Duty to Defend – Analytical Tools Utilized in Determining the Duty to Defend
Sharonsville v. American Employers Insurance Company, (2004) 158 Ohio App.3d 576
Judge Mark P. Painter rendered a decision on behalf of the First District Court of Appeals which reviewed, in part, the standards associated with the duty to defend. It should be noted that Judge Painter’s opinions are typically well reasoned and well written and, therefore, warrant inclusion in this Newsletter.
The Court reviewed the analytical tools associated with a determination of the existence of a duty to defend on behalf of a liability insurance carrier. In its syllabus, the Court stated the following:
“1. Where the allegations state a claim that falls potentially or arguably within the liability insurance coverage, the insurer must defend the insured in the action; but the insurer need not provide a defense if there is no set of facts alleged that would invoke coverage.
2. The liability insurer’s duty to defend exists even though the underlying action may eventually produce a result that does not trigger the duty to indemnify under the policy.
...
4. Insured city could not prove facts outside the complaint against it to establish negligence and, therefore, a duty to defend in suit by murder victims’ relatives alleging that city, police officer, and former and current police chiefs engaged in intentional destruction of evidence and the purposeful hindrance of a murder investigation; the language of the complaint determined coverage.
5. Courts must look to the language of the underlying complaint to determine possible coverage and the liability insurer’s duty to defend.
...
11. The claim determines the liability insurer’s duty to defend, and it is irrelevant that the insurer may get information from the insured, or from anyone else, which indicates, or even demonstrates, that the injury is not in fact covered.”
OACTA LEGISLATIVE ALERT
December 22, 2004
By Scott Gilliam, OACTA Government Affairs Chair
Tort Reform Enacted by Ohio General Assembly
After nearly two years of consideration, on December 9, 2004 the Ohio General Assembly passed and sent to Governor Taft a sweeping measure that makes major reforms to Ohio's civil justice system. Amended Substitute Senate Bill 80 (Am. Sub. SB 80) passed the Ohio House of Representatives by a vote of 65-32, followed by a 19-11 concurrence vote by the Ohio Senate. The early-morning passage (2:30 a.m. on December 9) occurred after several days of intense lobbying and negotiation between the House and the Senate. Several issues nearly brought the bill to a halt, including a proposal by the Ohio Academy of Trial Lawyers that would have given a special priority to personal injury lawyers for recovery of their attorney fees in subrogation cases and an attempt by the trial lawyers to impose a special (higher) cap on insurers for punitive damages claims in bad faith cases. The insurer bad faith provision was eventually removed from the bill and the subrogation proposal was replaced with a provision creating a legislative study commission (the "Ohio Subrogation Rights Commission") to investigate the issues posed by the Ohio Supreme Court's recent ruling in Northern Buckeye Education Council Group Health Benefits v. Lawson (193 Ohio St. 3d. 188).
The final product makes a number of reforms to Ohio's civil justice system, including the following:
· Permits evidence of non-use of a seat belt to be introduced in tort actions for the purpose of reducing noneconomic damage awards.
· Permits the introduction of collateral sources of payment to plaintiffs for damages.
· Limits the recovery of punitive damages to two times compensatory damages for large employers; for small employers and individuals, the limit is the lesser of two times compensatory damages, 10 percent of the employer's or individual's net worth, or $350,000.
· Limits the recovery of non-economic damages for non-catastrophic injuries to the greater of $250,000 or three times the amount of economic damages, up to $350,000.
· Prohibits the use of certain evidence in determining non-economic damages for catastrophic injuries.
· Establishes a 10-year statue of repose for product liability and construction-related claims.
· Provides immunity from civil damages for certain defendants on obesity claims.
· Eliminates the consumer expectation test as a stand-alone test for design defect causes of action and integrates the test into the list of factors to be considered in the risk-utility test for design defect causes of action.
· Strengthens the "no feasible alternative design or formulation" defense for design defect causes of action by eliminating the "unreasonableness" exception.
· Abrogates all common law product liability causes of action by superseding the holding of the Ohio Supreme Court in Carrel v. Allied Products Corporation (1997), 78 Ohio St.3d 284.
A more detailed summary of the bill is attached. Those wishing to review the enacted bill itself may view it at h. Governor Taft is expected to sign the bill before the end of the year, which will become effective 90 days thereafter.
New Standard for Proving Employer Intentional Torts Enacted by Ohio General Assembly
In the closing days of the lame duck session the Ohio General Assembly also passed and sent to Governor Taft legislation to codify what must be proven to establish an employer intentional tort in Ohio. The legislation, Amended House Bill 498 (Am. HB 498) attempts to add clarity to an area of the law that has been the subject of prior legislative action and several Ohio Supreme Court rulings. The bill incorporates the common law requirement that the employer must have committed the tortious act "with the intent to injure another or with the belief that the injury was substantially certain to occur" and defines "substantially certain" to mean "that an employer acts with deliberate intent to cause an employee to suffer an injury, a disease, a condition, or death." The bill also provides that "deliberate removal by an employer of an equipment safety guard or deliberate misrepresentation of a toxic or hazardous substance" creates a rebuttable presumption that the removal or misrepresentation was committed with intent to injure another if an injury or an occupational disease or condition occurs as a direct result.
Specifically excluded from operation of the new law are claims arising during the course of employment involving discrimination, civil rights, retaliation, harassment in violation of Chapter 4112 of the Revised Code, intentional infliction of emotional distress not compensable under Chapters 4121 and 4123 of the Revised Code, contract, promissory estoppel, or defamation.
Those wishing to review the enacted bill itself may view it at h. Governor Taft is expected to sign the bill before the end of the year, which will become effective 90 days thereafter. The author of the bill is State Rep. Keith Faber (R-Celina), a member of OACTA.
The information contained in this newsletter is not a legal opinion and is for informational purposes only. Specific questions should be directed to an attorney for a legal opinion.
Duty to Defend – Analytical Tools Utilized in Determining the Duty to Defend
Sharonsville v. American Employers Insurance Company, (2004) 158 Ohio App.3d 576
Judge Mark P. Painter rendered a decision on behalf of the First District Court of Appeals which reviewed, in part, the standards associated with the duty to defend. It should be noted that Judge Painter’s opinions are typically well reasoned and well written and, therefore, warrant inclusion in this Newsletter.
The Court reviewed the analytical tools associated with a determination of the existence of a duty to defend on behalf of a liability insurance carrier. In its syllabus, the Court stated the following:
“1. Where the allegations state a claim that falls potentially or arguably within the liability insurance coverage, the insurer must defend the insured in the action; but the insurer need not provide a defense if there is no set of facts alleged that would invoke coverage.
2. The liability insurer’s duty to defend exists even though the underlying action may eventually produce a result that does not trigger the duty to indemnify under the policy.
...
4. Insured city could not prove facts outside the complaint against it to establish negligence and, therefore, a duty to defend in suit by murder victims’ relatives alleging that city, police officer, and former and current police chiefs engaged in intentional destruction of evidence and the purposeful hindrance of a murder investigation; the language of the complaint determined coverage.
5. Courts must look to the language of the underlying complaint to determine possible coverage and the liability insurer’s duty to defend.
...
11. The claim determines the liability insurer’s duty to defend, and it is irrelevant that the insurer may get information from the insured, or from anyone else, which indicates, or even demonstrates, that the injury is not in fact covered.”
OACTA LEGISLATIVE ALERT
December 22, 2004
By Scott Gilliam, OACTA Government Affairs Chair
Tort Reform Enacted by Ohio General Assembly
After nearly two years of consideration, on December 9, 2004 the Ohio General Assembly passed and sent to Governor Taft a sweeping measure that makes major reforms to Ohio's civil justice system. Amended Substitute Senate Bill 80 (Am. Sub. SB 80) passed the Ohio House of Representatives by a vote of 65-32, followed by a 19-11 concurrence vote by the Ohio Senate. The early-morning passage (2:30 a.m. on December 9) occurred after several days of intense lobbying and negotiation between the House and the Senate. Several issues nearly brought the bill to a halt, including a proposal by the Ohio Academy of Trial Lawyers that would have given a special priority to personal injury lawyers for recovery of their attorney fees in subrogation cases and an attempt by the trial lawyers to impose a special (higher) cap on insurers for punitive damages claims in bad faith cases. The insurer bad faith provision was eventually removed from the bill and the subrogation proposal was replaced with a provision creating a legislative study commission (the "Ohio Subrogation Rights Commission") to investigate the issues posed by the Ohio Supreme Court's recent ruling in Northern Buckeye Education Council Group Health Benefits v. Lawson (193 Ohio St. 3d. 188).
The final product makes a number of reforms to Ohio's civil justice system, including the following:
· Permits evidence of non-use of a seat belt to be introduced in tort actions for the purpose of reducing noneconomic damage awards.
· Permits the introduction of collateral sources of payment to plaintiffs for damages.
· Limits the recovery of punitive damages to two times compensatory damages for large employers; for small employers and individuals, the limit is the lesser of two times compensatory damages, 10 percent of the employer's or individual's net worth, or $350,000.
· Limits the recovery of non-economic damages for non-catastrophic injuries to the greater of $250,000 or three times the amount of economic damages, up to $350,000.
· Prohibits the use of certain evidence in determining non-economic damages for catastrophic injuries.
· Establishes a 10-year statue of repose for product liability and construction-related claims.
· Provides immunity from civil damages for certain defendants on obesity claims.
· Eliminates the consumer expectation test as a stand-alone test for design defect causes of action and integrates the test into the list of factors to be considered in the risk-utility test for design defect causes of action.
· Strengthens the "no feasible alternative design or formulation" defense for design defect causes of action by eliminating the "unreasonableness" exception.
· Abrogates all common law product liability causes of action by superseding the holding of the Ohio Supreme Court in Carrel v. Allied Products Corporation (1997), 78 Ohio St.3d 284.
A more detailed summary of the bill is attached. Those wishing to review the enacted bill itself may view it at h. Governor Taft is expected to sign the bill before the end of the year, which will become effective 90 days thereafter.
New Standard for Proving Employer Intentional Torts Enacted by Ohio General Assembly
In the closing days of the lame duck session the Ohio General Assembly also passed and sent to Governor Taft legislation to codify what must be proven to establish an employer intentional tort in Ohio. The legislation, Amended House Bill 498 (Am. HB 498) attempts to add clarity to an area of the law that has been the subject of prior legislative action and several Ohio Supreme Court rulings. The bill incorporates the common law requirement that the employer must have committed the tortious act "with the intent to injure another or with the belief that the injury was substantially certain to occur" and defines "substantially certain" to mean "that an employer acts with deliberate intent to cause an employee to suffer an injury, a disease, a condition, or death." The bill also provides that "deliberate removal by an employer of an equipment safety guard or deliberate misrepresentation of a toxic or hazardous substance" creates a rebuttable presumption that the removal or misrepresentation was committed with intent to injure another if an injury or an occupational disease or condition occurs as a direct result.
Specifically excluded from operation of the new law are claims arising during the course of employment involving discrimination, civil rights, retaliation, harassment in violation of Chapter 4112 of the Revised Code, intentional infliction of emotional distress not compensable under Chapters 4121 and 4123 of the Revised Code, contract, promissory estoppel, or defamation.
Those wishing to review the enacted bill itself may view it at h. Governor Taft is expected to sign the bill before the end of the year, which will become effective 90 days thereafter. The author of the bill is State Rep. Keith Faber (R-Celina), a member of OACTA.
The information contained in this newsletter is not a legal opinion and is for informational purposes only. Specific questions should be directed to an attorney for a legal opinion.