Duty to Defend – Lost Insurance Policy
Sharonville v. Am. Employers Ins. Co., (2006) 109 Ohio St.3d 186:
The Ohio Supreme Court handed down a decision which revisited the well settled issue of the duty to defend and duty to indemnify and, in that context, it is always noteworthy to review pronouncements from the Ohio Supreme Court dealing with these important issues. In addition, the Court also dealt with an issue of an insurance policy that was lost and the manner in which evidence could or could not be produced to prove the terms of the insurance contract.
The basic facts were that a lawsuit had been filed against police officers alleging violation of civil rights and conspiracy under state law as well as claims for spoliation and intentional infliction of emotional distress. Subsequent to the initiation of that lawsuit, the city and the named police officers filed their own declaratory judgment action seeking to have the various insurance companies that had insured them during the period under scrutiny (1979-2002) adjudicated as being required to defend the action.
Curtin & Associates, LLP oftentimes has conversations with clients as it pertains to the analytical steps associated with the discharge of this important obligation on behalf of a liability insurance carrier. Sharonville reviewed the analytical process by first noting that it is imperative and a first step to examine the language of the policy. The policies at issue included the following language discussed in paragraph 7 of the opinion:
“Those policies stated that coverage included the defense either of groundless, false, or fraudulent claims or of “any” suit and the defense of claims for personal injury and wrongful acts.”
The more narrow the language in the insurance policy basically defines the scope of potential insurance coverage under the concept of duty to defend. In the Sharonville matter, the Court placed heavy emphasis upon the fact that the policies agreed to defend “any” suit and, therefore, this was the first step in the analysis.
The Court thereafter reviewed the duty to defend which was summarized in paragraph 13 of the opinion wherein the Court stated the following:
“An insurer’s duty to defend is broader than and distinct from its duty to indemnify. (citation omitted) An insurer has an absolute duty to defend an action when the complaint contains an allegation in any one of its claims that could arguably be covered by the insurance policy, even in part and even if the allegations are groundless, false, or fraudulent. (citation omitted) Once an insurer must defend one claim within a complaint, it must defend the insured on all of the other claims within the complaint, even if they bear no relation to the insurance-policy coverage. (citation omitted) An insurer need not defend any action or any claims within the complaint when all the claims are clearly and indisputably outside of the contracted policy coverage. (citation omitted) The duty to defend is further heightened when the insurer expressly states that it will defend claims that are groundless, false, or fraudulent. (citation omitted) The duty to defend an action is not determined by the action’s ultimate outcome or the insurer’s ultimate liability. (citation omitted)”
The Court concluded that given the broad nature of the language in the insurance policy, coverage was extended and the remaining issue dealt with an insurance policy that was lost which apparently served as the justification for the liability insurance carrier denying coverage for a policy period between 1980-1981.
The Court set forth the underlying principles and rules of analysis as it pertains to this factual/legal issue and stated in paragraph 19 of its opinion, the following:
“It is undisputed that one seeking to recover on an insurance policy generally has the burden of proving a loss and demonstrating coverage under the policy. (citation omitted) Thus, an insured seeking benefits must prove the existence of a policy covering the relevant period. (citations omitted) When the document of insurance has been lost or destroyed, the existence of coverage may be proved by evidence other than the policy itself when the loss or destruction was not occasioned by bad faith on the part of the proponent of the document. Evid.R. 1004. ‘The coverage provided by destroyed or lost policies can be proven through use of circumstantial evidence (i.e. payment records, renewal letters, miscellaneous correspondence, or prior claims files).’ 14 Couch, supra, Section 208:30. We hold that when an insurance policy is missing, lost or destroyed, its terms may be proved by secondary evidence, unless the record contains evidence that the policy was lost or destroyed in bad faith.”
The Court concluded that there was sufficient evidence that the lost policy existed and found that coverage applied for the policy period from 1980 through 1981, despite the fact that the policy had been lost.
Application of Moore v. State Auto. Mut. Ins. Co. (2000) 88 Ohio St.3d 27
Hedges v. Nationwide Mut. Ins. Co. (2006) 109 Ohio St.3d 70:
The prolific world of uninsured/underinsured motorist coverages and the breadth and scope of the coverages continues in the decision cited herein. In declining to overrule the Moore decision, the Ohio Supreme Court stated in paragraphs 27 and 28 of its opinion, the following:
“Applying the Galatis test, we decline to overrule Moore, but instead limit Moore to insurance contracts governed by the S.B. 20 version of R.C. 3937.18. We cannot say that Moore was wrongfully decided, for the court did not err in finding the S.B. 20 language at issue in that case to be ambiguous. Furthermore, effective October 31, 2001, to dispel any question of its intent, the General Assembly expressly superseded the holdings of Moore and Sexton when it enacted Am.Sub.S.B. No. 97 (‘In enacting this Act, it is the intent of the General Assembly to ... supersede the holdings of the Ohio Supreme Court in ... Sexton ... and [its] progeny’). Overruling Moore would have no practical effect in light of this legislative action and our ruling today.
Accordingly, we hold that the interpretation of R.C. 3937.18(A) in Moore applies only to the 1994 S.B.20 version of the statute. Thus, Moore does not apply to the 1997 H.B. 261 version of R.C. 3937.18(A).”
Motion for a New Trial;
Specificity for Granting of Motion Must be Articulated by Trial Court
Longo v. Nationwide Ins. Co. (2006), 165 Ohio App.3d 371:
The Seventh District Court of Appeals dealt with a situation wherein an insured had sued their insurer for underinsured motorist benefits. The case proceeded to trial and a verdict was rendered in favor of the underinsured motorist carrier. The insured filed a motion for a new trial and the trial court, without explanation, granted the motion for a new trial. On appeal, Nationwide Insurance Company challenged the trial court’s judgment entry by virtue of citation to Antal v. Olde Worlde Prods., Inc. (1984), 9 Ohio St.3d 144, arguing, in part, that the opinion lacked specificity as it pertains to the rationale granting the new trial. The Court, citing Antal stated in paragraph 13 of its opinion the standard and indicated the following:
“In Antal, the Ohio Supreme Court held: ‘When granting a motion for a new trial based on the contention that the verdict is not sustained by the weight of the evidence, the trial court must articulate the reasons for so doing in order to allow a reviewing court to determine whether the trial court abused its discretion in ordering a new trial.’”
The trial court thereafter went on to explain, citing the Ohio Supreme Court’s decision in Antal, the logical underpinnings behind such a rule and indicated in paragraph 17 of its opinion, the following:
“Were a trial court to be permitted the freedom to disregard a jury’s verdict by simply invoking the apothegm that the verdict ‘is not sustained by the weight of the evidence,’ the jury trial itself could become a futile prelude. Furthermore, without some articulated basis for granting a new trial, the trial court’s decision is virtually insulated from meaningful appellate review.”
The Court reversed the lower court’s entry of a new trial requesting that it reconsider its prior decision and, if it did reach a similar decision, then to set forth the requirements as detailed by the Ohio Supreme Court in Antal.
Assumption of the Risk – Products Liability
Ziegler v. Avco Corp. (2005) 165 Ohio App.3d 319:
The Sixth District Court of Appeals set forth a decision dealing with traditional assumption of the risk issues that are always worthy of review and, therefore, are briefly touched upon herein. The Court stated in its syllabus, the following:
“1. ‘Express assumption of risk’ involves an affirmatively demonstrated, and presumably bargained upon, choice by the plaintiff to relieve the defendant of his legal duty toward the plaintiff.
2. ‘Primary assumption of the risk’ involves risks so inherent in an activity that they cannot be eliminated.
3. ‘Implied assumption of risk’ is closely related, if not interwoven, with the concept of contributory negligence; acceptance of a known risk is implied by the conduct of a plaintiff under the circumstances.
4. Conceptually, ‘primary assumption of risk’ is a conclusion that a defendant owes no duty to a plaintiff.
5. In negligence cases, although express and primary assumption of the risk remain viable defenses, implied assumption of risk is merged with contributory negligence.
6. Comparative negligence is inapplicable in a products liability case
...
9. Traditional basis for assumption of risk is a matter of knowledge of the danger and of intelligent acquiescence in it; a plaintiff must both know and appreciate the risk to which he or she is exposed.
10. Under ordinary circumstances the plaintiff will not be taken to assume any risk of either activities or conditions of which he has no knowledge; moreover, he must not only know of the facts which create the danger, but he must comprehend and appreciate the nature of the danger he confronts.”
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 – Lost Insurance Policy
Sharonville v. Am. Employers Ins. Co., (2006) 109 Ohio St.3d 186:
The Ohio Supreme Court handed down a decision which revisited the well settled issue of the duty to defend and duty to indemnify and, in that context, it is always noteworthy to review pronouncements from the Ohio Supreme Court dealing with these important issues. In addition, the Court also dealt with an issue of an insurance policy that was lost and the manner in which evidence could or could not be produced to prove the terms of the insurance contract.
The basic facts were that a lawsuit had been filed against police officers alleging violation of civil rights and conspiracy under state law as well as claims for spoliation and intentional infliction of emotional distress. Subsequent to the initiation of that lawsuit, the city and the named police officers filed their own declaratory judgment action seeking to have the various insurance companies that had insured them during the period under scrutiny (1979-2002) adjudicated as being required to defend the action.
Curtin & Associates, LLP oftentimes has conversations with clients as it pertains to the analytical steps associated with the discharge of this important obligation on behalf of a liability insurance carrier. Sharonville reviewed the analytical process by first noting that it is imperative and a first step to examine the language of the policy. The policies at issue included the following language discussed in paragraph 7 of the opinion:
“Those policies stated that coverage included the defense either of groundless, false, or fraudulent claims or of “any” suit and the defense of claims for personal injury and wrongful acts.”
The more narrow the language in the insurance policy basically defines the scope of potential insurance coverage under the concept of duty to defend. In the Sharonville matter, the Court placed heavy emphasis upon the fact that the policies agreed to defend “any” suit and, therefore, this was the first step in the analysis.
The Court thereafter reviewed the duty to defend which was summarized in paragraph 13 of the opinion wherein the Court stated the following:
“An insurer’s duty to defend is broader than and distinct from its duty to indemnify. (citation omitted) An insurer has an absolute duty to defend an action when the complaint contains an allegation in any one of its claims that could arguably be covered by the insurance policy, even in part and even if the allegations are groundless, false, or fraudulent. (citation omitted) Once an insurer must defend one claim within a complaint, it must defend the insured on all of the other claims within the complaint, even if they bear no relation to the insurance-policy coverage. (citation omitted) An insurer need not defend any action or any claims within the complaint when all the claims are clearly and indisputably outside of the contracted policy coverage. (citation omitted) The duty to defend is further heightened when the insurer expressly states that it will defend claims that are groundless, false, or fraudulent. (citation omitted) The duty to defend an action is not determined by the action’s ultimate outcome or the insurer’s ultimate liability. (citation omitted)”
The Court concluded that given the broad nature of the language in the insurance policy, coverage was extended and the remaining issue dealt with an insurance policy that was lost which apparently served as the justification for the liability insurance carrier denying coverage for a policy period between 1980-1981.
The Court set forth the underlying principles and rules of analysis as it pertains to this factual/legal issue and stated in paragraph 19 of its opinion, the following:
“It is undisputed that one seeking to recover on an insurance policy generally has the burden of proving a loss and demonstrating coverage under the policy. (citation omitted) Thus, an insured seeking benefits must prove the existence of a policy covering the relevant period. (citations omitted) When the document of insurance has been lost or destroyed, the existence of coverage may be proved by evidence other than the policy itself when the loss or destruction was not occasioned by bad faith on the part of the proponent of the document. Evid.R. 1004. ‘The coverage provided by destroyed or lost policies can be proven through use of circumstantial evidence (i.e. payment records, renewal letters, miscellaneous correspondence, or prior claims files).’ 14 Couch, supra, Section 208:30. We hold that when an insurance policy is missing, lost or destroyed, its terms may be proved by secondary evidence, unless the record contains evidence that the policy was lost or destroyed in bad faith.”
The Court concluded that there was sufficient evidence that the lost policy existed and found that coverage applied for the policy period from 1980 through 1981, despite the fact that the policy had been lost.
Application of Moore v. State Auto. Mut. Ins. Co. (2000) 88 Ohio St.3d 27
Hedges v. Nationwide Mut. Ins. Co. (2006) 109 Ohio St.3d 70:
The prolific world of uninsured/underinsured motorist coverages and the breadth and scope of the coverages continues in the decision cited herein. In declining to overrule the Moore decision, the Ohio Supreme Court stated in paragraphs 27 and 28 of its opinion, the following:
“Applying the Galatis test, we decline to overrule Moore, but instead limit Moore to insurance contracts governed by the S.B. 20 version of R.C. 3937.18. We cannot say that Moore was wrongfully decided, for the court did not err in finding the S.B. 20 language at issue in that case to be ambiguous. Furthermore, effective October 31, 2001, to dispel any question of its intent, the General Assembly expressly superseded the holdings of Moore and Sexton when it enacted Am.Sub.S.B. No. 97 (‘In enacting this Act, it is the intent of the General Assembly to ... supersede the holdings of the Ohio Supreme Court in ... Sexton ... and [its] progeny’). Overruling Moore would have no practical effect in light of this legislative action and our ruling today.
Accordingly, we hold that the interpretation of R.C. 3937.18(A) in Moore applies only to the 1994 S.B.20 version of the statute. Thus, Moore does not apply to the 1997 H.B. 261 version of R.C. 3937.18(A).”
Motion for a New Trial;
Specificity for Granting of Motion Must be Articulated by Trial Court
Longo v. Nationwide Ins. Co. (2006), 165 Ohio App.3d 371:
The Seventh District Court of Appeals dealt with a situation wherein an insured had sued their insurer for underinsured motorist benefits. The case proceeded to trial and a verdict was rendered in favor of the underinsured motorist carrier. The insured filed a motion for a new trial and the trial court, without explanation, granted the motion for a new trial. On appeal, Nationwide Insurance Company challenged the trial court’s judgment entry by virtue of citation to Antal v. Olde Worlde Prods., Inc. (1984), 9 Ohio St.3d 144, arguing, in part, that the opinion lacked specificity as it pertains to the rationale granting the new trial. The Court, citing Antal stated in paragraph 13 of its opinion the standard and indicated the following:
“In Antal, the Ohio Supreme Court held: ‘When granting a motion for a new trial based on the contention that the verdict is not sustained by the weight of the evidence, the trial court must articulate the reasons for so doing in order to allow a reviewing court to determine whether the trial court abused its discretion in ordering a new trial.’”
The trial court thereafter went on to explain, citing the Ohio Supreme Court’s decision in Antal, the logical underpinnings behind such a rule and indicated in paragraph 17 of its opinion, the following:
“Were a trial court to be permitted the freedom to disregard a jury’s verdict by simply invoking the apothegm that the verdict ‘is not sustained by the weight of the evidence,’ the jury trial itself could become a futile prelude. Furthermore, without some articulated basis for granting a new trial, the trial court’s decision is virtually insulated from meaningful appellate review.”
The Court reversed the lower court’s entry of a new trial requesting that it reconsider its prior decision and, if it did reach a similar decision, then to set forth the requirements as detailed by the Ohio Supreme Court in Antal.
Assumption of the Risk – Products Liability
Ziegler v. Avco Corp. (2005) 165 Ohio App.3d 319:
The Sixth District Court of Appeals set forth a decision dealing with traditional assumption of the risk issues that are always worthy of review and, therefore, are briefly touched upon herein. The Court stated in its syllabus, the following:
“1. ‘Express assumption of risk’ involves an affirmatively demonstrated, and presumably bargained upon, choice by the plaintiff to relieve the defendant of his legal duty toward the plaintiff.
2. ‘Primary assumption of the risk’ involves risks so inherent in an activity that they cannot be eliminated.
3. ‘Implied assumption of risk’ is closely related, if not interwoven, with the concept of contributory negligence; acceptance of a known risk is implied by the conduct of a plaintiff under the circumstances.
4. Conceptually, ‘primary assumption of risk’ is a conclusion that a defendant owes no duty to a plaintiff.
5. In negligence cases, although express and primary assumption of the risk remain viable defenses, implied assumption of risk is merged with contributory negligence.
6. Comparative negligence is inapplicable in a products liability case
...
9. Traditional basis for assumption of risk is a matter of knowledge of the danger and of intelligent acquiescence in it; a plaintiff must both know and appreciate the risk to which he or she is exposed.
10. Under ordinary circumstances the plaintiff will not be taken to assume any risk of either activities or conditions of which he has no knowledge; moreover, he must not only know of the facts which create the danger, but he must comprehend and appreciate the nature of the danger he confronts.”
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.