The Ohio Supreme Court is set to hear oral arguments next week on the issue of whether insurance companies are subject to provisions of the Consumer Sales Practices Act ("CSPA") regarding non-manufacturer repair parts. R.C. 1345.81 requires insurers to provide a repair estimate for a motor vehicle that include a specific warning about the planned use of non-OEM, aftermarket replacement parts. Any failure to abide by the statutory terms, is an unfair and deceptive act or practice as defined by the CSPA. The problem stems from the fact that insurance companies are generally excluded from the definition of consumer transaction for the purposes of the CSPA.
That was the quirk the insurance company in Dillon v. Farmers Insurance, 2014-Ohio-431 attempted to exploit. In that case, the insured struck a deer. The insurance agent provided a proposed repair estimate that included non-OEM parts without obtaining the insured's signatures on the estimate, in contravention of R.C. 1345.81. Applying general concepts of statutory interpretation, the Fifth District concluded that R.C. 1345.81 was more recent and specific, and therefore, controlled. As a result, the insurance company was deemed to have violated the CSPA, entitling the insured to statutory damages and attorney fees.
The Fifth District seemed to reach the right result if R.C. 1345.81 applies. That section conflicts with the general provisions of the CSPA exempting insurance companies. The insurance company, in the merit briefing filed in advance of next week's oral argument, claims that R.C. 1345.81 was never an issue because the statute requires the insured to chose a written or oral estimate before the section can be invoked. The insurance company claims the insured did neither in this case. Even if that is correct, that seems to be an argument more geared to error correction, a proposition the Ohio Supreme Court generally avoids. Nevertheless, as the insured addressed, the insurance company made those arguments for the first time in the Ohio Supreme Court, so that likely will force the conflicting statutes issues to the forefront.
