Estate of Heintzelman v. Air Experts, Inc. , 2011 Ohio 5242 ( 2011 )

[Cite as Estate of Heintzelman v. Air Experts, Inc., 2011-Ohio-5242.]
COURT OF APPEALS
DELAWARE COUNTY, OHIO
FIFTH APPELLATE DISTRICT
THE ESTATE OF JEFFREY : JUDGES:
HEINTZELMAN, ET AL. : Hon. Sheila G. Farmer, P.J.
: Hon. John W. Wise, J.
Plaintiffs-Appellants : Hon. Julie A. Edwards, J.
:
-vs- :
:
AIR EXPERTS, INC., ET AL. : Case No. 11CAE050043
:
Defendants-Appellees : OPINION
CHARACTER OF PROCEEDING: Appeal from the Court of Common
Pleas, Case No. 04CVH-04-233
JUDGMENT: Affirmed
DATE OF JUDGMENT: October 10, 2011
APPEARANCES:
For Plaintiffs-Appellants For Defendant-Appellees
CHARLES H. COOPER, JR. BRUCE A. CURRY
REX H. ELLIOTT 8000 Ravine's Edge Court, #103
2175 Riverside Drive Columbus, OH 43235
Columbus, OH 43221
Delaware County, Case No. 11CAE050043 2
Farmer, J.
{¶1} In August of 1999, Jeffrey and Margaret Heintzelman hired Tom Martel,
dba Martel Heating and Cooling, to install an attic air conditioner in their home. The air
conditioner never worked properly. Mr. Martel attempted to fix the problem, but was
unsuccessful.
{¶2} In 2001, the Heintzelmans hired Air Experts, Inc. to fix the air conditioner.
Air Experts was unable to repair the unit and the problems continued.
{¶3} On July 15, 2002, Mr. Heintzelman went to the attic to examine leaking
from the air conditioner. Mr. Heintzelman was electrocuted by an unprotected outlet
providing power to the condensation pump leading to the air conditioner. The outlet had
been installed by Mr. Martel.
{¶4} At the time of the installation of the air conditioner, Mr. Martel was insured
under a commercial insurance policy issued by appellee, American Family Insurance,
Policy No. 34-X03305-01. The policy was in effect from May 18, 1999 to May 18, 2000,
with a limit of $500,000.00.
{¶5} On December 10, 2002, appellant, the Estate of Jeffrey K. Heintzelman,
together with Mrs. Heintzelman, filed a complaint against Mr. Martel and Air Experts,
claiming wrongful death and negligent infliction of serious emotional distress (Case No.
02CVH-12-712). Appellee defended Mr. Martel in the lawsuit. On March 16, 2003,
appellant dismissed the action without prejudice.
{¶6} On December 4, 2003, appellee filed a declaratory judgment action (Case
No. 03CVH-12-896), seeking a judgment that it did not have a duty to indemnify Mr.
Martel for any damages awarded in the case. Appellee did not join appellant as a party
nor did appellant seek to intervene.
Delaware County, Case No. 11CAE050043 3
{¶7} On March 4, 2004, appellee filed a motion for default judgment based
upon Mr. Martel's failure to answer or otherwise defend the action. The trial court
granted the motion on March 10, 2004. In March of 2007, Mr. Martel filed a motion to
vacate the default judgment. By judgment entry filed March 12, 2007, the trial court
denied the motion, finding the motion was untimely filed.
{¶8} On April 9, 2004, appellants again filed a complaint against Mr. Martel and
Air Experts (Case No. 04CVH-04-233). A jury trial commenced on February 28, 2005.
The jury found in favor of appellant, awarding the estate $1,014,186.00 and Mrs.
Heintzelman $2,650,000.00 on her emotional distress claim. The award to Mrs.
Heintzelman was subsequently reversed by this court. See, Estate of Heintzelman v.
Air Experts, Inc., Delaware App. No. 2005-CAPE-08-0054, 2006-Ohio-4832,
(hereinafter "Heintzelman I").
{¶9} On May 10, 2005, while the appeal was pending, appellant filed a
supplemental complaint against appellee, claiming appellee must indemnify Mr. Martel
(Case No. 04CVH-04-233). Appellee filed a motion for summary judgment on October
6, 2005, claiming in part that appellant could not collaterally attack the default judgment
in favor of appellee and against Mr. Martel, and Mr. Martel was not entitled to coverage
under the insurance policy. The trial court stayed the case pending the outcome of the
appeal.
{¶10} On August 23, 2006, Mr. Martel filed a separate complaint against
appellee, claiming fraud and misrepresentation regarding coverage under the policy and
over the default judgment in the declaratory judgment action (Case No. 06CVH-08-761).
Delaware County, Case No. 11CAE050043 4
{¶11} On December 15, 2006, appellee filed a motion to dismiss Mr. Martel's
complaint, claiming res judicata because of the declaratory judgment decision in Case
No. 03CVH12-0896. By judgment entry filed February 1, 2007, the trial court granted
the motion. On appeal, this court reversed, finding res judicata did not apply to the
specific claims made by Mr. Martel. Martel v. American Family Insurance Company,
Delaware App. No. 07CAE020012, 2007-Ohio-4819.
{¶12} Upon remand by this court in Heintzelman I, the trial court adjusted the
award for emotional distress to $0 (Case No. 04CVH-04-233). See, Judgment Entry
filed August 6, 2007. By separate entry filed August 6, 2007, the trial court granted
appellee's motion for summary judgment that had been stayed in Case No. 04CVH04-
0233, finding appellant was bound by the default judgment rendered against Mr. Martel
in Case No. 03CVH12-0896. On appeal, this court reversed the trial court's decision
granting appellee's motion for summary judgment, finding appellant as a judgment
creditor was not bound by the declaratory judgment because appellee had initiated the
declaratory judgment against its insured, Mr. Martel. See, Estate of Heintzelman v. Air
Experts, Inc., Delaware App. No. 07CAE090054, 2008-Ohio-4883, (hereinafter
"Heintzelman II"). The Supreme Court of Ohio affirmed the decision in Heintzelman II.
See, Estate of Heintzelman v. Air Experts, Inc., 126 Ohio St.3d 138, 2010-Ohio-3264.
{¶13} Upon remand by this court in Heintzelman II, affirmed by the Supreme
Court of Ohio, the trial court entertained motions for summary judgment filed by
appellant and appellee on the issue of insurance coverage on the wrongful death
award. By judgment entry filed April 29, 2011, the trial court denied appellant's motion
and granted appellee's motion, finding the subject insurance policy was not in effect at
Delaware County, Case No. 11CAE050043 5
the time of appellant's death, appellee had not waived its defense of no coverage, and
the doctrine of estoppel did not apply.
{¶14} Appellant filed an appeal and this matter is now before this court for
consideration. Assignment of error is as follows:
I
{¶15} "THE TRIAL COURT ERRED WHEN IT DENIED APPELLANT'S MOTION
FOR SUMMARY JUDGMENT AGAINST AMERICAN FAMILY REGARDING
COVERAGE UNDER AMERICAN FAMILY'S INSURANCE POLICY AND INSTEAD
GRANTED AMERICAN FAMILY'S MOTION FOR SUMMARY JUDGMENT."
I
{¶16} Appellant claims the trial court erred in granting summary judgment to
appellee. Specifically, appellant claims the trial court erred in finding there was no
coverage under the subject policy as the "occurrence" that caused bodily injury took
place in the "coverage territory" and the property damage occurred during the policy
period. We disagree.
{¶17} Summary Judgment motions are to be resolved in light of the dictates of
Civ.R. 56. Said rule was reaffirmed by the Supreme Court of Ohio in State ex rel.
Zimmerman v. Tompkins, 75 Ohio St.3d 447, 448, 1996-Ohio-211:
{¶18} "Civ.R. 56(C) provides that before summary judgment may be granted, it
must be determined that (1) no genuine issue as to any material fact remains to be
litigated, (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
viewing such evidence most strongly in favor of the nonmoving party, that conclusion is
Delaware County, Case No. 11CAE050043 6
adverse to the party against whom the motion for summary judgment is made. State
ex. rel. Parsons v. Fleming (1994), 68 Ohio St.3d 509, 511, 628 N.E.2d 1377, 1379,
citing Temple v. Wean United, Inc. (1977), 50 Ohio St.2d 317, 327, 4 O.O3d 466, 472,
364 N.E.2d 267, 274."
{¶19} As an appellate court reviewing summary judgment motions, we must
stand in the shoes of the trial court and review summary judgments on the same
standard and evidence as the trial court. Smiddy v. The Wedding Party, Inc. (1987), 30
Ohio St.3d 35.
{¶20} "An insurance policy is a contract and the relationship between the insurer
and the insured is purely contractual in nature. Nationwide Mut. Ins. Co. v. Marsh
(1984), 15 Ohio St.3d 107, 109, 15 OBR 261, 262, 472 N.E.2d 1061, 1062. The
interpretation and construction of insurance policies is a matter of law to be determined
by the court using rules of construction and interpretation applicable to contracts
generally. Gomolka v. State Auto. Mut. Ins. Co. 1982), 70 Ohio St.2d 166, 167-168, 24
O.O.3d 274, 275-276, 436 N.E.2d 1347, 1348-1349; Value City, Inc. v. Integrity Ins. Co.
(1986), 30 Ohio App.3d 274, 276, 30 OBR 472, 474, 508 N.E.2d 184, 186. In insurance
policies, as in other contracts, words and phrases are to be given their plain and
ordinary meaning unless there is something in the contract which would indicate a
contrary intention. Olmstead v. Lumbermen's Mut. Ins. Co. (1970), 22 Ohio St.2d 212,
216, 51 O.O.2d 285, 288, 259 N.E.2d 123, 126. Where the provisions of an insurance
policy are clear and unambiguous, courts may not indulge themselves in enlarging the
contract by implication in order to embrace an object distinct from that contemplated by
the parties. Gomolka, supra, 70 Ohio St.2d at 168, 24 O.O.3d at 276, 436 N.E.2d at
Delaware County, Case No. 11CAE050043 7
1348. However, where the provisions of a contract of insurance are reasonably
susceptible of more than one interpretation, they will be construed strictly against the
insurer and liberally in favor of the insured. King v. Nationwide Ins. Co. (1988), 35 Ohio
St.3d 208, 519 N.E.2d 1380, paragraph one of the syllabus." Nationwide Insurance
Company v. Tobler (1992), 80 Ohio App.3d 560, 563-564.
{¶21} In its brief at 3-4, appellant sets forth undisputed facts. Although appellee
did not accept these facts, appellee presented undisputed facts in its motion for
summary judgment consistent with appellant's. Appellant's undisputed facts are as
follows:
{¶22} "1. Jeff and Margie Heintzelman lived in a house on Berlin Station Road in
Delaware, Ohio. [TR. 328.]
{¶23} "2. In August of 1999, the Heintzelmans hired Martel to install a central air
conditioning unit in their home. [TR. 338]. The unit was installed by mid-September,
1999. [TR. 340.]
{¶24} "3. When the unit was turned on it leaked water. As a result, Martel was
called back to the Heintzelmans' property in the fall of 1999. [Amer. Fam. MSJ, p. 3.]
{¶25} "4. The unit Martel installed leaked through the ceiling, causing property
damage [TR. 344], and Martel offered to paint the ceiling where the leaks had damaged
the Heintzelmans' property. [TR. 781.]
{¶26} "5. The recurrent leaks that began in 1999 caused a loss of use of the
HVAC unit. Between the time it was installed and the time of Jeff Heintzelman's death,
the Heintzelmans were able to use the HVAC unit only sporadically due to the leaks.
[TR. 347-348.]
Delaware County, Case No. 11CAE050043 8
{¶27} "6. A Delaware County jury found that Jeff Heintzelman was killed on July
15, 2002 as a result of Martel's negligent installation of the unit when Mr. Heintzelman
went to the attic to once again examine the HVAC unit.
{¶28} "7. American Family issued insurance policy no. 34 X03305-01 to Tom
Martel d/b/a Martel Heating & Cooling. See Exhibit A. The policy was in effect during
the period May 18, 1999 to May 18, 2000.
{¶29} "8. Property damage occurred between May 1999 and May 2000. [Amer.
Fam. MSJ, p. 3.]
{¶30} "9. The Estate filed suit against Tom Martel on December 10, 2002.
{¶31} "10. American Family immediately retained counsel for Martel and began
defending him. American Family did not issue a 'Reservation of Rights' letter until June
30, 2003.
{¶32} "11. The 'Reservation of Rights' American Family issued to Tom Martel
misstated a key provision of Martel's insurance policy."
{¶33} The coverages at issue are contained in the 1999-2000 commercial
general liability policy. The pertinent parts of the policy are as follows:
{¶34} "COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY
{¶35} "1. Insuring Agreement
{¶36} "a. We will pay those sums that the insured becomes legally obligated to
pay as damages because of 'bodily injury' or 'property damage' to which this insurance
applies.
{¶37} "b. This insurance applies to 'bodily injury' and 'property damage' only if:
Delaware County, Case No. 11CAE050043 9
{¶38} "(1) The 'bodily injury' or 'property damage' is caused by an 'occurrence'
that takes place in the 'coverage territory'; and
{¶39} "(2) The 'bodily injury' or 'property damage' occurs during the policy
period." See, Commercial General Liability Coverage Form CG 00 01 07 98, Section I.
{¶40} "Bodily injury" and "property damage" are defined in the insurance policy
as follows:
{¶41} "3. 'Bodily injury' means bodily injury, sickness or disease sustained by a
person, including death resulting from any of these at any time.
{¶42} "17. 'Property damage' means:
{¶43} "a. Physical injury to tangible property, including all resulting loss of use of
that property. All such loss of use shall be deemed to occur at the time of the physical
injury that cause it; or
{¶44} "b. Loss of use of tangible property that is not physically injured. All such
loss of use shall be deemed to occur at the time of the 'occurrence' that caused it."
See, Commercial General Liability Coverage Form CG 00 01 07 98, Section V.
{¶45} Appellant argues although the bodily injury did not occur during the policy
period, the damage to the property was ongoing from 1999 until 2002, the time of Mr.
Heintzelman's death. Appellee takes the alternative position, arguing the bodily injury
occurred outside the policy period and appellant did not assert a property damage claim
against Mr. Martel at trial.
{¶46} Although the April 9, 2004 complaint generally pled property damages, the
judgment entry on the verdict was for wrongful death and compensatory damages only:
Delaware County, Case No. 11CAE050043 10
{¶47} "The Court hereby enters judgment on the jury's verdict against defendant
Martel Heating & Cooling and in favor of the Estate of Jeffrey K. Heintzelman on the
Estate's wrongful death claim in the amount of $1,014.186.00, and in favor of plaintiff
Margaret Heintzelman on her claim for negligent infliction of emotional distress in the
amount of $2,650,000.00. The total amount of the verdict against Martel Heating &
Cooling is $3,664,186.00. The jury further returned a verdict in favor of Air Experts, Inc.
on plaintiffs' claims, and the jury concluded that there was no comparative negligence
on the part of Mr. Heintzelman."
{¶48} The verdict forms filed March 7, 2005 limited the damages award to
appellant's wrongful death claim and Mrs. Heintzelman's emotional distress claim.
{¶49} Appellant artfully argues because the insurance policy coverage reads
"[t]his insurance applies to 'bodily injury' and 'property damage' and then speaks of "
'bodily injury' or 'property damage'," the estate is covered for bodily injury because the
property damage occurred within the policy period. (Emphasis added.) In other words,
because this case involves both bodily injury and property damage, the policy provides
coverage "if either bodily injury or property damage is caused by an occurrence within
the coverage territory and if either bodily injury or property damage occurs during the
policy period." (Emphasis sic.) Appellant's Brief at 6. Appellant argues this position
despite the fact that no amount was awarded for property damage and admittedly, the
bodily injury occurred outside the policy period.
{¶50} We view this argument as creative, but not within the plain reading and
understanding of the insurance policy. The word "or" is "used as a functional word to
indicate an alternative." Webster's Ninth New Collegiate Dictionary (1991) 829. As
Delaware County, Case No. 11CAE050043 11
used in the insurance contract, it is a conjunction i.e., a word that joins together
sentences and phrases.
{¶51} Using this grammatical definition, the coverage section would then read:
"bodily injury occurs during the policy period" and "property damage occurs during the
policy period." We cannot accept any other interpretation in applying the plain reading
of the policy.
{¶52} We find support for our interpretation in Ruffin v. Sawchyn (1991), 75 Ohio
App.3d 511, and Wells v. Westfield Insurance Co., Columbiana App. Nos. 99 CO 7 and
99 CO 12, 2001-Ohio-3172. In both cases, the policy language was nearly identical to
the policy language sub judice. The courts found no coverage because although the
negligence occurred during the policy period, the bodily injury occurred outside the
coverage period. Our brethren concluded the policy language was clear and
unambiguous.
{¶53} Given that the insurance contract is unambiguous, the facts are
undisputed, and the jury verdict related only to bodily injury claims, we concur with the
trial court's analysis.
{¶54} Appellant further argues appellee has waived its right to deny coverage
because appellee continued to defend Mr. Martel in the underlying action despite
issuing a "Reservation of Rights" letter. We disagree with this argument.
{¶55} A "reservation of rights is a notice given by the insurer that it will defend
the suit, but reserves all rights it has based on noncoverage under the policy." Motorists
Mutual Insurance Company v. Trainor (1973), 33 Ohio St.2d 41, 45. By providing such
a letter, an insurance company "reserves" its right "to deny coverage at a later date
Delaware County, Case No. 11CAE050043 12
based on the terms of the policy." Mastellone v. Lightning Rod Mutual Insurance Co.,
175 Ohio App.3d 23, 2008-Ohio-311, fn. 7.
{¶56} Appellant argues to issue such a letter and then continue to defend is
misleading and therefore the "no coverage defense" is waived. Appellant does not cite
to any case law supporting this argument that flies in the face of encouraging insurers to
defend their insureds in cases involving questionable coverage. Appellee's actions in
this case were not misleading as Mr. Martel acknowledged that appellee consistently
advanced its denial of coverage. Martel depo. at 67-68.
{¶57} Appellant also argues because of an error in the Reservation of Rights
letter, appellee should be estopped from denying coverage. There is no showing that
Mr. Martel relied on the error. In fact, Mr. Martel does not remember seeing the letter.
Martel depo. at 72, 115. We concur with the trial court in its April 29, 2011 judgment
entry that no evidence was presented to establish the error induced anyone "to change
its position with respect to the coverage issue."
{¶58} Upon review, we find the trial court did not err in granting summary
judgment to appellee.
{¶59} The sole assignment of error is denied.
Delaware County, Case No. 11CAE050043 13
{¶60} The judgment of the Court of Common Pleas of Delaware County, Oho is
hereby affirmed.
By Farmer, P.J.
Wise, J. and
Edwards, J. concur.
_s/ Sheila G. Farmer__________________
_s/ John W. Wise__________________
_s/ Julie A. Edwards________________
JUDGES
SGF/sg 906
[Cite as Estate of Heintzelman v. Air Experts, Inc., 2011-Ohio-5242.]
IN THE COURT OF APPEALS FOR DELAWARE COUNTY, OHIO
FIFTH APPELLATE DISTRICT
THE ESTATE OF JEFFREY :
HEINTZELMAN, ET AL. :
:
Plaintiffs-Appellants :
:
-vs- : JUDGMENT ENTRY
:
AIR EXPERTS, INC., ET AL. :
:
Defendants-Appellees : CASE NO. 11CAE050043
For the reasons stated in our accompanying Memorandum-Opinion, the
judgment of the Court of Common Pleas of Delaware County, Ohio is affirmed. Costs to
appellant.
s/ Sheila G. Farmer__________________
_s/ John W. Wise__________________
_s/ Julie A. Edwards________________
JUDGES