Lessak v. Metropolitan Cas. Ins. Co. of N.Y.

• Decision Date: 02 July 1958
• Docket Number: No. 35436,35436
• Parties: , 5 O.O.2d 442 LESSAK, d.b.a. Massillon Road Hardware & Lumber Co., Appellee, v. METROPOLITAN CASUALTY INS. CO. OF NEW YORK, Appellant, et al.
• Court: Ohio Supreme Court

Page 153

168 Ohio St. 153

151 N.E.2d 730, 5 O.O.2d 442

LESSAK, d.b.a. Massillon Road Hardware & Lumber Co., Appellee, v. METROPOLITAN CASUALTY INS. CO. OF NEW YORK, Appellant, et al.

No. 35436.

Supreme Court of Ohio.

July 2, 1958.

Syllabus by the Court

1. Where an insurance company issues a policy of liability insurance in which it agrees to pay on behalf of the insured all sums which the insured shall become obligated to pay by reason of liability imposed upon him by law for damages sustained by any person or persons caused by accident or arising out of ownership, maintenance or use for the purposes stated in the policy and arising out of all operations during the policy period which are necessary or incidental to such purposes, and where in such policy there is no limitation as to where the accident occurs, the policy is operative to protect the insured against a claim as to an accident occurring away from the insured's premises, where the hazard arose from an operation upon the premises, which was incidental to the purposes for which the premises were maintained.

2. The sole test as to the duty of an insurance company, under a policy of liability insurance, to defend an action against the insured is the allegations of the petition in the action against the insured, and where such petition brings the action within the coverage of the policy, the insurer is required to make defense, regardless of the ultimate outcome of the action or the liability to the insured. (Socony-Vacuum Oil Co. v. Continental Casualty Co., 144 Ohio St. 382, 59 N.E.2d 199, approved and followed.)

On April 25, 1955, William J. Lessak, doing business as Massillon Road Hardware & Lumber Company, hereinafter designated plaintiff, instituted an action for a declaratory judgment in the Court of Common Pleas of Summit County against The Metropolitan Casualty Insurance Company of New York and Floyd Daniel Fouts, a minor, hereinafter designated, respectively, the insurance company and Fouts.

Plaintiff alleges in his petition that he and his wife entered into a contract of liability insurance with the insurance company which was in full force and effect on January 22, 1954; that on April 9, 1954, Fouts filed a petition in the Summit County Court of Common Pleas against plaintiff and other parties, praying for money damages for injuries suffered by Fouts as the result of being struck by a B-B pellet allegedly sold by plaintiff in violation of law; that all the proper notices were given to the insurance company, together with a copy of Fouts' petition; and that, notwithstanding the provisions of the insurance policy, the insurance company has notified plaintiff that it will not honor the provisions of such policy, defend plaintiff in the action instituted by Fouts, or pay any judgment that might be rendered therein against plaintiff, to the extent of the coverage set forth in the contract of insurance.

Plaintiff prays that the court order, adjudge and declare that the coverage under the contract of insurance exists according to the terms and provisions of such contract, and that the court grant plaintiff such other and further relief as may be just and equitable.

It appears that, in the petition filed by Fouts against the plaintiff and others, Fouts alleges that one Lonnie St. Clair, a minor, about 13 years of age, on January 22, 1954, purchased from plaintiff, who is engaged in the operation of a general hardware store wherein he sells air guns and ammunition, approximately six packages of ammunition to be used in the discharge of an air gun, commonly termed a B-B gun; that such sale to said minor was contrary to the laws of Ohio in force and effect at the time of the sale; that Lonnie St. Clair's stepfather and mother furnished Lonnie with an air gun, contrary to the laws of Ohio; and that, while Lonnie was using the air gun loaded with the ammunition which he purchased and which was furnished to him by an agent of plaintiff, Lonnie negligently and carelessly caused the air gun to be discharged and caused the B-B pellet with which the same was loaded to be hurled through the air and to strike Fouts in the region of his right eye, as a result of which he sustained serious injury.

The insurance company answered the petition of plaintiff, admitting that it issued the contract of insurance to him and his wife concerning the operation of a retail hardware store that the policy was in full force and effect on January 22, 1954; that Fouts brought an action in the Common Pleas Court of Summit County against a number of defendants, of which plaintiff was one, for bodily injuries allegedly sustained by being struck in the eye by a B-B shot, which shot was claimed to have been purchased from the business establishment of plaintiff; and that the insurance company informed plaintiff that the policy of insurance did not cover plaintiff for the incidents or hazards, as alleged in the case brought by Fouts.

These admissions are followed by a denial of all other matters.

In the Court of Common Pleas, a judgment was rendered finding that, pursuant to the policy of insurance, the insurance company is obligated to defend plaintiff against the action brought against him and others by Fouts and to pay any judgment recovered therein by Fouts against plaintiff, up to the limits of liability set forth in the policy.

Upon appeal to the Court of Appeals, that court affirmed the judgment of the Court of Common Pleas.

The cause is before this court upon the allowance of a motion to certify the record.

Kaufmann, Shama & Devany, Akron, for appellant.

Buckingham, Doolittle & Burroughs, Hugh Colopy and Allan Johnson, Akron, for appellee.

STEWART, Judge.

The question before us is whether the insurance policy obligates the insurance company to defend the action of Fouts against plaintiff and to pay any judgment which may be rendered therein up to the limits of liability of the policy, by reason of plaintiff's alleged unlawful act of selling B-B shot to a minor, with the result that injury to another occurred away from plaintiff's premises.

This court has decided that an action for a declaratory judgment is appropriate to establish the obligations of an insurance company in a controversy between it and its insured as to the fact or extent of liability thereunder to persons injured through the wrongful act of the insured and as to the insurer's defense of the insured in an action for damages against him. Travelers Indemnity Co. v. Cochrane, 155 Ohio St. 305, 98 N.E.2d 840.

This court has likewise held that 'the duty of a liability insurance company under its policy to defend an action against its insured is determined from the plaintiff's petition, and when that pleading brings the action within the coverage of the policy of insurance, the insurer is required to make defense regardless of its ultimate liability to the insured.' Socony-Vacuum Oil Co. v. Continental Casualty Co., 144 Ohio St. 382, 59 N.E.2d 199.

In the present case, the action brought against plaintiff by Fouts is based upon the claim that the unlawful sale of B-B shot to a minor was a proximate cause in an uninterrupted sequence of an injury to Fouts, although the injury occurred away from the premises of plaintiff.

The provisions of the policy which we must interpret are as follows:

'The Metropolitan Casualty Insurance Company of New York

'* * *

'Does hereby agree with the insured * * *

'Insuring Agreements

'I Coverage A--Bodily Injury Liability

'To pay on behalf of the insured all sums which the insured...