[Cite as Oriani v. Reach Out Disposal, L.L.C., 2016-Ohio-7392.]


                 Court of Appeals of Ohio
                               EIGHTH APPELLATE DISTRICT
                                  COUNTY OF CUYAHOGA


                              JOURNAL ENTRY AND OPINION
                                      No. 103128




                                  GUY ORIANI, ET AL.
                                                           PLAINTIFFS-APPELLANTS

                                                     vs.

                REACH OUT DISPOSAL, L.L.C., ET AL.
                                                           DEFENDANTS-APPELLEES




                                           JUDGMENT:
                                            AFFIRMED


                                      Civil Appeal from the
                             Cuyahoga County Court of Common Pleas
                                    Case No. CV-13-815222

        BEFORE: Keough, P.J., Boyle, J., and Laster Mays, J.

        RELEASED AND JOURNALIZED: October 20, 2016
ATTORNEY FOR APPELLANTS

Thomas A. Muzilla
Muzilla Law Firm, L.L.C.
2996 Kingsley Road
Cleveland, Ohio 44122


ATTORNEYS FOR APPELLEES

For Century Surety Company

Kurt D. Anderson
Richard M. Garner
Collins, Roche, Utley & Garner, L.L.C.
655 Metro Place South, Suite 200
Dublin, Ohio 43017

For Axelrod Rubbish Recycling and
Reach Out Disposal, L.L.C.

c/o Joseph Vitanza
2603 Fortune Avenue
Parma, Ohio 44134

For Chris Gatarello

Chris Gatarello, pro se
1987 East 126th Street
Cleveland, Ohio 44106
KATHLEEN ANN KEOUGH, P.J.:

      {¶1} Plaintiffs-appellants, Guy and Elise Oriani (the “Orianis”), appeal from the

trial court’s judgment granting the motion for summary judgment of defendant-appellee,

Century Surety Company (“Century”). For the reasons that follow, we affirm.

                                    I. Background

      {¶2} The Orianis filed suit against Century, Reach Out Disposal, L.L.C., Axelrod

Rubbish Recycling International Global, L.L.C., Chris Gattarello, Joseph F. Vitanza, and

Charles Sotera (collectively “Axelrod”), and eight other defendants and John Does,

seeking damages and insurance coverage for damages they suffered as a result of the

defendants’ operation of a “garbage hauling/recycling business” on property owned by

the Orianis. This appeal involves only the Orianis’ claim against Century for insurance

coverage of a default judgment they obtained against Axelrod.       The Orianis either

dismissed the remaining defendants without prejudice or obtained a default judgment

against them.

      {¶3} The Orianis leased part of a building they owned to Axelrod pursuant to an

oral month-to-month lease. As part of the lease agreement, Axelrod was required to

provide the Orianis with insurance coverage for the operation of its business on the

property. Axelrod purchased a general commercial liability policy from Century for the

policy period March 15, 2012 to March 15, 2013.

      {¶4} Axelrod operated its garbage hauling and recycling business on the Orianis’

property beginning in January 2012.       Toward the end of 2012, garbage began
accumulating on the premises. Axelrod ceased operations in January 2013, but left

behind “tons of garbage” in the building. According to the Orianis, rats became attracted

to the garbage, and in 2013, Guy Oriani was told by a representative from the city of

Cleveland that the garbage posed a general health hazard to him (Guy and his son operate

a construction business in another part of the building leased to Axelrod) and the

surrounding residential neighborhood.      The Orianis were charged by the city of

Cleveland with creating a nuisance and retained legal counsel to defend themselves.

      {¶5} In the summer of 2013, the Orianis removed the garbage from the building,

incurring significant expense to do so. They also discovered that the stored garbage and

Axelrod’s operation of its business in the building had caused significant physical damage

to the building. In addition, Axelrod did not pay rent from November 1, 2012, thru

January 31, 2013.

      {¶6} In their complaint, the Orianis included three counts against Axelrod:

breach of contract, nuisance, and trespass. The Orianis also sought damages under the

Century policy, alleging that they were an additional insured under the policy issued to

Axelrod. They also sought declaratory relief that they were entitled to indemnification

from Century for the damages caused by Axelrod.

      {¶7} In response, Century counterclaimed against the Orianis and cross-claimed

against Axelrod for declaratory relief that the Century policy did not provide insurance

coverage for either the Orianis’ first-party claims as an additional insured, or

indemnification for the damages caused by Axelrod.
       {¶8} Century then moved for judgment on the pleadings and alternatively,

summary judgment against the Orianis. In its motion, Century argued that the Orianis

were not insureds under the Century policy, much of the Orianis’ claims were for

economic losses that are not covered under the Century policy (e.g., unpaid rent), and

coverage for the Orianis’ claims against Axelrod is expressly excluded by the policy.

Specifically, Century cited exclusions for property damage arising from (1) the insured’s

contractual liability, (2) the actual or threatened discharge or release of pollutants, (3)

property damage to property rented by the insured, and (4) a defect or dangerous

condition in the insured’s product or work.

       {¶9} The trial court subsequently granted the Orianis’ motion for default judgment

against Axelrod in the amount of $286,908.97. The Orianis then opposed Century’s

motion for judgment on the pleadings or, alternatively, for summary judgment, and filed a

cross-motion for summary judgment against Century.

       {¶10} In its brief in opposition to the Orianis’ motion for summary judgment,

Century argued that the Orianis’ claims did not arise out of an occurrence, which the

policy defines as an “accident,” because Axelrod deliberately brought the garbage into the

building as part of its business and then deliberately left it there, and that in addition to

the exclusions cited in its motion, the aircraft, auto, or watercraft exclusion also applied to

exclude coverage.

       {¶11} The trial court subsequently granted Century’s motion for summary

judgment, and denied the Orianis’ cross-motion for summary judgment, finding that the
Orianis were not insureds under the Century policy, and that the policy affords no

coverage for their claims. The Orianis now appeal from the trial court’s judgment.

                                           II. Analysis

       {¶12} In their single assignment of error, the Orianis assert that the trial court erred

in granting Century’s motion for summary judgment and denying their cross-motion for

summary judgment.1

       {¶13} Civ.R. 56(C) provides that summary judgment is appropriate when (1) there

is no genuine issue of material fact, (2) the moving party is entitled to judgment as a

matter of law, and (3) after construing the evidence most favorably for the party against

whom the motion is made, reasonable minds can reach only a conclusion that is adverse

to the nonmoving party.         Zivich v. Mentor Soccer Club, Inc., 82 Ohio St.3d 367,

369-370, 696 N.E.2d 201 (1998); Temple v. Wean United, Inc., 50 Ohio St.2d 317, 327,

364 N.E.2d 267 (1977).        We review the trial court’s judgment de novo, using the same

standard that the trial court applies under Civ.R. 56(C). Grafton v. Ohio Edison Co., 77

Ohio St.3d 102, 105, 671 N.E.2d 241 (1996).

       {¶14} Initially, the Orianis argue that where provisions of the Century policy are

ambiguous and reasonably susceptible of more than one interpretation, the provisions

should be construed strictly against Century and liberally in their favor. Although, as a


         In their brief in opposition to Century’s motion for summary judgment, the Orianis conceded
       1


that they are not named as an additional insured on the Century policy. Thus, they have abandoned
any claims to first-party coverage, and on appeal, claim only that Century is obligated to provide
third-party liability coverage under the policy for the damages awarded against Axelrod when the trial
court granted their motion for default judgment.
general rule, an insurance policy that is reasonably open to different interpretations will

be construed most favorably for the insured, where the plaintiff is not a party to the

insurance contract, the plaintiff is not in a position to urge that the contract be strictly

construed against the other party. Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216,

2003-Ohio-5849, 797 N.E.2d 1256, ¶ 14. Where a court decides whether a claimant is

insured under a policy, ambiguities are construed in favor of the policyholder, not the

claimant. Id. at ¶ 35. Thus, because the Orianis are not insured under the Century

policy, as third-party claimants, they are not entitled to have the provisions interpreted

liberally in their favor. Nevertheless, it is Century’s burden to demonstrate that any

asserted exclusions specifically apply.    Neal-Pettit v. Lahman, 125 Ohio St.3d 327,

2010-Ohio-1829, 928 N.E.2d 421, ¶ 19, citing Continental Ins. Co. v. Louis Marx & Co.,

64 Ohio St.2d 399, 401, 415 N.E.2d 315 (1980). Exclusions of coverage must be clear

and unambiguous to be enforceable. Moorman v. Prudential Ins. Co. of Am., 4 Ohio

St.3d 20, 445 N.E.2d 1122 (1983).

       {¶15} The Orianis’ claims against Axelrod arose out of Axelrod’s failure to pay

the monthly rent, the structural damage it caused to the property, and the accumulated

garbage it left on the property. Despite the Orianis’ arguments otherwise, our review of

the Century policy demonstrates that coverage for these claims is precluded by specific

exclusions in the policy.

       {¶16} The Century policy requires Century to “pay those sums that the insured

becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property
damage’ to which this insurance applies.” The Orianis argue that the harm caused by

Axelrod to them easily fits within the definition of property damage and “potential”

bodily injury.

       {¶17}     “Potential” bodily injury is not covered by the policy, however. The

policy defines “bodily injury” as “bodily injury, sickness or disease sustained by a person,

including death resulting from any of these at any time.” The Orianis argue that “there

was a threat of potential bodily injury” because the rats were attracted to the garbage that

Axelrod had left in the building, and that “cleanup of the nuisance was required to

prevent any bodily harm.” But the policy requires actual bodily harm, not just the

possibility for such harm to occur. The Orianis offered no evidence that anyone was

actually physically injured or got sick as a result of Axelrod’s actions. Accordingly,

none of the damages awarded to the Orianis qualify as bodily injury as defined in the

Century policy.

       {¶18} Moreover, $75,000 of the total $286,908.97 in damages awarded to the

Orianis are purely economic damages that do not qualify as either bodily injury or

property damage under policy. As part of their default judgment, the Orianis were

awarded damages of $60,000 for unpaid rent from November 2012 through July 2013,

and $15,000 in attorney fees. These damages do not involve any bodily injury, nor were

they awarded for property damage, which the Century policy defines as “physical injury

to tangible property” or “loss of use of tangible property.”         Thus, at most, only
$211,908.97 of the damages awarded against Axelrod possibly qualify for coverage under

the Century policy.

       {¶19} However, even assuming that these remaining damages were for “property

damage” caused by an “occurrence,”2 all of these damages are excluded by the Damage

to Property exclusion in the policy. This exclusion states:

       2.      Exclusions

               This insurance does not apply to:

               ***

               j.      Damage To Property

               “Property damage” to:

               (1)     Property you own, rent or occupy, including any
                       costs or expenses incurred by you, or any other
                       person, organization or entity, for repair,
                       replacement, enhancement, restoration or
                       maintenance of such property for any reason,
                       including prevention of injury to a person or
                       damage to another’s property;

               (2)     Premises you sell, give away or abandon, if the
                       “property damage” arises out of any part of
                       those premises;

                       * * *.




        Century does not argue on appeal, as it did in the trial court, that the policy does not cover
       2


the Orianis’ damages because they did not result from an “occurrence,” as required by the policy.
Century has therefore waived this argument on appeal.
       {¶20} Exclusion j.(1), which precludes coverage for any property damage to

property owned, rented, or occupied by Axelrod, clearly bars all of the Orianis’ damages

against Axelrod.

       {¶21} The Orianis assert that exclusion j.(1) is not applicable, however, because

there were two types of property damage: structural damage to the property, and the

cleanup of the nuisance, as required by the city of Cleveland, that occurred after Axelrod

ceased its operations in the building.

       {¶22} With respect to the structural damage to the building, the Orianis argue that

there is a question of fact regarding when the structural damage occurred. They contend

that “most of the damage likely occurred” after November 1, 2012, when Axelrod stopped

paying rent and, according to the Orianis, became a trespasser in the building.

Accordingly, the Orianis contend that Axelrod was not “occupying” the building when

the damage occurred and, thus, exclusion j.(1) does not apply.

       {¶23} Our review of the record, however, demonstrates that the Orianis did not

raise this argument below and therefore, they have waived it on appeal. Moreover, the

evidence produced by the Orianis demonstrates that any structural damage to the premises

did indeed occur while Axelrod was occupying the building. The Orianis submitted

affidavits in support of their motions for summary judgment and default averring that

Axelrod “caus[ed] structural damage to the building while performing their business in

the building,” “damag[ed] the premises in the operation of their recyling business,” and

“during the time that * * * Axelrod operated their recycling business, they damaged the
physical premises with their trucks, vehicles and other acts.” Accordingly, the evidence

demonstrated that Axelrod caused structural damage to the building while it was

operating its recycling business, during which time it clearly “occupied” the building. In

short, the evidence established that the structural damage occurred before Axelrod

vacated the building in January 2013. Accordingly, exclusion j.(1) precludes coverage of

the structural damage.

       {¶24} The Orianis further contend that exclusion j.(1) is not applicable to the

structural damage because the policy is ambiguous.         Specifically, they contend that

although the declarations page lists “each occurrence limits” as $1 million, it lists a

$100,000 limit for “any one fire/occurrence” for “Damages to Premises Rented to You.”

They contend the $100,000 listing would lead a reasonable insured to conclude that the

policy provided coverage for the insured’s rented property, and assert that this ambiguity

should be construed in their favor to provide coverage.

       {¶25} We find no ambiguity. Exclusion j. expressly provides:

       Paragraphs (1), (3) and (4) of this exclusion do not apply to “property
       damage” (other than damage by fire) to premises, including the contents of
       such premises, rented to you for a period of 7 or fewer consecutive days.
       A separate limit of insurance applies to Damage to Premises Rented to You
       as described in Section III - Limits of Insurance.

       {¶26} Thus, with the exception of fire, exclusion j.(1) does not apply to “property

damage” to premises rented for seven days or less. Where this exception to the exclusion

is applicable, the limits of the policy are $100,000 per occurrence.
      {¶27} With respect to damages incurred for cleanup of the nuisance, the Orianis

contend that exclusion j.(1) is not applicable because Axelrod was no longer “occupying”

the building in the summer of 2013 when the sitting pile of garbage became a nuisance

and had to be cleaned up. They contend that Axelrod was merely a trespasser on the

property at that point because it had stopped paying rent in November 2012, and was no

longer conducting its business on the property. The Orianis did not raise this argument

below, however, and thus have waived it on appeal. Moreover, in his affidavit in support

of the Orianis’ motion for summary judgment, Guy Oriani averred that “Axelrod

continued to occupy the premises thru July 31, 2013, when I was finally able to complete

the removal of the garbage from the premises.” Thus, the evidence demonstrated that

Axelrod occupied the building when the nuisance was created.

      {¶28} However, even if Axelrod was not occupying the building when the

nuisance occurred, as the Orianis contend, exclusion j.(2) excludes coverage for property

damage to “[p]remises you sell, give away or abandon, if the ‘property damage’ arises out

of any part of those premises.” If, as the Orianis assert, the nuisance was created after

Axelrod abandoned the building, leaving behind “tons of garbage,” exclusion j.(2) bars

any coverage for its cleanup.

      {¶29} The Orianis also contend that exclusion j.(1) is not applicable to cleanup of

the nuisance because it does not apply when expenses are incurred to prevent or mitigate

damage to a third party. We need not address this argument, however, because exclusion

j.(2) excludes any coverage for cleanup of the nuisance, even if j.(1) does not apply.
Likewise, because exclusions j.(1) and (2) preclude coverage for the Orianis’ damages

against Axelrod, we need not address the applicability of other exclusions in the policy.

       {¶30} Because exclusions j.(1) and (2) preclude coverage by Century for damages

awarded to the Orianis against Axelrod, the trial court properly granted summary

judgment to Century, and denied the Orianis’ cross-motion for summary judgment. The

trial court’s judgment is therefore affirmed.

       {¶31} Judgment affirmed.

       It is ordered that appellee recover from appellants costs herein taxed.

       The court finds there were reasonable grounds for this appeal.

       It is ordered that a special mandate be sent to said court to carry this judgment into

execution.

       A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of

the Rules of Appellate Procedure.




KATHLEEN ANN KEOUGH, PRESIDING JUDGE

MARY J. BOYLE, J., and
ANITA LASTER MAYS, J., CONCUR
