The opinion of the court was delivered by: Judge Marbley
This matter is before the Court on the Parties' Cross-Motions for Summary Judgment. Both Plaintiff, Columbia Casualty Corporation (hereinafter "Plaintiff" or "CCC") and Defendants, Al Davies, Robert Vincenzo, Patricia Bruhn, Frank Sabatino, John Barkmir, Tim Porter, John Swan, Linda Burch, Jim Weisgerber, Thomas Murphy, Dennis Bigler, Richard Bauer, Shelly Fortney, Don Smithburger, Jill A. Ludici, and the City of St. Clairsville, Ohio, (hereinafter "the City" or "Defendants") have moved this Court for declaratory relief relating to whether, under an insurance policy issued by CCC to Defendants, CCC is obligated to defend or indemnify Defendants in a suit brought against Defendants by a third-party. For the reasons stated herein, Plaintiff's Motion for Summary Judgment is GRANTED in part, DENIED in part, and rendered Moot in part, and Defendants' Motion for Summary Judgment is GRANTED in part, DENIED in part, and rendered Moot in part.
Plaintiff and Defendants entered into an insurance contract, CCC Public Officials Liability Policy number POL2237778143 ("the CCC policy" or "the policy"), which insured Defendants against certain occurrences during the period dating from May 20, 2004 until May 20, 2005. More specifically, the policy states that CCC is obligated to pay the defense costs and to indemnify Defendants if they are sued for certain "wrongful acts" as defined in the policy.*fn1
On December 13, 2004, a third-party to this action, Samuel Harris ("Harris"), filed a lawsuit against Defendants in the United States District Court for the Southern District of Ohio, Eastern Division, S.D. Ohio case number 2:04cv1179 (Frost, J.) (Hereinafter "the Harris lawsuit"). The Parties do not dispute that the allegations in the Harris lawsuit, if true, occurred during the period in which Defendants were covered by the CCC policy. Rather, CCC asserts that it is not under an obligation to defend or indemnify Defendants in the Harris lawsuit because the claims in Harris' third amended complaint (the "Harris complaint") allege conduct that falls within exceptions to the policy's coverage. Before examining this assertion, the Court will review the claims that Harris asserts in his complaint.
A. Harris' Allegations and Claims for Relief
In 2001, Harris was the owner of two tracts of land located in St. Clairsville, Ohio. On one piece of property he operated the Terrace Mobile Home Park (the "Terrace Property"). On the other piece of property, located near an interstate, he rented portions of land to commercial tenants (the "Interstate Property"). Harris alleges that Defendant Vincenzo, the Mayor of St. Clairsville, requested that Harris donate the Interstate Property to the City so that the City could build a "Welcome Center" on it. Harris declined to sell the property at less than full value.
Harris alleges that Mayor Vincenzo and other City officials engaged in a pattern of harassment against him in order to encourage him to sell the Interstate Property to the City at a price vastly under-market. This harassment allegedly included inflating the water and electricity bills for the Terrace Property by over $100,000. In connection with these utility bills, the City purportedly filed over $25,000 in fraudulent liens on the Terrace Property. Additionally, Harris contends that the City refused to make repairs to the telephone poles surrounding the Terrace Property, causing them to fall down and damage a mobile home. Harris alleges that Defendants' harassment caused him to lose money on his contracts with his Terrace tenants and eventually to sell the property at less than full market value.
In addition, Harris claims that City officials forged his signature on a petition for annexation of the Interstate Property. Later, City officials allegedly told him that the City had in fact annexed the property. When Harris challenged the annexation, he claims that City officials refused to take any action.
Last, Harris contends that the City changed the zoning on the Interstate Property from "commercial" use to "office and institutional" use. This allegedly caused Harris' tenant to vacate, a loss of $190,000 in construction work on the property, and the termination of a contract that Harris had to sell the property.
Harris' complaint contains seven different claims. In Count I of the complaint, Harris states a tortious interference with contract claim. Specifically, Harris asserts that the City over-billed his utilities relating to the Terrace Property, placed fraudulent liens on the Terrace Property, and refused to make the requisite repairs on certain telephone poles, causing Harris to sell the property at a loss of approximately $220,000. Harris claims that this conduct constitutes tortious interference with contract or prospective business advantage. Additionally, in Count I, Harris asserts that the City, by annexing and changing the zoning of the Interstate Property, tortiously interfered with the lease Harris had with a commercial tenant of the Interstate Property. Harris seeks compensation for emotional distress, loss of contract revenue, and punitive damages.
In Count II of the complaint, Harris claims that the City annexed the Interstate Property in violation of "Ohio code requirements." He seeks damages for the resulting loss of revenue relating to a commercial lease he had on the property, a court ordered de-annexing of the property, compensation for the lost value of the Interstate Property, and punitive damages.
In Count III of the complaint, Harris asserts that the City took the Interstate Property in violation of the Fifth Amendment of the United States Constitution by illegally annexing and zoning the property. Harris also asserts that Defendants "took the Terrace Property by illegally and maliciously making it impossible for Harris to continue to operate" the mobile home park. Harris seeks damage for the reduction in value of his properties.
In Count IV of the complaint, Harris asserts that the same conduct described in Count III constitutes a "taking without due process" in violation of the Fifth and Fourteenth Amendments of the United States Constitution.
In Count V, Harris makes a civil conspiracy claim. Specifically, he asserts that City officials deprived him of funds and property by falsely inflating his water bills, forging his signature on annexation documents, and placing fraudulent liens on the Terrace Property.
In Count VI, Harris claims that City officials violation 42 U.S.C. §1983 by using their positions to deprive him of property, interfere with his business, and violate his due process and equal protection rights.
In Count VII, Harris states a negligence claim against Defendant Lucidi. He asserts that Lucidi, as Finance Director of the City, negligently supervised the financial dealings of the City to Harris' detriment.*fn2
In addition to damage requests for loss of value in both properties, loss of value in his contract, punitive damages, and damages for emotional distress, Harris makes several other references to the type of damages he is seeking in his complaint. In Counts I, VI, and VII, he concludes by saying, approximately, "In consequence of defendants' acts . . . [Harris] was damaged as aforesaid and is entitled to compensation in an amount which is yet undetermined, but which, upon information and belief, exceeds the sum of $1,000,000."
B. Summary of the Arguments
CCC alleges that each of the six claims in the Harris lawsuit are excluded from Defendants' coverage by certain provisions of the policy.*fn3
The CCC policy specifically excludes from its coverage defense or indemnification funds relating to any claims for "bodily injury" or "property damage." Also excluded from converge is any claim "arising out of inverse condemnation, adverse possession . . . or eminent domain," or a claim seeking "injunctive, mandamus, declaratory or equitable relief."
The CCC policy defines "bodily injury" as "bodily injury, sickness, disease, emotional distress, or mental anguish . . .". The policy defines "property damage" as physical injury to tangible property or "loss of use, or reduction in value, of tangible property that is not physically injured or criminally abstracted."
Defendants argue that the alleged acts in Harris' claims do not fall in any of these exceptions, and, as such, they constitute "wrongful acts" which are covered under the policy.
Harris filed a lawsuit against Defendants on December 13, 2004. After paying all the premiums and receiving notice of the lawsuit, the City filed a claim with CCC under the policy asserting that CCC was obligated to defend and to indemnify the City in the Harris case. CCC initially disclaimed any obligation to defend or to indemnity the City. Later, CCC agreed to provide the City with a complete defense under a full reservation of rights.
On April 18, 2006, CCC filed its First Amended Complaint. This complaint asks this court to declare that CCC does not have to defend or to indemnify Defendants for each claim asserted against them in the Harris lawsuit. Additionally, CCC requests that this Court order Defendants to reimburse CCC for legal expenses that CCC has already paid under reservation of rights in connection with the Harris lawsuit.
On April 28, 2006, Defendants filed a Counterclaim against CCC requesting this Court to interpret the CCC policy and declare that it provides coverage for each and every claim against Defendants in the Harris lawsuit. Defendants ask this Court to hold that CCC is obligated to cover the defense costs of the Harris lawsuit, that CCC must indemnify Defendants against any damage award in the Harris case, and that CCC is not ...