IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF OHIO

EASTERN DIVISION

WILLIAM R. WRIGHT,

JAYDE WRIGHT

Plaintiffs,

v.

STATE FARM FIRE AND CASUALTY 

COMPANY,

Defendant.

Case No. 2:12-409

Judge Peter C. Economus

MEMORANDUM OPINION AND ORDER

This action stems from a claim under a homeowners insurance policy (the “Policy”) 

purchased by Plaintiffs William R. Wright and Jayde Wright from Defendant State Farm Fire 

and Casualty Company. The Policy covered Plaintiffs’ residence, which is subject to deed 

restrictions imposed by the Muirfield Homeowners Association, including requirements 

contained in the Muirfield Design Standards. (Am. Compl. ¶¶ 3–5, 8.) In February of 2011, a 

storm caused wind damage to the wood shake roof of Plaintiffs’ residence, and they filed a claim 

with Defendant. (Id. at ¶¶ 11–13.) The Muirfield Design Standards require that “[a]ny roof that 

needs repair must be re-roofed in entirety”; “partial or patch roofing is not permitted.” (Id. at 

¶ 5(b).) However, Defendant refused to pay for complete replacement of the roof, providing 

reimbursement only for the cost of repairing the damaged portion. (Id. at ¶¶ 14–15, 20.) 

Plaintiffs initially filed in the Franklin County Common Pleas Court alleging breach of 

contract, misrepresentation, and bad faith. The case was removed to this Court on the basis of 

diversity jurisdiction on May 10, 2012 and is currently before the Court on Defendant’s motion 

for summary judgment. (Dkt. 41.) For the reasons set forth below, Defendant’s motion is 

GRANTED.

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I. Standard of Review

Summary judgment is proper “if the pleadings, the discovery and disclosure materials on 

file, and any affidavits show that there is no genuine issue as to any material fact and that the 

movant is entitled to judgment as a matter of law.” Fed. R. Civ P. 56(c)(2). The court must 

“view the evidence and draw all reasonable inferences therefrom in the light most favorable to 

the non-moving party.” Little v. BP Exploration & Oil Co., 265 F.3d 357, 361 (6th Cir. 2001) 

(citing Williams v. Int’l Paper Co., 227 F.3d 706, 710 (6th Cir. 2000)). “Credibility 

determinations, the weighing of the evidence, and the drawing of legitimate inferences from the 

facts are jury functions, not those of a judge . . . The evidence of the non-movant is to be 

believed, and all justifiable inferences are to be drawn in his favor.” Anderson v. Liberty Lobby, 

Inc., 477 U.S. 242, 255 (1986); accord Graham-Humphreys v. Memphis Brooks Museum of Art, 

Inc., 209 F.3d 552, 556–57 n.7 (6th Cir. 2000). 

The central issue is “whether the evidence presents a sufficient disagreement to require 

submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.”

Anderson, 477 U.S. at 251–52. “[A] party seeking summary judgment always bears the initial 

responsibility of informing the district court of the basis for its motion, and identifying those 

portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, 

together with the affidavits, if any,’ which it believes demonstrate the absence of a genuine issue 

of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (quoting FED. R. CIV. P. 56 

(c)). For a dispute to be genuine, the evidence must be such that “a reasonable jury could return 

a verdict for the nonmoving party.” Anderson, 477 U.S. at 248.

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II. Breach of Contract

Plaintiffs assert that Defendant breached their insurance contract when it refused to pay 

for full replacement of their roof.1

A. Policy Language

 Plaintiffs essentially make two arguments to support their 

contention that Defendant is obligated to pay for full replacement of their roof: (1) the Policy 

language is ambiguous and should be construed against Defendant; and (2) the Ohio 

Administrative Code requires roof replacement. (Dkt. 45 at 9–11.)

The Policy provided coverage for “accidental direct physical loss to the property.” (Dkt. 

41-1 at 12.) The Policy provided that Defendant:

will pay the cost to repair or replace with similar construction and 

for the same use . . . the damaged part of the property . . . subject 

to the following:

(1) until actual repair or replacement is completed, we will pay 

only the actual cash value at the time of the loss of the 

damaged part of the property, up to the applicable limit of

liability shown in the Declarations, not to exceed the cost to 

repair or replace the damaged part of the property;

(2) when the repair or replacement is actually completed, we

will pay the covered additional amount you actually and 

necessarily spend to repair or replace the damaged part of 

the property, or an amount up to the applicable limit of 

liability shown in the Declarations, whichever is less;

. . .

(4) we will not pay for increased costs resulting from 

enforcement of any ordinance or law regulating the 

construction, repair or demolition of a building or other 

structure, except as provided under Option OL - Building 

Ordinance or Law Coverage.

 

1 While the Amended Complaint does not make this clear, Plaintiffs concede in their response brief that “Defendant 

has a contractual right to refuse to renew a policy.” (Dkt. 45 at 11–12.)

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(Id. at 16 (emphasis added).) The Policy included “Option OL,” which provided additional 

coverage for increased costs “caused by the enforcement of a building, zoning or land use 

ordinance or law.” (Id. at 29.) 

Before considering the parties’ arguments regarding coverage exclusions, the Court first 

addresses whether roof replacement was generally covered by the Policy. As stated above, the 

Policy covered the cost “actually and necessarily spen[t] to repair or replace the damaged part of 

the property.” (Dkt. 41-1 at 16.) While the Muirfield Design Standards obligated Plaintiffs to go 

above and beyond “repair[ing] or replac[ing] the damaged part of the property,” nothing in the

Policy language suggests that Defendant is obligated to cover such additional cost.

Plaintiffs argue that, because the “ordinance or law” exclusion set forth above does not 

include deed restriction requirements such as the Muirfield Design Standards, such requirements 

are covered by the Policy. Plaintiffs state that “if Defendant wished to exclude deed restriction 

requirements . . . , then it need only to have added it” to the exclusions. (Dkt. 45 at 11.) This 

argument assumes that the Policy’s general coverage language includes additional costs imposed 

by deed restriction requirements, however. As discussed above, the additional cost of complying 

with the Muirfield Design Standards is not covered by the Policy.

B. Ohio Administrative Code

Plaintiffs also point to Ohio Administrative Code § 3901-1-54(I), which provides that, 

“[w]hen an . . . exterior loss requires replacement of an item and the replaced item does not 

match the quality, color or size of the item suffering the loss, the insurer shall replace as much of 

the item as to result in a reasonably comparable appearance.” Citing this regulation, Plaintiffs 

assert that “the roof is not repairable” and that the additional cost of complying with § 3901-1-

54(I) is covered by Option OL. (Dkt. 45 at 2, 11.)

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Plaintiffs’ argument that Defendant must replace their entire roof under § 3901-1-54(I)

fails for two reasons. First, § 3901-1-54(B) states that “[n]othing in this rule shall be construed 

to create or imply a private cause of action for violation of this rule.” Second, in the absence of 

evidence of special circumstances regarding their particular roof, Plaintiffs effectively seek a 

blanket rule that no insurer could ever repair a wood shake roof in Ohio. While the Muirfield 

Homeowners Association apparently believes that wood shake roofs are replaceable, not 

repairable, this Court is not prepared to adopt such a rule.

As to Plaintiffs’ breach of contract claim, the Court finds that there is no genuine issue as 

to any material fact, and Defendant is entitled to judgment as a matter of law. This claim is 

therefore DISMISSED.

III. Misrepresentation

Plaintiffs allege that “Defendant misrepresented the terms of [Defendant’s] coverage to 

Plaintiff that it would insure Plaintiff from accidental direct physical loss and pay costs ‘actually 

and necessarily’ incurred to the dwelling when in fact it only intended to pay for partial physical 

loss.” (Am. Compl. ¶ 22.) Because Plaintiffs do not specify whether they allege negligent or 

intentional misrepresentation, the Court will address both. 

A. Negligent Misrepresentation

For a claim of negligent misrepresentation, Ohio law provides that “[o]ne who, in the 

course of his business, profession or employment, or in any other transaction in which he has a 

pecuniary interest, supplies false information for the guidance of others in their business 

transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance

upon the information, if he fails to exercise reasonable care or competence in obtaining or 

communicating the information.” Delman v. City of Cleveland Heights, 41 Ohio St. 3d 1, 4 

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(1989). Because Plaintiffs allege misrepresentation only by omission,2

B. Intentional Misrepresentation

they do not state a claim 

for negligent misrepresentation. See Martin v. Ohio State Univ. Found., 139 Ohio App. 3d 89, 

104 (2000) (“A negligent misrepresentation claim does not lie for omissions: there must be an 

affirmative false statement.”).

The elements of intentional misrepresentation are as follows:

(a) a representation or, where there is a duty to disclose, 

concealment of a fact,

(b) which is material to the transaction at hand,

(c) made falsely, with knowledge of its falsity, or with such utter 

disregard and recklessness as to whether it is true or false that 

knowledge may be inferred,

(d) with the intent of misleading another into relying upon it,

(e) justifiable reliance upon the representation or concealment, and

(f) a resulting injury proximately caused by the reliance.

Carpenter v. Scherer-Mountain Ins. Agency, 135 Ohio App. 3d 316, 327 (1999) (citing Burr v. 

Bd. of Cnty. Comm’rs of Stark Cnty., 23 Ohio St. 3d 69, 73 (1986); Cohen v. Lamko, Inc., 10 

Ohio St. 3d 167 (1984)) (emphasis added). 

The facts pertinent to this claim are not in dispute. Plaintiff William Wright purchased 

the Policy through Michelle Nix at the Mike McClaskie Insurance Agency, a captive agent of 

Defendant. (Am. Compl. ¶ 2.) Mr. Wright never met Mike McClaskie, and he had not met Ms. 

Nix until the day she took his insurance application. (Wright Dep. 44–45.) Mr. Wright testified 

that he applied for insurance in person, simply answering a “checklist of questions” by Ms. Nix. 

(Id. at 27, 43–44.) While there is no evidence that Mr. Wright sought or was offered advice 

 

2 The Amended Complaint states that, “[p]ursuant to exhibit C, Defendant represented to Plaintiff, ‘We cover 

accidental direct physical loss to the dwelling . . .’” (Am. Compl. ¶ 9.) This appears to be a mistaken and 

misquoted reference to the Policy, which is Exhibit D to the original complaint. To the extent that Plaintiffs allege 

misrepresentations contained in the language of the Policy, their claim is for breach of contract, addressed above.

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during this meeting, he testified that he “trust[ed] in [his] agent to give [him] what [he] need[ed] 

to cover the house.” (Id. at 44.) During this meeting, Plaintiff was not yet aware of the 

Muirfield Design Standards, and he did not discuss them or request coverage for additional costs 

imposed by them. (Id. at 20–21, 24, 27–28, 56.)

The parties’ arguments as to intentional misrepresentation focus on whether Defendant 

had a duty to advise Plaintiffs that the Policy would not cover roof replacement under the current 

circumstances. Under Ohio law, “[a]n insurance agency has a duty to exercise good faith and 

reasonable diligence in obtaining insurance that its customer requests. When the agency knows 

that the customer is relying upon its expertise, the agency may have a further duty to exercise 

reasonable care in advising the customer.” Fry v. Walters & Peck Agency, Inc., 141 Ohio App. 

3d 303, 310 (Ohio Ct. App. Williams Cty. 2001) (internal citations omitted) (citing First 

Catholic Slovak Union v. Buckeye Union Ins., 27 Ohio App. 3d 169, 170 (Ohio Ct. App. 

Cuyahoga Cty. 1986); Stuart v. Natl. Indemn. Co., 7 Ohio App. 3d 63, 66 (Ohio Ct. App. 

Cuyahoga Cty. 1982)). In such cases, therefore, the “agent must not only obtain the insurance 

requested, but also, advise [the] customer.” Wanner Metal Worx, Inc. v. Hylant Maclean, Inc., 

no. 02CAE10046, 2003 WL 1826558 at *6 (Ohio Ct. App. Delaware Cty. 2003) (citations 

omitted). “The customer, however, has a corresponding duty to examine the coverage provided 

and is charged with knowledge of the contents of his or her own insurance policies.” Fry, 141 

Ohio App. 3d at 310 (citing Craggett v. Adell Ins. Agency, 92 Ohio App. 3d 443, 453 (Ohio Ct. 

App. Cuyahoga Cty. 1993); Nickschinski v. Sentry Ins. Co., 88 Ohio App. 3d 185, 195 (Ohio Ct. 

App. Cuyahoga Cty. 1993)).

Here, Plaintiffs did not specifically request the full roof replacement coverage at issue. 

Nor is there evidence that they sought or were offered advice regarding their insurance coverage. 

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Under these circumstances, Ohio law imposes no duty on the agent to advise Plaintiffs. Even if 

Plaintiffs had sought or were offered advice, they did not fulfill their corresponding duty to 

examine and to know the contents of the Policy. (Dkt. 45 at 6 (admitting that Mr. Wright “did 

not read the policy”).)

As to Plaintiffs’ claim for intentional misrepresentation, the Court finds that there is no 

genuine issue as to any material fact, and Defendant is entitled to judgment as a matter of law. 

This claim is DISMISSED.

IV. Bad Faith

Plaintiffs assert that Defendant acted in bad faith when it (A) refused to pay Plaintiffs’ 

claim, (B) failed to obtain coverage through another insurer or advise Plaintiffs that they would 

not be covered, and (C) failed to renew the Policy. (Am. Compl. ¶¶ 24–27; Dkt. 45 at 13.)

A. Refusal to Pay

“[A]n insurer fails to exercise good faith in the processing of a claim of its insured where 

its refusal to pay the claim is not predicated upon circumstances that furnish reasonable 

justification therefor.” Zoppo v. Homestead Ins. Co., 71 Ohio St. 3d 552, 554 (1994) (citations 

omitted); Hoskins v. Aetna Life Ins. Co., 6 Ohio St. 3d 272, 276–77 (1983). Because the Policy 

did not cover full roof replacement under the circumstances, Defendant had reasonable 

justification for refusing to pay for it, and such refusal was not in bad faith under Ohio law.

B. Failure to Obtain Coverage or Advise Plaintiffs

Plaintiffs assert that Defendant “should have obtained insurance coverage from another 

insurer or warned [Plaintiffs] that [they] would not be covered.” (Am. Compl. ¶ 16.) The extent 

of an insurance agent’s duty to obtain insurance for and advise a client is discussed above. 

Having concluded that Defendant satisfied such duty, the Court cannot find that Defendant’s 

actions constituted bad faith. 

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C. Failure to Renew the Policy

While Plaintiffs concede that Defendant had the contractual right not to renew the Policy 

(Dkt. 45 at 11–12), they allege that the nonrenewal constituted bad faith. Defendant’s renewal 

decisions are informed by a “knowledge-based system” (KBS) that monitors claims activity. 

(Yoho Dep. 24 (Dkt. 45-8 at 18).) Plaintiffs assert that the “entire process” of “luring” in a new 

customer “and then subjecting the newly insured to KBS which can result in the insured being 

turned out as a non-renewer, and losing their status with State Farm without informing them of 

the consequences is a bad faith process.” (Dkt. 45 at 13.) 

Plaintiffs also assert that Defendant acted in bad faith by waiting several months to 

inform Plaintiffs of the nonrenewal: “Defendant made the decision June 26, 2011 not to renew 

[the] policy, but did not inform Defendant until October 19, 2011.” (Dkt. 45 at 13.) The Policy, 

which expired on December 3, 2011, provided that Defendant “may cancel by notifying 

[Plaintiffs] at least 10 days before the date cancellation takes effect.” (Dkt. 41-1 at 2, 24.) 

Defendant’s actions were specifically authorized by the Policy, and Plaintiffs have 

identified no legal authority suggesting that these actions constituted bad faith. The Court finds 

that there is no genuine issue as to any material fact, and Defendant is entitled to judgment as a 

matter of law. Plaintiffs’ claim of bad faith is therefore DISMISSED.

V. Conclusion

For the reasons discussed above, the Court hereby GRANTS Defendant’s Motion 

(Dkt. 41), DISMISSES this case, and DIRECTS the Clerk to enter judgment.

IT IS SO ORDERED.

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