[Cite as Luri v. Natl. Union Fire Ins. Co. of Pittsburgh, PA , 2019-Ohio-1440.] 

# Court of Appeals of Ohio

EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA

JOURNAL ENTRY AND OPINION No. 107412

RONALD LURI

PLAINTIFF -APPELLANT

vs. NATIONAL UNION FIRE INSURANCE CO. OF PITTSBURGH, PA, ET AL.

DEFENDANTS-APPELLEES

JUDGMENT:

AFFIRMED

Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-09-696383

BEFORE: Keough, J., Boyle, P.J., and Blackmon, J.

RELEASED AND JOURNALIZED: April 18, 2019ATTORNEYS FOR APPELLANT

Andrew A. Kabat Daniel M. Connell Shannon J. Polk Haber, Polk & Kabat 1300 West 78th Street, Suite 305 Cleveland, Ohio 44102

ATTORNEYS FOR APPELLEES

Steven G. Janik Crystal Lynn Maluchnik Janik, L.L.P. 9200 South Hills Blvd., Suite 300 Cleveland, Ohio 44147

Robert T. Glickman McCarthy, Lebit, Crystal & Liffman Co. 101 West Prospect Avenue 1800 Midland Building Cleveland, Ohio 44115

KATHLEEN ANN KEOUGH, J.: {¶1} Plaintiff-appellant, Ronald Luri (“Luri”), appeals from the trial court’s judgment granting the motions for summary judgment of defendants-appellees, National Union Fire Insurance Company of Pittsburgh, Pa. (“National Union”), American Home Assurance Company (“American Home”), and American International Group, Inc. (“ AIG”) (collectively “appellees”). For the reasons that follow, we affirm. I. Background A. Underlying Litigation{¶2} In August 2007, in Cuyahoga C.P. No. CV-07-633043, Luri filed suit against Republic Services, Inc., Re public Services of Ohio Hauling, L.L.C., Republic Services of Ohio I, L.L.C., Jim Bowen, and Ron Kra ll (collectively “Republic”), a lleging wrongful discharge and termination based on his refusal to comply with Republic’s directive that he terminate older employees and replace them with younger candidates. The case proceeded to trial, and the jury returned a verdict in favor of Luri, awar ding him $3,500,000 in compensatory damages and $43,108,599 in punitive damages. On July 8, 2008, th e trial court entere d judgment on the jury’s verdict. {¶3} After filing a supersedeas bond that stay ed execution of the judgment, Republic appealed the judgment to this court, arguing that the trial court erred in denying its motion to bifurcate Luri’s punitive damages claim under R.C. 2315.21(B)(1), and in not applying the statutory cap on punitive damages. This court a ffirmed the trial court’ s denial of Republic’s motion to bifurcate punitive damages, but revers ed the trial court’s aw ard of punitive damages and remanded to the trial court for further proceedings. Luri v. Republic Servs. , 193 Ohio App.3d 682, 2011-Ohio-2389, 953 N.E.2d 859 (8th Dist.). {¶4} Luri appealed this court’s application of punitive damages caps to the Ohio Supreme Court. Republic also appealed based on a certified conf lict between this court and the Tenth District regarding the cons titutionality of R.C. 2315.21(B)(1). {¶5} On July 3, 2012, the Ohio Supreme Court reversed this cour t, and remanded the matter to the trial court for application of Havel v. Villa St. Joseph , 131 Ohio St.3d 235, 2012-Ohio-552, 963 N.E.2d 1270, in which the Supreme Court held that mandatory bifurcation under R.C. 2315.21(B) was constitutional. Luri v. Republic Servs. , 132 Ohio St.3d 316,2012-Ohio-2914, 971 N.E.2d 944. The Supreme Court furt her held that Luri’s appeal was moot in light of its holding. Id. at ¶ 1. {¶6} Upon remand, the trial court held that application of Havel required a new trial. This court affirmed on appeal. Luri v. Republic Servs. , 8th Dist. No. 100539, 2014-Ohio-3817. The Ohio Supreme Court subsequently refused to accept jurisdiction of Luri’s appeal. {¶7} On May 21, 2015, the trial court vacated the July 8, 2008 judgment rendered after the first trial. Its journal entry vacating the judgment stated: Pursuant to the Supreme Court’s rejecti on of plaintiff’s appeal on 03/25/15, this court finds that its 10/04/13 ruling entitlin g [Republic] to a new trial has been affirmed and the judgment underlying de fendants’ supersedeas bond has thus been vacated. {¶8} The second trial commenced in June 2016, and Luri settled w ith Republic after opening statements. Luri’s suit was dismissed with prejudice. B. Luri’s Supplemental Complaint {¶9} At the time of the jury verdict in th e underlying litigation, Republic was insured under two indemnity policies: an employment practices liability insurance policy issued by American Home with a policy period of January 27, 2007 to January 27, 2008, and an employment practices liability insurance policy issued by National Union with a policy period of January 27, 2008 to January 27, 2009. Each po licy had coverage limits of $25 million with retentions of $1,000,000. {¶10} On June 22, 2009, Luri filed a supplemen tal complaint pursuant to R.C. 3929.06, which authorizes direct actions against the judg ment debtor’s insurance carrier after a final judgment has been obtained and upon the fulfillme nt of certain conditions precedent. Luri sought judgment against Ameri can Home, National Union, and AIG to “pay at least the policylimits of one policy, $25,000,000, and po ssibly two,” in pa rtial satisfaction of the July 8, 2008 judgment, which had been obtained after the jury trial but subsequently vacated by the trial

court. 1 {¶11} After briefing, the trial court granted appellees’ motions for summary judgment. It ruled that a vacated judgment is a void judgment, and thus, Luri lacked a final judgment as required by R.C. 3929.06 to proceed against Amer ican Home, National Union, and AIG. It further found that the vacated judgment was “uninsurable as a matter of law because it constitutes a ‘double recovery’ or windfall that would provide Luri greater coverage than Republic under the policies.” Ther efore, it concluded that ther e were no genuine issues of material fact, and National Un ion, American Home, and AIG we re entitled to judgment as a matter of law. This appeal followed. II. Law and Analysis {¶12} In his single assignment of error, Luri cont ends that the trial court erred in granting appellees’ motions for summary judgment.

A. Standard of Review {¶13} We review summary judgment rulings de novo, applying the same standard as the

trial court. Grafton v. Ohio Edison Co. , 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996). We

accord no deference to the trial court’s decisi on and independently review the record to determine whether summary j udgment is appropriate. Id

. {¶14} Under Civ.R. 56, summary judgment is appr opriate when (1) there is no genuine issue as to any material fact, (2) the moving party is entitled to judgment as a matter of law, and

1 Luri sought judgment against American Home and National Union as issuers of the policies, and against AIG, their parent company, under an agency theory.(3) viewing the evidence most strongly in favor of the nonmoving party, reasonable minds can reach only a conclusion that is a dverse to the nonmoving party. {¶15} On a motion for summary judgment, the moving party has the initial burden of setting forth specific facts that demonstrate its entitlement to summary judgment. Dresher v.

Burt , 75 Ohio St.3d 280, 292-293, 662 N.E.2d 264 (1996). If the moving party fails to meet this burden, summary judgment is not appropriate; if the moving party meets this burden, the nonmoving party has the reciprocal burden to point to evidence of specifi c facts in the record demonstrating the existence of a genuine issue of material fact for trial. Id . at 293. Summary judgment is appropriate if the nonmoving party fails to meet this burden. Id

. B. A Final Judgment {¶16} R.C. 3929.06 provides in relevant part: (1) If a court in a civil action enters a final judgment that awards damages to a plaintiff for injury, death, or loss to the person * * * and if, at the time that the cause of action accrued against the judgme nt debtor, the judgment debtor was insured against liability for that injury, death, or loss, the plaintiff * * * is entitled as judgment creditor to have an amount up to the remaining limit of liability coverage provided in the judgment debtor’s policy of liability insurance applied to the satisfaction of the final judgment

. (2) If, within, thirty days after the entry of the final judgment referred to in division (A)(1) of this section, the insu rer that issued the policy of liability insurance has not paid the judgment cr editor an amount equal to the remaining limit of liability coverage provided in that policy, the judgment creditor may file in the court that entered the final judg ment a supplemental complaint against the insurer seeking the entry of a judgment ordering the insurer to pay the judgment creditor the requisite amount. Subject to division (C) of this section, the civil action based on the supplemental complaint shall proceed against the insurer in the same manner as the original civil action against the judgment debtor. (Emphasis added.) {¶17} The pertinent provision from the insurance policies at issue reads as follows: 18. Action Against InsurerExcept as provided in Clause 17 of the policy, no action shall lie against the insurer unless, as a condition precedent thereto, there shall have been full compliance with all of the terms of th is policy, nor until the amount of the Insured’s obligation to pay shall have been fully and finally determined either by judgment against the insured after actual trial or by written agreement of the Insured, the claimant and the Insurer. {¶18} In his single assignment of error, Luri cont ends that the trial court erred in granting summary judgment to appellees because the insurance policies per mitted collection upon the entry of “judgment against the insured after actua l trial” without regard to the outcome of any appellate proceedings, and the “final judgme nt” precondition to rec overy under R.C. 3929.06 was

satisfied when the trial court en tered the July 8, 2008 final judgment . We find no merit to Luri’s

arguments. {¶19} The recovery of a final judgment is a condition precedent to a supplemental action

under R.C. 3929.06. Benkoe v. Monsanto Co. , 8th Dist. Cuyahoga No. 57342, 1990 Ohio App. LEXIS 3313, *3, (Aug. 9, 1990), citing Chitlik v. Allstate Ins. Co. , 34 Ohio App.2d 193, 229 N.E.2d 295 (8th Dist.1973), para graph two of the syllabus; In re All Cases Against Sager Corp ., 132 Ohio St.3d 5, 2012-Ohio-1444, 967 N.E.2d 1203, ¶ 33 (“R.C. 3929.06(B) * * * conditions the filing of a supplemental complaint against th e insurer upon the entry of a final judgment.”). {¶20} Luri does not have a final judgment, how ever, because the July 8, 2008 trial court judgment upon which he based his R.C. 3929.06 supplemental complaint was vacated and rendered void after appeal. “It is well settled that a final judgment is one which determines the

merits of the case and makes an end to it.” Stewart v. Zone Cab of Cleveland , 8th Dist. Cuyahoga No. 79317, 2002 Ohio App. LEXIS 378, *4 (J an. 31, 2002). Althoug h the trial court entered a judgment on July 8, 2008 after the jury’s verdict, Luri’s case remained pending, and not finally determined, until all appeals had been exhausted. Maynard v. Eaton Corp. , 119 OhioSt.3d 443, 2008-Ohio-4542, 895 N.E.2d 145, ¶ 13, citing Van Fossen v. Babcock & Wilcox Co. , 36 Ohio St.3d 100, 104, 522 N.E.2d 489 (1988) (“[A]n action or suit is ‘pending’ from its inception until the rendition of final judgment.”). Furthermore, an appeal suspends the effect of the trial court’s judgment until the court of appeals enters its own final judgment. Id . Thus, although the July 8, 2008 judgment was a judgment that determined the issues submitted to the trial court, it was not a “final judgment” of the type described in R.C. 3929.06 because, in light of both Luri and Republic’s appeals, it did not finally determine the merits of and make an end to the underlying case. {¶21} In fact, the July 8, 2008 judgment was re versed, remanded, and ultimately vacated by the trial court, such that it was rendered void and of no effect. “A judgment that has been vacated, reversed, or set aside on appeal is deprived of all conclusive effect * * *. The same is true of a judgment vacated by a trial court.” United States v. Lacey , 982 F.2d 410, 412 (10th Cir.1992). See also Local No. 74, AFSCME v. Warren , 174 Ohio App.3d 66, 2007-Ohio-6253, 880 N.E.2d 954, ¶ 27 (11th Dist.) (“A final judgment is conclusive as long as the judgment remains unreversed, unmodified, and unvacated.”). {¶22} “R.C. 3929.06 requires the application of the proceeds of insurance to satisfy an existing judgment and [R.C. 3929.06 claims] are ava ilable only when a final judgment has been entered against the insured.” Brennan v. Arkay Ind., Inc. , 164 F.R.D. 464, 468 (S.D.Ohio 1996). Here, there is neither an existing judgment nor a final judgment against Republic; indeed, Luri

settled his claims with Republic and they were dismissed with prejudice. {¶23} Luri cannot use R.C. 3929.06 to resurr ect his “ghost” judgment to create a windfall recovery over a nd above his settlement w ith Republic. He is not entitled to a double recovery on his claims against Republic — one by settle ment and one by supplemental petition.As the trial court recognized, it is “uncontroverted that Luri ’s supplemental petition seeks a ‘double recovery’ because, if he prevails on th e petition, Luri would gain both the insurance proceeds applied towards the vacated judgment and the settlement proceeds received in the underlying litigation.” The purpose of insurance, however, is to make the person whole, not provide a windfall. Shenyey v. Glasgow , 8th Dist. Cuyahoga No. 91713, 2009-Ohio-1366, ¶ 18.

{¶24} Likewise, we are not persuaded by Luri’s ar gument that his right to recover against the policies irrevocably accrued once the July 8, 2008 judgment was obtaine d after “actual trial,” and that he was entitled to collect against the policies irrespective of the outcome of any subsequent appellate pr oceedings. Clause 18 of the polices specifically and unambiguously provides that no action lies against the insurer un til the amount of the insured’s obligation to pay “shall have been fully and fina lly determined.” As discussed above, the July 8, 2008 judgment did not “fully and finally” dete rmine the underlying litigation. {¶25} Nevertheless, citing Hantz Fin. Serv. v. Am. Interna tl. Specialty Lines Ins. Co. , 664 Fed.Appx. 452 (6th Cir.2016), Luri asserts that unde r the AIG policies at issue, the July 8, 2008 judgment was a final judgment because the amount owed by the insured was “fully and finally determined by judgment against the insureds after actual trial,” and the plain language of the policies did not require that he maintain that j udgment through subsequent appellate proceedings.

{¶26} In Hantz , the insured sought coverage under a fidelity bond issued by AIG companies, including National Union, after the insured reimbursed to a ffected clients funds stolen by one of the insured’s employees. AIG defended on timeliness grounds, asserting that the insured had not brought its lawsuit with in the 24-month contr actual limitations provision,which provided that the insured could not bring le gal proceedings seeking the recovery of losses after the expiration of 24 months from the date of final judgment or settlement. {¶27} Hantz conceded on appeal that the Mich igan lower court’s order of judgment settling the clients’ claim agains t Hantz would constitute a final judgment under Michigan law, but argued that final judgment was actually the date the Michigan appellate court affirmed the lower court’s judgment. The Sixt h Circuit disagreed, noting that “Michigan courts use the term ‘final judgment’ to refer to the trial court’s order ending litigation at that level.” Id . at 458. It noted further that “as a legal term of art, ‘fi nal judgment’ virtually always designates the judgment by a court that determines all the rights and obligations of the parties in a case so that it can be appealed — not a judgment that has been resolved after appeal.” Id . at 459. {¶28} Luri asserts that Hantz is “persuasive authority” that indicates the July 8, 2008 judgment from the trial court was indeed a final judgment obtained after tr ial as required by the AIG policies, regardless of subsequent events. We do not agree because Hantz is easily distinguishable from this case. {¶29} First, Hantz was decided under Michigan law. Id. , 664 Fed.Appx. at 457. Further, there was no question that the trial court’s judgment at issue in Hantz was a valid final judgment; the judgment was affirmed on appeal. Id . It is not at all apparent that the Sixth Circuit would have considered a trial court judgment that was vacated after appeal, such as what we have here, to be a valid final judgment. {¶30} This court addressed the issu e of whether a trial court’ s judgment that had been reversed was a final judgment for purposes of R.C. 3929.06 in Benkoe, 8th Dist. Cuyahoga No. 57342, 1990 Ohio App. LEXIS 3313. In that case, the appellant brought suit against her employer for an intentional tort. The jury f ound for the appellant, and the employer appealed.Subsequent to the judgment ag ainst the employer, the appellant brought a supplemental petition under R.C. 3929.06 to execute the judgment against th e employer’s insurer. After briefing, the trial court granted the insurance company’s motion for summary judgment. Meanwhile, this court reversed the jury verdict that had been re ndered in favor of the a ppellant and remanded for

a new trial. Id . at *2. {¶31} The appellant then appealed the grant of summary judgment to the insurance company on the R.C. 3929.06 supplemental petition. Th is court found that a final judgment is a precondition to a recovery against an insura nce carrier under R.C. 3929.06, but that “no such final judgment exists insofar as this court of appeals has reversed a nd remanded the underlying

action for a new trial.” Id . at *3. As in Benkoe , Luri does not have a final judgment for R.C. 3929.06 purposes because the trial court’s July 8, 2008 judgment was re versed, remanded, and ultimately vacated after appeal. {¶32} Viewing the evidence in a light most favorable to Luri, reasonable minds can only conclude that there are no genuine issues of material fact and that appellees are entitled to judgment as a matter of law. Accordingly, the trial court did not err in granting appellees’ motions for summary judgment. {¶33} Judgment affirmed. It is, therefore, considered th at said appellees recover of appellant their costs herein. It is ordered that a special mandate be sent to said court to carry this judgment into

execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appella te Procedure.KATHLEEN ANN KEOUGH, JUDGE MARY J. BOYLE, P.J., and PATRICIA ANN BLACKMON, J., CONCUR