Blazek v. Ohio Bar Liab. Ins. Co.

[Cite as Blazek v. Ohio Bar Liab. Ins. Co., 2023-Ohio-1722.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
James N. Blazek, et al., :
Plaintiffs-Appellants, : No. 22AP-473
(C.P.C. No. 19CV-3471)
v. :
(REGULAR CALENDAR)
Ohio Bar Liability Insurance Co., :
Defendant-Appellee. :
D E C I S I O N
Rendered on May 23, 2023
On brief: The Behal Law Group LLC, and John M. Gonzales,
for appellants. Argued: John M. Gonzales.
On brief: Weston Hurd LLP, and Edward G. Hubbard, for
appellee. Argued: Edward G. Hubbard.
APPEAL from the Franklin County Court of Common Pleas
EDELSTEIN, J.
{¶ 1} Plaintiffs-appellants, James N. Blazek and Pillar Title, appeal from a decision
of the Franklin County Court of Common Pleas entered July 5, 2022 denying Mr. Blazek
and Pillar Title’s motion for summary judgment and granting the motion for summary
judgment submitted by defendant-appellee, Ohio Bar Liability Insurance Company
(“OBLIC”). For the following reasons, we affirm the judgment of the trial court.
I. Facts and Procedural History
{¶ 2} This matter arises from an insurance coverage dispute. Since May 1, 2015,
appellee OBLIC has provided professional liability insurance to appellants James Blazek
and the title company he owns and operates, Pillar Title. (Blazek Depo. at 7, 11.) The policy,
which is commonly known as a “claims made and reported” policy, has been renewed
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annually. (Compl. Ex. 1.) While the general dispute before the trial court was whether
OBLIC wrongfully denied Mr. Blazek’s claim, the crux of the disagreement is the meaning
of “policy period” as used to determine timely reporting of a claim.
A. The OBLIC Insurance Policy
{¶ 3} Beginning in 2015, Mr. Blazek and Pillar Title elected to enroll in a type of
professional liability insurance known as a “claims made and reported” policy. This phrase
is displayed prominently on the front page of the policy, with a notice below it that states
coverage is available for “only those ‘Claims’ that are first made against the Insured and
reported to the Company during the ‘Policy Period’ or a relevant ‘Extended Reporting
Period.’” (Emphasis in original.) (Compl. Ex. 1 at 1.) Section I of the policy addresses
coverage and restates the conditions provided on the cover page, stating that the insurer
will pay all sums that the insured is obligated to pay as money damages because of “any
‘Claim’ first made against the Insured and reported in writing to the Company during the
‘Policy Period,’ pursuant to Condition VI of this policy[.]” (Emphasis in original.)
(Compl. Ex. 1 at 2.) Pursuant to Condition VI, the insured must give written notice to
OBLIC “as soon as practicable” once the insured becomes aware of an event that is
reasonably expected to form the basis of a claim against the insured for money damages.
(Compl. Ex. 1 at 11.) The policy defines a “Claim” as “a demand received by the Insured
for money damages[.]” (Compl. Ex. 1 at 3.) “Policy Period” is defined as “the period of
time between the inception time and date shown in the Declarations and the time and date
of termination, expiration or cancellation of coverage for the Named Insured[.]” Id.{¶ 4} The policy coverage began on May 1, 2015 and remained in effect until 12:01
a.m. on May 1, 2016, at which point Mr. Blazek could renew the policy for another one-year
term or allow it to expire. (Compl. Ex. 1.) An alternate basis to terminate coverage is
through cancellation, which either party to the policy can invoke. (Compl. Ex. 1 at 13-14.)
Mr. Blazek renewed the policy each year through 2019. Consequently, with each annual
renewal, he received a new copy of his “Professional Liability Claims-Made and Reported
Policy” and a new Declarations page reflecting the updated policy period. (See, e.g., Compl.
Ex. 1.) Each Declarations page listed the following five items: (1) the named insured(s); (2)
the policy period; (3) limits of liability; (4) the deductible amount; and (5) the total policy
premium. Id. While the terms of the policy stayed the same or substantially similar from
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year to year, the Declarations page issued upon renewal reflected changed items, including
the new policy period.
B. Discovery of Wire Transfer Scam and Potential Coverage
{¶ 5} Mr. Blazek served as the title agent for a residential real estate transaction in
2016. Once the real estate sale was finalized, a processor for Pillar Title, Michelle Peters,
mailed the property sellers a check on September 21, 2016 for the escrowed sale proceeds
in the amount of $93,532.09. (Mar. 16, 2020 Blazek Aff. at ¶ 10; Blazek Depo. at 37.) Two
days later, Ms. Peters received an email from someone who appeared to be the sellers’ real
estate agent. (Blazek Depo. at 37) The purported agent claimed the sellers preferred to
have the funds wired to them directly and provided their bank account information,
assuring Pillar Title that the mailed check had already been shredded. (Blazek Aff. at ¶ 11.)
Believing the request and provided email address were legitimate, Ms. Peters promptly
transferred the funds. (Blazek Aff. at ¶ 12; Blazek Depo. at 38.) Shortly thereafter, Mr.
Blazek discovered the request was a scam—the wire transfer request had not come from the
sellers’ real estate agent, as believed, but an unauthorized third-party who had intercepted
their communications and impersonated the agent. (Blazek Aff. at ¶ 13; Blazek Depo. at
39.)
{¶ 6} When the sellers—unaware of what had transpired—deposited the sale
proceeds check from Pillar Title, the duplicate and nearly simultaneous payments of
$93,532.09 unexpectedly plunged the escrow account into the negatives. (Blazek Depo. at
38.) Later that day, a seller from a separate real estate transaction attempted to cash a
check from Pillar Title and was informed by the bank that the escrow account contained
insufficient funds to complete the deposit. (Blazek Depo. at 39.) Concerned about a
frustrated, unpaid seller and the reputation of his title company, Mr. Blazek quickly
marshalled enough cash from the title company and his own personal funds to cover the
bounced check and remedy the account deficiency. (Blazek Depo. at 21, 46, 48; Blazek Aff.
at ¶ 14.)
{¶ 7} Mr. Blazek worked with law enforcement to prosecute the individual behind
the wire transfer scam and retrieve the lost funds. (Blazek Depo. at 42-43.) Despite his
efforts, the money was never recovered. (Blazek Aff. at ¶ 15.) He reported the loss to his
insurer’s underwriter and informally consulted with a former law school classmate who was
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also in the title business. (Blazek Depo. at 19, 22-23.) No one Mr. Blazek spoke to suggested
he file a claim with OBLIC; on the contrary, his law school classmate expressed doubt his
insurance policy would cover this type of loss. (Blazek Depo. at 23-24.) He had similarly
concluded the email scam was most akin to a loss from a cyber-security attack, an event
that was not covered without the purchase of additional insurance. (Blazek Depo. at 28-
29.) Mr. Blazek did not contact OBLIC to discuss potential coverage under his policy. Nor
did he review the policy himself, instead relying on his recollection of the terms from when
he first enrolled. (Blazek Depo. at 17, 24.)
{¶ 8} While attending an underwriting seminar in August 2018, Mr. Blazek was
surprised to learn that other title agents had successfully submitted claims for the type of
loss he experienced in 2016. (Blazek Depo. at 32.) He called OBLIC and explained the
situation to a representative, including his revelation from the seminar. The representative
agreed the type of loss Mr. Blazek described was covered under the policy. After the
seminar, Mr. Blazek followed up with an email to OBLIC to formally provide written notice
of his claim. (Blazek Depo. at 33.)
{¶ 9} Soon thereafter, OBLIC denied the claim. OBLIC provided Mr. Blazek two
reasons for the denial: (1) the claim against Mr. Blazek and Pillar Title was not made during
the same policy period as when it was reported; and (2) Mr. Blazek and Pillar Title
voluntarily paid the claim against them in violation of a policy condition. (Mar. 10, 2020
Stip.)
C. Trial Court Proceedings
{¶ 10} On April 26, 2019, Mr. Blazek and Pillar Title brought an action in the
Franklin County Court of Common Pleas seeking a declaratory judgment that coverage
existed under the terms of the policy and OBLIC breached the insurance agreement by
denying the claim. The parties filed cross-motions for summary judgment on March 16,
2020. Mr. Blazek and Pillar Title argued the “policy period” ends on the “date of
termination, expiration or cancellation of coverage,” and the policy has remained
continuously in effect through ongoing annual renewals. (Compl. Ex. 1 at 3.) In its motion,
OBLIC asserted the denial was proper because Mr. Blazek did not report the claim during
the same policy period it was made against him.
No. 22AP-473 5
{¶ 11} The trial court entered summary judgment in favor of OBLIC and against Mr.
Blazek and Pillar Title on July 5, 2022. In its decision, the trial court found the clear and
unambiguous policy terms require a claim to be reported during the same policy period it
is made against the insured, the policy period is the one-year term listed on the Declarations
page, and Mr. Blazek’s delayed report failed to trigger coverage under the terms of his
policy. (July 5, 2022 Decision and Judgment Entry at 8.)
{¶ 12} Mr. Blazek and Pillar Title timely appeal that judgment.
II. Assignment of Error
{¶ 13} Appellants assign the following assignment of error for our review:
[I.] The Trial Court erred by denying Plaintiffs-Appellants’
Motion for Summary Judgment.
III. Discussion
{¶ 14} This court reviews an entry of summary judgment using a de novo standard
of review. “De novo appellate review means the court of appeals conducts an independent
review, without deference to the trial court's decision.” Garrison Southfield Park L.L.C. v.
Aspen Specialty Ins. Co., 10th Dist. No. 21AP-21, 2022-Ohio-709, ¶ 26. “In determining
whether a trial court properly granted summary judgment, an appellate court must review
the evidence according to the standard set forth in Civ.R. 56, as well as that stated in
applicable case law.” Grange Mut. Ins. Co. v. Patino, 10th Dist. No. 19AP-278, 2020-Ohio-
466, ¶ 22.
{¶ 15} Summary judgment is appropriate only if “the pleadings, depositions,
answers to interrogatories, written admissions, affidavits, transcripts of evidence, and
written stipulations of fact, if any, timely filed in the action, show that there is no genuine
issue as to any material fact and that the moving party is entitled to judgment as a matter
of law.” Civ.R. 56(C). “Thus, a party seeking summary judgment on the grounds that a
nonmoving party cannot prove its case bears the initial burden of informing the trial court
of the basis for the motion and must identify those parts of the record which demonstrate
the absence of a genuine issue of material fact on the elements of the nonmoving party's
claims.” Patino at ¶ 23, citing Dresher v. Burt, 75 Ohio St.3d 280, 292-93 (1996).
{¶ 16} An insurance policy is a contract, and its interpretation is a question of law.
Acuity v. Masters Pharmaceutical, Inc., 169 Ohio St.3d 387, 2022-Ohio-3092, ¶ 11. “When
No. 22AP-473 6
confronted with an issue of contract interpretation, our role is to give effect to the intent of
the parties. We will examine the contract as a whole and presume that the intent of the
parties is reflected in the language of the contract. In addition, we will look to the plain and
ordinary meaning of the language used in the contract unless another meaning is clearly
apparent from the contents of the agreement. When the language of a written contract is
clear, a court may look no further than the writing itself to find the intent of the parties.”
Sunoco, Inc. (R&M) v. Toledo Edison Co., 129 Ohio St.3d 397, 2011-Ohio-2720, ¶ 37.
“When interpreting a contract, we will presume that words are used for a specific purpose
and will avoid interpretations that render portions meaningless or unnecessary.” Capital
City Community Urban Redevelopment Corp. v. Columbus, 10th Dist. No. 08AP-769,
2009-Ohio-6835, ¶ 30.
{¶ 17} “In order to recover on a claim for a breach of an insurance contract, a
plaintiff must prove that a policy of insurance existed and that the claimed loss was covered
under the policy.” Patino at ¶ 31. “Insurance policies include both claims made policies
and occurrence policies.” Garrison Southfield Park L.L.C. at ¶ 29. See also Kentucky Med.
Ins. Co. v. Jones, 10th Dist. No. 02AP-817, 2003-Ohio-3301, ¶ 59. Under a “claims made”
policy, the insured must present a claim to the insurer within the defined policy period (or
extended period, if applicable) to trigger coverage. Garrison Southfield Park L.L.C. at ¶ 29.
{¶ 18} Appellants do not dispute the characterization of Mr. Blazek’s policy as a
claims made policy. Instead, they assert the trial court erred in concluding the meaning of
“policy period” in the agreement was unambiguous and thus rendered Mr. Blazek’s report
untimely. In support of this argument, appellants highlight specific language in the
definition of “policy period:” “the period of time between the inception time and date shown
in the Declarations” and “the time and date of termination, expiration or cancellation of
coverage[.]” (Compl., Ex. 1, at 3.) Because “inception” is not defined in the agreement and
the policy does not identify a specific Declarations page, appellants assert the original date
of enrollment, May 1, 2015, could reasonably be interpreted as the “inception” date of the
policy period. Likewise, because the policy has never been cancelled or permitted to expire,
it never terminated, which would allow the wire fraud loss to be reported at any time so
long as the policy remained in effect and uninterrupted.
No. 22AP-473 7
{¶ 19} Appellants’ interpretation of the inception date requires us to ignore the
second half of the phrase, “shown in the Declarations.” Mr. Blazek received a new
Declarations page with each annual renewal. Every year, that new Declarations page
contained an updated inception date reflecting the date of renewal. If appellants’
interpretation was correct, the beginning date of the policy period shown in the
Declarations would have remained May 1, 2015 interminably. Appellants’ explanation of
the policy period’s end-date (or lack thereof) is similarly unpersuasive. Continuous
coverage existed because Mr. Blazek did not cancel his policy and OBLIC opted to renew
his enrollment each year. The option to renew for a successive term does not mean the
duration of a contract is perpetual or indefinite.
{¶ 20} This court has previously addressed whether renewals under a “claims made”
policy extend the applicable reporting period. In Asp v. Ohio Med. Transp., Inc., 10th Dist.
No. 00AP-958, 2001 Ohio App. LEXIS 2865, *9 (June 28, 2001), a business was denied
coverage by its insurer for reporting a claim outside the policy period. On appeal, the entity
contended its “policy period” extended from the initiation date of its first insurance contract
(April 3, 1995) to the expiration date of its last insurance contract (April 3, 1999). This court
noted the policy period was “the definitive dates declared in the policy’s ‘Declarations’
page.” Id. at 8. Even though the policy number remained the same and the subsequent
policy was considered a renewal, this court held that “without a statement in the contract
that a renewal operates as an extension of coverage, merely renewing a claims-made policy
does not extend the ‘policy period’ in the contract.” Id. at *11. See also Wright State
Physicians, Inc. v. Doctors Co., 1st Dist. No. 2014 CV 05685, 2016 Ohio Misc. LEXIS 18967,
*63 (Mar. 25, 2016). Here, too, the length of the policy period stated on the Declarations
page is not affected simply because the policy systematically renews at the end of each one-
year term.
{¶ 21} Furthermore, adopting this interpretation would require the court to render
other provisions of the policy mere surplusage, contravening well-settled principles of
contract interpretation. See, e.g., Buckeye Wellness Consultants, LLC v. Hall, 10th Dist.
No. 20AP-380, 2022-Ohio-1602, ¶ 13. The policy defines “Effective Date,” as used in
Exclusion (i), as “the date on which coverage became effective under the first policy issued
by the Company, provided the same or substantially similar coverage has been in force
No. 22AP-473 8
continuously without interruption under this or any prior policies issued by the Company.”
(Compl. Ex. 1 at 3.) In contrast, the beginning date of the “Policy Period” is defined as “the
inception time and date shown in the Declarations.” Id. Exclusion (i) discusses coverage
for acts which occurred before the first policy was issued to the insured, i.e., before the
effective date of the policy. (Id. at 6.) This distinguishes the first date of enrollment from
the date of renewal, which is the inception date “shown in the Declarations” and which
changes every year. The provisions reflect an intent to differentiate the original date of
enrollment from the beginning of a new policy period.
{¶ 22} Appellants attempt to create ambiguity over the termination date of the
policy by reading the definition of “Policy Period” in isolation. However, any potential
ambiguity is resolved by giving full force and effect to the contract as a whole. A “Policy
Period” ends at the “date of termination, expiration or cancellation of coverage[.]” (Compl.
Ex. 1 at 3.) This clause, unlike the “inception date” preceding clause, does not contain the
phrase “shown in the Declarations” and is appellants’ basis for the claimed ambiguity.
However, this interpretation fails to account for the two methods by which coverage may
terminate: cancellation midway through the term or at the expiration of coverage.
Cancellation of the policy ends coverage at a date earlier than the one listed on the
Declarations page. Conversely, the natural end of coverage occurs on the date listed on the
Declarations page.
{¶ 23} Appellants argue coverage was never permitted to expire because the policy
was renewed each year by OBLIC. However, whether a renewal operates as a continuation
of the contract, or a new contract altogether, is dependent upon the language of the policy.
Dixon v. Professional Staff Mgt., 10th Dist. No. 01AP-1332, 2002-Ohio-4493, ¶ 25. This
court considers several factors to make this determination, such as whether the
Declarations page contains a policy period with a set duration, indications that coverage
only applies to loss that occurs during a specific policy period, and whether the insurer has
authority to renew the policy or allow it to expire at the end of the term. Id. at ¶ 27-28. See
also Benson v. Rosler, 19 Ohio St.3d 41, 44 (1985), limited in part on other grounds, Wolfe
v. Wolfe, 88 Ohio St.3d 246 (2000) (insurance policy constituted a new contract upon each
successive renewal because policy was written for a specific duration and terminated if
insurer elected not to renew); Gibbons-Barry v. Cincinnati Ins. Cos., 10th Dist. No. 01AP-
No. 22AP-473 9
1437, 2002-Ohio-4898, ¶ 23 (express provision authorizing insurer not to renew the policy
indicated renewal was a new policy as compared to extension of former policy). Here, the
Declarations page contains a policy period with a set duration, coverage under the policy
applies only to loss occurring during a specific policy period, and OBLIC has the right to
renew the policy or allow it to expire at the end of a defined term. Therefore, all three factors
support a conclusion that each renewal creates a separate contract of insurance rather than
the continuation of the same policy. Reading the contract as a whole, each policy renewal
operates as a new contract of insurance and thus the date of expiration is the projected end-
date listed in the declarations. Upon renewal, a new “inception time and date” begins and
a new Declarations page is issued containing the new duration of the policy.
{¶ 24} To trigger coverage, Mr. Blazek was required to report the claim made against
him for money damages in September 2016 before the end of his policy period on May 1,
2017. We concur with the trial court’s assessment that because Mr. Blazek waited to notify
his insurer of the claim until August 2018, he failed to satisfy that requirement, and
coverage was properly denied.
IV. Disposition
{¶ 25} Based on our independent review of the record, we hold the trial court’s
judgment denying Mr. Blazek and Pillar Title’s motion for summary judgment and granting
summary judgment in favor of OBLIC is in accordance with the law. We overrule
appellants’ sole assignment of error and affirm the judgment of the Franklin County Court
of Common Pleas.
Judgment affirmed.
LUPER SCHUSTER and BOGGS, JJ., concur.