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Pa. Gen. Ins. Co. v. Park-Ohio Indus.

Supreme Court of Ohio

December 2, 2009, Submitted; June 22, 2010, Decided

No. 2009-0104

Opinion

LANZINGER, J.

 [**P1]  [*99]  This appeal addresses issues regarding the allocation of insurance coverage [***803]  among multiple insurers in cases in which loss or injury is caused over a period of time ("progressive injury") and multiple insurance policies cover that time frame. This court has adopted an allocation approach known as "all-sums" in Goodyear Tire & Rubber Co. v. Aetna Cas. & Sur. Co., 95 Ohio St.3d 512, 2002 Ohio 2842, 769 N.E.2d 835. Although the parties ask us to overrule the case and adopt the competing pro rata approach, we decline to do so in this case.

 [**P2]  We continue to adhere to the all-sums method of allocation adopted in Goodyear, while emphasizing that the insured has a duty to cooperate with the targeted  [****3] insurer. Recognizing the need to clarify Goodyear, we hold that ] when the targeted insurer requests information regarding other policies that may cover the claim, the insured has a duty to cooperate by identifying any such policies. In the event that a nontargeted insurer is not timely notified of a claim, a targeted insurer's contribution claim against that nontargeted insurer will be barred only if the failure to notify resulted in prejudice to the nontargeted insurer. Although there was a delay in notification to the nontargeted insurers in the present case, we affirm the decision of the Eighth District Court of Appeals because this delay did not result in prejudice to those insurers.

I. Case Background

 [**P3]  George DiStefano filed suit for asbestos-related injuries against Park-Ohio Industries, Inc. ("Park-Ohio") and other defendants in the Superior Court of California in March 2002 after being diagnosed with mesothelioma. In August 2002, Park-Ohio notified one of its insurers, appellee Pennsylvania General Insurance Company ("Penn General") of the action, and in September 2002, Penn General's representative retained attorney Henry Rome to handle the DiStefano litigation. Park-Ohio settled  [****4] DiStefano's case the next month, without Penn General's formal consent, agreeing to pay $ 1 million in exchange for a full release and dismissal of the lawsuit. After reviewing the terms, Penn General's counsel concluded that the $ 1 million settlement between Park-Ohio and DiStefano was reasonable for several reasons: In similar mesothelioma cases, local juries had recently awarded verdicts in the $ 3-million-to-$ 5-million range, Park-Ohio's evaluation report indicated that a conservative verdict in the DiStefano case could reach $ 5 million to $ 6 million, and DiStefano's previous settlement demand had been $ 3 million. The settlement in DiStefano's lawsuit against Park-Ohio was finalized in October 2002.

 [**P4]  In September 2003, Park-Ohio filed a complaint for declaratory judgment against Penn General as its insurer, in the Cuyahoga County Court of Common Pleas, seeking a declaration that Penn General was obligated to defend Park-Ohio in the DiStefano lawsuit and that Penn General owed Park-Ohio indemnification for the full amount of the DiStefano settlement, compensatory damages for [*100]  damages, attorney fees, expenses, loss, and costs, and punitive damages. During the litigation, Penn General  [****5] had paid $ 250,000 to Park-Ohio as the full per-person bodily-injury limit of one of the policies at issue in the suit. But not until July 2004 did Park-Ohio's counsel notify Penn General's counsel that other insurance policies were discovered covering the time frame in which DiStefano's injuries were alleged to have occurred. Until Park-Ohio as the insured produced these documents, Penn General had no knowledge of any other comprehensive general liability insurance coverage available during the dates relevant to the DiStefano case because Park-Ohio maintained sole control of this information.

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126 Ohio St. 3d 98 *; 2010-Ohio-2745 **; 930 N.E.2d 800 ***; 2010 Ohio LEXIS 1417 ****

PENNSYLVANIA GENERAL INSURANCE COMPANY, APPELLEE, v. PARK-OHIO INDUSTRIES; NATIONWIDE INSURANCE COMPANY ET AL., APPELLANTS.

Prior History:  [****1] APPEAL from the Court of Appeals for Cuyahoga County, No. 90619, 179 Ohio App. 3d 385, 2008 Ohio 5991, 902 N.E.2d 53.

Pa. Gen. Ins. Co. v. Park-Ohio Indus., Inc., 179 Ohio App. 3d 385, 2008 Ohio 5991, 902 N.E.2d 53, 2008 Ohio App. LEXIS 5027 (Ohio Ct. App., Cuyahoga County, 2008)

Disposition: Judgment affirmed.

CORE TERMS

insurer, nontargeted, targeted, settlement, notice, all-sums, coverage, notified, policies, prejudiced, insurance policy, notification, equitable, failure to notify, appeals, lawsuit, actual prejudice, parties, duty to cooperate, trial court, contractual, occurrence, contracts, damages, cases

Insurance Law, Claim, Contract & Practice Issues, Coinsurance, Contribution, General Overview, Liability & Performance Standards, Notice to Insurers, Prejudice to Insurers, Group Policies, Conditions Precedent, Evidence, Inferences & Presumptions, Presumptions