[Cite as Sullivan v. Westfield Ins. Co.,

.]

IN THE COURT OF APPEALS

ELEVENTH APPELLATE DISTRICT

LAKE COUNTY, OHIO

TONY AND STEPHANIE SULLIVAN, : OPINION INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, :

Plaintiffs-Appellants, : CASE NO. 2012-L-004 - vs - :

WESTFIELD INSURANCE : COMPANY, et al. : Defendants-Appellees.

Civil Appeal from the Lake County Court of Common Pleas, Case No. 11CV000397.

Judgment: Affirmed.

Patrick J. Perotti, Dworken & Bernstein Co., L.P.A., 60 South Park Place, Painesville, OH 44077 (For Plaintiffs-Appellants).

John J. Haggerty and Thomas A. Cunniff, Fox Rothschild, LLP, 2700 Kelly Road, Suite 300, Warrington, PA 18976-2624 (For Defendants-Appellees).

MARY JANE TRAPP, J.

{¶1} Appellants, Tony and Stephanie Sullivan, appeal from two judgments of

the Lake County Court of Common Pleas. The first is an order dismissing certain

named defendants from the action, while the second is an order granting appellee,

Westfield Insurance Company’s (“Westfield”), motion for summary judgment. Through

the two orders, the trial court fully disposed of the action. {¶2} We find that the trial court did not err in dismissing two of the named

defendants, American Select Insurance Company (“American Select”) and Ohio

Farmers Insurance Company (“Ohio Farmers”), because the Sullivans failed to state a

claim against those two entities upon which relief could be granted. We further find no

error in the trial court’s grant of summary judgment in favor of the remaining defendant,

Westfield, because the Sullivans’ claims were barred by the applicable statutes of

limitations. Therefore, the decisions of the Lake County Court of Common Pleas are

affirmed.

Substantive Facts and Procedural History

{¶3} On October 5, 1994, the Supreme Court of Ohio, in Martin v. Midwestern

Group Insurance Co.,

, ruled that uninsured/underinsured (“UM/UIM”)

coverage followed the insureds under the policy and not the different vehicles in the

household, eliminating the “other-owned vehicle exception” to UM/UIM coverage. This

decision removed the necessity for insureds to pay UM/UIM premiums on each of the

vehicles on their policy, allowing them to pay for such coverage on only one vehicle, but

to have coverage for themselves and their resident family members while in any of their

owned vehicles.

{¶4} Prior to and at the time of the Martin decision, the Sullivans had an

automobile insurance policy through Westfield. Three cars were listed on the policy,

and the Sullivans paid UM/UIM premiums on all three vehicles. On December 10,

1994, the Sullivans’ insurance policy was up for renewal, however, they never

completed their premium payments, and Westfield cancelled their insurance policy for

non-payment on June 6, 1995.

2 {¶5} Over fifteen years after their policy was cancelled, the Sullivans filed a

complaint against Westfield, American Select, and Ohio Farmers, asserting claims of

breach of contract, and misrepresentation and fraud. They asserted these claims on

behalf of themselves and all others similarly situated. The crux of the Sullivans’

complaint was that Westfield, American Select, and Ohio Farmers had sold them

automobile insurance, including UM/UIM coverage, and had unnecessarily and

fraudulently continued to charge them premiums for UM/UIM coverage on more than

one vehicle, despite the holding in

{¶6} As to the breach of contract claim, the Sullivans alleged Westfield

provided “something other than what the parties contracted the plaintiffs would receive

for payment of premiums for ‘UM’ on vehicles beyond the first; charging a fee for a

‘benefit’ which does not exist; breaching the fiduciary duty owed by the carrier to its

customers; and breaching the contractual duty of good faith and fair dealing.”

{¶7} In regard to the misrepresentation and fraud count, the Sullivans asserted

that Westfield represented to them that “the amount they were paying for vehicles after

the first was for UM coverage for the named insured and family members, when that

was untrue; and was instead for guest coverage.” They contended that they had so

relied, to their detriment.

{¶8} Westfield, American Select, and Ohio Farmers filed a motion to dismiss

the complaint, which the trial court denied in part, granted in part, and converted in part

to a motion for summary judgment. Pursuant to Civ.R. 12(B)(6), the trial court

dismissed American Select and Ohio Farmers from the suit, finding that the Sullivans

had failed to state a claim against those entities upon which relief could be granted.

3 The trial court determined that “[n]othing in the complaint indicates that the named

plaintiffs had any contractual relationship with American Select Insurance Company or

Ohio Farmers Insurance Company. The only allegation against American Select

Insurance Company and Ohio Fa[r]mers Insurance Company is that they are

subsidiaries of Westfield.”

{¶9} Westfield also sought dismissal pursuant to Civ.R. 12(B)(6), but the trial

court converted this branch of the motion into a motion for summary judgment and

permitted the parties to further brief the matter. The trial court did so because

Westfield’s 12(B)(6) motion presented material outside the complaint, and the court did

not exclude such materials. See Civ.R. 12(B).

{¶10} In its motion for summary judgment, Westfield argued, among other

things, that the Sullivans’ claims were barred by the applicable statutes of limitations.

The Sullivans countered that the statute of limitations as to the breach of contract claim

had been tolled during the pendency of Beck v. Westfield Natl Ins. Co., Cuyahoga

Common Pleas, No. CV-09-691286,

(Dec. 3, 2010), and

therefore their action was brought within the 15-year statute of limitations, as extended.

They asserted that because Beck included class action allegations, it tolled the running

of the statute of limitations as to them because they were putative class members.

{¶11} As to the misrepresentation and fraud claim, the Sullivans argued that

the four-year statute of limitations had been tolled by application of the discovery rule,

because they had only recently discovered that Westfield had misrepresented the

premiums as UM/UIM coverage for the insureds and family members, and not as guest

coverage.

4 {¶12} The trial court agreed that the Sullivans’ claims were barred by both the

written contract and fraud statutes of limitations. As to the breach of contract claim, the

trial court distinguished the case from Vaccariello v. Smith & Nephew Richards, Inc.,

(2002), upon which the Sullivans had relied, and stated that the

Sullivans had “made the choice to rely on the potential class action, the risk that the

case could be dismissed on merits is foreseeable, and the plaintiff, having made the

choice to rely on the class action, should not be permitted a second bite at the apple.”

The trial court pointed out that “[i]n the case before this court, the previous lawsuit, filed

in Cuyahoga County, never addressed the class action allegations, and granted the

defendant’s motion to dismiss as to the breach of contract claim, and granted the

defendant’s motion for summary judgment on the fraud and misrepresentation claim.

Thus, the action did not fail otherwise than upon the merits and R.C. 2305.10 is not

applicable and cannot toll the statute of limitations.”

{¶13} With regard to the misrepresentation and fraud claim, the trial court found

that the Sullivans had constructive knowledge of the facts giving rise to their claim, and

that constructive knowledge was sufficient to begin the running of the statute of

limitations. “That they were not aware of the legal significance of these charges (that

the additional premiums only provided UM coverage for ‘guests’ and were not

necessary to protect the insureds and their resident family members) does not act to toll

the statute of limitations. ‘Ignorance of the law does not toll the statute of limitations.’”

{¶14} Accordingly, the trial court granted Westfield’s motion for summary

judgment in its entirety, disposing of the case. The Sullivans timely appealed, and now

bring the following assignments of error:

5 {¶15} “[1.] The trial court erred in granting Defendant’s motion for Summary

Judgment which dismissed Plaintiff’s breach of contract and fraud claims on statute of

limitations grounds.”

{¶16} “[2.] The trial court erred in dismissing the other Westfield coverage

entities.”

{¶17} Westfield has brought a single cross-assignment of error:

{¶18} “The trial court did not consider alternative grounds in granting

Defendant’s Motion for Summary Judgment which dismissed Plaintiffs’ breach of

contract and fraud claims on statute of limitations grounds.”

The Motion for Summary Judgment - Statute of Limitations

{¶19} In their first assignment of error, the Sullivans challenge the trial court’s

grant of summary judgment in favor of Westfield based on statute of limitations grounds.

They argue that the trial court erred in not tolling the 15-year statute of limitations

applicable to the breach of contract claim on account of Beck, supra, and not applying

the discovery rule in determining when the 4-year statute of limitations began running

on the misrepresentation and fraud claim. We find that the trial court properly declined

to find that either statute of limitations was tolled, and thus we affirm the grant of

summary judgment to Westfield on statute of limitations grounds.

Standard of Review

{¶20} We review de novo a trial court’s order granting summary judgment.

Hapgood v. Conrad, 11th Dist. No. 2000-T-0058,

, ¶13, citing Cole v.

Am. Industries and Resources Corp.,

(7th Dist. 1998). “A

reviewing court will apply the same standard a trial court is required to apply, which is to

6 determine whether any genuine issues of material fact exist and whether the moving

party is entitled to judgment as a matter of law.”

citing Parenti v. Goodyear Tire &

Rubber Co.,

(9th Dist. 1990).

{¶21} “Since summary judgment denies the party his or her ‘day in court’ it is not

to be viewed lightly as docket control or as a ‘little trial’. The jurisprudence of summary

judgment standards has placed burdens on both the moving and the nonmoving party.

In Dresher v. Burt [

(1996)], the Supreme Court of Ohio held that the

moving party seeking summary judgment bears the initial burden of informing the trial

court of the basis for the motion and identifying those portions of the record before the

trial court that demonstrate the absence of a genuine issue of fact on a material element

of the nonmoving party’s claim. The evidence must be in the record or the motion

cannot succeed. The moving party cannot discharge its initial burden under Civ.R. 56

simply by making a conclusory assertion that the nonmoving party has no evidence to

prove its case but must be able to specifically point to some evidence of the type listed

in Civ.R. 56(C) that affirmatively demonstrates that the nonmoving party has no

evidence to support the nonmoving party’s claims. If the moving party fails to satisfy its

initial burden, the motion for summary judgment must be denied. If the moving party

has satisfied its initial burden, the nonmoving party has a reciprocal burden outlined in

the last sentence of Civ.R. 56(E) to set forth specific facts showing there is a genuine

issue for trial. If the nonmoving party fails to do so, summary judgment, if appropriate

shall be entered against the nonmoving party based on the principles that have been

firmly established in Ohio for quite some time in Mitseff v. Wheeler (1988),

7 St.3d 112,

.” Welch v. Ziccarelli, 11th Dist. No. 2006-L-229, 2007-Ohio-

4374, ¶40.

Beck Did Not Toll the Breach of Contract Statute of Limitations

{¶22} Pursuant to R.C. 2305.06, a plaintiff must bring an action for breach of

contract within 15 years of the date that the cause of action accrued. The Sullivans do

not dispute they brought their claim for breach of contract later than 15 years after the

cause of action had accrued (June 6, 1995), but argue that the statute of limitations had

been tolled during the pendency of the Beck case in the Cuyahoga County Court of

Common Pleas. They suggest that the tolling of the statute thus brought their filing date

of February 11, 2011 within the 15 years limitations period.

{¶23} The Sullivans rely on

asserting that because the Beck

case included class action allegations, the statute of limitations was tolled because they

were putative class members in the Beck action. The Vaccariello court held specifically

that “the filing of a class action, whether in Ohio or the federal court system, tolls the

statute of limitations as to all asserted members of the class who would have been

parties had the suit been permitted to continue as a class action.” Vaccariello at 382-

383.

{¶24} A review of the Cuyahoga County Common Pleas Court’s decision in Beck

reveals that the action did not terminate because of a failure to secure class

certification, as in Vaccariello. Instead, the Beck court disposed of the action squarely

on the merits of the case. The plaintiffs in Beck brought identical claims against

Westfield as the Sullivans attempted to bring here, including class action allegations.

The trial court never addressed the class action allegations in Beck; instead, the trial

8 court granted Westfield’s motion to dismiss the breach of contract claim and its motion

for summary judgment on the fraud and misrepresentation claim. Both motions and

judgment entries addressed the merits of the case; thus, the Beck case did not fail

“otherwise than upon the merits.”

{¶25} In Vaccariello, the plaintiff was able to successfully invoke the saving

statute, R.C. 2305.19 (which adds one year to the applicable limitations period for an

action that was commenced but “fails otherwise than upon the merits”), because the

federal court denied class certification. Thus the first action “failed otherwise than upon

the merits.” As the tolling of time in Vaccariello was based on the saving statute, it was

essential that the first action filed by the Becks “failed otherwise than upon the merits” in

order for the Sullivans to benefit from Vaccariello. It is critical to note that had the

federal case in Vaccariello failed on the merits, the outcome of that case would have

been different, because the saving statute would then have been unavailable to toll the

time.

{¶26} In contrast, the Beck case, where the Sullivans could potentially be class

members (and indeed sought to be added), failed upon the merits. Therefore, the

saving statute was not available to the Sullivans, and Vaccariello is distinguishable.

{¶27} The Sullivans’ statutory time expired in June 2010; Beck was pending at

that time. In June 2010, the Sullivans essentially had to make a decision whether to file

their own class action in Lake County before the statutory time expired, or gamble and

wait for the outcome of the Beck case, in which the trial court could do a number of

things: decide the merits; decide otherwise than on the merits; certify the class and

proceed to merits; or, deny the class and proceed to merits. Under Vaccariello, the time

9 could only be tolled if the Cuyahoga county case “failed otherwise than upon the

merits,” such as when the trial court denied certification. Then the time for Sullivan’s

claim would be tolled up to that point.

{¶28} The Sullivans had two choices in June 2010. The first was to hold off filing

their own claim – the benefit would be saving any time and expense in filing, while the

risk would be that Beck may be decided upon the merits, rendering the saving statute

inapplicable. The second was to file their own claim to protect the statute in the event

Beck failed “upon the merits.”

{¶29} The Sullivans chose the former, taking the risk that the case could be

decided on the merits and not in their favor. As Judge Lucci remarked, the Sullivans

should not be allowed a second bite at the apple after making their choice.

{¶30} Therefore, we find the court below correctly determined that the statute

of limitations was not tolled during the pendency of Beck, and that the Sullivans failed to

bring their action within the 15 year limitations period

The Discovery Rule Does Not Delay the Running of the Fraud Statute of Limitations

{¶31} Pursuant to R.C. 2305.09, a plaintiff must bring a claim for fraud and

misrepresentation within four years of discovering the fraud. The Sullivans argue that

the fraud action was tolled by the “discovery rule,” because they claim they only recently

discovered that Westfield misrepresented that the UM/UIM premiums on the additional

vehicles provided UM/UIM coverage, when Westfield really only provided guest

coverage.

{¶32} “The discovery rule set forth in R.C. 2305.09(D) is applicable to claims

sounding in fraud. Investors REIT One v. Jacobs (1989),

, 546

. ‘The discovery rule operates to extend the time in which a party may file a

complaint. Generally, the discovery rule states that the statute of limitations does not

begin to run until the plaintiff discovered, or through the exercise of reasonable

diligence, should have discovered, the complained of injury.’ Smith v. Rudler,

, *3-4 (Aug. 13, 1993), Ashtabula App. No. 92-A-1753,

unreported, citing Investors REIT

. Thus, ‘[a] cause of action for

fraud or conversion accrues either when the fraud is discovered, or in the exercise of

reasonable diligence, the fraud should have been discovered.’ Stokes v. Berick,

, *14 (Dec. 23, 1999), Lake App. No. 98-L-094, unreported, citing

Investors REIT

paragraph 2b of the syllabus.” Thut v. Thut, 11th Dist. No.

2000-G-2281,

, *8-9 (April 13, 2001). See also Ciganek v.

Kaley, 11th Dist. No. 2004-P-0001,

. The applicable statute of

limitations is triggered by the “constructive knowledge of facts, rather than actual

knowledge of their legal significance * * *.” (Emphasis sic.) Flowers v. Walker,

(1927).

{¶33} The trial court was correct not to apply the discovery rule to the Sullivans’

fraud claim, because the Sullivans had knowledge of all the relevant facts back in 1994.

From our review of the record, we find the Sullivans failed to meet their reciprocal

burden of demonstrating that there remains a genuine issue of material fact for trial.

Simply put, the Sullivans did not demonstrate why, in the exercise of due diligence from

the release of the Martin decision in 1994, they could not have discovered the alleged

fraud.

11 {¶34} The UM/UIM premiums applied to each of their three vehicles are obvious

from their declaration sheet, thus they are presumed to know the contents of their policy

and that they were being assessed these charges. See Michigan Auto Ins. Co. v. Van

Buskirk,

(1927). Furthermore, Mr. Sullivan, in his affidavit,

confirmed that he had in fact reviewed the declaration page and was aware they were

being charged multiple UM/UIM premiums. While the Sullivans were not aware of the

legal significance of these multiple premiums, nor the fact that it was legally

unnecessary to pay a separate premium for each automobile to provide UM/UIM

coverage to them and their resident family members, that lack of understanding of the

legal significance does not act to toll the running of the statute. “Ignorance of the law

does not toll the statute of limitations.” Lynch v. Dial Finance Co. of Ohio, Inc.,

(8th Dist. 1995).

{¶35} Furthermore, “all persons are ‘conclusively presumed to know the law.’” In

re Estate of Holycross,

,

, ¶27, quoting State v. Pinkney,

(1988). The Sullivans, therefore, are presumed to have known

that, in a post-Martin world, UM/UIM coverage followed the insureds and not the

vehicles, requiring only one premium to cover their household. While the Sullivans may

not have known what sort of coverage the additional UM/UIM premiums provided them,

if anything, they were on notice back in 1994 to inquire if concerned. Therefore, the

discovery rule does not apply, as the Sullivans were fully in possession of all the facts

necessary to bring their claim. The fact they were not told until 16 years later, by their

attorney, that they might have a claim “cannot be used to circumvent the statute of

limitations or limitations would become meaningless.”

.

12 {¶36} The trial court was correct in its determination that no genuine issue of

material fact existed and in its grant of summary judgment in favor of Westfield. Under

no set of facts could the Sullivans continue their action against Westfield, because, as a

matter of law, they were time barred from so doing. The first assignment of error is

without merit.

The Motion to Dismiss American Select and Ohio Farmers

{¶37} In their second assignment of error, the Sullivans argue that the trial court

erred when it dismissed American Select and Ohio Farmers from the action. Because

we have determined that summary judgment was appropriate on statute of limitations

grounds, this assignment of error is moot. Even if it was determined that American

Select and Ohio Farmers were improperly dismissed from the action, the trial court’s

grant of summary judgment in favor of the defendants and this court’s affirmance of that

decision above would render any reversal of their dismissals meaningless. The

Sullivans, whether upon the motion to dismiss, or the subsequent motion for summary

judgment, would ultimately have been precluded from pursuing their claims against

American Select and Ohio Farmers, just as they were against Westfield. The claims

against American Select and Ohio Farmers were identical to those against Westfield,

and accrued on the same date, thus they too would have been time barred and resolved

through a grant of summary judgment to the defendants. Therefore, the second

assignment of error is without merit.

Westfield’s Cross-Assignment of Error

{¶38} Westfield, in an effort to protect its position and prevent the reversal of the

trial court’s decision, brought a single cross-assignment of error. However, we need not

13 address the cross-assignment of error, as we decline to reverse the trial court’s grant of

summary judgment.

{¶39} Pursuant to R.C. 2505.22, “assignments of error may be filed by an

appellee who does not appeal, which assignments shall be passed upon by a reviewing

court before the final order, judgment, or decree is reversed in whole or in part.” These

cross-assignments of error, however, may only be considered by a reviewing court

when necessary to prevent the reversal of the judgment under review. Parton v.

Weilnau,

, 158 (1959). “There is nothing in the statute to indicate that

such assignments of error shall necessarily be passed upon where, as here, the

judgment of the [court] is being affirmed.”

{¶40} Because we affirm the decision of the trial court, we decline to further

consider Westfield’s cross-assignment of error. The Sullivans’ assignments of error are

without merit and the judgment of the Lake County Court of Common Pleas is affirmed.

TIMOTHY P. CANNON, P.J.,

CYNTHIA WESTCOTT RICE, J.,

concur.

14