The Ohio Supreme Court recently issued a significant decision affecting insurance coverage for employer intentional torts. In Ohio, as in other states, workplace injuries are generally covered by the workers’ compensation system. Intentional injuries, however, are considered to occur outside of the context of the employment relationship and are not covered by workers’ comp benefits. Instead, employer intentional torts become the responsibility of the employer and any separate liability insurance covering the employer. With the recent decision in Hoyle v. DTJ Enterprises, Inc., 2015-Ohio-843, the Ohio Supreme Court has effectively eliminated insurance coverage for employer intentional torts.
The case arose when an employee fell from scaffolding that did not have the proper safety brackets attached. The employee alleged that the job superintendent kept the bolts that secured the safety brackets in his office and told employees that they did not need the bolts and brackets because they took too much time to use. The employee sued his employer, alleging a claim for employer intentional tort. The employer’s insurer intervened in the suit, seeking a declaratory judgment that it had no obligation to indemnify the employer under its policy.
Factoring public policy, the Ohio statute controlling employer intentional torts, and the employer’s liability insurance policy, the Supreme Court faced the question of whether the employee could maintain a claim under the statute and still recover under the insurance policy.
Public policy generally disallows insurance coverage for intentional acts, but courts have distinguished between intentional torts that are “directly intended” and intentional torts that are “substantially certain to occur.” In Ohio, insurance is not available when the actor directly intends the harm—that is the actor “does something which brings about the exact result desired.” However, coverage may be available for intentional torts based on “substantial certainty”—that is “the actor does something which he believes is substantially certain to cause a particular result, even if the actor does not desire that result.”
Under ordinary circumstances, an injured party can demonstrate either the actor’s direct intent or the actor’s belief that injury was substantially certain to occur. But the Ohio Revised Code limits the circumstances under which an employee may sue its employer for an intentional tort. Ohio courts originally allowed employees to sue their employers for acts committed with the specific intent to injure as well as acts committed with the belief that injury is substantially certain to occur, but in 2005 the Ohio General Assembly passed Section 2745.01 which says that an employer will only be liable for an intentional tort if the employee proves that the employer acted (A) with the intent to injure the employee or (B) with the belief that injury was substantially certain to occur. The statute effectively eliminates any distinction between the two levels of intent by defining “substantially certain” as acting with “deliberate intent” to cause injury. “What appears at first glances as two distinct bases for liability is revealed on closer examination to be one and the same.” Rudisill v. Ford Motor Co., 709 F.3d 595, 602-603 (6th. Cir. 2013).
Subsection (C) of the statute provides a third basis of liability by creating a rebuttable presumption of intent to injure when safety guards are deliberately removed by an employer. It was within the context of this presumption that Ohio’s Ninth District Court of Appeals originally considered the case.
In the case, the employer’s commercial general liability policy provided coverage for injuries to employees caused by intentional acts that were “substantially certain to cause bodily injury” but excluded coverage for intentional acts committed “with the deliberate intent to injure.” In order to recover under the policy, the employee needed to prove intent under the Ohio statute to establish the employer’s liability while avoiding the “deliberate intent” exclusion within the policy. The Ninth District thought the rebuttable presumption in subsection (C) gave the employee an avenue to do so.
The court read the presumption of intent in subsection (C) as moderating the “intent” and “deliberate intent” requirements of subsections (A) and (B). The court concluded that presuming intent when an employer deliberately removes a safety guard for purposes of the statute does not necessarily amount to “deliberate intent” for purposes of the insurance policy. In short, the court thought the employee could satisfy the statute and establish liability by way of the presumption of intent and could still maintain that the injury was covered under the policy as having been “substantially certain to occur.”
The Supreme Court rejected this reading of the statute and the insurance policy. According to the lead opinion of the court, the only means of recovering under Ohio statute is for the employee to prove that the employer directly intended or deliberately intended the injury. The rebuttable presumption for removing safety guards does not alter the level of intent required, it simply “presume the injurious intent required under divisions (A) and (B).” Accordingly, because the policy excluded coverage for deliberately intended injuries, the court said there was no way for the employer to both prove intent under the statute and avoid the policy exclusion.
Indeed, one concurring justice wrote separately, “by defining ‘substantially certain’ acts as ‘deliberate’ in R.C. 2745.01, the General Assembly has closed off employer intentional torts. Even if the a plaintiff proves the employer’s intent to injure directly under R.C. 2745.01(A) or (B), or by an unrebutted presumption under R.C. 2745.01(C), the act is not insurable as was the old substantial-certainty intentional tort… There is now nothing less than deliberate intent. As a practical matter, employees will be limited to workers’ compensation remedies for their workplace injuries.”
A strong dissent questioned whether the lead opinion’s conclusion rendered the coverage illusory: “Can this court truly countenance an insurance company’s assertion that it should be permitted to collect a premium for an event that is never going to happen?” But the majority refused to address the issue of illusory coverage as it was not raised at the trial court or appellate levels.
In any case, with the court’s ruling, Ohio has likely foreclosed insurance coverage for employer intentional torts. With state statute enabling recovery only for those intentional torts that are directly or deliberately intended, and public policy prohibiting (and insurance policies excluding) insurance coverage for such acts, the court in this case has effectively removed the possibility of insurance coverage for employer intentional torts. The decision is important for workers, employers, and insurers in Ohio as claims of employer intentional torts and their associated insurance recovery should change significantly in light of this decision.
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