William Powell Co. v. Onebeacon Ins. Co. , 2014 Ohio 3528 ( 2014 )

[Cite as William Powell Co. v. Onebeacon Ins. Co., 2014-Ohio-3528.]
IN THE COURT OF APPEALS
FIRST APPELLATE DISTRICT OF OHIO
HAMILTON COUNTY, OHIO
THE WILLIAM POWELL COMPANY, : APPEAL NO. C-130681
TRIAL NO. A-1109350
Plaintiff-Appellee, :
vs. : O P I N I O N.
ONEBEACON INSURANCE :
COMPANY,
:
Defendant-Appellant,
:
and
:
FEDERAL INSURANCE COMPANY,
Defendant-Intervenor. :
Civil Appeal From: Hamilton County Court of Common Pleas
Judgment Appealed From Is: Appeal Dismissed
Date of Judgment Entry on Appeal: August 15, 2014
Vorys, Sater, Seymour, and Pease LLP, Daniel J. Buckley, Robert C. Mitchell and
Joseph M. Brunner, for Plaintiff-Appellee,
Davis & Young and Richard M. Garner, for Defendant-Appellant.
Please note: this case has been removed from the accelerated calendar.
OHIO FIRST DISTRICT COURT OF APPEALS
DINKELACKER, Judge.
{¶1} Defendant-appellant OneBeacon Insurance Company (“OneBeacon”)
appeals the decision of the trial court granting partial summary judgment in favor of
plaintiff-appellee The William Powell Company (“Powell”). We cannot reach the
merits of OneBeacon’s two assignments of error, because we have no jurisdiction to
hear the appeal, and we must, therefore, dismiss it.
{¶2} Powell is a manufacturer of industrial valves some of which may have
included one or more components made of asbestos. It has been involved in asbestos
litigation all over the country for a number of years. Between 1960 and 1977, Powell
carried liability insurance under a series of primary and excess policies issued by
OneBeacon’s predecessor.
{¶3} Powell filed a complaint seeking a declaratory judgment of its rights
under the policies. OneBeacon filed a counterclaim in which it also asked the court
to declare the parties’ rights under the policies. Subsequently, Powell filed a motion
for partial summary judgment in which it argued that (1) it had proved the existence
and terms of several missing policies; (2) all the policies, both primary and excess,
contained annualized limits of liability; (3) the stub periods (a period of coverage
beyond a full year’s coverage) in three of the policies contained full annual limits; (4)
the asbestos exposures and resulting claims constituted multiple occurrences under
the policies; and (5) Powell had a right to direct the allocation of indemnity and
settlement payments to its policies.
{¶4} OneBeacon also filed a motion for summary judgment. Its overriding
argument was that the asbestos claims against Powell were caused by a single
occurrence. It also argued that if the court found that there were multiple
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OHIO FIRST DISTRICT COURT OF APPEALS
occurrences, Powell was not entitled to aggregate annualized limits under the
existing policies, the missing policies, or any stub periods in the policies, and that the
annual aggregate limits for the 1972-1975 primary and excess policies had been
impaired or exhausted.
{¶5} In its decision granting Powell’s motion in part and denying
OneBeacon’s motion, the trial court specifically stated that “[t]he dispute involves
three questions: 1) whether the aggregate limitation of liability applies annually or
for the term; 2) what constitutes an ‘occurrence’; and 3) whether Plaintiff can direct
the allocation of funds.” The court decided the first two issues in Powell’s favor. As
to the allocation issue, the court found that issues of fact existed that precluded
summary judgment.
{¶6} In an “Order Granting and Denying Motions for Summary Judgment,”
the court stated that OneBeacon’s motion for summary judgment was denied in all
respects. It stated that Powell’s motion for summary judgment “will be, and hereby
is, granted in all respects except on the issue of allocation, which the court reserves
for further proceedings[.]” The court then added that “there is no just reason for
delay” under Civ.R. 54(B). OneBeacon has appealed from that judgment.
{¶7} The Ohio Constitution limits an appellate court’s jurisdiction to the
review of final, appealable orders. Hooten v. Safe Auto Ins. Co., 1st Dist. Hamilton
No. C-061065, 2007-Ohio-6090, ¶ 10. An order is final and appealable only if it
meets the requirements of both R.C. 2505.02 and Civ.R. 54(B), if applicable. Noble
v. Colwell, 44 Ohio St. 3d 92, 540 N.E.2d 1381 (1989), syllabus; Icon Constr., Inc. v.
Statman, Harris, Siegel & Eyrich, LLC, 1st Dist. Hamilton No. C-090458, 2010-
Ohio-2457, ¶ 7. Civ.R. 54(B) certification cannot transform a nonfinal order into an
appealable order. Wisintainer v. Elcen Power Strut Co., 67 Ohio St. 3d 352, 354, 617
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OHIO FIRST DISTRICT COURT OF APPEALS
N.E.2d 1136 (1993); MRK Ents. v. Rochester, 1st Dist. Hamilton No. C-990819, 2000
Ohio App. LEXIS 3600, *5 (Aug. 11, 2000).
{¶8} R.C. 2505.02(B)(2) provides that an order “that affects a substantial
right made in a special proceeding” is a final order. A declaratory judgment action is
a special proceeding. Gen Acc. Ins. Co. v. Ins. Co. of N. Am., 44 Ohio St. 3d 17, 540
N.E.2d 266 (1989), paragraph two of the syllabus; Konold v. R.W. Sturge, Ltd., 108
Ohio App. 3d 309, 311, 670 N.E.2d 574 (1st Dist.1996).
{¶9} A substantial right is “a right that the United States Constitution, the
Ohio Constitution, a statute, the common law, or a rule of procedure entitles a
person to enforce or protect.” R.C. 2505.02(A)(1). An order affects a substantial
right if, in the absence of an immediate appeal, it forecloses appropriate relief in the
future. Bell v. Mt. Sinai Med. Ctr., 67 Ohio St. 3d 60, 63, 616 N.E.2d 181 (1993);
Konald at 311.
{¶10} When a trial court enters a judgment in a declaratory-judgment action,
the order must declare all of the parties’ rights and obligations to constitute a final,
appealable order. The trial court does not fulfill its function if it does not construe
the documents at issue. Midwestern Indem. Co. v. Nierlich, 8th Dist. Cuyahoga No.
92526, 2009-Ohio-3472, ¶ 8; Owner Operators Indep. Drivers Risk Retention
Group v. Stafford, 3d Dist. Marion No. 9-06-65, 2007-Ohio-3135, ¶ 10. A judgment
entry that does not completely construe the documents is not a final, appealable
order even though the entry contains Civ.R. 54(B) language. Midwestern Indem. Co.
at ¶ 9.
{¶11} In this case, the trial court did not grant summary judgment on the
issue of allocation. The court relied on Goodyear Tire & Rubber Co. v. Aetna Cas. &
Sur. Co., 95 Ohio St. 3d 512, 2002-Ohio-2842, 769 N.E.2d 835, in which the Ohio
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OHIO FIRST DISTRICT COURT OF APPEALS
Supreme Court discussed the issue of allocation “which deals with the
apportionment of a covered loss across multiple triggered insurance policies.” Id. at
¶ 5. It stated that “[t]he issue of allocation arises in situations involving long-term
injury or damage, such as environmental cleanup claims where it is difficult to
determine which insurer must bear the loss.” Id.
{¶12} The Supreme Court explained:
There are two accepted methods for allocating coverage. One
approach, favored by Goodyear, permits the policyholder to seek
coverage from any policy in effect during the time period of injury or
damage. This "all sums" approach allows Goodyear to seek full
coverage for its claims from any single policy, up to that policy's
coverage limits, out of the group of policies that has been triggered. In
contrast, the insurers urge us to apply the pro rata allocation scheme
implicitly adopted by the court of appeals. Under the pro rata
approach, each insurer pays only a portion of a claim based on the
duration of the occurrence during its policy period in relation to the
entire duration of the occurrence. It divides "a loss 'horizontally”
among all triggered policy periods, with each insurance company
paying only a share of the policyholder's total damages.
(Citation omitted.) Id. at ¶ 6.
{¶13} The Supreme Court stated that the starting point for determining the
scope of coverage was the language of the insurance policies. Id. at ¶ 7. After
examining the policies in question, the court held that “[w]hen a continuous
occurrence of environmental pollution triggers claims under multiple primary
insurance policies, the insured is entitled to secure coverage from a single policy of
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OHIO FIRST DISTRICT COURT OF APPEALS
its choice that covers ‘all sums’ incurred as damages ‘during the policy period,’
subject to that policy’s limit of coverage.” Id. at paragraph one of the syllabus.
{¶14} In ruling on the allocation issue, the trial court stated:
Under the authority of Goodyear, generally an “all sums” approach
would apply. OneBeacon argues however, that Plaintiff cannot
retroactively apply this approach. It argues that Plaintiff has been
operating under a “pro rata” approach and cannot now apply a
different method. The Court finds that questions of fact exist
precluding either party from summary judgment at this point.
{¶15} The determination of the allocation of coverage is akin to a
determination of damages. In Walburn v. Dunlap, 121 Ohio St. 3d 373, 2009-Ohio-
1221, 904 N.E.2d 863, syllabus, the Ohio Supreme Court held that “[a]n order that
declares that an insured is entitled to coverage but does not address damages is not a
final order as defined in R.C. 2505.02(B)(2), because the order does not affect a
substantial right even though made in a special proceeding.” Therefore, that order is
not a final, appealable order even if it includes a Civ.R. 54(B) certification. Id. at ¶ 4.
{¶16} The court pointed out that unlike a case that involves a duty to defend
which does affect a substantial right, when a determination is made that an insured
is entitled to coverage, the insurer is obligated to pay only if the insured is awarded
damages. Id. at ¶ 26. The court further stated that “even where the issue of liability
has been determined, but a factual adjudication of relief is unresolved, the finding of
liability is not a final appealable order even if Rule 54(B) language was employed.”
Id. at ¶ 31, quoting Noble, 44 Ohio St. 3d at 96, 540 N.E.2d 1381.
{¶17} Similarly, in this case there is a determination of liability, but not a
determination of how much will be paid out of each insurance policy. The results
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OHIO FIRST DISTRICT COURT OF APPEALS
will differ dramatically depending on whether the trial court applies the “vertical” all-
sums approach or the “horizontal” pro-rata approach. The trial court has not
decided any claim in its entirety, but has instead partially decided all the claims. See
Lucio v. Safe Auto Ins. Co., 188 Ohio App. 3d 190, 2010-Ohio-2528, 935 N.E.2d 53, ¶
16-17 (7th Dist.).
{¶18} Consequently, the court has not completely declared the rights of the
parties under the insurance policies at issue. Further, the absence of an appeal
would not foreclose relief in the future. Therefore, the trial court’s judgment does
not affect a substantial right made in a special proceeding. It is not a final,
appealable order under R.C. 2505.02, and this court does not have jurisdiction to
hear the appeal. Gen. Acc. Ins. Co., 44 Ohio St. 3d at 20, 540 N.E.2d 266; Empower
Aviation, LLC v. Butler Cty. Bd. of Commrs., 185 Ohio App. 3d 477, 2009-Ohio-6331,
924 N.E.2d 862, ¶ 9 (1st Dist.). Consequently, we have no choice but to dismiss the
appeal, and the appeal is hereby dismissed.
Appeal dismissed.
HENDON, P.J., concurs.
DEWINE, J., concurs separately.
DEWINE, J., concurring separately.
{¶19} Although I agree with the majority that the appeal must be dismissed
for lack of a final, appealable order, I arrive there by a somewhat different path.
{¶20} As the majority points out, to be final and appealable an order must
meet the requirements of R.C. 2505.02(B) and, if applicable, Civ.R. 54(B). There are
two provisions of 2505.02(B) that merit consideration here: R.C. 2505.02(B)(1) and
2505.02(B)(2).
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OHIO FIRST DISTRICT COURT OF APPEALS
{¶21} To meet the requirements of R.C. 2505.02(B)(1), an order must
“affect[] a substantial right in an action that in effect determines the action and
prevent[] a judgment.” On its face, the trial court’s order does not fall within R.C.
2505.02(B)(1) because it does not determine the action. The trial court left other
issues to be decided.
{¶22} The trial court’s inclusion of Civ.R. 54(B) language does not overcome
this deficiency. Civ.R. 54(B) only allows a court to enter “final judgment as to one or
more but fewer than all of the claims or parties.” (Emphasis added.) Here, the
court’s order does not purport to enter judgment as to one or more claims or parties.
Powell filed a complaint for declaratory judgment. As amended, the complaint
included six “claims for relief.” Each claim for relief sought a declaration of rights
under specifically enumerated insurance policies. (For example, the first claim
sought a declaration of rights under policies CG249982 and CG304557.) The
decision issued by the trial court didn’t decide any of Powell’s claims; that is, it didn’t
fully declare the parties’ rights under any of the enumerated policies. Rather, the
court decided certain issues and left others to be decided later.
{¶23} There is no provision in Civ.R. 54(B) that allows a court to enter
judgment as to issues. Rather, the court can only enter judgment under Civ.R. 54(B)
as to “claims or parties.” Thus, the certification is of no effect. And because the
order did not determine the action, it is not final under R.C. 2505.02(B)(1).
{¶24} An order that does not meet the requirements for finality under R.C.
2505.02(B)(1) may still be final under R.C. 2505.02(B)(2). That provision applies to
an order that affects “a substantial right made in a special proceeding.” An order
affects a substantial right if it has immediate consequences, Walburn v. Dunlap, 121
Ohio St. 3d 373, 2009-Ohio-1221, 904 N.E.2d 863, ¶ 24, or if appropriate relief in the
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OHIO FIRST DISTRICT COURT OF APPEALS
future would be foreclosed in the absence of an immediate appeal. Bell v. Mt. Sinai
Med. Ctr., 67 Ohio St. 3d 60, 63, 616 N.E.2d 181 (1993). Here, there are no immediate
consequences of the court’s order, and appropriate relief may be obtained by way of
appeal upon the trial court’s conclusion of the case. As a result, a substantial right is
not affected, and the order is not final under R.C. 2505.02(B)(2).
{¶25} For these reasons, I concur with the decision to dismiss the case for
lack of jurisdiction.
Please note:
The court has recorded its own entry on the date of the release of this opinion.
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