Ohio Supreme Court - Insurance for Multiple Stabbing:

A policy that excludes coverage for injuries that arise out of the intentional or criminal acts of "any" insured, does NOT exclude coverage for claims of negligent entrustment or supervision brought against "any" other insured.

SAFECO INSURANCE COMPANY OF AMERICA, APPELLANT, v. WHITE ET AL.; FEDERAL INSURANCE COMPANY ET AL. Ohio Supreme Court, Decided August 4, 2009.

SUMMARY:
The Ohio Supreme Court has now held that when one insured commits an intentional act (in this case the multiple stabbing of a young girl), the homeowner insurance policy must still provide coverage for any claims that other insureds were negligent in supervising or entrusting the insured perpetrator. This is despite any exclusion that precludes coverage for bodily injury that arises out of the conduct of "any insured."

Specifically, the Court held:

1. When a liability insurance policy defines an "occurrence" as an "accident," a negligent act committed by an insured that is predicated on the commission of an intentional tort by another person, e.g., negligent hiring or negligent supervision, qualifies as an "occurrence."

2. Insurance-policy exclusions that preclude coverage for injuries expected or intended by an insured, or injuries arising out of or caused by an insured's intentional or illegal acts, do not preclude coverage for the negligent actions of other insureds under the same policy that are predicated on the commission of those intentional or illegal acts, e.g., negligent hiring or negligent supervision.

UNSOLICITED FAXES - INCLUDING TREBLE DAMAGES

COVERED UNDER "ADVERTISING INJURY" PROVISIONS OF COMMERCIAL INSURANCE POLICY

Motorist Mutual Insurance Company v. Dandy-Jim, Inc. et al., (May 14, 2009), 8th District Court of Appeals.

In Motorist Mutual, the insured allegedly sent numerous unsolicited facsimilies in violation of the TCPA. The insured submitted the claims to it's insurer, Motorist Mutual and demanded coverage under the "advertising injury" provisions of the policy. The Court of Appeals agreed and found coverage despite Motorist Mutual's arguments that: (i) certain exclusions applied; (ii) there was no triggering event under the coverage; and (iii) the nature of the claims were not within the ambit of the definition of "advertising injury."

The most interesting part of the decision in Motorist Mutual was that the treble damages authorized by the TCPA, and sought by the claimants, were not punitive in nature and were also covered under the policy. The Court reasoned that the claimants were not seeking punitive damages. Rather, they are "seeking damages under the TCPA. The amounts of such damages are specified by the statute. The TCPA provides for the higher of actual damages, or damages of $500 per violation. 47 U.S.C. §227(b)(3)(B). The award may be increased to "not more than 3 times the amount available under subparagraph (B)" if the violation was committed "willfully or knowingly." 47 U.S.C. §227(b)(3)."

"Motorists offered no evidence that Congress intended TCPA damages to be punitive in nature. To the contrary, the purpose of the statutory damage provision of the TCPA is to "liquidate uncertain actual damages and to encourage victims to bring suit to redress violations." In addition, damages under the TCPA are "set to be fair." Hence, the TCPA is a remedial law. "

"The public policy prohibiting the protection of insurance for punitive damages stems from the underlying assumptions that an individual should not be able to escape punishment for his or her intentionally malicious acts and that the deterrent effect of punitive damages would be diminished if tortfeasors can be indemnified against them. ... However, no showing of intentional malice is required to obtain treble damages under the TCPA if the fax advertisements were sent "willfully." "[T]o establish a willful violation of the TCPA for an award of treble damages, a plaintiff must prove that the defendant consciously and deliberately committed or omitted an act that violated the statute, irrespective of any intent to violate the law." Thus, a willful or knowing violation of the TCPA is different from an intentionally malicious act that could give rise to punitive damages."

"As the treble damage provision of the TCPA is not punitive in nature, we find no public policy prohibiting insurance coverage for treble damages under the TCPA."

NEW EMPLOYMENT INTENTIONAL TORT STATUTE

CONSTITUTIONALITY IN QUESTION

Ohio's new employment intentional tort statute (R.C. 2745.01) is under attack and losing in the Ohio Courts of Appeal. Most recently in Barry v A.E. Steel Erectors, Inc. and previously in Kaminski v. Metal & Wire Products,(March 18, 2008), Columbiana County App. No. 07-CO-15. Both of these Ohio Courts of Appeal decisions have found the new employment intentional tort unconstitutional.

The rationale employed by the Appellate Courts is that due to the excessive standard of requiring proof that the employer intended to cause injury, "it is clearly not 'a law that furthers the "*** comfort, health, safety and general welfare of all employee[e]s."' Johnson, 85 Ohio St. 3d at 308, quoting Brady, 61 Ohio St.3d at 633, quoting Section 34, Article II of the Ohio Constitution.

Additionally, "because R.C. 2745.01 is an attempt by the General Assembly to govern intentional torts that occur within the employment relationship, R.C. 2745.01 'cannot logically withstand constitutional scrutiny, inasmuch as it attempts to regulate an area that is beyond the reach of constitutional empowerment.'" Id., quoting Brady, 61 Ohio St.3d at 634.

Our postings have been anticipating this struggle since the enactment of the new statute.