[Cite as Andrews v. Nationwide Mut. Ins. Co., 2012-Ohio-4935.]


                 Court of Appeals of Ohio
                               EIGHTH APPELLATE DISTRICT
                                  COUNTY OF CUYAHOGA



                              JOURNAL ENTRY AND OPINION
                                       No. 97891



                         STANLEY ANDREWS, ET AL.
                                                          PLAINTIFFS-APPELLANTS

                                                    vs.

                              NATIONWIDE MUTUAL
                              INSURANCE CO., ET AL.
                                                          DEFENDANTS-APPELLEES




                                           JUDGMENT:
                                            AFFIRMED


                                     Civil Appeal from the
                            Cuyahoga County Court of Common Pleas
                                     Case No. CV-756463


        BEFORE:          Celebrezze, J., Blackmon, A.J., and Sweeney, J.

        RELEASED AND JOURNALIZED:                          October 25, 2012
ATTORNEYS FOR APPELLANTS

James M. Kelley, III
Arthur M. Elk
David J. Elk
Peter D. Traska
Elk & Elk Co., L.P.A.
6105 Parkland Boulevard
Suite 100
Mayfield Heights, Ohio 44125

Donna A. Evans
Dennis E. Murray, Jr.
Florence J. Murray
John T. Murray
Leslie O. Murray
Margaret M. Murray
Dennis E. Murray, Sr.
Patrick G. O’Connor
Murray & Murray Co., L.P.A.
111 E. Shoreline Drive
Sandusky, Ohio 44870


ATTORNEYS FOR APPELLEES

Robert S. Faxon
Katie M. McVoy
Jones Day
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114

Daniel F. Attridge, P.C.
Thomas A. Clare, P.C.
Rebecca A. Koch
Kirkland & Ellis, L.L.P.
655 Fifteenth Street, N.W.
Suite 1200
Washington, DC 20005                           -continued-
ATTORNEYS FOR AMICUS CURIAE
ASSOCIATION OF OHIO LIFE INSURANCE COMPANIES

Anne Marie Sferra
Faith M. Williams
Bricker & Eckler, L.L.P.
100 South Third Street
Columbus, Ohio 43215
FRANK D. CELEBREZZE, JR., J.:

       {¶1} Plaintiffs-appellants, Stanley Andrews and Donald C. Clark (collectively

“appellants”), appeal the judgment of the Cuyahoga County Court of Common Pleas

granting the Civ.R. 12(B)(6) motion to dismiss of defendants-appellees, Nationwide

Mutual Insurance Company and Nationwide Life Insurance Company (collectively

“Nationwide”). After careful review of the record and relevant case law, we affirm the

judgment of the trial court.

       {¶2} In 1992 and 1947, respectively, appellants Andrews and Clark entered into

written life insurance contracts with Nationwide. On their face, appellants’ insurance

contracts expressly provide that Nationwide is required to pay death proceeds to the

beneficiary of the policy on receiving “due” or “satisfactory” proof of the insured’s

death.1 In addition to these provisions requiring “receipt” of proof of death, appellants’

insurance contracts contain terms permitting Nationwide to investigate the insured’s death

before paying death benefit proceeds.             Specifically, the insurance contracts allow

Nationwide to investigate, among other things, whether the insured committed suicide,

whether the death benefit must be reduced by unpaid premiums or indebtedness, and

whether there has been any misrepresentation of the insured’s age or sex. These

provisions are specifically designed to avoid fraud.


         In Ohio, all life insurance policies are required to include a provision stating that “when a
       1


policy becomes a claim by the death of the insured, settlement shall be made upon receipt of due
proof of death, or not later than two months after receipt of such proof.” R.C. 3915.05(K). Thus,
payment is not due merely on the death of an insured, but, rather, on “receipt of proof of death.”
        {¶3} When claims on a life insurance policy can be brought due to an insured’s

death and satisfaction of other policy requirements, some unaware beneficiaries fail to file

claims, resulting in benefit proceeds going unpaid.

        {¶4} Appellants filed this class action complaint against Nationwide on May 31,

2011, seeking injunctive and declaratory relief. Their complaint alleges that Nationwide

has breached its duty of good faith and fair dealing by failing to make reasonable attempts

to determine when the beneficiaries of a life insurance policy are entitled to death benefit

proceeds.2     As a result, appellants now seek to force Nationwide to search the Death

Master File3 (hereinafter referred to as “the DMF”) and independently determine on an

annual basis whether members of the purported class have died prior to Nationwide

receiving proof of death from beneficiaries or claimants. Appellants contend that by

doing this, Nationwide will be meeting their duties of good faith and fair dealing by

determining which of its policy holders are deceased, and thereby determining when




          Appellants’ purported class is defined as: “Policy holders of life insurance policies, which 1)
        2


are currently in force or have been wrongfully cancelled by [Nationwide] prior to the payment of
death benefits, 2) were held within the period that commenced 15 years prior to the filing of this
action, 3) were issued by [Nationwide], 4) where the premiums were either a) paid up, or b) the
accumulated cash value of the policy was used to make ongoing premium payments, and 5) where the
insureds’ age at any time during which the policies were in force actuarially indicated a 70%
probability of death, or such lesser probability of death as the Court should order.”

         The Death Master File is a computer database file made available by the United States
        3


Social Security Administration. The file contains information about persons who had Social Security
numbers and whose deaths were reported to the Social Security Administration from 1962 to the
present.
beneficiaries of the appellants and other class members are rightfully entitled to death

benefit proceeds.

       {¶5} On July 13 2011, Nationwide moved to dismiss on four grounds:

(1) appellants’ lack of standing; (2) appellants’ failure to state a legally cognizable claim

under the plain terms of their insurance contracts and Ohio law; (3) appellants are

inadequate representatives of the class because they lack the requisite element of common

interest and injury; and (4) appellants’ complaint failed to allege facts in support of

material elements of each alleged cause of action.

       {¶6} By order entered on January 23, 2012, the trial court granted Nationwide’s

motion to dismiss, finding that (1) appellants lacked the requisite standing to file this

action, and (2) the claims alleged in appellants’ complaint were barred by the plain

language of their insurance policies.

       {¶7} Appellants appeal the judgment of the trial court, raising three assignments of

error for review:

       I. The trial court erred in concluding that the terms of plaintiffs’ life
       insurance contracts create a clear and unambiguous condition precedent
       which precludes the use of readily available electronic databases.

       II. The trial court erred in concluding that plaintiffs lack standing to seek
       declaratory and injunctive relief as to Nationwide’s refusal to make the
       same inquiry of its life insureds as it does for the payees of its annuities.

       III. The trial court should have allowed for a complete development of the
       record.

                                     Law and Analysis
       {¶8} In challenging the trial court’s dismissal pursuant to Civ.R. 12(B)(6),

appellants argue that the court erred in concluding that the terms of their life insurance

contracts create a clear and unambiguous condition precedent. Further, appellants contend

that the trial court erred in concluding that they lack standing to seek declaratory and

injunctive relief as to Nationwide’s refusal to utilize the DMF.

       {¶9} Assuming, without finding, that appellants have standing to bring this class

action, we find that the trial court did not err in granting Nationwide’s motion to dismiss

based on the express terms of appellants’ life insurance contracts.

                                    Standard of Review

       {¶10} A Civ.R. 12(B)(6) motion to dismiss for failure to state a claim on which

relief can be granted “is procedural and tests the sufficiency of the complaint.” State ex

rel. Hanson v. Guernsey Cty. Bd. of Commrs., 65 Ohio St.3d 545, 548, 1992-Ohio-73,

605 N.E.2d 378, citing Assn. for Defense of Washington Local School Dist. v. Kiger, 42

Ohio St.3d 116, 117, 537 N.E.2d 1292 (1989). In order for a trial court to grant a motion

to dismiss for failure to state a claim on which relief can be granted, it must appear

“beyond doubt from the complaint that the plaintiff can prove no set of facts entitling her

to relief.” Grey v. Walgreen Co., 1970 Ohio App.3d 418, 2011-Ohio-6167, 967 N.E.2d

1249, ¶ 3 (8th Dist.), citing LeRoy v. Allen, Yurasek & Merklin, 114 Ohio St.3d 323,

2007-Ohio-3608, 872 N.E.2d 254, ¶ 14.

       {¶11} In ruling on a Civ.R. 12(B)(6) motion, a trial court “‘cannot resort to

evidence outside the complaint to support dismissal [except] where certain written
instruments are attached to the complaint.’”      Brisk v. Draf Indus., 10th Dist. No.

11AP-233, 2012-Ohio-1311, ¶ 10, quoting Park v. Acierno, 160 Ohio App.3d 117,

2005-Ohio-1332, 826 N.E.2d 324, ¶ 29 (7th Dist.). Rather, “[i]f a Civ.R. 12(B)(6)

movant relies on evidence outside of the complaint and its attachments, then Civ.R. 12(B)

specifies that the motion must either be denied or converted to a summary judgment

motion, which would proceed under Civ.R. 56.” Id. at ¶ 30, citing Petrey v. Simon, 4

Ohio St.3d 154, 156, 447 N.E.2d 1285 (1983).

      {¶12} An appellate court employs “a de novo standard of review for motions to

dismiss filed pursuant to Civ.R. 12(B)(6).” Grey at ¶ 3, citing Greeley v. Miami Valley

Maint. Contrs., Inc., 49 Ohio St.3d 228, 551 N.E.2d 981 (1990).           Under de novo

analysis, we are required to “accept all factual allegations of the complaint as true and

draw all reasonable inferences in favor of the nonmoving party.” Grey at ¶ 3, citing Byrd

v. Faber, 57 Ohio St.3d 56, 565 N.E.2d 584 (1991).

      {¶13} Here, the trial court granted Nationwide’s motion to dismiss based on the

language in the life insurance contracts underlying appellants’ claims. The life insurance

contracts are attached to appellants’ complaint and, therefore, could be considered by the

trial court for purposes of Nationwide’s Civ.R. 12(B)(6) motion. Brisk; Miller v. Cass,

3d Dist. No. 3-09-15, 2010-Ohio-1930 (a copy of a written instrument attached to a

pleading is a part of the pleading for all purposes and thus can be considered for purposes

of a motion to dismiss); Adlaka v. Giannini, 7th Dist. No. 05 MA 105, 2006-Ohio-4611, ¶

34 (“If the plaintiff decides to attach documents to his complaint, which he claims
establish his case, such documents can be used to his detriment to dismiss the case if they

along with the complaint itself establish a failure to state a claim”). Thus, to the extent

the language in the purported life insurance contracts clearly foreclose appellants’ claims

against Nationwide, the trial court could properly dismiss those claims under Civ.R.

12(B)(6). Denlinger v. Columbus, 10th Dist. No. 00AP-315, 2000 Ohio App. LEXIS

5679 (Dec. 7, 2000). See Allstate Ins. Co. v. Blaum, 4th Dist No. 1490, 1988 Ohio App.

LEXIS 4800 (Dec. 2, 1988) (“if a written instrument is attached to the complaint, it

should be construed together with the averments of the complaint in determining whether

there is any possible set of facts which would entitle the plaintiff to relief”).

                            Appellants’ Life Insurance Contracts

       {¶14} An insurance policy is a contract, and the relationship between the insurer

and the insured is purely contractual in nature. Nationwide Mut. Ins. Co. v. Marsh, 15

Ohio St.3d 107, 109, 472 N.E.2d 1061 (1984). The interpretation and construction of

insurance policies is a matter of law to be determined by the court using rules of

construction and interpretation applicable to contracts generally. Gomolka v. State Auto.

Mut. Ins. Co., 70 Ohio St.2d 166, 167-168, 436 N.E.2d 1347 (1982); Value City, Inc. v.

Integrity Ins. Co., 30 Ohio App.3d 274, 276, 508 N.E.2d 184 (10th Dist.1986).

       {¶15} In insurance policies, as in other contracts, words and phrases are to be

given their plain and ordinary meaning unless there is something in the contract that

would indicate a contrary intention. Olmstead v. Lumbermens Mut. Ins. Co., 22 Ohio

St.2d 212, 216, 259 N.E.2d 123 (1970). Where the provisions of an insurance policy are
clear and unambiguous, courts may not indulge themselves in enlarging the contract by

implication in order to embrace an object distinct from that contemplated by the parties.

Gomolka at 168.

       {¶16} However, where the provisions of a contract of insurance are reasonably

susceptible to more than one interpretation, they will be construed strictly against the

insurer and liberally in favor of the insured. King v. Nationwide Ins. Co., 35 Ohio St.3d

208, 519 N.E.2d 1380 (1988), paragraph one of the syllabus.

       {¶17} In the case at hand, appellants argue that the trial court erred in concluding

that they were “foreclosed from pursuing this class action based on the express terms of

the parties’ life insurance contracts and Ohio law.” Specifically, appellants contend that

their insurance policies fail to identify who is required to provide “proof of death” and are

thereby ambiguous. Thus, appellants submit that the trial court was required to look

beyond the four corners of the complaint to determine the plain meaning of the disputed

life insurance provision, a procedure improper in determining a Civ.R. 12(B)(6) motion.

For the following reasons, we disagree.

       {¶18} The operative contract provisions, in this case, between Nationwide and

appellants are expressly contained in the parties’ insurance contracts. Andrews’s

insurance contract states, in relevant part:

       We agree to pay the Death Proceeds to the Beneficiary upon receiving
       proof that the Insured has died while this Policy is in force and before the
       Maturity Date.

       ***
       [Nationwide] will pay the Death proceeds to the Beneficiary after we
       receive at our Home Office proof of death satisfactory to us and such other
       information as we may reasonably require. (Emphasis added).

Similarly, Clark’s contract provides, in relevant part:

       Insurance Company Columbus, Ohio AGREES TO PAY the sum of ONE

       THOUSAND (1,000) Dollars Less any unpaid premium or premiums to the

       end of the then current policy year, and less any indebtness on or secured by

       this Policy To ELLEN FISHER CLARK, Mother, if living; Otherwise to

       JOHN LAWRENCE CLARK, Father, the Beneficiary, at its Home Office,

       immediately upon receipt of due proof of death of DONALD CHARLES

       CLARK, the Insured, during the continuance of this Policy. (Emphasis

       added).

       {¶19} After review of the pertinent contract provisions, we find no merit in

appellants’ assertion that their life insurance contracts are ambiguous because the

contracts “are silent as to the party upon whom the responsibility for providing proof

falls.” The terms “receipt” and “receiving” demonstrate Nationwide’s passive role in

establishing an insured party’s proof of death; they do not connote an obligation to

procure such information. Webster’s New Collegiate Dictionary 964 (1990) (“Receipt”

is defined as “the act or process of receiving”). Thus, a finding obligating Nationwide to

solicit or gather information pertaining to an insured’s death would be contrary to the

terms contained in the insurance policy.
       {¶20} Moreover, Ohio law indicates that the burden of furnishing proof of death

lies with appellants’ beneficiaries or claimants. In a related case dealing with automobile

insurance, the court held that “the policyholder who believes that he or she is entitled to

reimbursement must make the insurance company aware of the claim and give it the

opportunity to pay.” Kincaid v. Erie Ins. Co., 128 Ohio St.3d 322, 2010-Ohio-6036, 944

N.E.2d 207. Similarly, the Sixth Circuit has observed that, “[u]nder traditional principles

of contract law * * * the notice provision of an insurance policy creates a condition

precedent, non-compliance with which precludes recovery by the insured.” Am. Emps.

Ins. Co. v. Metro Regional Transit Auth., 12 F.3d 591, 592 (6th Cir.1993), citing

Kornhauser v. Natl. Sur. Co., 114 Ohio St. 24, 150 N.E. 921 (1926).

       {¶21} In evaluating the “proof of death” provision in appellants’ insurance

contracts, the trial court relied on Natl. Acc. & Health Ins. Co. v. Edrez, 19 Ohio Law

Abs. 202, 1935 Ohio Misc. LEXIS 1321 (9th Dist.1935). In Edrez, the court dealt with a

similar complaint based on a similar insurance contract provision. In Edrez, the plaintiff

failed to submit proof of death according to the requirements of his accidental death

insurance policy. As a result, the defendants did not pay out benefits on the policy.

Like the present case, the plaintiff argued that it was not necessary for him to file a proof

of death under the accident provision of the policy. The Edrez court relied on the life

insurance contract, which provided, in relevant part:

       4. Written notice of injury or of sickness on which claim may be based must
       be given to the company within twenty days after the date of the accident
       causing such injury or within ten days after the commencement of disability
       from such sickness. In event of accidental death immediate notice thereof
       must be given to the company.

       {¶22} The Edrez court found that this provision of the life insurance contract

required the beneficiary to provide proof of death to the insurer as a condition precedent

for the claim to be honored. Because the plaintiff did not comply with this condition

precedent, the court entered final judgment in favor of the defendants.

       {¶23} In challenging the application of Kincaid and Edrez to the case at hand,

appellants contend that life insurance policies are distinguishable from other forms of

insurance policies because, unlike automobile or accidental death insurance policies

where the triggering event is not certain to occur, the death of a party with a life insurance

policy is certain to occur. While we understand that the death of an insured party is an

inevitable fact, we are not persuaded that such certainty places an additional duty on

Nationwide beyond what is expressed in the life insurance contracts, and appellants

provide no case law to support such a proposition. See DeHart v. Aetna Life Ins. Co., 8th

Dist. No. 42932, 1982 Ohio App. LEXIS 13478 ( July 15, 1982) (finding the insurer had

no implied duty to inform insureds on reaching an age where they were likely disabled

that the insureds had a right to stop making premium payments if disabled).

       {¶24} Accordingly, we find that, as in Kincaid and Edrez, appellants’ life

insurance contracts create a clear and unambiguous condition precedent, in accordance

with Ohio law, that requires, among other things, that appellants provide Nationwide with

proof of death for their life insurance claims to be honored. It is clear from the contracts,

as well as from the case law, that the standard language used places the burden on the
claimant or the beneficiary to produce the proof of death. In the absence of legislative or

administrative regulatory action, we will not import additional unspoken duties and

obligations onto Nationwide that will conflict with the parties’ contracted terms.

                          The Duty of Good Faith and Fair Dealing

       {¶25} We further find no validity to appellants’ allegations that Nationwide has

breached the implied covenant of good faith and fair dealing by failing to utilize the DMF

for the benefit of its life insureds.

       {¶26} Under Ohio law, because a fiduciary relationship exists in the context of

insurance contracts, the insurer has a duty to act in good faith in handling the claims of

the insured. Hoskins v. Aetna Life Ins. Co., 6 Ohio St.3d 272, 275, 452 N.E.2d 1315

(1983). Such duty is grounded on the fundamental principle that in every contract there

is an implied covenant “that neither party shall commit any act that shall destroy or injure

the rights of the other party to enjoy the fruits of the contract.” Anthony’s Pier Four, Inc.

v. HBC Assoc., 411 Mass. 451, 471, 583 N.E.2d 806 (1991), quoting Druker v. Roland

Wm. Jutras Assoc., Inc., 370 Mass. 383, 385, 348 N.E.2d 763 (1976).

       {¶27} A violation of this covenant usually requires more than a simple breach of

contract. Targus Group Internatl., Inc. v. Sherman, 76 Mass.App.Ct. 421, 435, 922

N.E.2d 841 (2010).        Usually, a breach of the covenant involves bad-faith conduct

“implicating a dishonest purpose, consciousness of wrong, or ill will in the nature of

fraud.” Id., quoting Equip. & Sys. for Indus., Inc. v. Northmeadows Constr. Co., 59

Mass.App.Ct. 931, 932-933, 798 N.E.2d 571 (2003). However, the covenant is limited
in scope and cannot create rights and duties not otherwise provided for in the contract.

Lawarre v. Fifth Third Secs., 1st Dist. No. C-110302, 2012-Ohio-4016, ¶ 35, citing Uno

Restaurants, Inc. v. Boston Kenmore Realty Corp., 441 Mass. 376, 385, 805 N.E.2d 957

(2004).

       {¶28} As discussed, the provisions contained in appellants’ life insurance contracts

with Nationwide expressly require “receipt” of “proof of death,” in compliance with R.C.

3915.05(K). Importantly, the contracts do not impose a duty on Nationwide to search the

DMF to determine whether their insureds are deceased. Accordingly, we are unable to

conclude that Nationwide has breached its duty of good faith and fair dealing by failing to

incorporate the DMF into its account servicing practices when it is not contractually or

legally obligated to do so.

       {¶29} Based on the foregoing, we find that the trial court did not err in granting

Nationwide’s motion to dismiss.      Appellants’ first assignment of error is overruled.

Therefore, the issue raised in appellants’ second assignment of error regarding their

standing to bring this action is rendered moot.

                                        Discovery

       {¶30} Finally, appellants argue that the trial court erred in preventing the complete

development of the record in this matter. We disagree. As stated, the trial court did not

err in granting Nationwide’s motion to dismiss. Therefore, appellants were not entitled

to develop the record through discovery.

       {¶31} Appellants’ third assignment of error is overruled.
      {¶32} Judgment affirmed.

      It is ordered that appellees recover from appellants 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.



FRANK D. CELEBREZZE, JR., JUDGE

PATRICIA A. BLACKMON, A.J., and
JAMES J. SWEENEY, J., CONCUR
