In Hoyle v. DTJ Ents., Inc., the Ohio Supreme Court has ruled that provisions of an insurance policy do not require an insurance company to indemnify employers if they are found to have intentionally injured their employee.
On March 25, 2008, Duane Allen Hoyle, while working for DTJ Enterprises and Cavanaugh Building Corporation, fell approximately 14 feet from a ladder-jack scaffold, landed on concrete and suffered injuries. Hoyle sued his employers alleging claims of intentional tort, including an allegation that his supervisor would not permit him to use bolts and pins to secure the ladder jacks to the ladders. The employers’ insurance company intervened and filed a complaint for declaratory judgment that it had no obligation to indemnify the employers for Hoyle’s injuries.
Most work-related injuries are covered by Ohio’s workers’ compensation system as the employee’s exclusive remedy. However, when an employee’s injury results from acts or omissions committed by the employer with an intent to injure or “with the belief that the injury was substantially certain to occur,” Ohio’s intentional tort statute permits the employee to also file a lawsuit for compensatory and punitive damages against the employer. Oddly, the statute 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.
In this case, the employers had obtained insurance coverage from Cincinnati Insurance Company and had purchased an additional policy that covered Employer Liability. The additional policy obligated the insurance company to pay when the employer’s acts were substantially certain to cause injury, but barred coverage for acts committed with the deliberate intent to injure. At trial, the insurance company argued that it had no duty to indemnify the employers and the trial court agreed, specifically noting that any liability Hoyle might establish would fall within the policy exclusion and granted judgment in favor of the insurance company. A divided panel of the Ninth District Court of Appeals reversed the decision and the Supreme Court accepted a discretionary appeal.
The Supreme Court reversed the appellate court and held that because liability for an intentional tort requires a finding that the employer acted with the intention to injure an employee, an insurance provision that excludes from coverage liability for an insured’s act committed with the deliberate intent to injure an employee precludes coverage for employer intentional torts. Hence, the Supreme Court held that the insurance company was not required to indemnify the employers even if Hoyle were to prevail on his claims against them. Indeed, the court held, “Because the Employers Liability Coverage Form excludes from coverage ‘liability for acts committed by or at the direction of an insured with the deliberate intent to injure,’ there is no set of facts under which [the employers] could be legally liable to Hoyle that falls within the policy’s coverage.” This result certainly begs the question of what coverage the insurance company was actually selling to the employers for the additional premiums it obtained from them under the Employer Liability policy. The majority avoided this question by noting that the employers never argued before the lower courts that the coverage provided by the insurance company was illusory.
Interestingly, Justice O’Neill was not willing to let this issue pass unaddressed. In a scathing dissent lamenting “insurance agents selling worthless pieces of paper that will never pay a claim,” he asked, “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?” Despite this language, Justice O’Neill’s opinion was not really founded on feelings of sympathy for the employers, but rather a belief, recognized as well by Justice Lanzinger in her concurring opinion, that it is extraordinarily difficult for an employee to establish that his or her employer has committed an employment intentional tort under the current statute.
The Hoyle decision almost certainly forecasts the death of employer liability insurance policies purporting to provide coverage for employment intentional tort claims in Ohio. Though employers may feel that the heightened intentional tort standard provides its own protection because they would never deliberately intend to injure an employee, they should not be lulled into a false sense of security. As Justice O’Neill pointed out in his dissent, the statute creates rebuttable presumptions that an injury was caused intentionally if it was caused by the deliberate removal of a safety guard or the deliberate misrepresentation of the toxicity of a substance or chemical. Certainly, one does not have to have too fertile an imagination to believe that such conduct is possible in the workplace. As a result, employers still need to remain diligent in maintaining safe workplaces for their employees.