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Bluemile, Inc. v. Atlas Industrial Contractors, Ltd.

Court of Appeals of Ohio, Tenth District

December 21, 2017

Bluemile, Inc., Plaintiff-Appellee,
v.
Atlas Industrial Contractors, Ltd. et al., Defendants-Appellees, Hartford Casualty Insurance Company, Defendant-Appellant. Bluemile, Inc., Plaintiff-Appellant,
v.
Atlas Industrial Contractors, Ltd. et al., Defendants-Appellees.

         APPEALS from the Franklin County Court of Common Pleas No. 12CV-5597

         On brief:

          Rutter & Russin, LLC, Robert P. Rutter and Robert A. Rutter, for Bluemile, Inc.

         Argued:

          Robert A. Rutter.

         On brief:

          Mazza & Associates, LLC, and John P. Mazza, for Atlas Industrial Contractors, LLC.

         Argued:

          John P. Mazza.

         On brief:

          Smith, Rolfes & Skavdahl Co., LPA, and James P. Nolan; Robins Kaplan LLC, and Scott G. Johnson, for Hartford Casualty Insurance Company.

         Argued:

          Scott G. Johnson.

          DECISION

          TYACK, P.J.

         {¶ 1} In this consolidated appeal, defendant-appellant, Hartford Casualty Insurance Company ("Hartford"), appeals from the February 25, 2014 decision and entry of the Franklin County Court of Common Pleas denying Hartford's motion for summary judgment and granting plaintiff-appellee's, Bluemile, Inc. ("Bluemile"), motion for partial summary judgment and declaratory relief. In addition, Bluemile appeals from the September 19, 2016 decision and entry of the Franklin County Court of Common Pleas granting defendant-appellee's, Atlas Industrial Contractors, Ltd. ("Atlas"), motion for judgment notwithstanding the verdict ("JNOV"). For the reasons that follow, we affirm in part and reverse in part the judgment of the trial court.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         {¶ 2} Bluemile is a company that provides its clients cloud services, network services, data hosting, and voice services at its data center located at 226 North Fifth Street, Columbus, Ohio. On February 10, 2011, Bluemile suffered a temporary disruption in its service capabilities when an Atlas technician placed a noninsulated screwdriver into one of Bluemile's computer drives causing an electrical short and an interruption in Bluemile's service capabilities that lasted approximately two hours. During this period of time, Bluemile was unable to provide voice and other network services to its customers and as a result, customers left and Bluemile suffered a loss of voice and cloud business income.

         {¶ 3} At the time of the incident, Bluemile had an effective insurance policy with Hartford and therefore Bluemile sought coverage from Hartford for its loss of business income. Hartford made some payments to Bluemile, but refused additional payments, and litigation ensued. Bluemile and Hartford disagreed about the duration of Extended Business Income ("EBI") coverage in the policy. After Bluemile submitted its claim, Hartford claimed that there was a typographical error in the policy and that EBI coverage was limited to a period of 90 days from the date of repair. Bluemile, however, claimed that there was no typographical error and the coverage was not limited to 90 days. The parties filed cross-motions for summary judgment on the issue of the duration of the EBI coverage. On February 25, 2014, the trial court granted Bluemile's motion for partial summary judgment and denied Hartford's motion. The trial court declined to correct the alleged typographical error, and ruled that Hartford had to pay based on the policy as written.

         {¶ 4} While the litigation was pending, Bluemile and Hartford agreed that under the terms of the policy, an appraisal hearing was needed. The appraisal panel was to determine the relevant and material facts concerning the dispute and to determine the amount of loss of Bluemile's business income ("BI") and EBI claims submitted to Hartford. The insurance policy defines and treats BI and EBI losses differently.

         {¶ 5} The appraisal panel awarded Bluemile a grand total of $1, 861, 450 broken down among voice and cloud business. The trial court found Bluemile entitled to judgment against Hartford for its claimed EBI loss of voice and cloud business in the amount of $1, 861, 450 less the pre-appraisal payment of $172, 920 and the post-appraisal payment of $203, 304 for a grand total of $1, 485, 226, plus prejudgment interest from April 3, 2015. (Jan. 29, 2016 Decision and Entry on Bluemile's Motion for Order Confirming Appraisal Award at 13, 15.) All told, Hartford paid Bluemile $718, 202-$545, 282 for loss of cell phone/voice income and $172, 920 for loss of cloud income.

         {¶ 6} Both Bluemile and Hartford sued Atlas. Bluemile alleged Atlas breached its duty to perform electrical work for Bluemile in a reasonable manner by negligently inserting a noninsulated screwdriver into one of Bluemile's computer drives.

         {¶ 7} Hartford had a right of subrogation, and sought to collect the money it had paid Bluemile to date. However, prior to trial, Atlas settled with Hartford for $315, 000. The settlement was a lump sum that encompassed all voice and cloud damages already paid by Hartford ($718, 202) plus any voice or cloud damages Hartford would have to pay in the future if it lost its appeal concerning the duration of EBI coverage in the policy.

         {¶ 8} The jury returned a verdict of $1, 000, 000 against Atlas for voice damages, and a verdict of zero for cloud damages. Atlas filed a motion for JNOV pursuant to Civ.R. 50(B) seeking a setoff. The trial court set off the entire ...


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