Buckeye Union Insurance Company, Respondent, v. New England Insurance Company, Petitioner

Buckeye Union Insurance Company, Respondent, v. New England Insurance Company, Petitioner

A jury finding of bad faith with actual malice in a refusal to settle does not, as a matter of law, establish the specific intent to injure required to render the act an uninsurable intentional tort; such a finding also does not collaterally estop the insurer from litigating whether direct intent (or substantial certainty) to injure existed; the applicability of the policy exclusion for dishonesty/fraud was left to the trial court because the exclusion’s language is ambiguous and the prior verdict did not conclusively establish the exclusion’s elements.

Citation
1999 Ohio 67; 87 Ohio St. 3d 280
Parties
Respondent/assignee of Board of Commissioners of Erie County: Buckeye Union Insurance Company; Petitioner/insurer: New England Insurance Company
Court
Ohio Supreme Court
Jurisdiction
United States
Judgment Date
22 December 1999
Case Number
1998-1268
Procedural Posture
Certified Questions From Sixth Circuit Concerning Insurance Coverage/breach and Declaratory Relief / Supreme Court of Ohio Decision on Certified Questions
Outcome
Answered certified questions: (1) No — bad faith with actual malice does not necessarily constitute an uninsurable intentional tort; (2) No — such a finding does not collaterally estop Buckeye; (3) Court declined to answer question three (left for trial court)
Legal Topics
Insurability of Intentional Torts, Bad Faith Refusal to Settle, Actual Malice, Policy Exclusions for Dishonesty/fraud, Collateral Estoppel, Policy Interpretation
Source Language
English
Insurance Law Contract Law Tort Law Civil Procedure Insurability of Intentional Torts Bad Faith Refusal to Settle Actual Malice Policy Exclusions for Dishonesty/fraud +2 more

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Parties

Buckeye Union Insurance Company

Respondent/assignee of Board of Commissioners of Erie County

New England Insurance Company

Petitioner/insurer

Procedural Posture

Certified Questions From Sixth Circuit Concerning Insurance Coverage/breach and Declaratory Relief / Supreme Court of Ohio Decision on Certified Questions

Legal Issues

  1. 1 Whether an insurer’s bad-faith failure to settle with actual malice constitutes an uninsurable intentional tort under Ohio law
  2. 2 Whether a prior jury finding of bad faith with actual malice collaterally estops Buckeye from litigating coverage
  3. 3 Whether the policy exclusion for personal dishonesty/fraud encompasses insurer bad faith with actual malice

Ratio Decidendi

A jury finding of bad faith with actual malice in a refusal to settle does not, as a matter of law, establish the specific intent to injure required to render the act an uninsurable intentional tort; such a finding also does not collaterally estop the insurer from litigating whether direct intent (or substantial certainty) to injure existed; the applicability of the policy exclusion for dishonesty/fraud was left to the trial court because the exclusion’s language is ambiguous and the prior verdict did not conclusively establish the exclusion’s elements.

Court Disposition

Answered certified questions: (1) No — bad faith with actual malice does not necessarily constitute an uninsurable intentional tort; (2) No — such a finding does not collaterally estop Buckeye; (3) Court declined to answer question three (left for trial court)

Orders

  • Judgment accordingly.