Setting Precedents, Setting Standards
In the course of arguing before the Ohio Supreme Court, Rutter & Russin has won cases that established precedents and set new standards for the rights of policyholders.
In the firm's landmark case of Zoppo v. Homestead Insurance Company, the Ohio Supreme Court ruled that there are many ways an insurer can act in bad faith:
- Conducting an inadequate investigation
- Exploiting the insured's vulnerable financial position
- Unnecessarily delaying the settlement of a claim
If bad faith can be proven, the insured may be entitled to collect damages for emotional distress, economic harm, and attorney fees and costs.
Below are representative cases based on applicable policy limits.
Fire & Property
Restaurant Owner Collects $478,000
When a popular restaurant burned down, all the owners wanted to do was rebuild it and get back into business. They turned to their insurance company for help, but, after a ponderous investigation and repeated examinations under oath, the carrier accused them of setting the fire and then lying about it, even though the local authorities had never charged the owners with arson. Rutter & Russin took on the carrier and proved to a jury that the insureds had nothing to do with causing the fire, resulting in a judgment for several hundred thousand dollars. Rather than risk an appeal, the insurance company agreed to pay the judgment plus interest and attorney fees.
Homeowner Cleared of Arson
A fire destroyed a house in the country occupied by a divorced man. The insurance company's investigator claimed that the fire was set intentionally with a flammable liquid. The homeowner believed that the fire occurred because he fell asleep smoking a cigarette. The insurance company denied the claim and accused the homeowner of arson. A trial in federal court in Indiana resulted in a verdict for the homeowner after a fire expert hired by Rutter & Russin was able to rebut the allegations made by the insurance company's investigator.
Restaurant Fire Results in $3 Million Settlement
A suspicious fire destroyed a popular river-front restaurant that was insured by two identical policies issued by two different companies. The owner had requested his long-time carrier to cancel its policy the week before the fire after receiving a substantially lower quote from another carrier. The agent for the long-time carrier asked for more time to try and match the new company's quote. While the agent was preparing his new quote, the fire occurred. Rutter & Russin convinced the carriers that the cause of the fire could never be determined, and that both carriers owed their full policy limits, rather than both policies prorating the loss. The claim was resolved for nearly $3 million.
Cigar Owner Receives Over $1 Million
The insurance company agreed to insure an inventory of cigars for over $1 million, but when a water loss rendered the cigars a pile of smelly tobacco, the carrier argued that the cigars were not worth as much as they had been insured for. Rutter & Russin pursued an appraisal under the terms of the insurance policy, resulting in the insurance company paying over $1 million to resolve the case.
Arson Defense Rejected by Jury
A family was spending the night at a relative's house when their home burned down, but the insurance company decided their absence was no coincidence and denied their claim, asserted that they had conspired to burn down their house. Rutter & Russin took the case to trial, and a jury found against the carrier and ordered it to pay the homeowners what they were owed.
$2.2 Million Settlement Follows Claim Denial
When fire destroyed the insured's house, he barely escaped alive. But that did not stop his insurance company from investigating him for arson and fraud. The insured thought he could handle the claim investigation by himself--after all, he had nothing to hide. Despite the insured's best efforts, the claim was denied because the insured did not fully comply with all of the insurer's onerous requests for information. He was forced to hire Rutter & Russin, who obtained a favorable settlement, but not until nearly two years after the fire.
Insurer's Theory of Suicide by Fire Successfully Rebutted
A man was devastated when his wife perished in a house fire, but even more shocked when the insurance company and the state fire marshal concluded that the woman had set the fire herself in order to commit suicide. Rutter & Russin hired a fire cause and origin expert, a toxicologist, and a pathologist in order to convince the carrier that its conclusion was erroneous, resulting in a favorable settlement for its client.
Successful Examination Under Oath Results in $600,000 Payment of Fire Claim Caused by Arson
The insurance company was suspicious when the insured suffered his second arson fire in two months, this one totally leveling his warehouse. The insured was a young Afro-American man with a limited income and little business experience. The insurance company demanded that he, his father, and the property manager all appear for examinations under oath, obviously hoping that it could take advantage of the insured's youth and inexperience and somehow prove that he had a financial motive to commit the arson. But with Rutter & Russin's guidance, the insured established with cell phone records and credit card receipts that he was out of state when the arsons had occurred and that the warehouse's tenant had a felony record and had made threats against the insured because of a rent dispute. Rutter & Russin also located a witness who heard the tenant's threats and had seen the tenant removing the insured's property from the warehouse prior to the fire. Rutter & Russin provided the insurance company with all of the exonerating records, including the tenant's felony convictions, and the insurance company paid the claim in full.
Insurance Company Caught Changing Rules in the Middle of the Game
The century old house located in Ohio City was not much to look at when the insured bought it for $5,000 at a sheriff's sale. But he invested money and sweat labor into the house, completely redoing it and turning it into a plush retreat. The insurance company agreed to insure it for $300,000, but when a fire totally destroyed the house the company quickly changed its tune. Now it wanted all the receipts that the insured had for the repairs, arguing that it was only liable for $5,000 plus the value of the repairs that the insured could prove with receipts and records. Rutter & Russin called the insurance company's bluff and demanded an appraisal, resulting in a settlement for nearly the entire policy limit.
Denied Fire Claim Results in $185,000 Settlement
All the elderly woman owned was her house, but that did not stop the insurance company from denying her fire claim based on a hyper-technical reading of the insurance policy. The insurer claimed that the woman did not reside in her own house because she had temporarily rented out the house while she went to live and care for a sick friend. Rutter & Russin established in court that the insurer's policy interpretation was wrong, and the case was settled for an amount in excess of the policy limits.
Underwriting Dispute Leads to Shorting of Fire Insurance Claim
The insured was renovating a century-old commercial building when a fire broke out that required the building to be gutted and rebuilt. The insurance company paid for the renovations that had been completed before the fire, but argued that it had never intended to insure the entire building. The resulting lawsuit against both the insurance company and the agent who had completed the application resulted in a settlement that allowed the insured to rebuild the entire structure.
Juveniles Successfully Sued for Burning Barn
Four juveniles were skateboarding in a barn when they decided to build a small fire to keep warm. They thought that they had put out the fire when they left, but it rekindled and destroyed the barn. Rutter & Russin, representing the barn owner, sued the juveniles, who were all insured under their parents' homeowners policies. The insurers denied coverage, asserting that the fire was an excluded loss because it resulted from the intentional acts of the juveniles. The court disagreed, holding that although the initial fire was set intentionally, the juveniles had never intended to burn down the barn.
Allstate Pays Homeowners Over $700,000 for Fire Loss
A young couple had built their dream home in the country, but that did not stop the insurer from questioning whether they were involved in its destruction. The insureds had nothing to hide, so they fully cooperated with Allstate's investigators until it became clear that the investigation was focusing on them. Allstate hired an attorney to obtain voluminous documents from the couple and then to take separate examinations under oath from the husband and wife. Finally, seeing the writing on the wall, the couple came to Rutter & Russin for help. We navigated them through the process, presented circumstances to Allstate that helped exonerate the couple, and negotiated a settlement that allowed the couple to rebuild their home better than ever.
$3.2 Million Paid Despite Inoperable Sprinkler System
A fire caused millions of dollars of damage to a business' manufacturing facility. The policy had just gone into effect, and the insurer had inspected the risk and told the insured to make sure the sprinkler system was operable. The insurer called a repair company that scheduled a visit the following week. The weekend before the repairs were to be completed, the fire occurred. The insurer denied the claim, asserting that the policy was void because the insured was required to have an operable sprinkler system. After the insured hired Rutter & Russin to file suit, discovery revealed that the agent and the insurer's underwriter both knew the sprinkler system was inoperable when the policy was written, and all parties understood that the insured would be given a reasonable time to remedy the situation. The case settled for $3.2 million.
Tenants Vandalize and Burn House
The policyholder bought a distressed house in East Cleveland hoping that he could repair it and make a profit. However, his tenants had other ideas. They trashed the house and rendered it unlivable. While the owner struggled to make repairs, the home was set on fire. The insurance company was not sympathetic to the homeowner's plight-it argued that the house was vacant at the time of the fire and that fire was not covered under the policy if the structure was vacant for more than 30 days. Rutter & Russin filed suit and convinced the trial judge and the court of appeals that the cause of loss was vandalism-not arson-and that vandalism was a covered peril even for vacant structures.
Insurance Bad Faith
Ohio Supreme Court Affirms Punitive Damage Award
No arrests were made when a Cleveland bar was intentionally burned, but the insurance company still denied the owner's claim asserting that he had set the fire. The owner believed that the fire had probably been set by some former patrons that he had kicked out for causing trouble. The jury determined that the owner was not involved in setting the fire, and awarded him $80,000 for his property loss plus another $187,000 for bad faith and attorneys' fees. The Ohio Supreme Court upheld the jury's verdict including the jury's decision that a further amount should be awarded to the owner for punitive damages. The punitive damage claim was later settled for a confidential amount.
Bad Faith Delay in Paying Fire Claim
An insurance company took nearly two years to pay its policyholders what they were owed after a fire destroyed their house. The carrier forced the policyholders to appraisal twice, refused to advance even the amounts it admitted it owed, and tried to get its contractor to cut corners on his repair estimate. Rutter & Russin represented the insureds and obtained a confidential settlement from the carrier for its bad faith conduct during the adjustment process.
$7,000 Claim For Stolen Car Results in $135,000 Judgment
When his car was stolen and later recovered severely damaged all the insured wanted was the $7,000 market value of his car. Allstate saw things differently, and accused its insured of setting up the theft because Allstate's expert thought the car could only have been stolen using a key and the insured still had his keys. The jury disagreed with Allstate's theory, and awarded the insured not only the cost of his car, but bad faith, punitive damages, and attorney fees totaling $135,000.
Injury Claims
Widow and Children Recover $3 Million
A young widow with three children came to Rutter & Russin after her husband was killed in a head-on traffic accident. The wrongdoer's insurance company was dragging its feet, and her own insurance company was refusing to pay anything. Rutter & Russin took the case and recovered the wrongdoer's policy limits, then forced the widow's own insurance carrier to admit that it had coverage, resulting in a payment of over $3 million.
Disabled Woman Receives $1.5 Million Settlement
The insurance company blamed the disabled victim for an accident that occurred in a highway turnaround, and refused to pay anything. Rutter & Russin filed suit and, working with an accident reconstructionist, the state highway patrol, the victim's treating doctor, and a rehabilitation specialist, convinced the insurance company that its insured driver was probably at fault and that the victim was permanently disabled. The case settled before trial for $1.5 million.
Back Injury Results in $505,000 Verdict
A 42-year-old father of three was injured when the van he was riding in went out of control and rolled off the highway. Although the man did not initially believe he was seriously injured, his condition deteriorated to the point where he was in constant pain and was unable to continue working. An MRI done over a year after the accident revealed that he had a compression fracture of one of his vertebrae. The insurance company hired a doctor to examine the man, then took the position that his back problems were the result of a degenerative arthritic condition, and totally unrelated to the accident. A jury trial resulted in a $505,000 verdict for the man and his family.
Broken Hip and Urinary Incontinence Results in $225,000 Settlement
An elderly woman was getting into the front passenger seat of a car when her equally elderly friend began pulling away. The woman fell and broke her hip, and that injury seemed clear-cut. However, after her hip healed she began suffering from incontinence. The insurance company's doctor said that the incontinence had nothing to do with the accident, and the fact that it started shortly after the accident was merely a coincidence. Rutter & Russin worked with a board qualified urologist and a board certified orthopedic surgeon to establish that the client's broken hip also resulted in an injury to her lower back where the nerves controlling the bladder were located. The client received a $225,000 settlement shortly before the trial.
Insurance Coverage Disputes
Child's Death Results in Insurer Paying $500,000 Policy Limits
A negligent driver crashed his truck into the living room of a house, killing an eight-year old girl. The family's personal attorney obtained the driver's policy limits in a settlement, but was unable to convince the family's own uninsured motorists carrier that it owed its limits as well. The family turned to Rutter & Russin, who obtained a court of appeals ruling obligating the carrier to pay its full $500,000 policy limits.
Printing Company Recovers an Additional $750,000
A printing company suffered a devastating fire loss, and recovered over a million dollars from its carrier for damage to a warehouse, but the carrier refused to pay for most of the inventory claiming that it was not covered by a technical reading of the policy. The company hired Rutter & Russin to pursue the balance of the claim, resulting in the insurance company paying an additional $750,000.
Fortune 500 Company Gets Coverage Help
A Fortune 500 company needed coverage help when its medical excess insurer refused to reimburse it for over $500,000 in medical bills resulting from the hospital stays of two badly injured employees. Rutter & Russin filed suit in federal court, and, following several lengthy depositions of the involved parties, convinced the insurance company to honor the vast majority of the claim.
Banking Error Results in Fidelity Claim
An employee of a bank erroneously authorized the deposit of millions of dollars worth of checks into an unauthorized account. The bank was forced to reimburse its customer for the loss, and then turned to its fidelity insurer for reimbursement. When the carrier refused, citing certain technical defenses, Rutter & Russin filed suit and forced a settlement favorable to the bank.
Duty to Defend Upheld
Several carriers refused to defend their insured when it was sued for conduct that the carriers did not feel was covered by their policies. The insured hired Rutter & Russin to vindicate its position, and the firm's work resulted in the court of appeals ordering the carriers to provide a defense.
Disabled Worker Needs Help Collecting Judgment
A disabled woman and her attorney already had a multi-million dollar judgment when they came to Rutter & Russin. The problem was that they had nobody to collect it from. The wrongdoer was threatening bankruptcy and the wrongdoer's insurance companies were all denying liability. Rutter & Russin pursued the carriers all the way to the Ohio Supreme Court, and obtained a ruling that resulted in a confidential settlement.
Equine Insurance Claim Resolved Without Lawsuit
A family insured its show horse for its $150,000 value. The horse had to be put down because of persistent leg problems, and the family expected its insurer to honor the claim. They were surprised when the insurer denied the claim, pointing to an application in which the insureds had supposedly claimed that the horse had no pre-existing leg issues. Rutter & Russin established that the error was the agent's fault, and the claim resolved without a lawsuit.
Racial Discrimination Claim Covered by Insurance Policy
The insurance company took the position that it had no duty to defend its insured in a racial discrimination case because its EPL (Employer Liability Policy) did not cover such claims. The insured corporation settled the underlying discrimination lawsuit brought by its former employee and then hired Rutter & Russin to sue the insurance company for the cost of the settlement and its substantial attorney fees. Rutter & Russin demonstrated that the insurance company's coverage position was wrong, leading to a settlement of the lawsuit.
Dead Chinchillas Lead to Coverage Argument
The insured found us through this web site. He operated a chinchilla farm, and hundreds of his animals had died when the power went out to one of the buildings where the chinchillas were housed, causing the animals to suffocate from lack of ventilation. He had called in the claim to his insurer and it had only taken them two days to deny the claim because there was ostensibly no proof the policy interruption was caused by a mechanical malfunction-the only arguable covered cause of loss. Rutter & Russin hired an electrician and an engineer, who pinpointed the cause of loss as a defective wire, which caused a motor to short out-a mechanical malfunction. The insurer finally accepted this conclusion, but then argued that the policy limited coverage for farm animals to $5,000. Once again, Rutter & Russin proved them wrong, and the insurer ended up paying its $100,000 policy limits.
Nursing Home Sued for Sexual Abuse Committed by Employee
The story was splashed across the front page of the local paper-an employee of a nursing home had confessed to sexually abusing several elderly and incapacitated patients. The relatives of the abused patients were understandably upset, and sued the nursing home, which turned to its insurance carrier for protection. The insurance company, however, also filed suit against the nursing home, asserting that its policies did not cover sexual abuse. Not knowing where to turn, the owner of the nursing home came to us. Rutter & Russin challenged the insurance company's coverage position, eventually resulting in a settlement that resolved all claims against the nursing home.
Title Insurer Pays Confidential Amount to Settle Claim
The property owner bought title insurance to protect him if any claims were made that challenged his clear title to the property that he had developed. Sure enough, a claim was asserted challenging an easement that had existed for many years. The title insurer said it would defend, but it never paid the insured's attorney fees as they grew larger and larger. By the time the underlying case was resolved, the fees exceeded $1 million. The insured turned to Rutter & Russin for help. It took a lawsuit, several depositions, and a few court hearings, but the title insurer-facing a bad faith claim-eventually resolved the claim for a confidential amount.
Insurance Agent Negligence
Insurance Agent Pays for Mistake
A sudden storm caused a sewer line to back up and flood the entire lower level of a suburban home, resulting in extensive water damage. The homeowner thought he was insured, but the carrier pointed to an exclusion in the policy for flood damage. The homeowner turned to Rutter & Russin for help, and the firm's work discovered that the agent had erroneously failed to secure the proper type of coverage. The agent's own insurance company stepped in to settle the case for a confidential amount.
Agent's Application Error Results in Settlement
Since a man's wife was in a nursing home, he transferred title of his home to his adult daughter. Rather than name both the daughter and her father as insureds on the insurance application, the agent listed only the daughter. When a fire occurred, the insurance company refused to pay for the father's property, arguing that he was not an insured. Rutter & Russin sued the agent for his error, resulting in a settlement after the case was decided in the father's favor in the court of appeals.
Life Insurance
Widow Collects $1.35 Million in Life Insurance
The president of an Ohio-based company was killed in a plane crash enroute to a subsidiary company located in New Hampshire. The subsidiary company had purchased a $1.5 million life insurance policy for the president, naming his wife as beneficiary. The insurance carrier, however, denied the widow's claim, asserting that the policy had been canceled nearly a year before the crash due to the subsidiary's failure to pay the premium. Rutter & Russin argued that the cancellation was ineffective because Ohio law applied and required a notice of cancellation to be sent to the insured-president, not merely the subsidiary responsible for paying the premium. The parties settled for 90% of the policy limits.
Procedural Mistake Leads to Denial of Life Insurance Claim
The decedent had worked for his employer for over thirty years before retiring. His exit interview was supposed to include the signing of paperwork that would transfer his employer sponsored life insurance policy to an individual policy, but the employer forgot to present the correct forms to the employee, who died only a few months later. The insurance company was unmoved by the procedural snafu, so Rutter & Russin successfully asserted a claim against the employer for the full value of the policy that should have been in force.
Application Error Results in Denial
After her father died, his daughter presented a life insurance claim that the insurance company denied based on material misrepresentations in the application that was completed two years earlier. The father was not around to defend his answers, but Rutter & Russin obtained the agent's file and the company's underwriting file and showed that the false answers were probably the result of the agent's carelessness, and did not come from the decedent.
Suicide Results in Claim Denial
A young woman's husband tragically committed suicide following years of depression. The widow submitted a life insurance claim that the insurance company denied, arguing that its policy contained a suicide exclusion. Rutter & Russin established that the suicide exclusion was not in the policy when it was issued, and that the later versions of the policy that contained the suicide exclusion did not apply to this claim. The company paid the claim in full without the filing of a lawsuit.
Disability Insurance
Professional Basketball Player Disabled by Knee Injury
A young man's professional prospects were cut short by a devastating knee injury. Fortunately, he had the foresight to purchase an own occupation disability policy. Unfortunately, the insurance company contended that the knee injury occurred before the policy took effect. Rutter & Russin worked with the insured's doctors to establish that the knee problem that pre-existed the policy was insignificant, and that the actual disabling event had occurred after the policy went into effect.
Lawyer's Depression Leads to Disability Claim
The insurance company did not believe its insured when he told them that he was too depressed to continue practicing law, so he turned to Rutter & Russin to help him establish his claim. Working with the insured's doctor and psychiatrist, Rutter & Russin convinced the carrier to honor the claim, resulting in lifetime disability payments to the lawyer.
Salesman's Back Injury Results in Disability Claim
A salesman admitted that his bad back did not prevent him from performing many jobs – just the sales job that he had at the time since it required him to carry and display to customers heavy items. The disability insurer did not buy the story, but it agreed to a confidential settlement once Rutter & Russin became involved and successfully argued that the policy insured the client in his own occupation, not just any occupation.
Water Damage
Frozen Pipes Result in Substantial Water Damage
A boiler in an old Cleveland warehouse malfunctioned, preventing heat from reaching a seldom used section of the building. During the next week some water pipes froze and split. When the weather warmed over the weekend and the pipes thawed, water ran and did substantial damage before the owner discovered the problem on Monday. The insurance company denied the claim, asserting that the insured had not used reasonable care to maintain heat in the building. A jury disagreed, finding that the insured had no reason to anticipate that the boiler would malfunction and that the owner had used due care.
State Farm Reverses Claim Denial
State Farm had already denied the homeowner's claim before Rutter & Russin became involved. The insurer contended that the frozen pipes were the result of the insured's own negligence in failing to maintain heat in a house that was unoccupied and up for sale. Working with the real estate agent, an HVAC expert, and a plumbing contractor, Rutter & Russin proved that a prospective buyer had inspected the furnace and not properly replaced the furnace door, thereby activating a safety feature that prevented the furnace from functioning. State Farm reversed its decision and paid the claim in full prior to the filing of a lawsuit.
Theft Losses
Homeowner Recovers for Missing Jewelry
The insurance company was suspicious when the insured turned in a claim for over $100,000 in missing jewelry, especially since she did not have appraisals for most of the items. As is customary when an insurer is preparing to deny a claim, the carrier requested a laundry list of documents and dragged the husband, wife, and family members in for examinations under oath. With Rutter & Russin's help, the insureds were able to reconstruct how the jewelry was lost-probably stolen-and get the claim paid in its entirety.
Body Shop Suffers $350,000 Theft Loss
The claim was already ten months old when the insured finally came to Rutter & Russin for help. The body shop owner was getting nowhere with his insurance company and he needed his stolen tools replaced in order to operate at full capacity. The longer the claim dragged on, the more money he lost. Compounding his problem, he was too busy trying to keep his business afloat to gather the many receipts, invoices, credit card statements, and tax returns the insurer was demanding in order to process the claim. Rutter & Russin took over the insured's duties, allowing him to concentrate on repairing cars. The firm gathered and organized thousands of documents, represented the owner and several of his employees and vendors at examinations under oath, worked with the insured's accountant, and ultimately obtained payment of the claim.
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