Title: Granger v. Auto-Owners Ins.

State: ohio

Issuer: Ohio Supreme Court

Document:

[Cite as Granger v. Auto-Owners Ins., Slip Opinion No. 2015-Ohio-3279.] 
 
 
 
NOTICE 
This slip opinion is subject to formal revision before it is published in 
an advance sheet of the Ohio Official Reports.  Readers are requested 
to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 
65 South Front Street, Columbus, Ohio 43215, of any typographical or 
other formal errors in the opinion, in order that corrections may be 
made before the opinion is published. 
 
 
SLIP OPINION NO. 2015-OHIO-3279 
GRANGER ET AL., APPELLEES, v. AUTO-OWNERS INSURANCE ET AL.; AUTO-
OWNERS (MUTUAL) INSURANCE CO. ET AL., APPELLANTS. 
[Until this opinion appears in the Ohio Official Reports advance sheets, it 
may be cited as Granger v. Auto-Owners Ins., Slip Opinion No.  
2015-Ohio-3279.] 
Insurance—Duty to defend—Intentional-acts exclusion—Inferred-intent doctrine 
not applicable when the harm is not an inherent result of an intentional 
act—Emotional distress is not inherent in the nature of housing 
discrimination. 
(No. 2013-1527—Submitted June 25, 2014—Decided August 18, 2015.) 
APPEAL from the Court of Appeals for Summit County, No. 26473, 
2013-Ohio-2792. 
___________________________ 
PFEIFER, J. 
{¶ 1} In this case, we address whether an umbrella insurance policy’s 
intentional-acts exclusion—through application of the inferred-intent doctrine—
SUPREME COURT OF OHIO 
 
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obviates the insurer’s duty to defend an insured against claims based on alleged 
acts of pre-leasing housing discrimination that result in alleged emotional distress.  
We hold that the particular umbrella policy at issue arguably provides coverage 
for emotional-distress damages through its coverage for humiliation.  We further 
hold that emotional-distress damages are not inherent in a claim for 
discrimination and that the inferred-intent doctrine is thus inapplicable in this 
case. 
Factual and Procedural Background 
{¶ 2} Steve Granger and Paul Steigerwald, appellees, established a trust 
together to hold certain assets; one of the assets is a rental property in Akron that 
they rent to tenants on a month-to-month basis.  That property consists of four 
units: three in the main house and a fourth above a three-car garage that they call 
a carriage house.  Granger refers to himself as “the rules Nazi” and will terminate 
a lease at the end of the following month if a tenant is too loud.  Granger 
paraphrases a clause in the rental agreement as stating, “[I]f you make noise to 
disturb other tenants, your month-to-month lease will not be renewed.” 
{¶ 3} Valerie Kozera alleged that she called Granger on June 7, 2010, to 
inquire about renting one of the units of the property.  She wanted to move closer 
to her disabled mother.  Granger asked Kozera who would be living in the 
apartment, and she responded that she and her six-year-old son would live there.  
Granger told Kozera that he does not rent to people with children and ended the 
phone call.  Granger maintains that he did not specifically state that he would not 
lease to Kozera, but that he told her instead that the apartment “wasn’t conducive 
to children.”  He said, “I didn’t want her—I told her, now, if you come all the way 
here and then you do rent, I said, and there’s noise, I said, you can only be here 
for one month.  I tell everybody that.” 
{¶ 4} Kozera contacted the Fair Housing Contact Service, Inc. (“FHCS”), 
which investigated Kozera’s claims by using trained testers to interact with 
January Term, 2015 
 
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Granger.  One tester inquired about the property by e-mail, and Granger replied, 
“Truely [sic] a lovely and large apartment and in a very well keep [sic] apartment 
house.  No pets or children.”  Granger later sent an additional e-mail to the same 
tester, stating, “Yes it is still available as I am selective as to who [sic] I rent to 
and I run a background check on any possible tenant, just so you know.  It is an 
adult apartment house so it is quite [sic] and very will keep [sic] with no children 
or pets permitted.”  He sent a proposed lease to at least one tester; one of its terms 
was “No children or pets are permitted—period.”  Further, FHCS related that 
Granger told only an African-American tester that he ran background checks on 
prospective tenants because “he didn’t want a rapist in the building”; he did not 
make the same comment to a Caucasian tester. 
{¶ 5} Based on information from Kozera and the testers, FHCS contended 
that Granger had discriminated against Kozera, an African-American, on the basis 
of familial status and race in violation of 42 U.S.C. 3604 and R.C. 4112.02(H).  In 
March 2011, Kozera and FHCS filed a complaint in federal court against Granger 
and Steigerwald, individually and in their capacities as trustees of the trust.  
Kozera claimed that she had “experienced out of pocket costs and emotional 
distress as a result of Defendants’ conduct”; FHCS alleged that it had “expended 
its resources and was harmed in its mission by Defendants’ conduct.” 
{¶ 6} There was potential coverage under two separate Auto-Owners 
Insurance Group policies.  Appellant Auto Owners (Mutual) Insurance Company 
covered Granger, Steigerwald, and their trust under a dwelling policy that 
included landlord-liability coverage.  The second policy is the one at issue in this 
appeal; it is an umbrella policy issued by appellant Owners Insurance Company 
under which Granger is the named insured.  For ease of reference, we refer to 
appellants collectively as “Auto-Owners.” 
{¶ 7} On May 18, 2011, Granger and Steigerwald forwarded the complaint 
to their insurance agent at the Church Agency.  The agency contacted Auto-
SUPREME COURT OF OHIO 
 
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Owners, seeking coverage under the dwelling policy only.  On June 8, 2011, 
Auto-Owners sent a letter to Granger and Steigerwald explaining that the 
dwelling policy did not provide coverage to them.  Auto-Owners pointed out that 
the discrimination lawsuit did not allege any bodily injury, property damage, or 
personal injury that was covered by the policy.  Auto-Owners stated that 
discrimination did not fall under the policy’s definition of personal injury.  The 
letter quoted the definition of “personal injury” from the policy: 
 
c. Personal injury means: 
(1) libel, slander, or defamation of character; 
(2) false arrest, detention or imprisonment, or malicious 
prosecution; 
(3) invasion of privacy; or 
(4) wrongful eviction or wrongful entry. 
 
{¶ 8} The letter denying coverage did not mention the umbrella policy.  
After the denial under the dwelling policy, Granger’s insurance agent, Michael 
Coudriet, determined that the agency should submit a claim to Auto-Owners on 
Granger’s behalf under the umbrella policy.  The agency submitted the claim on 
June 9, 2011.  Granger and Steigerwald did not hear from Auto-Owners on the 
question of coverage under the umbrella policy. 
{¶ 9} On July 11, 2011, Granger and Steigerwald settled the federal case 
with Kozera and FHCS for $32,500.  Separate payments went to the two 
plaintiffs: $5,000 to Kozera and $27,500 to FHCS. 
{¶ 10} On July 22, 2011, appellees sued Auto-Owners, the Church 
Agency, Inc., and Mike Coudriet for claims relating to Auto-Owners’ failure to 
provide coverage.  In this appeal, we address only appellees’ claim regarding 
Auto-Owners’ duty to defend Granger under the umbrella policy. 
January Term, 2015 
 
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{¶ 11} The umbrella policy states: 
 
DEFENSE—SETTLEMENT  
With respect to any occurrence: 
(a) not covered by underlying insurance; but 
(b) covered by this policy except for the retained limit; 
we will: 
(a) defend any suit against the insured at our expense, using 
lawyers of our choice. * * * 
(b) investigate or settle any claim or suit as we think appropriate. 
 
{¶ 12} The policy also states that Auto Owners “will pay on behalf of the 
insured the ultimate net loss in excess of the retained limit which the insured 
becomes legally obligated to pay as damages because of personal injury.” 
{¶ 13} The definition of “personal injury” is broader in the umbrella 
policy than in the dwelling policy—it includes particular damages rather than 
only particular causes of action: 
 
“Personal injury” means: 
(a) bodily injury, sickness, disease, disability or shock; 
(b) mental anguish or mental injury; 
(c) false arrest, false imprisonment, wrongful eviction, 
wrongful detention, malicious prosecution or humiliation; and 
(d) libel, slander, defamation of character or invasion of 
rights of privacy; 
including resulting death, sustained by any person * * *. 
 
SUPREME COURT OF OHIO 
 
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{¶ 14} The umbrella policy excludes coverage for intentional acts, stating, 
“We do not cover * * * [p]ersonal injury or property damage expected or intended 
by the insured.” 
{¶ 15} Appellees filed a motion for summary judgment in the trial court 
on the issue of Auto-Owners’ duty to defend Granger under the umbrella policy.  
Auto-Owners filed a motion seeking summary judgment on its duty to defend and 
indemnify the appellees under the policies.  The trial court denied appellees’ 
motion and granted that of Auto-Owners. 
{¶ 16} Appellees appealed, arguing that the trial court erred in granting 
Auto-Owners’ motion for summary judgment on the issue of its duty to defend 
Granger under the umbrella policy.  The Ninth District Court of Appeals reversed.  
The appellate court pointed out that “Auto–Owners defined personal injury both 
in terms of certain claims, such as malicious prosecution, and in terms of resulting 
harms, such as humiliation or mental anguish.”  2013-Ohio-2792, 991 N.E.2d 
1254, ¶ 13.  The court concluded that because Kozera claimed that she had 
suffered emotional distress, “she arguably suffered humiliation, which is a 
personal injury covered under the policy,” and that, therefore, “it would appear 
that the federal complaint alleges a personal injury as contemplated by the 
umbrella policy.”  Id. at ¶ 14. 
{¶ 17} The appellate court next addressed the policy’s intentional-acts 
exclusion.  The court drew a distinction between Granger’s intent to discriminate 
and his intent to cause personal injury.  The court held that the argument that the 
exclusion applies because Granger intended the discrimination “ignores the plain 
language of the policy”; instead, the court reasoned, “[t]he relevant inquiry under 
the exclusion portion of the policy * * * is whether Mr. Granger expected or 
intended Ms. Kozera to be humiliated by his conduct.”  Id. at ¶ 15.  The court 
found that Auto-Owners had not yet made an argument on that point, let alone 
introduced evidence. Id.  The court also rejected the idea that the intent to injure 
January Term, 2015 
 
7
could be inferred from Granger’s acts: “ ‘An insurer’s motion for summary 
judgment may be properly granted when intent may be inferred as a matter of law.  
In cases such as this one, where the insured’s act does not necessarily result in 
harm, we cannot infer an intent to cause injury as a matter of law.’ ”  Id., quoting 
Allstate Ins. Co. v. Campbell, 128 Ohio St.3d 186, 2010-Ohio-6312, 942 N.E.2d 
1090, ¶ 59. 
{¶ 18} The court thus held that “Auto-Owners [was] not entitled to 
summary judgment on the issue of whether it breached the contract by failing to 
defend Mr. Granger pursuant to the umbrella policy.”  Id. 
{¶ 19} The cause is before this court upon the allowance of Auto-Owners’ 
discretionary appeal. 
Law and Analysis 
{¶ 20} An insurance policy is a contract; in interpreting contracts, courts 
must give effect to the intent of the parties, and that intent is presumed to be 
reflected in the plain and ordinary meaning of the contract language.  Cincinnati 
Ins. Co. v. CPS Holdings, Inc., 115 Ohio St.3d 306, 2007-Ohio-4917, 875 N.E.2d 
31, ¶ 7.  In this case, there are several factors in play that affect how we interpret 
the policy at issue. 
{¶ 21} First, this case concerns the duty to defend.  The duty of an insurer 
to defend an insured is a broad duty—broader than the duty to indemnify—that is 
absolute when the complaint contains any allegation that could arguably be 
covered by the insurance policy.  Sharonville v. Am. Emps. Ins. Co., 109 Ohio 
St.3d 186, 2006-Ohio-2180, 846 N.E.2d 833, ¶ 13.  An exception to the absolute 
duty exists when all the claims are each clearly and indisputably outside the 
coverage.  Id.  Another way of stating the exception is that the insurer need not 
provide a defense if there is no set of facts alleged in the complaint which, if 
proven true, would invoke coverage for any claim.  Cincinnati Indemn. Co. v. 
Martin, 85 Ohio St.3d 604, 605, 710 N.E.2d 677 (1999). 
SUPREME COURT OF OHIO 
 
8
{¶ 22} In this appeal, we are also interpreting a policy exclusion; “ ‘ “an 
exclusion in an insurance policy will be interpreted as applying only to that which 
is clearly intended to be excluded.” ’ ”  (Emphasis sic.)  Westfield Ins. Co. v. 
Hunter, 128 Ohio St.3d 540, 2011-Ohio-1818, 948 N.E.2d 931, ¶ 11, quoting 
Sharonville at ¶ 6, quoting Hybud Equip. Corp. v. Sphere Drake Ins. Co., Ltd., 64 
Ohio St.3d 657, 665, 597 N.E.2d 1096 (1992). 
{¶ 23} Finally, the policy at issue is an umbrella policy:  
 
“An umbrella policy is a policy which provides excess 
coverage beyond an insured’s primary policies.”  Midwestern 
Indemn. Co. v. Craig (1995), 106 Ohio App.3d 158, 164, 665 
N.E.2d 712.  See, also, Cleveland Builders Supply Co. v. Farmers 
Ins. Group of Cos. (1995), 102 Ohio App.3d 708, 657 N.E.2d 851.  
Umbrella policies are different from standard excess insurance 
policies, since they provide both excess coverage (“vertical 
coverage”) and primary coverage (“horizontal coverage”).  Am. 
Special Risk Ins. Co. v. A–Best Prods., Inc. (1997), 975 F.Supp. 
1019, 1022.  “The vertical coverage provides additional coverage 
above the limits of the insured’s underlying primary insurance, 
whereas the horizontal coverage is said to ‘drop down’ to provide 
primary coverage for situations where the underlying insurance 
provides no coverage at all.”  Id. at 1022. 
 
Cincinnati Ins. Co., 115 Ohio St.3d 306, 2007-Ohio-4917, 875 N.E.2d 31, ¶ 5. 
{¶ 24} The umbrella policy in this case contained a more expansive 
definition of “personal injury” than did the dwelling policy.  Its inclusion of 
coverage for particular harms rather than just for particular causes of action 
January Term, 2015 
 
9
creates the crux of the case: did the umbrella policy’s inclusion of coverage for 
humiliation give rise to a duty to defend under the particular facts of this case? 
{¶ 25} We address Auto-Owners’ propositions of law in reverse order.  
We will first determine whether Kozera’s claim for “emotional distress” damages 
is within the policy’s coverage for humiliation.  Then, we will determine whether 
any potential duty to defend is obviated by the policy’s intentional-acts exclusion. 
Emotional Distress as a Form of Humiliation 
{¶ 26} Auto-Owners’ second proposition of law reads as follows: 
 
A claim for emotional distress does not constitute 
“humiliation” sufficient to trigger a duty to defend under an 
umbrella policy of insurance.  The duty to defend can only be 
triggered by actual facts, not an inference of potential recoverable 
damages where no covered conduct is even alleged. 
 
{¶ 27} The issue is whether Kozera’s allegation that she suffered 
“emotional distress” was sufficient to trigger Auto-Owners’ duty to defend under 
the umbrella policy.  The umbrella policy in this case includes coverage for 
particular harms— “sickness, disease, disability or shock; * * * mental anguish or 
mental injury [and] humiliation.”  We hold that Kozera’s claim of emotional 
distress invoked coverage under the policy. 
{¶ 28} First, emotional-distress damages were available to Kozera under 
the Fair Housing Act, 42 U.S.C. 3601 et seq.: 
 
Courts have held, under the Fair Housing Act, that plaintiffs may 
recover, as compensatory damages, out-of-pocket expenses for 
property damage and damages for emotional distress.  * * *  The 
Sixth Circuit has used a “totality of the circumstances” standard in 
SUPREME COURT OF OHIO 
 
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evaluating a plaintiff’s right to such damages in housing 
discrimination cases. 
 
Byrd v. Brandeburg, 932 F.Supp. 198, 200 (N.D.Ohio 1996). 
{¶ 29} In Bishop v. Pecsok, 431 F.Supp. 34, 38 (N.D.Ohio 1976), another 
case involving discrimination in housing, the court held that “[i]n calculating the 
amount of compensatory damages this Court is required to consider not only out-
of-pocket expenses, but also the emotional distress and humiliation suffered by 
plaintiffs.”  Under R.C. 4112.99, “the availability of ‘damages’ and ‘other 
appropriate relief’ fairly encompasses an award for pain and suffering, mental 
anguish, humiliation, and the like.”  Keys v. U.S. Welding, Fabricating & Mfg., 
Inc., N.D.Ohio No. CV91-0113, 1992 WL 218302, at *9 (Aug. 26, 1992). 
{¶ 30} Does Kozera’s claim of emotional distress encompass humiliation?  
The duty to defend is broad and is not dependent on magic words.  We find that a 
broad allegation of emotional distress arguably contains an allegation of 
humiliation.  As the appellate court noted, “Emotional distress has been defined as 
‘[a] highly unpleasant mental reaction (such as anguish, grief, fright, humiliation, 
or fury) that results from another person’s conduct[.]’  (Emphasis added.)  Black’s 
Law Dictionary 563 (8th Ed.2004).”  2013-Ohio-2792, 991 N.E.2d 1254, ¶ 14.  
Humiliation is one of the particular reactions that falls under the umbrella of 
emotional distress. 
{¶ 31} The policy at issue provides coverage for certain harms, including 
humiliation.  Humiliation is a recognized injury in housing-discrimination cases.  
Humiliation is included within the ordinary meaning of “emotional distress.”  
Kozera alleged emotional distress.  That was enough to establish that Kozera’s 
allegation could be covered under the policy. 
 
 
January Term, 2015 
 
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Intentional-Acts Exclusion and Inferred Intent 
{¶ 32} Appellants’ first proposition of law raises the question of whether 
the policy’s exclusion for intentional acts obviates coverage for Granger even if 
Kozera’s allegation of emotional distress was otherwise enough to trigger the duty 
to defend.  The appellants’ first proposition of law reads, “Discriminatory intent is 
inferred as a matter of law for purposes of an intentional act exclusion under an 
umbrella policy of insurance on a claim for pre-leasing housing discrimination.” 
{¶ 33} Auto-Owners seeks application of the inferred-intent doctrine in 
this case.  The policy in this case, like most other insurance policies, contains an 
intentional-acts exclusion, which relieves the obligation of Auto-Owners to 
provide coverage when the harm alleged is intentionally caused by the insured.  
Under the inferred-intent doctrine, “when there is no evidence of direct intent to 
cause harm and the insured denies the intent to cause any harm, the insured’s 
intent to cause harm will be inferred as a matter of law in certain instances.”  
Campbell, 128 Ohio St.3d 186, 2010-Ohio-6312, 942 N.E.2d 1090, ¶ 9, citing 
Gearing v. Nationwide Ins. Co., 76 Ohio St.3d 34, 36, 665 N.E.2d 1115 (1996), 
paragraph one of the syllabus.  Auto-Owners argues that it can be inferred as a 
matter of law from the nature of Granger’s act—pre-leasing housing 
discrimination—that Granger intended to cause Kozera’s personal injuries; thus, 
since the policy “do[es] not cover * * * [p]ersonal injury or property damage 
expected or intended by the insured,” there would be no duty to provide a defense 
or indemnity.  Applying the inferred-intent doctrine would relieve Auto-Owners 
of the burden of proving intent through evidence: the evidence of intent would be 
inherent in Granger’s act, there would be no genuine issue of fact regarding the 
issue, and thus summary judgment would be appropriate. 
{¶ 34} Campbell is the most recent of this court’s decisions on the 
doctrine of inferred intent, and it discusses the development of the doctrine in 
Ohio.  Campbell contains two important holdings.  First, Campbell recognizes 
SUPREME COURT OF OHIO 
 
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that although this court has inferred intent only in cases in which would-be 
insureds committed particularly heinous acts—the murder of a child in Preferred 
Risk Ins. Co. v. Gill, 30 Ohio St.3d 108, 114–115, 507 N.E.2d 1118 (1987), and 
the molestation of children in Gearing—“[a]s applied to an insurance policy’s 
intentional-act exclusion, the doctrine of inferred intent is not limited to cases of 
sexual molestation or homicide.”  Campbell at paragraph one of the syllabus.  
Second, this court held that “the doctrine of inferred intent applies only in cases in 
which the insured’s intentional act and the harm caused are intrinsically tied so 
that the act has necessarily resulted in the harm.”  Id. at paragraph two of the 
syllabus.  In making that decision, this court considered but declined to adopt the 
“substantially certain” test in inferred-intent cases.  Under that test, a harm that 
was substantially certain to result from an intentional act would fall under an 
intentional-acts exclusion of an insurance policy.  Instead, this court held that for 
an act to fall within the doctrine, the harm must be the inherent result of an 
intentional act.  Id. at ¶ 56. 
{¶ 35} In Campbell, the underlying act by the potential insureds was the 
placement of a Styrofoam target deer on a hilly country road at night.  Id. at ¶ 2.  
A group of youths intentionally placed the deer in the roadway to watch the 
reactions of motorists.  Id.  Some motorists successfully avoided the fake deer, but 
one driver lost control of his vehicle and crashed; he and his passenger suffered 
serious injuries.  Id.  This court held that the serious harm that resulted from the 
act of placing the deer in the roadway was not “intrinsically tied so that the act has 
necessarily resulted in the harm,” id. at ¶ 48, and remanded the case to the trial 
court.  There, the trier of fact would weigh the facts in evidence to determine 
whether the boys intended or expected harm.  Id. at ¶ 59.  Any intent to harm 
would be determined by the trier of fact rather than inferred as a matter of law. 
{¶ 36} “In order to avoid coverage on the basis of an exclusion for 
expected or intentional injuries, the insurer must demonstrate that the injury itself 
January Term, 2015 
 
13
was expected or intended.”  Physicians Ins. Co. of Ohio v. Swanson, 58 Ohio 
St.3d 189, 569 N.E.2d 906 (1991), syllabus.  We agree with the court below that 
“[t]he relevant inquiry under the exclusion portion of the policy is whether the 
personal injury was expected or intended.  Thus, the appropriate question to ask is 
whether Mr. Granger expected or intended Ms. Kozera to be humiliated by his 
conduct.”  (Emphasis sic.)  2013-Ohio-2792, 991 N.E.2d 1254, ¶ 15. 
{¶ 37} We do not find that humiliation is so intrinsically tied to pre-
leasing discrimination that Granger’s act necessarily resulted in the harm suffered 
by Kozera.  Although emotional-distress damages are available to victims of 
housing discrimination, such damages are not automatically awarded: 
 
We have long held that emotional distress caused by 
housing discrimination is a compensable injury under the Fair 
Housing Act.  See Seaton v. Sky Realty Co., 491 F.2d 634, 636-38 
(7th Cir.1974).  However, a court may not presume emotional 
distress from the fact of discrimination.  A plaintiff must actually 
prove that he suffers from emotional distress and that the 
discrimination caused that distress.  Cf. Carey v. Piphus, 435 U.S. 
247, 263-64, 98 S.Ct. 1042, 1052, 55 L.Ed.2d 252 (1978) (holding 
in a procedural due process case that “neither the likelihood [of 
emotional distress] nor the difficulty of proving it is so great as to 
justify awarding compensatory damages without proof that such 
injury actually was caused”); Spence v. Board of Education, 806 
F.2d 1198, 1200-01 (3d Cir.1986) (applying the same principle in a 
first amendment case). 
 
United States v. Balistrieri, 981 F.2d 916, 931 (7th Cir.1992). 
SUPREME COURT OF OHIO 
 
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{¶ 38} Is this case of a kind with Gill and Gearing, cases in which 
insureds pled guilty to criminal acts of violence against children?  We determine 
that it is not.  Both Gill and Gearing, in the civil cases that followed their criminal 
convictions, claimed that they did not intend the civil injuries associated with 
their criminal acts.  Those claims rang hollow, due to the nature of their acts.  
This court connected the civil claims to the underlying criminal acts, which 
necessarily included the intent to harm. 
{¶ 39} Here, Granger does not stand convicted of a criminal act that 
includes intent to harm as an element.  Although he claims that he did not know 
he was violating the law, he did discriminate against Kozera.  But Granger does 
not claim coverage for the discrimination; he instead claims coverage for the 
personal injury—the humiliation—that allegedly followed the discrimination.  
Included in the plain language of this umbrella policy is coverage for certain 
discrete injuries.  Our only concern here is a specific harm, humiliation, and 
whether Granger intended to cause it. 
{¶ 40} Although Campbell holds that the inferred-intent doctrine is not 
limited to cases of murder or sexual molestation, it also warns that “courts should 
be careful to avoid applying the doctrine in cases where the insured’s intentional 
act will not necessarily result in the harm caused by the act.”  Campbell, 128 Ohio 
St.3d 186, 2010-Ohio-6312, 942 N.E.2d 1090, at ¶ 48.  The policy excludes 
coverage when “the personal injury * * * was expected or intended.”  We cannot 
say that the personal injury was intended in this case, nor can we say that 
emotional distress is inherent in the very nature of housing discrimination. 
{¶ 41} We note that Granger did not appeal the holding below that there 
was no coverage under the dwelling policy.  The umbrella policy was more 
expansive, but even so, it arguably covers just one aspect of the damages suffered 
by Kozera.  That is all that is necessary, however, to give rise to the duty to 
defend.  Meanwhile, under this ruling, appellants still have the ability to 
January Term, 2015 
 
15
demonstrate to the trier of fact that Granger intended to cause humiliation to 
Kozera.  In this instance, the inferred-intent doctrine does not remove that burden. 
{¶ 42} Accordingly, we affirm the judgment of the court of appeals. 
Judgment affirmed. 
O’CONNOR, C.J., and LANZINGER, FRENCH, and O’NEILL, JJ., concur. 
O’DONNELL and KENNEDY, JJ., dissent. 
____________________________ 
KENNEDY, J., dissenting. 
{¶ 43} Respectfully, I dissent.  I would hold that appellant Auto Owners 
(Mutual) Insurance Company (“Auto-Owners”) had no duty to defend appellee 
Steve Granger against Valerie Kozera’s discrimination lawsuit because the Auto-
Owners’ umbrella policy excluded from coverage those injuries that are expected 
or intended by the insured.  Accordingly, I would reverse the judgment of the 
court of appeals and reinstate the trial court’s order of summary judgment in favor 
of Auto-Owners. 
Insurance Coverage 
{¶ 44} “The duty [of the insurer] to defend [the insured] is determined by 
the scope of the allegations in the [plaintiff’s] complaint.”  Ward v. United 
Foundries, Inc., 129 Ohio St.3d 292, 2011-Ohio-3176, 951 N.E.2d 770, ¶ 19, 
citing Ohio Govt. Risk Mgt. Plan v. Harrison, 115 Ohio St.3d 241, 2007-Ohio-
4948, 874 N.E.2d 1155, ¶ 19.  “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.  When the policy excludes coverage for bodily 
injury or property damage that is expected or intended by the insured, the 
insured’s conduct is not covered by the policy and the insurer has no duty to 
defend.  Preferred Risk Ins. Co. v. Gill, 30 Ohio St.3d 108, 113, 507 N.E.2d 
1118 (1987).  However, even “when there is no evidence of direct intent to cause 
harm and the insured denies any intent to cause harm, the insured’s intent to cause 
SUPREME COURT OF OHIO 
 
16
harm will be inferred as a matter of law in certain instances”  (the “inferred-intent 
doctrine”).  Allstate Ins. Co. v. Campbell, 128 Ohio St.3d 186, 2010-Ohio-6312, 
942 N.E.2d 1090, ¶ 9, citing Gearing v. Nationwide Ins. Co., 76 Ohio St.3d 34, 
665 N.E.2d 1115 (1996), paragraph one of the syllabus. 
{¶ 45} In Campbell, we “clarif[ied] that the doctrine of inferred intent 
applies only in cases in which the insured’s intentional act and the harm caused 
are intrinsically tied so that the act has necessarily resulted in the harm.”  
(Emphasis added.)  Id. at ¶ 56.  Justice O’Donnell disagreed with the majority’s 
adoption of the “intrinsically tied” test.  Id. at ¶ 76-78 (O’Donnell, J., concurring 
in part and dissenting in part).  He opined that the majority improperly discounted 
precedent that had established a “substantial certainty” test for determining when 
inferred intent applied.  Id. at ¶ 77, citing Gearing at 39 and Physicians Ins. Co. v. 
Swanson, 58 Ohio St.3d 189, 193, 569 N.E.2d 906 (1991).  While I agree with 
Justice O’Donnell’s concerns, I also recognize that the “intrinsically tied” test is 
the law after Campbell. 
Discrimination and Harm Are “Intrinsically Tied” 
 
 
Discrimination is not simply dollars and cents * * *; it is the 
humiliation, frustration, and embarrassment that a person must 
surely feel when he is told that he is unacceptable as a member of 
the public because of his race or color.  It is equally the inability to 
explain to a child that regardless of education, civility, courtesy, 
and morality he will be denied the right to enjoy equal treatment, 
even though he be a citizen of the United States and may well be 
called upon to lay down his life to assure this Nation continues. 
 
January Term, 2015 
 
17
Heart of Atlanta Motel, Inc. v. United States, 379 U.S. 241, 292, 85 S.Ct. 348, 13 
L.Ed.2d 258 (1964) (Goldberg, J., concurring), citing S.Rep. No. 88-872, at 16 
(1964). 
{¶ 46} Courts have recognized that injury is inherent1 in the act of 
discrimination.  See Gresham v. Windrush Partners, Ltd., 730 F.2d 1417, 
1423 (11th Cir.1984) (“injury may be presumed from the fact of discrimination 
and violations of the fair housing statutes”); Innovative Health Sys., Inc. v. White 
Plains, 931 F.Supp. 222, 238 (S.D.N.Y.1996) (“A general allegation of 
discrimination embraces its inherent harms, such as stigma, insult, and the 
inability to receive the same opportunities as those who do not face 
discrimination”); see also Feurer v. Curators of Univ. of Missouri, E.D. Missouri 
No. 4:06CV750 HEA, 2006 WL 2385260 (Aug. 17, 2006), * 2.  I agree. 
Auto-Owners Had No Duty to Defend 
{¶ 47} The insurance policy at issue is Kozera’s umbrella policy provided 
by Auto-Owners, which excludes from coverage “[p]ersonal injury or property 
damage expected or intended by the insured.” 
{¶ 48} Fair Housing Contact Service, Inc. (“FHCS”), a nonprofit 
organization that promotes fair housing, filed a discrimination claim on behalf of 
Kozera against Granger in federal court alleging a violation of the Fair Housing 
Act, 42 U.S.C. 3601 et seq., which prevents discrimination in housing based on 
race and familial status.  42 U.S.C. 3604.  The complaint alleged that Kozera is 
African-American and has a minor child.  It also alleged that when Kozera called 
Granger about renting a house she had seen on Craigslist, Granger asked who 
would be living at the house and then said that “he would not rent the Premises to 
                                                 
1 “Inherent” and “intrinsic” are synonymous.  “Inherent” means “structual or involved in the 
constitution or essential character of something: belonging by nature or settled habit,” Webster’s 
Third New International Dictionary 1163 (1986), while “intrinsic” means “belonging to the 
inmost constitution or essential nature of a thing:  essential or inherent and not merely apparent, 
relative, or accidental,” id. at 1186.   
SUPREME COURT OF OHIO 
 
18
anyone with children.”  In his deposition, Granger denied that he refused to rent 
the house to Kozera. 
{¶ 49} The complaint alleged that as part of its investigation of Kozera’s 
case, FHCS sent testers to inquire about renting housing from Granger.  Granger 
allegedly made racially discriminatory remarks toward the testers. 
{¶ 50} The complaint claims discrimination.  See 42 U.S.C. 3604.  
Because discrimination and injury are intrinsically tied, the inferred-intent 
doctrine applies, which means that when Granger acted in a discriminatory 
manner, he intended injury as a matter of law, for the purpose of determining 
insurance coverage.  Therefore, Auto-Owners had no duty to defend Granger 
because the umbrella policy excludes from coverage an “injury” that is “expected 
or intended by the insured.” 
{¶ 51} Accordingly, I would reverse the judgment of the court of appeals 
and reinstate the trial court’s grant of summary judgment in favor of Auto-
Owners.  I respectfully dissent. 
O’DONNELL, J., concurs in the foregoing opinion. 
____________________________ 
McNeal, Schick, Archibald & Biro Co., L.P.A., Brian T. Winchester, and 
Patrick J. Gump, for appellants. 
Thomas C. Loepp Law Offices Co. and Thomas C. Loepp, for appellees. 
_______________________