[Cite as Canfield Motor Sports, Inc. v. Motorist Mut. Ins. Co., 2017-Ohio-735.]

STATE OF OHIO, MAHONING COUNTY 

IN THE COURT OF APPEALS 

SEVENTH DISTRICT 

CANFIELD MOTOR SPORTS, INC. 

 PLAINTIFF-APPELLEE 

VS. 

MOTORIST MUTUAL INSURANCE 

COMPANY 

 DEFENDANT-APPELLANT 

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CASE NO. 16 MA 0001 

OPINION 

CHARACTER OF PROCEEDINGS: Civil Appeal from the Court of Common 

Pleas of Mahoning County, Ohio 

Case No. 13 CV 2161 

JUDGMENT: Affirmed. 

APPEARANCES: 

For Plaintiff-Appellee Attorney Stuart Strasfeld 

100 East Federal Street, Suite 600 

Youngstown, Ohio 44503-1893 

For Defendant-Appellant Attorney Merle Evens, III 

Millenium Centre, Suite 300 

200 Market Avenue, North 

P.O. Box 24213 

Canton, Ohio 44701-4213 

JUDGES: 

Hon. Mary DeGenaro 

Hon. Cheryl L. Waite 

Hon. Carol Ann Robb 

 

 

 Dated: February 28, 2017 
[Cite as Canfield Motor Sports, Inc. v. Motorist Mut. Ins. Co., 2017-Ohio-735.]

DeGENARO, J. 

{¶1} Defendant-Appellant, Motorist Mutual Insurance Company appeals the 

trial court judgment awarding $27,500.00 to Plaintiff-Appellee, Canfield Motor Sports, 

Inc. pursuant to the terms of a commercial general liability insurance policy issued by 

Motorist. For the following reasons, the judgment entry of the trial court is affirmed. 

{¶2} CMS was formerly in the business of selling both new and used 

motorcycles, and insured under a commercial policy issued by Motorist. The "Select 

Dealers Plus Program", Endorsement CA 7089 (01/09) of the policy includes a 

section entitled "False Pretense Coverage" which provides as follows: 

B. Physical Damage Coverage is changed as follows: 

1. The following is added: 

We will pay for "loss" to a covered "auto" under: 

False Pretense Coverage caused by: 

a. Someone causing you to voluntarily part with the covered "auto" 

by trick, scheme or under false pretenses. 

{¶3} John Allen, the former general manager of CMS, testified that he was 

first contacted by a sales associate of Elite Auction Sales, Inc., John Watson, in early 

August of 2009. Watson solicited Allen to contract with Elite to sell CMS's 

motorcycles through a public auction at its facility in Murfreesboro, Tennessee. 

Watson explained that goods sold at public auctions typically garnered a much higher 

price than goods sold at private auctions. During that first telephone conversation, 

Allen told Watson that CMS was not interested in Elite's services. Watson contacted 

Allen by telephone roughly ten times during the month of August. By the end of the 

month, and after several discussions with Allen, Thomas Wronkovich, one of CMS's 

owners, instructed Allen to contract with Elite to auction ten used "sport bikes" from 

CMS's inventory. The sport bikes sold mainly in the springtime, and Wronkovich 

reasoned that it would be preferable to sell the bikes than carry them over in CMS's 

inventory to the following spring. 

{¶4} Prior to contracting Elite's services, Wronkovich advised Allen to 
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perform a due diligence investigation of Elite's business practices. Allen contacted 

another dealer that had employed Elite in the past. He spoke with the general 

manager who did not raise any concerns regarding Elite. 

{¶5} According to the Exclusive Auction Listing Contract, executed on 

September 2, 2009, CMS's motorcycles were to be sold at an absolute auction with a 

tentative sale date of September 5, 2009. Wronkovich and Allen agreed to sell the 

motorcycles through Elite without a reserve price because Watson told them that the 

auction would be widely publicized. Elite charged a commission of $300.00 per bike, 

which included transportation from Ohio to Tennessee. Elite collected the 

motorcycles on the day the contract was signed, and provided a tentative auction 

date of Saturday, September 5, 2009. Allen testified that the motorcycles were taken 

in a red pickup truck with an open trailer on the back. Allen believed that the titles 

had been sent to Elite, but conceded that he never looked up the vehicle 

identification numbers in order to determine whether title had transferred to Elite or 

the buyers at auction. 

{¶6} On the Monday following the auction, Allen attempted to contact Elite at 

the telephone number provided on the contract. The recipient of the call answered, 

"Trotter Auction Sales." Allen asked for Watson, but he was told that Watson was 

unavailable. Allen was informed that Trotter Auction Sales had purchased Elite, 

however Allen conceded at the bench trial that he was not aware of the details of the 

sale. Allen had previously contacted Watson on Watson's mobile phone, but ten 

phone messages on Watson's mobile voice mail over the course of the next week 

went unanswered. Likewise, Allen made ten unsuccessful attempts to collect the 

purchase money for the motorcycles from Trotter Auction Sales. 

{¶7} Despite Allen's inability to contact Watson, CMS received a facsimile 

transmission on September 10, 2009 of a consignor statement, which contained the 

details of each of the ten motorcycle sales. The statement indicated that an auction 

was held on September 5, 2009, and provided a description of the motorcycles which 

were sold at auction, the unit price, the total price received, the commission, and the 
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amount due to CMS, $35,400.00. However, CMS never received the amount owed 

under the contract from Elite. 

{¶8} Elite filed for bankruptcy on or about September 25, 2009. Both Allen 

and Wronkovich conceded that they did not know the circumstances surrounding 

Elite's bankruptcy petition or when Elite ceased doing business. According to 

Wronkovich's testimony, Elite filed a Chapter 11 petition for reorganization under the 

Bankruptcy Code. CMS filed a claim for $35,400.00 in the bankruptcy proceeding, 

and was identified in the petition as one of the largest unsecured creditors. CMS 

received $7,838.39 from the bankruptcy court. As a consequence, CMS submitted a 

claim under the commercial policy on the basis that it voluntarily parted with the ten 

motorcycles by trick, scheme or under false pretenses. 

{¶9} CMS filed a complaint for declaratory judgment against Motorist 

seeking a determination of coverage under a false pretenses endorsement, which 

Motorist answered. The case proceeded to a bench trial before the magistrate, who 

issued a decision granting CMS a judgment of $27,500.00. Motorist filed objections 

which CMS opposed. The trial court overruled the objections, concluding that CMS 

had voluntarily parted with ten motorcycles as a result of an intentional deceptive act 

on the part of Elite, and that the terms of the policy required reimbursement for its 

loss: 

Intent to deceive can be deduced from the circumstances of the 

transaction as a whole, as the misleading party is unlikely to admit to 

deceptive conduct. In re Case No. 01-50091, 2002 Bankr. LEXIS 1540. 

The timeline of events surrounding the transaction clearly establishes 

that Elite [ ], intended to deceive, and did deceive [CMS]. Such 

deceptive conduct falls under the Policy's False Pretense Coverage 

Clause. 

{¶10} Motorist asserts in its sole assignment of error: 
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THE TRIAL COURT'S JUDGMENT FILED ON DECEMBER 8, 2015, IS 

AGAINST THE MANIFEST WEIGHT OF THE EVIDENCE. 

{¶11} Motorist contends that CMS failed to meet its burden of proof with 

respect to the policy language that requires evidence that CMS was induced to part 

with the motorcycles by trick, scheme, or false pretenses. Motorist argues that 

neither Allen nor Wronkovich knew the details surrounding the sale of CMS's 

motorcycles or the events prompting Elite's Chapter 11 bankruptcy. Likewise, 

Motorist asserts that CMS failed to offer testimony from any representative from Elite 

to establish that Elite had with false pretense induced CMS to surrender the 

motorcycles. Motorist concludes that the trial court drew unwarranted inferences 

from the dearth of evidence adduced at trial regarding Elite's motives. 

{¶12} CMS counters that the trial court did not rely solely upon the filing of the 

bankruptcy petition to conclude that Elite engaged in a trick, scheme, or false 

pretenses. CMS argues instead that trick, scheme, or false pretenses can be 

inferred from the fact that Elite ceased doing business immediately after the auction. 

{¶13} As to the standard of review of a declaratory judgement, an appellate 

court's "inquiry * * * involves whether the trial court's judgment was against the 

manifest weight of the evidence." Allason v. Gailey, 189 Ohio App.3d 491, 2010-

Ohio-4952, 939 N.E.2d 206, ¶ 26 (7th Dist.), citing Blair v. McDonagh, 177 Ohio 

App.3d 262, 2008-Ohio-3698, 894 N.E.2d 377, ¶ 56. "Judgments supported by some 

competent, credible evidence going to all the essential elements of the case will not 

be reversed by a reviewing court as being against the manifest weight of the 

evidence." Allason at ¶2, citing C.E. Morris Co. v. Foley Constr. Co., 54 Ohio St.2d 

279, 280, 8 O.O.3d 261, 376 N.E.2d 578 (1978). 

{¶14} Insurance policies are construed by the same rules used to construe 

contracts. World Harvest Church v. Grange Mut. Cas. Co., Slip Opinion 2016-Ohio2913, ¶ 28. In Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216, 2003-Ohio-5849, 

797 N.E.2d 1256, the Ohio Supreme Court recognized that the court's task when 

interpreting an insurance policy is to "examine the insurance contract as a whole and 
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presume that the intent of the parties is reflected in the language used in the policy." 

Id. at ¶ 11, citing Kelly v. Med. Life Ins. Co., 31 Ohio St.3d 130, 509 N.E.2d 411 

(1987), paragraph one of the syllabus. Moreover, courts must "look to the plain and 

ordinary meaning of the language used in the policy unless another meaning is 

clearly apparent from the contents of the policy." Id., citing Alexander v. Buckeye 

Pipe Line Co., 53 Ohio St.2d 241, 374 N.E.2d 146 (1978), paragraph two of the 

syllabus. The party seeking to recover under an insurance policy bears the burden of 

proof to demonstrate that the policy provides coverage for the particular loss. 

Chicago Title Ins. Co. v. Huntington Natl. Bank, 87 Ohio St.3d 270, 273, 719 N.E.2d 

955 (1999). 

{¶15} A brief review of the history of false pretense provisions in insurance 

policies is instructive. Most false pretenses provisions are typically exclusionary in 

nature. Thus, when interpreting the false pretense language as is present in 

Motorist's policy here, courts have done so in order to determine if the allegedly 

fraudulent actions serve to exclude coverage under the policy. See, e.g., Magolan v. 

Shellhouse, 5th Dist. No. 2011-CA-105, 2012-Ohio-2144, where the vehicle owner 

brought an action against the automobile insurer, claiming the body shop's conduct in 

selling vehicle without owner's permission constituted theft. Notably, Magolan

appears to be a case of first impression in Ohio; case law outside Ohio is based on 

more commonly-accepted examples of trick, scheme and false pretense, for 

instance, embezzlement by an employee. See, e.g., Joe Cotton Ford Inc. v. Illinois 

Emcasco Ins .Co. 389 Ill. App.3d 718, 906 N.E.2d 1279 (2009), a retail customer 

providing a worthless check; LaPerla, Ltd. V. Peerless Ins. Co., 51 Conn.Supp. 241, 

980 A.2d 971 (2009) and; Lyday v. Ohio Farmers Insurance Co., 2d Dist. No. 

5752,1978 WL 216210; McConnell v. Fireman's Fund Ins. Co., 178 F.2d 76, 77 (5th 

Cir.1949), cert. denied, 339 U.S. 952, 70 S.Ct. 840, 94 L.Ed. 1365 (1950), or a 

prospective car purchaser providing false identification in order to test drive a car. 

{¶16} In Magolan, the Fifth District underscored that the insured must 

demonstrate that the scheme or trick existed at the time when the goods are 
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transferred. Magolan at ¶16-17. Magolan contracted with Shellhouse to restore a 

vintage automobile. After several delays, Magolan began contacting Shellhouse 

every couple of months for a report on Shellhouse's progress. Several years passed. 

Roughly five years after the contract was executed, because Magolan had stopped 

calling Shellhouse and did not pay him additional money required under the contract, 

Shellhouse sold the automobile. Magolan's insurance policy excluded coverage for 

loss as a result of "anyone causing you to voluntarily part with [a covered auto] as a 

result of any scheme or trick." Id. at ¶12. 

{¶17} The trial court entered summary judgment in favor of the insurer in the 

declaratory judgment action file by Magolan, but the Fifth District concluded that 

genuine issues of material fact existed as to whether Magolan voluntarily parted with 

the vehicle as a result of a trick or scheme. Although Magolan conceded that 

Shellhouse lied to try to placate Magolan over the course of many years when he 

was either unable or unwilling to restore the automobile, the Fifth District recognized 

that Magolan's admissions did not demonstrate that the trick or scheme existed on 

the date the contract was executed. The Fifth District also relied upon the many years 

that passed after the automobile was transferred to Shellhouse before he sold the 

automobile. Id. at ¶ 16. 

{¶18} The crux of Motorist's argument is that there is no competent, credible 

evidence in the record from which to infer that Elite engaged in any false pretense on 

September 2nd, the date CMS signed the contract with Elite and took possession of 

the 10 motor bikes. To the contrary, the chain of events occurred over approximately 

a 45-day period, starting with Elite's relentless sales pitch during the month of August 

through the September 5th auction, the multiple unreturned phone calls, culminating 

in Elite's Bankruptcy petition filed on September 25th. 

{¶19} There was competent, credible evidence in the record from which the 

trial court could infer fraudulent purpose by Elite. The events that occurred were 

sufficiently close in proximity to support the trial court's inference that Elite's 

fraudulent intent existed on September 2nd, the day the contract was executed and 
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the motorcycles were retrieved by Elite. 

{¶20} Accordingly, Motorist's sole assignment of error is meritless, and the 

judgment entry of the trial court is affirmed. 

Waite, J., concurs. 

Robb, P. J., concurs.