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In the policy, the stop gap endorsement contained standard language for intentional injuries:

This insurance does not apply to:

e. Bodily injury intentionally caused or aggravated by you, or bodily injury resulting from an act which is determined to have been committed by you with the belief that an injury is substantially certain to occur.

(Emphasis added.)

The certified conflict to the Supreme Court addressed whether the underlined language requires a final determination made by either a judge or jury before the defense of a claim for a substantial certainty tort can be denied. The parties agreed that the stop-gap endorsement excluded coverage for a “substantial-certainty” intentional tort and that if the employer was ultimately liable to the employee, Gulf would have no duty to indemnify. The only question was whether the policy required Gulf to defend United Foundries in the underlying action.

In a unanimous decision authored by Justice Stratton, the Ohio Supreme Court held that the stop-gap provision does not require such a duty to defend:

An exclusion in a commercial generally liability insurance policy or stop-gap endorsement stating that the insurance does not apply to bodily injury intentionally caused or aggravated by an insured, or bodily injury resulting from an act that is determined to have been committed by an insured with the belief that an injury is substantially certain to occur does not require a final determination by either a judge or a jury before the insurer can refuse to defend a claim alleging a substantial-certainty employer intentional tort.

In so holding, the Court held that the specific language in the stop gap endorsement is clear and unambiguous, disagreeing with the reasoning of the Third District Court of Appeals in Cooper Tire & Rubber Co. v. Travelers Cas. & Sur. Co. The Court further held that the endorsement as interpreted is not illusory, as it provides some limited form of coverage. And finally, in response to the employer’s claim that the policy does not provide it with the coverage it intended to purchase, the Court stated: “But this is an argument for United to assert against the insurance agency and broker who procured the policy, not against the insurer.”

Notably, the injury at issue predated the 2005 enactment of Ohio’s latest intentional tort statute, R.C. 2745.01, which defines “substantially certain” to mean “that an employer acts with deliberate intent to cause an employee to suffer an injury, a disease, a condition, or death.” Thus, the Court followed the earlier line of cases holding that a substantial-certainty intentional tort occurs “when [an] employer does not directly intend to injure [an] employee, but acts with the belief that injury is substantially certain to occur,” citing Penn Traffic Co. v. AIU Ins. Co. It is unclear how the Court would have applied the statute.

Justice Pfeifer concurred in the judgment only.
 

In the second opinion released by the Court on Tuesday – Stetter v. R.J. Corman Derailment Services – the Court answered questions of state law submitted by the U.S. District Court for the Northern District of Ohio. In a 6-1 decision, the Court found that R.C. § 2745.01 does not violate the provisions of the Ohio Constitution that guarantee trial by jury, a remedy for damages, open courts, due process, equal protection of the laws or the separation of powers between the legislative and judicial branches of government. The Court also held that, while R.C. § 2745.01 limits the ability of workers to assert common law employer intentional tort claims previously recognized by this Court, it does not eliminate such claims. Based on those findings, and its holding in Kaminski, the Court concluded that R.C. § 2745.01 is constitutional on its face.

Justice Paul Pfeifer dissented in both cases, writing that tightening the definition of intentional workplace tort “defines the cause of action into oblivion” because an “employee may recover damages under the statute only if his employer deliberately intends to harm him.” Justice Pfeifer further noted that “Are we to believe that criminally psychotic employers are really a problem that requires legislation in Ohio?” 

The Court’s decisions yield a swift blow to plaintiffs attempting to bring an intentional tort lawsuit based on a workplace injury. Plaintiffs now bear an exceptionally high burden of proving that the employer intended for the injury to occur. 

Under the law in effect before the 2005 passage of R.C. 2745.01 – the tort reform provision challenged in Kaminski –the employee had to prove that the employer required the employee to act knowing that an injury was “substantially certain” to occur. Determining whether employer fault rose to this “substantially certain” level was hotly contested in intentional tort cases, with many employers believing that the standard as applied by most courts was too low. 

R.C. 2745.01 essentially raised this standard by clarifying that “substantially certain means that an employer acts with deliberate intent to cause an employee to suffer an injury….” It further required that employees prove all elements of intentional tort claims by “clear and convincing” evidence – a more stringent burden of proof than the typical “preponderance of the evidence.”

The Kaminski court found that this “deliberate intent to injure” standard was so high that it effectively eliminated the cause of action for employer intentional torts. The court then cited earlier Ohio Supreme Court precedent that rejected as unconstitutional efforts to legislate a common-law cause of action out of existence. Based on those cases, the court found that R.C. 2745.01 was unconstitutional.  The court’s ruling effectively restores the old “substantially certain to occur” standard and eliminates the requirement that employees prove a “deliberate intent to injure” through clear and convincing evidence.

Kaminski binds only lower courts within the Seventh Appellate District, which includes Belmont, Carroll, Columbiana, Harrison, Jefferson, Mahoning, Monroe, and Noble counties. It may nevertheless be cited as persuasive authority by other appellate districts, and it is therefore likely that the constitutionality of R.C. 2745.01 eventually will be addressed by the Supreme Court of Ohio.

We’ll keep an eye on this and provide you with updates.