Al Neyer, LLC v. Westfield Ins. Co.
| Decision Date | 25 November 2020 |
| Docket Number | NO. C-200007,C-200007 |
| Parties | AL NEYER, LLC, Plaintiff-Appellee, v. WESTFIELD INSURANCE COMPANY, Defendant-Appellant, and Berkley Assurance Company, Defendant-Appellee. |
| Court | Ohio Court of Appeals |
Brouse McDowell, Amanda M. Leffler and Lucas M. Blower, for Plaintiff-Appellee.
Fischer, Evans & Robbins, Ltd., and Cari Fusco Evans, for Defendant-Appellant.
Rendigs, Fry, Kiely & Dennis, LLP, and John F. McLaughlin, for Defendant-Appellee.
{¶1} Defendant-appellant Westfield Insurance Company appeals from a judgment of the Hamilton County Court of Common Pleas granting summary judgment in favor of plaintiff-appellee Al Neyer, LLC, ("Neyer") a construction company. For the following reasons, we reverse.
{¶2} This case arises from an interior demolition of a restaurant in Oakdale, Pennsylvania.
{¶3} In the months preceding the demolition, the building owner, the King Trust, alleged that its tenant, KRG Kings, LLC, ("KRG") was in breach of a lease agreement that required KRG to maintain a restaurant in the building. The King Trust filed an action for ejectment against KRG in the Western District of Pennsylvania, in the case captioned King v. KRG Kings, LLC (the " King Litigation"). See King v. KRG Kings, LLC , W.D.Penn. No. 2:18-CV-00223, 2019 WL 626237 (Feb. 14, 2019). KRG operated "Kings Family Restaurant" in the space for a time but had apparently abandoned it. Based upon the abandonment, and with the intention of retaking possession of the property, the King Trust began to explore other options for the space, including leasing the property as a new medical center to Weirton Medical Center ("Weirton").
{¶4} Weirton entered into a lease with the King Trust and contacted Neyer, a Cincinnati-based company that designs and constructs commercial real estate, regarding the renovations. Weirton discussed with Neyer the costs and the work to be performed, including demolition of the existing restaurant, but the parties did not formalize an agreement.
{¶5} Despite not having a signed contract with Weirton, and without notifying senior management at Neyer, a project manager for Neyer secured the necessary permits and proceeded with the demolition of the restaurant space.
{¶6} Unbeknownst to the project manager, the King Trust's right to lease the building to Weirton was being disputed by KRG in the King Litigation, as KRG contended that it still had legal possession of the property. Senior management at Neyer knew that an existing tenant had to be released from a lease before Weirton would finalize a contract with Neyer to begin the renovations but did not know of KRG's identity or its specific claims to the property.
{¶7} Upon learning of the demolition, KRG added to its counterclaims against the King Trust claims for aiding and abetting tortious conduct and negligence for allegedly contemplating the demolition of the property. KRG also asserted third-party claims against Weirton and Neyer for trespass, conversion, tortious interference with contractual relations, and negligence. The King Trust and Weirton filed cross-claims against Neyer for contribution and indemnity for demolishing the interior of the property without authorization.
{¶8} Neyer sought coverage for these claims under its commercial general liability insurance policies provided through Westfield Insurance Company ("Westfield") and Berkley Assurance Company ("Berkley"). Westfield agreed to defend Neyer against the claims, but reserved the right to later dispute its obligations to indemnify Neyer for any judgment or settlement.
{¶9} Ultimately, the King Litigation settled. Westfield, however, refused to indemnify Neyer for the amount Neyer paid for the settlement.
{¶10} On January 4, 2019, Neyer sued Westfield and Berkley. Neyer sought a declaration of coverage, as well as damages for Westfield's and Berkley's anticipatory breach of contract for their refusal to indemnify Neyer for all sums that it was obligated to pay as part of the settlement in the King Litigation. Westfield and Berkley filed separate answers. Berkley also filed a cross-claim against Westfield, asserting that Westfield had priority of coverage as the primary insurer of Neyer. At the close of discovery, Westfield filed a motion for summary judgment and Neyer filed a cross-motion for summary judgment. Berkley filed a cross-motion for partial summary judgment.
{¶11} On December 9, 2019, the trial court issued a judgment granting Neyer's cross-motion for summary judgment and Berkley's cross-motion for partial summary judgment and denying Westfield's motion for summary judgment. The trial court found that "although the demolition was volitional, the resulting damage to the property of KRG was not intended or anticipated by anyone at [ ] Neyer." The trial court reasoned that although senior management at Neyer knew of a lease dispute involving the property, it did not know of the project manager's plans to begin with the demolition; and, while the project manager knew of his own plans for the demolition, he did not know of the lease dispute. Therefore, the trial court held that the demolition of the property "was an accident and the result of an ‘occurrence’ under the Westfield policy." The trial court rejected Westfield's argument that, because Neyer intended to demolish the property, the property damage was not accidental. The trial court also rejected Westfield's argument that policy exclusions applied to deny coverage. The trial court found that Berkley's coverage was in excess of Westfield's liability limits, and therefore Berkley had no duty to defend or indemnify Neyer.
{¶12} Westfield now appeals, asserting one assignment of error.
{¶13} We review summary-judgment decisions de novo. See Holloman v. Permanent Gen. Assur. Corp. , 1st Dist. Hamilton No. C-180692, 2019-Ohio-5077, 2019 WL 6724549, ¶ 8, citing Comer v. Risko , 106 Ohio St.3d 185, 2005-Ohio-4559, 833 N.E.2d 712, ¶ 8. "We accord no deference to the trial court's decision and independently review the record to determine whether summary judgment is appropriate." Sarrough v. Budzar , 2015-Ohio-3674, 38 N.E.3d 921, ¶ 15 (8th Dist.).
{¶14} Under Civ.R. 56(C), summary judgment is proper where the moving party establishes that "(1) no genuine issue of any material fact remains, (2) the moving party is entitled to judgment as a matter of law, and (3) it appears from the evidence that reasonable minds can come to but one conclusion, and construing the evidence most strongly in favor of the nonmoving party, that conclusion is adverse to the party against whom the motion for summary judgment is made." State ex rel. Duncan v. Mentor City Council , 105 Ohio St.3d 372, 2005-Ohio-2163, 826 N.E.2d 832, ¶ 9, citing Temple v. Wean United, Inc. , 50 Ohio St.2d 317, 327, 364 N.E.2d 267 (1977).
{¶15} The moving party carries an initial burden of informing the court of the basis for the motion and identifying those portions of the record that set forth specific facts that demonstrate its entitlement to summary judgment. Dresher v. Burt , 75 Ohio St.3d 280, 292-293, 662 N.E.2d 264 (1996). If the moving party fails to meet this burden, summary judgment is not appropriate. If the moving party meets this burden, summary judgment is appropriate only if the nonmoving party fails to meet its reciprocal burden, setting forth specific facts establishing that a genuine issue exists for trial. Id. at 293, 662 N.E.2d 264.
{¶16} In its sole assignment of error, Westfield argues that the trial court erred in declaring that Neyer is entitled to coverage for defense and indemnification of the King Lawsuit pursuant to its commercial general liability ("CGL") policy. Westfield argues that the CGL policy it issued to Neyer included coverage for property damage caused by an "occurrence," which means an "accident," and that such an accident did not take place so as to trigger coverage. We agree.
{¶17} The terms of Neyer's coverage provide, in relevant part:
The term "accident" is not defined in the policy.
{¶18} When interpreting an insurance policy, the Ohio Supreme Court has instructed:
When confronted with an issue of contractual interpretation, the role of a court is to give effect to the intent of the parties to the agreement. Hamilton Ins. Servs., Inc. v. Nationwide Ins. Cos. , 86 Ohio St.3d 270, 273, 714 N.E.2d 898 (1999), citing Employers' Liab. Assur. Corp. v. Roehm , 99 Ohio St. 343, 124 N.E. 223, syllabus (1919); see also Section 28, Article II, Ohio Constitution. We examine the insurance contract as a whole and presume that the intent of the parties is reflected in the language used in the policy. Kelly v. Med. Life Ins....
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