City of E. Liverpool v. Owners Ins. Co.

171 N.E.3d 1207

City of EAST LIVERPOOL, Plaintiff-Appellant,

v.OWNERS INSURANCE COMPANY et al., Defendants-Appellees.

No. 20 CO 0009

Court of Appeals of Ohio, Seventh District, Columbiana County.

April 21, 2021

Atty. Charles L. Payne, Law Director, 617 St. Clair Ave, P.O. Box 114, East Liverpool, Ohio 43920 and Atty ThomasW. Connors, Warner Mendenhall, 190 N. Union St. Akron, Ohio 44304 for Plaintiff-Appellant.

Atty. Craig G. Pelini, Atty. Nicole Richard, Pelini, Campbell & Williams LLC, Bretton Commons - Suite 400, 8040 Cleveland Avenue N.W., North Canton, Ohio 44720 and Atty. Joseph F. Nicholas, Jr., Atty. Frank H. Scialdone, Atty. George V. Pilat, Atty. Michael P. Byrne, Mazanec, Raskin & Ryder Co., L.P.A., 100 Franklin's Row, 34305 Solon Road, Cleveland, Ohio 44139 for Defendants-Appellees.

BEFORE: Carol Ann Robb, Gene Donofrio, Cheryl Waite, Judges.

OPINION AND JUDGMENT ENTRY

Robb, J.

{¶1} Plaintiff-Appellant City of East Liverpool (the City) appeals the decision of the Columbiana County Common Pleas Court granting summary judgment for Defendants-Appellees Owners Ins. Co., Auto-Owners Ins. Co., Auto-Owners Ins. Group (the three Owners Insurance Companies collectively referred to as Owners), John Gauron, Jack L. Mills Agency, Inc., and Mega Ins. Agency, Inc. (all Appellees collectively referred to as Appellees). Multiple assignments of error are raised in this appeal. The first assignment of error is whether the term "intake well house" is plain and unambiguous. If it is not, then does the evidence indicate it is reasonably susceptible to more than one interpretation? Reasonably susceptible to more than one interpretation would create a genuine issue of material fact and thereby preclude the granting of summary judgment against the City. In the second assignment of error, the City asserts the trial court erred in granting summary judgment in Owners’ favor on the bad faith denial of coverage claim and failure to investigate claim. The third assignment of error raises issue with the trial court's decision denying the City's Civ.R. 56(F) motion for a continuance of the summary judgment ruling so that it could conduct more discovery. The final assignment of error raises arguments concerning the trial court's decision to grant summary judgment for Appellees’ on the reformation, equitable estoppel, and negligence claims. For the reasons discussed below, the trial court's ruling is affirmed.

Statement of the Facts

{¶2} Many of the facts are undisputed in this case. In 1986, the City requested bids for insurance for Water Department buildings and equipment. Appellee Auto Owners submitted its bid in 1986 through agent Appellees Gauron and Mega Ins. Group. The bid request listed the "Intake Well House" located at 2220 Michigan Avenue, East Liverpool, Ohio. The bid was accepted by the City in 1986.

{¶3} Appellee Owners asked the City to provide estimated values of the buildings and equipment. The City hired Stilson & Associates, Inc. to provide the estimated values and they issued a report in 1989.

{¶4} The report defines and assigns a value for the "Intake Structure." It defines the structure as the point where the river water enters the system. The structure is located in the Ohio River and is constructed out of reinforced concrete. It contains several valves and piping from the river to the Well House, as well as minor electrical lighting for warning lights. The replacement value of the Intake Structure is listed in the Stilson & Associates Report as $750,000.

{¶5} The report also separately defines the "Well House." It "receives water from the intake structure and acts as a suction well for the pumps in the Pump Station." The Well House is 14 feet in diameter and is constructed of brick and contains ventilation, service electricity, and a one-ton crane. The replacement value of the Well House is listed at $115,800.

{¶6} In 1990, a renewal policy was issued. The declarations pages of the policy did not list the Intake Structure and Well House as separate structures. The renewal policy effective March 21, 2015 likewise does not list the Intake Structure and Well House separately. Instead, the 2015 policy, for example, listed "Intake Well House" as being located at 2198 Michigan Avenue and the limit of insurance as $142,800.

{¶7} On February 19, 2016, the water vessel Mary Artie Brannon owned by Defendant Crounse Corporation collided with the Intake Structure in the Ohio River. Following the collision, the City submitted a claim to Owners. That claim was denied on the basis that the Intake Structure was not covered by the terms of the policy; the assertion was the term "Intake Well House" only covered the Well House, not the Intake Structure.

Statement of the Case

{¶8} Following the denial of the claim, the City filed suit against Appellees and Defendant Crounse Corp. 2/15/18 Complaint; 3/28/19 Amended Complaint. The City asserted causes of action sounding in breach of contract, reformation of contract, equitable estoppel, misrepresentation, bad faith denial of a claim, failure to obtain the requested coverage, and negligence with a request for punitive damages. The negligence claim was solely against Defendant Crounse Corp. The claim against John Gauron who was working for or doing business as Jack L. Mills Agency, Inc. and Mega Ins. Agency, Inc. was that Gauron failed to obtain the insurance the City requested.

{¶9} All defendants filed answers. Crounse admitted that its vessel, the Mary Artie Brannon, collided with the Intake Structure located at Mile Marker 40.2, but denied the nature and extent of the damage the City claimed was caused by the collision. 3/15/18 Answer of Crounse; 5/10/19 Crounse Answer of First Amended Complaint. Owners Insurance Company answered and filed a cross claim against Crounse. 3/22/18 Owners Insurance Company Answer and Cross Claim; 5/23/19 Answer of Owners Insurance Company to First Amended Complaint. Appellees Mega Ins. Agency, Gauron, and Jack L. Mills Agency answered asserting the building insured was the Intake Well House located at 2220 Michigan Avenue, not the Intake Structure located in the Ohio River. 4/2/18 Answer of Defendant Mega Ins. Agency; 4/20/18 Gauron and Jack L. Mills Agency Answer; 5/20/19 Answer of Gauron and Mega Ins. Agency to First Amended Complaint; 5/21/19 Answer of Gauron and Jack L. Mills Agency to First Amended Complaint.

{¶10} Defendant Crounse Corp. answered the cross claim. 3/29/18 Answer of Crounse Corp. to Cross Claim.

{¶11} Following discovery, Owners filed a Motion for Summary Judgment asserting the language of the policy is clear that the Intake Structure was not listed in the policy. The policy instead listed the "Intake Well House" located at 2220 Michigan Avenue with a coverage limit of $142,800. (The 2015 policy actually lists the location as 2198 Michigan Ave.). Similarly, Appellees Gauron, Jack L. Mills Agency and Mega Ins. Agency filed a motion for summary judgment asserting the Intake Well House remained on the policy as a single item for over 20 years at a value ranging from approximately $120,000 to $140,000. 5/31/19 Motion for Summary Judgment. However, when the Stilson Report was completed in 1989 the replacement value listed on that report for the Intake Structure was $750,000. Owners asserted the Stilson Report was not a request for coverage and the City failed to read the policy to ensure that there was coverage for the Intake Structure.

{¶12} The City filed motions in opposition to the motions for summary judgment asserting there was a genuine issue of material fact as to what the term "Intake Well House" means. 8/5/19 Plaintiff's Brief in Opposition to Motion for Summary Judgment. Appellees filed a reply in support of summary judgment. 8/19/19 Reply.

{¶13} Defendant Crounse Corp also filed a motion for partial summary judgment. 8/7/19 Crounse Corp Motion for Partial Summary Judgment.

{¶14} The trial court granted summary judgment for Appellees on the claims the City asserted against them. 11/5/19 J.E. The judgment entry did not address the claims the City asserted against Crounse. Thus, the decision was not a final appealable order.

{¶15} Following the summary judgment ruling, the City and Crounse reached a settlement. The trial court then issued a judgment entry indicating the November 5, 2019 grant of summary judgment for Appellees is a final appealable order. 2/20/20 J.E.{¶16} On April 29, 2020 the City and Crounse entered an agreed entry of dismissal stating, "The within action having been fully compromised and settled between Plaintiff City of East Liverpool and Defendant Crounse Corporation, Plaintiff's Amended Complaint and all pending Motions may be and are hereby dismissed, with prejudice each party to bear its own costs." 4/29/20 Agreed Entry of Dismissal.

{¶17} The notice of Appeal was filed prior to the Entry of Dismissal. 3/12/20 Notice of Appeal. Appellees filed a Motion to Dismiss. 3/20/20 Motion to Dismiss. On May 4, 2020, days after the agreed entry of dismissal was filed with the trial court, we granted the motion to dismiss indicating the order granting summary judgment would not become final until the entry of dismissal was filed and other issues such as allocation of court costs were resolved. 5/4/20 J.E. (acknowledging the parties were granted until May 29, 2020 to file an agreed entry of dismissal or judgment).

{¶18} On May 13, 2020 the City filed a second notice of appeal attaching the April 29, 2020 Entry of Dismissal. 5/13/20 Notice of Appeal. A new appeal number was assigned.

Standard of Review for the First, Second, and Fourth Assignments of Error

{¶19} An appellate court reviews a summary judgment ruling de novo. Comer v. Risko , 106 Ohio St.3d 185, 2005-Ohio-4559, 833 N.E.2d 712, ¶ 8. Thus, we shall apply the same test as the trial court in determining whether summary judgment was proper. A court may grant summary judgment only when (1) no genuine issue of material fact exists; (2) the moving party is entitled to...