ALD Concrete & Grading Co. v. Chem-Masters Corp.

• Decision Date: 18 June 1996
• Docket Number: CHEM-MASTERS,No. 95APE11-1521,95APE11-1521
• Citation: 677 N.E.2d 362,111 Ohio App.3d 759
• Parties: ALD CONCRETE & GRADING COMPANY, INC. et al., Appellees, v.CORP. et al., Appellees; Buckeye Union Insurance Company, Appellant. *
• Court: Ohio Court of Appeals

Page 759

111 Ohio App.3d 759

677 N.E.2d 362

ALD CONCRETE & GRADING COMPANY, INC. et al., Appellees, v. CHEM-MASTERS CORP. et al., Appellees Buckeye Union Insurance Company, Appellant. ^*

No. 95APE11-1521.

Court of Appeals of Ohio Tenth District, Franklin County.

Decided June 18, 1996.

Michael F. Colley Co., L.P.A. and Daniel N. Abraham, Columbus, for appellees ALD Concrete and Grading Co. and Stanley Electric Co., U.S., Inc.

Arter & Hadden and John P. Gartland, Columbus, for appellees Columbus Builder's Supply Company and Indiana Insurance Company.

Wiles, Doucher, Van Buren & Boyle Co., L.P.A. and Thomas J. Keener, Columbus, for appellant Buckeye Union Insurance Company.

DESHLER, Judge.

Plaintiff-appellee, ALD Concrete and Grading Company, Inc. ("ALD"), was employed as a subcontractor to pour and finish the concrete floor slab in a building under construction for plaintiff-appellee, Stanley Electric Co., U.S., Inc. ("Stanley Electric"), near London, Ohio. ALD used a concrete floor hardening and coloring agent sold under the name Concolor, manufactured by defendant-appellee, Chem-Masters Corp. ("Chem-Masters"), and sold locally through defendant/third-party plaintiff-appellee, Columbus Builder's Supply, Inc. ("Builder's Supply"), a wholesale distributor of construction materials and supplies.

The Concolor product was applied to the concrete floors poured by ALD in the Stanley Electric facility as these were curing and hardening. As a result of the application of the Concolor product, the concrete floors blistered, spalled, fractured, debonded, and flaked.

The first action in this matter was filed by ALD and Stanley Electric against Chem-Masters and Builder's Supply in the Madison County Court of Common Pleas. That action was ultimately voluntarily dismissed by plaintiffs. The current action originated in the Franklin County Court of Common Pleas with a product liability and negligence action brought by ALD and Stanley Electric, again against Chem-Masters and Builder's Supply.

At the time the problems occurred with the floors at the Stanley Electric facility, Chem-Masters was insured under a policy of general liability insurance issued by defendant-appellant, Buckeye Union Insurance Company ("Buckeye Union"). Although the specific terms of the policy remain an issue for interpretation in this appeal, they can in general be described as providing coverage for the negligent acts of Chem-Masters' employees, but excluding coverage for product hazard claims.

Buckeye Union was given notice and an opportunity to defend the suit against Chem-Masters, but denied coverage for the claim and declined to defend the suit. Prior to resolution of the underlying action against Chem-Masters, plaintiffs filed a separate declaratory judgment action to determine the validity of the denial of coverage by Buckeye Union. That declaratory action was eventually voluntarily dismissed without prejudice by the plaintiffs. Plaintiffs then pursued their action against Chem-Masters, and later filed an uncontested motion for summary judgment.

On June 11, 1993, the trial court entered summary judgment for plaintiffs ALD and Stanley Electric in the amount of $447,515 against Chem-Masters. The court specifically found that plaintiffs' damages were caused by the sole negligence of Chem-Masters, and that there was no evidence of negligence on the part of Builder's Supply. The court found that Builder's Supply and its insurer, Indiana Insurance Company, had discharged a portion of the common liability of defendant Chem-Masters towards the plaintiffs, and that, in the absence of any evidence of negligence on the part of Builder's Supply, the entire amount of the $95,000 settlement paid by Builder's Supply to plaintiffs represented an excess of Builder's Supply common liability. Builder's Supply, therefore, was entitled to recover from Chem-Masters on its cross-claim for contribution and/or indemnity in the amount of $95,000.

After securing judgment against Chem-Masters, the plaintiffs then filed a supplemental petition under R.C. 3929.06 seeking to recover against the liability insurance policy issued to Chem-Masters by Buckeye Union. All parties agreed to waive jury trial on the supplemental petition, and the matter was presented to the trial court on cross-motions for summary judgment, on the basis of the record previously created in the action against Chem-Masters, upon supplemental written briefs, and upon the oral arguments of counsel. On October 19, 1995, the trial court rendered a decision setting forth findings of fact and conclusions of law, and finding in favor of plaintiffs and against Buckeye Union, finding that the liability insurance coverage under the Buckeye Union policy issued to Chem-Masters was applicable to the underlying judgment in the action against Chem-Masters, and that plaintiffs were entitled to recover from Buckeye Union in the amount of $352,515 for plaintiffs ALD Concrete and Stanley Electric, and $95,000 for defendant/third-party plaintiffs, Builder's Supply and Indiana Insurance Company.

Appellant, Buckeye Union, has timely appealed and brings the following assignments of error:

"1. The trial court erred when it held that the completed operations hazard and products hazard exclusion in the liability insurance policy in question did not bar coverage under the policy for the judgment rendered in this case against the insured, Chem-Masters Corporation.

"2. The trial court erred in denying the motion for summary judgment filed on behalf of the third-party defendant-appellant, Buckeye Union Insurance Company, and erred in granting the motion for summary judgment filed on behalf of the plaintiffs, ALD Concrete & Grading Company and Stanley Electric Company and in granting the motion for summary judgment filed on behalf of the defendants and third-party plaintiffs, Columbus Builder's Supply and Indiana Insurance Company."

Appellant's two assignments of error raise common issues, and will be addressed together. Initially we note that summary judgment is a procedural device to terminate litigation without a formal trial. It must be awarded with caution, resolving doubts and construing evidence against the moving party, and must be granted only when it appears from the evidence before the court that reasonable minds can reach only one conclusion, and that conclusion is adverse to the party opposing the motion. Norris v. Ohio Std. Oil Co. (1982), 70 Ohio St.2d 1, 2, 24 O.O.3d 1, 2, 433 N.E.2d 615, 616; Harless v. Willis Day Warehousing Co. (1978), 54 Ohio St.2d 64, 8 O.O.3d 73, 375 N.E.2d 46. A motion for summary judgment forces the nonmoving party to produce evidence on any issue for which the party bears the burden of production at trial. Wing v. Anchor Media, Ltd. of Texas (1991), 59 Ohio St.3d 108, 570 N.E.2d 1095, paragraph three of the syllabus (Celotex v. Catrett [1986] 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265, approved and followed.)

Appellant concedes that issues resolved by the judgment in the underlying action against Chem-Masters are res judicata and may not be relitigated in the present supplemental petition proceeding. The more precise doctrine applicable in this case is that of collateral estoppel, a term which refers to the doctrine of issue preclusion. See, generally, Columbus v. Triplett (1993), 91 Ohio App.3d 239, 243, 632 N.E.2d 550, 552-553. "It is well established in Ohio that in addition to the parties in a prior action, others may be estopped from relitigating issues decided therein." Columbus v. Alden E. Stilson & Assoc. (1993), 90 Ohio App.3d 608, 614, 630 N.E.2d 59, 63. "[Collateral estoppel] does not apply merely to those who were parties to the proceeding. It applies likewise to those in privity with the litigants and to those who could have entered the proceeding but did not avail themselves of the opportunity." Howell v. Richardson (1989), 45 Ohio St.3d 365, 367, 544 N.E.2d 878, 881. Because Buckeye Union in the present case was given notice and opportunity to defend in the underlying action, and declined to do so based on an asserted lack of coverage, appellant properly concedes upon appeal that it is collaterally estopped from attacking the factual and legal conclusions of the trial court in the underlying action, most significantly the trial court's finding that the damages were caused by the sole negligence of Chem-Masters.

The issues to be addressed in the present appeal which were not litigated in the underlying action against Chem-Masters concern the application and interpretation of the terms, conditions and exclusions of the insurance policy issued by Buckeye Union to Chem-Masters in relation to the judgment rendered in the underlying action against Chem-Masters. The relevant general liability policy provisions provide as follows:

"The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of

"A. bodily injury or

"B. property damage

"[T]o which this insurance applies, caused by an occurrence and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage * * *."

The completed operations hazard and products hazard exclusion states:

"It is agreed that such insurance as is afforded by the Bodily Injury Liability Coverage and the Property Damage Liability Coverage of Part VI of the policy does not apply to bodily injury or property damage included within the Completed Operations Hazard or the Products Hazard."

Within the definitions section of the general liability insurance coverage the term "Products Hazard" is defined as follows:

" 'products hazard' includes bodily injury and property damage arising out of the named insured's products or reliance upon a representation or warranty made at any time with respect thereto, but only if the bodily injury or property damage occurs away from premises...