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State Housing Authority Risk Pool Association12/30/2004
e April 10, 2003 decision of the Portage County Court of Common Pleas granting Erie summary judgment.
{ } In its cross-appeal, Erie asserts the following assignment of error:
{ } "The trial court erred in denying Erie's motion for summary judgment."
{ } Erie's cross-appeal is based upon the trial court's September 23, 2002 judgment entry denying its initial motion for summary judgment. In essence, Erie argues that, pursuant to its own insurance policy, SHARP had no duty to defend PMHA in the LRL lawsuits. The SHARP policy provides that "SHARP shall have the opportunity to be associated with the insured in defense of any and all claims." This language, Erie argues, gives SHARP the right to defend, but does not impose a duty to defend. Thus, Erie concludes, SHARP's voluntary assumption of PMHA's defense precluded its claim for reimbursement. We disagree with Erie's argument and affirm the trial court's decision.
{ } The SHARP policy provides: "SHARP shall have the opportunity to be associated with the insured in defense of any and all claims." Erie contends this provision affords SHARP the right to defend, but imposes no such duty. However, SHARP's "Joint Powers Agreement and Bylaws," which is incorporated into the SHARP policy indicates: "SHARP may refuse to defend and indemnify a Member only in the event that a claim or occurrence (a) is determined to be outside the scope of coverage or (b) is not untimely submitted."
{ } One provision of the policy gives SHARP the right to defend PMHA, but does not impose a duty; a separate provision imposes a duty to defend PMHA unless the claim is outside the scope of the policy or not timely filed. Erie does not allege that the claim was outside the scope of the policy or untimely filed. As the policy is reasonably susceptible to more than one interpretation, the policy language will bestrictly construed against the insurer, viz., SHARP. See, Scott-Pontzer v. Liberty Mutual Fire Ins. Co. (1999), 85 Ohio St.3d 660, 664. Thus, by operation of law, a duty to defend PMHA would be imposed upon SHARP. Appellant's cross-appeal is therefore overruled.
{ } It is worth noting that our respective holdings on SHARP's appeal and Erie's cross-appeal are not inconsistent. Even if SHARP had a duty to defend as a matter of law, it maintained complete control of the litigation in both the federal and the State suits. As discussed in SHARP's first assignment of error, supra, in order to be legitimately entitled to contribution from Erie, Erie had to authorize or ratify SHARP's choices for attorney, litigation strategies, and other features of PMHA's defense. Erie did not so authorize.
{ } For the foregoing reasons, SHARP's three assignments of error are overruled, Erie's cross-appeal is overruled, and the judgment of the Portage County Court of Common Pleas is hereby affirmed.
DONALD R. FORD, P.J.,
ROBERT A. NADER, J., Ret., Eleventh Appellate District, sitting by assignment, concur.
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