OHIO SUPREME COURT RULING EFFECTIVELY PRECLUDES INSURANCE COVERAGE FOR ALL EMPLOYER INTENTIONAL TORT CLAIMS, EVEN “SUBSTANTIALLY CERTAIN” CLAIMS

In Hoyle v. DTJ Ents., Inc., Slip Opinion No. 2015-Ohio- 843 (Mar. 12, 2015), the Supreme Court of Ohio precluded insurance coverage for virtually every employer intentional tort claim, stating “[w]e hold that an insurance provision that excludes coverage for acts committed with the deliberate intent to injure an employee precludes coverage for employer intentional torts, which require a finding that the employer intended to injure the employee.”  Id. ¶ 1. As such, insurers are likely not obligated to indemnify an insured, even when the policy at issue purports to extend coverage to “substantial certainty” cases.

The case stemmed from a workplace injury in which plaintiff Duane Hoyle was injured when he fell from a ladder-jack scaffold.  He claimed that the injury was caused by his employer’s failure to provide the bolts and pins necessary to safely secure the ladder jacks to the ladders, which he framed, at least in part, as a claim that a safety guard had been removed by the employer.  Id. ¶ 2-3. Hoyle sued his employer under claims of intentional tort and Cincinnati Insurance Company (“CIC”), which insured the employer under a commercial general liability policy (“CGL”), intervened and file a declaratory judgment action claiming that it had no duty to indemnify the employer should Hoyle prevail on his claim. Id. ¶ 6.

The CIC policy at issue generally excluded “coverage for bodily injuries that may reasonably result from the insured’s intentional acts or that the insured expected or intended” but the employer had also paid for an endorsement that provided coverage “for those sums that an insured becomes legally obligated to pay as damages because of bodily injury sustained by your employee in the workplace and caused by an intentional act to which this insurance applied.” As such, the policy purported to extend to coverage to substantially certainty employer torts otherwise excluded under the general policy.  However, even the endorsement excluded coverage “for acts committed by or at the direction of an insured with the deliberate intent to injure.”  Id. ¶ 17-18.

Under the Ohio’s Worker’s Compensation statute, employers are immune from liability and the employee’s only remedy is through a Worker’s Compensation claim but Ohio courts have held that that immunity does not extend to intentional acts. The present Worker’s Compensation statute, Ohio Revised Code § 2745.01, took effect in 2005 and limits employer liability to those cases where the employer committed the act with intent to injure “or with the belief that the injury was substantially certain to occur.”  R.C. 2745.01(A).  However, the statute defines “substantially certain” to mean that “an employer acts with deliberate intent to cause an employee to suffer an injury  . . . .”  R.C. 2745.01(B).  Therefore, even “substantially certain” claims still require proof of intent.  The statute does have one small opening for an injured worker if the injury was allegedly caused by the removal of a safety guard by creating a rebuttal presumption that such a removal was committed with an intent to injure if that removal was the direct cause of the injury.  R.C. 2745.01(C).  In other words, no matter the theory, the plaintiff must prove that the employer acted with a deliberate intent to injure, even under the rebuttable presumption, which ultimately requires intentional conduct.  The Ohio Supreme Court declared the statute constitutional in Kaminski v. Metal & Wire Prods. Co., 125 Ohio St.3d 250, 2010-Ohio-1027, 927 N.E.2d 1066.  Hoyle, ¶ 9.

In its declaratory judgment action, CIC claimed that even if Hoyle prevailed on his employer intentional tort claims, any liability would be excluded from coverage since it necessarily had to be based on the employer’s deliberate intent to injure him.  The trial court granted summary judgment to the employer on Hoyle’s claims based on sections A and B of the statute but determined that there were genuine issues of material as to the claim based on section C’s rebuttable presumptions with regard to the removal of a safety guard. The trial court also granted CIC’s motion for summary judgment but the appeals court reversed that ruling stating “[a]lthough the deliberate intent to injure may be presumed for purposes of the statute where there is a deliberate removal of a safety guard, . . . this does not in itself amount to ‘deliberate intent’ for purposes of the insurance exclusion.”  Id. ¶ 20 (emphasis in original).  As such, the appeals court suggested that an employee could prevail on an employer intentional tort claim without proving deliberate intent under the policy.

The supreme court disagreed.  It held that whether Hoyle established intent through direct evidence or through an unrebutted presumption, he still could only prevail against the employer by proving intent to injure, the very claim specifically excluded by both the general CGL policy and the endorsement.  As such, the court held that there was no set of facts under which CIC could be legally liable under the policy’s coverage.  Id. ¶ 27.

By ruling this way, and interpreting the statute the way it did, it appears that the Ohio Supreme Court has effectively precluded insurance coverage for all employer intentional tort claims in Ohio, even the narrow field of substantially certain claims.

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