Collecting From the Dog Owner's Insurance Company: McCruter v. Travelers

Published March 4, 2021 · Ohio Appeals Courts

Winning a judgment and collecting it are two different things. In most injury cases the money comes from a liability insurance policy, not from the wrongdoer's own pocket. So what happens when the person who caused the injury tells her insurance company to stay out of it, and the insurer happily agrees?

A Lake County case decided on February 22, 2021, answers that question in a way that protects injured people. McCruter v. Travelers Home & Marine Ins. Co., 2021-Ohio-472 (11th Dist.), involves a child's dog-bite injury, but the lesson applies to almost every kind of injury claim.

What happened

In July 2017, a young girl was walking with her family in Fairport Beach Park when a woman walking her pit bull in the same area passed nearby. The dog lunged at the child and bit or clawed her face, leaving a cut about an inch long beneath her left eye. Her mother sued the dog's owner.

The owner had a homeowner's policy with Travelers, but she did not want her insurer involved. She hired her own lawyer and never told Travelers about the lawsuit. The child's lawyer did, sending the complaint to Travelers and warning that if the family won, it would come after the policy.

Travelers then prepared a letter agreement, and the owner and her husband signed it in front of a notary. In it, the owner declined to use her homeowner's coverage for the lawsuit, and Travelers said it would not defend her or pay any verdict. The letter went further: by signing, she agreed she was "not going to cooperate or allow us to investigate or defend you in this matter any longer."

The case went to a bench trial. The owner stipulated to liability, and the court entered a judgment of $16,780.68 for the child. When the family asked Travelers to pay, the insurer pointed to its "policy-holder's release" and refused. The family filed a supplemental complaint against Travelers, and the trial court ruled for the insurance company.

The statute that lets you go after the insurer

Ohio has a specific procedure for this situation. Under R.C. 3929.06(A)(1), when an injured person wins a final judgment and the wrongdoer was insured for that injury when it happened, the injured person, as a judgment creditor, is entitled to have the policy's remaining limits applied to the judgment. If the insurer does not pay within 30 days, R.C. 3929.06(A)(2) allows the injured person to file a supplemental complaint against the insurer in the same court.

There is a catch. Under R.C. 3929.06(C)(1), the insurer can raise any coverage defense it could have raised against its own policyholder. Travelers argued that the owner broke the policy by giving late notice and refusing to cooperate, so it owed nothing.

What the Eleventh District decided

The court of appeals reversed the judgment for Travelers and sent the case back for trial. Its reasoning should give every insurer pause.

Late notice may have been waived, and prejudice was not proven. Travelers knew about the lawsuit months before trial, because the child's lawyer told it. The court held there were genuine factual disputes about whether Travelers waived the notice requirement and whether it was actually prejudiced by the delay, especially because its own adjuster said Travelers had been "prepared to defend and indemnify" the owner.

An insurer cannot contract away the victim's rights. This is the heart of the decision. A separate statute, R.C. 3929.05, says a liability policy cannot be canceled or annulled by an agreement between the insurer and the insured after the insured has become responsible for the injury, and any such cancellation "is void." The court explained that "an injured person has a potential interest and a substantial right in an insurance policy from the very moment of his or her injury." It also noted that an insured's failure to perform defeats the victim's claim only if it happened without collusion with the insurer.

Applying those rules, the court found evidence supporting an inference that the letter agreement was collusion or an improper cancellation of the policy. Travelers called the letter a mere confirmation of the owner's own choice, but the court observed that the letter itself had the owner agree not to cooperate going forward.

Cooperation clauses run both ways. Travelers also claimed the owner failed to "help" it settle and defend the case. The court pointed out that the policy required help only at Travelers' request, and Travelers never asked. An insurer that walks away from a case cannot later blame its insured for not helping.

One judge concurred separately, agreeing that fact questions remain but reasoning that Georgia law, where the policy was issued, should govern the cooperation question. The case now returns to the trial court. How it ends is not yet known.

Why a dog-bite case is really an insurance case

Ohio's dog statute is strong. Under R.C. 955.28(B), the owner, keeper, or harborer of a dog is liable for injuries the dog causes, subject to narrow exceptions such as trespassers and people teasing or abusing the dog. We covered the basics in our earlier post on Ohio's dog-bite statute.

Proving liability is often the easy part. The hard part is collecting. Most dog owners do not have tens of thousands of dollars in the bank, but many have homeowner's or renter's insurance that covers dog bites. As our guide chapter on what your case is worth puts it, a case is worth what can be collected. McCruter protects the most important asset in many bite cases: the policy.

Practical lessons for injured people

• Find the policy early. Ask the owner for insurance information at the scene, and make sure animal control or police make a record, as our guide on the first 72 hours recommends. A lawyer can send notice directly to the insurer, as the family's lawyer did here.
• Put the insurer on notice in writing. That notice was what allowed the court to find a fact question on waiver.
• A side deal between the wrongdoer and the insurer is not the end of the road. Ohio law treats your rights in the policy as attaching at the moment you are hurt.
• Do not assume a small judgment is uncollectible. The statutory supplemental-complaint procedure exists precisely so the injured person can reach the coverage.

What this means for you

If you or your child was bitten or injured, and the person responsible says there is no insurance or that the insurer "won't be involved," do not accept that at face value. Those statements are often wrong, and sometimes they are the product of an arrangement the law does not allow. Our personal injury practice handles both halves of the job: proving fault and reaching the money.