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Yatsko v. Graziolli

United States District Court, N.D. Ohio, Eastern Division

June 17, 2019

MELISSA YATSKO, Co-Administrator of the Estate of Thomas Yatsko,
SERGEANT DEAN GRAZIOLLI, et al., Defendants. and DARIAN ALLEN, Co-Administrator of the Estate of Thomas Yatsko, Plaintiffs,



         Before the Court is Safeco Insurance Company of Indiana's (“Safeco”) Motion for Judgment on the Pleadings, Doc #: 13.[1] For the following reasons, Safeco's Motion is


         I. Facts

         A. Background

         Melissa Yatsko and Darian Allen, individually and as Co-Administrators of the Estate of Thomas Yatsko, brought the underlying case in this action, Yatsko v. Graziolli, No. 1:18-cv-814 (the “Underlying Action”), on April 4, 2018. Doc #: 48; 1:18-cv-814.[2] Plaintiffs in the Underlying Action filed their First Amended Complaint on March 1, 2019 and their Second Amended Complaint on March 31, 2019. Doc #: 41, 48.[3] The Underlying Action arises from an incident that occurred on the night of January 13, 2018 and resulted in Defendant Sergeant Dean Graziolli shooting and killing Thomas Yatsko just outside of the Corner Alley. Yatsko Compl. ¶ 1.

         That evening, Sgt. Graziolli was working as security for Corner Alley. Yatsko Compl. ¶ 15, 19-20. When Yatsko got into an argument with a friend inside Corner Alley, Sgt. Graziolli escorted them out of the bar. Yatsko Compl. ¶ 19-20. Yatsko was lingering on the sidewalk outside Corner Alley, when Sgt. Graziolli approached Yatsko again, this time unprovoked. Yatsko Compl. ¶ 21-22. Sgt. Graziolli became more aggressive in telling Yatsko to leave the premises, brandishing his Cleveland Police Department-issued weapon and pointing it at Yatsko when he refused to leave. Yatsko Compl. ¶ 22, 26. Sgt. Graziolli and Yatsko proceeded to get into a physical altercation on the sidewalk outside Corner Alley. Yatsko Compl. ¶ 27. While engaged with Yatsko, Sgt. Graziolli was wearing a City of Cleveland police officer's uniform and badge, announced that he was a Cleveland police officer multiple times, and brandished his City-issued firearm. Yatsko Compl. ¶ 30. During that altercation, Sgt. Graziolli fired his weapon, fatally wounding Yatsko. Yatsko Compl. ¶ 28, 34. Sgt. Graziolli states that on the night of the shooting he was employed by both Corner Alley and the City of Cleveland. Doc #: 10 ¶ 10.

         Plaintiffs in the Underlying Action bring both federal and state law claims against Sgt. Graziolli. Yatsko Compl. PageID #: 414, 416, 419, 421-22, 427. Plaintiffs also bring federal and state law claims against the City of Cleveland and the Chief of Police for the City of Cleveland Calvin Williams. Id. at PageID #: 417, 427. Plaintiffs bring Ohio state tort claims against MRN Group, LLC, MRN Investment Group, LLC, MRN Enterprises, LLC, MRN Development Corporation, MRN Limited Partnership, Corner Alley, LLC, Corner Alley Uptown, LLC, Corner Alley Fourth Limited Partnership, and 629 Euclid Ltd. (collectively “Corner Alley Defendants”).[4], [5] Id. at PageID # 419, 421-23, 425, 427.

         B. Safeco Insurance Policy

         Safeco brought the instant action on July 19, 2018 because Sgt. Graziolli requested that Safeco defend and indemnify him in the Underlying Action pursuant to Homeowner's Insurance Policy #OK5308888 (“Policy”), issued by Safeco to Sgt. Graziolli. Doc #: 1, ¶ 32-34.[6] Safeco seeks a declaratory judgment that it has no duty to defend or indemnify Sgt. Graziolli in the Underlying Action.

         This Opinion only addresses Safeco's duty to defend because it is premature to determine whether Safeco has a duty to indemnify Sgt. Graziolli. “The duty to defend is broader than the duty to indemnify ‘because the duty to defend is based on the facts alleged, while the duty to indemnify is based upon the facts found by the trier of fact.'” Acuity v. Reed & Assocs. of TN, LLC, 124 F.Supp.3d 787, 790 (W.D. Tenn. 2015) (citations omitted). See Erie Ins. Exchange v. Colony Dev. Corp., 136 Ohio App.3d 406, 413 (Ohio Ct.App.1999) (“[O]nce a duty to defend is recognized, speculation about the insurer's ultimate obligation to indemnify is premature until facts excluding coverage are revealed during the defense of the litigation”). Safeco only has a potential duty to indemnify at this time and “[f]ederal courts may not … give opinions advising what the law would be upon a hypothetical state of facts.” Chafin v. Chafin, 568 U.S. 165, 172 (2013) (citations omitted). Therefore, the Court will consider only whether Safeco has a duty to defend Graziolli.

         Safeco cites three different exclusions in the Policy as evidence it does not have a duty to defend Sgt. Graziolli. The first exclusion is a “business pursuits” exclusion. Safeco Compl., Ex. B, Policy at 15, §(1)(c). Under this provision, the Policy will not provide coverage for “bodily injury” “arising out of business pursuits of any insured.” Id. This exclusion does not apply to “activities which are ordinarily incident to non-business pursuits[.]” Id. at §(1)(c)(1).

         The Policy defines “business” as:

a trade, profession or occupation engaged in on a full-time, part-time or occasional basis, or any other activity, including civic or public, engaged in for money or other compensation, except for the following:
(1) One or more activities, not described in (2) below, for which no insured receives more than $3, 000 in total compensation for the 12 months before the beginning of the policy period; and
(2) volunteer activities for which no money or other compensation is received other than for expenses incurred ...

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