Suder-Benore Co., Ltd. Appellee
Motorists Mutual Insurance Co. Appellant
Trial Court No. CI0201106043
Stuart J. Goldberg and Jeffrey M. Stopar, for appellee.
Robert H. Eddy, Adam P. Sadowski and Colleen A. Mountcastle, for appellant.
DECISION AND JUDGMENT
(¶ 1} Defendant-appellant, Motorists Mutual Insurance Company, timely appeals the November 20, 2012 judgment of the Lucas County Court of Common Pleas granting summary judgment in favor of plaintiff-appellee, Suder-Benore Co., Ltd. Motorists Mutual assigns the following errors for our review:
I. The Trial Court Erred in Granting Suder Benore's [sic] Motion for Summary Judgment and Denying Motorists's Cross Motion for Summary Judgment by Determining That the "Renovation" Exception Is Ambiguous. Motorists Does Not Owe Suder Benore [sic] Insurance Coverage for Theft and Vandalism Because There Is No Coverage for a Vacant Building.
II. The Trial Court Erred in Granting Suder Benore's [sic] Motion for Summary Judgment and Denying Motorists's Cross Motion for Summary Judgment Because Turning on the Fire Sprinkler System to Keep the Dollar Store Open Is Not a Renovation of the Vacant Food Town Store So as to Preclude Application of Motorists's Vacancy Exclusion.
III. The Trial Court Erred in Finding That Motorists's Enforcement of an Ordinance Exclusion Is Inapplicable and in Awarding Damages to Suder Benore [sic] for Actions Done at the Fire Department's Directive That Are Not Covered by the Policy.
IV. The Trial Court Erred in Awarding Damages Because Suder Benore [sic] Failed to Properly Submit Proof of Damages and Questions of Fact Exist.
(¶ 2} For the reasons that follow, we find appellant's first, second, and fourth assignments of error well-taken, and its third assignment of error not well-taken. We reverse the judgment of the trial court and grant summary judgment in favor of Motorists Mutual.
A. Factual Background
(¶ 3} Appellee, Suder-Benore, is the owner of a shopping center called Suder Square in Toledo, Ohio. Located in Suder Square is a Family Dollar Store which is in the same building as what once was a Food Town store. The building is approximately 48, 000 square feet; Family Dollar occupies approximately 7, 800 square feet of that space and Food Town occupied approximately 42, 000 square feet.
(¶ 4} Food Town vacated Suder Square sometime between 2009 and 2010, leaving the building unoccupied. Due to the expense to heat and provide water to maintain the fire sprinkler system, the system was disabled when Food Town left. In January of 2011, Toledo's fire inspector conducted a regular inspection of the building and advised Suder-Benore that it must maintain a functioning sprinkler system or Family Dollar would have to close. Suder-Benore had believed that because Family Dollar occupied less than 12, 000 square feet, a sprinkler system was not required. There was only one sprinkler system for the entire building, thus it was not possible to turn on the sprinklers in only the Family Dollar store.
(¶ 5} Suder-Benore hired Marine Fire Sales & Services and on January 13, 2011, Marine Fire Sales began the process of turning on the sprinkler system. On that date, it met with the fire department and checked the sprinkler. On January 14, 2011, it air tested the system and re-filled it with water. As part of that process, it replaced six one-inch plugs, one 1" x ½" concentric reducer, one 6" x 1" nipple, and one ¾" plug in order to fix holes or leaks in the system. These parts totaled $20.40. Marine Fire Sales returned on January 17, 2011, after receiving a call from Family Dollar indicating that there was a leak. It determined that the leak originated in the roof.
(¶ 6} In activating the sprinkler system, Suder-Benore leased six propane-fueled heaters and bought approximately 1, 600 gallons of fuel from Reliance Propane and Fuel Oil. These were needed to heat the area to 45 degrees to keep the water lines from freezing during the cold winter months.
(¶ 7} Also necessary to the functioning of the sprinkler system was a security system. The security system would send an alert if the sprinklers were triggered. A Habitec security system already existed on the property, but like the sprinkler system, it had been deactivated. With the sprinkler system functioning again, it was necessary to reactivate the security system and, as required by fire code, to install smoke alarms in the ducts. On February 3, 2011, a Habitec employee went to the Food Town building but discovered that the electricity was not on. He called Suder-Benore's property manager and informed him that electricity was required for the system. He left without performing any work. He returned on February 8, 2011, but discovered that a break-in had occurred. Again, on this date, Habitec performed no work.
(¶ 8} The February 8, 2011 break-in occurred in the unoccupied portion of the building. Thieves stole copper piping from the building and vandalized security system hardware and a radio unit. Suder-Benore filed a police report and made a claim with its insurer, Motorists Mutual. Motorists Mutual denied the claim because its policy contained a vacancy exclusion under which it was not obligated to provide coverage for vandalism or theft if more than 31 percent of the building was vacant in the 60-day period preceding the loss.
(¶ 9} Suder-Benore filed this declaratory judgment action on October 17, 2011, asserting, among other things, that the vacancy exclusion was inapplicable because under the terms of the policy, "buildings under construction or renovation are not considered vacant." Suder-Benore argued that repairing and reactivating the sprinkler system constituted "renovations, " therefore entitling it to coverage under the policy.
(¶ 10} Suder-Benore filed a motion for summary judgment and Motorists Mutual filed a cross-motion. In an opinion and judgment entry dated November 20, 2012, the trial court found in favor of Suder-Benore, holding that the building was under renovation within the 60 days preceding the theft of copper and that no other exclusion applied. The court awarded damages of $123, 316-$2, 400 for the vandalized security system hardware and a radio unit, plus $120, 916 for the replacement of the copper pipe that was stolen. Motorists Mutual appeals that judgment.
B. Standard of Review
(¶ 11} Appellate review of a summary judgment is de novo, Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996), employing the same standard as trial courts. Lorain Natl. Bank v. Saratoga Apts., 61 Ohio App.3d 127, 129, 572 N.E.2d 198 (9th Dist.1989). The motion may be granted only when it is demonstrated:
(1) that there is no genuine issue as to any material fact; (2) that the moving party is entitled to judgment as a matter of law; and (3) that reasonable minds can come to but one conclusion, and that conclusion is adverse to the party against whom the motion for summary judgment is made, who is entitled to have the evidence construed most strongly in his favor. Harless v. Willis Day Warehousing Co., 54 Ohio St.2d 64, 67, 375 N.E.2d 46 (1978), Civ.R. 56(C).
(¶ 12} When seeking summary judgment, a party must specifically delineate the basis upon which the motion is brought, Mitseff v. Wheeler, 38 Ohio St.3d 112, 526 N.E.2d 798 (1988), syllabus, and identify those portions of the record that demonstrate the absence of a genuine issue of material fact. Dresher v. Burt, 75 Ohio St.3d 280, 293, 662 N.E.2d 264 (1996). When a properly supported motion for summary judgment is made, an adverse party may not rest on mere allegations or denials in the pleadings, but must respond with specific facts showing that there is a genuine issue of material fact. Civ.R. 56(E); Riley v. Montgomery, 11 Ohio St.3d 75, 79, 463 N.E.2d 1246 (1984). A "material" fact is one which would affect the outcome of the suit under the applicable substantive law. Russell v. Interim Personnel, Inc., 135 Ohio App.3d 301, 304, 733 N.E.2d 1186 (6th Dist.1999); Needham v. Provident Bank, 110 Ohio App.3d 817, 826, 675 N.E.2d 514 (8th Dist.1996), citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 201 (1986).
(¶ 13} In evaluating Motorists Mutual's four assignments of error, we must review three provisions in the insurance policy: the "vacancy exclusion, " the "ordinance or law exclusion, " and the "replacement cost" provisions.
(¶ 14} Insurance contracts are construed using the same rules as other written contracts. Universal Underwriters Ins. Co. v. Shuff, 67 Ohio St.2d 172, 173, 423 N.E.2d 417 (1981). Where the policy's language is clear and unambiguous, the court may not "resort to construction of that language." Hybud Equip. Corp. v. Sphere Drake Ins. Co., Ltd., 64 Ohio St.3d 657, 665, 597 N.E.2d 1096 (1992), citing Karabin v. State Auto. Mut Ins. Co., 10 Ohio St.3d 163, 167, 462 N.E.2d 403 (1984). The words and phrases used in the policy must be given their natural and commonly accepted meaning. Id. at 665. Ambiguous provisions-particularly provisions purporting to exclude or limit coverage- must be construed strictly against the insurer and liberally in favor of the insured. Westfield Ins. Co. v. Hunter, 128 Ohio St.3d 540, 2011-Ohio-1818, 948 N.E.2d 931, ¶ 11 (2011). "However, the rule of strict construction does not permit a court to change the obvious intent of a provision just to impose coverage." Hybud Equip. at 665. Moreover, "the mere absence of a definition in an insurance contract does not make the meaning of the term ambiguous." Belich v. Westfield Ins. Co., 11th Dist. Lake No. 99-L-163, 2001 WL 20751, *2 (Dec. 29, 2000). Where a contract is clear and unambiguous, its interpretation is a matter of law. Id.
(¶ 15} Applying these general principles, we address each of Motorists Mutual's assignments of error. Because they are interrelated, we address the first and second assignments of error together.
I. The Trial Court Erred in Granting Suder Benore's [sic] Motion for Summary Judgment and Denying Motorists's Cross Motion for Summary Judgment by Determining That the "Renovation" Exception Is Ambiguous. Motorists Does Not Owe Suder Benore [sic] Insurance Coverage for Theft and ...