 197:16 Abon, Ltd. v. Transcontinental Ins. Co., 5th Dist. No. 2004-CA-
0029, 2005-Ohio-3052, ¶ 82 ("Most courts have construed materiality broadly,
emphasizing that the subject of the misrepresentation need not ultimately prove to be
significant to the disposition of the claim, so long as it was reasonably relevant to the
insurer's investigation at the time.").
{¶ 8} Appellant claims there are genuine issues of material fact with regard to all
four misrepresentations on which the trial court relied. Appellant argues that any
misrepresentations were not material and willful but, rather, were inadvertencies based
upon the stress he suffered as a result of the fire and business loss three days prior to his
statement to Haggit, the Columbus Fire Department investigator. Appellant also asserts
that his statements to Grange did not affect Grange's attitude and action, and were not
meant to mislead the claim investigation.
{¶ 9} The first statement the trial court found to be a material misrepresentation
was that appellant told Haggit that three people—a Ms. Elkins, a Mr. Beatty, and a
"crackhead" named Toby—had keys to the property, but then later testified that three
entirely different people actually had keys. In his deposition, appellant admitted that he
told Haggit during Haggit's investigation that the aforementioned three people were the
only people who had keys, but then later told Grange's counsel in his Examination Under
Oath ("EUO") that his realtor, Don Henderson, a Mr. Foster, and a Mr. Darrett were the
only people who had keys. Appellant testified that he did not believe the statements were
conflicting because he was under stress from the fire at the time of his statement to
Haggit, and he meant to say that Elkins, Beatty, and Toby had keys in the past but not at
the time of the fire. Appellant admitted that he never communicated with Grange or
Grange's counsel regarding the discrepancy.
No. 14AP-206 5
{¶ 10} Appellant argues that, when the evidence is viewed in his favor, reasonable
minds could differ on whether he made a willful misrepresentation regarding the names
of the individuals who had access to the premises. We agree. This is not a situation in
which reasonable minds could come to but one conclusion when viewing the evidence
most strongly in favor of appellant. Intentional concealment or misrepresentation is a
requirement for fraud under the terms of the contract. Appellant's deposition testimony
that his misstatements were inadvertent raises a question of fact for a factfinder to
determine, and reasonable minds could differ as to whether he intentionally concealed or
misrepresented the names of those who had keys to the premises. Although we agree that
who possessed keys to the premises was clearly relevant and germane to the insurer's
investigation and could have affected the attitude and action of Grange, these findings are
relevant to the issue of materiality, which we do not reach unless the underlying
concealment or misrepresentation is intentional, based on the plain language of the fraud
provision in the contract. Therefore, we find a genuine issue of material fact as to this first
statement.
{¶ 11} The second material misrepresentation cited by the trial court was that
appellant initially told a Grange representative that he had secured a broken window on
the building with a board the day before the fire occurred but then later told Haggit that
he lied to Grange about securing the broken window because he did not want to sound
"stupid." At his EUO, appellant admitted he told Grange that he put a board over the
broken window. He stated he did not want to sound "stupid" because he did not know
how to use a screwdriver and put up a board to secure a window. Appellant stated he had
never done any "tool work," and did not want the Grange representative to say he was
"stupid."
{¶ 12} This second statement differs from the first statement we analyzed above, in
that appellant admits that he intentionally lied to the Grange representative in the second
statement. Thus, appellant's admission satisfies the requirement of the fraud provision in
the contract that the insured intentionally concealed or misrepresented a fact.
{¶ 13} With regard to the materiality requirement in the contract, it is clear that
appellant's false statement that he placed a board over the window was relevant and
germane to the insurer's investigation as it was then proceeding. Whether there existed
No. 14AP-206 6
easy access to the interior of the premises was highly relevant to Grange's investigation
into whether the fire was accidental or an intentional act of arson. Thus, the requirement
of materiality was satisfied. Although appellant claims that he lied only so that he would
not be embarrassed by his inability to use tools, his motivation for lying is only relevant to
one alternative definition of materiality. Pursuant to Skeens, false answers are material if
they might have affected the attitude and action of the insurer or if they may be said to
have been calculated either to discourage, mislead or deflect the company's investigation.
Id. at ¶ 10. Skeens does not require that the statement satisfy both definitions to be
material. Therefore, we find the trial court did not err when it found no issues of material
fact remained as to whether appellant intentionally misrepresented a material fact when
he lied to the Grange representative about placing a board over the broken window.
{¶ 14} The third material misrepresentation cited by the trial court was that
appellant admitted he told his own fire investigator the wrong information about the
location of the broken window at the rear of the property in order to motivate the
investigator. In his deposition testimony, appellant testified that he hired his own
certified fire investigator, Christopher Oiler, and he sent an e-mail to Oiler in which
appellant claimed he hired a fire investigator from Battelle Institute to examine the
premises. Although the e-mail is difficult to decipher due to syntax errors and lack of
context, it appears that appellant was telling Oiler that appellant had identified the wrong
window that had been broken previous to the fire. Appellant also told Oiler that the
investigator from Battelle Institute gave an opinion about the burn pattern and the course
the fire took.
{¶ 15} At his deposition, appellant admitted that he made up the story about the
investigator from Battelle Institute to motivate Oiler to look "real hard." However,
appellant argues that his e-mail to Oiler did not constitute a willful material
misrepresentation because, although his statements to Oiler were false, they were not
made to affect the attitude and action of Grange and were not meant to discourage,
mislead, or deflect Grange's investigation. Appellant points out that Oiler was his own
investigator, Oiler never prepared a report, and Grange never relied on Oiler's findings.
{¶ 16} We appreciate appellant's reasoning but must ultimately dismiss his
argument. The insurance policy at issue provides that it is void for fraud if the insured
No. 14AP-206 7
intentionally conceals or misrepresents a material fact concerning the covered property.
Appellant here intentionally misrepresented facts when he told Oiler that he had hired
another investigator who looked at the property and opined about the burn pattern and
course of the fire. Although appellant protests that he made this misrepresentation to his
own investigator and not Grange, and he never had Oiler prepare a report on his findings
that Grange could review, we must examine the statement in the context of when it was
made. Appellant's intention in making these blatantly false statements to Oiler was to
affect his investigation, analysis, and opinions. Oiler's investigative findings would
certainly be relevant and germane to Grange's investigation, might affect the attitude and
action of Grange, and might mislead or deflect Grange's investigation. Even though Oiler
ultimately did not prepare a report on his investigative findings, and Grange only learned
of appellant's misrepresentations to Oiler later, the misrepresentations in the e-mail were,
at the time, potentially material to the entire investigation, including Grange's
investigation. For these reasons, we find the trial court did not err when it found
appellant's intentional misrepresentations to Oiler were material.
{¶ 17} The fourth material misrepresentation cited by the trial court was that
appellant admitted that the $405,000 replacement cost for the property he provided in
the sworn affidavit attached to his proof of loss form was a "made up" figure. However, as
we have already found the trial court did not err when it found appellant made two other
material misrepresentations, we decline to address the fourth material misrepresentation.
{¶ 18} Therefore, although we have found that there remained genuine issues of
material fact with regard to the first misrepresentation cited by the trial court, Grange was
still entitled to summary judgment based on the second and third misrepresentations. For
all of the foregoing reasons, appellant's assignment of error is overruled.
{¶ 19} Accordingly, appellant's single assignment of error is overruled, and the
judgment of the Franklin County Court of Common Pleas is affirmed.
Judgment affirmed.
SADLER, P.J., and LUPER SCHUSTER, J., concur.
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