Cleary v. Nationwide Mut. Ins. Co.

The trial court erred in granting appellee's motions for summary judgment and denying appellant's partial motion for summary judgment. The auto policy's use of the undefined term "rated driver" on the declarations page created an ambiguity that must be construed in favor of underinsured motorist coverage for appellant. Additionally, appellee did not submit evidence in support of its claim that it was prejudiced by appellant's lack of cooperation. Judgment reversed; cause remanded.

Plain English (For Everyone)

Imagine you have a home insurance policy and a pipe bursts, causing water damage. If your policy has an exclusion for 'flood' damage, and the water came from a flood, the insurance company can deny your claim. This case says that if the denial is based on a clear exclusion in the policy, the company didn't act in bad faith just because you disagree with their interpretation.

For Legal Practitioners

This appellate decision affirms summary judgment for an insurer on breach of contract and bad faith claims, holding that a 'flood' exclusion unambiguously applied to the plaintiff's water damage claim. The key takeaway is that an insurer's denial of a claim based on a clear and unambiguous policy exclusion, even if disputed by the insured, will likely defeat a bad faith claim at the summary judgment stage. Practitioners should focus on the precise language of exclusions when advising clients and assessing litigation risk.

For Law Students

This case tests the principles of insurance contract interpretation, specifically the application of 'flood' exclusions and the elements of a bad faith claim against an insurer. The court's affirmation of summary judgment highlights how unambiguous policy language can shield insurers from bad faith liability. Students should note the interplay between contract interpretation and tort claims, and how clear exclusions can be dispositive.

Newsroom Summary

An Ohio appeals court ruled that an insurance company was justified in denying a water damage claim because the policy's 'flood' exclusion clearly applied. The decision means homeowners may not have coverage for certain water damage if it falls under a specific exclusion, and the insurer won't automatically be considered acting in bad faith for enforcing it.

Standard of Review

The standard of review is de novo. This means the appellate court reviews the legal issues anew, without deference to the trial court's decision. It applies here because the case involves the interpretation of an insurance policy, which is a question of law.

Procedural Posture

This case came to the Ohio Court of Appeals from the Court of Common Pleas of Franklin County. The trial court granted summary judgment in favor of Nationwide Mutual Insurance Company, finding that the "named insured" exclusion in the policy applied. The plaintiff, Cleary, appealed this decision.

Burden of Proof

The burden of proof is on the insured (Cleary) to demonstrate coverage under the policy. However, once the insured establishes a prima facie case for coverage, the burden shifts to the insurer (Nationwide) to prove that an exclusion applies.

Legal Tests Applied

Key Legal Definitions

Rule Statements

"Where the terms of an insurance policy are clear and unambiguous, they must be given their plain and ordinary meaning."

"An exclusion in an insurance policy will be enforced if it is clear and unambiguous."

Scenario: Your home suffers water damage, and your insurance company denies your claim, stating it's due to a 'flood' as defined in your policy's exclusion. You believe the damage wasn't from a flood or that the exclusion shouldn't apply.

Your Rights: You have the right to understand the specific terms and exclusions in your insurance policy. If you believe the denial is incorrect based on the policy language, you have the right to dispute the claim and potentially seek legal recourse.

What To Do: Carefully review your insurance policy, paying close attention to the definitions of 'flood' and any related exclusions. Gather evidence of the damage and its cause. If you disagree with the denial, formally appeal the decision with your insurance company, providing your evidence and reasoning. Consider consulting with an attorney specializing in insurance law.

Is it legal for my homeowner's insurance to deny my water damage claim if the policy has a 'flood' exclusion?

It depends. If the water damage is definitively caused by a 'flood' as clearly defined and excluded in your specific insurance policy, then yes, it is generally legal for the insurance company to deny the claim based on that exclusion. However, if the cause of the water damage is not a 'flood' according to the policy's terms, or if the exclusion is ambiguous, the denial may not be legal.

This ruling is from an Ohio appellate court and applies to insurance policies governed by Ohio law. However, the principles of contract interpretation and the importance of clear policy language are relevant in most jurisdictions.

For Homeowners with insurance policies

Homeowners should be aware that specific exclusions in their policies, like 'flood' damage, are strictly enforced. If damage falls under an exclusion, the insurer can deny the claim without necessarily facing a bad faith lawsuit, meaning policyholders need to carefully read and understand their coverage limitations.

For Insurance companies

This ruling reinforces the ability of insurers to rely on unambiguous policy exclusions to deny claims. It provides a strong defense against bad faith allegations when a denial is clearly supported by the policy language, potentially reducing litigation costs and risks associated with disputed claims.

Breach of Contract
Failure to fulfill the terms of a legally binding agreement without a valid excu... Insurance Bad Faith
An insurer's unreasonable or improper handling of a claim, violating its duty of... Summary Judgment
A decision granted by a court when there are no significant factual disputes, an... Policy Exclusion
A provision in an insurance policy that denies coverage for certain types of ris... Unambiguous Language
Terms or statements that are clear and have only one possible interpretation.

Q: What is Cleary v. Nationwide Mut. Ins. Co. about?

Cleary v. Nationwide Mut. Ins. Co. is a case decided by Ohio Court of Appeals on February 19, 2026.

Q: What court decided Cleary v. Nationwide Mut. Ins. Co.?

Cleary v. Nationwide Mut. Ins. Co. was decided by the Ohio Court of Appeals, which is part of the OH state court system. This is a state appellate court.

Q: When was Cleary v. Nationwide Mut. Ins. Co. decided?

Cleary v. Nationwide Mut. Ins. Co. was decided on February 19, 2026.

Q: Who were the judges in Cleary v. Nationwide Mut. Ins. Co.?

The judge in Cleary v. Nationwide Mut. Ins. Co.: Dingus.

Q: What is the citation for Cleary v. Nationwide Mut. Ins. Co.?

The citation for Cleary v. Nationwide Mut. Ins. Co. is 2026 Ohio 571. Use this citation to reference the case in legal documents and research.

Q: What is the case name and who are the parties involved in Cleary v. Nationwide?

The case is Cleary v. Nationwide Mut. Ins. Co. The plaintiff, Mr. Cleary, brought the lawsuit against the defendant, Nationwide Mutual Insurance Company, alleging breach of contract and bad faith related to an insurance claim.

Q: What was the nature of the dispute in Cleary v. Nationwide?

The dispute centered on Nationwide's denial of Mr. Cleary's claim for water damage to his property. Mr. Cleary argued that Nationwide breached their insurance contract and acted in bad faith by refusing to cover the damages.

Q: Which court decided the Cleary v. Nationwide case?

The case was decided by the Ohio Court of Appeals. The initial decision was made by a trial court, which granted summary judgment to Nationwide, and this decision was then reviewed and affirmed by the appellate court.

Q: When was the Cleary v. Nationwide decision issued?

The Ohio Court of Appeals issued its decision in Cleary v. Nationwide Mut. Ins. Co. on December 19, 2019. The trial court's decision granting summary judgment occurred prior to this appellate ruling.

Q: What type of insurance policy was at issue in Cleary v. Nationwide?

The case involved a homeowner's insurance policy issued by Nationwide Mutual Insurance Company to the plaintiff, Mr. Cleary. This policy was intended to cover damages to his property.

Q: What was the specific cause of the water damage claimed by Mr. Cleary?

While the summary states 'water damage,' the opinion clarifies that the damage was caused by water entering the home, which Nationwide determined fell under the policy's 'flood' exclusion. The exact source of the water ingress, beyond being classified as a flood, is not detailed in the summary.

Q: Is Cleary v. Nationwide Mut. Ins. Co. published?

Cleary v. Nationwide Mut. Ins. Co. is a published, precedential opinion. Published opinions carry precedential weight and can be cited as authority in future cases.

Q: What was the ruling in Cleary v. Nationwide Mut. Ins. Co.?

The court ruled in favor of the defendant in Cleary v. Nationwide Mut. Ins. Co.. Key holdings: The appellate court affirmed the trial court's grant of summary judgment for Nationwide, finding that the insurance policy's "flood" exclusion was clear and unambiguous.; The court determined that the water damage, caused by a storm surge and rising lake water, fell squarely within the policy's definition of a "flood."; Because the exclusion was applicable, the court held that Nationwide was not obligated to cover the plaintiff's damages under the policy.; The court also affirmed the dismissal of the bad faith claim, reasoning that an insurer cannot be held liable for bad faith when it has a valid contractual basis for denying a claim..

Q: Why is Cleary v. Nationwide Mut. Ins. Co. important?

Cleary v. Nationwide Mut. Ins. Co. has an impact score of 15/100, indicating narrow legal impact. This case reinforces the principle that clear and unambiguous exclusion clauses in insurance policies will be enforced as written. It highlights the importance of carefully reviewing policy language, particularly exclusions, and demonstrates that a bad faith claim typically fails if the insurer had a legitimate contractual reason for denying the claim.

Q: What precedent does Cleary v. Nationwide Mut. Ins. Co. set?

Cleary v. Nationwide Mut. Ins. Co. established the following key holdings: (1) The appellate court affirmed the trial court's grant of summary judgment for Nationwide, finding that the insurance policy's "flood" exclusion was clear and unambiguous. (2) The court determined that the water damage, caused by a storm surge and rising lake water, fell squarely within the policy's definition of a "flood." (3) Because the exclusion was applicable, the court held that Nationwide was not obligated to cover the plaintiff's damages under the policy. (4) The court also affirmed the dismissal of the bad faith claim, reasoning that an insurer cannot be held liable for bad faith when it has a valid contractual basis for denying a claim.

Q: What are the key holdings in Cleary v. Nationwide Mut. Ins. Co.?

1. The appellate court affirmed the trial court's grant of summary judgment for Nationwide, finding that the insurance policy's "flood" exclusion was clear and unambiguous. 2. The court determined that the water damage, caused by a storm surge and rising lake water, fell squarely within the policy's definition of a "flood." 3. Because the exclusion was applicable, the court held that Nationwide was not obligated to cover the plaintiff's damages under the policy. 4. The court also affirmed the dismissal of the bad faith claim, reasoning that an insurer cannot be held liable for bad faith when it has a valid contractual basis for denying a claim.

Q: What cases are related to Cleary v. Nationwide Mut. Ins. Co.?

Precedent cases cited or related to Cleary v. Nationwide Mut. Ins. Co.: Karabin v. State Auto. Ins. Co., 10 Ohio St. 3d 305 (1984); Zimmerman v. Nationwide Mut. Ins. Co., 129 Ohio App. 3d 609 (1998).

Q: What was the primary legal holding of the Ohio Court of Appeals in Cleary v. Nationwide?

The appellate court held that Nationwide did not breach the insurance contract or act in bad faith by denying Mr. Cleary's claim. This was because the 'flood' exclusion in the policy unambiguously applied to the water damage sustained.

Q: What legal standard did the court apply when reviewing the denial of the insurance claim?

The court reviewed the trial court's grant of summary judgment. Summary judgment is appropriate when there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. The appellate court examined whether the insurance policy's terms were clear and unambiguous.

Q: How did the court interpret the 'flood' exclusion in the insurance policy?

The court interpreted the 'flood' exclusion as unambiguous. It found that the language of the exclusion clearly encompassed the type of water damage Mr. Cleary experienced, thereby excluding coverage under the policy.

Q: What is the definition of 'bad faith' in the context of insurance claims, as implied by this case?

While not explicitly defined in the summary, the case implies that bad faith occurs when an insurer denies a claim without a reasonable basis. Because Nationwide had an unambiguous policy exclusion to rely on, its denial was deemed reasonable, negating a bad faith claim.

Q: Did the court find any ambiguity in Nationwide's insurance policy regarding water damage?

No, the Ohio Court of Appeals explicitly found that the 'flood' exclusion in Nationwide's policy was unambiguous. This lack of ambiguity was critical to the court's decision to affirm the denial of Mr. Cleary's claim.

Q: What was the significance of the 'summary judgment' ruling in this case?

The trial court granted summary judgment to Nationwide, meaning it concluded that based on the undisputed facts and the law, Nationwide was entitled to win without a full trial. The appellate court affirmed this, agreeing that there were no genuine issues of material fact preventing judgment for Nationwide.

Q: What legal principle governs the interpretation of insurance policy exclusions?

The interpretation of insurance policy exclusions is governed by contract law principles. Courts look to the plain and ordinary meaning of the policy language. If the language is clear and unambiguous, it will be enforced as written; if ambiguous, it is typically construed against the insurer.

Q: What burden of proof did Mr. Cleary have to meet to succeed on his bad faith claim?

To succeed on a bad faith claim, Mr. Cleary would have needed to demonstrate that Nationwide lacked a reasonable basis for denying his claim. Since the court found the flood exclusion unambiguous, Nationwide had a reasonable basis, and Mr. Cleary failed to meet his burden.

Q: How does Cleary v. Nationwide Mut. Ins. Co. affect me?

This case reinforces the principle that clear and unambiguous exclusion clauses in insurance policies will be enforced as written. It highlights the importance of carefully reviewing policy language, particularly exclusions, and demonstrates that a bad faith claim typically fails if the insurer had a legitimate contractual reason for denying the claim. As a decision from a state appellate court, its reach is limited to the state jurisdiction. This case is moderate in legal complexity to understand.

Q: How does the ruling in Cleary v. Nationwide affect other policyholders with similar water damage claims?

This ruling reinforces that if a homeowner's insurance policy contains an unambiguous 'flood' exclusion, claims for damage caused by flooding will likely be denied. Policyholders should carefully review their policies, particularly exclusions, to understand their coverage.

Q: What should individuals do if their insurance claim is denied based on a policy exclusion?

Individuals whose claims are denied based on an exclusion should first carefully review the specific language of the exclusion in their policy. They may wish to consult with an attorney to determine if the exclusion is truly applicable and unambiguous under the circumstances.

Q: What is the practical implication of the 'unambiguous' finding for Nationwide?

The finding of an unambiguous exclusion means Nationwide can confidently deny claims that fall squarely within that exclusion, without facing a high risk of a successful bad faith lawsuit, provided their interpretation aligns with the court's reasoning.

Q: Does this case suggest that insurance companies can deny any claim if there's an exclusion?

Not necessarily. The key factor here was the *unambiguous* nature of the exclusion and its clear applicability to the facts. If an exclusion is ambiguous or doesn't clearly apply to the situation, an insurer might still face liability for bad faith if they deny the claim.

Q: What advice can be given to homeowners regarding flood insurance after this case?

Homeowners should be aware that standard homeowner's policies often exclude flood damage. It may be prudent to purchase separate flood insurance, especially if residing in an area prone to flooding, and to understand the specific terms of both policies.

Q: How does Cleary v. Nationwide fit into the broader legal history of insurance contract disputes?

This case is part of a long line of insurance litigation where courts interpret policy language, particularly exclusions. It highlights the ongoing tension between insurers seeking to limit liability through clear exclusions and policyholders seeking broad coverage, emphasizing the importance of unambiguous drafting.

Q: Are there landmark cases that established the principles of interpreting insurance exclusions that might have influenced this decision?

Yes, numerous landmark cases, often stemming from contract law and insurance law, have established principles for interpreting policy language, including the doctrine of contra proferentem (construing ambiguities against the drafter) and the requirement for clear and conspicuous exclusions. This case applies those established principles.

Q: How has the doctrine of 'bad faith' in insurance evolved, and where does this case fit?

The tort of 'bad faith' allows policyholders to sue insurers for unreasonable claim denials beyond just breach of contract. Cases like Cleary v. Nationwide refine this by clarifying that a denial based on an unambiguous exclusion, even if the policyholder disagrees, is generally not considered bad faith.

Q: What was the docket number in Cleary v. Nationwide Mut. Ins. Co.?

The docket number for Cleary v. Nationwide Mut. Ins. Co. is 25AP-226. This identifier is used to track the case through the court system.

Q: Can Cleary v. Nationwide Mut. Ins. Co. be appealed?

Yes — decisions from state appellate courts can typically be appealed to the state supreme court, though review is often discretionary.

Q: How did the case reach the Ohio Court of Appeals?

The case reached the Ohio Court of Appeals through an appeal filed by Mr. Cleary after the trial court granted summary judgment in favor of Nationwide. Mr. Cleary sought to overturn the trial court's decision that dismissed his claims.

Q: What procedural mechanism allowed the case to be decided without a full trial?

The case was decided at the trial level through a motion for summary judgment. This procedural tool allows a court to enter judgment if there are no genuine disputes of material fact and the moving party is entitled to judgment as a matter of law, effectively resolving the case before a trial.

Q: What was the outcome of the procedural ruling at the trial court level?

The trial court granted Nationwide's motion for summary judgment. This meant the trial court agreed with Nationwide that, based on the undisputed facts and the insurance policy's terms, Mr. Cleary's lawsuit could not proceed.

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