Goolsby v. Best in Neighborhood, LLC

• Decision Date: 24 September 2021
• Docket Number: Case No. 3:19 CV 2664
• Citation: 563 F.Supp.3d 726
• Parties: Ron GOOLSBY, et al., Plaintiffs, v. BEST IN NEIGHBORHOOD, LLC, et al., Defendants.
• Court: U.S. District Court — Northern District of Ohio

563 F.Supp.3d 726

Ron GOOLSBY, et al., Plaintiffs,

v.BEST IN NEIGHBORHOOD, LLC, et al., Defendants.

Case No. 3:19 CV 2664

United States District Court, N.D. Ohio, Western Division.

Filed September 24, 2021

Andrew J. Karas, Fair Shake Environmental Legal Services, Cleveland, OH, Emily A. Collins, Fair Shake Environmental Legal Services, Akron, OH, for Plaintiffs.

Andrew J. Ayers, Rohrbachers Cron Manahan Trimble Zimmerman, Toledo, OH, R. Ethan Davis, Barkan & Robon, Maumee, OH, for Defendants Best in Neighborhood LLC, Keith Brown, Courtney Brown.

MEMORANDUM OPINION AND ORDER

James R. Knepp II, UNITED STATES DISTRICT JUDGE

INTRODUCTION

Plaintiffs Ron and Allyse Goolsby bring this action on behalf of their minor child against their landlords, Defendants Best in Neighborhood, LLC, Courtney Brown, and Keith Brown¹ , alleging a violation of the Residential Lead-Based Paint Hazard Reduction Act, 42 U.S.C. § 4851 et seq. , and state law claims of negligence, negligence per se, loss of consortium, private nuisance, intentional infliction of emotional distress, negligent infliction of emotional distress, fraud, negligent misrepresentation, breach of contract, and unjust enrichment. (Doc. 1). The property's insurer, Auto-Owners (Mutual) Insurance Company, filed an Intervenor's Complaint, seeking declaratory judgment regarding whether it has a duty to defend or indemnify Defendants in response to Plaintiffs’ claims. (Doc. 38). The Court has jurisdiction under 28 U.S.C. §§ 1331 and 1367. Currently pending before the Court are two related motions: (1) Auto-Owners's Motion for Judgment on the Pleadings (Doc. 45) and (2) Auto-Owners's Motion to Certify Question to the Ohio Supreme Court (Doc. 52). Both motions are primarily directed at the same question – whether the at-issue insurance policy covers Plaintiffs’ claims, and thus requires Auto-Owners to defend Defendants in this suit. Both are fully briefed and ripe for decision. For the reasons discussed below, the Court denies the Motion to Certify, and denies the Motion for Judgment on the Pleadings except as it relates to Auto-Owner's duty to defend Plaintiffs’ breach of contract and unjust enrichment claims.

BACKGROUND

The facts relevant to the pending motions are not in dispute. In March 2017, Plaintiffs agreed to lease the home, for two years, at 540 Collins Street, Toledo, Ohio 43610 from Defendant Best in Neighborhood. (Doc. 1, at 9). In their Complaint, Plaintiffs assert their minor child suffered injuries as a result of lead-based paint at the property. See generally Doc. 1.

Best in Neighborhood was insured under a commercial general liability policy by Auto-Owners for the period April 24, 2017 through April 24, 2018. See Doc. 38, at 1; Doc. 38-1 (policy). That policy contains what is frequently referred to as an "absolute pollution exclusion". It provides, in relevant part:

SECTION I – COVERAGES

COVERAGE A. BODILY INJURY AND PROPERTY DAMAGE LIABILITY

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. We may at our discretion investigate any claim or "occurrence" and settle any claim or "suit" that may result. But:

(1) The amount we will pay for damages is limited as described in Section III – Limits of Insurance; and

(2) Our right and duty to defend end when we have used up the applicable limit of Insurance in the payment of judgments or settlements under Coverage A or B or medical expenses under Coverage C .

* * *

2. Exclusions

This insurance does not apply to:

* * *

f. Pollution

(1) "Bodily injury" or "property damage" arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of "pollutants":

(a) At or from any premises, site or location which is or was at any time owned or occupied by, or rented or loaned to, any insured. * * *

* * *

SECTION V – DEFINITIONS

* * *

16. "Pollutants" means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.

(Doc. 38-1, at 24-25, 37, 40).

STANDARD OF REVIEW

A motion for judgment on the pleadings under Federal Civil Rule 12(c) is reviewed under the same standard as a Rule 12(b)(6) motion. Coley v. Lucas County , 799 F.3d 530, 536–37 (6th Cir. 2015). When considering either a Rule 12(b)(6) or 12(c) motion, this Court presumes all well-pleaded material allegations of the pleadings are true and draws all reasonable inferences in the non-moving party's favor. Total Benefits Planning Agency v. Anthem Blue Cross & Blue Shield , 552 F.3d 430, 434 (6th Cir. 2008). "[O]nly a complaint that states a plausible claim for relief survives a motion to dismiss." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Bell Atl. Corp. v. Twombly , 550 U.S. 544, 556, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ).

DISCUSSION

At issue in both pending motions is whether Auto-Owners has a duty to defend Defendants pursuant to the at-issue insurance policy. Auto-Owners argues this Court should either (1) hold it does not have such a duty (Doc. 45), or (2) certify the following question to the Ohio Supreme Court:

Does an absolute pollution exclusion contained within a standard commercial general liability coverage form operate to exclude coverage for claims of bodily injury resulting from exposure to lead-based paint?

(Doc. 52, at 1). Auto-Owners asserts claims regarding lead-based paint are specifically excluded from the at-issue policy under the pollution exclusion and thus it owes no duty to Defendants. Alternatively, Auto-Owners asserts this is an unsettled question of Ohio law that should be certified. Plaintiffs oppose certification (Doc. 53), and both Plaintiffs and Defendants oppose the motion for judgment on the pleadings (Docs. 59, 60). As to judgment on the pleadings, Plaintiffs and Defendants contend the pollution exclusion is either ambiguous as applied to lead-based paint claims or that lead paint is not a "pollutant" as defined by the policy; either way, they assert, Auto-Owners has a duty to defend. (Docs. 59, 60). Opposing certification, Plaintiffs contend the standard for certification is not satisfied, and even if it is, this Court should exercise its discretion to deny such a motion. (Doc. 53).

For the reasons discussed below, the Court denies Intervenor Auto-Owners's Motion to Certify (Doc. 52), and grants in part and denies in part Auto-Owners's Motion for Judgment on the Pleadings (Doc. 45).

Ohio Insurance Policy Interpretation

"[A]n insurance policy is a contract between an insured and the insurer." Pilkington N. Am., Inc. v. Travelers Cas. & Sur. Co. , 112 Ohio St. 3d 482, 487, 861 N.E.2d 121 (2006). The interpretation and construction of a written contract are questions of law. Alexander v. Buckeye Pipe Line Co. , 53 Ohio St. 2d 241, 374 N.E.2d 146 (1978). "The purpose of contract construction is to discover and effectuate the intent of the parties. The intent of the parties is presumed to reside in the language they chose to use in their agreement." Graham v. Drydock Coal Co. , 76 Ohio St. 3d 311, 313, 667 N.E.2d 949 (1996). The Court is to "honor the plain meaning of the policy's language ‘unless another meaning is clearly apparent from the contents of the policy.’ " Ohio N. Univ. v. Charles Constr. Servs., Inc. , 155 Ohio St. 3d 197, 199, 120 N.E.3d 762 (2018) (quoting Westfield Ins. Co. v. Galatis , 100 Ohio St. 3d 216, 219, 797 N.E.2d 1256 (2003) ). "Where exceptions, qualifications or exemptions are introduced into an insurance contract, a general presumption arises to the effect that which is not clearly excluded from the operation of such contract is included in the operation thereof." Home Indemn. Co. of N.Y. v. Village of Plymouth , 146 Ohio St. 96, ¶ 2 of syllabus, 64 N.E.2d 248 (1945).

"Contract terms are generally to be given their ordinary meaning when the terms are clear on their face," and courts must "apply the plain language of the contract when the intent of the parties is evident from the clear and unambiguous language in a provision." Coma Ins. Agency v. Safeco Ins. Co. , 526 F. App'x 465, 468 (6th Cir. 2013) (citing, inter alia , Karabin v. State Auto. Mut. Ins. Co. , 10 Ohio St. 3d 163, 166-67, 462 N.E.2d 403 (1984) ). Contract language is ambiguous "only where its meaning cannot be determined from the four corners of the agreement or where the language is susceptible of two or more reasonable interpretations."

United States Fid. & Guar. Co. v. St. Elizabeth Med. Ctr. , 129 Ohio App. 3d 45, 55, 716 N.E.2d 1201 (1998) (citing Potti v. Duramed Pharm., Inc. , 938 F.2d 641, 647 (6th Cir. 1991) ). " ‘The test to be applied is not what the insurer intended by his words, but what the ordinary reader and purchaser would have understood them to mean. ’ " Andersen v. Highland House Co. , 93 Ohio St. 3d 547, 551, 757 N.E.2d 329 (2001) (quoting Davis v. M.L.G. Corp , 712 P.2d 985, 989 (Colo. 1986) ) (internal quotation omitted) (emphasis added in Andersen ). "Where provisions of a contract of insurance are reasonably susceptible of more than one interpretation, they will be construed strictly against the insurer and liberally in favor of the insured." Lane v. Grange Mut. Cos. , 45 Ohio St. 3d 63, 65, 543 N.E.2d 488 (1989).

Insurer's Duty to Defend

An insurer's "duty to defend is broader than and distinct from its duty to indemnify." Ohio Gov't Risk Mgmt. Plan v. Harrison , 115 Ohio St. 3d 241, 245, 874 N.E.2d 1155 (2007). "The insurer must defend the insured in an action when the allegations state a claim that potentially or arguably falls within the liability insurance coverage." Id. (citing Willoughby Hills v. Cincinnati Ins. Co. , 9 Ohio St. 3d 177, 179, 459 N.E.2d 555 (1984) ). This means "where the complaint brings the action within the coverage of...