Ohio Supreme Court Shows Greater Divide as it Rules on Insurance Coverage Dispute

While the Ohio Supreme Court ruled unanimously in the Motorists Mutual Insurance Company vs. Ironics, Inc., 2022-OHIO-841 case that Motorists Mutual must provide coverage for to a metal supplier that damaged nearly four million pounds of glass containers, it did not do so without dissention on the majority opinion. In what is becoming an alarming trend due to the division on the Court, this is another example of Chief Justice Maureen O’Connor ruling with the 3 “activist” justices on their interpretation of the law. We are seeing a new “gang of four” emerge in the current Court which is bringing back memories of the Court in the late 90s and early 2000s.

This calls attention to the need for OIA members to be engaged in the Ohio Supreme Court elections. OIAPAC has supported candidates with a judicial philosophy of restraint, interpretation of the law and deference to the legislature as opposed to activist jurists who supersede the legislature’s policy decisions by inserting their opinions into rulings. OIAPAC is proactively supporting Sharon Kennedy for Chief Justice and the re-election efforts of Pat DeWine and Pat Fischer. We encourage you to learn more about these races and the importance of the Ohio Supreme Court on your clients, stability in the insurance industry and independent agency system.

Here is a summary of Motorists Mutual Insurance Company vs. Ironics, Inc., 2022-OHIO-841 case as reviewed by Gongwer News Service.

“A unanimous Ohio Supreme Court has determined an insurance company must provide coverage to a metal supplier that damaged nearly four million pounds of glass containers.

The court found that the umbrella policy purchased by Ironics Inc. from Motorists Mutual Insurance provides coverage for its accidental contamination of Owens-Brockway Glass Container bottles.

Owens in 2016 contracted with Ironics to purchase a product to make its bottles amber and brown, the high court’s media arm reported.

However, the company found the product to be defective, increasing the likelihood that the glass would break. It ultimately scrapped more than 1,850 tons of glass and sued, claiming damages in excess of $1 million.

Ironics sought coverage from Motorists to defend the company and pay for any damages. But the Wood County Common Pleas Court determined the insurance company had no obligation to do so.

On appeal, the Sixth District found that the commercial general liability policy did not cover the damages, but an umbrella policy did.

The high court agreed.

“Owens’s containers are tangible property that cannot be used, because they incorporate Ironics’s defective tube scale. But the impaired-property exclusion does not apply in this case, because Owens’s glass containers could not be restored to use by the repair, replacement, adjustment, or removal of the contaminated tube scale,” Justice Jennifer Brunner wrote for the court.

“As noted, Owens’s technical-capabilities leader submitted an affidavit stating that once the contaminated tube scale was incorporated into Owens’s glass containers, it was not possible to remove the contamination or otherwise restore the containers to use, so they had to be scrapped. None of the three exclusions identified by Motorists bars coverage for Owens’s claims.”

She was joined in her opinion by Chief Justice Maureen O’Connor, Justice Michael Donnelly and Justice Melody Stewart.

In an opinion concurring in judgement only and dissenting in part, Justice Pat Fischer determine both policies covered the claim, but coverage under the CGL should be considered first.

“I agree with the majority opinion that—absent an exclusion or endorsement stating otherwise—there is coverage in this case,” he wrote. “I disagree, however, with the majority opinion’s decision to find that coverage under only the umbrella policy. Unlike the majority opinion, I would find that this particular claim is covered first and foremost under the commercial general-liability policy in place at the time.”

Justice Pat DeWine wrote a separate concurring opinion in which he was joined by Justice Sharon Kennedy.

“Under the plain language of the contract in front of us, Ironics is entitled to coverage under the umbrella policy,” he wrote. “The majority digresses well beyond the contractual language, but ultimately ends up with the right result.”

To read the full court opinion, click here.

Article written by Gongwer News Service, www.gongwer.com

Success Starts Here

Sign up for our newsletter today!
  • This field is for validation purposes and should be left unchanged.