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Stickovich v. City of Cleveland8/2/2001
, citing McCabe/Marra Co. v. City of Dover (1995), 100 Ohio App.3d 139, 652 N.E.2d 236, appeal dismissed, 72 Ohio St.3d 1529, 649 N.E.2d 839; Arthur Young & Co. v. Kelly (1993), 88 Ohio App.3d 343, 623 N.E.2d 1303, cause dismissed, 67 Ohio St.3d 1462, 619 N.E.2d 697. As such, it must be raised in a responsive pleading or it is deemed waived. McCabe/Marra Co. v. City of Dover (1995), 100 Ohio App.3d 139, 147, 652 N.E.2d 236. Net-Tech did not raise the issue of the illegality of the indemnification agreement and, therefore, has waived this issue. Id. at 4.
As in Blount,Commercial Union's Answer to Cleveland's Third- Party Complaint in the case at bar did not raise the affirmative defense of illegality, did not mention R.C. 2305.31, and did not assert that the additional insured endorsement violated public policy in any way. Accordingly, these arguments are deemed to be waived. Id.
Public Policy
Even if Commercial Union's public policy argument were not deemed to be waived, the argument is unpersuasive in the case at bar. Both Commercial Union and the dissent argue incongruously that a public agency violates public policy by obtaining compulsory liability insurance to protect the public from liability on a public works project. Neither has cited any authority holding that a governmental agency's official actions, within its jurisdiction and discretion, violate public policy.
The public works contract and liability insurance agreements in the case at bar were authorized by the Ohio Constitution, Cleveland's Charter, and the Ohio Revised Code. Cleveland Ordinance No. 993-90 specifically authorized and directed the City to enter into the challenged public works contracts, which incorporated the challenged substantive terms from Chapter 185 of Cleveland's codified ordinances.
Liability insurance was compulsory both by law, C.C.O. 185.26, and by contract. Paragraph B-18 of the Contract and Specifications specifically required ICC to obtain the insurance coverage involved in the case at bar:
PUBLIC LIABILITY, PROPERTY DAMAGE AND AUTOMOBILE INSURANCE
a. The Contractor shall take out and maintain during the life of this contract such public liability and property damage insurance, wherein the City of Cleveland is named as an additional insured, as shall protect himself, the City of Cleveland and any subcontractor performing work covered by this contract from claims for damage for personal injury , including accidental death, as well as from claims for property damages which may arise from operations under this contract, whether such operations be by himself or by any subcontractor or by anyone directly or indirectly employed by either of them. An exact copy of such policy or policies shall be deposited with the City of Cleveland before the commencement of any work under the contract. *
Liability insurance was compulsory precisely to protect the public from liability and to provide a fund for anyone injured in connection with the Project.
Any doubt concerning the governing public policy in this context is dispelled by R.C. 2744.08(A)(1), which specifically authorizes political subdivisions to obtain liability insurance to provide coverage for their own alleged negligence, as follows:
(A)(1) A political subdivision may use public funds to secure insurance with respect to its and its employees' potential liability in damages in civil actions for injury, death, or loss to persons or property allegedly caused by an act or omission of the political subdivision or any of its employees in connection with a governmental or proprietary function. The insurance may be at the limits, for the circumsta
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