[Cite as Ward v. United Foundries, Inc., 129 Ohio St.3d 292, 2011-Ohio-3176.]




          WARD ET AL. v. UNITED FOUNDRIES, INC., APPELLANT, ET AL.;
              GULF UNDERWRITERS INSURANCE COMPANY, APPELLEE.
[Cite as Ward v. United Foundries, Inc., 129 Ohio St.3d 292, 2011-Ohio-3176.]
Stop-gap endorsement to commercial liability insurance policy — Substantial-
        certainty intentional tort — Language in a commercial liability insurance
        policy stating that insurance does not apply to 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 a fact-finder before the insurer can refuse to defend
        a claim alleging a substantial-certainty employer intentional tort.
     (Nos. 2010-1049 and 2010-1275 — Submitted April 5, 2011 — Decided
                                         July 6, 2011.)
      APPEAL from and CERTIFIED by the Court of Appeals for Stark County,
                                09CA-019, 2010-Ohio-6694.
                                   __________________
        LUNDBERG STRATTON, J.
        {¶ 1} This dispute involves the interpretation of a stop-gap endorsement
to a commercial liability insurance policy that appellee, Gulf Underwriters
Insurance Company (“Gulf”), issued to appellant, United Foundries, Inc.
(“United”).      United seeks coverage under the policy for its defense in a
substantial-certainty intentional tort1 lawsuit filed by a United employee. Gulf
has denied that it has a duty to defend United because the intentional-tort claims




1. 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.” Penn
Traffic Co. v. AIU Ins. Co., 99 Ohio St.3d 227, 2003-Ohio-3373, 790 N.E.2d 1199, ¶ 6.
                             SUPREME COURT OF OHIO




in the underlying complaint are outside the coverage of the policy. The trial court
held in favor of United, and the court of appeals reversed.
        {¶ 2} For the reasons that follow, we affirm the judgment of the court of
appeals.
                                    Gulf Policy
        {¶ 3} Gulf issued a commercial general liability policy (“CGL policy”)
to United with an endorsement for employer’s liability coverage, known as a stop-
gap endorsement. Under Section I of the CGL policy, Gulf agreed 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” and “to
defend the insured against any ‘suit’ seeking those damages.” However, under
that same section of the policy, Gulf had “no duty to defend the insured against
any ‘suit’ seeking damages for ‘bodily injury’ or ‘property damage’ to which this
insurance does not apply.”
        {¶ 4} The CGL policy excluded coverage for injuries “expected or
intended from the standpoint of the insured,” bodily injury to an employee arising
in the course of employment, and injury to the family of an employee as a
consequence of the employee’s injury, as well as for contribution claims and
claims alleging liability under the dual-capacity doctrine.
                             Stop-Gap Endorsement
        {¶ 5} The stop-gap endorsement modified the CGL policy by deleting
the exclusions in Section I of the CGL policy “with respect to ‘bodily injury’
included within the ‘employer’s liability hazard’ ” and replacing them with the
exclusions listed in the stop-gap endorsement.
        {¶ 6} The following exclusion in the stop-gap endorsement is the subject
of this dispute:
        {¶ 7} “This insurance does not apply to:
        {¶ 8} “* * *



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                                January Term, 2011




       {¶ 9} “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.”
                                Procedural History
       {¶ 10} David Ward (“Ward”) and his wife filed a complaint against
Ward’s employer, United, alleging claims for employer intentional tort and
seeking compensatory and punitive damages and damages for loss of consortium.
While the case was pending, United filed an action against its insurance agency
and broker for failure to obtain the coverage that United had requested and against
Gulf for a declaration that Gulf had a duty to defend and indemnify United for the
claims asserted by Ward. The cases were eventually consolidated. The trial court
concluded that if the stop-gap endorsement excluded coverage for substantial-
certainty intentional torts, then the Gulf policy was illusory. The court granted
summary judgment to United on the issue of Gulf’s duty to provide a defense in
the underlying case.
       {¶ 11} The Fifth District Court of Appeals reversed. The appellate court
determined that the claims alleged in the underlying complaint were not within
the coverage provided in the policy; thus, Gulf had no duty to defend or
indemnify United. The court rejected United’s argument that it is entitled to a
defense because the underlying tort claim had not yet been “ ‘determined to have
been committed.’ ” Ward v. United Foundries, Inc., Stark App. No. 09CA-019,
2010-Ohio-6694, ¶ 83, quoting United’s brief. Instead, the court concluded that
because the underlying claim was neither potentially nor arguably covered under
the terms of the policy, Gulf had no duty to defend or indemnify United. Id.
       {¶ 12} The Fifth District certified that its decision was in conflict with the
decision of the Third District Court of Appeals in Cooper Tire & Rubber Co. v.
Travelers Cas. & Sur. Co. (Apr. 23, 2007), Hancock App. No. 5-06-40, 2007-




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Ohio-1905. And we determined that a conflict exists. 126 Ohio St.3d 1579,
2010-Ohio-4542, 934 N.E.2d 352.
       {¶ 13} This cause is now before this court upon our determination that a
conflict exists (case No. 2010-1275) and pursuant to the acceptance of a
discretionary appeal (case No. 2010-1049), 126 Ohio St.3d 1581, 2010-Ohio-
4542, 934 N.E.2d 354.
                                 Certified Conflict
       {¶ 14} We ordered the parties to brief the issue that is stated as follows in
the court of appeals’ entry certifying the conflict:
       {¶ 15} “Whether an exclusion in a commercial general liability insurance
policy and/or stop/gap endorsement form, stating the insurance does not apply to
‘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’ requires a final determination
made by either a judge or a jury before the defense of a claim for a substantial
certainty employer intentional tort can be denied.”
       {¶ 16} The parties agree that the stop-gap endorsement excludes coverage
for a substantial-certainty intentional tort and that if United is liable to Ward in
the underlying action, Gulf has no duty to indemnify United. We need determine
only whether the policy obligates Gulf to defend United in the underlying action.
       {¶ 17} United contends that the phrase “an act which is determined to
have been committed by you with the belief that an injury is substantially certain
to occur” in the Gulf policy requires Gulf to defend United against any complaint
alleging a substantial-certainty intentional tort until a fact-finding judge or jury
has “determined” whether or not United is liable for an intentional tort.
                           General Insurance Principles
       {¶ 18} An insurance policy is a contract between the insurer and the
insured. Pilkington N. Am., Inc. v. Travelers Cas. & Sur. Co., 112 Ohio St.3d



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                                January Term, 2011




482, 2006-Ohio-6551, 861 N.E.2d 121, ¶ 23. If we must interpret a provision in
the policy, we look to the policy language and rely on the plain and ordinary
meaning of the words used to ascertain the intent of the parties to the contract.
Penn Traffic Co. v. AIU Ins. Co., 99 Ohio St.3d 227, 2003-Ohio-3373, 790
N.E.2d 1199, ¶ 9; Cincinnati Ins. Co. v. CPS Holdings, Inc., 115 Ohio St.3d 306,
2007-Ohio-4917, 875 N.E.2d 31, ¶ 7. We examine the contract as a whole, which
means that an endorsement is read as though it is within the policy. Penn Traffic,
¶ 30.
        {¶ 19} We have held that the duty to defend is broader than and distinct
from the duty to indemnify. Ohio Govt. Risk Mgt. Plan v. Harrison, 115 Ohio
St.3d 241, 2007-Ohio-4948, 874 N.E.2d 1155, ¶ 19. The duty to defend is
determined by the scope of the allegations in the complaint. Id. If the allegations
state a claim that potentially or arguably falls within the liability insurance
coverage, then the insurer must defend the insured in the action. Id., ¶ 19. But if
all the claims are clearly and indisputably outside the contracted coverage, the
insurer need not defend the insured. Id.
                         Analysis of Exclusion Language
        {¶ 20} The plain language of the exclusion at issue precludes coverage for
substantial-certainty intentional torts. The allegations within Ward’s complaint
fall within this exclusion. United agrees that if it is liable in the underlying case,
Gulf has no duty to indemnify United. Thus, as the court of appeals below
concluded, because all the claims are clearly and indisputably outside the
contracted coverage, Gulf is not required to defend United under the terms of the
policy. Ward, 2010-Ohio-6694, ¶ 82; Ohio Govt. Risk Mgt., ¶ 19.
        {¶ 21} Nevertheless, in the conflict case, the Third District Court of
Appeals interpreted the identical language in a policy issued by a different
company and concluded that the exclusion was ambiguous because it did not
specify how or by whom the act or failure to act is to be determined. Cooper



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Tire, 2007-Ohio-1905, ¶ 6. The Third District acknowledged that the policy
specifically excluded liability for substantial-certainty intentional torts, but it
reasoned that the language implied that there must be a determination by either a
judge or jury for the exclusion to be enforceable. “Since no judicial determination
can be made prior to the conclusion of the case, [the insurer] may still have a duty
to defend without the subsequent liability.” Id. at ¶ 8.
       {¶ 22} We do not agree with that reasoning. There is no language in the
exclusion that implies that a determination by a fact-finder is required before the
exclusion can be enforced. Furthermore, even if the phrase were ambiguous, the
ambiguity would have no legal significance. There is no set of facts under which
United would be covered under the CGL policy because all potential claims fall
with the exclusion. Furthermore, the CGL policy provides that Gulf has “no duty
to defend the insured against any ‘suit’ seeking damages * * * to which this
insurance does not apply.”
       {¶ 23} United argues that since the exclusion language uses the past
tense—“an act which is determined to have been committed by you with the
belief that an injury is substantially certain to occur”—Gulf must provide a
defense until it has been determined that the employer committed a tort that
would be excluded by the policy language. We do not find this interpretation,
which was accepted by the Third District in the conflict case, convincing.
       {¶ 24} United contends that it intended to purchase insurance for
substantial-certainty intentional torts and that if the stop-gap endorsement does
not provide a defense or indemnification for substantial-certainty intentional torts,
then the Gulf policy is illusory and unenforceable.         Although the stop-gap
endorsement may not have added the coverage that United intended, it did add
coverage for “employer’s liability hazards” that were expressly excluded in the
CGL policy: coverage for consequential bodily injury (claims by relatives of an
employee for their injuries resulting as a consequence of the employee’s injury),



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claims alleging liability under the dual-capacity doctrine (liability both as
employer and in another capacity), and contribution or indemnification claims of
third parties resulting from workplace injuries. When there is some benefit to the
insured from the face of the endorsement, it is not an illusory contract. State Auto
Ins. Co. v. Golden (1998), 125 Ohio App.3d 674, 678, 709 N.E.2d 529.
        {¶ 25} United contends that this was not the coverage it intended to
purchase. But this is an argument for United to assert against the insurance
agency and broker who procured the policy, not against the insurer. For purposes
of this action, the plain language of the stop-gap endorsement that United
purchased is plain, unambiguous, and not misleading, and the policy is not
illusory.
                                    Conclusion
        {¶ 26} We answer the certified-conflict question in the negative.       An
exclusion in a commercial general 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.
        {¶ 27} We agree with the Fifth District Court of Appeals that the claims
stated in the underlying complaint are neither potentially nor arguably covered
under the terms of the policy, and thus, Gulf has no duty under the policy to
defend United. Therefore, we affirm the judgment of the court of appeals.
                                                                Judgment affirmed.
        O’CONNOR, C.J., and O’DONNELL, LANZINGER, CUPP, and MCGEE
BROWN, JJ., concur.
        PFEIFER, J., concurs in judgment only.



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                               __________________
       Pelini, Campbell, Williams & Traub, L.L.C., Craig G. Pelini, and Kristen
E. Campbell, for appellant.
       Zelle, Hofmann, Voelbel & Mason, L.L.P., and Michael R. Cashman; and
Roetzel & Andress, L.P.A., and Ronald B. Lee, for appellee.
                              _____________________




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