Katz v. Ohio Insurance Guaranty Association, 103 Ohio St. 3d. 204, 2004–Ohio–4109 - Application of Single Per Person Limit with Multiple Wrongful Death Claimants

This suit involved a medical malpractice policy. A patient died as a result of the alleged act of malpractice. A number of surviving family members asserted claims. The physician was insured by P.I.E. Following P.I.E.’s insolvency, claims were made to the Guaranty Association. The OIGA has a statutory limit of $300,000.00 per claim. Plaintiffs contended each wrongful death claimant was entitled to recover up to $300,000.00 from OIGA. The OIGA contended a single payment of $300,000.00 was the maximum recoverable, to be shared by the various claimants. The Supreme Court rejected the plaintiffs’ efforts to impose Savoie, instead it accepted the position of the OIGA. $300,000.00 was the maximum amount recoverable, regardless of the number of wrongful death claimants.

Thompson v. OHIC Insurance Company, 103 Ohio St. 3d 119, 204–Ohio–4775 - Single Per Person Limit

The appeal involved a medical malpractice policy with limits of $1,000,000.00 per person, and a total of $3,000,000.00 per policy year. An act of alleged malpractice resulted in injury to one plaintiff. Two other plaintiffs asserted loss of consortium claims as a result of the same bodily injury. The plaintiffs contended they were entitled to recover up to $3,000,000.00 under the policy as each plaintiff had a separate claim. The policy contains specific language restricting derivative claims to the policy’s “each person limit.” Accordingly, the Supreme Court held the maximum amount recoverable under the policy was $1,000,000.00, which was to be shared by both the injured plaintiff and those making derivative claims.

Penn Traffic Co. v. AIU Ins. Co., 99 Ohio St.3d 227, 2003-Ohio-3373 - Duty to Defend

This case involved the exclusion for bodily injury to an employee of the insurer arising out of the course of employment, where the employee alleges a “substantial-certainty” intentional tort. The plaintiff alleged the employer’s failure to place a guardrail on the loading dock resulted in her falling off the loading dock while working. The plaintiff alleged the employer’s failure to place the guardrail on the loading dock made her injuries “substantially certain” to occur.
The Court interpreted a CGL policy and it had a liability coverage enhancement endorsement. The endorsement provided the company would cover bodily injury sustained by any employee of the insured arising out of or in the course of employment (provided the employee is reported under the worker’s compensation fund). The endorsement excluded coverage with respect to any act “substantially certain” to cause bodily injury. The court upheld the exclusion, reasoning the words “arise out of or in the course of employment” merely means that the injury is causally related to one’s employment. The court held a CGL policy containing this type of exclusion does not provide coverage for an employer’s liability for “substantial-certainty” intentional torts. The policy did not have stop gap coverage.

Cincinnati Ins. Co. v. Zen Design Group 329 F.3d 548 (6th Cir. 2003) - Duty to Defend

This was a declaratory judgment action involving whether the insurer had a duty to defend or indemnify its insured in a lawsuit alleging, among other claims, trademark and tradedress infringement. The district (lower) court granted the insurer’s summary judgment motion as to all claims, except for the claim of infringement of slogan. The district court also ruled since one of the claims was possibly covered, the insurer had a duty to defend. The court applied Michigan law.
The Court of Appeals affirmed the decision of the district court. The court concluded since the insurance company had a duty to defend one client, it had a duty to defend the entire case.
Although Michigan law was applied, the result would have been the same under Ohio law. The general rule in Ohio is if at least one claim among a number of claims is covered in a lawsuit, the insurer has the duty to defend the entire case.

Farmers Insurance of Columbus, Inc. v. Martin, 2005-Ohio-556 - Intentional Acts Exclusion

Farmers’ named insured shot and seriously injured a police officer.  The insured subsequently pled guilty to felonious assault.  The police officer sued the insured, claiming he negligently caused him bodily injury.  Farmers filed a declaratory judgment action based upon its policy’s intentional acts exclusion.  Both the officer and the insured argued the insured simply acted negligently and the exclusion did not apply.  The Court of Appeals upheld summary judgment in favor of Farmers, as the insured’s conviction for felonious assault was dispositive of the intentional act issues.  Felonious assault requires one to have acted “knowingly” in causing injury to another, and the court determined the level of intent required to act knowingly rose to a sufficient level to satisfy the intentional act exclusion. 

Arrowood v. Grange Ins. Co., 2003-Ohio-4075 - Intentional Acts

The issue in this case involved the application of two exclusions under a homeowner’s policy for expected/intended injury and willful violation of a penal statute.
The tortfeasor drove to the plaintiff’s house, where they had an argument. The tortfeasor left, then returned with a shotgun. He fired at least three shots in the front of the plaintiff’s house. As this was occurring, the plaintiff exited the back door of the house. As she was leaving the house, one of the bullets (fired in front of the house) ricocheted, and struck the plaintiff. The tortfeasor pleaded guilty to felonious assault with a firearm specification.
The tortfeasor’s parents had a homeowner’s policy with Grange. The policy included the following two exclusions:

1. Bodily injury… expected or intended by an insured person.
2. Personal injury arising out of a willful violation of a penal statute . . . committed by an insured person.

The court determined there was no coverage under the homeowner’s policy for the plaintiff’s claim. Although the court found both exclusions applied, the written opinion of the court is somewhat unclear. The court referred to the felonious assault charge, but within the context of the expected/intentional injury exclusion. In addressing the expected/intentional injury exclusion, the court found the tortfeasor’s actions were substantially certain to cause harm in that the injury to the plaintiff was expected. The court held for the exclusion to apply the insurer must demonstrate only that the injury was intended or expected, not that the particular victim of the injury was intended or expected.
This decision represents a departure from the Supreme Court decision in Physicians Ins. Co. of Ohio v. Swanson (1991), 58 Ohio St.3d 189. The Arrowood decision has the effect of lowering the standard of proof necessary for upholding the exclusion for intended/expected injury.

State Farm v. Totarella, 2003-Ohio-5229 - Intentional Acts

The issue in this case involved coverage under a homeowner’s policy for an assault. The insured claimed he did not intend to or expect the plaintiff would be injured, and that he was acting merely to restrain the plaintiff until the police arrived.
The incident began when the plaintiff and a friend walked past the tortfeasor’s home and knocked on his door “just for fun.” The plaintiff knocked on the door, jumped off the porch, and began running. The tortfeasor cursed at the plaintiff and his friend, chased them, and caught the plaintiff after the plaintiff fell. He then punched the plaintiff repeatedly. In his affidavit, the tortfeasor stated he did not intend to injure the plaintiff, nor did he expect the plaintiff would be injured. He further stated he believed the plaintiff was an intruder, that he feared for his and his family’s safety, and intended to restrain the plaintiff until the police officer arrived.
The court held the insurance policy did not provide coverage for the claim. The policy defined “occurrence” to mean an accident resulting in bodily injury or property damage. The policy excluded bodily injury that is expected or intended by the insured, or that is the result of willful and malicious acts.
The court addressed the argument that the plaintiff’s complaint alleged both negligent and intentional misconduct by the tortfeasor. The court reasoned that merely characterizing conduct as “negligent” does not create a question of fact with respect to the insured’s intent, since the mere insinuation of negligence in a civil complaint cannot transform what are essentially intentional torts into something “accidental” that might be covered by insurance. Finally, the court determined the facts of the case did not warrant a privilege to use force in the form of either self-defense, ejectment of a trespasser, or making a citizens arrest.
When a plaintiff is injured in an assault, the plaintiff’s attorney will often allege both intentional conduct and negligent conduct. The negligence claim is added in an attempt to obtain insurance coverage under the tortfeasor’s homeowner policy. This case is significant because it stands for the proposition that the mere stating of a claim for negligence does not transform the intentional tort of assault into a claim that might be covered by insurance.

Allstate v. Long, 2003-Ohio-61 - Intentional Acts

This case involved the question of coverage under a homeowner policy. In the underlying action, the plaintiffs sued Allstate’s insured, alleging intentional as well as negligent acts. Allstate filed a separate declaratory judgment action. The cases were then consolidated.
The plaintiffs voluntarily dismissed the tort action against Allstate’s insured. They then filed a motion to dismiss Allstate’s complaint in the declaratory judgment action, arguing the declaratory judgment action had become moot. The trial court granted the motion.
The Court of Appeals reversed this portion of the decision of the trial court. The Court of Appeals reasoned a justiciable controversy still exists, because the plaintiffs retained their right to refile their case at a later date. The Court of Appeals cited a previous Supreme Court decision, which held that a justiciable controversy still exists even when no tort action is currently pending against the insured, but is merely threatened.

Bailey v. Bevilacqua, 158 Ohio App. 3d 382, 2004-Ohio-4392 - Duties to Defend on Intentional Act and Self-Defense Claims

State Farm’s insured was involved in a scuffle with another man. When he was sued, he pled self-defense as an affirmative defense and requested for coverage from State Farm. The court of appeals determined State Farm had a duty to defend its insured, based upon the assertion of self-defense, until such time that there was a factual determination as to whether the self-defense claim was valid. This ruling did not necessarily trigger any duty to indemnify, but did trigger an initial defense.

State Farm Fire and Casualty Company v. Condon, 2005-Ohio-5208 - Penal Statute Exclusion

Condon was convicted of multiple counts of gross abuse of a corpse after taking photographs of corpses in a county morgue, allegedly for artistic purposes.  He was subsequently sued by a number of families of the deceased and he sought coverage under his business policy with State Farm.  State Farm’s policy excluded “willful violation[s] of a penal statute or ordinance committed by or with the consent of the insured.”  The criminal statute for gross abuse of a corpse requires one to have acted recklessly.  The court determined since recklessness had already been adjudicated, it was akin to acting willfully in a civil context, and therefore a willful violation was established and there was no coverage under the State Farm policy. 

Allstate v. Oldham, 2003-Ohio-924 - Bodily Injury

This case involved the question of coverage under a homeowner policy for a claim of slander, humiliation, and embarrassment. The insurer argued it had no duty to defend the underlying lawsuit because the alleged damages did not constitute “bodily injury.” The lower court granted summary judgment in favor of the insurance company.
The Court of Appeals upheld the ruling of the lower court. The complaint filed in the underlying lawsuit alleged the plaintiff suffered humiliation, embarrassment, and “other damages” as a result of the insured’s statements. The court stated the rule in Ohio is that the term “bodily injury” does not include non-physical harm such as emotional distress. On this basis, the court concluded the plaintiff’s alleged humiliation and embarrassment did not constitute a bodily injury under Ohio law. The court further concluded the claim for slander, by its very nature, suggests the absence of a bodily injury. Although the complaint also alleged “other damages,” the court concluded these “other damages” should not be construed as including bodily injury.

WAS, Inc. v. Alea London, Ltd., 161 Ohio App. 3d 111, 2005-Ohio-2533 - Duty to Defend

Plaintiff owned a bar and claims were asserted against it by patrons who were allegedly assaulted on the premises.  The policy contained an exclusion for any claims stemming from an assault and battery committed by any person, including employees of the bar.  The policy also contained an intentional act exclusion, but removed from the exclusion claims for bodily injury stemming from the use of reasonable force to protect persons or property.  The employees of the bar who were named as defendants submitted affidavits that they were acting to defend a patron from being assaulted by her husband, during the altercation in question.  The appellate court held these affidavits, combined with the policy provisions, created issues of fact as to whether the employees were acting reasonably to protect other persons, and that therefore the insurer owed the bar and its employees a duty to defend until there was a factual finding to the contrary. 

National Engineering and Contracting Company v. USF&G, 2004-Ohio-2503 - Duty to Defend

Plaintiff was a general contractor on a project to improve a wastewater treatment facility. Plaintiff was subsequently sued by its customer under a number of theories, including allegations it negligently performed its duties of a project. There was no specific accident on the project, and instead it was simply alleged the work was poorly done, resulting in corrosion and deterioration to the facility. The appellate court held this constituted an occurrence under the insured’s CGL policy. The court made it clear however, it was not extending its grant of coverage so the insured’s actual work was covered, but rather to any resultant damage which was ultimately found.

Sylvania Township Board of Trustees v. Twin City Fire Insurance Company, 2004-Ohio-483 - Duty to Defend

A township was sued by a disgruntled resident who alleged violations of Ohio’s public records and open meeting laws. The resident’s lawsuit sought injunctive relief, the assessment of fines, and an award of attorney fees. There was no request for an award of actual monetary damages. The insurer contended it owed no duty to defend or indemnify its insured as the lawsuit did not seek an award of monetary damages. The court of appeals disagreed, holding the claims for the imposition of statutory fines and attorney’s fees were sufficient to trigger a claim for damages as defined under the policy.

Auto-Owners Insurance Company v. J.C.K.C., Inc., 2004-Ohio-5186 - Insurer’s Right To Control Litigation

This declaratory judgment action stemmed from a dram shop lawsuit filed against Auto-Owners insured. Auto-Owners filed a declaratory judgment action to determine its duties to defend and indemnify its insured, while simultaneously providing the insured a defense under a reservation of rights. The insured entered into a settlement with the plaintiff for the insured’s $300,000.00 policy limits, without Auto-Owners’ consent. Subsequently the insured prevailed in its appeal of the trial court’s original coverage ruling. The plaintiff and the insured then sought to enforce the judgment against Auto-Owners.

A second declaratory judgment action was filed, on the basis the judgment was entered into without Auto-Owners’ consent. The court of appeals sided with Auto-Owners, noting Auto-Owners never denied coverage and never denied its insured a defense. At the time the judgment was entered into, Auto-Owners was still providing its insured with a defense, under a reservation of rights. The Court concluded that by entering into this judgment, the insured breached its policy with Auto-Owners, that the judgment could not be enforced against the Auto-Owners policy. The court also noted the fact Auto-Owners continued to provide the insured with a defense, preserved its right to direct and control the underlying litigation.

Jarrett v. Progressive Preferred Insurance Company, 2004-Ohio-5323 - Failure to Cooperate

Plaintiff made a claim to Progressive alleging his truck was stolen. Progressive suspected fraud and referred the claim to their Special Investigative Unit. Progressive denied plaintiff’s claim on the basis the plaintiff failed to cooperate with their claim investigation. This included failing to present for an examination under oath as required by the policy, or to provide documentation requested by the insurer. The court of appeals upheld Progressive’s denial of the claim, noting plaintiff failed to comply with the terms and conditions of his policy. The court of appeals also upheld the dismissal of plaintiff’s bad faith claim.

Sharonville v. American Employers Insurance Company, 2004-Ohio-4664 - Duty to Defend on Municipal Claims

The City of Sharonville and several past and current police officers were sued by the relatives of murder victims, alleging the murder investigations were covered up as part of a conspiracy between the murderers and law enforcement personnel. A declaratory judgment action ensued between the City and a number of its insurers. The court of appeals ruled in favor of the CGL insurers, finding there was no duty to defend or indemnify based upon intentional act exclusions contained in their policies. The appellate court ruled the law enforcement liability insurers did owe a duty to defend and indemnify, as that duty was triggered by the 1983 claims, which were asserted. The Court determined the 1983 claims were not excluded from coverage under the particular coverage forms involved.

Westfield Companies v. O.K.L. Can Lines, 155 Ohio App. 3d 747, 2003-Ohio-7151 - Duty to Defend on Advertising Injury Claim

O.K.L. was sued by a competitor on claims of patent and trade dress infringement. Westfield filed a declaratory judgment action to determine its duties owed to O.K.L. This appeal involved only the trade dress claims. The court of appeals held the trade dress infringement claims were conceivable covered by Westfield’s personal and advertising injury coverage. They concluded allegations that O.K.L. sold and marketed a product which confused buyers were sufficient to constitute an “advertisement” as defined under the policy. The court also concluded a claim of trade dress infringement by its very nature involved a component of advertising. No duties were however triggered by the patent claims.

McKean v. Howell, 2005-Ohio-721 - Late Notice

The defendant did not notify his insurer of a suit filed against him, and a default judgment was taken against him.  In plaintiff’s supplemental action the insurer argued the defendant’s failure to notify them of the suit should preclude coverage and any recovery by the plaintiff.  The appellate court disagreed, based upon the Ferrando decision and that unless the insurer could establish it was somehow prejudiced, coverage would not be precluded. 

Indiana Lumbermans’ Mutual Insurance Company v. Connor Industries, Inc., 2005-Ohio-6036 - Late Notice

An insurer brought a declaratory judgment action claiming it had no duty to defend or indemnify its insured because of a three year delay in being notified of an incident.  The appellate court upheld summary judgment in the insurer’s favor, noting the insured failed to rebut the presumption of prejudice in favor of the insurer based upon the late notice.  The court felt the insured’s delay was unreasonable and the insured failed to demonstrate that information had not been lost, or that witnesses were still available and had reliable memories. 

Aubin v. Metzger, 2003-Ohio-5130 - Alcohol Exclusions

This case involved the liquor liability exclusion under a tavern’s policy. The plaintiff was injured when he was attacked by another patron while playing pool at the tavern. The tavern’s policy contained a three-part liquor liability exclusion. The third part of the exclusion precluded coverage for bodily injury for which any insured may be liable by reason of any statute relating to the sale of alcoholic beverages.
The court discussed this exclusion in the context of R.C. §4399.18. In Ohio, claims brought against liquor permit holders based upon the actions of intoxicated persons must now be brought under this statute.
The plaintiff argued he still had a claim under a business invitee liability theory, outside of the Ohio Dram Shop Statute. The court disagreed, finding the business invitee liability claim could only be brought under R.C. §4399.18. Therefore, since the claim could only be brought under the statute, this triggered the application of the liquor liability exclusion, which applies when the insured may be held liable by reason of any statute relating to the use of alcoholic beverages.

Felton v. Nationwide Mutual Fire Insurance Company, 2005-Ohio-4792 - Residency

While Nationwide’s insureds were out of town on vacation their son house sat for them.  He brought his dogs with him while he house sat.  During this time the dogs attacked plaintiff.  The son sought coverage under his parents’ homeowner’s policy with Nationwide.  The Court of Appeals ruled he was not covered by the Nationwide policy because he was not living in the household at the time of the attack and he and his parents were not living together as a family unit.  Since his stay at the home was only temporary, residency was not established. 

Billow v. Whitesell, 2005-Ohio-904 - Permissive Use

Plaintiff was a passenger in a car driven by his friend.  The vehicle was owned by the car dealership where the friend worked as a manager.  Auto-Owners insured the dealership and their policy specifically required the permission of the named insured in order for liability coverage to be available.  The appellate court held it was plaintiff’s burden to establish permissive use.  Plaintiff’s assertion that he saw his friend previously drive other vehicles which he thought belonged to the dealership, along with the friend’s status as a manager, was insufficient based upon the testimony of the employer and other employees that the manager had never driven company owned vehicles, was not permitted to drive company owned vehicles, and in fact had a suspended driver’s license.  The court concluded there was no evidence of actual permission. 

Green v. Henderson, 2005-Ohio-284 - Permissive Use

The defendant was driving a vehicle insured through a policy issued to his girlfriend’s parents.  He was given permission to drive the vehicle by his girlfriend.  The policy stated only a named insured could give permission to operate the vehicle.  As a result there was no coverage for the defendant on a claim brought by a passenger injured in a one vehicle accident.

Medical Protective Company v. Watson, 2005-Ohio-1452  - Pre-judgment Interest

A policy’s stated liability limit was held not to include pre-judgment interest.  The court’s rationale was pre-judgment interest in large part is dictated by an insurer’s good faith efforts to settle a matter, and that any award of pre-judgment interest should still be paid by the insurer, but should not be subject to the liability limit.

Williams v. Allstate Insurance Company, 2004-Ohio-2390 - Excluded Drivers

Allstate’s insured was involved in an earlier accident, resulting in Allstate providing her with a rental car. Her rental contract specifically provided no one else was permitted to drive the car. The insured allowed her son, a non-resident relative, to operate the rental car, and he was involved in an accident which was his fault. Allstate denied liability coverage based upon the terms of the rental contract as well as the son’s status as a non-resident relative. The court of appeals determined the son did not qualify as an insured because the policy specifically required an insured driver to have permission of the owner to operate the vehicle. Since the rental company (the owner) limited permission to drive only to the mother, coverage was not afforded to the son. The court of appeals rejected an argument that coverage for the son should be precluded only if he was specifically listed as an excluded driver.

Rybacki v. Allstate Insurance Company, 2004-Ohio-2116 - Pollution Exclusion.

This was the first significant Ohio decision addressing a pollution exclusion following Supreme Court’s decision in Andersen v. Highland House Company, 93 Ohio St. 3d 547, 2001-Ohio-1607. Many have argued Andersen stands for the proposition that all pollution exclusions were unenforceable as a matter of public policy. The court of appeals took great pains to distinguish this case from Andersen, noting Andersen involved a release of carbon monoxide from a heater, whereas this particular appeal involved a ruptured underground heating oil storage tank. Accordingly, the pollution exclusion was enforced.