Opinion
12 CV 5597 12 CV 5768
02-25-2014
BLUEMILE, INC., Plaintiff, v. ATLAS INDUSTRIAL CONTRACTORS, LTD., et al., Defendants. ATLAS INDUSTRIAL CONTRACTORS, LLC, Plaintiff, v. BLUEMILE, INC, et al., Defendants
DECISION AND ENTRY DENYING DEFENDANT HARTFORD CASAULTY INSURANCE COMPANY'S MOTION FOR SUMMARY JUDGMENT AND GRANTING PLAINTIFF BLUEMILE, INC.'S MOTION FOR PARTIAL SUMMARY JUDGMENT AND DECLARATORY RELIEF
MCINTOSH, J.
This matter is before the Court on Motion by Defendant Hartford Casualty Insurance Company for Summary Judgment and Motion by Plaintiff Bluemile, Inc. for Partial Summary Judgment and Declaratory Relief, both filed September 23, 2013. The motions have been fully briefed and the parties appeared before the Court for a hearing on the matter on November 18, 2013. Upon review and for the following reasons, the Court finds in favor of plaintiff and against defendant.
STATEMENT OF FACTS
The underlying facts are not in dispute. Bluemile, Inc. (" Bluemile") provides cloud, network, data hosting, and phone services. On February 10, 2011, Bluemile suffered an outage that caused a disruption in services from 7:36 a.m. to 9:45 a.m. Bluemile alleges in its Complaint that it suffered damages in excess of $7,000,000.
At all times relevant, Bluemile had an insurance policy with Hartford Casualty Insurance Company (" Hartford"), which provided Business Income and Extended Business Income (" EBI") coverage. Hartford paid Bluemile $514,898 toward its claim for Business Income coverage. However, the parties dispute the length of time for EBI Coverage, which is the sole issue before the Court at this time.
The EBI language in Bluemile's policy states:
Extended Business Income
We will pay for the actual loss of Business Income you incur during the period that:
(1) Begins on the date property is actually repaired, rebuilt or replaced and " operations" are resume; and
(2) Ends on the earlier of:
a. The date you could restore your " operations" with reasonable speed, to the condition that would have existed if no direct physical loss or physical damage occurred; or
b. 90 consecutive days after the date determined in (a) above.
The parties' dispute arises from the language in subsection 2(b). Bluemile argues that subsection 2(a) governs the length of EBI coverage, while Hartford suggests that there is a typographical error in subsection 2(b) and the length of time is 90 days from the date of repair. Bluemile and Hartford now move for summary judgment.
STANDARD OF REVIEW
In order to prevail upon a motion for summary judgment, the moving party must inform the court of the basis for the motion and identify those portions of the record which demonstrate the absence of a genuine issue of material fact. In Dresher v. Burt (1996), 75 Ohio St.3d 280, 1996 Ohio 107, 662 N.E.2d 264, the Ohio Supreme Court explained:
the movant must be able to point to evidentiary materials of the type listed in Civ.R.56(C) that a court is to consider in rendering summary judgment. . . . These evidentiary materials must show that there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law. . . . If the moving party fails to satisfy its initial burden, the motion for summary judgment must be denied, (emphasis added).Id. at 292, 293.
Although the court is obligated to view all evidentiary material in a light most favorable to the non-moving party, Temple v. Wean United, Inc . (1977), 50 Ohio St. 2d 317, 364 N.E.2d 267, when faced with a properly supported motion for summary judgment a non-moving party may not rely upon the mere allegations of its complaint, but must demonstrate a material issue of fact exists by directing the court's attention to evidentiary materials of the type listed in Civ.R. 56(C). Dresher at 292. See also, Wing v. Anchor Media, Ltd . (1991), 59 Ohio St.3d 108, 111, 570 N.E.2d 1095, following Celotex v. Catrett (1986), 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265; and Morris v. Ohio Cas. Ins. Co . (1988), 35 Ohio St.3d 45, 517 N.E.2d 904. Viewing all facts in a light most favorable to the non-moving party, the court must determine whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one sided that one party must prevail as a matter of law. Turner v. Turner (1993), 67 Ohio St.3d 337, 340, 1993 Ohio 176, 617 N.E.2d 1123.
The court must examine the evidence properly before the court and determine, based on that evidence alone, whether a genuine issue of material fact remains for trial. There is no " default" summary judgment under Ohio law. Maust v. Palmer (1994), 94 Ohio App.3d 764, 769, 641 N.E.2d 818; O'Brien v. Citicorp Mortgage, Inc ., Franklin App. No. 93AP-1074 A trial court must thoroughly examine all appropriate materials filed by the parties before ruling on a motion for summary judgment. Murphy v. Reynoldsburg (1992), 65 Ohio St.3d 356, 1992 Ohio 95, 604 N.E.2d 138.
Further, as to documents falling outside of 56(C), it is well settled that, in order to be considered by the Court, they must be properly authenticated through an affidavit. See, e.g. Nadra v. Mbah , Franklin App. No. 06AP-829, 2007 Ohio 501. (" The proper procedure for introducing evidentiary matter of a type not listed in Civ.R. 56(C) is to incorporate the material by reference into a properly framed affidavit..."
LAW AND ANALYSIS
The issue before the Court is a matter of contractual interpretation and the law governing interpretation of an insurance contract is well-established. The Court must first look at the plain and ordinary meaning of the language in the policy to glean the intent of the parties to the agreement. Westfield Ins. Co. v. Galatis , 100 Ohio St.3d 216, 2003 Ohio 5849, 797 N.E.2d 1256. When the language is clear and unambiguous, the Court may look no further than the language of the contract to determine the intent. Id.
Unambiguous contractual language is language that can be given a definite legal meaning. Id. That being said, the Tenth District Court of Appeals held that " [t]he test to be applied by the court in determining whether there is an ambiguity is not what the insurer intended its words to mean, but what a reasonably prudent person applying for insurance would have understood." Snedegar v. Midwestern Indem. Co. , 64 Ohio App.3d 600, 604, 582 N.E.2d 617, citing 2 Couch on Insurance 2d (1984) 416, Section 15:84. If the language is unambiguous, the Court cannot create a new contract by finding intent not expressed in the clear language. Alexander v. Buckeye Pipe Line Co ., 374 N.E.2d 146, 53 Ohio St. 2d 241 (1978).
However, if language in the contract is ambiguous, the doctrine of contra proferentum controls. Specifically, this doctrine requires the Court to give any ambiguities in the contract the most liberal interpretation possible in favor of the insured and strictly against the insurer. Buckeye Union Ins. Co. v. Price , 313 N.E.2d 844, 39 Ohio St. 2d 95 (1974); see also Bobier v. Nat'l. Cas. Co ., 143 Ohio St. 215, 54 N.E.2d 798 (1944).
Hartford concedes that there is no ambiguity in Bluemile's insurance policy, but nevertheless argues the EBI provision is subject to an alternative, more reasonable interpretation. Hartford relies upon the Supreme Court of Ohio's decision in Farmers Nat'l Bank v. Delaware Ins. Co. , 83 Ohio St. 309, 94 N.E. 834, 8 Ohio L. Rep. 607, paragraph six of the syllabus, which states: " When construing an insurance contract, the law requires the Court to, if possible , give effect * * * to every provision therein contained, and if one construction of a doubtful condition written in a contract would make that condition meaningless, and it is possible to give it another construction that would give it meaning and purpose, then the latter construction must obtain." The Court emphasizes the " if possible" language because Hartford relies extensively upon this tenet of contract interpretation for the proposition that Bluemile's argument would render certain provisions of the contract meaningless.
Here, the Court is not asked to interpret ambiguous language, but rather a typographical error -- specifically whether section (a) referenced in 2(b) of Bluemile's EBI coverage provision was really supposed to be a (1). Because the issue is not one of ambiguity, the Court cannot look beyond the language of the contract. Thus, the various editions of the Special Property Coverage Form and Actual Loss Sustained endorsements provided by Hartford cannot, as a matter of law, be used as guidance on this issue. To that end, the Court is left to consider whether the insurance contract should be strictly construed or whether Hartford's interpretation is more reasonable under the circumstances. The more fundamental question is when the Court can correct a typographical error and when it cannot.
Hartford cites several cases in which the courts corrected typographical errors to accurately reflect the intentions of the parties. While that may be acceptable in some instances, in none of those cases did doing so fundamentally alter the provisions in the policy. Here, the error is not one where the contract stated " included" instead of " including" . That is an obvious error.
Here, the alleged error is refers to subsection (1) instead of subsection (a). The alleged error is not obvious because it refers to valid provision in the policy. While Hartford's interpretation does appear to make more sense, the Court still consider whether it can rewrite the terms of the policy. Upon serious consideration, the following factors weigh against doing so.
As already noted, this is not a question of ambiguity. Thus, this Court cannot look beyond the contract to determine the intent of the parties. Even it could, the evidence and arguments of Hartford do not purport to reflect the intent of the parties, but rather the intent of Hartford when it rewrote its policies.
Additionally, the Court cannot ignore the lengthy existence of this particular error. Hartford concedes that the EBI provision has referred to subsection (1) instead of subsection (a) for seven years. For seven years this alleged error has gone unnoticed until Bluemile made a claim for coverage. Only then did anyone discover that perhaps the EBI provision, as written, provided coverage in excess of what was originally intended by Hartford.
That being said, the law is clear that, when in doubt, insurance policies must be liberally construed in favor of the insured and strictly against the insurer. Because the alleged error has existed for seven years and was not discovered until after Bluemile submitted its claim for coverage, it would be inequitable to deny Bluemile the coverage it reasonably believed it had under the policy as written.
CONCLUSION
For the forgoing reasons, the Court GRANTS Bluemile's Motion for Summary Judgment and DENIES Defendant's Motion for Summary Judgment
So Ordered.
It Is So Ordered.