[Cite as Goldman v. Nationwide Life Ins. Co., 2012-Ohio-3574.]


                 Court of Appeals of Ohio
                               EIGHTH APPELLATE DISTRICT
                                  COUNTY OF CUYAHOGA


                              JOURNAL ENTRY AND OPINION
                                      No. 97871




 STANLEY GOLDMAN, EXECUTOR FOR THE ESTATE
            OF HARVEY ROSNER
                                                          PLAINTIFF-APPELLANT

                                                    vs.

          NATIONWIDE LIFE INSURANCE COMPANY
                                                          DEFENDANT-APPELLEE




                                           JUDGMENT:
                                            AFFIRMED


                                     Civil Appeal from the
                            Cuyahoga County Court of Common Pleas
                                    Case No. CV-694931

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

        RELEASED AND JOURNALIZED: August 9, 2012
ATTORNEYS FOR APPELLANT

Thomas C. Wagner
Thomas C. Wagner, LLC
1610 Hanna Building
1422 Euclid Avenue
Cleveland, OH 44115

Karl D. Kammer
75 Public Square
Suite 650
Cleveland, OH 44114

ATTORNEYS FOR APPELLEE

Natalie T. Furniss
Anne Marie Sferra
Bricker & Eckler, LLP
100 South Third Street
Columbus, OH 43215
KATHLEEN ANN KEOUGH, J.:

       {¶1} Plaintiff-appellant, Stanley Goldman, Executor of the Estate of Harvey

Rosner, (“the Estate”), appeals the trial court’s decision granting summary judgment in

favor of defendant-appellee, Nationwide Life Insurance Company. For the reasons that

follow, we affirm.

       {¶2} In June 2007, Rosner, age 82, purchased a Nationwide Individual Single

Purchase Payment Immediate Annuity (“the annuity”) for $73,000 through U.S. Bancorp

Investments, Inc. (“USBI”) and its employee, Kristen Hummel. At that time, Hummel

had been Rosner’s financial advisor for approximately six years. Pursuant to the terms of

the annuity, Rosner was to receive regular monthly payments during his lifetime, with the

payments ceasing upon his death. The balance of the annuity, if any, would be paid to

Nationwide.

       {¶3} On April 15, 2008, Rosner passed away. Per the terms of the annuity, the

monthly payments paid to Rosner and the balance of the annuity, approximately $65,000,

was delivered to Nationwide.

       {¶4} In June 2009, the Estate filed a lawsuit against Nationwide, USBI, and

Hummel, alleging that Hummel, as an agent of both Nationwide and USBI, sold Rosner

an unsuitable financial product given Rosner’s advanced age, serious medical conditions,

and past personal and financial directives.

       {¶5} USBI and Hummel filed a joint motion to stay proceedings pending
arbitration, asserting that any controversies arising out of any order or transaction

between USBI and Rosner were subject to mandatory and binding FINRA arbitration.

The trial court granted the joint motion and the Estate did not appeal.

       {¶6} While the claims against USBI and Hummel were stayed, the Estate

proceeded with the case against Nationwide.           On March 5, 2010, the Estate and

Nationwide filed a joint motion to stay proceedings pending the arbitration with the

Estate, USBI, and Hummel. In this joint motion, the parties agreed that “Nationwide’s

liability, if any, is based solely upon a determination that [the Estate’s] allegations against

Defendant Hummel are true.” The trial court granted the joint motion to stay.

       {¶7} Following the arbitration hearing, an arbitration award was issued that

summarily dismissed with prejudice all of the Estate’s claims against USBI and Hummel.

 USBI and Hummel moved the trial court to confirm the arbitration award. The Estate

did not oppose confirmation, provided it could still proceed with its case against

Nationwide and Hummel, as an agent for Nationwide. The trial court confirmed the

award and the Estate did not appeal.

       {¶8}    Based on the arbitration award and the parties’ agreement regarding

Hummel’s liability, Nationwide moved for summary judgment. The Estate opposed the

motion, asserting that Nationwide failed to properly train and supervise Hummel. The

trial court granted Nationwide’s motion.

       {¶9} The Estate appeals, raising as its sole assignment of error that the trial court

erred in granting summary judgment in favor of Nationwide.
       {¶10} Civ.R. 56(C) provides that summary judgment is appropriate when (1) there

is no genuine issue of material fact, (2) the moving party is entitled to judgment as a

matter of law, and (3) after construing the evidence most favorably for the party against

whom the motion is made, reasonable minds can reach only a conclusion that is adverse

to the nonmoving party. Zivich v. Mentor Soccer Club, Inc. 82 Ohio St.3d 367, 369-370,

1998-Ohio-389, 696 N.E.2d 201; Temple v. Wean United, Inc., 50 Ohio St.2d 317, 327,

364 N.E.2d 267 (1977). We review the trial court’s judgment de novo, using the same

standard that the trial court applies under Civ.R. 56(C). Grafton v. Ohio Edison Co., 77

Ohio St.3d 102, 105, 1996-Ohio-336, 671 N.E.2d 241.

       {¶11} It is well established that the party moving for summary judgment bears the

burden of demonstrating that no material issues of fact exist for trial. Dresher v. Burt, 75

Ohio St.3d 280, 292-293, 1996-Ohio-107, 662 N.E.2d 264. The moving party bears the

initial responsibility of informing the trial court of the basis for the motion, and

identifying those portions of the record that demonstrate the absence of a genuine issue of

fact on a material element of the nonmoving party’s claim. Id. The nonmoving party

has a reciprocal burden of specificity and must set forth specific facts showing that there

is a genuine issue for trial. Id. The reviewing court evaluates the record in a light most

favorable to the nonmoving party. Saunders v. McFaul, 71 Ohio App.3d 46, 50, 593

N.E.2d 24 (8th Dist.1990). Any doubts must be resolved in favor of the nonmoving

party. Murphy v. Reynoldsburg, 65 Ohio St.3d 356, 358-359, 1992-Ohio-95, 604 N.E.2d

138.
       {¶12} In this case, Nationwide moved for summary judgment asserting (1) that the

Estate’s vicarious liability claims against it must fail as a matter of law because Hummel

was found not liable; thus, no agency liability exists; and (2) the doctrine of res judicata

applies due to the arbitration decision dismissing USBI and Hummel. In support of its

motion, Nationwide relies on the allegations in the complaint, Nationwide and the

Estate’s joint motion to stay arbitration, and the arbitration award.

       {¶13} The Estate contends that a genuine issue of material facts exists about

Nationwide’s duty to train and supervise the appropriate sale of the annuity.

Specifically, the Estates sets forth the following questions as material facts:

       1. How could Nationwide have permitted this insurance product to be sold
       by their agent to this elderly and infirm man?

       2. What training and supervisory systems did Nationwide have in place at
       the time this product was sold to someone in the position of Mr. Rosner?
       Did they include measures designed to detect and prevent the inappropriate
       sale of the product to an elderly and serious[ly] infirm customer?

       3. How did the “supervisory” procedures allegedly employed by Bancorp
       — the securities firm — compare with those required by Nationwide — an
       insurance company and the issuer of the annuity, especially with respect to
       an applicant’s age and medical condition.

       {¶14} In essence, the Estate argues that genuine issues of material fact exist on a

claim of negligent supervision. However, reviewing the complaint filed in this matter,

the Estate did not assert a claim of negligent supervision. In fact, our review of the

pleadings reveal the claim of negligent supervision was raised for the first time in

response to Nationwide’s motion for summary judgment. “A response by a plaintiff in

opposition to a defendant’s motion for summary judgment is not the appropriate avenue
by which to raise causes of action not previously set forth in a pleading.” Young v.

Leslie, 9th Dist. No. 08CA0015, 2009-Ohio-396, ¶ 9. A plaintiff cannot include claims

beyond those raised in the complaint for the first time in the summary judgment stage of

the litigation without amending the complaint. Everstaff, LLC v. Sansai Enviromental

Techs, LLC, 8th Dist. No. 96108, 2011-Ohio-4824, ¶ 13, citing Wolk v. Paino, 8th Dist.

No. 94850, 2011-Ohio-1065, ¶ 36. Accordingly, the claim for negligent supervision is

waived, and the Estate cannot use this claim to defeat Nationwide’s motion for summary

judgment.

       {¶15} Nevertheless, even if the Estate had properly pled a cause of action for

negligent supervision, summary judgment would still be proper because an essential

element of a claim for negligent supervision is that the plaintiff must show that the agent,

here Hummel, was incompetent and that Nationwide had actual or constructive

knowledge of Hummel’s incompetence. Crable v. Nestle USA, Inc., 8th Dist. No. 86746,

2006-Ohio-2887, ¶ 39, citing Payton v. Receivables Outsourcing, Inc., 163 Ohio App.3d

722, 2005-Ohio-4978, 840 N.E.2d 236 (8th Dist.). The Estate has failed to allege any

facts demonstrating that Hummel was incompetent in her duties or that Nationwide knew

or should have known of her incompetence.            Accordingly, a claim for negligent

supervision could not survive summary judgment.

       {¶16} Our de novo review of the record demonstrates that summary judgment was

properly granted in favor of Nationwide. The Estate and Nationwide jointly moved the

trial court to stay proceedings pending resolution of the arbitration between the Estate and
USBI, and Hummel. The motion, stated: “[t]he parties agree that Nationwide’s liability,

if any, is based solely upon a determination that [the Estate’s] allegations against

Defendant Hummel are true.” Furthermore, the parties agreed:

      Although neither plaintiff nor defendant herein concedes any of the claims
      and defenses that have been asserted, the parties recognize that the
      [arbitration] panel’s determination as to the suitability of the annuity may
      either dispose entirely of the claim against Nationwide, or in the alternative,
      may have the practical effect of shaping the course of this lawsuit and/or
      any potential settlement negotiations between the parties.

      {¶17} Thereafter, the parties cite the Ohio Supreme Court’s rule of law in Comer

v. Risko, 106 Ohio St.3d 185, 2005-Ohio-4559, 833 N.E.2d 712, ¶ 20, which states,

      An agent who committed the tort is primarily liable for its action, while the

      principal is merely secondarily liable. The liability for the tortious conduct

      flows through the agent by virtue of the agency relationship to the principal.

        If there is no liability assigned to the agent, it logically flows that there can

      be no liability imposed upon the principal [for the agent’s actions].

      (Internal citations omitted).

      {¶18} We find that no genuine issue of material facts exist that would preclude

summary judgment in favor of Nationwide. The parties agreed in their joint motion to

stay that “Nationwide’s liability, if any, is based solely upon a determination that the

Estate’s allegations against Defendant Hummel are true.” As a result of the arbitration,

the claims against USBI and Hummel were dismissed with prejudice. While we cannot

speculate as to the rationale behind the arbitrator’s decision, it can be presumed based on

the dismissal and the allegations raised in the complaint that Hummel was not found
liable for selling Rosner the annuity.

       {¶19} The Estate’s complaint does not raise any cause of action specifically

against Nationwide. Rather, it alleges that Hummel exercised undue influence in her role

as both an agent of USBI and Nationwide in inducing Rosner to purchase an unsuitable

annuity based on his age, medical condition, and past and personal directives. Because

no liability was found against Hummel during the arbitration proceedings, it logically

flows that there can be no liability imposed upon Nationwide for Hummel’s actions. See

Comer. Furthermore, because the Estate has failed to demonstrate any genuine issue of

material fact specifically against Nationwide, summary judgment is appropriate.

       {¶20} Accordingly, we find the trial court did not err in granting summary

judgment in favor of Nationwide; the Estate’s sole assignment of error is overruled.

       {¶21} Judgment affirmed.

       It is ordered that appellee recover from appellant costs herein taxed.

       The court finds there were reasonable grounds for this appeal.

       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 Appellate Procedure.




KATHLEEN ANN KEOUGH, JUDGE

PATRICIA ANN BLACKMON, A.J., and
MARY J. BOYLE, J., CONCUR
