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Vol. 5, Iss. 12
December 7, 2016

Brian Roof:
Practicing Insurance Coverage Law In Ohio

After two installments the new “My Hometown” column is off to a great start. Its objective is (was, at least) for a coverage lawyer, practicing in a lesser-populated state, to describe some of his or her state’s key coverage decisions and aspects of practicing there that may differ from other states. The point being that, when it comes to larger states, we often know the key coverage decisions and things about practicing there that make it unique. California has Cumis. New York has §3420(d). New Jersey has Burd. Arizona has Morris. But what about the lesser-populated states? They have their own DNA too. But it is not as well known.

Brenda Wallrichs, of Lederer Weston Craig, in Cedar Rapids, took the plunge and got “My Hometown” off the ground. Brenda did a wonderful job of discussing how Iowa addresses a number of coverage issues. Next up was Jim Semple, of Cooch and Taylor in Wilmington, who masterfully guided readers through Delaware law on several coverage fronts.


I’ve decided to make a change to the “My Hometown” column. Instead of only lawyers in lesser-populated states discussing the ins and outs of practicing there, lawyers in all states will discuss the key aspects, and peculiarities, of their hometowns. One reason for this change is that next year I want to get the perspective of policyholder lawyers – and I had a hard time locating lawyers in smaller states that focus exclusively on insurance coverage.

Thank you to Brian Roof, of Sutter O’Connell in Cleveland, for agreeing to tackle Ohio – no easy task as the Buckeye state produces a tremendous number of coverage decisions.


Ohio insurance law can be confusing on certain coverage issues because the Ohio Supreme Court has not clearly decided the issue nor provided clear guidance. Therefore, attorneys, appellate courts, and trial courts are sometimes left to grapple, which can lead to inconsistent results. I will address some of these issues.

For a bad faith claim, the Ohio Supreme Court has concluded that “[a]n insurer fails to exercise good faith in the processing of a claim of its insured where its refusal to pay the claim is not predicated upon circumstances that furnish reasonable justification therefor.” Zoppo v. Homestead Ins. Co., 71 Ohio St.3d 552 (1994) (syllabus, ¶ 1). The Ohio Supreme Court, however, has not answered the question of whether an insured can pursue a bad faith claim against an insurer, despite the insurer correctly denying coverage. In this vacuum, state and federal courts have developed two lines of authority. Compare Bullet Trucking, Inc. v. Glen Falls Ins. Co., 84 Ohio App.3d 327, 333-34 (2nd Dist. 1992) (concluding that an insured does not need to succeed on its breach of contract claim to pursue a bad faith claim), with Pasco v. State Automobile Mut. Ins. Co., 10th Dist. No. 99AP-430, 1999 Ohio App. LEXIS 6492, *17 (Dec. 21, 1999) (denial of coverage is per se reasonable if the reason for the denial was correct).

In an attempt to reconcile these two contrasting decisions, one federal court contends there is no split of authority because, whether an insured must be successful on its breach of contract claim to recover on its bad faith claim is distinct from whether there must be coverage to maintain a bad faith claim. See Toledo-Lucas County Port Authority v. Axa Marine & Aviation Ins. (UK) Ltd., 220 F. Supp. 2d 868, 873 (N.D. Ohio 2002), rev’d on other grounds, 368 F.3d 524 (6th Cir. 2004). An Ohio appellate court also tried to reconcile this split, contending that there were two types of bad faith claims – one where the insurer had no lawful basis to deny coverage, which is based on proving the contract claim, and the other where the insurer had no reasonable justification to fail to determine whether its refusal had a lawful basis, which does not require success on the coverage claim. Ballard v. Nationwide Ins. Co., 7th Dist. No. 14 MA 85, 2015-Ohio-4474, ¶18. The issue is still up in the air.

The Ohio Supreme Court also has not decided whether Ohio’s anti-indemnity statute, R.C. 2305.31, applies to additional insured provisions of policies. Ohio appellate courts generally have concluded that an additional insured provision will not violate R.C. 2305.31, as long as the additional insured provision in the contract and the additional insured language in the policy do not require coverage for the additional insured’s own negligence. See The Dayton Power and Light Co. v. Enerfab, Inc., 2nd Dist. No. 21512, 2007-Ohio-432, ¶¶ 20, 23; Liberty Mut. Ins. Group v. Travelers Property Cas., 8th Dist. No. 80560, 2002-Ohio-4280, ¶ 16; Buckeye Union Ins. Co. v. Zavarella Bros. Constr. Co., 121 Ohio App. 3d 147 (8th Dist. 1997). Other courts have not agreed and noted the confusion in Ohio law on this issue. See Brzeczek v. Standard Oil Co., 4 Ohio App. 3d 209, 213 (1986); Toledo Edison Co. v. ABC Supply Co., 46 Fed. Appx. 757, 763 (6th Cir. 2002). The lack of clarity from the Ohio Supreme Court has resulted in policyholders and insurers continuing to dispute the application of the additional insured provisions.

Another issue without guidance from the Supreme Court is whether an insurer can recoup defense costs if successful on indemnification. But the Sixth Circuit, in applying Ohio law, concluded that an insurer can recoup defense costs with a properly worded reservation of rights letter based on the implied in contract theory. See United Nat’l Ins. v. SST Fitness Corp., 309 F.3d 914, 921 (6th Cir. 2002). Adding to the confusion, one Ohio appellate court allowed for the insurer to recover defense costs under the theory of restitution. Chiquita Brands Int’l, Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh PA, 1st Dist. No. C-140492, 2015-Ohio-5477, ¶24.

The Ohio Supreme Court and the Ohio Legislature have created confusion on a different coverage issue. Ohio was one of the earlier states to weigh in on whether a policyholder could obtain an insurer’s privileged documents in a claims file. In Boone v. Vanliner Ins. Co. (2001), 91 Ohio St. 3d 209, 213, the Ohio Supreme Court allowed a plaintiff in a bad faith claim against an insurer to discover privileged information in the insurer’s claims files that existed prior to the denial of coverage because the “claims file materials that show an insurer’s lack of good faith in denying coverage are unworthy of protection.” The Ohio Legislature attempted to limit the impact of the Boone decision by adding Subpart (2) to R.C. 2317.02. The new subpart requires that the insured must first establish a prima facie showing of bad faith, fraud, or criminal conduct before the insurer’s attorney can be compelled to testify regarding attorney-client communications. Courts are now left with reconciling R.C. 2317.02 (testimony) and Boone (documents) on whether policyholders are entitled to privileged communications in a bad faith action. See Little Italy Development, LLC v. Chicago Title Insurance Co., Case No. 1: 11CV112, 2011 U.S. Dist. Lexis 119698 (N.D. Ohio Oct. 17, 2011).

Although Ohio is one of the jurisdictions that have concluded that the inferred-intent doctrine, which is applicable to the intentional-acts exclusion, is not limited to just sexual molestation and murder, there are still many unanswered questions on its application. See Allstate Ins. Co. v. Campbell (2010), 128 Ohio St. 3d 186. For example, the Ohio Supreme Court did not broadly expand the doctrine, and instead vaguely concluded that the inferred-intent doctrine “applies only in cases in which the insured’s intentional act and the harm caused are intrinsically tied so that the act has necessarily resulted in the harm.” Id. at 197. Therefore, Ohio lower courts and attorneys are left with the issue of how broadly to apply the inferred-intent doctrine.

Hopefully the above summary of some these insurance coverage issues will help you in your analysis and legal research when faced with one of them in Ohio.

Brian Roof practices in Cleveland and is Chair of Sutter O’Connell’s Insurance Coverage practice with over 17 years of experience working in insurance coverage litigation. His insurance coverage practice is devoted to first-party and third-party coverage disputes involving CGL, professional liability, D&O and E&O policies. He is a member of DRI and the Professional Liability Underwriting Society and serves on the Advisory Group of the U.S. District Court, Northern District of Ohio. He also is a Delegate to the Eighth Judicial Conference. Brian is a frequent author and presenter on insurance coverage matters. Finally, Brian is very active in his community serving as President of the Board of Directors of the non-profit organization Linking Employment, Ability and Potential and serving on the Board of Directors of Citizens Academy.

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