Blue Ash Auto Body, Inc. v. Grange Property & Cas. Ins. Co.

Citation: 2022 Ohio 4599Docket: C-220165

Court: Ohio Court of Appeals; December 20, 2022; Ohio; State Appellate Court

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Blue Ash Auto Body, Inc. appealed a summary judgment from the Hamilton County Court of Common Pleas, which favored Grange Property, Casualty Insurance Company in a breach-of-contract and unjust enrichment case. The appeal, numbered C-220165, followed a complaint filed by Blue Ash in October 2020, alleging Grange owed $18,447.98 for repairs on 14 vehicles owned by Grange's insureds. Blue Ash argued that the repair costs exceeded the amounts Grange was willing to pay, and it secured 'Assignments of Proceeds' from insured customers to excuse them from covering the shortfall.

Grange contested Blue Ash's claims, stating that it did not dispute the work performed but challenged the assertion that the amounts charged were reasonable under the insurance policies. Grange cited an anti-assignment provision in these policies, emphasizing that it did not consent to the assignments and referenced limitations on liability and the requirement for insureds to cooperate in claims processes. The trial court granted summary judgment in favor of Grange in March 2022, which was upheld on appeal, affirming Grange's entitlement to summary judgment on both claims.

Grange sought summary judgment on two claims, asserting that an anti-assignment provision in its policies invalidated any assignment made by Blue Ash and that no benefit was conferred upon Grange. A hearing occurred on January 28, 2022, and the court granted summary judgment in favor of Grange on March 25, 2022. The court found the breach-of-contract claim unenforceable due to the anti-assignment provision, which Grange argued rendered the assignment invalid. The unjust-enrichment claim also failed as the court determined that any benefit was conferred solely to the vehicle owners, not Grange.

Blue Ash challenged the trial court’s judgment on both claims. Appellate review of summary judgment is conducted de novo, with summary judgment granted when there are no genuine issues of material fact, and the moving party is entitled to judgment as a matter of law. The moving party must demonstrate the absence of genuine issues of material fact, while the nonmoving party must present specific evidentiary facts to establish such an issue exists.

A breach-of-contract claim requires proof of the existence of a contract, a breach, and damages. The case hinges on whether a contract existed; Grange contends the anti-assignment provision invalidates Blue Ash's assignment. Blue Ash argues this provision is irrelevant as it holds an assignment of a 'chose in action,' which refers to the right to initiate legal action. Generally, contract rights can be assigned unless specific conditions apply, such as clear prohibitions in the contract or significant changes to the obligor's duties or risks. The Ohio Supreme Court has previously ruled that assignments of interest in insurance policies are valid after the insured loss occurs, even with an anti-assignment provision, as the loss is fixed at that time.

A person cannot assign the right to future settlement proceeds if such rights do not exist at the time of assignment. The Ohio Supreme Court cautioned that allowing these assignments could lead to increased litigation and hinder settlements because the assignee expects full payment without interest in negotiating the debt amount, while insurers may lack the ability to dispute the charges. The Southern District of Ohio invalidated an assignment from State Farm insureds to Blue Ash for exceeding the agreed payment, ruling that it met the conditions outlined in Pilkington. The Grange policy explicitly prohibits assignments without written consent, which was not given. The assignment would also materially alter Grange's obligations, placing it at risk of arbitrary payment demands from Blue Ash. Furthermore, it would conflict with public policy by promoting litigation instead of negotiation. Consequently, the trial court granted summary judgment to Grange on the breach-of-contract claim, which was upheld on appeal. 

Regarding unjust enrichment, Blue Ash failed to prove it conferred a benefit to Grange. To succeed in such a claim, one must show a benefit was conferred, the defendant knew of it, and retaining it would be unjust. A prior case highlighted that the connection between a body shop’s work and an insurer was too indirect to establish unjust enrichment. Blue Ash's argument that it completed repairs to fulfill the insurer's obligations lacked supporting facts. Thus, the trial court's summary judgment in favor of Grange on the unjust-enrichment claim was affirmed. Both of Blue Ash's assignments of error were overruled, and the trial court's judgment was confirmed.