Goodrich Corp. v. Commercial Union Ins. Co., 2008 Ohio 3200 (Ohio App. 6/30/2008)

Decision Date30 June 2008
Docket NumberC.A. No. 23586.,C.A. No. 23585.
Citation2008 Ohio 3200
PartiesGoodrich Corporation, Appellee/Cross-Appellant, v. Commercial Union Insurance Company, et al., Appellants/Cross-Appellees.
CourtOhio Court of Appeals

Appeal from Judgment Entered in the Court of Common Pleas, County of Summit, Ohio, Case No. Cv 1999-02-0410.

Irene C. Keyse-Walker, Susan M. Audey, and Karen Ross, Attorneys at Law, for Appellant/Cross-Appellee.

Dennis J. Bartek and Natalie M. Niese, Attorneys at Law, for Appellee/Cross-Appellant.

Brian D. Sullivan, Robert V. P. Waterman, and Thomas D. Waterman, Attorneys at Law, for Appellant/Cross-Appellee.

Paul A. Rose, Sallie Conley Lux, and Amanda M. Leffler, Attorneys at Law, for Appellee/Cross-Appellant.

Lisa Del Grosso, Attorney at Law, for Appellee/Cross-Appellant.

Steven G. Janik, Attorney at Law, for Appellee/Cross-Appellant.

Andrew Reidy and Catherine Serafin, Attorneys at Law, for Appellee/Cross-Appellant.

Daniel Carter and Jeffrey Ruple, Attorneys at Law, for Appellee/Cross-Appellant.

Michael J. Baughman, Attorney at Law, for Appellee/Cross-Appellant.

DECISION AND JOURNAL ENTRY

CARR, Presiding Judge.

{¶1} Commercial Union Insurance Company ("Commercial Union") and a group of London Market Insurers: Accident & Casualty Company; Commercial Union Assurance Company; Edinburgh Assurance Company; United Scottish Insurance Company, Ltd.; Victoria Insurance Company, Ltd.; Road Transport, GP AV; Winterthur Swiss Insurance Company; World Auxiliary Insurance Corporation Limited; and Yasuda Fire & Marine Insurance Company (U.K.) Limited (collectively referred to as "the London Market Insurers")1, separately appeal from a judgment of the Summit County Court of Common Pleas entered against them in favor of Goodrich Corporation ("Goodrich"). Goodrich cross-appeals from the judgment. This Court affirms in part and reverses in part.

I.

{¶2} This action commenced in 1999, when Goodrich filed a complaint against several insurance carriers with whom it had held excess general commercial liability insurance policies from 1955 through 1986. Goodrich had already settled its coverage dispute with its primary insurance carrier and had exhausted its $20 million in primary insurance coverage. Goodrich's excess insurance policies attached at coverage levels of $20 million and higher.

{¶3} Goodrich's principal claims were for breach of contract and bad faith. The litigation focused on whether the insurers were contractually obligated to indemnify Goodrich against claims filed by the government under the Comprehensive Environmental Response, Compensation, and Liability Act and the Resource Conservation and Recovery Act. Goodrich's environmental cleanup costs stemmed from soil and groundwater contamination caused by Goodrich's manufacturing and waste water disposal practices from approximately 1963 to 1983 at its plant in Calvert City, Kentucky. The sole contaminant at issue in this litigation was ethylene dichloride ("EDC"), a chemical used in Goodrich's production of vinyl chloride monomer.

{¶4} Experts had opined that there were four main sources of the EDC groundwater contamination at Calvert City: (1) the burn pits (Goodrich disposed of oily EDC waste water by burning it in open pits during the early 1960s until 1967); (2) the landfill (during the mid-1960s until 1973, Goodrich also disposed of EDC in a landfill at Calvert City); (3) the process areas (periodic pipe ruptures and equipment malfunctions caused EDC to accidentally spill into the environment); and (4) the settling ponds (during much of this period, EDC waste was placed in large ponds and allowed to settle, evaporate, and dissipate in a process akin to a septic system).

{¶5} Although this case proceeded to trial against numerous defendant insurers, by the time the trial ended, Goodrich had settled with most of its excess insurers. The jury ultimately decided Goodrich's claims against four insurers or insurer groups: Commercial Union on claims of bad faith and breach of contract, and the London Market Insurers, California Union Insurance Company, and Insurance Company of North America on claims of breach of contract. The jury's general verdicts were for Goodrich against Commercial Union and the London Market Insurers on all claims, and for California Union Insurance Company and Insurance Company of North America against Goodrich. On the breach of contract claims, the jury found that Goodrich had sustained $42 million in damages, including two million dollars in litigation expenses on the underlying actions by the government. The jury also found that Goodrich was entitled to recover its attorney fees in this case on both the breach of contract claims and the bad faith claim. As instructed by the trial court, the jury did not calculate a dollar award for attorney fees but left that determination for the trial court.

{¶6} Commercial Union, the London Market Insurers, and Goodrich all filed motions for judgment notwithstanding the verdict on various grounds, and the trial court later denied all of those motions. The trial court decided many issues through post-trial proceedings. These issues included Goodrich's attorney fees, prejudgment interest, whether the damage judgment against the defendants would be reduced due to Goodrich's prior settlements with other insurers, and whether Goodrich would incur future cleanup costs.

{¶7} The trial court ordered the appellants to pay Goodrich over $22 million in attorney fees and other litigation costs, with Commercial Union being held liable for a greater portion of those costs due to Goodrich's bad faith judgment and separate attorney fee award against it. The trial court awarded Goodrich over $20 million in prejudgment interest against Commercial Union only. The trial court also determined that the damage judgment against Commercial Union and the London Market Insurers would be reduced by $20 million received from the primary insurer because liability under the excess policies did not attach until Goodrich's damages had reached $20 million. Despite their requests and arguments to the contrary, the trial court did not allow Commercial Union and the London Market Insurers any further reduction of the damage award due to settlement money received by Goodrich. The trial court also declared that Commercial Union and the London Market Insurers are contractually obligated to Goodrich for remediation and defense costs at the Calvert City site incurred after September 30, 2005, the damage cutoff date for trial.

{¶8} Commercial Union and the London Market Insurers filed separate appeals, which this Court later consolidated. Goodrich cross-appealed against each of the appellants as well as against the remaining defendants. Goodrich filed two briefs in its cross-appeal, assigning slightly different cross-assignments of error against Commercial Union and the London Market Insurers. For ease of discussion, the assignments and cross-assignments of error will be rearranged and, to the extent the assigned errors are identical or related to other assignments of error or cross-assignments of error, they will be consolidated.

II.

Bad Faith

COMMERCIAL UNION'S ASSIGNMENT OF ERROR I

"THE TRIAL COURT ERRED WHEN IT DENIED CU'S MOTIONS FOR DIRECTED VERDICT AND [JUDGMENT NOTWITHSTANDING THE VERDICT] ON [GOODRICH'S] `BAD FAITH' [CLAIMS]."

CROSS-ASSIGNMENT OF ERROR I AGAINST LONDON

"THE TRIAL COURT ERRED IN GRANTING A DIRECTED VERDICT TO LONDON MARKET RELATING TO GOODRICH'S BAD FAITH CLAIM."

{¶9} Goodrich had alleged bad faith claims against both Commercial Union and the London Market Insurers and presented evidence at trial on each of these claims. Each insurer filed a motion for directed verdict on the bad faith claim against it at trial. The trial court granted a directed verdict to the London Market Insurers on Goodrich's bad faith claim, but denied the directed verdict motion of Commercial Union. The jury ultimately found for Goodrich on its bad faith claim against Commercial Union. Commercial Union moved for a judgment notwithstanding the verdict on the bad faith claim, which the trial court denied.

{¶10} Through its first assignment of error, Commercial Union contends that the trial court erred when it overruled its motions for directed verdict and judgment notwithstanding the verdict on Goodrich's bad faith claim. Through its first cross-assignment of error against the London Market Insurers, Goodrich contends that the trial court erred in granting the London Market Insurers a directed verdict on the bad faith claim. This Court will address each bad faith claim in turn.

{¶11} This Court begins by emphasizing that a motion for judgment notwithstanding the verdict under Civ.R. 50(B) is reviewed under the same standard as a motion for a directed verdict under Civ.R. 50(A). Texler v. D.O. Summers Cleaners & Shirt Laundry Co. (1998), 81 Ohio St.3d 677, 679. On appeal, this Court reviews de novo and applies the same standard as the trial court. Goodyear Tire & Rubber Co. v. Aetna Cas. & Sur. Co., 95 Ohio St.3d 512, 2002-Ohio-2842, at ¶4. Pursuant to Civ.R. 50(A)(4), a motion for directed verdict is granted if, after construing the evidence most strongly in favor of the nonmoving party, "reasonable minds could come to but one conclusion upon the evidence submitted and that conclusion is adverse to such party."

{¶12} The standard to determine whether an insurer acted in bad faith was set forth in Zoppo v. Homestead Ins. Co. (1994), 71 Ohio St.3d 552, paragraph one of the syllabus:

"An insurer fails to exercise good faith in the processing of a claim of its insured where its refusal to pay the claim is not predicated upon circumstances that furnish reasonable justification therefor."

{¶13} As the Court emphasized in Zoppo, an insurer has an "affirmative duty to conduct an adequate investigation." Id. at 558. Consequently, the circumstances that would provide a ...

To continue reading

Request your trial
2 cases
  • Herlihy Moving & Storage Inc. v. Adecco U.S. Inc.
    • United States
    • U.S. District Court — Southern District of Ohio
    • 2 Marzo 2011
    ...bears the burden of proving the amount of credit to which he is entitled.” (ECF No. 42 at 3) (relying on Goodrich Corp. v. Commercial Union Ins. Co., 2008 Ohio 3200, Nos. 23585 and 23586, 2008 WL 2581579, 2008 Ohio App. LEXIS 2716 (Ohio Ct.App. June 30, 2008), which stated: “It has been hel......
  • Herlihy Moving & Storage Inc v. Adecco USA. Inc
    • United States
    • U.S. District Court — Southern District of Ohio
    • 2 Marzo 2011
    ...of proving the amount of credit to which he is entitled." (ECF No. 42 at 3) (relying on Goodrich Corp. v. Commercial Union Ins. Co., 2008 Ohio 3200, Nos. 23585 and 23586, 2008 Ohio App. LEXIS 2716 (Ohio Ct. App. June 30, 2008), which stated: "It has been held in other jurisdictions that, 'b......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT