IN THE SUPREME COURT OF OHIO

CATHERINE SCHNEIDER

PlaintifflAppellant

V.

ALLSTATE INSURANCECOMPANY

Defendant/Appellee

Case No. 2009-0256

On appeal from the judgment rendered inthe 9t" Judicial District C.A. No.07CA009273

DEFENDANT/APPELLEEALLSTATE INSURANCE COMPANY'S

MEMORANDUM IN OPPOSITION TO JURISDICTION

THOMAS M. COUGHLIN, JR. (0055419)1360 East Ninth Street1000 IMG CenterCleveland, Ohio 44114216-241-8333 Telephone216-241-5890 Facsimileteoughlin a res-law.comAttorney for Defendant/AppelleeAllstate Insurance Company

CHRISTOPHER M. DeVITO (0047118)BRIAN J. SEITZ (0076634)Morganstein, MacADams & DeVito Co., L.P.A..623 West Saint Clair AvenueCleveland, Ohio 44113216-687-1212 Telephone216-621-2951 FacsimileAttorney for Plaintiff/Appellant

TABLE OF CONTENTS

1. THIS CASE PRESENTS NO CONSTITUTIONAL QUESTION NORANY ISSUES OF PUBLIC OR GREAT GENERAL INTEREST .........................1

II. RESPONSES TO PLAINTIFF/APPELLANT'S PROPOSITIONS OFLAW .............................................. :............................................................................... 8

A. Response to Proposition of Law No. 1: The Ohio financialresponsibility law contained in R.C. 4509.101 does not intend to make ainjured party a third party beneficiary to a tortfeasor's insurance contract. ...........8

B. Response to Proposition of Law No. 2; The prejudgment interest statutecontained in R.C. 1343.03 does not give rise to a right of a third party tosue a purported tortfeasor's insurer directly under a theory of a third partybeneficiary under said policy . ...............................................................................11

III. CONCLUSION ..........................................................................................................15

CERTIFICATE OF SERVICE ..................................................................:...............................15

MEMORANDUM IN OPPOSITION

1. THIS CASE PRESENTS NO CONSTITUTIONAL QUESTION NOR ANYISSUES OF PUBLIC OR GREAT GENERAL INTEREST

This appeal does not involve a single matter of public or great general interest, nor does it

involve a substantial constitutional question. In fact, contrary to the assertions of Appellant

Catherine Schneider ("Appellant"), this is merely an impermissible attempt to have the Court

step into the role of the legislature and change that which the legislature has already enacted.

The Appellate Courts of Ohio routinely rule on the questions of law addressed in Appellant's

brief and have consistently, if not uniformly, ruled against the arguments raised by Appellant.

This case is a garden variety motor vehicle accident where the injured party seeks to

recover directly from the insured's insurance company, as a third party beneficiary, without first

obtaining a judgment against the insured. While Appellant presents several issues under each

propositions of law, there is really only one (1) issue before this Court: 1) should this Court

disregard the express language in R.C. 4509.101 and R.C. 1343.03(C) and instead subsfitute its

own burdens and requirements in clear violation of the separation of powers? Specifically,

Appellant seeks to have the Court add new provisions to the aforementioned statutes that simply

are not present and which are contrary to the uniformly established, clear public policy of Ohio

as to the lack of a cause of action by a third party directly against a purported tortfeasor' s

insurance company.

A mere review of the status of the law on third party beneficiaries to an insurance

contract will show that there is nothing about this matter that concerns any matter of public or

great general interest. It is well established under Ohio law that the Appellant cannot maintain a

direct cause of action for bad faith and/or breach of the covenant of good faith and fair dealing

against Ms. Eady's insurer, Allstate Insurance Company ("Allstate" or "Appellee"). Ohio Courts

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have uniformly held that no such cause of action exists because an insurer's duty under the

contract extends only to its insured, not third party claimants, such as Appellant.

This matter arises out of a motor vehicle accident that allegedly occurred between

Appellant, who admits that she was insured by Nationwide, and Rene Eady, who was insured by

Allstate, at the time of the accident. Complaint at 6, 10, 11, 17 & 20. In her Complaint,

Appellant's sole allegation against Allstate is for an alleged breached a duty of good faith to

review a claim pursuant to Appellee Eady's policy and respond to Appellant. Complaint at 15-

25. The law in Ohio is clear. Even if Allstate breached this duty as alleged, which it did not,

Appellant sirnply has no standing to bring this claim. As noted by the Appellant in her Brief in

Opposition to Appellee's Motion for Summary Judgment, if Allstate fails to act in good-faith in

settling a claim under Appellee Eadv's policy it allegedly "exposes Eady to liabilities in excess

of her policy limits" Brief in Opposition at Page 6-7 (en-iphasis added).

Based upon these facts alone, Appellant cannot state a claim for bad faith against

Appellee. Buckeye Union Ins. Co. v. State Farm Mut. Auto. Ins. Co. (April 16, 1997), Hamilton

App, Nos. C-960282, C-9100556, 1997 WL 180278 (duty of good faith exists solely because of

contractual relationship between insurer and insured, and no bad faith claim can exist in absence

of insurance relationship between Appellant and insurer); Gillette v. Estate of Gillette (2005), 63

Ohio App.3d 426 ("Given the contractual relationship requirement, Ohio courts have repeatedly

held that a third-party claimant cannot assert bad faith claims against an insurer") Calich v.

Allstate Ins. Co. (March 31, 2004), Lorain App. No. 21500, 2004-Ohio-1619 ("A third party

cannot sue the insurer directly, or via assignment, for bad faith refusal to settle in the absence of

an adjudicated excess judgment against the insured"). Appellant simply cannot seek redress on

her own behalf based upon an alleged injury to Appellee Eady. A third-party claimant, such as

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the Appellant, may not maintain a bad faith action directly against the alleged tortfeasor's

insurer, Allstate, because Allstate's duty to act in good faith in settling a claim runs only from

the Allstate to Appellee Eady as the insured. D.H. Overmeyer Telecasting Co. v. American

Home Assurance Co. (1986), 29 Ohio App.3d 31. An insurance contract is made with the

intention of benefiting the insured - not someone he or she may injure. Secrest Trucking Inc. v.

Szerzinski (Jan. 25, 1988), Stark App. No. CA-72-98, 1988 WL 17839 at *2; Reynolds v Laice

Mohawk Property Owners' Association, Inc. (March 31, 1989), Carroll App. No. 552, 1989 WL

30861 at *13, Erie Ins. Co. v. Speece (Nov. 30, 1992), Crawford App. No. 3-92-27, 1992 WL

368762 at *5; Tannoh v. Strawbridge (May 18, 2000), Cuyahoga App. No. 76094, 2000 WL

640378 at *20.

Following the Ohio Supreme Court's decision in Hoskins v. Aetna Life ins: Co. (1983), 6

Ohio St.3d 272, Ohio Courts have consistently held that although Ohio recognizes a duty to act

in good faith in settling insurance claims, the duty only runs from the insurer to the insured - not

to third parties. ller v. Wright (Aug. 22, 2002), Cuyahoga App. No. 80555, 2002-Ohio-4279 at

*3; Reynolds, supra; Tannoh, supra. The reason for this is that, unlike the claimant, the insured

has contractual privity with the insurer and may be left to defend himself in an action if his

insurer wrongfully refuses to defend him, or may be exposed to excess judgment it the insurer

refuses to settle in bad faith without reasonable justification. Appellant is not in the same

position as an insured, because she has no contract promising indemnity for her claim and only

possesses a contingent expectancy. If she is successful in obtaining recovery at trial, her interest

in the insurance policy accrues pursuant to R.C. 3929.06.

In Chitlik v. Allstate Ins. Co. (1973), 34 Ohio App.2d 193, the Appellant attempted to sue

the insurer of the party alleged to have injured him in an automobile accident. The Court held

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that the existence of an insurance policy does not transform an injured party into a third party

beneficiary under the insurance policy. The Court rejected Appellant's attempt to sue an insurer

directly for injuries allegedly caused by the acts or omissions of the insured. The Chitlik Court

held:

We are of the opinion that in the absence of statute or special provision in the policy,a standard liability insurance policy is not a contract for the benefit of a third person.The contract is made with the intention of benefiting the insured, not someone heinjures.

In Ohio, there is substantial authority that the injured person must sue the allegedtortfeasor first. (Citations omitted).

We therefore hold that personal injury actions must first be brought by the injuredparty against the alleged tortfeasor. He is the one whose wrongdoing is alleged tohave caused the injury, and if the facts are found as alleged, he will be primarilyliable. Further, the policy excluding any reference to the existence of insurance in anaction to determine liability for personal injury would be circumvented by permittingthe injured person to sue the insurance company and could constitute a prejudicial orharmful effect against the insurer.

Chitlik at 197-198. The Chitlik Court explained that a person cannot be a third party beneficiary

to a contract unless the contract contemplates such individual and he is sufficiently identified. Id.

at 196. A mere incidental or indirect benefit is not sufficient to give his a right of action. Id.

Thus, an injured person is not a third party beneficiary to a standard liability insurance policy.

Id. at 197. The holding in Chitlik is consistent with the long-standing line of precedent

prohibiting injured parties from bringing direct actions against the tortfeasor's insurer. Steinbach

v. Maryland Cas. Co. (1921), 15 Ohio App. 392; Canen v. Kraft (1931), 41 Ohio App. 120; Fire

Asn. v. State Auto. Ins. (1938), 29 Ohio Law. Abs. 135; Alms v. Doepke (1954), 98 Ohio App.

78. See also: Buckeye Union, supra; Salem v. Aurora National Life Assurance Co. (March 19,

1999), Hamilton App. No. C-980215, 1999 WL 147846; Iler, supra; Daniels v. Citizens

Insurance Co. qf Ohio (Nov. 21, 2005), Madison App. No. CA-2005-03-008, 2005-Ohio-6166.

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In Speece, supra, the Third Appellate District recognized the continuing vitality of Chitlik

noting:

Appellee correctly states that Ohio law requires that the insurer's duty of good faithextend only to its insured. *** An insurer's duty of good faith is based upon therelationship of the two parties and justified by the disparity between the economicand bargaining positions of the two parties. *** An insurance policy is not contractedfor the benefit of third persons, but rather is entered into for the benefit of the insured.Chitlik v. Allstate Ins. Co. (1973), 34 Ohio App.2d 193. Therefore, third partyclaimants or injured persons are generally not entitled to maintain a cause of actionagainst a tortfeasor's insurance company for breach of the duty of good faith.

Speece at *5. Appellant's curious reliance on the fact that the Chilik case being more than 30

years old as a basis for it somehow not being good law is clearly misplaced. The reasoning and

holding of Chilik continues to be the recognized law in Ohio. ln fact, Auuellant was unable to

cite a sinszle case under Ohio law that stated that an injured party could be considered to be a

third-party beneficiary of a liability insurance contract and did not even try to differentiate the

long line of cases holding that an injured party is not a third party beneficiary under the

tortfeasor's policy of insurance. Instead, Appellant merely cited general law regarding third

party beneficiaries and states to several out-of-state cases purportedly alleging that an insurer has

a good-faith duty to settle a suit.

Unfortunately for Appellant, the fact that an injured party is not a third party beneficiary

has already been clearly established under Ohio law. Chitlik at 197 ("[A] standard liability

insurance policy is not a contact for the benefit of a third person. The contract is made with the

intention of benefiting the insured, not someone he injures); Iler at 3 ("an injured person is not a

third-party beneficiary of a liability insurance contract between an insurer and its insured and

may not sue the insurer under that theory"); Speece at 2 (Ohio law requires that the insurer's duty

of good faith extend only to its insured...An insurance policy is not contracted for the benefit of

third persons, but rather is entered into for the benefit of the insured); Estate ofShoff v. Estate of

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Zimmerman (Dec. 16, 1998), Wayne Court of Appeals Case No. 19045, 1998 WL 887227 at *3

("The injured party is not a third party beneficiary of the insurance contract ... [T]he injured

Appellant has no statutory or common law right to recover directly on the insurance contract").

The Chitlik Court noted that even if an injured party were permitted to proceed directly

against the insurer, witl7out first obtaining judgment against the insured, the proceeding would

still require him to establish the insured's negligence, proximate cause and damages, and that the

same defenses would be available to the insured and insurer. Id. at 198. In light of the elements

of proof and the fact that the injured party has the right to proceed against the insurance coinpany

directly pursuant to R.C. 3929.06 subsequent to such judgment, the injured party would obtain

little advantage by proceeding directly against the insurer. Id.

On the other hand, as the Chitlik Court pointed out, allowing claimants to directly sue the

tortfeasor's insurer prior to obtaining a judgment against such tortfeasor would also

impermissibly circumvent Ohio Rule of Evidence 411:

In effect, in order to recover against the insurer in a third party beneficiary suit all ofthe evidence would be the same, except the jury, if the case were tried before a jury,would know that there was an insurance company involved.

Chitlik at 198. Ohio Courts consistently hold that permitting an injured party to directly sue the

tortfeasor's insurer undermines the policy of excluding evidentiary references to the existence of

insurance. Chitlik at 197-198; Bletsh v. Parma Gen. Hosp. (June 4, 1987), Cuyahoga App. No.

52204, 1987 WL 11980. Ohio Rule of Evidence 411 "was imposed to prevent the admission of a

tortfeasor's insurance in a tort case as the disclosure of said insurance coverage is inadmissible at

trial because it is highly prejudicial to the Appellee. " Snyder v. Lincoln General Ins. Co. (May

7, 1997), Crawford App. No. 3-97-4, 1997 WL 232246 at *2. Namely, Ohio Evid. R. 411

provides:

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Liability InsuranceEvidence that a person was or was not insured against liability is not admissible uponthe issue whether he acted negligently or otherwise wrongfully. This rule does notrequire the exclusion of evidence of insurance against liability when offered foranother purpose, such as proof of agency, ownership or control, if controverted, orbias or prejudice of a witness.

In Bletsh v. Parma Gen. Hosp., supra, the Court observed:

The exclusionary effect of Evid.R. 411 is to minimize any unfair prejudice resultingfrom knowledge of the existence of liability insurance. It is generally recognized thatsuch information may influence juries to decide cases on whether or not money isavailable from an insurance company to pay a damage award.

Bletsh at *3. See also, Piontkowski v. Scott (1989), 65 Ohio App,3d 4, 7. Allowing claimants to

sue the tortfeasor's insurer directly and prior to obtaining a judgment would completely

dismantle Evid.R. 411 and undermine the sound policy supporting the exclusion of such

evidence.

Based upon the long-standing Ohio precedents, and based upon the language in the

contract, Appellant is neither a party to the insurance policy nor a third-party beneficiary under

said policy. As Appellant, a nationwide insured, cannot be a third party beneficiary to Ms.

Eady's insurance policy with Allstate, Appellant simply has no standing to sue Allstate on a bad

faith claim. It has been clearly established under Ohio law that Appellant cannot bring a claim of

bad faith or a claim for breach of the duty of good-faith and fair dealing against Ms. Eady's

insurance company. As such, this honorable Court should decline jurisdiction. If Appellant's

tired arguments were to be adopted, it would represent a dramatic and ill-advised departure from

well-reasoned and long-standing Ohio law and public policy.

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RESPONSES TO PLAINTIFF/APPELLANT'S PROPOSITIONS OF LAW

A. RESPONSE TO PROPOSITION OF LAW NO. 1: The Ohio FinancialResponsibility law contained in R.C. 4509.101 does not intend to make ainjured party a third party beneficiary to a tortfeasor's insurance contract.

Appellant erroneously argues that R.C. 4509.101 intended to make the injured party of a

automobile accident "fairly, timely, and fully compensated for their injuries." Memorandum in

Support of Jurisdiction at 6. However, this is contrary to the purpose expressly stated in R.C.

4509.101(J):

The purpose of this section is to require the maintenance of proof of financialresponsibility with respect to the operation of motor vehicles on the highways of thisstate, so as to minimize those situations in which persons are not compensated forinjuries and damages sustained in motor vehicle accidents. The general assemblyfmds that this section contains reasonable civil penalties and procedures forachievina this purpose.

R.C. 4509.101(J) (emphasis added). The general assembly specifically stated that the

requirements found in this section 4909.101 are the only requirements necessary to achieve the

stated purpose.

The principles of statutory construction require courts to first look at the specific

language contained in the statute, and, if unambiguous, to then apply the clear meaning of the

words used." Rozane Laboratories, Inc. v. Tracy (1996), 75 Ohio St.3d 125, 127. If the statute

conveys a clear, unequivocal, and definite meaning, interpretation comes to an end, and the

statute must be applied according to its terms." Columbia Gas Transmission Corp. v. Levin

(2008), 117 Ohio St.3d 122, 2008-Ohio-511 at ¶19. Courts may not delete words used or insert

words not used. Cline v. Ohio Bur. of Motor Vehicles (1991), 61 Ohio St.3d 93, 97.

Here, the statute expressly states that it was the General Assembly's intent to assert civil

penalties for failing to maintain automobile insurance oniv, in an attempt to minimize situations

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in which persons are not compensated for injuries and damages sustained in motor vehicle

accidents. As such, the clear meaning of such words requires the Court to limit the application

of said provisions to the imposition of the civil penalties stated therein.

The well recognized principles of statutory construction further require this honorable

Court to read "all statutes pertaining to the same general subject matter *** in pari materia, and

to construe potentially conflicting statutory provisions so as to give effect to both" whenever

possible. Meeks v. Papadopulos (1980), 62 Ohio St.2d 187, 192. "In pari materia" is a rule of

statutory construction, the meaning of which is that the General Assembly, in enacting a statute,

is assumed to have been aware of other statutory provisions concerning the subject matter of the

enactment. Id. This honorable Court must harmonize and give full application to all such

provisions "unless they are irreconcilable and in hopeless conflict ." Hughes v. Ohio Bar. of

Motor Vehicles (1997), 79 Ohio St.3d 305, 308, 1997-Ohio-387. To the extent that any conflict is

perceived between the above statutes, the rules of statutory construction provide that when

statutes conflict, the more specific provision controls over the more general provision. R.C. 1.51.

Despite Appellants assertions, there are no provisions within R.C. 4509.101 to allow for a

third party to sue a tortfeasor's insurer directly as a third party beneficiary. Rather the

provisions, as clearly and unambiguously written by the Legislature merely provide for civil

penalties if a person fails to maintain such insurance. If the Legislature had so intended for third

party beneficiary claims to be permitted under this statute, it would have specifically stated such

a right in the statute.

Appellant's erroneous interpretation of R. C. 4509.101 further renders R. C. 3929.06 moot,

thereby creating an illogical and absurd result. Specifically, R.C. 3929.06 permits a judgment

creditor, such as the prevailing plaintiff in a motor vehicle action against a tortfeasor, to sue the

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tortfeasor's insurer directly if said judgment is not paid within a specified time frame by said

insurer. If such a plaintiff was permitted to sue the insurer directly in the initial action, than R.C.

3929.06 would never be applicable, as there would be ajudgment against the insurer in the initial

matter. Thus, Appellant's erroneous interpretation of R.C. 4509.101 would make R.C. 3929.06

irrelevant and nonsensical, creating an illogical and absurd result.

Appellant's argument further ignores Ohio case law subsequent to the enactment of the

most recent version of R.C. 4509.101. The current version of R.C. 4509.101 was effective Sept.

16, 2004. Contrary to Appellant's argument, the Courts of Ohio have continued to uniformly

uphold Chitlik and find that an injured party is not a third party beneficiary under the alleged

tortfeasor's insurance policy subsequently to the enactment of the statute. See: Siemientkowski v.

State Farni Ins. Co. (Aug. 18, 2005), Cuyahoga App. No. 85323, 2005-Ohio-4295 ("Ohio law is

clear that an injured party cannot directly sue the insurer of a tortfeasor because the injured party

is not a third-paity beneficiary of a liability insurance contract...In accord with both the statute

and with case law, since the [Appellants] failed to first obtain a judgment against [Appellee],

they could not recover against her insurer... Where the insurer has ...refused to settle a case, an

injured third party cannot sue the insurer directly, or via assignment, for bad faith refusal to settle

in the absence of an adjudicated excess judgment against the insured"); Gillette, supra ("Given

the contractual relationship requirement, Ohio courts have repeatedly held that a third-party

claimant cannot assert bad-faith claims against an insurer").

Appellant further encourages this Honorable Court to ignore the long line of cases whicli

have already examined this matter and instead adopt the laws and policies of Florida, Texas and

Colorado - all of which are no fault states. The purpose and objective of a no-fault statute is to

"assure claimants of expeditious compensation for their injuries through prompt payment of first-

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party benefits without regard to fault and without expense to them"' Kingsbrook Jewish Medical

Center v. Allstate Ins. Co. (2009), 871 N.Y.S.2d 680. In Ohio, an injured party must first

establish that the insured was negligent and establish the amount of damages, if any, that were

proximately caused by such negligence before there would be any duty of the insured or his

insurer to pay any claim. Thus, the public policies and authority for allegedly permitting third

party beneficiaries under insurance contracts is clearly based upon completely different laws and

policies.

Appellant has not offered a single Ohio citation to rebut the well reasoned wave of

authority that she asks this Court to ignore or any authority of any at fault state that has similar

laws or public policies. As such, this honorable Court should disregard Appellant's argument

and deny jurisdiction in this matter.

B. RESPONSE TO PROPOSITION OF LAW NO. 2: The prejudgment interest

statute contained in R.C. 1343.03 does not give rise to a right of a third party to suea purported tortfeasor's insurer directly under a theory of a third party beneficiaryunder said policy.

Appellant's reliance on R.C. 1343.03(C) is similarly misplaced. This statue merely

allows a Court to award prejudgment interest when the Court finds that the prevailing party made

a good-faith effort to settle and the other party did not make such an effort. R.C. 1343.03(C)

does not require settlement, only that the party have a reasonable good-faith belief for any offer

made or for the lack of making an offer.

This statute in no way provides any basis for permitting Appellant to file an action for

bad faith directly against an alleged tortfeasor's insurance company. In fact, if anything, the

existence of this statute destroys Appellant's spurious argument that there is some sort of need

for a public policy change to allow a third party to sue an alleged tortfeasor's insurer directly,

without first obtaining any judgment against the purported tortfeasor, to force an insurer to

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negotiate in good faith. Pursuant to R.C. 1343.03(C), if the insurer, in accordance with its

contractual agreement with the tortfeasor, does not negotiate in good faith in the underlying

action, than said insurance company may be subject to prejudgment interest, which can be

substantial. Thus, there are already safeguards in place to require good-faith negotiations and no

change in public policy is necessary to achieve this purpose.

Appellant then argues that the provisions contained in R.C. 1343.03(C) are not sufficient

to achieve the legislature's purpose. Appellant claims, without any support, that the prejudgment

interest may be nominal in some situations and therefore the insurance company will presumably

have no financial incentive to negotiate in good faith. Therefore, Appellant asks this Court to

add provisions to this statute in order to give it "more teeth." Memorandum in Support at p. 10.

However, it is not the role of the Court to rewrite Legislative matters. "The Legislative branch of

government is the ultimate arbiter of public policy," and "in fulfilling that role, the Legislature

continually refines Ohio's laws to meet the needs of the citizens." Groch v. Gen. Motors Corp.

(2008), 117 Ohio St.3d 192, 2008-Ohio-546 at ¶102, citing Arbino v. Johnson & Johnson (2007),

116 Ohio St.3d 468, 2007-Ohio-6948 at ¶21.

Rather, the role of the Supreme Court is to decide issues of constitutionality, not to

legislate. The Supreme Court cannot ignore the requirements of a statute as enacted by the

Legislature and instead create additional burdens or requirements under said laws. In re: C.F.

(2007), 113 Ohio St.3d 73, 84, 2007-Ohio-1104 ("We cannot override unambiguous statutory

language and establish additional burdens not required by law."); State ex rel Moorehead v.

Indus. Comm. (2006), 112 Ohio St.3d 27, 2006-Ohio-6364 at ¶15 (The Ohio Supreme Court may

only give effect to the words used by the General Assembly and cannot add any requirements or

burdens to a statute enacted by the General Assembly).

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The wisdom of particular statute, its suitability, and whether another method would have

been more satisfactory to accomplish desired purpose are questions of policy into which "courts

cannot and will not inquire." In re: Russo (1958), 107 Ohio App. 238, 241; citing Const. Art. 1,

§19 and Phillips v. State (1907), 77 Ohio St. 214, 217. See also, In re: Estate of Roberts (2002),

94 Ohio St.3d 311, 317, 2002-Ohio-791 ("There is no authority under any rule of statutory

construction to add to, enlarge, supply, expand, extend or improve the provisions of the statute to

meet a situation not provided for.")

Thus, if the Legislature intended for, or would like R.C. 1343.03(C) to have "more teeth,"

than it is up to the Legislature to create such additional requirements under this statute.

Appellant further encourages this honorable Court to ignore the long line of cases which

have already been examined this matter and instead adopt the laws and policies of Kentucky and

West Virginia.

Kentucky is also a no-fault state as discussed above, and thus, the case law of Kentucky

are based upon completely different set of public policies and laws. Regardless, the Kentucky

Supreme Court expressly stated in State Farm Mut. Auto. Ins. Co. v. Reeder (1989), 763 S.W.2d

116, as cited by Appellant, that there was not a common law right of a third party to sue an

insurer directly as a third party beneficiary. Reeder at 118. Rather the right of the third party

in that matter arose out of express legislation entitled the Kentucky Unfair Claims Settlement

Practices Act in KRS 304.12-230. Namely, the Court found that the legislature had created a

third party bad faith claim in enacting KRS 304.12-230, which lists statutory violations of the

Unfair Claims Settlement Practices Act which include such things as misrepresenting insurance

coverage, failing to promptly respond to communications relating to insurance claims, failing to

reasonably investigate insurance claims, acting in bad faith, and other similar insurance related

13

matters, and by enacting ICRS 446.070. KRS 446.070 permits any person injured by the

violation of any statute, including KRS 304.12-230, to recover from the offender. The Court

found that when read in conjunction, a third party could sue a tortfeasor's insurance company for

any violation listed in KRS 304.12-230 that was committed against the third party. No similar

law exists in Ohio and as such, this case cannot serve as support for Appellants spurious

argument.

Similarly , there is no common law action for a third party claim of bad faith in West

Virginia. Elmore v. State Farm Mut. Auto. Ins. Co. (1998), 202 W. Va. 430, 434; Grubbs v.

Westfield Ins. Co. (2006), 430 F. Supp.2d 563. In fact, the case cited by Appellant, Barefield v.

DPIC Companies, Inc. (2004), 215 W. Va. 544, merely concerned a certified question as to

whether or not a defense attorney's actions in representing an insured could form the basis of a

claim under the West Virginia Unfair Trade Practices Act. The Court held that the West

Virginia Unfair Trade Practices Act only applied to persons who are engaged in the business of

insurance. The purpose of the West Virginia Unfair Trade Practice Act is to regulate certain

insurance practices, including claim settlement practices, that the legislature has declared to be

unfair or deceptive. W.VA.Code 33-11-1; 33-11-4. Subsequently to the Barefield matter, the

West Virginia Legislature enacted W.VA.Code 33-11-4a to expressly prohibit any private cause

of action by a third party directly against an insurance company under said Act. Thus, West

Virainia does not permit a private causes of action of third party pursuant to the West

Virginia Unfair Trade Practices Act, as alleged by Appellant.

Appellant cannot cite to a single Ohio citation to rebut the well reasoned wave of

authority that she asks this Court to ignore. As such, this honorable Court should disregard

Appellant's argument and deny jurisdiction in this matter.

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II. CONCLIJSION

For all the foregoing reasons, this Court should deny jurisdiction and dismiss the within

appeal, as this case involves no substantial constitutional question, nor any matter of public or

great general interest. Appellant has utterly failed to provide this Court with any lawful reason

to disregard well-established Ohio law. Furthermore, Appellant's wish that the Court rewrite

legislation is contrary to the powers provided to this honorable Court pursuant to the

Constitution.

Respeetfally submitted,

By:THOMAS M. COUGHLIN, JR. 055419)Attorney for Defendazt AppelleeAllstate Insurance Company1360 East Ninth Street1000 IMG CenterCleveland, Ohio 44114216-241-8333 (PH)216-241-5890 (FAX)tcouglilin(a^xcs-1aw.com

CERTIFICATE OF SERVICE %A copy of the foregoing has been fonvarded by regular U.S. Mail on tbis)l-^, flay of2009 to the following: Christopher DeVito, Esq., 623 West St. Clair Avenue,

Cleveland, Ohio 44113 and James E. Bums, Esq., 113 St. Clair, Suite 525, Cjeveland, Ohio 44114

By:THOMAS M. COUGHLIIV, JR. (0055419)Attorney For Allstate Insy(rance Company

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