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Para-Chem Southern2/25/2004
Decision and Journal Entry
This cause was heard upon the record in the trial court. Each error assigned has been reviewed and the following disposition is made:
Appellant, South Carolina Property and Casualty Insurance Guaranty Association ("SCIGA") has appealed from a decision of the Summit County Court of Common Pleas that granted declaratory judgment to Appellee, Para-Chem Southern, Inc. ("Para-Chem"). Para-Chem has appealed from the same decision, with respect to determinations made regarding its insurance policy with National Union Fire Insurance Company of Pittsburgh ("National Union"). The two appeals have been consolidated. We reverse and remand.
I.
Para-Chem, a corporation doing business in Ohio, produces adhesives used to attach carpeting to floors. On September 28, 1998, Gregory Roach and Gordon Falkner sustained severe injuries as a result of an explosion and a fire ("the accident") that erupted while the two men were using an adhesive manufactured by Para-Chem. Roach and Falkner each filed a complaint against Para-Chem in the Summit County Court of Common Pleas. The trial court ultimately consolidated the two cases and submitted the matter to a jury on a products liability failure to warn claim. On July 8, 2002, the jury returned a $3,000,000 verdict in favor of Falkner and a $5,000,000 verdict in favor of Roach. These verdicts were reduced to a judgment, which was affirmed by this Court. See Falkner v. Para-Chem, 9th Dist. No. 21288, 2003-Ohio-3155.
Shortly before this Court affirmed the judgment against it, Para-Chem filed a declaratory judgment action in the Summit County Court of Common Pleas. In that action, which is the subject of this appeal, Para-Chem sought declarations regarding the duties owed to it by National Union and SCIGA.
At the time of the accident, Para-Chem maintained a commercial umbrella insurance policy with National Union, with limits of $20,000,000 per occurrence and in the aggregate. Para-Chem's primary insurance carrier at the time of the accident was Reliance Insurance Company ("Reliance"). Para-Chem maintained a general liability insurance policy with Reliance, with a limit of $1,000,000 in the aggregate for product liability claims.
SCIGA is a non-profit, unincorporated statutory entity created by the South Carolina Property and Casualty Insurance Guaranty Association Act ("the Act"). See S.C. Code Ann. 38-31-10 to 38-31-170. SCIGA's purpose is to "provide some protection to insureds whose insurance companies become insolvent." South Carolina Property & Cas. Ins. Guar. Assn. v. Carolinas Roofing & Sheet Metal Contr. Self-Ins. Fund (1994), 315 S.C. 555; 446 S.E.2d 422, 424. Para-Chem found itself in the predicament which SCIGA was designed to ameliorate when Reliance, which was one of SCIGA's member insurers, was declared insolvent by the Commonwealth Court of Pennsylvania.
On July 1, 2002, before filing any other motions or responsive pleadings, SCIGA filed a motion to dismiss on the ground that the trial court lacked personal jurisdiction. The trial court denied this motion.
At an August 6, 2002 pretrial conference, the parties agreed to submit the case by stipulations and briefs, and the trial court entered a scheduling order reflecting this agreement. The parties submitted stipulations, and National Union submitted a merit brief. Para-Chem and SCIGA, however, submitted motions for summary judgment, along with memoranda in support of their motions. The trial court did not rule on the summary judgment motions, but apparently treated the memoranda attached to those motions as merit briefs. On February 24, 2003, the trial court rendered its fina
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