Court of Appeals - Property Damage Coverage

Water Damage Exclusion - Mudslide - Natural and Artificial Perils

Read The Case: Shanton v. United Ohio Ins. Co. (11-20-2007)


Appellees suffered property damage from a mudslide caused by a broken county-owned water line. They made a claim against their homeowner’s policy. The insurer denied coverage based upon a “water damage” exclusion. The trial court found that coverage existed.

On appeal, the court disagreed. The policy excluded damage caused by water damage. “Both parties focus their arguments on whether the policy exclusions may reasonably be construed as applying to non-natural perils as well as natural ones.” The court found that the distinction was without effect in the policy. “The exclusion at issue in this case, is broadly phrased, referring to water below the surface of the ground—without limitation—and excluding all water damage caused directly or indirectly by subsurface water. Although this exclusion refers to water that exerts pressure on or seeps or leaks through a structure, it is not limited to that type of damage. Accordingly, we conclude that damage caused by subsurface water, whether caused by natural or non-natural forces, is excluded by the insurance policy.” Reversed and remanded.

Shanton v. United Ohio Ins. Co. (9 pages) (Harsha) Appeal from the court of common pleas for Pike County.

Court of Appeals - One "Primary" Residence - Uninsured/Underinsured Motorist Coverage

UM/UIM coverage - Primarily Residing With the Policyholder

Read The Case: Wallace v. State Farm Mut. Ins. Co. (11-30-2007)

The trial court properly granted insurer’s motion for summary judgment on the issue of coverage in this UM/UIM case. Decedent spent a portion of her time in appellant’s home, but lived with her father and attended school there. She was employed in that city and her driver’s license listed her father’s address as her residence.

The trial court properly concluded that decedent was not an insured under mother’s policy. “The underlying State Farm policy furnishes underinsured motorist coverage conditioned upon the injured party ‘primarily residing with the policyholder.’” The court concluded that the deceased could have only one primary residence and that was with her father. As such, she was not an insured under the policy in this case. Affirmed.

Wallace v. State Farm Mut. Ins. Co. (9 pages) (Osowik) Appeal from the court of common pleas for Fulton County.

Court of Appeals - Contractual Interpretation and Choice of Law

Out of State Accident
Choice of Law In Insurance Dispute

Read The Case: Reserve Assoc. Ltd. v. Selective Ins. Co. of South Carolina (11-30-2007)


The trial court properly granted appellee’s motion for summary judgment. This case involved insurance coverage for an accident that occurred in South Carolina. The insurance policy was purchased by appellant, an Ohio company, and covered the Ohio business and a vehicle owned in South Carolina. The accident case was litigated in South Carolina. Appellant later claimed that appellee failed to negotiate in good faith. Appellee argued that, under Ohio law, appellant had no standing because she was not insured under the policy.

Appellant argued that Ohio law did not apply. The court disagreed. Appellant purchased the Selective policy from Sky Insurance in Ohio. The policy was delivered to appellant in Ohio. Accordingly, we conclude that the place of contracting was in Ohio. The place of performance was also Ohio. “Based on the foregoing, we find that Ohio has the most significant relationship to the insurance contract and to the parties. The contract was negotiated and delivered in Ohio; the majority of the contract performance occurred in Ohio; and appellant is an Ohio company.

Accordingly, we find that Ohio law applies to appellant's claims; the trial court did not err in granting appellee's motion for summary judgment.” Affirmed.

Reserve Assoc. Ltd. v. Selective Ins. Co. of South Carolina (7 pages) (Pietrykowski) Appeal from the court of common pleas for Lucas County

Court of Appeals - Liability Insurance

Intentional Act Exclusion - Criminal Act Exclusion


Read The Case: Allstate Ins. Co. v. Dolman (11-30-2007)

Husband was previously been convicted of sexually assaulting a child in Michigan. After husband and wife moved to Ohio, he sexually assaulted another child who was in the couple’s home visiting their daughter. Wife was sued for negligence and sought defense and indemnification from her homeowner’s insurance policy. The trial court concluded that coverage was not afforded.

On appeal, the court found no error. The court first concluded that the negligent conduct attributed to wife constituted an “occurrence” under the policy. The court also found that the “joint obligation” clause created ambiguity. “The context in which the joint obligations clause appears is not conducive to a clear and unambiguous declaration that it is intended as an exclusion to coverage. Absent such clarity of purpose, we must agree with appellants that the clause is ambiguous and it must be construed in favor of coverage.”

Nonetheless, the exclusion for criminal conduct barred coverage. “By the plain language of the exclusions, if bodily injury or property damages result from the intentional or criminal acts of anyone insured under the policy, there is no coverage. Since June Doe's injury is undisputedly the result of the criminal acts of an insured, Alan Dolman, there is no coverage under this policy.” Affirmed.

Allstate Ins. Co. v. Dolman (13 pages) (Singer) Appeal from the court of common pleas for Lucas County.

Court of Appeals - Underinsured Motorist Coverage

UM/UIM – Motorcycle not covered

Read The Case: Siciliano v. Natl. Mut. Ins. Co. (11-30-2007)

Appellee purchased a motorcycle on April 10 and was killed in an accident on April 16. Appellant denied his UIM claim. The policy listed only two vehicles, neither of which was the motorcycle. The trial court concluded that there was coverage, finding that although the motorcycle was not listed as a covered vehicle under the policy, it could be considered a “newly acquired auto” under the terms of the policy.

The court disagreed with this analysis. “'Newly acquired auto' means a private passenger auto; or a pickup or van. A motorcycle is not a private passenger auto. “We find a motorcycle is a motor vehicle and an automobile is a motor vehicle, but an automobile is not a motorcycle. Because we find a motorcycle is not a ‘private passenger auto,’ the motorcycle is not a ‘newly acquired auto.’” Reversed and remanded.

But see dissent of Delaney – “Construing this ambiguity strictly against the Appellant, wrongful death claims are not excluded from coverage by the ‘other owned auto’ exclusion. I further find that a review of the above case law also shows that the wrongful death claims are made by another insured under the decedent’s policy. I would find that under the Appellant’s policy terms of who is an insured, the next-of-kin of the decedent are also considered insureds under the policy under B.3, which states, ‘3. Any person for damages that person is entitled to recover because of ‘bodily injury’ to which this coverage applies sustained by a person described in B.1. or 2. above.”

Siciliano v. Natl. Mut. Ins. Co. (14 pages) (Farmer) Appeal from the court of common pleas for Fairfield County.

Court of Appeals - Commercial Property Insurance Coverage

Meaning of the term "collapse"

Read The Case: Zanesville L.L.C. v. Motorists Mut. Ins. Co. (11-30-2007)

Appellee owned commercial property that was covered by appellant. The coverage included coverage for collapse of the building. Collapse did not include settling, cracking, shrinkage, bulging, or expansion. The wall of the building was discovered to be bowing and had pulled away from the structure 3 to 4 inches. The insurer denied coverage.

The trial court properly concluded that coverage was owed in this case. Appellant argued that the trial court improperly concluded that the had been a collapse. The Supreme Court has held that “collapse” means an actual falling down, falling together, or caving into an unorganized mass. “In the case sub judice, there was evidence before the trial court that part of the City Grille Building had collapsed. Bricks from the building were on the ground in front of the building. Pieces were crumbling off of the building and concrete, mortar and parts of a brick were on the sidewalk underneath the wall.” Affirmed.

Zanesville L.L.C. v. Motorists Mut. Ins. Co. (12 pages) (Edwards) Appeal from the court of common pleas for Muskingum County.