IN THE SUPREME COURT OF OHIO

Ohio Northern University, ) Case No. 2017-0514 ) Plaintiff-Appellee, ) On Appeal from the Hancock ) County Court of Appeals v. ) Third Appellate District ) Charles Construction Services, Inc., ) ) Court of Appeals Defendant-Appellee, ) Case No. 05-16-01 ) v. ) ) The Cincinnati Insurance Company, ) ) Intervenor-Appellant. )

Merit Brief of Amici Curiae Associated Builders and Contractors, Inc.; Associated Builder and Contractors, Inc., Central Ohio

Chapter; Associated Builders and Contractors, Inc., Ohio Valley Chapter; and Associated Builders and Contractors, Inc., Northern Ohio Chapter

BROUSE McDOWELL Amanda M. Leffler (0075467) (Counsel of Record) P. Wesley Lambert (0076961) Lucas M. Blower (0082729) Alexandra V. Dattilo (0086444) Christopher T. Teodosio (0089316) 388 S. Main Street Suite 500 Akron, Ohio 44311 (330) 535.5711 – phone (330) 253.8601 – fax aleffler@brouse.com wlambert@brouse.com lblower@brouse.com adattilo@brouse.com cteodosio@brouse.com

Attorneys for Amici Curiae Described Above

Supreme Court of Ohio Clerk of Court - Filed April 10, 2018 - Case No. 2017-0514

Gregory Edmund O'Brien Cavitch, Familo & Durkin LPA 1300 E Ninth St, 20th Floor Cleveland, OH 44114 (216) 621-7860 Counsel for Plaintiff-Appellant Ohio Insurance Institute

David Paul Kamp Jean Marie McCoy White, Getgey & Meyer Co., L.P.A. One West Fourth St., Suite 1700 Cincinnati, OH 45202 (513) 241-3685 Counsel for Appellee Charles Construction Services, Inc.

Kristen Lee Sours Ohio Home Builders Association 17 S. High St., Suite 700 Columbus, OH 43215 (614) 221-9876 Counsel for Appellee Ohio Home Builders Association and Building Industry Association of Central Ohio

Allen Lewis Rutz Mitchell Aaron Tobias Vorys, Sater, Seymour & Pease LLP 52 E. Gay Street P.O. Box 1008 Columbus, OH 43216-1008 (614) 464-5644 Counsel for Appellee Ohio Northern University

Terry Wayne Posey, Jr. Thompson Hine LLP Austin Landing I 10050 Innovation Dr., Suite 400 Miamisburg, OH 45342-4934 (937) 443-6857 Counsel for Appellee Associated General Contractors of Ohio

Thomas Patrick Kemp Eastman & Smith Ltd. 510 South Main Street P.O. Box 963 Findlay, OH 45839-0963 (419) 424-1977 Counsel for Appellee Ohio Northern University

Richard McLain Garner David Walter Orlandini Collins Roche Utley & Garner, LLC 655 Metro Place Suite 200 Dublin, OH 43017 (614) 901-9600 Counsel for Appellant The Cincinnati Insurance Company

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TABLE OF CONTENTS

I. STATEMENT OF INTEREST……………………………………………........................1

II. STATEMENT OF FACTS AND THE CASE….………………………….......................2

III. INTRODUCTION………………………………………………………………………...2

IV. LAW AND ARGUMENT………………………………………………………………...4

Appellant’s Proposition of Law No. I: Westfield Ins. Co. v. Custom Agri Systems, Inc., 133 Ohio St.3d 476, 2012-Ohio-4712, remains applicable to claims of defective construction or workmanship by a subcontractor included within the “products-completed operations hazard” of a commercial general liability policy……………………………...4

A. The Policy Provides Coverage to the Named Insured for Work Performed by a Subcontractor Within the Products-Completed Operations Hazard………………………4

1. This Court Did Not Previously Decide the Issue Presented in This Appeal……...4

2. The Subcontractor Exception Must Be Given Meaning…………………………..6

3. Appellate Court’s Decision Conforms With the Expectations of the Insurance Industry and Ohio’s Contractor-Insureds…………………………………………7

a. The Insurance Industry Intended to Provide Coverage for Damages Caused by a Subcontractor……………………………………………….……….......7

b. Ohio’s Contractor-Insureds Reasonably Expect Coverage For Property Damage Arising From Subcontractor Work………………………..………...8

4. The Policy Provides Broader Coverage for Damage Occurring Once the Project Is Completed…………………………………………………………………….…..9

5. At a Minimum, Damages Arising From Subcontractor Work Are An “Occurrence” As To The General Contractor……………………………….…...11

B. Custom Agri Should Be Overruled……………………………………………………...12

1. The Galatis Factors……………………………………………………………...14

2. Custom Agri Was Wrongly Decided………………………………………….…15

a. Interpretation of an Insurance Policy……………………………………….15

b. Business Risk Exclusions Are Separate From the Insuring Agreement……..17

i. The Fortuity Doctrine Encompasses Two Distinct Concepts…….…18

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ii. Fortuity’s Two Aspects Are Reflected in Both the Insuring Agreement and the Exclusions…………………………………………………...18

1. Occurrence…………………………………………...18

2. Business Risk Exclusions……………………………21

iii. Custom Agri Makes the Business Risk Exclusions Superfluous…….21

iv. Contractors Receive Less Coverage Than Other Insureds…………..22

c. Applying The Policy Language, Not an Undefined “Fortuity Doctrine,” Construction Defects are “Occurrences,” which May be Excluded by the Business Risk Exclusions.................................................................................23

3. There Has Been a Change of Circumstances Since Custom Agri Was Decided...24

a. Custom Agri Is Against the National Trend…………………………………24

b. The National Trend In Favor of Coverage Has Grown……………………..27

c. Cases Relied Upon in Custom Agri Have Been Overruled………………….28

4. Custom Agri Provides an Unworkable Framework……………………………...29

a. Custom Agri Has Resulted in Increased Coverage Litigation and Disputes..29

5. There Will Be No Undue Hardship If Custom Agri Is Overruled……………….31

a. Insurers Can Continue to Rely Upon Exclusions……………………………31

b. In the Majority of Jurisdictions, the Insurers Have Found Ways to Adequately Price and Underwrite Coverage………………...…………………………...32

c. Reversal of Custom Agri Will Not Result in Increased Litigation…………...32

V. CONCLUSION ..................................................................................................................32

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TABLE OF AUTHORITIES

Cases

Acme Constr. Co., Inc. v. Continental Natl. Indem. Co., 8th Dist. Cuyahoga No. 81402, 2003-Ohio-434 (Jan. 30, 2003)........................................................................................................... 29

ACUITY v. Burd & Smith Constr., Inc., 2006 ND 187, 721 N.W.2d 33 ...................................... 28 Acuity v. City Concrete LLC, N.D.Ohio No. 4:06CV0415, 2006 WL 2987717 (Oct. 17, 2006) . 30 Allied Roofing Inc. v. W. Res. Group, 10th Dist. Franklin No. 12-AP-575, 2013-Ohio-1637 ..... 31 Allstate Ins. Co. v. Campbell, 128 Ohio St.3d 186, 2010-Ohio-6312, 942 N.E.2d 1090………..19 Allstate Ins. Co. v. Steinemer, 723 F.2d 873 (11th Cir.1984) ....................................................... 20 American Empire Surplus Lines Ins. Co. v. Hathaway Dev. Co., Inc., 288 Ga. 749, 707 S.E.2d 369 (2011)............................................................................................................... 26 American Family Mut. Ins. Co. v. American Girl, Inc., 268 Wis.2d 16, 44, 673 N.W.2d 65 (2004)............................................................................................................... 27 Andersen v. Highland House Co., 93 Ohio St.3d 547, 757 N.E.2d 329 (2001) ........................... 16 Architex Ass’n, Inc. v. Scottsdale Ins. Co., 27 So.3d 1148 (Miss.2010) ....................................... 27 Auto Owners Mut. Ins. Co. v. Kendrick, 5th Dist. No. 08–COA–028, 2009-Ohio-2169 ............. 30 Black & Veatch Corp. v. Aspen Ins. (Uk) Ltd, 882 F.3d 952 (10th Cir.2018) ................ 7, 8, 24, 25 Bogner Constr. Co. v. Field & Assocs., 5th Dist. No. 08-CA-11, 2009-Ohio-116 ...................... 30 Bonanza of Cleveland, Inc. v. Fairfax Underwriters Servs., Inc., 5 Ohio App.3d 190, 450 N.E.2d

689 (8th Dist.1981) ................................................................................................................... 16 Buckeye Union Ins. Co. v. New England Ins. Co., 87 Ohio St.3d 280, 720 N.E.2d 495 (1999) .. 20 Burlington Ins. Co. v. PMI America, Inc. et al., S.D.Ohio No. 2:08-CV-1054, 2012 WL 995294,

*5 (Mar. 23, 2012)............................................................................................................... 29, 30 Capstone Bldg. Corp. v. American Motorist Ins. Co., 308 Conn. 760, 67 A.3d 961 (2013) ............................................................................................................. 24, 26 Century Indem. Co. v. Hearrean, 98 Cal.App.4th 734, 120 Cal.Rptr.2d 66 (Ca.App.2002) ....... 26 Century Indemn. Co. v. Golden Hills Builders, Inc., 348 S.C. 559, 561 S.E.2d 355 (2002) ........ 28 Cherrington v. Erie Ins. Property and Cas. Co., 231 W.Va. 470, 745 S.E.2d 508 (2013)24, 25,27 Cincinnati Ins. Co. v. Motorists Mut. Ins. Co., 306 S.W.3d 69, 74 (Ky.2010) ............................ 17 Claris, Ltd. v. Hotel Development Servs., et al., Franklin County Court of Common Pleas Case

No. 2014 CV4516 ..................................................................................................................... 30 Columbia Mut. Ins. Co. v. Epstein, 239 S.W.3d 667 (Mo.App.2007) .......................................... 26 Corner Constr. Co. v. United States Fid. & Guar. Co., 638 N.W.2d 887 (S.D.2002) ................. 27 Crossmann Communities of N. Carolina, Inc. v. Harleysville Mut. Ins. Co., 395 S.C. 40, 717 S.E.2d 589 (2011)............................................................................................................... 28 Cypress Point Condominium Assn., Inc. v. Adria Towers, LLC, 226 N.J. 403, 143 A.3d 273 (2016) ................................................................................................................. 27 Dublin Bldg. Sys. v. Selective Ins. Co. of Am., 172 Ohio App.3d 196, 874 N.E.2d 788 (10th Dist.2007) ........................................................................................................................ 29

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Erie Ins. Exchange v. Colony Dev. Corp., 136 Ohio App.3d 406, 736 N.E.2d 941 (10th Dist.1999) ........................................................................................................................ 29 Essex Ins. Co. v. Holder, 370 Ark. 465, 261 S.W.3d 456 (2008)……………………………….28 Gearing v. Nationwide Ins. Co., 76 Ohio St.3d 34, 665 N.E.2d 115 (1996) ................................ 19 Heile v. Herrmann, 136 Ohio App.3d 351, 736 N.E.2d 566 (1st Dist.1999) ............................... 30 Hybud Equip. Corp. v. Sphere Drake Ins. Co., 64 Ohio St.3d 657, 597 N.E.2d 1096 (1992) 16, 18 JTO, Inc. v. State Auto. Mut. Ins. Co., 194 Ohio App. 3d 319, 2011-Ohio-1452, 956 N.E.2d 328, ¶ 32 ................................................................................................................. 18 K & L Homes, Inc. v. Am. Family Mut. Ins. Co., 2013 ND 57, 829 N.W.2d 724 .................. 24, 26 Lamar Homes, Inc. v. Mid-Continent Cas. Co., 242 S.W.3d 1 (Tx. 2007) ........................ 8, 11, 26 Lee Builders, Inc. v. Farm Bureau Mut. Ins. Co., 281 Kan. 844, 137 P.3d 486 (2006) ............... 26 Lennar Corp. v. Auto-Owners Ins. Co., 214 Ariz. 255, 151 P.3d 538 (Az.App.2007) ................ 26 Miller v. Midwestern Indemnity Co., 2nd Dist. Montgomery No. 15360, 1996 WL 397450 (Feb. 23, 1996) ............................................................................................. 20 Mitchell v. W.T. Grant Co., 416 U.S. 600, 94 S.Ct. 1895, 40 L.Ed.2d 406 (1974) ...................... 14 Moler v. Beach (1995), 102 Ohio App.3d 332 ............................................................................. 20 Natl. Surety Corp. v. Westlake Investments, LLC, 880 N.W.2d 724 (Iowa 2016) ....................... 27 Ohio Cas. Ins. Co. v. Joseph Sylvester Constr. Co., 11th Dist. Trumbull No. 90–T–4439, 1991

WL 206628 (Sept. 30, 1991) ..................................................................................................... 29 Owens-Corning Fiberglas Corp. v. Am. Centennial Ins. Co., 74 Ohio Misc. 2d 183, 660 N.E.2d 770 (C.P.1995) ....................................................................................................... 18 Physicians Ins. Co. v. Swanson, 58 Ohio St.3d 189, 569 N.E.2d 906 (1991) ............ 13, 16, 19, 20 Preferred Risk Ins. Co. v. Gill, 30 Ohio St.3d 108, 507 N.E.2d 1118 (1987) .............................. 19 Reggie Construction v. Westfield Insurance, 11th Dist. Lake No. 2013-L-095, 2014-Ohio-3769 ........................................................................................................................ 31 Sheehan Constr. Co., Inc. v. Continental Cas. Co., 935 N.E.2d 160 (Ind.2010) ......................... 26 Spears v. Smith, 117 Ohio App.3d 262, 690 N.E.2d 557 (2d Dist.1996) ..................................... 10 State v. Jenkins, 93 Hawai’i 87, 112, 997 P.2d 13 (2000) ............................................................ 14 Taylor Morrison Services, Inc. v. HDI-Gerling America Ins. Co., 293 Ga. 456, 746 S.E.2d 587 (2013)............................................................................................................... 25 Travelers Indem. Co. of Am. v. Moore & Assocs., Inc., 216 S.W.3d 302 (Tenn.2007) ................ 26 United States Fire Ins. Co. v. J.S.U.B., Inc., 979 So.2d 871 (Fla.2007) ....................................... 26 Village at Deer Creek Homeowners Assn., Inc. v. Mid-Continent Cas. Co., 432 S.W.3d 231

(Mo.App.2014) .......................................................................................................................... 25 Wanzek Constr., Inc. v. Employers Ins. of Wausau, 679 N.W.2d 322 (Minn.2004) .................... 27 Weitz Company, LLC v. Acuity, N.D. Ohio No. 1:12-cv-855, 2016 WL 6432835 (Oct. 31, 2016) .......................................................................................................................... 31 Westfield Ins. Co. v. Custom Agri Sys., Inc., 133 Ohio St.3d 476, 2012-Ohio-4712............. passim Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216, 2003-Ohio-5849, 797 N.E.2d 1256...14, 15, 18

Wohl v. Swinney, 118 Ohio St. 3d 277, 2008-Ohio-2334, 888 N.E.2d 1062 ................................ 22

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Statutes

Arkansas (Ark.Code Ann. § 23-79-155(a)(2) (2011)) ............................................................ 27, 28 Colorado (Colo.Rev.Stat. § 13-20-808(3) (2010))........................................................................ 27 South Carolina (S.C.Code Ann. § 38-61-70(B)(2) (2011)) .......................................................... 27

Other Authorities

Insurance Contracts, §14.13[D], at 14-224.8, STEMPEL ON INSURANCE CONTRACTS § 14.13[D], at 14-224.8 (3d ed. Supp. 2007) ................................................................................. 7

Ins. Servs. Office, Inc., Commercial General Liability Program Instructions Pamphlet, Circular No. GL-86-204 (July 15, 1986) ................................................................................................... 7

Christopher C. French, Revisiting Construction Defects as “Occurrences” Under CGL Insurance Policies, 19 U. Pa. J. Bus. L. 101, 107 (2016)………………………………….…7, 21, 24

I. STATEMENT OF INTEREST

In its decision, the Court of Appeals correctly held that a standard CGL policy provides

coverage for property damage to a completed project caused by a subcontractor’s faulty

workmanship. In so doing, the Court of Appeals gave meaning to all the provisions of the policy

and preserved coverage for which the contractor-insured had paid an additional premium. The

appellate decision is consistent with Ohio law and this Court’s prior precedent. Further, the

decision is of significant interest to everyone involved in the construction industry, to Ohio

homeowners and commercial developers, and to the public at large.

Associated Builders and Contractors, Inc. is a national trade association representing

23,000 merit construction and construction-related firms in 70 chapters across the United States.

ABC's membership represents all specialties within the U.S. construction industry and is

comprised primarily of firms that perform work in the industrial and commercial sectors. Three

chapters of the national association join this brief: (1) Central Ohio; (2) Ohio Valley; and (3)

Northern Ohio (collectively referred to as “ABC”). ABC is acknowledged as one of the leading

organizations representing the U.S. construction industry, and it regularly advocates on behalf of

its members in connection with issues that impact the construction market.

The question presented by this case implicates long-standing, fundamental insurance

rights of contractor-insureds in Ohio. These rights create an environment in which construction

industry participants can conduct business in a sensible, reasonable manner and one that also is

both fair and predictable to the contracting parties. These amici curiae comprise Ohio

construction companies that have an interest in this case as policyholders whose coverage rights

are implicated by the question before this Court.

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II. STATEMENT OF FACTS AND THE CASE

ABC adopts the Statement of the Case and Statement of Facts set forth in the Merit Briefs

of the Appellees as if fully rewritten herein.

III. INTRODUCTION

This is an insurance coverage case involving a situation common in the construction

industry. A contractor, Appellee Charles Construction Services, Inc. (“CCS”), contractually

agreed with an owner, Appellee Ohio Northern University (“ONU”), to purchase and maintain a

commercial general liability (“CGL”) policy with a “completed operations” segment. ONU was

named as an additional insured on the policy. The purpose of the “completed operations”

extension of coverage, for which CCS paid substantial premiums, was that it would provide

protection to CCS and ONU if property damage occurred after the project was completed.

In compliance with its contract, CCS purchased a CGL policy (the “Policy”) from

Appellant Cincinnati Insurance Company (“Cincinnati”). The Policy is a standard form,

commonly purchased by Ohio’s contractors, and states that it will pay all sums CCS is liable to

pay arising from property damage arising from an “occurrence.” The Policy also states that,

while it generally excludes damage to CCS’s own work, the exclusion does not apply to (i)

damaged work performed by subcontractors and (ii) damage arising from work performed by

subcontractors.

At issue in this appeal is whether Cincinnati may disregard this explicit policy language

in order to avoid its coverage obligations to its insureds. ABC respectfully requests that this

Court enforce the Policy as written and determine that CCS and ONU are entitled to coverage.

Cincinnati and Amicus Curiae Ohio Insurance Institute (“OII”) have largely failed to

address the meaning of the subcontractor exception that is squarely at issue here. Instead, the

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insurers avoid the question or mischaracterize the issue presented by this appeal. The insurers

try to avoid the question by suggesting that this Court should refrain from even analyzing the

provisions of the Policy that bear most directly on the issue. The insurers also devote pages of

their briefs to making the point that “completed operations” is not a stand-alone coverage—a

concept that is completely immaterial to the analysis.

The insurers’ briefs are also notable for what they fail to address. Cincinnati and OII fail

to provide this Court with any interpretation of the Policy that would give meaning to all of its

terms. Moreover, the insurers fail to include any discussion of the history and development of

the very provision that they now ask this Court to write out of the Policy. As discussed below,

however, the historical context of the subcontractor exception compels the conclusion that the

insurance industry itself intended to provide coverage for the type of damage at issue in this

case.

In reality, Cincinnati and OII are seeking to avoid paying a claim that everyone in the

industry—insurers and contractors alike—understood would be covered by a standard-form CGL

policy like Cincinnati’s. The insurers can only advance this extraordinary argument because of

this Court’s prior ruling in Westfield Ins. Co. v. Custom Agri Systems, Inc., 133 Ohio St.3d 476,

2012-Ohio-4712, a case in which no insured appeared and no arguments were presented on

behalf of Ohio’s contractor-insureds. As discussed below, the Custom Agri decision was

wrongly decided and has created an unworkable framework that is inconsistent with this Court’s

prior pronouncements; ABC therefore respectfully requests that Custom Agri be overruled.

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IV. LAW AND ARGUMENT

Appellant’s Proposition of Law No. I: Westfield Ins. Co. v. Custom Agri Systems, Inc., 133 Ohio St.3d 476, 2012-Ohio-4712, remains applicable to claims of defective construction or workmanship by a subcontractor included within the “products-completed operations hazard” of a commercial general liability policy.

A. The Policy Provides Coverage to the Named Insured for Work Performed by a Subcontractor Within the Products-Completed Operations Hazard.

ABC respectfully urges this Court to affirm the decision of the Third District Court of

Appeals which rightly held that Cincinnati’s insurance policy covers property damage occurring

after project completion when the damage is caused by a subcontractor’s faulty workmanship.

The appellate court’s decision should be affirmed because:

• It is consistent with this Court’s prior precedent;

• It is mandated by the plain language of the policy at issue and Ohio’s rules of

policy interpretation; and,

• It conforms with the expectations of both the insurer and the insured as to the

scope of the coverage provided by the subject policy.

Simply put, adoption of the rule announced by the Third District is necessary to ensure that

Ohio’s contractor-insureds receive the insurance coverage for which they paid substantial

premiums.

1. This Court Did Not Previously Decide the Issue Presented in This Appeal.

Cincinnati incorrectly contends that this Court has already decided the question of

whether a standard-form CGL policy covers damage to completed work caused by a

subcontractor, citing Westfield Ins. Co. v. Custom Agri Sys., Inc., 133 Ohio St.3d 476, 2012-

Ohio-4712. The Custom Agri Court, however, answered only the certified question before it and,

importantly, did so without the benefit of any appearance or briefing by the insured whose

coverage was at issue. Instead, relying solely upon the information submitted by the insurer, the

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Court held only that the policy at issue would not cover the repair or replacement of the

insured’s own defective work. Nowhere in the majority opinion does the Court discuss the

subcontractor exception, nor does it discuss completed operations coverage.

Nonetheless, Cincinnati urges the Court to recognize that the “scope of the dispute” in

Custom Agri “was much broader than the two issues that were eventually certified to this Court.”

(CIC Brief, p. 14). As correctly noted by ONU, however, it is not this Court’s responsibility to

scour the voluminous underlying record in order to identify issues and arguments not expressed

in the certified question or raised by the sole party appearing in the case.

This is particularly true where the insurer itself suggested that damages caused by

subcontractor work might fall within the coverage of the policy. In fact, the insurer (Westfield)

argued that the “Your Work” exclusion and subcontractor exception thereto were not relevant to

or applicable in Custom Agri because the damages there occurred during the project:

Thus, Exclusion 1. [the “Your Work” exclusion] only applies to “property damage” to “your work” that is complete, abandoned and that does not fall within the three additional exceptions provided in the “products-completed operations hazard”. If, as PSD alleged against Younglove in this case, the general contractor caused damage to its own work during the construction process, then Exclusion 1., by its very terms, is not applicable.

(Westfield Ins. Co. v. Custom Agri Sys., Inc., Ohio Supreme Court Case No. 2011-1486,

Petitioner’s Merit Brief, p. 23) (Dec. 30, 2011) (emphasis in original). Thus, Westfield, who was

represented by the same counsel as Cincinnati herein, asserted that the Your Work exclusion and

subcontractor exception were not at issue in Custom Agri.

Perhaps more importantly, Westfield then went on to recognize that the policy treated

completed work differently and that in such circumstances coverage would depend upon whether

the insured utilized subcontractors:

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If the “property damage” falls within the “products-completed operations hazard,” the exception to the exclusion is only triggered if the general contractor happens to use a subcontractor and that portion of the general contractor's work was damaged by that particular subcontractor. For contractors that do not use subcontractors or where the contractor's work is not damaged by a subcontractor, the exception to the exclusion is inapplicable.

(Id.) (emphasis added). Thus, Westfield (and its counsel) made a distinction between damage

occurring during the insured’s ongoing operations (which, it argued was not covered) and

damage occurring to the completed project (which, it admitted may be covered).1 Cincinnati’s

contention that the issue before the Court now has already been resolved by Custom Agri is

incorrect, and Custom Agri does not compel a reversal of the appellate court’s decision.

2. The Subcontractor Exception Must Be Given Meaning.

In addressing the issue of first impression before it, the Third District properly construed

the policy’s terms in the manner required by Ohio law. As described in detail in the merit briefs

of ONU, CCS, and amicus curiae the Ohio Home Builders Association and the National

Association of Home Builders, an insurance policy must be interpreted as a whole and in a

manner that gives effect to all of its terms.2 The appellate court properly applied these well-

established principles of Ohio law and its decision should be affirmed.

1 With respect to the issue presented in this appeal, Westfield made the following

statement: “Even where the exception to the exclusion is applicable, it is well-established that exceptions to exclusions do not and cannot expand the initial scope of the insuring agreement.” (Custom Agri, Ohio Supreme Court Case No. 2011-1486, Petitioner’s Merit Brief, p. 23). Westfield’s nebulous assertion cannot credibly be said to have put the application of the subcontractor exception at issue in the Custom Agri case.

2 It bears noting that Cincinnati provides no rational, alternative purpose for the

subcontractor exception. The insurers fail to cite a single case in which any court has applied the subcontractor exception to any industry other than the construction industry. Instead, in a footnote, Cincinnati posits an illogical hypothetical, predicated solely upon a recent, online story published by a Pennsylvania newspaper. (Cincinnati Brief, p. 19, n. 9). Tellingly, Cincinnati itself acknowledges that, if this Court adopts the interpretation advanced by the insurers herein, the business risk exclusions (and subcontractor exception) “will remain largely unimportant

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3. The Appellate Court’s Decision Conforms With the Expectations of the Insurance Industry and Ohio’s Contractor-Insureds.

a. The Insurance Industry Intended to Provide Coverage for Damages Caused by a Subcontractor.

Notably absent from the merit briefs of Cincinnati and OII is any recitation of the history

and development of the subcontractor exception at issue in this appeal. The insurance industry,

however, has long understood and intended that property damage arising from a subcontractor’s

work would be covered by a standard-form CGL policy. In fact, it is widely recognized that the

current CGL form was specifically revised to make clear that the policy would provide

coverage for subcontractor work:

[T]he insurance and policyholder communities agreed that the CGL policy should provide coverage for defective construction claims so long as the allegedly defective work had been performed by a subcontractor rather than the policyholder itself. This resulted both because of the demands of the policyholder community (which wanted this sort of coverage) and the view of insurers that the CGL was a more attractive product that could be better sold if it contained this coverage.

Christopher C. French, Revisiting Construction Defects as “Occurrences” Under CGL Insurance

Policies, 19 U. Pa. J. Bus. L. 101, 107 (2016) (“French”), quoting Jeffery W. Stempel, Stempel

on Insurance Contracts, §14.13[D], at 14-224.8, STEMPEL ON INSURANCE CONTRACTS §

14.13[D], at 14-224.8 (3d ed. Supp. 2007).

Significantly, the drafter of the language, ISO, explained that the entire point of the

subcontractor exception was to clarify that the CGL policy would “cover …damage to, or

caused by, a subcontractor's work after the insured's operations are completed.” Black & Veatch

Corp. v. Aspen Ins. (Uk) Ltd, 882 F.3d 952, 959 (10th Cir.2018), citing Ins. Servs. Office,

Inc., Commercial General Liability Program Instructions Pamphlet, Circular No. GL-86-204 under fact patterns such as the one in this case.” (Id. at p. 23). This Court should refrain from adopting an interpretation of the policy that renders its terms meaningless.

8

(July 15, 1986) (emphasis added). Likewise, numerous courts have recognized that “[b]y

incorporating the subcontractor exception into the “your-work” exclusion, the insurance industry

specifically contemplated coverage for property damage caused by a subcontractor's defective

performance.” Lamar Homes, Inc. v. Mid-Continent Cas. Co., 242 S.W.3d 1, 12 (Tx. 2007); see

also Black & Veatch, 882 F.3d at 959. It is against this historical backdrop that this Court should

interpret the meaning of the subcontractor exception.

b. Ohio’s Contractor-Insureds Reasonably Expect Coverage For Property Damage Arising From Subcontractor Work.

Given that the insurance industry has itself affirmed that the very purpose of the

subcontractor exception is to ensure coverage in circumstances like those presented in this case,

it should come as no surprise that Ohio’s contractor-insureds have relied upon the insurers’

representations and reasonably expect to be covered when damages arise from subcontractor

work. Based upon the insureds’ and insurers’ shared understanding of the scope the coverage

provided:

• Construction contracts specifically require that contractors purchase completed-

operations coverage that will provide coverage for subcontractor work;

• Contractor-insureds purchase and pay an additional premium for completed

operations coverage;

• Bid prices and the cost of construction are lower because contractors are able to

shift to their insurers the risk of property damage to completed projects; and,

• Owners and developers are better protected because they can recover against an

insurer after the project is completed, even if the contractor is insolvent and the

construction bond is no longer in force.

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Thus, owners, developers, and contractors have entered into their construction contracts with the

understanding that, when property damage occurs after the project is complete, they can rely

upon their insurers to protect them when the faulty work at issue was performed by

subcontractors.

4. The Policy Provides Broader Coverage for Damage Occurring Once the Project Is Completed.

Cincinnati and OII provide no alternative interpretation of the policy that would give

meaning to all of its terms. The insurers provide no historical framework that would suggest that

Cincinnati’s policy should be interpreted in the narrow manner the insurers now suggest.

Instead, Cincinnati and OII have tried to avoid these questions altogether by mischaracterizing

the issue before the Court. The insurers’ arguments are largely predicated upon their assertion

that “completed operations coverage” is not a “separate coverage” and is no broader than any

other coverage provided under the Policy. While true that completed operations is not a

“separate coverage,” that is not the proper question—rather, the question is what is the scope of

coverage for a completed project.

It is misleading and inaccurate to say that the scope of coverage is the same regardless of

whether the damage at issue is caused during operations or after project completion. In fact, the

terms of the Policy itself compel the opposite conclusion. In a standard-form CGL policy, there

are three exclusions, generally known as business risk exclusions, which are understood to apply

specifically to the construction industry.3 Two exclusions apply solely to damage occurring

during operations. The first, Exclusion j(5), commonly known as the “Ongoing Operations”

3 A fourth business risk exclusion, the “Impaired Property Exclusion,” also applies to the

industry, but is not relevant herein, as it applies under circumstances where a defective product has been incorporated into the property of another and will cause loss of use of the property when the defective product is replaced or removed. The exclusion also bars coverage for loss-of-use scenarios.

10

exclusion, states that the Policy does not apply to “property damage” to “[t]hat particular part of

real property on which you or any contractors or subcontractors working directly or indirectly on

your behalf are performing operations, if the ‘property damage’ arises out of those operations[.]”

(Cincinnati Appx. 000020, Court of Appeals Decision, p. 20). Importantly, the “Ongoing

Operations” exclusion is drafted in the present tense (“performing”), and applies only to property

damage where construction is still in progress. Id.; see also Spears v. Smith, 117 Ohio App.3d

262, 266, 690 N.E.2d 557 (2d Dist.1996).

The second, Exclusion j(6), commonly known as the “Damage to Property” exclusion,

states that the Policy does not apply to “property damage” to “[t]hat particular part of any

property that must be restored, repaired, or replaced because ‘your work’ was incorrectly

performed on it.” (Cincinnati Appx. 000021, Court of Appeals Decision, p. 21). “Your Work”

is defined to include work performed by subcontractors. (Id. at 000022-23). The exclusion,

however, explicitly does not apply to property damage included in the products-completed

operations hazard. (Id. at 000021).

Both of these exclusions expressly apply to preclude coverage for property damage

caused by subcontractors. However, neither of these exclusions apply to damage falling within

the products-completed operations hazard—i.e. to damage occurring after project completion.

Instead, the exclusion at issue in the instant appeal is the only exclusion applicable to damages

occurring after work is complete. Exclusion l, commonly referred to as the “Your Work”

exclusion, precludes coverage for “[p]roperty damage to your work arising out of it or any part

of it and included in the products-completed operations hazard.” (Id. at 000024). Importantly,

however, “[t]his exclusion does not apply if the damaged work or the work out of which the

damage arises was performed on your behalf by a subcontractor.” (Id.).

11

Thus, the scope of coverage provided for damages caused by defective work of

subcontractors is unequivocally broader for damage occurring after the project is completed.

This makes sense—contractors obviously want broader coverage after completion, at which

point subcontractors have been paid (and are arguably less motivated to repair defective work) or

may have become insolvent or gone out of business.

Cincinnati argues that, for some contractor-insureds, the subcontractor exception may

operate to swallow the rule because the use of subcontractors is prevalent, and certain contractors

perform little or no work on the project themselves. In apparent recognition of the broad scope

of the exception, however, insurers promulgated an endorsement over a decade ago that

removes the subcontractor exception. Lamar Homes, 242 S.W.3d at 12 (acknowledging that as

early as 2007 “the Insurance Services Office has issued an endorsement that may be included in

the CGL to eliminate the subcontractor exception to the “your-work” exclusion.”). Notably, that

endorsement was not added to the Cincinnati policy at issue here. The fact that insurers have

crafted, and utilize, an endorsement that removes this coverage from the policy belies the

arguments of the insurers herein—there would be no need to endorse the policy in such a manner

unless the policy unequivocally provided coverage for damages arising from subcontractor work

in the first place.

5. At a Minimum, Damages Arising From Subcontractor Work Are An “Occurrence” As To The General Contractor.

ABC respectfully urges this Court to give meaning to all the terms of the Policy, to

provide the scope of coverage contemplated by both the insurance and construction industries at

the time the policies were written, and, accordingly, to affirm the Third District’s decision. At a

minimum, ABC requests that the Court hold that property damage occurring after completion of

12

a construction project is “property damage” caused by an “occurrence” where the damage arises

from the faulty workmanship of the insured’s subcontractor.

ABC further requests that the Court clarify its holding in Custom Agri to confirm that it is

limited to the narrow set of facts actually considered by the Court therein. Specifically, ABC

requests that the Court hold that, under Custom Agri, where defective work causes damage to the

non-defective work of any party (including the insured or other contractors on the project), there

has been “property damage” caused by an “occurrence.” In order to give meaning to all of the

terms of the policy, the term “consequential damages” should include damage to any non-

defective work, regardless of whether that work was performed by the insured or any other party.

Finally, ABC respectfully submits that the Custom Agri decision itself has introduced

great uncertainty into the law for Ohio policyholders and insurers, has created conflicts among

the districts, and has resulted in the denial of coverage rights to construction-industry insureds.

As discussed below, ABC therefore urges this Court to revisit Custom Agri, and to find that the

existence of an “occurrence” in construction cases should be decided in the same manner as all

other coverage cases, without regard to the scope of the damage or who caused it.

B. Custom Agri Should Be Overruled.

By the time this Court accepted the certified questions posited by the Sixth Circuit Court

of Appeals in Custom Agri, the policyholder had become insolvent and was no longer

participating in the case. Thus, only the insurer’s merit brief was submitted to the Court for

consideration, and only the insurer appeared at oral argument. Accordingly, this Court was

never provided the opportunity to consider numerous arguments that were critically important to

the issues presented by the certified questions.

13

In Custom Agri, the insurer (Westfield) described the issues relevant to the Court’s

analysis as follows:

• “The context of the CGL insuring agreement is tort liability[;]”

• “In the context of tort liability, accidental property damage requires damage to

property other than the work or produce of the insured defendant[;]” and

• “The majority of decisions hold that accidental property damage requires damage

to property other than the work or product of the insured defendant.”

(Westfield Ins. Co. v. Custom Agri Sys., Inc., Ohio Supreme Court Case No. 2011-1486,

Petitioner’s Merit Brief, Table of Contents). These assertions are not only wrong, but they miss

the point.

The central flaws in Westfield’s argument, and Custom Agri’s adoption thereof, are (i)

the incorporation of an ill-defined fortuity standard into the insuring agreement, and (ii) the

implicit rejection of this Court’s seminal decision in Physicians Ins. Co. v. Swanson, 58 Ohio

St.3d 189, 569 N.E.2d 906 (1991) and its progeny. As discussed below, however, applicable

concepts of fortuity are already encompassed within both the insuring agreement and the

business risk exclusions, and they differentiate precisely the types of risks that are insured from

those that are not. By expanding the narrow concepts contained in the exclusions and then

grafting them into the insuring agreement, Custom Agri effectively re-wrote the policy, limiting

the insuring agreement in a manner inconsistent with its express language and rendering the

narrow, carefully crafted exclusions superfluous. This has left Ohio’s insurers and insureds with

unclear guidance as to when a contractor’s “work” will be covered (or not covered).

Moreover, by eliminating certain types of “business risks” from the scope of the insuring

agreement, Custom Agri ignored Ohio’s long-standing precedent that there is an “occurrence”

14

where the consequences of the insured’s act was fortuitous (i.e. unexpected and unintended).

Whether the act was fortuitous is immaterial. Custom Agri did not consider this principle and, as

a result, Ohio’s construction-industry insureds receive less insurance coverage than insureds in

any other industry.

The Court’s ruling has resulted in litigation concerning what the term “consequential

damages” means, as well as litigation like this case in which lower courts struggle to reconcile

Custom Agri with the policy’s other provisions. These issues would evaporate if this Court were

to reconsider Custom Agri and hold that, consistent with its long-standing precedent, damages

arising from construction defects are “property damage” caused by an “occurrence” unless the

insurer proves that the insured expected or intended the specific property damage at issue.

Notably, overruling Custom Agri would not mean that insureds would be able to recover

for the repair or replacement of their own faulty workmanship. That type of damage is clearly

excluded by the policy. Ohio courts, like the majority of courts nationally, would simply apply

the business risk exclusions (discussed in detail above), which more clearly define the scope of

the coverage. For the following reasons, ABC requests that this Court overrule its decision in

Custom Agri.

1. The Galatis Factors.

As this Court recognized in Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216, 2003-Ohio-

5849, 797 N.E.2d 1256, ¶ 43, the doctrine of stare decisis, while “designed to provide continuity

and predictability in our legal system,” is not so rigid that it prevents the Court from exercising

its “duty to examine its former decisions and, when reconciliation is impossible, to discard its

former errors.” Id. at ¶43, citing State v. Jenkins, 93 Hawai’i 87, 112, 997 P.2d 13 (2000) and

Mitchell v. W.T. Grant Co., 416 U.S. 600, 627–628, 94 S.Ct. 1895, 40 L.Ed.2d 406 (1974).

15

To assist the Court in carrying out this duty, the Galatis Court articulated a three-factor

approach to determining whether the Court’s prior precedent should be overruled. “Thus, in

Ohio, a prior decision of the Supreme Court may be overruled where (1) the decision was

wrongly decided at that time, or changes in circumstances no longer justify continued adherence

to the decision, (2) the decision defies practical workability, and (3) abandoning the precedent

would not create an undue hardship for those who have relied upon it.” Galatis at ¶ 48.

2. Custom Agri Was Wrongly Decided.

a. Interpretation of an Insurance Policy.

A CGL insurance policy is intricate, containing an interlocking set of clauses, conditions,

definitions, exclusions, and endorsements. To interpret the policy, courts follow its structure,

analyzing first the insuring agreement, then the exclusions, and then, if applicable, the policy’s

conditions. Importantly, however, in order to properly understand the meaning of any one of the

policy’s provisions, a court must “examine the insurance contract as a whole and presume the

intent of the parties is reflected in the language used in the policy.” Custom Agri, 133 Ohio St.3d

476, 2012-Ohio-4712, 979 N.E.2d 269, ¶ 8.

The first step is to determine whether the insuring agreement applies. This section,

broadly speaking, describes what “sums” the insurer will pay. In most policies, and the policy at

issue here, the insurer agrees to “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.”

The insurance applies to “property damage” or “bodily injury” that “is caused by an ‘occurrence’

….”

“Property damage” is defined broadly and intuitively as “[p]hysical injury to tangible

property.” (Cincinnati Appx. 000013, Court of Appeals Decision, p. 13). Damage arising from

16

construction defects usually meets this definition. For example, there can be no dispute that the

water intrusion at issue in this case caused physical injury to tangible property.

Next, an “occurrence” is defined to include “an accident.” An accident, under

longstanding Ohio law, is something that is “unexpected, as well as unintended.” Hybud Equip.

Corp. v. Sphere Drake Ins. Co., 64 Ohio St.3d 657, 666, 597 N.E.2d 1096 (1992). Importantly,

in order to defeat coverage based on “no occurrence,” an insurer4 must demonstrate that the

policyholder expected or intended the precise harm; knowledge of a risk is insufficient.

Swanson, 58 Ohio St.3d 189, 193, 569 N.E.2d 906.

Accordingly, “sums” will be within the insuring agreement, and thus payable by the

insurer, if those sums are the culmination of a particular causal chain. That is, they will be

covered if they are sums the insured has become legally obligated to pay because of a physical

injury to tangible property caused by an accident.

After determining whether the insuring agreement applies, the next step in the order of

operations is to analyze whether an exclusion applies. A standard CGL policy contains

numerous exclusions which carve away certain risks from the broad insuring agreement. These

provisions, which serve to exclude or limit coverage, apply “only to that which is clearly

intended to be excluded.” Hybud at 665; see also Andersen v. Highland House Co., 93 Ohio

St.3d 547, 549, 757 N.E.2d 329 (2001) (“[I]n order to defeat coverage, the insurer must establish

not merely that the policy is capable of the construction it favors, but rather that such an

interpretation is the only one that can be fairly placed on the language in question.”) (emphasis

added).

4 When a policy contains exclusionary language, the burden of proof is on the insurer

regardless of where the language appears. Swanson, 58 Ohio St.3d at 191; Bonanza of Cleveland, Inc. v. Fairfax Underwriters Servs., Inc., 5 Ohio App.3d 190, 192, 450 N.E.2d 689 (8th Dist.1981).

17

In some cases, after performing these first two steps, it is necessary to go on to consider

other provisions, such as the declarations, conditions to coverage, or endorsements, if any. Here,

though, the first two steps of the analysis are all that are necessary.

b. Business Risk Exclusions Are Separate From the Insuring Agreement.

In Custom Agri, the Court ostensibly performed the interpretive steps in their proper

order, analyzing the insuring agreement first, and then declining to analyze the exclusions, since

it determined that claims for construction defects were not “occurrences” in the first place. See

Custom Agri, 133 Ohio St. 3d 476, 2012-Ohio-4712, 979 N.E.2d 269, at ¶ 21. But the analysis

faltered on the first step. Instead of strictly analyzing the issue under Swanson’s “occurrence”

standard, Westfield advocated, and the Court adopted, a narrower definition of the term and

considered, at the first stage, whether construction defects constitute “business risks.” Id. at ¶ 13.

Routine business risks, in general, are not covered by a CGL policy. See id. Importantly,

though, the reason that these risks are not covered is that they are excluded under the specific

terms of the business risk exclusions. Custom Agri ignored these exclusions by importing all of

the so-called “fortuity doctrine” into the insuring agreement, fitting it within the single word

“accident” in the definition of occurrence. Id. (“Inherent in the plain meaning of ‘accident’ is the

doctrine of fortuity.”) (quoting Cincinnati Ins. Co. v. Motorists Mut. Ins. Co., 306 S.W.3d 69, 74

(Ky.2010)). The requisite levels of fortuity are carefully articulated throughout the policy,

however, not lumped into a consolidated mass in the insuring agreement. Moreover, in

following the approach it did, Custom Agri rendered the business risk exclusions superfluous,

and applied a different and more narrow standard of coverage to Ohio’s construction-industry

insureds than the standard applied to every other Ohio insured.

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i. The Fortuity Doctrine Encompasses Two Distinct Concepts.

“Insurance coverage is bottomed on the concept of fortuity.” Custom Agri at ¶ 13

(quoting JTO, Inc. v. State Auto. Mut. Ins. Co., 194 Ohio App. 3d 319, 2011-Ohio-1452, 956

N.E.2d 328, ¶ 32). According to the insurers, for damage or injury to be “fortuitous,” it must

first be unintended, and second, “beyond the control of the insured.” Cincinnati at 74.

The fortuity doctrine was not very well developed by Ohio courts leading up to the

Custom Agri decision. Still, this Court has never acknowledged that a stand-alone fortuity

doctrine exists or that it supersedes express policy language. Rather, it is just the opposite—the

fortuity doctrine, to the extent it is applicable, must be reflected in, and strictly defined by, the

language of the policy. See Galatis, 100 Ohio St.3d 216, 2003-Ohio-5849, at ¶ 10-11 (holding

that freedom of contract is constitutionally protected and that insurance contracts are to be

interpreted in accordance with “the intent of the parties to the agreement.”); see also Owens-

Corning Fiberglas Corp. v. Am. Centennial Ins. Co., 74 Ohio Misc. 2d 183, 194, 660 N.E.2d 770

(C.P.1995) (“[T]he defense that only fortuitous losses are insurable is already provided for in the

policy ….”).

ii. Fortuity’s Two Aspects Are Reflected in Both the Insuring Agreement and the Exclusions.

1. Occurrence.

The first aspect of the fortuity doctrine—that damage or injury must be unexpected and

unintended—is reflected in the definition of “occurrence.” Again, an occurrence includes “an

accident,” which under long-established Ohio law, is something that is “unexpected, as well as

unintended.” Hybud, 64 Ohio St.3d 657 at 666. Importantly, though, this Court has cautioned

that “unexpected and unintended” should not be read narrowly. In Swanson, the Court held that

“in order to avoid coverage on the basis of an exclusion for expected or intentional injuries, the

19

insurer must demonstrate that the injury itself was expected or intended. It is not sufficient to

show merely that the act was intentional.” Swanson, 58 Ohio St.3d 189, 193, 569 N.E.2d 906.

An exception to this general rule was recognized, however, in cases where an intent to harm may

be inferred from conduct that is “intrinsically tied” to its resulting harm: i.e. aggravated murder;

sexual molestation of minors; and “certain felonious assault or rape cases.” Allstate Ins. Co. v.

Campbell, 128 Ohio St.3d 186, 2010-Ohio-6312, 942 N.E.2d 1090, ¶ 48; see also Preferred Risk

Ins. Co. v. Gill, 30 Ohio St.3d 108, 507 N.E.2d 1118 (1987).

The doctrine of inferred intent, however, is only to be applied narrowly in cases in which

“the intentional act could not have been done without causing harm.” Campbell at ¶ 48 (stating

that inferred intent doctrine “is needed only in a narrow range of cases . . . [and] courts should be

careful to avoid applying the doctrine in cases where the insured’s intentional act will not

necessarily result in the harm caused by that act.”). Further to this point, in Campbell, the Court

explicitly rejected the “substantially certain” test, stating that its prior decisions in Swanson and

Gearing v. Nationwide Ins. Co., 76 Ohio St.3d 34, 665 N.E.2d 115 (1996) had not held to the

contrary:

We now clarify that the doctrine of inferred intent applies only in cases in which the insured’s intentional act and the harm caused are intrinsically tied so that the act has necessarily resulted in the harm. Because this test provides a clearer method for determining when intent to harm should be inferred as a matter of law, we hold that courts are to examine whether the act has necessarily resulted in the harm—rather than whether the act is substantially certain to result in harm.

Campbell at ¶ 56. Because the insured’s conduct in Campbell did not necessarily result in harm,

the Court refused to infer an intent to harm from the facts before it and remanded the case for a

determination by the trier of fact. Id. at ¶ 58.

20

The foregoing cases establish that in Ohio, “an intent to injure, not merely an intentional

act is a necessary element to uninsurability.” (Emphasis added.) Buckeye Union Ins. Co. v. New

England Ins. Co., 87 Ohio St.3d 280, 283, 720 N.E.2d 495 (1999). The required intent to injure

may be found only where the conduct of the insured will, by its very nature, unavoidably result

in harm or, in some cases, as suggested by the Allstate Court, where the trier of fact determines

that the insured did, in fact, subjectively intend the harm. In either case, however, the Swanson

rule remains unchanged: the policyholder must be found to have intended the injury; it is not

enough for the policyholder to have intended the act alone.

Thus, Ohio’s courts have long-recognized that there is an “occurrence” even where the

resulting harm is a foreseeable consequence of the insured’s act:

We find that Swanson is controlling on the issue of intended or expected exclusions. As interpreted by the Supreme Court in Swanson and by this court in Moler v. Beach (1995), 102 Ohio App.3d 332, intended or expected injury exclusions do not come into operation unless it is proved that the insured not only intended the act, but also intended the resulting injury. The exclusion does not apply if “ ‘the insured intentionally does an act, but has no intent to commit harm, even if the act involves the foreseeable consequences of great harm or even amounts to gross or culpable negligence.’ ”

Miller v. Midwestern Indemnity Co., 2nd Dist. Montgomery No. 15360, 1996 WL 397450, *10

(Feb. 23, 1996) (emphasis added), citing Swanson, 58 Ohio St.3d 189, 192, 569 N.E.2d 906,

quoting Allstate Ins. Co. v. Steinemer, 723 F.2d 873, 875 (11th Cir.1984).

Notably, none of the foregoing authorities were raised or discussed by Westfield in

Custom Agri. Nonetheless, by requiring construction-industry insureds to prove that damages

are “fortuitous,” Custom Agri effectively adopted a far narrower definition of the term

“occurrence,” in contravention of this Court’s prior precedent.

21

2. Business Risk Exclusions.

The second aspect of the fortuity doctrine—that damage must be beyond the insured’s

control—is not reflected at all in the insuring agreement. The “control” aspect is, however,

addressed in the business risk exclusions. As discussed above, these exclusions are a set of three

policy exclusions that address when and how damages to the insured’s own work or own product

will be covered. See French, 19 U. PA. J. BUS. L. at 106. In general, they exclude property

damage to a contractor’s work but subject to important qualifications, such as exceptions for

specifically defined damages and work performed by subcontractors. Id. at 107-08. Notably,

these exclusions are the sections of the policy that deal directly with the control aspect of

fortuity, since they describe and define the situations in which the insurer will pay for damages

to the insured’s work or products—i.e., things that are within the policyholder’s control.

iii. Custom Agri Makes the Business Risk Exclusions Superfluous.

Under Custom Agri, the business risk exclusions are never reached. Instead, a court

determines whether construction defects meet a narrow, undefined fortuity standard, and then

disregards specific exclusions for “business risks.”5 Custom Agri, 133 Ohio St. 3d 476, 2012-

Ohio-4712, at ¶ 13 (holding that business risks are not fortuitous). If, however, no business risks

are covered in the first place, it renders the business risk exclusions superfluous by definition.

Custom Agri, thus, runs afoul of the contract interpretation rule requiring a court to

“avoid interpretations that render portions [of a contract] meaningless or unnecessary.” Wohl v.

5 OII’s own brief demonstrates the impossibility of defining a “business risk,” asserting that risks that are “predictable,” “anticipated,” or that “can be managed” should be excluded (OII Brief, p. 2). Not only do these concepts violate this Court’s prior pronouncements in Swanson and Campbell, but they are virtually impossible to define. In addition, the very purpose of purchasing insurance in the first place is the reality that some damage or injury is foreseeable—i.e. we buy insurance because we anticipate risk of liability. That is precisely why “foreseeability” is not the framework for the “occurrence” analysis. Such a framework would undermine the entire purpose of insurance.

22

Swinney, 118 Ohio St. 3d 277, 2008-Ohio-2334, 888 N.E.2d 1062, ¶ 22. Further, the Custom

Agri decision supplants specific policy language defining both insured and uninsured “business

risks,” which allows for anomalous and unpredictable results.

If Custom Agri were overruled, and Swanson were followed, this case would never have

reached this Court. The lower courts would have found that the property damage at issue was

caused by an “occurrence” because there is no evidence that CCS expected or intended the water

intrusion damages that impacted the project. The lower courts would have then analyzed the

business risk exclusions, which plainly allow coverage for property damage to completed

projects caused by subcontractors.

Yet, because of Custom Agri, the insurers now ask this Court to decide whether property

damage caused by subcontractors is a fortuitous event that falls within the definition of

“occurrence.” ABC respectfully submits that this will not be the last time that this Court will be

asked to consider the scope of Custom Agri’s rule. This Court should avoid this result, as well as

the burden of judicially defining what constitutes a business risk, by giving meaning to all of the

policy’s provisions, and permitting the more specific language of the business risk exclusions to

govern what is covered and what is not.

iv. Contractors Receive Less Coverage Than Other Insureds.

By incorporating an undefined concept of fortuity into the insuring agreement, Custom

Agri effectively eliminated certain of the contractual coverage rights of contractor-insureds. In

its brief, Cincinnati cautions that this Court should view critically any interpretation of the policy

that would vary by industry. (Cincinnati Brief, p. 23). Yet that is exactly what Custom Agri

does. In every other industry, Ohio courts will find an “occurrence” unless the insurer proves

that the insured expected or intended the specific injury or damage at issue. It is irrelevant

whether some injury or damage is foreseeable, or predictable, or a “business risk.” But in the

23

construction industry, insureds must meet a higher standard—they must prove that the damages

at issue were fortuitous and not a “business risk.” Thus, contractors receive less coverage for

property damage than every other insured in the State of Ohio.

No facts were presented in Custom Agri to suggest that the insured actually expected or

intended the precise property damage that occurred. Nonetheless, and without addressing the

significant departure from well-established Ohio law for which it advocated, Westfield urged the

Court to determine that damages from defective construction did not constitute “property

damage” caused by an “occurrence.” This fundamental error has interjected uncertainty and

confusion where there was none, has effectively negated contractual coverage rights of Ohio

policyholders, and should be overruled.

c. Applying The Policy Language, Not an Undefined “Fortuity Doctrine,” Construction Defects are “Occurrences,” which May be Excluded by the Business Risk Exclusions.

If no fortuity doctrine is artificially read into the insuring agreement, the analysis of a

construction defect claim follows the same analytical steps of any other claim. First, the Court

must determine whether the insuring agreement applies by asking whether the insured is legally

obligated to pay sums because of a physical injury to tangible property caused by an accident. In

most construction defect claims, the answer will be yes. In almost every instance, a construction

defect claim involves physical injury to tangible property. And, in almost every instance, that

physical injury is accidental, inasmuch as the harm is not expected or intended by the insured.

Accordingly, the insuring agreement will be satisfied in most cases. The Court must then go on

to analyze whether any of the exclusions will apply, with special attention to the business risk

exclusions. In many instances, these exclusions will apply to preclude coverage. Notably,

though, the business risk exclusions will not apply to claims of property damage caused by a

subcontractor. The claims at issue here, thus, are covered under the policy.

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3. There Has Been a Change of Circumstances Since Custom Agri Was Decided.

a. Custom Agri Is Against the National Trend.

In the years leading up to the Custom Agri decision, a trend was starting to emerge

among courts nationally, as courts in several states held that defective construction could

constitute an “occurrence” under the common CGL definition. See Cherrington v. Erie Ins.

Property and Cas. Co., 231 W.Va. 470, 479, 745 S.E.2d 508 (2013) (noting a “definite trend” in

the law finding coverage for construction defects since its prior opinions on the issue).

This pre-2012 trend only continued to strengthen for the period leading up to, and after,

the Custom Agri decision. “State supreme courts that have considered the issue since 2012 have

reached ‘near unanimity’ that ‘construction defects can constitute occurrences and contractors

have coverage under CGL policies at least for the unexpected damage caused by defective

workmanship done by subcontractors.’” Black & Veatch Corp. v. Aspen Ins. (Uk) Ltd, 882 F.3d

952, 966 (10th Cir.2018) (quoting French, 19 U.PA.J.BUS.L. at 122-23).

In the ensuing six years since Custom Agri, the gap between “occurrence” and “non-

occurrence” jurisdictions has continued to widen. See K & L Homes, Inc. v. Am. Family Mut. Ins.

Co., 2013 ND 57, 829 N.W.2d 724, ¶ 26 (“We conclude faulty workmanship may constitute an

‘occurrence’ if the faulty work was ‘unexpected’ and not intended by the insured, and the

property damage was not anticipated or intentional, so that neither the cause nor the harm was

anticipated, intended, or expected. This is consistent with our definition of ‘accident’ for

purposes of a CGL policy.”); Capstone Bldg. Corp. v. American Motorist Ins. Co., 308 Conn.

760, 786, 67 A.3d 961 (2013) (finding that “defective workmanship can give rise to an

‘occurrence’ under the [CGL policy],” but also finding that if there is “no damage beyond the

faulty workmanship or defective work, then there may be no resulting property damage.”);

Taylor Morrison Services, Inc. v. HDI-Gerling America Ins. Co., 293 Ga. 456, 591, 746 S.E.2d

25

587 (2013) (holding that “an ‘occurrence,’ as the term is used in a standard CGL policy, does not

require damage to the property or work of someone other than the insured.”); Black & Veatch at

971 (“We predict the New York Court of Appeals would decline to follow these decisions and

instead would join the clear trend among state supreme courts holding that damage from faulty

subcontractor work constitutes an ‘occurrence’ under the Policy.”); Village at Deer Creek

Homeowners Assn., Inc. v. Mid-Continent Cas. Co., 432 S.W.3d 231, 246 (Mo.App.2014) (“It is

well-settled Missouri law that when a liability policy defines occurrence as meaning accident,

Missouri courts consider this to mean injury caused by the negligence of the insured.”).

One of the most notable of such decisions was the West Virginia Supreme Court’s

opinion in Cherrington, decided the year after this Court decided Custom Agri. In Cherrington,

the West Virginia Supreme Court reversed a prior line of cases, dating back to at least 1999,

which had held that claims for defective workmanship do not constitute an “occurrence” under

the standard CGL policy language. In so doing, the court recognized that “a majority of other

states have reached the opposite conclusion, announcing their contrary view either in judicial

decisions or through legislative amendments to their states’ insurance statutes.” Cherrington,

231 W.Va. at 479.

26

In 2013, when evaluating this “national trend,” the Cherrington Court identified sixteen

states whose courts had held that faulty workmanship was an “occurrence” under a CGL policy,6

6 The Cherrington Court cited decisions from Arizona, California, Connecticut, Florida,

Georgia, Indiana, Kansas, Minnesota, Mississippi, Missouri, Montana, North Dakota, South Dakota, Tennessee, Texas, and Wisconsin. It bears noting that the circumstances under which these courts found that faulty workmanship could constitute an “occurrence’ varied. Some decisions found that both the defective work itself, and any resulting damage, can constitute an occurrence. Sheehan Constr. Co., Inc. v. Continental Cas. Co., 935 N.E.2d 160, 171–72 (Ind.2010) (“[F]aulty workmanship may constitute an accident and thus an occurrence depending on the facts.”); Lee Builders, Inc. v. Farm Bureau Mut. Ins. Co., 281 Kan. 844, 859, 137 P.3d 486 (2006) (“The damage in the present case is an occurrence—an even more expansive coverage term than ‘accident’—because faulty materials and workmanship provided by [the] subcontractors caused continuous exposure of the…home to moisture.”); Columbia Mut. Ins. Co. v. Epstein, 239 S.W.3d 667 (Mo.App.2007) (concluding defective workmanship constituted an “occurrence” under CGL policy); K & L Homes, Inc., 2013 ND 57, 829 N.W.2d 724, at ¶ 26 (“We conclude faulty workmanship may constitute an ‘occurrence’ if the faulty work was ‘unexpected’ and not intended by the insured, and the property damage was not anticipated or intentional, so that neither the cause nor the harm was anticipated, intended, or expected.”); Travelers Indem. Co. of Am. v. Moore & Assocs., Inc., 216 S.W.3d 302, 308 (Tenn.2007) (finding that the CGL policy provided coverage “to any ‘property damage’ caused by an event that was not foreseeable.”); Lamar Homes, Inc. v. Mid–Continent Cas. Co., 242 S.W.3d 1, 4 (Tex.2007) (finding that property damage to the contractor’s own work constituted an occurrence under the CGL policy); and Century Indem. Co. v. Hearrean, 98 Cal.App.4th 734, 120 Cal.Rptr.2d 66 (Ca.App.2002) (concluding that defective construction triggered coverage as an “occurrence” under CGL policy).

Other courts have held that held that construction defects can be occurrences if there is damage to property other than the defective work itself. Lennar Corp. v. Auto-Owners Ins. Co., 214 Ariz. 255, 262-64, 151 P.3d 538 (Az.App.2007) (finding that the faulty construction itself does not constitute an “occurrence,” but the damages resulting from defective workmanship constitute an “occurrence” under a CGL policy.); Capstone Bldg. Corp., 308 Conn. at 776, 786, 67 A.3d 961 (finding that “defective workmanship can give rise to an ‘occurrence’ under the [CGL policy],” but also finding that if there is “no damage beyond the faulty workmanship or defective work, then there may be no resulting property damage.”); and United States Fire Ins. Co. v. J.S.U.B., Inc., 979 So.2d 871, 888-889 (Fla.2007) (The Court, in deciding a case involving a subcontractor’s faulty work found that “faulty workmanship that is neither intended nor expected from the standpoint of the contractor can constitute an ‘accident’ and, thus, an ‘occurrence,’ but also finding that “if there is no damage beyond the faulty workmanship or defective work, then there may be not resulting ‘property damage.’”).

Furthermore, other courts hold that defective construction can constitute an occurrence if the defective work was performed by a subcontractor. American Empire Surplus Lines Ins. Co. v. Hathaway Dev. Co., Inc., 288 Ga. 749, 752, 707 S.E.2d 369 (2011) (finding a subcontractor’s

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and another three states whose legislatures had enacted statutes requiring such a result.7 Id. at

479-89 and notes 19 and 20. The Cherrington Court also identified this Court’s decision in

Custom Agri as one of the minority decisions holding otherwise. Id. at note 21.

b. The National Trend In Favor of Coverage Has Grown.

Post-Cherrington, the number of states joining the majority view has grown. After

Cherrington was decided, the Supreme Courts of Iowa and New Jersey joined the majority view

through judicial pronouncements holding that construction defects constitute an occurrence

under the standard CGL policy language under varying circumstances. See Cypress Point

Condominium Assn., Inc. v. Adria Towers, LLC, 226 N.J. 403, 143 A.3d 273 (2016) (In a case of

first impression, the Court held that “consequential damages called by the subcontractors’ faulty

workmanship constitute ‘property damage’ and the event resulting in the damage… is an

‘occurrence’ under the plain language of the CGL policies.”); Natl. Surety Corp. v. Westlake faulty workmanship constituted an “occurrence” within the meaning of the subcontractor’s CGL policy where it causes unforeseen or unexpected damage to other property.); Wanzek Constr., Inc. v. Employers Ins. of Wausau, 679 N.W.2d 322 (Minn.2004) (determining CGL policy provided coverage for faulty work of subcontractor); Architex Ass’n, Inc. v. Scottsdale Ins. Co., 27 So.3d 1148, 1162 (Miss.2010) (“[T]he term ‘occurrence’ cannot be construed in such a manner as to preclude coverage for unexpected or unintended ‘property damage’ resulting from negligent acts or conduct of a subcontractor, unless excluded or the insured breaches its duties after loss.”); Corner Constr. Co. v. United States Fid. & Guar. Co., 638 N.W.2d 887 (S.D.2002) (finding that CGL policy covered general contractor’s liability for a subcontractor’s defective work to the extent it resulted in property damage to the completed work of the general contractors and subcontractors.); and American Family Mut. Ins. Co. v. American Girl, Inc., 268 Wis.2d 16, 44, 673 N.W.2d 65 (2004) (finding that the faulty workmanship of a subcontractor that gives rise to property damage “was the result of an ‘occurrence’ within the meaning of the [CGL policy].”). As argued elsewhere in this Brief, the amicus parties assert that the definition of “occurrence” should be decided without regard to the scope of the damage or who caused it, as the coverage implications from these varying fact patterns are more appropriately addressed through application of the commonly-cited “business risk” exclusions in the standard CGL policy.

7 The three states that had enacted legislation were Arkansas (Ark.Code Ann. § 23-79-155(a)(2) (2011)), Colorado (Colo.Rev.Stat. § 13-20-808(3) (2010)), and South Carolina (S.C.Code Ann. § 38-61-70(B)(2) (2011)).

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Investments, LLC, 880 N.W.2d 724, 744 (Iowa 2016) (“Accordingly, we interpret the insuring

agreement in the modern standard-form CGL policy as providing coverage for property damage

arising out of defective work performed by an insured's subcontractor unless the resulting

property damage is specifically precluded from coverage by an exclusion or endorsement. In

addition, we conclude the defective work performed by the insureds' subcontractors falls within

the definition of ‘occurrence’ in the insuring agreement appearing in the [insurance company’s]

policy.”).

c. Cases Relied Upon in Custom Agri Have Been Overruled.

Further, the Custom Agri Court relied upon decisions from other jurisdictions that are no

longer good law. For example, the Custom Agri opinion cites to ACUITY v. Burd & Smith

Constr., Inc., 2006 ND 187, 721 N.W.2d 33, ¶ 12 for support. However, the quoted portion of

that opinion was subsequently overruled by the North Dakota Supreme Court’s decision in K &

L Homes (“We conclude faulty workmanship may constitute an ‘occurrence’ if the faulty work

was ‘unexpected’ and not intended by the insured, and the property damage was not anticipated

or intentional, so that neither the cause nor the harm was anticipated, intended, or expected. This

is consistent with our definition of ‘accident’ for purposes of a CGL policy.”). Similarly, the

decision in Century Indemn. Co. v. Golden Hills Builders, Inc., 348 S.C. 559, 565–566, 561

S.E.2d 355 (2002), cited in Custom Agri, is also called into question by subsequent South

Carolina Supreme Court decisions and legislative enactments. See, Crossmann Communities of

N. Carolina, Inc. v. Harleysville Mut. Ins. Co., 395 S.C. 40, 50, 717 S.E.2d 589 (2011);

S.C.Code Ann. § 38–61–70(B)(2) (2011). Finally, the decision in Essex Ins. Co. v. Holder, 370

Ark. 465, 261 S.W.3d 456 (2008) was superseded by the Arkansas legislature’s enactment of

Ark.Code Ann. § 23-79-155(a)(2) (2011) (requiring CGL insurance policies to define

“occurrence” to include “[p]roperty damage or bodily injury resulting from faulty

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workmanship”). Thus, it is apparent that a change in circumstances, as recognized in the

national trend and in legislative enactments, requires that Custom Agri be revisited.

4. Custom Agri Provides an Unworkable Framework.

a. Custom Agri Has Resulted in Increased Coverage Litigation and Disputes.

OII asserts that the amount of construction coverage litigation has substantially decreased

since the Court issued its decision in Custom Agri, citing eight published opinions rendered

since. Importantly, however, the number of construction defect coverage disputes has not

decreased. Instead, the issues presented by those disputes have changed since Custom Agri was

decided.

Cases decided prior to Custom Agri tended to deal with the predicate issue of whether

claims for construction defects constituted an “occurrence.” Ohio’s appellate courts were split as

to whether an insured’s defective or faulty workmanship in a construction project is an

occurrence. Burlington Ins. Co. v. PMI America, Inc. et al., S.D.Ohio No. 2:08-CV-1054, 2012

WL 995294, *5 (Mar. 23, 2012).

Many Ohio courts “held that ‘an insured’s defective workmanship on a construction

project constitutes an insurable occurrence under a commercial general liability policy.’” Id.

(quoting Dublin Bldg. Sys. v. Selective Ins. Co. of Am., 172 Ohio App.3d 196, 201, 874 N.E.2d

788 (10th Dist.2007); see also Acme Constr. Co., Inc. v. Continental Natl. Indem. Co., 8th Dist.

Cuyahoga No. 81402, 2003-Ohio-434, ¶ 11, 14 (Jan. 30, 2003); Ohio Cas. Ins. Co. v. Joseph

Sylvester Constr. Co., 11th Dist. Trumbull No. 90–T–4439, 1991 WL 206628, *3 (Sept. 30,

1991). These courts reasoned that “allegations of negligence in constructing or designing a

building reasonably fall within the [commercial general liability] policy's definition of

occurrence, that is, accident, because negligent acts are not done with the intent or expectation of

causing injury or damage.” Dublin Bldg. Sys. at 201 (citing Erie Ins. Exchange v. Colony Dev.

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Corp., 136 Ohio App.3d 406, 414, 736 N.E.2d 941 (10th Dist.1999)). Other Ohio courts held

that “‘defective workmanship is not an occurrence.’” Burlington, S.D.Ohio No. 2:08-CV-1054,

2012 WL 995294, at *5 (quoting Heile v. Herrmann, 136 Ohio App.3d 351, 352, 736 N.E.2d 566

(1st Dist.1999)); Acuity v. City Concrete LLC, N.D.Ohio No. 4:06CV0415, 2006 WL 2987717,

at *4 (Oct. 17, 2006); Auto Owners Mut. Ins. Co. v. Kendrick, 5th Dist. No. 08–COA–028, 2009-

Ohio-2169, ¶25; Bogner Constr. Co. v. Field & Assocs., 5th Dist. No. 08-CA-11, 2009-Ohio-

116, ¶ 44.

Courts interpreting Custom Agri now, however, must grapple with its intended scope.

For example, Custom Agri has resulted in disputes concerning the meaning of the undefined term

“consequential damages”—insureds argue that Custom Agri preserves coverage where defective

work causes damage to the non-defective work of any party (i.e. if a contractor’s work damages

other work that it already completed, there should be coverage for such damage). Conversely,

insurers argue that only damage to the non-defective work of another party is covered. These

issues continue to plague trial courts, and they make the underlying construction cases

impossible to settle because insurers, relying upon Custom Agri, refuse to contribute to the

settlement of the underlying construction case in any meaningful fashion.

The Court’s ruling has resulted in litigation like the case at issue here in which lower

courts struggle to reconcile Custom Agri with the policy’s other provisions. See also Claris, Ltd.

v. Hotel Development Servs., et al., Franklin County Court of Common Pleas Case No. 2014

CV4516, Trial Court Decision Denying Summary Judgment, p. 6 (Jul. 31, 2015) (noting that

subcontractor exception to “Your Work” exclusion would be rendered meaningless if it did not

apply to damage caused by the defective work of subcontractors).

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Other courts have wrongly construed Custom Agri so broadly—with little or no

discussion—as to find that all claims arising from defective construction are not covered. Weitz

Company, LLC v. Acuity, N.D. Ohio No. 1:12-cv-855, 2016 WL 6432835 (Oct. 31, 2016);

Reggie Construction v. Westfield Insurance, 11th Dist. Lake No. 2013-L-095, 2014-Ohio-3769;

Allied Roofing Inc. v. W. Res. Group, 10th Dist. Franklin No. 12-AP-575, 2013-Ohio-1637.

These issues, however, would vanish if this Court were to reconsider Custom Agri and

hold that, consistent with its long-standing precedent and the overwhelming weight of national

authority, damages arising from construction defects are “property damage” caused by an

“occurrence” unless the insured expected or intended the specific property damage at issue.

Then, Ohio courts would simply apply the business risk exclusions (discussed in detail above),

which more clearly define the scope of the coverage that is provided to the insured.

5. There Will Be No Undue Hardship If Custom Agri Is Overruled.

a. Insurers Can Continue to Rely Upon Exclusions.

There can be no hardship to consigning insurers to the very policy language they drafted.

As discussed in detail above, the business risk exclusions specifically define the scope of

coverage afforded to contractors in construction defect claims. Importantly, these exclusions

explicitly address some of the issues not resolved in Custom Agri. For example, the “Ongoing

Operations” exclusion applies only to “that particular part” on which the operations are actually

being performed at the time of the property damage. If a contractor completed performance on

one area of work, such as framing, and damaged that framing while performing other work, such

as roofing, the exclusion would not apply. Thus, if the coverage analysis were conducted within

the exclusions (instead of the insuring agreement), the scope of coverage would be far better

defined and would result in a decrease in disputes between insurers and insureds.

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b. In the Majority of Jurisdictions, the Insurers Have Found Ways to Adequately Price and Underwrite Coverage.

Insurers will not suffer undue hardship because policy language is standardized, and they

are already required to cover these claims in other states, as well as in Ohio depending upon the

underlying allegations. Notably, neither Cincinnati nor OII suggest that they have exited the

markets in the majority of jurisdictions that find that property damage caused by defective

construction constitutes an occurrence.

c. Reversal of Custom Agri Will Not Result in Increased Litigation.

As discussed above, OII’s assertion that the number of construction coverage cases has

decreased since Custom Agri is misleading. Prior to Custom Agri, the appellate courts were split

as to whether defective construction constituted an “occurrence.” Obviously, this type of

dispute would not re-emerge if the Court were to overrule Custom Agri as the issue will still have

been resolved by this Court. Instead, the number of construction coverage disputes would

decrease because all contractual parties to the insurance policy would be able to rely upon the

more specific business risk exclusions in order to determine the scope of coverage provided by

the policy.

V. CONCLUSION

If this Court were to adopt the position advanced by the insurers herein, the cost of

construction would inevitably go up, to the detriment of all Ohio citizens and businesses. The

only beneficiaries of such a ruling would be the insurers, who would receive a windfall by being

permitted to charge substantial premiums to Ohio policyholders while never having to pay

claims.

Thus, this Court should affirm the decision of the Third District and ensure that Ohio’s

contractor-insureds receive the insurance coverage for which they paid. Alternatively, this Court

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should overrule Custom Agri and hold that the claims asserted against CCS herein satisfy the

insuring agreement because they unequivocally include claims arising from property damage

caused by an occurrence. The Court should then adopt the appellate court’s application of the

“Your Work” exclusion, and the subcontractor exception thereto, and affirm judgment in favor

of Appellees.

Respectfully submitted, BROUSE McDOWELL /s/Amanda M. Leffler Amanda M. Leffler (0075467) (Counsel of Record) P. Wesley Lambert (0076961) Lucas M. Blower (0082729) Alexandra V. Dattilo (0086444) Christopher T. Teodosio (0089316) 388 S. Main Street Suite 500 Akron, Ohio 44311 (330) 535.5711 – phone (330) 253.8601 – fax aleffler@brouse.com wlambert@brouse.com

lblower@brouse.com adattilo@brouse.com cteodosio@brouse.com

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CERTIFICATE OF SERVICE

I hereby certify that a copy of the foregoing Merit Brief of Amici Curiae has

been mailed this 10th day of April 2018 by regular U.S. mail to the following

parties:

Gregory Edmund O'Brien Cavitch, Familo & Durkin LPA 1300 E Ninth St, 20th Floor Cleveland, OH 44114 (216) 621-7860 Counsel for Plaintiff-Appellant Ohio Insurance Institute

David Paul Kamp Jean Marie McCoy White, Getgey & Meyer Co., L.P.A. One West Fourth St., Suite 1700 Cincinnati, OH 45202 (513) 241-3685 Counsel for Appellee Charles Construction Services, Inc.

Kristen Lee Sours Ohio Home Builders Association 17 S. High St., Suite 700 Columbus, OH 43215 (614) 221-9876 Counsel for Appellee Ohio Home Builders Association and Building Industry Association of Central Ohio

Allen Lewis Rutz Mitchell Aaron Tobias Vorys, Sater, Seymour & Pease LLP 52 E. Gay Street P.O. Box 1008 Columbus, OH 43216-1008 (614) 464-5644 Counsel for Appellee Ohio Northern University

Terry Wayne Posey, Jr. Thompson Hine LLP Austin Landing I 10050 Innovation Dr., Suite 400 Miamisburg, OH 45342-4934 (937) 443-6857 Counsel for Appellee Associated General Contractors of Ohio

Thomas Patrick Kemp Eastman & Smith Ltd. 510 South Main Street P.O. Box 963 Findlay, OH 45839-0963 (419) 424-1977 Counsel for Appellee Ohio Northern University

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Richard McLain Garner David Walter Orlandini Collins Roche Utley & Garner, LLC 655 Metro Place Suite 200 Dublin, OH 43017 (614) 901-9600 Counsel for Appellant The Cincinnati Insurance Company

/s/Amanda M. Leffler Amanda M. Leffler (0075467) 1023281