Cincinnati Ins. Co. v. Disc. Drug Mart, Inc.

• Decision Date: 30 December 2021
• Docket Number: 110151
• Citation: Cincinnati Ins. Co. v. Disc. Drug Mart, Inc., 183 N.E.3d 538 (Ohio App. 2021)
• Parties: CINCINNATI INSURANCE COMPANY, Plaintiff-Appellant, v. DISCOUNT DRUG MART, INC., Defendant-Appellee.
• Court: Ohio Court of Appeals

183 N.E.3d 538

CINCINNATI INSURANCE COMPANY, Plaintiff-Appellant,

v.DISCOUNT DRUG MART, INC., Defendant-Appellee.

No. 110151

Court of Appeals of Ohio, Eighth District, Cuyahoga County.

RELEASED AND JOURNALIZED: December 30, 2021

Collins, Roche, Utley & Garner, L.L.C., Richard M. Garner, and David L. Lester, for appellant.

Cavitch, Familo & Durkin, Co., LPA, and Gregory E. O'Brien, Cleveland, for appellee.

JOURNAL ENTRY AND OPINION

MARY J. BOYLE, A.J.:

{¶1} Plaintiff-appellant, the Cincinnati Insurance Company ("Cincinnati"), appeals from the trial court's order granting the summary judgment motion of defendant-appellee, Discount Drug Mart ("DDM"), and denying Cincinnati's summary judgment motion. The trial court found and declared that Cincinnati has a duty to defend DDM against lawsuits brought by Cuyahoga and Summit Counties for DDM's alleged role in the opioid epidemic. Cincinnati raises one assignment of error for our review:

The trial court erred in granting the Motion for Summary Judgment of [DDM] and finding that [Cincinnati] has a duty to defend [DDM] against opioid lawsuits brought by local governments for public nuisance and civil conspiracy.

{¶2} Finding no merit to the assignment of error, we affirm the trial court's judgment.

I. Procedural History and Factual Background

{¶3} In April 2019, Cincinnati filed a declaratory judgment action against DDM, seeking a judgment "determining and declaring that [Cincinnati] has no duty to defend or indemnify DDM" for any claims brought against DDM in six federal lawsuits. Cincinnati also requested that the trial court "determine the nature and extent of Cincinnati's contribution rights, and such other or further relief as may be just and proper."

{¶4} In July 2019, DDM filed a motion to transfer the case to Medina County because the insurance policies were issued to DDM at its home office in Medina. Cincinnati opposed the transfer, arguing that Cuyahoga County is where DDM conducted the activity that gave rise to the underlying litigation. The trial court denied the motion to transfer, noting that both Cuyahoga County and Cleveland are parties to the underlying litigation, and the underlying cases allege that DDM distributed controlled substances and caused harm in Cuyahoga County.

{¶5} In August 2020, DDM filed a "Statement in Lieu of Answer." DDM explained that at a case management conference, the trial court gave Cincinnati leave to file an amended complaint, and the trial court and Cincinnati agreed to allow DDM to file an answer to the amended complaint instead of the original complaint.

{¶6} In September 2019, Cincinnati filed, with leave of court, an amended complaint, identifying additional opioid-related lawsuits in which DDM was a defendant. The amended complaint brought the total number of underlying actions to 27.

{¶7} DDM filed an answer to the amended complaint and a counterclaim for declaratory judgment against Cincinnati. The counterclaim requested that the trial court "enter declaratory judgment in [DDM's] favor and find and declare that Cincinnati is obligated to continue defending [DDM] in the underlying suits as well as to indemnify it and pay damages that [DDM] becomes legally obligated to pay to the plaintiffs in the underlying suits." The counterclaim also included a jury trial demand. Cincinnati filed an answer to the counterclaim.

{¶8} In December 2019, the parties filed, pursuant to Civ.R. 42(B), a joint motion to bifurcate the coverage issues arising from the Cuyahoga and Summit County lawsuits, Cuyahoga v. Purdue Pharma, LP, et al. , N.D.Ohio No. 1:17-OP-45004, and Summit v. Purdue Pharma, LP, et al. , N.D.Ohio No. 1:18-OP-45090, both of which were pending in the Northern District of Ohio as part of the National Prescription Opiate Litigation MDL, N.D.Ohio No. 1:17-MD-02804. The parties asked the trial court to stay the coverage issues arising from the remaining underlying cases. The trial court granted the motion.

{¶9} In April 2020, the parties each filed a motion for summary judgment.¹ They also filed a five-part stipulation of facts and documents. The stipulation contained 20 exhibits, and the parties stipulated to the authenticity of these documents. The parties included in their stipulation the lengthy, operative complaints from the Cuyahoga and Summit County cases. For the Cuyahoga County case, the parties included the 357-page third amended complaint and the 50-page "amendment by interlineation" to the third amended complaint. For the Summit County case, the parties likewise included the 335-page third amended complaint and the 47-page "amendment by interlineation" to the third amended complaint.

{¶10} These four documents allege that DDM distributed and sold "opioids in ways that facilitated and encouraged their flow into the illegal, secondary market"; distributed "opioids without maintaining effective controls against the diversion of opioids"; chose not to "effectively monitor for," investigate, report, or "stop or suspend shipments of" suspicious orders; and distributed and sold "opioids prescribed by ‘pill mills’ " when DDM "knew or should have known the opioids were being prescribed by ‘pill mills.’ " The counties claim that DDM's conduct caused "a dramatic increase in opioid abuse, addiction, overdose, and death throughout" the counties. The counties asserted claims against DDM for statutory public nuisance, common law absolute public nuisance, negligence, injury through criminal acts in violation of R.C. 2307.60, unjust enrichment, and civil conspiracy for DDM's alleged wrongful conduct in distributing prescription opioids.²

{¶11} The parties also included in their stipulation of facts and documents copies of the three commercial general liability insurance policies that Cincinnati issued to DDM between 2006 and 2018. The relevant language in the policies is substantially the same. The policies state in relevant part the following:

1. Insuring Agreement

a. We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages. However, we will have no duty to defend the insured against any "suit" seeking damages for "bodily injury" or "property damage" to which this insurance does not apply. We may, at our discretion, investigate any "occurrence" and settle any claim or "suit that may result[.]"

b. This insurance applies to "bodily injury" and "property damage" only if:

(1) The "bodily injury" or "property damage" is caused by an "occurrence." * * *

(2) The "bodily injury" or "property damage" occurs during the policy period. * * *

{¶12} The policies define "bodily injury" as "bodily injury, sickness, or disease sustained by a person, including death resulting from any of these at any time." They define "occurrence" as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions." The policies do not define the term "damages." The policies also contain one or more endorsements providing professional liability coverage, which likewise limit coverage to damages because of bodily injury.

{¶13} On September 9, 2020, after full briefing, the trial court granted DDM's summary judgment motion and denied Cincinnati's motion with a detailed opinion.

The trial court found and declared that Cincinnati had a duty to defend DDM in the Cuyahoga and Summit County cases but found that the issue of indemnification was not yet ripe for review because no judgment against DDM had yet been entered.

{¶14} On September 30, 2020, Cincinnati filed a motion for the trial court to certify its judgment under Civ.R. 54(B) and add the language "no just reason for delay." Cincinnati argued that the trial court's judgment affected a substantial right in a special proceeding and that delaying an appeal until the underlying litigation is fully resolved would cause Cincinnati to continue to incur "tremendous" defense expenses. DDM filed an opposition, arguing that the trial court's judgment did not fully adjudicate any of the parties’ claims, and Civ.R. 54(B) certification could not transform the judgment into a final order. Cincinnati filed a reply in support of its motion. On November 6, 2020, the trial court granted DDM's motion without an opinion. The trial court then issued a "nunc pro tunc entry as of [and] for 09/09/2020" that added the Civ.R. 54(B) language to its order granting DDM's summary judgment motion and denying Cincinnati's motion.

{¶15} Cincinnati appealed from this order six days later. This court sua sponte ordered the parties to brief whether the trial court's judgment was a final, appealable order, and whether the notice of appeal was timely. The parties submitted supplemental briefing.

II. Final Order

{¶16} DDM argues that the trial court's judgment is not a final, appealable order because it did not fully resolve any claim: the trial court has yet to resolve the issues of Cincinnati's duty to indemnify as well as the parties’ rights with respect to the underlying cases other than the Cuyahoga and Summit County cases. However, Cincinnati maintains that the trial court's order is final because it affects a substantial right (its duty to defend) in a special proceeding (the declaratory judgment action), and that in the context of a declaratory judgment action, the issue of the duty to defend can be isolated for appeal.

{¶17} The jurisdiction of a court of appeals is constitutionally limited to the review of "final" orders. See Article IV, Section 3(B)(2), Ohio Constitution. To be a final, appealable order, the order must meet the requirements of both R.C. 2505.02 and, if applicable, Civ.R. 54(B). Madfan, Inc. v. Makris , 8th Dist. Cuyahoga No. 102179, 2015-Ohio-1316, 2015 WL 1513987, ¶ 6, citing Chef Italiano Corp. v. Kent State Univ. , 44 Ohio St.3d 86, 88, 541 N.E.2d 64 (1989).

{¶18} R.C. 2505.02(B) defines the...