[Cite as Reggie Constr. v. Westfield Ins. Co., 2014-Ohio-3769.]

IN THE COURT OF APPEALS

ELEVENTH APPELLATE DISTRICT 

LAKE COUNTY, OHIO 

REGGIE CONSTRUCTION, LTD., et al., : O P I N I O N 

 Plaintiffs-Appellants, :

CASE NO. 2013-L-095

 - vs - :

WESTFIELD INSURANCE CO., :

 Defendant-Appellee. :

Civil Appeal from the Lake County Court of Common Pleas, Case No. 12 CV 000211. 

Judgment: Affirmed. 

Erik L. Walter and Grant J. Keating, Dworken & Bernstein Co., L.P.A., 60 South Park 

Place, Painesville, OH 44077 (For Plaintiffs-Appellants). 

Richard M. Garner, Davis & Young, 140 Commerce Park Drive, Suite C, Westerville, 

OH 43082 (For Defendant-Appellee). 

CYNTHIA WESTCOTT RICE, J. 

{¶1} Appellants, Reggie Construction, LTD, et al., appeal from the trial court’s 

entry of summary judgment in favor of appellee, Westfield Insurance Co. At issue is 

whether appellee had a duty to defend and indemnify appellants in an underlying 

lawsuit, pursuant to a commercial general liability (“CGL”) insurance policy issued by 

appellee. For the reasons that follow, we affirm. 

{¶2} In October 2003, appellants began excavation on a lot in Lake County, 

Ohio, with the intention of building a single-family residence. By December 2003, the 
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home was framed and, by mid-to-late February 2004, the roof and windows had been 

installed. In 2006, the home was sold to Jamel M. White, Jennifer M. White and JW30, 

LLC (“the Whites”) for $685,000. 

{¶3} After the Whites moved into the home, they allegedly began to suffer from 

mold-related illnesses. In June 2009, they had the home inspected by a mold 

remediation company, which conducted tests and offered the Whites certain proposals 

to remedy the purported mold problems in the home. The Whites subsequently filed a 

complaint against appellants, alleging seven claims for relief, to wit: breach of contract, 

fraud, negligence, fraudulent misrepresentation, innocent misrepresentation, breach of 

warranties of fitness and habitability, and rescission. The complaint was premised upon 

the Whites’ allegations that appellants allowed the home to remain open through the 

winter season. As a result, the White’s alleged, the structure flooded, which caused the 

home to be severely impacted by mold. 

{¶4} At all times relevant to the allegations, appellants were insured by 

appellee under various renewals of commercial general liability (“CGL”) Policy No. 

CWP3802636. Appellants sought defense and indemnity against the Whites’ lawsuit by 

operation of the policy. Pursuant to the policy, appellee was obligated to defend and 

indemnify appellants, in pertinent part, for bodily and/or property damage caused by an 

“occurrence.” An “occurrence” is defined as “an accident, including continuous or 

repeated exposure to substantially the same general harmful conditions.” Moreover, the 

policy expressly excluded coverage for damage resulting from “fungi or bacteria.” 

According to the policy, fungi includes “mold or mildew and any myocotoxins, spores, 

scents or byproducts produced or released by fungi.” 
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{¶5} Based upon the Whites’ allegations and the exclusions in the policy, 

appellee declined to defend or indemnify appellants in the 2009 litigation. In early 2010, 

appellants filed a complaint for declaratory judgment seeking defense and indemnity 

under the CGL policy. That action was voluntarily dismissed, however, in May 2011. 

Shortly thereafter, the Whites voluntarily dismissed their complaint against appellants. 

{¶6} The Whites re-filed their suit against appellants approximately two months 

after the dismissal. The allegations in the Whites’ 2011 litigation substantially tracked 

the allegations set forth in the 2009 complaint with the following exceptions: the 

complaint neither directly referenced mold or illnesses related to mold and it added a 

count for breach of fiduciary duty. The modified allegations asserted, inter alia, that 

appellants, through carelessness and/or ignorance, allowed the property to sit open and 

flood and the inaction caused general damage to the property. 

{¶7} In January 2012, appellants re-filed their complaint against appellee, 

seeking declaratory judgment and damages for breach of contract and breach of 

fiduciary duty. Appellee answered appellants’ complaint and filed a counterclaim for 

declaratory judgment based upon its position that it had no obligation to defend or 

indemnify appellants in the Whites’ re-filed action. Appellee subsequently moved for 

judgment on the pleadings, which appellants duly opposed. 

{¶8} On August 24, 2012, the trial court granted appellee’s motion in part and 

denied the motion in part. The court specifically concluded that appellee had no duty to 

defend or indemnify appellant against the Whites’ allegations of fraud, 

misrepresentation, and rescission. The court, however, declined to award appellee 

judgment on the Whites’ allegations of breach of contract, negligence, and breach of 

warranties. The court reasoned that, construing these claims and all reasonable 
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inferences in appellants’ favor, it could not conclude, as a matter of law, that appellants 

could prove no set of facts entitling them to a defense and/or indemnity. 

{¶9} After conducting discovery, appellee filed a motion for summary judgment 

on June 14, 2013. In its motion, appellee argued it was not obligated to defend or 

indemnify appellants for the Whites’ remaining claims because: (1) any damages 

arising from mold problems were expressly excluded by the CGL policy; and (2) any 

other damage alleged by the Whites did not constitute property damage caused by an 

“occurrence,” a necessary precondition to trigger coverage under the CGL policy. Thus, 

appellee concluded, there were no genuine issues of material fact and, as a result, it 

was entitled to judgment as a matter of law. 

{¶10} Meanwhile, on June 27, 2014, a judgment in the amount of $735,000 was 

entered against appellants in the White litigation. The record indicates appellants could 

not afford to defend themselves through trial in that case and therefore confessed 

judgment. 

{¶11} After judgment was entered in the White proceeding, appellants filed a 

memorandum in opposition to appellee’s motion for summary judgment. In support, 

appellants acknowledged that claims for defective workmanship and mold are excluded 

under the policy. They argued, however, the claims asserted by the Whites were not 

limited to defective workmanship or mold. Instead, appellants asserted, the Whites also 

sought damages that resulted from ongoing water infiltration and moisture events, which 

were occurring as a consequence of appellants’ faulty workmanship; consequential 

damages which, appellants maintained, are covered under the policy. To support their 

position, appellants submitted an expert report, used by the Whites in the underlying 
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suit against appellants, to establish the alleged consequential nature of the damages. 

To wit, appellants asserted: 

{¶12} The Whites have offered evidence in the form of an expert report by 

Marko E. Vovk (“The Vovk Report”) in the White Proceeding that 

demonstrates property damage occurred as a result of Plaintiff’s 

defective work * * *. Mr. Vovk also makes specific findings in his 

report: failure of cultured stone cladding as result of moisture, 

insects and animal infiltration due to poor construction; uplift in 

shingles due to prior moisture event in Property; damage to the 

downspout, underground piping, front porch and back patio due to 

poor compaction of soil during construction; holes in the Property’s 

exterior allowing access to moisture, insects and vermin as result of 

poor installation or compaction of soil during the construction 

process; rusty black pipes in basement due to past moisture 

events; infestation of carpenter ants on the southwest corner of 

Property due to water infiltration. 

{¶13} According to appellants, the Vovk report demonstrates that the property 

sustained ongoing moisture and humidity events as a consequence of defective 

workmanship. Thus, they maintained genuine issues of material fact remain as to 

whether the property damage was an “occurrence” triggering coverage under the policy. 

{¶14} On September 19, 2013, the trial court issued its order granting appellee 

summary judgment. In the entry, the trial court noted that the parties conceded the 

claims for defective workmanship and mold are excluded from coverage. The court 

determined, however, appellants presented no evidence to support their position that 
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the Whites’ claims were not limited to defective workmanship or mold. The trial court 

reasoned: 

{¶15} In his deposition, one of the plaintiffs, Michael Regalbuto[, owner of 

appellant RB Construction], testified that the only injuries he was 

aware of complained of by the Whites were defective workmanship 

and mold. * * * The plaintiffs attach what appears to be an expert 

report to their brief in opposition that discusses problems with a 

home, although it does not identify what home. Even assuming 

that it is the home at issue in the underlying lawsuit, all of the 

issues identified in the report are defective workmanship. There is 

nothing in the report opining that the allegedly defective work 

caused some sort of consequential damage, other than mold 

growth. 

{¶16} The trial court consequently declared appellee was entitled to judgment as 

a matter of law. Appellants filed a timely notice of appeal and assign three errors for 

this court’s review, each of which challenge the entry of summary judgment. 

{¶17} Pursuant to Civil Rule 56(C), summary judgment is proper when (1) the 

evidence shows “that there is no genuine issue as to any material fact” to be litigated; 

(2) “the moving party is entitled to judgment as a matter of law;” and (3) “it appears from 

the evidence * * * that reasonable minds can come to but one conclusion and that 

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

made, that party being entitled to have the evidence * * * construed most strongly in the 

party’s favor.” A trial court’s decision to grant summary judgment is reviewed by an 

appellate court under a de novo standard of review. Grafton v. Ohio Edison Co., 77 
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Ohio St.3d 102, 105 (1996). “A de novo review requires the appellate court to conduct 

an independent review of the evidence before the trial court without deference to the 

trial court's decision.” (Citation omitted.) Peer v. Sayers, 11th Dist. Trumbull No. 2011-T0014, 2011-Ohio-5439, ¶27 

{¶18} To avoid redundancy in our analysis, the assignments of error shall be 

considered together. They provide: 

{¶19} “[1.] The trial court erred by granting Westfield’s motion for summary 

judgment because a genuine issue of material fact existed as to whether the claims in 

the White proceeding were covered under the policy. 

{¶20} “[2.] The trial court erred in holding that Westfield was not obligated to 

defend appellants in the White proceeding. 

{¶21} “[3.] The trial court erred in granting Westfield judgment on appellants’ 

claim for indemnification.” 

{¶22} Appellants’ assigned errors collectively assert there are genuine issues of 

material fact for trial regarding whether appellee was obligated, under the CGL policy, to 

defend and, later, indemnify them in the White proceeding. Resolution of this general 

argument requires this court to consider the CGL policy issued by appellee. It is well 

settled that a reviewing court, when confronted with an issue of contractual 

interpretation, must give effect to the intent of the parties. See e.g. Hamilton Ins. 

Servs., Inc. v. Nationwide Ins. Cos., 86 Ohio St.3d 270, 273 (1999). When considering 

an insurance contract, a court presumes the intent of the parties is manifested in the 

language of the policy. Kelly v. Medical Life Ins. Co., 31 Ohio St.3d 130 (1987), 

paragraph one of the syllabus. “When the language of a written contract is clear, a 

court may look no further than the writing itself to find the intent of the parties.” 
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Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216, 2003-Ohio-5849, ¶11. A contract is 

unambiguous as a matter of law if it can be given a definite legal meaning. Id.

{¶23} The insurance policy at issue in this case provides, in relevant part: 

{¶24} SECTION I - COVERAGES 

{¶25} COVERAGE A BODILY INJURY AND PROPERTY DAMAGE 

LIABILITY 

{¶26} 1. Insuring agreement 

{¶27} a. We 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. We will have the right 

and duty to defend the insured against any “suit” seeking those 

damages. However we will have no duty to defend the insured 

against any “suit” seeking damages for “bodily injury” or “property 

damage” to which this insurance does not apply. We may, at our 

discretion, investigate any “occurrence” and settle any claim or 

“suit” that may result. But: 

{¶28} * * * 

{¶29} b. This insurance applies to “bodily injury” and “property damage” 

only if: 

{¶30} (1) The “bodily injury” or “property damage” is caused by an 

“occurrence” that takes place in the “coverage territory;” 

{¶31} * * * 

{¶32} SECTION V – DEFINITIONS 

{¶33} * * * 
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{¶34} 3. “Bodily injury” means bodily injury, sickness or disease sustained 

by a person, including death resulting from any of these at any 

time. 

{¶35} * * * 

{¶36} 13. “Occurrence” means an accident, including continuous or 

repeated exposure to substantially the same general harmful 

conditions. 

{¶37} * * * 

{¶38} 17. “Property damage” means 

{¶39} a. Physical injury to tangible property, including all resulting loss of 

use of that property. All such loss of use shall be deemed to occur 

at the time of the physical injury that caused it; or 

{¶40} b. Loss of tangible property that is not physically injured. All such 

loss of use shall be deemed to occur at the time of the “occurrence” 

that caused it. 

{¶41} As indicated above, both parties acknowledge that the policy 

unequivocally excludes coverage from any bodily injury or property damage caused by 

mold. They also acknowledge that appellee’s rights and duties are not triggered under 

the policy by claims of faulty or defective workmanship. See Westfield Ins. Co. v. 

Custom Agri-Systems, Inc., 133 Ohio St.3d 476, 2012-Ohio-4712, syllabus (“Claims of 

defective construction or workmanship brought by a property owner are not claims for 

‘property damage’ caused by an ‘occurrence’ under a commercial general liability 

policy.”) Appellants assert the damages alleged by the Whites were not limited to claims 

for damages resulting from mold or defective workmanship claims, but also included 
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damages caused by the defective workmanship, i.e., consequential damages. 

Appellants specifically contend that there are issues of fact regarding whether the 

ongoing moisture and humidity events, which they contend are results of defective 

workmanship, are “occurrences” under the policy. 

{¶42} In the CGL policy under consideration, the word “occurrence” is defined as 

“an accident, including continuous or repeated exposure to substantially the same 

general harmful conditions.” The word “accident” is not defined in the policy. Hence, 

the term must be given its “natural and commonly accepted meaning.” Gomolka v. 

State Auto. Mut. Ins. Co., 70 Ohio St.2d 166, 167-168 (1982). This court has defined 

the term “accident” as follows: 

{¶43} “An ‘accident is an event proceeding from an unexpected happening or 

unknown cause without design and not in the usual course of things; an event that takes 

place without one’s expectation; an undesigned, sudden and unexpected event; an 

event which proceeds from an unknown cause or is an unusual effect of a known cause 

and, therefore, unexpected.” Westfield Cos. v. Gibbs, 11th Dist. Lake No. 2004-L-058, 

2005-Ohio-4210, ¶17 (quotation omitted). 

{¶44} The Ohio Supreme Court has also emphasized that “‘[i]nherent in the plain 

meaning of “accident” is the doctrine of fortuity. Indeed, ‘[t]he fortuity principle is central 

to the notion of what constitutes insurance * * *.”’” Custom Agri Systems, Inc., supra, at 

¶13, quoting Cincinnati Ins. Co. v. Motorists Mut. Ins. Co., 306 S.W.3d 69, 74 (Ky.2010), 

quoting Corpus Juris Secundum, Insurance, Section 1235 (2009). Applying this 

principle in the context of a contractor, “truly accidental property damage generally is 

covered because such claims and risks fit within the statistical abstract. Conversely, 

faulty workmanship claims generally are not covered, except for their consequential 
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damages, because they are not fortuitous.” JTO, Inc. v. State Auto. Mut. Ins. Co., 194 

Ohio App.3d 319, 2011-Ohio-1452, ¶31-32 (11th Dist.), quoting Ind. Ins. Co. v. Alloyd 

Insulation Co., 2d Dist. Montgomery No. 18979, 2002-Ohio-3916, ¶27-28. 

{¶45} In this case, the Whites’ causes of action were premised upon damages to 

the home resulting from ongoing moisture and humidity events. The issue, therefore, is 

whether these events, viewed in a light most favorable to appellants, can be construed 

as unexpected or “fortuitous.” We hold they are not. 

{¶46} Appellants rely significantly on the Vovk report to support their position. 

The trial court rightly pointed out that the report merely “discusses problems with a 

home, although it does not identify what home.” (Emphasis added.) And, even 

assuming that the home referred to in the report is the home at issue, the report does 

not appear to be competent evidence as contemplated by Civ.R. 56. To wit, it is not a 

pleading, deposition, answer to an interrogatory, a written admission, affidavit, transcript 

of evidence, or a written stipulation. Moreover, it is not referred to in an affidavit nor is it 

certified or sworn to. Assuming, arguendo, however, these deficiencies did not exist, 

the damage described in the report cannot be characterized as an “accident” and thus 

cannot be viewed as an “occurrence” under the policy. 

{¶47} A foreseeable and therefore non-fortuitous result of poor workmanship on 

a home is the infiltration of moisture and humidity. All of the damages that purportedly 

went beyond allegations of defective workmanship were ascribed to the infiltration of 

moisture and humidity. The Supreme Court of Ohio has observed that CGL policies do 

not exist to protect business owners against business risks, i.e., those risks that are the 

“‘normal, frequent, or predictable consequences of doing business, and which business 

management can and should control or manage.’” Custom Agri Systems, Inc., supra, 
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¶10, quoting Columbia Mut. Ins. Co. v. Schauf, 967 S.W.2d 74, 77 (Mo. 1998), quoting 

James T Hendrick and James P. Wiezel, The New Commercial General Liability Forms 

–An Introduction and Critique, Fedn. Of Ins. & Corporate Counsel Quarterly 319, 322 

(Summer 1986). Instead, 

{¶48} [c]ourts generally conclude that the policies are intended to insure 

the risks of an insured causing damage to other persons and their 

property but that the policies are not intended to insure the risks of 

an insured causing damage to the insured’s own work. [Id.] In 

other words, the policies do not insure an insured’s work itself; 

rather, the policies generally insure consequential risks that stem 

from the insured’s work. Custom Agri Systems, Inc., supra, ¶10, 

quoting Heile v. Herrmann, 136 Ohio App.3d 351, 353 (1st 

Dist.1999). 

{¶49} Accordingly, a CGL policy “‘does not cover an accident of faulty 

workmanship but rather faulty workmanship which causes an accident.’” Alloyd 

Insulation Co., supra, at ¶29 quoting Weedo v. Stone-E-Brick, 81 N.J. 233, 249 (1979). 

{¶50} In his deposition, appellant Michael Regalbuto, appellants’ representative, 

testified the only allegations of which he was aware in the White litigation were those 

related to his company’s “bad work.” And, while the ongoing moisture and humidity 

problems may be consequences of this “bad work,” the record is devoid of any evidence 

that these events were anything other than “an accident of faulty workmanship” in this 

case. 

{¶51} Moreover, moisture and humidity events are within the gamut of “business 

risks” a contractor must contemplate in the course of building a structure. The ongoing 
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moisture and humidity events were, accordingly, predictable consequences of poor 

workmanship, which appellants could have controlled during the building process. We 

therefore conclude any property damage upon which the Whites’ causes of action were 

premised, beyond that which was clearly excluded by the policy, did not involve 

“occurrences.” As a result, we hold, as a matter of law, appellee had no duty to defend 

and has no duty to indemnify appellants under the CGL policy. 

{¶52} Appellants’ three assignments of error are without merit. 

{¶53} For the reasons discussed above, the judgment of the Lake County Court 

of Common Pleas is affirmed. 

THOMAS R. WRIGHT, J., 

COLLEEN MARY O’TOOLE, J., 

concur.