Court Opinion

ID: 2708260
Source: CourtListenerOpinion
Date Created: 2014-08-05 13:47:22.97851+00
Date Added: 2024-06-11T13:00:37.809904
License: Public Domain

[Cite as Chibinda v. Depositors Ins., 2013-Ohio-526.]

                                     IN THE COURT OF APPEALS

                            TWELFTH APPELLATE DISTRICT OF OHIO

                                             BUTLER COUNTY

PETER CHIBINDA,                                         :

        Plaintiff-Appellant,                            :   CASE NO. CA2012-04-073

                                                        :        OPINION
    - vs -                                                        2/19/2013
                                                        :

DEPOSITORS INSURANCE,                                   :

        Defendant-Appellee.                             :

                   CIVIL APPEAL FROM BUTLER COUNTY AREA III COURT
                                  Case No. CVF0801606

Peter Chibinda, 5718 Liberty Pass Drive, Liberty Township, Ohio 45044, plaintiff-appellant,
pro se

Subashi & Wildermuth, Nicholas E. Subashi, Andrew E. Rudloff, Halli Brownfield Watson,
The Greene Town Center, 50 Chestnut Street, Suite 230, Dayton, Ohio 45440, for
defendant-appellee

        RINGLAND, J.

        {¶ 1} Plaintiff-appellant, Peter Chibinda, appeals from a Butler County Area III Court

decision on remand granting summary judgment in favor of defendant-appellee, Depositors

Insurance Company, on the basis that Chibinda's claim for coverage under his homeowner's

insurance policy with Depositors was barred by the doctrine of collateral estoppel. For the

reasons that follow, we agree with Chibinda's argument, reverse the judgment of the trial
                                                                      Butler CA2012-04-073

court and remand this cause for further proceedings.

       {¶ 2} Chibinda and his wife Dora had a homeowner's insurance policy with

Depositors, an affiliate of Nationwide Insurance Company. In 2007, the Chibindas sought

coverage under their homeowner's policy for water damage to their residence. A claims

representative for Depositors, Jeffrey Boehm, inspected the damage and denied coverage on

the basis of a policy provision that excluded coverage for loss caused by "[c]onstant or

repeated seepage or leakage of water or steam over a period of weeks, months or years

from * * * [a] plumbing system" within the insured's residence. Boehm informed the

Chibindas of his decision to deny coverage in a letter with the heading, "Nationwide® On

Your Side."

       {¶ 3} In February 2008, the Chibindas filed a complaint against Nationwide Insurance

in the Butler County Area III Court. The Chibindas alleged that the water damage to their

residence "was caused by a sudden pipe bust [sic] just below the kitchen counter bottom

board" and that Nationwide had breached the terms of the parties' homeowner's insurance

policy and acted in bad faith by wrongfully denying them coverage. Nationwide filed an

answer to the Chibindas' complaint, denying any and all averments and allegations contained

therein and alleging as one of its defenses that "'Nationwide Insurance' is not a proper party

to this action."

       {¶ 4} Nationwide later moved for summary judgment on the grounds that (1) the

Chibindas' homeowner's policy had been issued by Depositors rather than Nationwide, and

therefore the Chibindas had filed their complaint against the wrong party, and (2) the

Chibindas' homeowner's policy expressly excluded coverage for the water damage in

question. After the Chibindas filed a memorandum in opposition, the magistrate issued an

"Entry Granting Summary Judgement [sic] In Favor Of The Defendant" which stated in

pertinent part:
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               The Plaintiffs failed to respond to the motion [for summary
               judgment] with proper evidence or affidavits. Technically, the
               interview by the Defendant's agent (Boehm) [sic]1 could be used,
               but even in reviewing that, there is no evidence to contradict the
               Defendant's evidence. The Plaintiff [sic] moved to compel the
               depositions [sic] of Boehm but did not request additional time to
               respond to the defendant's motion. With just a little proper
               response, the Plaintiff [sic] could have overcome the motion.

               More importantly, the issue of the proper Defendant was not
               addressed and the Defendant must prevail simply on that issue.

       {¶ 5} On September 29, 2008, the trial court, finding that no objections to the

magistrate's decision had been filed, ordered that the magistrate's decision would stand as

the decision of the court. Chibinda v. Nationwide Ins., Butler Cty. Court, Area III, No. CVF

0800239 (Sept. 29, 2008) (Nationwide). The Chibindas did not appeal the trial court's

decision.

       {¶ 6} On October 1, 2008, Chibinda, but not his wife, filed another complaint in the

trial court that was similar to the one he and his wife had brought in Nationwide, except that it

named "Depositors Insurance" rather than "Nationwide Insurance" as the defendant in the

action. When Depositors failed to answer the complaint or otherwise defend in the action,

Chibinda moved for default judgment. The trial court initially denied Chibinda's motion for

default judgment. However, in early 2009, the trial court, after holding a hearing on the

matter at Chibinda's request, granted default judgment to Chibinda against Depositors in the

amount of $15,000 plus costs and interest.

       {¶ 7} Upon learning that default judgment had been entered, Depositors filed a Civ.R.

60(B) motion to set aside the default judgment. A hearing was scheduled on the motion in

May 2009, and then rescheduled to a later date in June 2009 because the trial judge was

unavailable. However, no further filings were made in the case until nearly one year later.

1. Boehm was actually Depositors' agent rather than Nationwide's agent.

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                                                                         Butler CA2012-04-073

       {¶ 8} In May 2010, the parties were sent notice that a status hearing had been

scheduled for July 14, 2010. After holding the scheduled status hearing, the magistrate

issued an entry that directed Depositors to brief the 'res judicata' issue by August 16, 2010,

allowed Chibinda to respond, and stated that the court would review the "the issues in

dispute on August 25, 2010."

       {¶ 9} On August 16, 2010, Depositors filed an answer and counterclaim for

declaratory judgment. On that same date, Depositors filed a separate motion for summary

judgment, arguing that since Chibinda's claims had been litigated in Nationwide, he should

be barred under the doctrine of collateral estoppel from relitigating them in the current action.

Chibinda did not file a response to the motion for summary judgment.

       {¶ 10} On August 25, 2010, the magistrate issued a decision recommending that

Depositors' motion for summary judgment be granted, that Depositors' counterclaim be

dismissed as moot, and that Chibinda's complaint be dismissed with prejudice. On August

26, 2010, the trial court adopted the magistrate's recommendations in their entirety and made

them the order of the court. Chibinda v. Depositors Ins., Butler Cty. Area III, Case No. CVF

0801606 ("Depositors").

       {¶ 11} On appeal, this court reversed the trial court's decision in Depositors. This

court found that the trial court erred by failing to rule on Depositors' Civ.R. 60(B) motion to set

aside the 2009 default judgment and by granting summary judgment to Depositors without

requiring Depositors to serve its motion for summary judgment upon Chibinda at least 14

days prior to the hearing scheduled on the motion as required by Civ.R. 56(C). Chibinda v.

Depositors Ins., 12th Dist. No. CA2010-09-254, 2011-Ohio-2597, ¶ 24-40 (Chibinda I). We

declined to rule on Chibinda's argument that the trial court erred by granting summary

judgment to Depositors on the basis of res judicata or collateral estoppel, finding that the trial

court had prematurely ruled on this issue without first ruling on Depositors' motion to set
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aside the default judgment and without requiring Depositors to serve its motion for summary

judgment. Id. at ¶ 41. We remanded the matter for further proceedings consistent with our

opinion. Id. at ¶ 42.

       {¶ 12} On remand, the trial court granted Depositors' motion to set aside or vacate the

default judgment granted to Chibinda in 2009. The trial court then granted Depositors leave

to file a motion for summary judgment, and ruled that Depositors' August 16, 2010 motion for

summary judgment would serve as that motion. In response, Chibinda filed a "reply" to

Depositors' motion for summary judgment.

       {¶ 13} On January 25, 2012, the magistrate issued a decision, noting that in

Nationwide, the trial court granted summary judgment in favor of the defendant (Nationwide)

on the grounds that the defendant "established by adequate evidence that [the Chibindas']

claim was not covered by the terms of the [homeowners'] policy"; the Chibindas "named the

wrong [d]efendant" in their action; and that the Chibindas "failed to establish a genuine issue

of material fact to controvert either issue." As a result, the magistrate found that Chibinda

was "estopped from re-litigating the same issue in this case against this Defendant [i.e.,

Depositors]."

       {¶ 14} On February 6, 2012, Chibinda filed a "Motion to Set Aside Mgistrate's [sic]

Order" in which he argued as follows:

                The Nationwide [sic] case involves similar issues but different
                parties namely: Peter and Dora Chibinda v. Nationwide
                Insurance Company, as opposed to Peter Chibinda v. Depositors
                Insurance. Therefore, the Magistrate Decision [sic] is erroneous
                in the sense that it cannot be sustained by Ohio law. As argued
                in plaintiff's briefing of the case, Nationwide has acknowledged in
                its pleadings that it is not a party to the cause of action brought
                by the Chibindas and the court ruled likewise. Depositors has no
                legal grounds on which to estop this cause of action against it.

       {¶ 15} On March 13, 2012, the trial court overruled Chibinda's motion to set aside the

magistrate's decision, finding that "the issue of liability for the water damage was conclusively
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determined in the first action against Nationwide, notwithstanding that Nationwide may not

have been the proper party[,]" and therefore, "[p]rinciples of collateral estoppel and issue

preclusion prevent this court from relitigating this same issue."

       {¶ 16} Chibinda now appeals, assigning the following as error:

       {¶ 17} Assignment of Error No. 1:

       {¶ 18} THE TRIAL COURT COMMITTED PREJUDICIAL ERROR IN GRANTING

DEFENDANT-APPELLEE [sic] MOTION FOR SUMMARY JUDGMENT AS A MATTER OF

LAW BASED UPON THE DOCTRINES [sic] OF COLLERAL ESTOPPEL.

       {¶ 19} Assignment of Error No. 2:

       {¶ 20} THE TRIAL COURT ERRED BY COLLATERALLY ESTOPPING APPELLANT

FROM RE-LITIGATING A CLAIM PREVIOUSLY DECIDED AGAINST HIM ON A SINGLE

ISSUE WHEN THE OPPORTUNITY TO LITIGATE THE PRECLUSIVE ISSUE WAS

TECHNICALLY NOT AVAILABLE TO HIM.

       {¶ 21} Assignment of Error No. 3:

       {¶ 22} THE TRIAL COURT COMMITTED PREJUDICIAL ERROR BY IGNORING

CLAIM OF FRAUD AND BAD FAITH BY DEPOSITORS CONTAINED IN APPELLANT [sic].

THESE ACTS ARE ILLEGAL IN THE STATE OF OHIO PURSUANT TO O.R.C. 3901.19

AND 3901.20.

       {¶ 23} Assignment of Error No. 4:

       {¶ 24} THE TRIAL COURT COMMITTED PREJUDICIAL ERROR BY ALLOWING

DEPOSITORS TO ASSERT A LEGAL POSITION INCONSISTENT WITH A LEGAL

POSITION TAKEN IN A PRIOR ACTION WHENEVER ADVANTAGEOUS TO DO SO,

NOTABLY AS REGARDING THE QUESTION OF 'PROPER PARTY DEFENDANT' [sic].

       {¶ 25} Assignment of Error No. 5:

       {¶ 26} THE TRIAL COURT ERRED TO THE PREJUDICE OF APPELLANT BY
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                                                                         Butler CA2012-04-073

GRANTING SUMMARY JUDGMENT TO APPELLEE BASED ON RES JUDICATA WHERE

IT WAS NOT A PARTY TO THE ORIGINAL CASE.

       {¶ 27} Assignment of Error No. 6:

       {¶ 28} THE TRIAL COURT COMMITTED PREJUDICIAL ERROR BY DEPRIVING

APPELLANT OF HIS CONSTITUTIONAL AND STATE RIGHTS TO DUE PROCESS AND

EQUAL PROTECTION OF THE LAW WHEN THE MAGISTRATE 'NUANCED' HIS OWN

ORDER FROM THE INITIAL CASE TO FAVOR APPELLEE'S COLLATERAL ESTOPPEL

CLAIM.

       {¶ 29} Before addressing Chibinda's assignments of error, we must discuss two

preliminary matters.

       {¶ 30} First, in Chibinda I, 2011-Ohio-2597 at ¶ 3, this court, when setting forth the

facts and procedural history of the case, stated that Depositors had represented itself as

"Nationwide Insurance" in that action. We arrived at this conclusion because the defendant

in that action, Nationwide had referred to itself in its pleadings, motions and briefs in that

action as "Nationwide Insurance," placing quotation marks around its name. Nationwide and

Depositors, which are separate though affiliated corporate entities, were represented by the

same counsel. What is clear now is that (1) Depositors did not represent itself as Nationwide

in the Chibindas' action against Nationwide; (2) Nationwide represented itself in that action,

using the same counsel that now represents Depositors in the current action; and (3)

Depositors played no role in the proceedings in Nationwide. To the extent Chibinda I

suggests anything different from the above, that portion of the decision is overruled.

       {¶ 31} The second preliminary matter we need to address is Depositors' assertion

that Chibinda failed to file a timely, proper objection to the magistrate's January 25, 2012

decision as required by Civ.R. 53(D)(3)(b)(i)-(iii). Depositors argues that Chibinda therefore

waived his right to assign as error on appeal, except as a claim of plain error, the trial court's
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                                                                        Butler CA2012-04-073

adoption of the magistrate's decision pursuant to Civ.R. 53(D)(3)(b)(iv). This argument lacks

merit. The record shows that Chibinda filed a motion to set aside the magistrate's decision

on February 6, 2012, which was within 14 days of the date the magistrate issued its decision.

Contrary to what Depositors contends, the trial court properly treated this motion as a timely

objection under Civ.R. 53(D)(3)(b).

         {¶ 32} Turning now to Chibinda's assignments of error, we note that his first, second,

fourth, fifth and sixth assignments of error raise issues that are interrelated, and therefore we

will discuss them together. In those assignments of error, Chibinda argues the trial court

erred by granting summary judgment to Depositors on the basis of collateral estoppel. We

agree.

         {¶ 33} A court of appeals engages in a de novo review of a trial court's decision to

grant summary judgment. Farmer v. Bailey, 12th Dist. No. CA2009-04-046, 2009-Ohio-5921,

¶ 7. A trial court may grant a moving party summary judgment when (1) there are no genuine

issues of material fact remaining to be litigated, (2) the moving party is entitled to judgment

as a matter of law, and (3) reasonable minds can come to but one conclusion and that

conclusion is adverse to the nonmoving party, which is entitled to have the evidence viewed

most strongly in its favor. Id. The moving party bears the initial burden of informing the court

of the basis for the motion and demonstrating the absence of a genuine issue of material

fact. Id., citing Dresher v. Burt, 75 Ohio St.3d 280, 293 (1996). If the moving party meets its

burden, the nonmoving party has a reciprocal burden to set forth specific facts showing a

genuine issue for trial. Farmer.

         {¶ 34} The doctrine of res judicata consists of two branches: (1) "claim preclusion,"

also known as "estoppel by judgment," and (2) "issue preclusion," also known as "collateral

estoppel." Id. Claim preclusion or estoppel by judgment bars the relitigation of the same

cause of action between the same parties. Id. Issue preclusion or collateral estoppel
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precludes a party from relitigating issues of fact or law that have been actually and

necessarily litigated and determined in a different cause of action. Id.

       {¶ 35} Offensive use of collateral estoppel occurs when the plaintiff seeks to prevent

the defendant from relitigating a fact or issue that the defendant has previously litigated

unsuccessfully in another action. Providence Manor Homeowners Assoc., Inc. v. Rogers,

12th Dist. No. CA2011-10-189, 2012-Ohio-3532, ¶ 40. Defensive use of collateral estoppel

occurs when the defendant seeks to prevent the plaintiff from relitigating a fact or issue that

the plaintiff has previously litigated unsuccessfully in another action. Id.

       {¶ 36} To successfully assert collateral estoppel, a party must show that (1) the fact

or issue in question was passed upon and determined by a court of competent jurisdiction,

(2) there was a final judgment on the merits in the previous case after a full and fair

opportunity to litigate the fact or issue in question, (3) the fact or issue in question was either

admitted or actually tried and decided and was necessary to the final judgment, (4) the fact or

issue in question is identical to the fact or issue involved in the prior suit, and (5) there is a

"mutuality of parties." See id. at ¶ 43. Mutuality of parties exists when all parties or their

privies to the present proceedings were bound by the prior judgment. Therefore, in order to

preclude either party from relitigating an issue, a judgment must be preclusive upon both.

Goodson v. McDonough Power Equip., Inc., 2 Ohio St.3d 193, 195-196 (1983).

       {¶ 37} The Ohio Supreme Court indicated in Goodson at 199 that the mutuality

requirement could be relaxed "where justice would reasonably require it." A number of

appellate courts, including this one, relying on language in Goodson, have relaxed the

mutuality requirement and allowed the nonmutual defensive use of collateral estoppel when a

party against whom the doctrine is asserted previously had his day in court and was

permitted to fully litigate the specific issue sought to be raised in the later action. Rogers,

2012-Ohio-3532 at ¶ 40. See also, Hoover v. Transcontinental Ins. Co., 2nd Dist. No. 2003-
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                                                                         Butler CA2012-04-073

CA-46, 2004-Ohio-72, ¶ 17.

       {¶ 38} Depositors, relying on cases like Rodgers, argues that even though it was not

a party to the proceedings in Nationwide, it should nevertheless be allowed to make

defensive use the trial court's decision in that case to collaterally estop Chibinda from

relitigating the issue of whether he is entitled to coverage under his homeowner's policy with

Depositors. We find this argument unpersuasive.

       {¶ 39} The trial court granted summary judgment to Depositors on the ground that

"the issue of liability for the water damage [to Chibinda's residence] was conclusively

determined in the first action against Nationwide, notwithstanding that Nationwide may not

have been the proper party." As a result, the trial court concluded that Chibinda was

prevented by the "[p]rinciples of collateral estoppel and issue preclusion * * * from relitigating

this same issue."

       {¶ 40} By finding that the issue of liability for the water damage had been

"conclusively determined" in Nationwide, the trial court was relying on its finding in that case

that the Chibindas failed to present sufficient evidence to show the existence of a genuine

issue of material fact as to whether they were entitled to coverage under their homeowner's

policy with Depositors. However, the trial court, in the very next sentence of its decision,

stated that "[m]ore importantly, the issue of the proper Defendant was not addressed and the

Defendant must prevail simply on that issue." (Emphasis added.) The trial court found that

the Chibindas failed to name the proper party defendant in its action, and that Nationwide

prevailed on that issue alone.

       {¶ 41} Prior to the adoption of the Ohio Rules of Civil Procedure, courts in this state

held that if a plaintiff named an incorrect party as the defendant in the action, the plaintiff's

case would not be "thrown out of court." The trial court, in the exercise of its discretion,

would correct the mistake so that the true merits of the controversy could be determined by
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                                                                        Butler CA2012-04-073

the proper parties. Board of Ed. of Miami Trace Local School Dist. v. Marting, 88 Ohio Law

Abs. 453, 465 (C.P.1961). Civ.R. 21 similarly provides that parties may be dropped or added

by order of the court on its own initiative or on motion of any party at any stage of the action

and on such terms as are just, and that misjoinder or nonjoinder of parties is not ground for

dismissal of an action.

       {¶ 42} Accordingly, when the trial court learned in Nationwide that the Chibindas had

named the wrong party defendant in their action, the trial court should not have dismissed the

Chibindas' action; instead, the trial court should have dropped Nationwide from the action as

the party defendant and added Depositors as the party defendant to the action so that the

true merits of the controversy could then be determined with the proper parties present in the

action. See Civ.R. 21 and Marting.

       {¶ 43} However, since the trial court did not substitute Depositors for Nationwide, the

court had no need or justification to rule on the substantive issue of whether or not the

Chibindas had presented sufficient evidence to create a genuine issue of material fact as to

their claim for coverage under their homeowner's policy with Depositors. Nationwide did not

have standing to argue the substantive merits of the Chinbindas' claim.

       {¶ 44} Therefore, the trial court's finding that the Chibindas failed to present sufficient

evidence to create a triable issue of fact regarding their coverage claim in Nationwide was

dicta and cannot be used to establish a collateral estoppel defense for Depositors. See

Rogers, 12th Dist. No. CA2011-10-189, 2012-Ohio-3532, ¶ 43 (To successfully assert

collateral estoppel, a party must show, among other things, that the fact or issue in question

was "necessary" to the final judgment). Consequently, the trial court erred by awarding

summary judgment on remand to Depositors on Chibinda's claim for coverage on the basis of

collateral estoppel.

       {¶ 45} In light of the foregoing, Chibinda's first, second, fourth, fifth and sixth
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                                                                    Butler CA2012-04-073

assignments of error are sustained. Our ruling on those assignments of error renders the

third assignment of error moot.

      {¶ 46} The judgment of the trial court is reversed, and this cause is remanded for

further proceedings according to law and consistent with this opinion.

      S. POWELL, P.J., and HENDRICKSON, J., concur.

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