Can punitive damages be awarded in a breach of contract?

Gavel and scales punitive damages

Last week, the Supreme Court of Ohio issued a ruling in an insurance case that called into question whether punitive damages can be awarded in a breach of contract claim.

The case, which involves an insurance agent and Nationwide Insurance, had the potential to change the landscape of not only the insurance industry, but businesses at large in Ohio.

In a 6-1 decision, the Court reversed a judgment of the Seventh District Court of Appeals, clarifying that punitive damages are not recoverable in a breach-of-contract lawsuit. The exception to this rule is if the breach involves a tort, among other clarifications the decision provides to Ohio contract law:

  • When a breach of contract involves conduct that also constitutes a tort, punitive damages may be awarded only for the tort, not for the breach, and any punitive damages awarded are subject to the statutory limitations on punitive damages imposed in R.C. 2315.21.
     

  • A party to a contract does not breach the implied duty of good faith and fair dealing by seeking to enforce the agreement as written or by acting in accordance with its express terms, nor can there be a breach of the implied duty unless a specific obligation imposed by the contract is not met.
     

  • An unconditional release of liability becomes effective upon execution and delivery and bars any claims encompassed within it, unless it was procured by fraud, duress, or other wrongful conduct.
     

  • A party seeking to avoid a release of liability on the basis that it was procured under duress is required to prove duress by clear and convincing evidence.
     

  • The prevention of performance doctrine, which states that a party who prevents another from performing a contractual obligation may not rely on that failure of performance to assert a claim for breach of contract, is not a defense to a release of liability and therefore cannot be asserted as a defense to a release.
     

  • A fraud claim cannot be predicated on predictions or projections relating to future performance or on misrepresentations made to third parties.

This is just one of many cases that showcase the important role of the Supreme Court of Ohio. With two of the seven justices up for election this November, you’ll want to pay close attention to this race. Learn why Supreme Court of Ohio races really do matter.

Read more about this ruling in Court News Ohio.
 

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A mission to support kids with cancer, one race at a time

Ashley Winebrenner receives OIA Community Service AwardFor Ashley Winebrenner, making a difference for children with brain cancer has become a true calling in life.

Winebrenner, an independent agent at Dwyer Insurance Agency in London, OH, started Rockin’ on the Run, an annual walk/run to raise awareness about the prevalence of childhood brain tumors and raise money for research.

Now heading into its ninth year, Rockin’ on the Run brings in more than 500 participants and has raised more than $112,000 for pediatric brain cancer research.

Because of her selfless efforts, Winebrenner is the recipient of OIA’s prestigious 2017 Community Service Award.
 

“Our only goal was to create a memorable experience where Reagyn could have fun, just be a kid and forget about her cancer for the day.” Ashley Winebrenner


Coming together for a great cause

Inspired by a family friend’s daughter, Reagyn, who was diagnosed with an inoperable brain tumor in 2009, Rockin' on the Run survivors and volunteersWinebrenner decided it was time to take action.

“When Reagyn was diagnosed with a brain tumor, we just felt so helpless – she was only five years old,” Winebrenner says. “I always thought brain tumors were very rare, but I soon realized how many children are being diagnosed with this disease every day.”

According to the Pediatric Brain Tumor Foundation, about 4,600 children are diagnosed with a brain tumor each year.

Winebrenner, along with her mom Johnda and Reagyn’s mom Carol, founded Rockin’ on the Run in 2010 to bring members of the community together to support Reagyn and other children battling this devastating disease.

“The three of us were at a walk/run supporting cancer research in Columbus, and we thought, ‘Why can’t we do this in London?’ she says. “We’re a small community and everyone knows Reagyn and her family. That’s how the idea for Rockin’ on the Run was born.”

During its first year, Rockin’ on the Run brought in more than 100 participants and raised $4,500 for the Pediatric Brain Tumor Foundation.

“In the beginning, we had no idea what we were doing – just flying by the seat of our pants,” Winebrenner says with a laugh. “Our only goal was to create a memorable experience where Reagyn could have fun, just be a kid and forget about her cancer for the day.”
 

Giving back runs in the family

Winebrenner is part of a family passionate about community service. “When I was growing up, I was taught that you work hard and give back,” she says.

Funny group of volunteers at Rockin' on the RunThroughout her life, Winebrenner also experienced firsthand the importance of independent agents and the dedication and passion they bring not just to their clients but to their local communities.

Winebrenner’s great grandfather, Paul Dwyer, founded Dwyer Insurance Agency in 1931. In fact, Dwyer Insurance is the oldest family-run agency in Madison County.

Today, her father, Bill Beathard, is the agency owner. An independent agent for more than 40 years, Beathard has been an active member of his local community for many years, from volunteering on London City Council to the Madison County Emergency Medical District.

Following in both of their footsteps, Winebrenner understands the vital role that independent agents play as pillars in the local community.

“To keep the small town community spirit and hometown feel, events like Rockin’ on the Run are so important,” she says. “They let everyone know we might be busy with the hustle and bustle of daily life, but we are always here to support one another.”
 

‘This has become my mission’

Now, as a mother of three children (and a fourth on the way in April), Winebrenner says she is even more Participant at Rockin' on the Runmotivated to make a difference for children battling brain cancer.

“I was pregnant with my first daughter during our inaugural race,” she explains. “Once I had my daughter, I was so appreciative that she was healthy. I can’t imagine what parents of sick kids are going through. This has become my mission.”

Rockin’ on the Run now raises funds for Nationwide Children’s Hospital in Columbus. Participants can choose whether they want their money to go toward the hospital’s cancer research efforts or the “fun fund,” which helps make a child’s stay more pleasant.

For example, the “fun fund” is used for art therapy, music therapy, holiday parties and gift cards for parents who commute a far distance. This fund is also used to pay for a teacher to work at the hospital in the summertime to help children catch up on their studies.

“We’ve formed a great relationship with Nationwide Children’s Hospital,” Winebrenner says. “We have two research doctors that speak at our event and participate in the race. They talk to the public about how the funds are used for cutting-edge research right here in Central Ohio.”
 

A milestone in the making

With Rockin on the Run’s 10th anniversary coming up in 2019, Winebrenner is excited for what the future holds. Rockin' on the Run Race DayThe nonprofit’s donation goal increases each year, and plans to start a second race in a different community are in discussion.

“Our 10th year is going to be really special for us,” Winebrenner recalls. “I’ve actually never run our race, so maybe I’ll lace up my running shoes to celebrate this milestone.”

As Rockin’ on the Run continues to grow each year, Winebrenner meets more and more children with brain tumors – moments that reinforce her dedication to the nonprofit’s mission.

“We had a very sick little girl come to our race who was getting ready to start treatment,” Winebrenner says. “We introduced her to Reagyn, who is now 16 years old, which gave her a light at the end of the tunnel. Hope that she won’t always feel sick. This is what Rockin’ on the Run is all about.”

To learn more about Rockin' on the Run, visit their Facebook page.


‘Tis the season for holiday office closures

OIA’s office will be closed on the following days for the holidays: Dec. 25, Dec. 26, Jan. 1 and Jan. 2. Normal business hours will resume on Jan. 3.

We wish you and your family a safe and happy holiday season!

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Need perpetuation help? OIA to launch agency valuation services in 2018

2018 start button

With a median agency principal age of 59 years in Ohio, it’s time to buckle up and ride the wave of ownership change coming down the pike in the next five to 10 years.

Agency Owner Age: Frequency Distribution graph dataTo ensure small- to mid-sized retail agency owners are empowered with tools to make the best decisions when considering succession planning for their agency, OIA is building a robust offering of valuation and operational consulting services scheduled to roll out in 2018.

Craig Niess, business planning and valuation manager at OIA, will lead the initiatives.

“I’m excited about the opportunity to develop and manage the consulting practice within OIA and bring much needed services and solutions to Ohio’s independent agencies,” Niess says.

“In 2018, we want to offer high-quality business consulting to as many agencies as possible.”

Niess shares OIA’s passion for independent agents and the IA channel. He has more than seven years of financial and operational consulting experience with independent agents through his tenure at Marsh, Berry & Company.

Interested in being the first to know when the new services are available? Sign up to receive notifications.


Supreme Court of Ohio case could have major impact on insurance agency negligence claims

Lady Justice holding scales in front of legal books

When should the statute of limitations begin on an insurance agency negligence claim?

That’s the question the Supreme Court of Ohio will answer in London Insurance vs. LGR Realty – a case that could have a major impact on the entire insurance industry.

LGR Realty filed a complaint against Frank & London Insurance Agency, an independent agency in Columbus, alleging that they received an unsatisfactory insurance policy.

This allegation arose after a third party filed a claim against LGR Realty and the commercial policy carrier, Continental Casualty Company, refused to defend and indemnify.

Frank & London Insurance argues that the statute of limitations clock began running when the policy was issued. However, LGR Realty argues that it was a “delayed-damages” situation and the statute of limitations clock began when Continental Casualty Company refused to defend or indemnify on the third-party claim.

The trial court ruled in favor of Frank & London Insurance Agency, citing that the case was time-barred. LGR Realty appealed this decision, and the 10th District Court of Appeals overturned the trial court ruling.

Recent Supreme Court of Ohio professional negligence cases have nearly rescinded the court’s decision in Kunz v. Buckeye Union Insurance Co., which approved the delayed-damages rule regarding statute of limitations. However, this decision has not been expressly overruled.

The Supreme Court of Ohio will soon determine whether the delayed-damages rule in Kunz v. Buckeye Union Insurance Co. will remain valid.

LGR Realty’s argument rests on the logic that it is unrealistic to expect a policyholder to know the extent of their coverage until harm is suffered. Therefore, the Court should rule that the statute of limitations began when Continental refused to indemnify LGR when they were sued by a third party.

However, Frank & London Insurance argues that since a cause of action in a professional negligence claim begins when the wrongful act is committed, the statute of limitations in this specific case began when LGR Realty purchased their policy.

Additionally, Frank & London Insurance argues that since the Kunz v. Buckeye Union Insurance Co. case, there have been other professional negligence claims where the court held that the statute of limitations begins when the act is committed, not when the discovery of the tort occurs.

A decision by the Supreme Court of Ohio is expected to be issued soon. Stay tuned for more updates!

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