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Stickovich v. City of Cleveland8/2/2001
tional tort claim. The employee thereafter sued the project general contractor, Snavely, who was named as an additional insured under the subcontractor's insurance policy.
The subcontractor's insurer refused to defend the claim, so the general contractor's own insurer defended and settled it. The general contractor's insurer thereafter sued the subcontractor's insurer to recover the amount of its settlement and defense costs, which were covered by its own insurance policy. Unlike the case at bar, the general contractor's insurer did not raise a claim that the subcontractor's insurer breached its duty to defend and the subcontractor's insurer raised the affirmative defense that coverage under its policy would be tantamount to indemnification. Id. at 150.
Kendall v. U.S. Dismantling Co.
The Zavarella Court failing to distinguish liability insurance contracts from construction indemnity agreements purported to rely on Kendall v. U.S. Dismantling Co. (1985), 20 Ohio St.3d 61, which involved a construction indemnity agreement, but not liability insurance. Because no liability insurance was involved, Kendalldid not cite or apply the second sentence of R.C. 2305.31 involved in Zavarella or the case at bar. Id. at 62. Even though Kendall did not involve liability insurance, Zavarella concluded that paragraph one of its syllabus prohibited liability insurance contracts. Id. at 150.
Kendall, however, held that an indemnity agreement between two private parties in a contract to dismantle a factory was barred by R.C. 2305.31, stating:
R.C. 2305.31 prohibits indemnity agreements, in the construction-related contracts described therein, whereby the promisor agrees to indemnify the promisee for damages caused by or resulting from the negligence of the promisee, regardless of whether such negligence is sole or concurrent. (Emphasis added.) Id. at syllabus paragraph one.
As noted above, however, because Zavarella and the case at bar involve liability insurance, a commercial liability insurer, rather than the contractor (that is, the promisor ), agrees to pay the injured party, rather than indemnify the promisee. Zavarella's misapplication of Kendall requires confusing different contracts, different parties, and different duties.
To reach the result advocated by Commercial Union and the dissent requires an increasingly loose use of the term indemnity. Contrary to Zavarella, R.C. 2305.31 does not by its own terms prohibit agreements tantamount to, that is, in effect like, indemnity, as argued in that case. Zavarella at 150. The General Assembly understands the distinction between liability insurance and indemnity contracts. By its own terms R.C. 2305.31 prohibits only certain construction indemnity agreements, not ones that are tantamount to such agreements.
It would go far beyond Zavarella to hold that the promisor indemnifies the promisee by naming the promisee as an additional insured. It is a fiction to suggest that a contractor indemnifies the property owner by naming it as an additional insured on a liability insurance policy. The commercial liability insurer has a separate and independent duty under the insurance contract on which the owner is named as an additional insured, but the contractor does not either (1) enter into an indemnity agreement or (2) agree to indemnify the owner under the insurance contract simply by requesting that it be named as an insured on a liability insurance policy.
Intentional Tort Evidence
Commercial Union and the dissent also ignore another important substantive distinction between Zavarella and the case at bar. Unlike the employee in Zavarella, the employees in th
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