Summary
The Supreme Court of Ohio interpreted a homeowner’s insurance exclusion for claims arising out of premises owned by the insured but not listed as an insured location. The court held that the exclusion applies to premises-based liability claims, including claims arising from the quality or condition of the premises or based on ownership of the property, but not necessarily to negligence unrelated to the premises. The court reversed and remanded because the record was insufficient to determine the factual basis of the underlying claims.
Topics
Practice areas
Questions Presented
- Whether a homeowner's policy exclusion for bodily injury claims arising out of premises owned by the insured but not designated as an insured location applies only when a dangerous condition or quality of the premises caused or contributed to the injury.
- Whether the exclusion also applies to claims based on the insured's ownership of the property, even when the alleged negligence is unrelated to the property's quality or physical condition.
- Whether the record was sufficient to determine whether the underlying claims were premises-based or instead arose from the Hunters' personal negligent supervision or control.
Holdings
- An exclusion in a homeowner's insurance policy for claims arising out of premises owned by the insured other than the insured location excludes coverage for premises-based liability claims, including claims arising from the quality or condition of the premises.
- The exclusion applies to claims based upon the insured's ownership of the property upon which the injury occurred, even if the claim is not based on the physical quality or condition of the premises.
- The record was insufficient to determine whether the Whickers' claims were based on a personal duty to supervise or control the minors, in which case the exclusion would not apply, or on the Hunters' ownership of the farm, in which case the exclusion would apply.
Key quotations
“It happened there, but did not ‘arise out of,’ as the phrase is understood.” (545)
“The simple fact that Ashley’s misconduct took place on land is a matter of the law of gravity, not the law of insurance.” (546)
“Insurers are free to draft exclusions to more fully preclude coverage for occurrences like that at issue in this litigation, but the use of the causal phrase “arising out of” in the exclusion is insufficient to do so.” (546)
Factual background
The Hunters' Ohio residence was insured under a Westfield homeowner's policy that provided personal-liability coverage but excluded claims arising out of premises owned by an insured that were not an insured location. The Hunters also owned an Indiana farm that was insured by Grinnell but was not an insured location under the Westfield policy. Their minor grandchild was injured in an ATV accident on the farm, and the underlying complaint alleged that the Hunters negligently failed to control or supervise another minor, without alleging that a condition of the property caused the accident.
Procedural history
Westfield brought a declaratory-judgment action seeking a declaration that it had no duty to defend or indemnify the Hunters in an underlying personal-injury action arising from an ATV accident on the Hunters' uninsured Indiana farm. On cross-motions for summary judgment, the trial court granted judgment to Westfield. The court of appeals affirmed, and Grinnell appealed; the court of appeals also certified a conflict, which the Supreme Court of Ohio accepted and recognized.
Remand instructions
The trial court must further develop the record and determine whether the Whickers' theory is that the Hunters breached a personal duty assumed for the care and control of Terrell and Ashley, in which case the exclusion does not apply, or whether the claims are based only on the Hunters' ownership of the property where the injuries occurred, in which case the exclusion applies. The Indiana farm is to be treated as not an insured location for purposes of remand.