Orthopedic & Neurological Consultants, Inc., et al., Plaintiffs-Appellants,
The Cincinnati Insurance Company, Defendant-Appellee.
from the Franklin County Court of Common Pleas C.P.C. No.
Miller LLP, James E. Davidson, Nicholas B. Reuhs, and Derek
R. Molter, for appellants.
& Nye LLP, and Nancy K. Tordai; Freund, Freeze &
Arnold, and Sandra R. McIntosh, for appellee.
Nicholas B. Reuhs.
1} Plaintiffs-appellants, Carl Berasi, D.O., Mark E.
Gittins, D.O., Gregory A. Mavian, D.O., Daryl R. Sybert,
D.O., Michael B. Cannone, D.O., Larry T. Todd, D.O., Desmond
J. Stutzman, D.O., Jeffrey E. Gittins, D.O., Martin Taylor,
D.O., Donald Rohl, D.O., Ying Chen, D.O., Robert J. Nowinski,
D.O., and Jeremy Mathis, D.O. ("individual
appellants"), and Orthopedic & Neurological
Consultants, Inc. ("ONC"), appeal from a judgment
of the Franklin County Court of Common Pleas granting summary
judgment in favor of defendant-appellee, The Cincinnati
Insurance Company ("Cincinnati Insurance"). For the
following reasons, we affirm.
I. Facts and Procedural History
2} This matter arises from an insurance coverage
dispute. In June 2016, Michael J. Simek, M.D., Scott M. Otis,
M.D., and Emily J. Yu, M.D. ("Simek plaintiffs"),
filed an amended complaint ("Simek complaint") in
the Franklin County Court of Common Pleas against appellants
("Simek case"). In the Simek complaint, the Simek
plaintiffs asserted multiple claims against appellants
relating to appellants' alleged fiduciary and contractual
obligations to the Simek plaintiffs as partners in a real
estate partnership and as shareholders in the ONC medical
practice. The Simek complaint alleges that, at differing
times between 1998 and 2009, the Simek plaintiffs became
employee-shareholders in ONC and partners in the real estate
partnership. The Simek complaint further alleges that the
individual appellants wrongfully took action to maximize
their own personal income, to the detriment of the Simek
plaintiffs, in breach of their fiduciary duties to the Simek
plaintiffs. As a result, the Simek plaintiffs decided not to
continue as ONC shareholders and partners in the real estate
partnership. Consequently, on May 1, 2014, the Simek
plaintiffs each signed three documents: a purchase of
partnership interest agreement, under which the Simek
plaintiffs would sell their partnership interests to the
individual appellants; a stock purchase agreement to
effectuate the buyout of the Simek plaintiffs' shares in
ONC; and a new employment agreement with ONC. The Simek
complaint plainly alleges breaches of the stock purchase
agreement and the partnership interest purchase agreement.
The parties dispute whether the Simek plaintiffs have alleged
a claim for breach of an employment agreement.
3} A few days after the filing of the Simek
complaint, appellants initiated an action alleging that
Cincinnati Insurance had breached its duties to defend and
indemnify them in the Simek case. Effective July 18, 2015,
Cincinnati Insurance insured appellants through a
"Health Care Institutions Blue Chip Policy"
("policy"). The policy includes separate coverage
provisions, only one of which is relevant for the purpose of
this appeal -Part II of the policy, "Employment
Practices Liability Coverage" ("EPL
Coverage"). Generally, the policy's EPL Coverage
part provides coverage for losses incurred by appellants
resulting from employment related claims. In their complaint,
appellants allege that Cincinnati Insurance wrongfully denied
their demand for a defense and indemnification in the Simek
4} In December 2016, appellants moved for partial
summary judgment on the asserted basis that Cincinnati
Insurance has a duty to defend them in the Simek case.
Cincinnati Insurance also moved for summary judgment, arguing
that it has no duty or obligation to defend or indemnify
appellants in the Simek case. In May 2017, the trial court
found no duty to defend and therefore partially granted
Cincinnati Insurance's motion for summary judgment.
Conversely, the trial court denied appellants' motion for
partial summary judgment. Because it found no duty to defend,
the trial court determined that resolution of the
indemnification issue was premature and therefore denied
Cincinnati Insurance's motion as to that issue. Based on
these rulings, the trial court entered final judgment in
favor of Cincinnati Insurance.