[Cite as World Harvest Church v. Grange Mut. Cas. Co., 2013-Ohio-5707.]

IN THE COURT OF APPEALS OF OHIO 

TENTH APPELLATE DISTRICT 

World Harvest Church, : 

 Plaintiff-Appellee/ : 

 Cross-Appellant, 

 : No. 13AP-290 

v. (C.P.C. No. 09CV-11327)

 : 

Grange Mutual Casualty Company, (REGULAR CALENDAR) 

 : 

 Defendant-Appellant/ 

 Cross-Appellee. : 

 

 

D E C I S I O N 

Rendered on December 24, 2013 

 

Robert P. Rutter, for appellee/cross-appellant. 

Gallagher, Gams, Pryor, Tallan & Littrell, L.L.P., and James 

R. Gallagher; Tucker Ellis, LLP, and Irene C. Keyse-Walker, 

for appellant/cross-appellee. 

 

APPEAL from the Franklin County Court of Common Pleas 

O'GRADY, J. 

{¶ 1} Defendant-appellant/cross-appellee, Grange Mutual Casualty Company 

("Grange"), and plaintiff-appellee/cross-appellant, World Harvest Church ("WHC"), 

appeal from a judgment entered by the Franklin County Court of Common Pleas holding 

that Grange must indemnify WHC for $1,472,677, representing $549,100 in 

compensatory damages, $693,861 in attorney fees, and $229,716 in postjudgment 

interest, plus statutory interest, and that Grange is not obligated to indemnify WHC for 

punitive damages awarded in a prior case. Because we find that Grange is not obligated to 

indemnify WHC for that portion of the compensatory damage award for which WHC was 

found to be directly liable, we reverse that portion of the judgment as well as the part of 

the postjudgment interest award attributable to these damages. Finding no error in the 
No. 13AP-290 2 

remainder of the judgment, including the denial of coverage for punitive damages, we 

affirm that portion of the judgment. 

I. BACKGROUND1

{¶ 2} On May 30, 2006, Michael and Lacey Faieta and their minor son, A.F., filed 

a complaint alleging that Richard Vaughan, an employee of the prepatory school operated 

by WHC, physically abused A.F. in January 2006 while the two and one-half-year-old boy 

was in Vaughan's care in WHC's daycare program. According to the Faietas, Vaughan 

struck and severely beat A.F. with an object that left plainly visible marks, cuts, and 

contusions on the child's back, buttocks, and thighs. The Faietas raised claims of battery 

and intentional infliction of emotional distress ("IIED") against Vaughan and claims of 

negligent supervision and IIED against WHC. 

{¶ 3} On October 18, 2007, after a seven-day trial, the jury returned general 

verdicts in favor of the Faietas against both Vaughan and WHC. The jury awarded the 

Faietas compensatory damages of $134,865 and punitive damages of $100,000 against 

Vaughan, and compensatory damages of $764,235 and punitive damages of $5,000,000 

against WHC. The jury also found that the Faietas were entitled to attorney fees against 

WHC. 

{¶ 4} The jury interrogatory forms indicated they found, by a preponderance of 

the evidence, that: (1) Vaughan committed a battery against A.F. that was the proximate 

cause of damages to the Faietas (Interrogatory 1); (2) Vaughan and/or WHC intentionally 

inflicted serious emotional distress on the Faietas that proximately caused damages to 

them (Interrogatory 2); and (3) WHC was negligent in supervising its employee Vaughan, 

and its negligent supervision was the proximate cause of damages to the Faietas 

(Interrogatory 3). 

{¶ 5} After the trial, on May 6, 2008, the trial court denied the parties' post-trial 

motions, but after applying statutory caps to the damage awards, reduced the 

noneconomic compensatory damages award by $350,000 and limited the punitive 

damages award to $1,628,470. Faieta v. World Harvest Church, 10th Dist. No. 08AP527, 2008-Ohio-6959, ¶ 4. The trial court further determined that a statute exempted 

Vaughan from paying the $100,000 in punitive damages awarded against him, and the 

 

1 Some of these preliminary facts are taken from this court's opinion in Faieta v. World Harvest Church, 

10th Dist. No. 08AP-527, 2008-Ohio-6959, ¶ 1-4, 8. 
No. 13AP-290 3 

court assessed all the punitive damages against WHC under its joint and several liability. 

Id. The trial court ordered WHC to pay the Faietas attorney fees in the amount of 

$693,861.87. Id. 

{¶ 6} On May 23, 2008, the trial court entered a final judgment of $2,871,431.87 

in favor of the Faietas. WHC was held to be solely liable for $2,789,066.87 of the 

judgment, and Vaughan was held to be primarily liable, and WHC secondarily liable, for 

the remaining $82,365 in compensatory damages against Vaughan. 

{¶ 7} WHC and Vaughan appealed, and on December 31, 2008, this court 

affirmed the judgment of the trial court. Id.

{¶ 8} The Faietas then settled the case with interest in the total amount of 

$3,101,147. After Grange refused to indemnify WHC for any portion of the judgment 

pursuant to its insurance policies, WHC, on July 29, 2009, filed a complaint in the 

Franklin County Court of Common Pleas for indemnification against Grange. WHC 

sought, among other things, a declaration that it is entitled to payment from Grange of all 

or some of the amount it paid to resolve the Faietas' case. Following its answer, Grange 

filed a motion to dismiss or, in the alternative, for judgment on the pleadings. The 

common pleas court denied the motion. WHC filed a motion for partial summary 

judgment and declaratory relief on the issue of Grange's duty to indemnify, i.e., that 

Grange is contractually obligated by its policy language to pay the entire amount of the 

judgment. Grange filed a motion for summary judgment on all of WHC's claims and 

sought dismissal of the case. 

{¶ 9} On December 16, 2012, the common pleas court issued a decision granting 

and denying in part both motions for summary judgment. The trial court determined that 

the $3,101,147 award could be roughly separated into $549,100 in compensatory 

damages, $1,628,000 in punitive damages, $694,000 in attorney fees, and $230,000 in 

postjudgment interest. The trial court determined that Grange is obligated to provide 

coverage for and reimburse WHC for the entire compensatory damages award of 

$549,100, Grange is under no duty to provide coverage for the punitive damages award, 

and Grange is obligated to provide coverage to WHC for the attorney fees and 

postjudgment interest awards. The trial court determined there remained a genuine issue 

of material fact on WHC's bad-faith claim against Grange. 
No. 13AP-290 4 

{¶ 10} On March 11, 2013, the trial court entered judgment in favor of WHC 

against Grange in the amount of $1,472,677 plus statutory interest, which represents the 

compensatory award of $549,100, the attorney fees award of $693,861, and the 

postjudgment interest award of $229,716. The trial court rendered judgment in favor of 

Grange and against WHC on the issue of indemnification for the punitive damages award 

of $1,528,470 directly against WHC and $100,000 against Vaughan for which WHC is 

secondarily liable. The trial court determined, pursuant to Civ.R. 54(B), that the 

judgment fully resolved the declaratory judgment claim, and there was no just reason for 

delay of an appeal from the judgment. 

{¶ 11} Grange filed a timely appeal, and WHC filed a timely cross-appeal. 

II. ASSIGNMENTS OF ERROR 

{¶ 12} In Grange's appeal, it assigns the following error: 

THE TRIAL COURT ERRED BY FAILING TO GRANT 

APPELLANT GRANGE'S MOTION FOR SUMMARY 

JUDGMENT IN ITS ENTIRETY; BY GRANTING SUMMARY 

JUDGMENT IN FAVOR OF WHC; AND, BY ENTERING A 

DECLARATORY JUDGMENT OBLIGATING GRANGE TO 

INDEMNIFY WHC FOR DAMAGES, INTEREST AND 

ATTORNEY FEES. 

{¶ 13} In WHC's cross-appeal, it assigns the following errors: 

Assignment of Error Number One: The trial court erred in 

holding that Grange was not obligated to indemnify WHC for 

the $1,528,470 in punitive damages awarded directly against 

WHC. 

Assignment of Error Number Two: The trial court erred in 

holding that Grange was not obligated to indemnify WHC for 

the $100,000 in punitive damages awarded directly against 

Vaughan and secondarily against WHC. 

 

III. STANDARD OF REVIEW AND GENERAL PRINCIPLES 

{¶ 14} Appellate courts apply the de novo standard of review to a decision granting 

or denying summary judgment based on interpretation of an insurance contract. 

Westfield Ins. Co. v. Hunter, 128 Ohio St.3d 540, 2011-Ohio-1818, ¶ 12. Summary 

judgment is appropriate when the party moving for summary judgment establishes that: 

(1) there is no genuine issue of material fact, (2) the moving party is entitled to judgment 

as a matter of law, and (3) reasonable minds can come to only one conclusion, and that 
No. 13AP-290 5 

conclusion is adverse to the party against whom the motion for summary judgment is 

made. Civ.R. 56(C); New Destiny Treatment Ctr., Inc. v. Wheeler, 129 Ohio St.3d 39, 

2011-Ohio-2266, ¶ 24; Miller v. J.B. Hunt Transport, Inc., 10th Dist. No. 13AP-162, 2013-

Ohio-3892, ¶ 20. 

{¶ 15} The meaning of an insurance policy is gathered from a consideration of all 

its parts, and the intent of the parties is presumed to be reflected by the language used. 

Marusa v. Erie Ins. Co., 136 Ohio St.3d 118, 2013-Ohio-1957, ¶ 8. In the absence of an 

explicit contractual definition, we will construe words and phrases contained in an 

insurance policy in accordance with their plain and ordinary meaning. Safeco Ins. Co. of 

Am. v. White, 122 Ohio St.3d 562, 2009-Ohio-3718, ¶ 17. Ambiguities in the policy are 

construed strictly against the insurer and liberally in favor of the insured. Id. at ¶ 18. The 

court must thus adopt any reasonable construction that results in coverage for the 

insured. Royal Paper Stock Co. v. Robinson, 10th Dist. No. 12AP-455, 2013-Ohio-1206, 

¶ 29. 

IV. ANALYSIS 

A. Grange's Appeal

{¶ 16} In Grange's sole assignment of error, it claims the trial court erred by failing 

to grant its motion for summary judgment in its entirety, by granting summary judgment 

in favor of WHC, and by entering a declaratory judgment obligating Grange to indemnify 

WHC for damages, interest, and attorney fees. 

1. Burden of Proof

{¶ 17} The trial court determined that for the three causes of action on which the 

jury entered a general verdict in favor of the Faietas—battery, IIED, and negligent 

supervision—Grange "bears the burden of proof to demonstrate that coverage does not 

apply to each of the causes of action and will need to establish exclusions for the other 

portions of the award, if any," and that because "it is not possible to allocate the 

proportions of the general compensatory verdicts," "if [WHC] establishes coverage for any 

of the three causes of action, then [Grange] must indemnify [WHC] for the entire 

compensatory amount of the award." (R. 102, at 5.) 

{¶ 18} Grange argues that WHC should have the burden of proof as to the 

allocation of the verdict between Vaughan's battery, WHC's negligent supervision, and the 

IIED by Vaughan "and/or" WHC, and that "[s]ince the verdict cannot be allocated, WHC's 
No. 13AP-290 6 

action against Grange [for compensatory damages, attorney fees, and interest] must fail." 

(Corrected Grange brief, at 31.) WHC counters that Grange has the burden of allocating a 

general verdict to prove that some or all of the award represents damages for non-covered 

claims. WHC asserts that "[s]ince it is not possible to allocate the general compensatory 

verdicts, if WHC can establish coverage under any one of these three causes of action—

battery, IIED, or negligent supervision—then Grange must indemnify WHC for the entire 

compensatory portion of the verdict." (Emphasis sic.) (WHC's brief opposing appeal, at 

25.) 

{¶ 19} In general, the insured has the burden of proving a loss and demonstrating 

coverage under the policy. Sharonville v. Am. Emps. Ins. Co., 109 Ohio St.3d 186, 2006-

Ohio-2180, ¶ 19; Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216, 2003-Ohio-5849, ¶ 35, 

quoting Inland Rivers Serv. Corp. v. Hartford Fire Ins. Co., 66 Ohio St.2d 32, 34 (1981). 

"Where a complaint alleges both covered and non-covered claims and a general verdict is 

entered against the insured, the insurer should only have an obligation to indemnify the 

insured for those damages, if any, that are covered, which is all that is required by the 

policy. * * * The majority view of the cases outside Ohio that have addressed the issue is 

that the burden rests upon the insured to allocate a judgment and that the insured also 

bears the burden of demonstrating in the first instance that all or some portion of the 

judgment is, in fact, covered." Young, Bekeny & Mesko, Ohio Insurance Coverage, 

Section 10:16 (2013); see generally 2 Windt, Insurance Claims & Disputes, Section 6:27 

(6th Ed.2013), and cases cited in fn. 5 ("[m]ost courts have held that the burden is on the 

insured" to allocate the verdict to ascertain the amount of damages for which the insurer 

is responsible); Morris v. Western States Mut. Auto. Ins. Co., 268 F.2d 790, 793 (7th 

Cir.1959), citing Gen. Acc. Fire & Life Assur. Corp. v. Clark, 34 F.2d 833 (9th Cir.1929) 

("Where the judgment includes elements for which the insurer is liable and elements 

outside the range of coverage, apportionment of damages to the respective causes of 

action is a burden on the party seeking to recover from the insurer."). 

{¶ 20} WHC asserts the trial court's placement of the burden on Grange to allocate 

the general verdict was correct pursuant to Ohio law. Lavender v. Grange Mut. Casualty 

Co., 4th Dist. No. 1417 (Aug. 27, 1979). In that case, however, the appellate court 

expressly cautioned that it did "not find that the issue presented is actually one 

concerning which party has the burden of proving the allocation of a general verdict 
No. 13AP-290 7 

rendered in a prior proceeding." Id. Therefore, reliance on Lavender is misplaced. 

Instead, this is an issue that has not yet been definitively decided in Ohio. See Bank One, 

N.A. v. Echo Acceptance Corp., 522 F.Supp.2d 959, 978 (S.D.Ohio 2007) (Ohio law has 

not established a method of allocation, and the issue has not yet been addressed by the 

Supreme Court of Ohio). 

{¶ 21} "[M]ost courts to have considered the question have held that while the 

insured generally bears the burden of allocating between covered and noncovered claims, 

that burden shifts to the insurer when the insurer had an affirmative duty to defend and 

fails to fulfill its duty," including the duty not to prejudice an insured's rights by failing to 

request special interrogatories or a special verdict to clarify coverage or damages. See 

Automax Hyundai South, L.L.C. v. Zurich Am. Ins. Co., 720 F.3d 798, 808 (10th 

Cir.2013); 2 Windt, Insurance Claims & Disputes, at Section 6:27 (exception to general 

rule placing burden of allocating verdict on the insured "should be made to that rule in 

those cases in which the circumstances surrounding the defense of the underlying action 

were such that the insurer was obligated to seek an allocated verdict or advise the insured 

of the need for one" so that the burden should be placed on the insurer); Duke v. Hoch, 

468 F.2d 973, 978-79 (5th Cir.1972) (a case in which the insurer did not specifically advise 

its insured of the insured's interest in an allocated verdict, insured was relieved of the 

burden to prove allocation of a verdict between covered and noncovered claims unless the 

insurer could prove that the verdict represented, in whole or in part, noncovered claims). 

{¶ 22} This rule sensibly avoids any conflict of interest and places the burden on 

the party in the best position to discern and correct it—the insurer: 

As an initial matter, we note that an insurer who undertakes 

the defense of a suit against its insured must meet a high 

standard of conduct. The right to control the litigation carries 

with it certain duties. One of these is the duty not to prejudice 

the insured's rights by failing to request special 

interrogatories or a special verdict in order to clarify coverage 

of damages. The reason for this is that when grounds of 

liability are asserted, some of which are covered by insurance 

and some of which are not, a conflict of interest arises 

between the insurer and the insured. If the burden of 

apportioning damages between covered and non-covered 

were to rest on the insured, who is not in control of the 

defense, the insurer could obtain for itself an escape from 

responsibility merely by failing to request a special verdict or 

special interrogatories. The insurer is in the best position to 
No. 13AP-290 8 

see to it that the damages are allocated; therefore, it should be 

given the incentive to do so. 

(Citations omitted.) Magnum Foods, Inc. v. Continental Cas. Co., 36 F.3d 1491, 1498-99 

(10th Cir.1994); see also MedMarc Cas. Ins. Co. v. Forest Healthcare, Inc., 359 Ark. 495, 

199 S.W.3d 58, 62 (2004). 

{¶ 23} Therefore, the court should apply what appears to be the general rule that 

an insured has the burden to prove entitlement to coverage, including the burden of 

allocating a prior general award into covered and noncovered claims, but that where an 

insurer has a duty to defend the insured and fails to seek an allocated verdict or advise the 

insured of the need for one, the burden shifts to the insurer. 

{¶ 24} Grange asserts that the burden of proving allocation of the verdict did not 

shift from WHC to Grange because it sent a reservation of rights letter to WHC, WHC 

engaged its own private counsel in addition to the counsel that Grange provided to it in 

the personal-injury trial, Grange advised WHC of its divergence of interests, and WHC's 

private counsel controlled the litigation. 

{¶ 25} The record establishes, however, that Grange, pursuant to its insurance 

policies issued to WHC, retained a law firm to represent WHC in the Faietas' personalinjury case. Grange sent WHC a reservation of rights letter informing WHC that there 

were questions as to whether claims alleged in the case were covered by their insurance 

policies and that WHC may wish to consult with its private attorney. WHC engaged its 

own counsel in the matter to jointly defend it with the counsel provided by Grange in the 

case, and WHC, Vaughan, and their counsel entered into a joint defense agreement. The 

attorneys represented WHC and Vaughan in the trial and on appeal. See Faieta v. World 

Harvest Church, 147 Ohio Misc.2d 51, 2008-Ohio-3140, and Faieta, 2008-Ohio-6959. 

The counsel that Grange provided to WHC and Vaughan was shown the proposed jury 

interrogatories and was given the opportunity to review and comment on them, and 

Grange did not propose any interrogatories. 

{¶ 26} Although the record indicates that Grange informed WHC there may be 

coverage issues and that Grange's provided counsel expressed concern that a reply brief in 

support of their motion for judgment notwithstanding the verdict and new trial did not 

include an argument "concerning the global or cumulative nature of the jury's verdict," 

Grange never advised WHC of the specific apportionment issue and of the need for special 
No. 13AP-290 9 

interrogatories allocating damages. Grange's most specific notification about this issue 

came after the verdict had been returned and was provided only in the context of what to 

include in a reply brief in support of WHC's and its employee's post-trial motion. See 

State ex rel. Kolcinko v. Ohio Police & Fire Pension Fund, 131 Ohio St.3d 111, 2012-Ohio46, ¶ 10 (new argument in reply brief is forbidden). Further, notification was based on the 

contention of Grange's provided counsel that the general verdict violated WHC's and 

Vaughan's due process rights because it was so confusing and uncertain that the trial 

court could not properly apply statutory caps to the jury's award. Ultimately, Grange was 

satisfied with providing its insured, which it was defending in the case, with only the most 

general and vague statements concerning their divergent interests. 

{¶ 27} Under these circumstances, the presence of WHC's independent counsel 

and Grange's notification to WHC of its reservation of rights did not constitute a discharge 

of Grange's duty to fully disclose the precise situation concerning the necessity of seeking 

an allocated verdict in the personal-injury case. See Duke at 979. If Grange truly believed 

that intervening in the case to submit special interrogatories would have compromised 

WHC and its employee's ability to advance their agreed upon joint defense, Grange or its 

provided counsel could have still discharged any duty by precisely advising WHC of the 

need for an allocation of the damages and the consequences of not obtaining one. Id. ("At 

the merits trial [the insurance company's] counsel was required to make known to the 

insured the availability of a special verdict and the divergence of interest between them 

and the insurer springing from whether damages were or were not allocated."). Neither 

Grange's reservation of rights nor the presence and participation of WHC's independently 

retained counsel during the Faietas' personal-injury case discharged Grange's duty. See 

Arnett v. Mid-Continent Cas. Co., M.D. Florida No. 8:08-CV-2373-T-27EAJ, 2010 WL 

2821981 (July 16, 2010), citing Duke. 

{¶ 28} Moreover, notwithstanding Grange's claim to the contrary, its provided 

counsel sufficiently participated in the litigation for WHC so as to require it to properly 

notify WHC of the need for an allocated verdict or to seek the allocated verdict itself. In 

fact, it has been held that, even when the insurance company does not control the 

litigation, but monitors it and remains in regular contact with the insured's private 

counsel, the insurance company retains the burden because it remains "the most 

informed party concerning coverage issues and the potential difficulties of parsing a 
No. 13AP-290 10 

general verdict as between covered and uncovered claims." Pharmacists Mut. Ins. Co. v. 

Myer, 187 Vt. 323, 993 A.2d 413, ¶ 15 (2010). 

{¶ 29} Accordingly, the trial court did not err in finding that Grange had the 

burden to establish the specific allocation of the general verdict for covered and 

noncovered claims. 

2. Coverage for WHC's Vicarious Liability for Employee's Intentional Torts 

{¶ 30} The trial court determined that the parties' insurance policies provided 

coverage for the battery committed by Vaughan and the IIED committed by Vaughan 

and/or WHC. More specifically, the trial court found that, from WHC's perspective, the 

battery committed by its employee, Vaughan, constituted a covered occurrence, i.e., an 

accident, because the battery was not committed by an officer, director, or other principal 

of WHC. As to the IIED claim against Vaughan and WHC, the trial court found that if the 

tort was committed by Vaughn, the act would be a covered occurrence for the same reason 

underlying its finding on the battery issue. The trial court further found that if the tort 

was committed by WHC, it would be excluded from coverage under the policies' 

intentional-injury exclusion. The trial court concluded that, because Grange's counsel 

failed to submit special interrogatories that would have separated responsibility for the 

IIED claim, Grange had a duty to indemnify WHC for all the compensatory damages 

incurred under the IIED claim. 

{¶ 31} Grange asserts that its insurance policies with WHC do not cover damages 

that may have been assessed for IIED or battery because: (1) an intentional tort is not an 

"occurrence" as required by the policies, and (2) there is no coverage for purely emotional 

injuries because they do not constitute a "bodily injury" as defined by the policies. 

(Corrected Grange Brief, at 40.) 

{¶ 32} The parties entered into two insurance policies that are pertinent here, a 

commercial general liability ("CGL") policy and a commercial umbrella ("CU") policy. 

Section I, 1. a. of the CGL policy provides that Grange "will pay those sums that the 

insured becomes legally obligated to pay as damages because of 'bodily injury' or 'property 

damage' to which this insurance applies." (R. 29, exhibit B, CGL Policy, at 1.) "This 

insurance applies to 'bodily injury' and 'property damage' only if: (1) The 'bodily injury' or 

'property damage' is caused by an 'occurrence' that takes place in the 'coverage territory.' " 

Section I, 1. b. of the CGL Policy. (CGL Policy, at 1.) "Occurrence" is defined at Section V, 
No. 13AP-290 11 

13. of the CGL policy as "an accident." (CGL Policy, at 14.) "Bodily injury" is defined as 

"bodily injury, sickness or disease sustained by a person, including death resulting from 

any of these at any time." Section V, 3. of the CGL Policy. (CGL Policy, at 13.) 

{¶ 33} Similarly, Section I, A. 1. a. of the CU policy provides that Grange "will pay 

on behalf of the insured the 'ultimate net loss' in excess of the 'retained limit' because of 

'bodily injury' or 'property damage' to which this insurance applies." (R. 29, exhibit A, CU 

Policy, at 1.) The "bodily injury" or "property damage" "must be caused by an 

'occurrence.' " Section I, A. 1. b. 3 of the CU Policy. (CU Policy, at 1.) "Occurrence" means 

"an accident." Section VI, 14. a. of the CU Policy. (CU Policy, at 14.) Section VI, 4. of the 

CU policy defines "[b]odily injury" as "bodily injury, sickness or disease sustained by a 

natural person" and specifies that the definition "includes death, shock, fright, mental 

anguish, mental injury or disability which results from any of these at any time." (CU 

Policy, at 13.) 

{¶ 34} Grange first contends that the definition of "occurrence" in both the CGL 

and CU policies as an "accident" precludes coverage for Vaughan's battery or IIED against 

the Faietas. The issue of liability coverage "hinges on whether the act is intentional from 

the perspective of the person seeking coverage." Safeco at ¶ 24. "When a liability 

insurance policy defines an 'occurrence' as an 'accident,' a negligent act committed by an 

insured that is predicated on the commission of an intentional tort by another person, 

e.g., negligent hiring or negligent supervision, qualifies as an 'occurrence.' " Id. at 

paragraph one of the syllabus. 

{¶ 35} WHC's liability under the insurance policies for Vaughan's intentional 

actions underlying his battery and IIED rested on its vicarious liability for the acts of its 

employee—Vaughan—that WHC admitted in the personal-injury case were committed 

within the scope of his employment with it. See Faieta, 2008-Ohio-6959, at ¶ 46. In 

general, a principal is vicariously liable for the torts of its employees under the doctrine of 

respondeat superior. Natl. Union Fire Ins. Co. of Pittsburgh, PA v. Wuerth, 122 Ohio 

St.3d 594, 2009-Ohio-3601, ¶ 20. 

{¶ 36} Despite Grange's claim that, for insurance coverage purposes, the 

intentional conduct of Vaughan should be imputed to his employer, WHC, it has been 

determined that "[o]ne of the most common situations in which courts have found 

coverage for vicarious liabilities is where an employer is held liable for the intentional 
No. 13AP-290 12 

injuries or damage(s) caused by one of its employees under the theory of respondeat 

superior." French, Debunking the Myth that Insurance Coverage is Not Available or 

Allowed for Intentional Torts or Damages, 8 Hastings Bus.L.J. 65, 90 (2012). Claims of 

negligence or vicarious liability against employers for intentional acts by employees 

constitute an "occurrence" under liability insurance policies. See TIG Ins. Co. v. Travelers 

Ins. Co., D.Or. No. CV-00-1780-ST, 2003 WL 24051560 (Mar. 24, 2003); McLeod v. 

Tecorp Internatl., Ltd., 117 Or.App. 499, 503, 844 P.2d 925, 927 (1992), rev'd on other 

grounds, 865 P.2d 1283 ("Vicarious liability is imposed as a risk allocation between the 

employer and an innocent plaintiff and, therefore, does not require any degree of fault on 

the employer's part."); compare K & T Ents., Inc. v. Zurich Ins. Co., 97 F.3d 171, 179 (6th 

Cir.1996) (insured corporation denied fire insurance coverage when arson was committed 

by president, sole officer, and 50 percent shareholder in the corporation, who is married 

to the other 50 percent shareholder). 

{¶ 37} Therefore, unless corporate management committed the intentionally 

wrongful conduct, the corporate insured will not be denied coverage on the basis of an 

employee's intentional tort. See generally 3 Windt, Insurance Claims & Disputes, Section 

11:9 (6th Ed.2013). WHC's corporate management did not commit Vaughan's 

intentionally wrongful conduct. Grange's contention that WHC is precluded from 

recovering for Vaughan's IIED and battery because of the definition of "occurrence" in its 

insurance policies consequently lacks merit. 

{¶ 38} Grange secondly claims there is no coverage for purely emotional injuries 

because they do not constitute "bodily injury" as required by the policies. Grange's claim 

fails, however, because the CU policy expressly includes "mental anguish, mental injury or 

disability" resulting from any bodily injury at any time. 

{¶ 39} Moreover, both policies provide coverage for damages incurred "because of 

'bodily injury.' " It is true that nonphysical harms, like emotional distress, are not "bodily 

injury" as commonly defined in many insurance policies. See, e.g., Bernard v. Cordle, 116 

Ohio App.3d 116, 120-21 (10th Dist.1996); Johnson v. Am. Family Ins., 160 Ohio App.3d 

392, 2005-Ohio-1776, ¶ 25-29 (6th Dist.). However, even in those jurisdictions in which 

emotional distress damages do not qualify as "bodily injury" for insurance coverage, these 

damages "may nevertheless be covered as damages 'because of' bodily injury or property 

damage." Turner, Insurance Coverage of Construction Disputes, Section 2:53 (2d 
No. 13AP-290 13 

Ed.2013); see also Young, Bekeny & Mesko, Ohio Insurance Coverage, Section 3:1 (2013) 

(CGL policies that provide coverage for damages "because of 'bodily injury' or 'property 

damage' (to which the insurance applies)" covers the resulting damage flowing from the 

"bodily injury" or "property damage" even if it consists of something other than "bodily 

injury" or "property damage"). (Emphasis sic.) The pertinent portions of the CGL and 

CU policies do not state that the insured or the primary victim of the insured's conduct 

must be the one who suffered the bodily injury—for example, the CGL policy requires only 

that the insured be legally obligated to pay damages (including mental suffering) for what 

could be someone else's bodily injury. See Willett v. Geico Gen. Ins. Co., 10th Dist. No. 

05AP-1264, 2006-Ohio-3957, ¶ 9 (insurance policy's statement providing coverage for 

"damages for bodily injury caused by accident which the insured is legally entitled to 

recover" did not preclude coverage for mental suffering); Allstate Ins. Co. v. Teel, 100 

P.3d 2, 4 (Alaska 2004) (negligent infliction of emotional distress claim covered under 

policy providing coverage to "any other person who is legally entitled to recover because 

of bodily injury to [the insured]"). Bernard and Johnson are distinguishable because the 

policies considered therein included different policy language than that at issue here. 

{¶ 40} Therefore, Grange's contention that the trial court erred in ruling that WHC 

is entitled to coverage for Vaughan's IIED and battery lacks merit. Grange's suggestion 

that the trial court also erred in determining that the policies covered WHC's own IIED is 

incorrect. The trial court held that "if the jury found that [WHC] committed the 

intentional infliction of emotional distress, it would be an intentional tort committed by 

[WHC], and therefore would fall under the intentional injury exclusion of the insurance 

policy." (R. 102, at 6-7.) Thus, WHC's own IIED, assuming that the jury determined any, 

was not covered by the insurance policies. 

{¶ 41} Consequently, before determining whether any exclusion is applicable, 

Grange's policies provided coverage for WHC's vicarious liability for its employee's 

intentionally tortious conduct. 

3. Abuse or Molestation Exclusion 

{¶ 42} The trial court determined that a coverage exclusion for abuse or 

molestation in both the CGL and CU policies was ambiguous and, thus, did not bar WHC 

from coverage for Vaughan's battery and WHC's negligent supervision of Vaughan. 
No. 13AP-290 14 

{¶ 43} Grange claims that the trial court erred in so concluding. The CGL and CU 

policies contained identical language entitled "Abuse or Molestation Exclusion": 

This insurance does not apply to "bodily injury", "property 

damage", "personal injury" or "advertising injury" arising out 

of: 

1. The actual or threatened abuse or molestation by anyone of 

any person while in the care, custody or control of any 

insured, or 

2. The negligent:

* * * 

c. Supervision; 

* * * 

of a person for whom any insured is or ever was legally 

responsible and whose conduct would be excluded by 1. 

above. 

(R. 29, exhibits A and B.) 

{¶ 44} When an insurer denies coverage based on an exclusion, it bears the burden 

of demonstrating that the exclusion applies. Sauer v. Crews, 10th Dist. No. 12AP-320, 

2012-Ohio-6257, ¶ 30. Insurance coverage is determined by the policy language. Allstate 

Ins. Co. v. Campbell, 128 Ohio St.3d 186, 2010-Ohio-6312, ¶ 10; Reed v. Davis, 10th Dist. 

No. 13AP-15, 2013-Ohio-3742, ¶ 10. Courts give undefined words in an insurance policy 

their plain and ordinary meaning. Nationwide Mut. Fire Ins. Co. v. Guman Bros. Farm, 

73 Ohio St.3d 107, 108 (1995). 

{¶ 45} The plain and ordinary meaning of the word "abuse," which is not defined 

in the CGL and CU policies, is, as pertinent here, physical maltreatment.2 See Black's 

Law Dictionary 10 (9th Ed.2009), defining "abuse" as "[p]hysical or mental 

maltreatment, often resulting in mental, emotional, sexual, or physical injury"; Webster's 

Encyclopedic Unabridged Dictionary 7 (1996), defining "abuse" as "bad or improper 

treatment; maltreatment"; see also Discover Property & Cas. Ins. Co. v. Scudier, 

D.Nevada No. 2:12-CV-836 JCM (CWH), 2013 WL 2153079 (May 16, 2013) (stating that 

 

2 Although both parties cite the R.C. 2151.031 definition of "abused child," this statutory definition is 

inapplicable because that definition is limited, by its own terms, to application of the phrase in R.C. Chapter 

2151, i.e., "[a]s used in this chapter." 
No. 13AP-290 15 

"abuse," which was undefined in the insurance policies, meant according to the definition 

in the Oxford Dictionaries to " 'use or treat in such a way as to cause damage or harm' " or 

to " 'treat with cruelty or violence, especially regularly or repeatedly' "); State v. Eagle 

Hawk, 411 N.W.2d 120, 123 (S.D.1987), fn. 5 (noting that "abuse" is defined in Webster's 

New Collegiate Dictionary 5 (1980) as "improper use or treatment" and "physical 

maltreatment"). 

{¶ 46} WHC's narrow construction of the term "abuse" as only "sexual abuse" is, 

thus, belied by the above authorities which define the term more broadly to include 

physical abuse. WHC cites no authority holding that an abuse or molestation exclusion 

does not preclude coverage for injuries arising from nonsexual assault, and our 

independent research has revealed no such authority. To the contrary, in Cincinnati Ins. 

Co. v. Hall, Mich.App. No. 297600, 2011 WL 2342704, the court held, in an appeal 

involving a declaratory judgment action concerning insurance coverage, that an "abuse or 

molestation exclusion" precluded coverage for injuries arising from nonsexual assault 

because "there is no reason why 'abuse' or 'molestation' must be sexual in nature" so that 

"the plain meanings of the words encompass a broader range of possible acts and 

behaviors, and we find no authority requiring their use in an insurance policy to be 

artificially restricted to only sexual acts or behaviors." (Emphasis sic). 

{¶ 47} Moreover, the exclusion is not ambiguous. "The mere absence of a 

definition of a term in a contract does not make the term ambiguous." State ex rel. Petro 

v. R.J. Reynolds Tobacco Co., 152 Ohio App.3d 345, 2003-Ohio-1654, ¶ 37 (10th Dist.). 

See, e.g., Community Action for Greater Middlesex Cty., Inc. v. Am. Alliance Ins. Co., 254 

Conn. 387, 402, 757 A.2d 1074, 1083 (2000), and cases cited therein ("plaintiff has not 

identified any case, and we are aware of none, in which a policy exclusion for abuse or 

molestation has been deemed ambiguous"). 

{¶ 48} The jury in the personal-injury trial expressly found in its answers to 

interrogatories that Vaughan "intentionally harmed" the Faietas' minor child and that 

Vaughan's battery directly and proximately caused damages to the Faietas. (R. 3, exhibit 

No. 3.) As the trial court in Faieta held in ruling on the post-trial motions in that case, the 

jury, in effect, determined that the marks on the child's body "were a result of abuse" by 

Vaughan. Faieta, 2008-Ohio-3140, ¶ 39. Therefore, it was conclusively determined in the 

personal-injury case that Vaughan's battery constituted abuse of the Faietas' minor child, 
No. 13AP-290 16 

which was excluded from coverage under Section 1 of the abuse or molestation exclusion 

of the CGL and CU policies. See Howell v. Richardson, 45 Ohio St.3d 365 (1989), 

paragraph one of the syllabus ("Where a determination is made in an initial action against 

a tortfeasor relative to his culpable mental state, collateral estoppel precludes relitigation 

of the determination in a subsequent proceeding brought against the tortfeasor's insurer 

pursuant to R.C. 3929.06."). 

{¶ 49} Moreover, Section 2(c) of the abuse or molestation exclusion precluded 

coverage for WHC's negligent supervision of Vaughan's intentionally tortious conduct 

under the CGL and CU policies. Contrary to WHC's contention, the Supreme Court of 

Ohio's decision in Safeco does not require a different result because that case did not 

involve such a specifically worded exclusion. That case merely held that "[i]nsurancepolicy exclusions that preclude coverage for injuries expected or intended by an insured, 

or injuries arising out of or caused by an insured's intentional or illegal acts, do not 

preclude coverage for the negligent actions of other insureds under the same policy that 

are predicated on the commission of those intentional or illegal acts, e.g., negligent hiring 

or negligent supervision." Id. at paragraph two of the syllabus. Safeco did not involve the 

construction of an abuse or molestation exclusion. 

{¶ 50} In Crow v. Dooley, 3d Dist. No. 1-11-59, 2012-Ohio-2565, the court ruled 

that a sexual-molestation exclusion applied to preclude coverage for all bodily injury 

arising out of acts of sexual molestation, irrespective of the mental state, including 

negligence, of the insured. The court averred that its holding was not at odds with Safeco

because both of the exclusions at issue in that case included specific language that did not 

preclude coverage for injuries predicated on an allegation of negligence. In contrast to the 

pertinent policy provisions in Safeco, the exclusion at issue here specifically precluded 

coverage based on WHC's negligent supervision. 

{¶ 51} WHC further claims that a 1993 corporal-punishment endorsement in the 

CGL policy renders the abuse or molestation exclusion inoperable. We disagree. By its 

very terms, the corporal punishment endorsement provides an exclusion only to the 

exclusion for bodily injury or property damage expected or intended from the standpoint 

of the insured: 
No. 13AP-290 17 

CORPORAL PUNISHMENT 

This endorsement modifies insurance provided under the 

following: 

COMMERCIAL GENERAL LIABILITY COVERAGE PART 

Exclusion a. of paragraph 2., Exclusions of COVERAGE A – 

BODILY INJURY AND PROPERTY DAMAGE LIABILITY 

(Section I – Coverages) is replaced by the following: 

This insurance does not apply to: 

a. "Bodily injury" or "property damage" expected or intended 

from the standpoint of the insured. 

This exclusion does not apply to "bodily injury" resulting 

from: 

(1) The use of reasonable force to protect persons or property; 

or 

(2) Corporal punishment to your student administered by or 

at the direction of any insured. 

(Emphasis added.) (R. 29, exhibit B.) 

{¶ 52} The manifest language of this endorsement applies only to permit coverage 

that would otherwise have been excluded under the "expected or intended from the 

standpoint of the insured" exclusion. It does not purport to limit, for example, the 1998 

endorsement for the "abuse or molestation exclusion" in the CGL policy. Moreover, an 

additional 1998 endorsement to the CGL policy sets forth a "corporal punishment" 

exclusion that specifies that the insurance provided by the policy "does not apply to 

'bodily injury', 'property damage' or 'personal and advertising injury' to your student 

arising out of any corporal punishment administered by or at the direction of any 

insured." (R. 29, exhibit B.) Therefore, the 1993 corporal punishment endorsement does 

not change the fact that claims concerning Vaughan's battery and WHC's negligent 

supervision are excluded under the policy's CGL abuse or molestation exclusion. Because 

the language of the policy controls our analysis, WHC's citation of Grange notes and 

deposition testimony of a Grange representative to the effect of what they thought was 

covered by the policy does not change this result. 
No. 13AP-290 18 

{¶ 53} Nor are we persuaded that interpreting the abuse or molestation exclusion 

as broadly as its plain language dictates would—as WHC argues—render the insurance 

coverage provided by the policies illusory. Where there is some benefit to an insured 

through an insurance policy, it is not illusory. See Ward v. United Foundries, 129 Ohio 

St.3d 292, 2011-Ohio-3176, ¶ 24. The policies' exclusion is limited to abuse or molestation 

occurring to "any person while in the care, custody or control of any insured," while the 

insurance coverage encompasses circumstances beyond harm to people in the "care, 

custody or control" of WHC or any of its employees. The policies are not illusory. 

{¶ 54} Therefore, Grange's argument has merit. The trial court erred in ruling that 

claims involving Vaughan's battery and WHC's negligent supervision of him were covered 

under the insurance policies. They were excluded under the abuse or molestation 

provisions. 

{¶ 55} The Faietas' claims for compensatory damages directly against WHC were 

for its negligent supervision of Vaughan and based on the ambiguity in the pertinent jury 

interrogatory, possibly for WHC's IIED. Pursuant to the foregoing discussion, the 

negligent supervision claim is excluded from coverage under the abuse or molestation 

exclusions of the CGL and CU policies. The trial court determined that if the jury did find 

against WHC for its own direct IIED, that claim was excluded from coverage because it 

did not constitute a covered occurrence. The claim for Vaughan's battery was also 

excluded from coverage under the policies' abuse or molestation exclusions. 

Nevertheless, the claim for Vaughn's IIED, which WHC is vicariously liable for, was not 

excluded from coverage under the policies. 

{¶ 56} As previously discussed, it is Grange's burden to prove which claims were 

covered and which were not. Grange has met that burden here. The May 23, 2008 

judgment of the trial court in the personal-injury case brought by the Faietas against 

WHC and its employee, Vaughan, specifies $82,365 as the amount of compensatory 

damages for which Vaughan was primarily, and WHC was secondarily, liable. This 

amount represents the damages for the claims of battery and, potentially, IIED against 

Vaughan. The remainder of the $549,100 compensatory damage award—$466,735—was 

excluded from coverage. 

{¶ 57} Therefore, any amount of compensatory damages for which WHC was 

found to be directly liable in excess of the $82,365 ($466,735) that could have represented 
No. 13AP-290 19 

all the damages from any covered IIED claim against Vaughan was established by Grange 

to be excluded from coverage under the policies. Consequently, Grange's assignment of 

error is sustained to this extent. 

4. Attorney Fees and Postjudgment Interest 

{¶ 58} In the personal-injury case, the trial court ordered WHC to pay the Faietas 

$693,861.87 in attorney fees. In the indemnification action brought by Grange, the trial 

court determined that Grange was obligated to provide coverage to WHC for the attorney 

fees and the $229,716 in postjudgment interest. 

{¶ 59} Grange asserts the trial court erred in so determining because there was no 

proof that any of the claims were covered. But, as previously discussed, there was 

coverage for the claim of IIED against Vaughan for which WHC was vicariously liable. 

Moreover, even if the attorney fees were awarded solely because of the punitive damages 

assessed against WHC, "[a]ttorney fees are distinct from punitive damages, and public 

policy does not prevent an insurance company from covering attorney fees on behalf of an 

insured when they are awarded solely as a result of an award for punitive damages." 

Neal-Pettit v. Lahman, 125 Ohio St.3d 327, 2010-Ohio-1829, syllabus. Finally, because 

the attorney fees cannot now be allocated between the covered and noncovered claims, 

Grange is liable for the entire amount. 

{¶ 60} The postjudgment interest was also recoverable under the CGL and CU 

policies. Nevertheless, because some of the postjudgment interest is attributable to the 

compensatory damages that are excluded from coverage, that portion of the interest 

award is vacated. 

{¶ 61} In sum, Grange's assignment of error is sustained insofar as the trial court 

erred in determining that WHC is entitled to coverage under the insurance policies for the 

direct compensatory claims against WHC for negligent supervision and IIED. 

Accordingly, we reverse the judgment of the trial court to this extent and the portion of 

the postjudgment interest award attributable to this amount. The remainder of Grange's 

assignment of error is overruled. The remainder of the judgment, including the 

declaration that Grange must indemnify WHC for the $82,365 in compensatory damages 

for which WHC is secondarily liable, the $693,861 in attorney fees, and the postjudgment 

interest attributable to this portion of the judgment, is affirmed. 
No. 13AP-290 20 

B. WHC'S Cross-Appeal

{¶ 62} In its cross-assignments of error, WHC claims the trial court erred in 

holding that Grange was not obligated to indemnify WHC for the $1,628,470 in punitive 

damages awarded against it directly and secondarily in the personal injury case. 

{¶ 63} The trial court denied WHC's claim for coverage for the punitive damages 

awarded against it directly and secondarily in the personal injury case. The trial court did 

not err in so holding for the following reasons. 

{¶ 64} First, R.C. 3937.182(B) prohibits insurance coverage of punitive damages. 

Neal-Pettit at ¶ 21. The statute states in pertinent part that "no other policy of casualty or 

liability insurance that is covered by sections 3937.01 to 3937.17 of the Revised Code and 

that is so issued, shall provide coverage for judgments or claims against an insured for 

punitive or exemplary damages." R.C. 3937.03(C)(1) refers to "[c]ommercial insurance," 

which is defined as "any commercial casualty or commercial liability insurance except 

sickness and accident, fidelity and surety, and automobile insurance as defined in section 

3937.30 of the Revised Code." The Grange CGL and CU policies are commercial liability 

policies and are, thus, prohibited from providing coverage for punitive or exemplary 

damages. 

{¶ 65} Second, "public policy prevents insurance contracts from insuring against 

claims for punitive damages based upon an insured's malicious conduct." Neal-Pettit at 

¶ 21. As this court previously decided in Faieta, 2008-Ohio-6959, ¶ 43, the Faietas 

presented sufficient evidence of WHC's malice, including its conscious disregard of the 

well-being and safety of A.F. and the other young children in its care, to justify the trial 

court's award of punitive damages against WHC. 

{¶ 66} Third, WHC's belated citation of R.C. 2719.01 at oral argument does not 

modify this result. An issue raised for the first time at oral argument and not assigned as 

error in an appellate brief is untimely. Watkins v. Dept. of Human Servs., 10th Dist. No. 

00AP-224 (Oct. 31, 2000). 

{¶ 67} Finally, the CU policy contained an endorsement that expressly excludes 

insurance coverage for punitive or exemplary damages. 

{¶ 68} Thus, the trial court did not err in determining that Grange is under no 

duty to provide coverage for punitive damages in this case. WHC's cross-assignments of 

error are overruled. 
No. 13AP-290 21 

V. CONCLUSION 

{¶ 69} Having sustained part of Grange's assignment of error, we reverse the 

judgment of the Franklin County Court of Common Pleas determining that Grange must 

indemnify WHC for the $466,735 in compensatory damages awarded directly against 

WHC for its negligent supervision of Vaughan and for its IIED on the Faietas and 

awarding postjudgment interest on this portion of the award for compensatory damages. 

Having overruled the remainder of Grange's assignment of error, we affirm the judgment 

of the trial court determining that Grange must indemnify WHC for the $82,365 in 

compensatory damages for which it is secondarily liable for its employee's intentional 

torts, for the $693,861 in attorney fees, and for that portion of the postjudgment interest 

award on these amounts. Finally, having overruled WHC's cross-assignments of error, we 

affirm the judgment of the trial court determining that Grange has no obligation to 

indemnify WHC for any portion of the punitive damages awarded. 

Judgment affirmed in part; 

reversed in part, and cause remanded. 

BROWN and McCORMAC, JJ., concur. 

McCORMAC, J., retired, formerly of the Tenth Appellate 

District, assigned to active duty under authority of the Ohio 

Constitution, Article IV, Section 6(C). 

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