* Da nie l M. Frie dman, Ci rcui t Ju dge of the Unit ed Sta tes Court of Appeals for the Federal Circuit, sitt ing by designati on.
1 RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Six

th Circuit Rul e 206

ELECTRO NIC CIT

ATION: 2004 FED App . 0128P (6th C ir.) File Name: 04a01 28p.06



### UNITED STATES COURT OF APPEALS

FOR THE SIXT H CIR CUIT

_________________
T OLEDO -LUCAS C OUNTY P ORT A UTHORI TY ; C ORE GIS I NSURANCE C O ., Plaintiffs- Appellant s,

v.

A XA M ARINE & A VIATI ON I NSURANCE (UK), L TD ., et al., Defenda nts-Appe llees. X - - - -
> , - - - - - - N No. 02-4120

Appeal from the United States District Court for the Northern District of Ohio at Toledo. No. 99-07320—James G. Carr, District Judge.

Argued: March 11, 2004 Decided and Filed: May

6, 2004

Befor e: MOORE, SUTTON, a nd FRI EDMAN, Cir

cuit Judges. * 2 Toledo-Lucas County, et al. v. Axa Marin e, et al. No. 02-4120

_________________ COUNSEL

ARGUED: Steven R. Sm ith , CONNELL

Y, JACKSON & COLL IER, Toledo, Ohio, M. Charles Collins, EASTMAN & SM IT H LTD., Toledo, Ohio, for Appellants. Jack C. Hsu , CHRISTENSEN

& EHRET, C h icago, Illinois, Stephen D. Hartm a n, KERGER & KERGER, Toledo, Ohio, for Appellee s. ON BRI EF: Steven R. Smith, Janine Thompson Avila, Tammy Geig er Lavalette, CONNELL Y, JACKSON & COLLIE R, To led

o, O hio , M. Cha

rle s Col lins , Ro ber

t J. Gil m er, Jr., EASTMAN & SMITH L TD., Toledo, Ohio, for Appellan ts. Jack C. Hsu, Kirsten R. Waack, CHRISTENSEN & EHRET, Chicago, Illinois, Stephen D. Har tman, Richard M. Ke r ger, KERGER & KERGER, Toledo, Ohio, Mark E. Christensen, CHRISTENSEN & EHRET, Chicago, Illi nois, for Appe llees.

_________________

OPINION

_________________ SUTTON, Circu it J udge

. At issue in this insurancecovera ge dispute

is th e s co pe of

a “ Po rt s Li ab il it y Po li cy” (the “P oli cy”)that the T oledo-L ucas Coun

ty Port Author

ity purchased

froma group of insurance companies in 1994. The Policy covers, among o ther thing s, “Public Officia ls Liability ,” which is def

ined as “ any

actual or alleg ed act, error,

. . . omission and/or breach of duty by

an officer and/or

. . . employee [of the Port Authority] . . . i n the discharge of his/her duties . . . and clai

med aga inst him /her sol ely by
reason of his/her capacity

as such with

[the Port Authority].” This appeal presents two questions abo ut the scope of the provis ion: (1) whether the Public Officials L iability portion of the policy covers the Port Aut hority as well as Port Au thorit y officials and employe es, and (2) if so, whether aNo. 02-4120 Toledo-Lucas County, et al. v. Axa Marin e, et al. 3

formal c laim or de

mand must

be made against an individual official or employee

in order for the Port

Authority to invoke the coverage. The better reading of the Policy, in our view, is that it cov ers the Port Auth ority as well a s Port Authority offi cers a nd employ

ees and t hat a for mal deman

d or clai m agains tan individual official is not a con diti on of coverage. Becau se the district court held otherwise and granted summary judgment in favor of the defendant insurance companies on this basis, we revers e the judgment below and remand the case for fur th e r proce edings c onsistent w ith this opinion.

I.

A.
The Toledo Cou nty

Port Authority

is a public

entity organized under Ohio la w. See Ohio Rev. Code Ann. § 4582.01 et seq. In 1 99 4, th e P or t A ut ho ri ty p urc hased a “Ports Liability

Policy” from the L

ondon Companies—a group of 12 insuran ce comp anies locat ed in s everal forei gn countrie s. The Policy identifies the following as the insured parties:

ASSURED : Toledo-L

ucas Coun

ty Port Author

ity and as per Endorsement No.1.
JA 948. Endorsement N o.1 in turn states:

It is hereby un

derstood and ag reed th at the Named Assured shall read:

TOLEDO -L UCAS COUNTY PORT AUTHORITY AND ANY SUBSIDI AR Y, ASSOCIATED , AFFIL IATED COMPANIES OR OWNED AND CONTROLL ED COMPANIES , T HEIR DUL Y ELECTED AND AP PO INTE D OF FICIA LS , COMMI SSION

ERS, OFFICERS, EMPL OYEES AND 4 Toledo-Lucas County, et al. v. Axa Marin e, et al. No. 02-4120

V OLUN TEERS WHILE WORKI NG FOR AND ON BEHALF OF

THE PORT. All other terms and conditions remain unchanged.

JA 947. The Certificate of I nsurance similarly sa

ys that th e P olicy is “[ i] n f

av or of [t he ] T ol ed o- Luc as Co un ty Por t Authority and as per

Endorsement No. 1.” JA 946.
The Policy

also inclu

des a form definition of “Assured,” whichprovides that “[t]he unqualified word ‘Assured ’ ”
means: (a) The N amed Assured and/or subsidiary , associated,
a ffiliated companies or owned and controlled com panies , their d uly electe d and app oin ted offic ials , commissioners, office

rs, emplo yees and voluntee rs while working for and on behalf of thePort, as now or hereafter constituted . . . (b) any officer, d irector, commissioner, stockholder , partner or employee of

the Named Assured, while acting in his capacity as suc

h . . . .

JA 951–52.
Givenan effe ctive da

te of May 22, 1994 t hrough May 22, 1995, the Policy

provides (1) occurrence-ba sed coverage for bodily inj u ry, persona

l injury, property

damage, advertising liability and addi ti onal expenses and (2) claims-made
covera ge for public officials liability. Occ urrence -ba sed
covera ge applies when “a negligent or omitted act occurred during the per iod of the

policy , whatev er the da

te of cla im
a gainst the insur

ed,” whi le claims -made c overag e applie s when “a neg ligent or omitted a

ct is discovered a

nd broug ht to the attention of the insurance company during the period of the policy, nomatter when the act occurr ed.” 1 L ee R. Russ & Thomas F. Segalla, Couch on I nsu rance § 1:5 (3d ed.No. 02-4120 Toledo-Lucas County, et al. v. Axa Marin e, et al. 5

2003); see St. Pa ul Fire

& Marine

Ins. Co. v. Barry , 438 U.S. 531, 535 n.3 (1978).
The cor e promise of the Poli cy

states:

I. INSURI

NG AGREEMENTS :
1. COVERAGE

In the eve nt of an occurrence happening during the annual period of t

his policy

but, in re spect of

Public Officia ls Liability

in the event that notice of an
occurrenceis first

made in writing by a

nd/or against the Assured and received by

Underwr iters or U nderwr iters’ representatives set forth

in Ite m 4 of the D ecla

rat ions during the annual period

of this policy, Underwrit

ers will payon behalf of the Assured for that a mount of Ul

timate Net Losswhich the

Assured shallbe obligated to pay

by
re as on of th e l ia bi li ty: (a) Imposed

upon the Assured by law , incl udin g all Protectionand I

ndemnity ri sks of whatsoever nature . . . for damages on account of : (i) Bodily I

njury (ii) Personal Injury (iii) Prope rty Damage (iv) Advertis ing L iability (v) Public Off

icials Liabi lity (vi) Additional Expenses 6 Toledo-Lucas County, et al. v. Axa Marin e, et al. No. 02-4120

caused by or arising

out of any occ

urrence a t a ny of the Assured’s premises, and/or by ope rat ions and/or activities anywher

e in the world. JA 950 ( emphasis

added).
After stating the insur ance companies’ promise to “pay on behalf of th e Assure d . . . for damages on account of . . . Public Officia

ls Lia bil it y,” the Policy

specifically de fines “Public Officials Liability ”:

6. PUBLI C OFFICI

ALS LI ABIL ITY
The words “Public Officials Liability ”, wherever used he rein, shall mea

n any actual or alleg ed act, e

rror, mis

statemen t, neglec t, omission a

nd/or bre ach of du

ty (incl udin g, but not limited to, misfeasance, malfeasance and/or non-feasance) by

an officer and/or

commissioner and/or employee and/ or committee member in the dis charg e of his/he

r duties a s such and

claimed a

gainst him/her solely by reason of his/her capacity as suchwith
a port or harbor commission named herein. Notwithstanding when the actual or alleged event

giving rise to a claim under this section of the policy may

have or be deemed to have occurr ed, Unde rwriters shall only be liable for a cl aim of which the/an As sured fi

rst receiv es, within the term specified in this policy, written notice from a

ny party intending

to hold the/an Assured responsible for any

wrongful act as enumerated a bove.

JA 953.

Inview of the Policy’s $3 million limit, the Port Au thority purchased

additiona

l insu ranc e. Th e fir st exc es s policy was issued by a g roup of insura

n ce companies (the “Naviga tors Group”) composed of Navigators I nsurance Company , The Reinsurance Company of New Y ork, Christiana General Insurance Corpora tion of Ne

w York, Co lonia

Insu ranceNo. 02-4120 Toledo-Lucas County, et al. v. Axa Marin e, et al. 7

Co mpa ny, Employers Mutual Casualty Company and Farmers M utual Hail Insurance Company of Iowa. The second excess policy was issue d b y Coregis Insuranc e Co mp an y.
B.

Between 1993 and 1998, several lawsuits werefiled ag ainst the Port Authority concerning the operation of the Toledo Express Airport—more spe ci fically , conce rning the noise create d by

Burling ton Air Expr

ess’s fli ghts in and

out of the airport. The first of these lawsuits was filed in June 1993 by Joseph and Winifred Kagy and several other citiz e ns of FultonCounty, Ohio. The Kagy plaintiffs claimed nuisance, inv ers e condemnation and violations of equal protection by the Port A

ut hority, but did not allege a ny specific w

rongful acts by Port Authority employ

ees and did not name any Port Authority employ ees as de fendant s.
OnJuly 20, 1994, Richa r d and Jane McQuade filed a second lawsuit, w

hic h d id name individual Port Author ity employees as well as the Port Authority

itself as defe ndants. The complaint alleged that the named employ ees (a nd oth er unnamed e

mploy ees) of the Port Authority committed fraud and other wrongful acts in e

nticing Burling ton Air Expr

ess to establish a hub at the Toledo Express Airport. The complaint further alleged that

the Port Authority employ ees acted a

t all times as agents of

the Port Au

thority, that the

Port Authority acted b y a nd throug

h its employ

ees, and that the Po r t Authority was l iable for the intentional, reckless and/or neglig ent acts

of its empl oye es.
Within days of the filing

of the McQuade lawsuit, the Port Authority notified the London Companies of the suit and asked the London Compani es to deter mine whet

her the s uit
was covered

by the Policy, including its provisi on for Pub lic Officia ls Liability

coverage. The London Companies withheld covera ge, as serting

that the Po lic y did n ot cover 8 Toledo-Lucas County, et al. v. Axa Marin e, et al. No. 02-4120

liability arising from “airport activities.” All parties now agree that the stated reason for withholding coverag e was incorrect and th at P ubl ic O ffi cia ls Li abili ty covera ge under the Policy does incl ude airp ort activ

ities.

Numerous other lawsuits followed, al l containing similar allegations against the Port Authority a nd many of it s individual employees. Af ter McQ uade , even the Kagy plaintiffs amended

their complaint to include allegations and claims against individual Port Authority employ ees as well as the Port Authority itself. By February 8, 1996, however, all of the claims against the individua l Port Authority employ ees had been dismissed

for failure to state a

claim, le aving only

the claim s a gai nst the Po rt Au th or it y. In September 1999, face d with animminent state-court

jury trial on the i ss ue of damages to the prope

rty owners, the Port Authority settled the remaining claims for $4.6 million.
While this settl eme nt ended the noise-related litigation agains tthe PortAuthority , it did not end the

covera ge dispu te between the Port Authority and its insurer s. Without adm itting liability, the L ondon Companies paid the P or t Authorit y’s a ttorney’s fe es and defense costs for the period during which cla

ims were

pending agains t individual employ ees, but refused to pay

fo r any thing af ter the c laims agains tthe individual employees had be endis missed in February 1996, including any

of the $4.6 million

settleme nt. The excess insurance provider s, t he Navigators Group and Coregi s, followed suit, refusing to p rovide coverage under their poli cies.No. 02-4120 Toledo-Lucas County, et al. v. Axa Marin e, et al. 9

C.

OnMay 21, 1999 , the P ort Authority filed this state-law diversity lawsuit agains tthe London Companies, Navigators and Coregi s, claimin

g th at the companies had reneged on their insurance obligations. As this is a suit between citizens of different Stat e s and countries—the Port Authority is an Ohio public entity, Coreg is is an Indiana corporation

with its principal place of

business i

n Illi nois, the London Companies
are organized and

headq uarter ed in f

oreign countries and the Navigators Group is composed of companies organized and having principa l places of busine ss in NewYork, Cal ifornia and Iowa —diversi ty ju risdiction exists unde

r 28 U.S.C. § 1332. After the filing of this lawsuit, Coregis agr eed t o provide cover age a

nd paid $3.45 million of the cost of the settleme nt. After providing this coverage , Coregis realigned itself as a co-plaintiff i n the case, then claimed that Navigators was res ponsibl e for the entire amount paid by Coregi s. The Port Authority and Coregi s eventua

lly amended their joint compl aint to ad

d a claim o f bad fa

ith denia l o f
covera ge. Both sides mov ed for su mmary judgmen t.
OnMay 9, 200 1, th e dist rict c ourt gr ante d summary judgment infavor of the London Companies and Navi gators

. Inthe district court’s view, the Public Off

icials L iability provision appli es only to claims aga inst individual employee s, not t o claims against the Port Authority as an en ti ty. Toledo-Lucas County Port Authority v. Axa Marine & Av iation Ins. , 147 F. Supp. 2d 849, 852 (N.D. Ohio 2001 ) (“[O ]f the enume

rated ‘ Ass ured s’, only individual persons receive covera ge for act s under [th e Public O fficial s Lia bi li ty] portion of the policy.”) . Acknowledging that under Ohio law ambiguous provisions of

an in surance policy

drafted by

the insurer must be construed i

nfavor of the insured, the court held that the terms of the Policy were clear and

unambig uous. “The langua

ge req uires two

things,” the dist rict c ourt reasoned: “first, a[] [wrongful] act by one or some individuals

. . . , and se cond, a c laim

against those individuals by r eason 10 Toledo-Lucas County, et al. v. Axa Marin e, et al. No. 02-4120

of their ca pacit y as a port or harbor officer, commissioner, employee, or committee member.” Id. “By specifying

that an act be carried out by

an individual, and

that a claimant make
a demand of that individual,” the court co nt inued, the term “‘Assured’” under the

Pu bli c Offic ials Li abili ty coverage “refers to any

of the enumerated assureds who are individua ls rather than entities.” Id. at 853. Bolsteringthis interpretation, the district court explained, is the Policy’s form definition of the term “Assured,” which includes “[t]he Name d Ass ured a nd/or ” a number of other parties. Id. The cou rt concluded that “the term ‘Assured’ cannot always be pr

operly substituted by

‘Port Authority’, as the word ‘or ’ convey

s. ” Id. Lastly , “[b]ecause . . . the London Companies ’ public o fficial s covera ge is not invoked in this case,” the court reasoned that “there can be no excess public officials liability under the Na vigators’ policy .” Id.

Ina separate order, the district court g ranted summary judgm ent to the London Companies and Naviga tors on the bad-fa ithclaims, reasoning

tha t without the possibility of
covera ge in the fir st instanc e, Ohio la w recog nizes no cl aim fo r bad faith denial of coverage . The court entered a fina l judgmen t in favor of the de fendant s.
Plai ntiff s timely appeale d the distr

ict cour t’s judg ment, whichwe review de novo. See Hen ry v. W ausau Bus. Ins. Co. , 351 F.3d 710, 713 (6th Cir. 2003).

II.
The parties a

gree t hat Ohiolaw governs this dispute. When the “terms of an

insurance policy

are clear and unambiguous,” Ohio law requ

ires a c ourt to “a

ppl[y] [them] to th e facts withoute ngagi ng in any construction.” Ledyard v. AutoOwners Mut. Ins. Co. , 739 N.E.2d 1, 3 (Ohio Ct. App. 2000) (citationand quotation om itted). Conversely, whe n the insur er has drafted the contract and the “provisions of aNo. 02-4120 Toledo-Lucas County, et al. v. Axa Marin e, et al. 11

contract of insurance are reasonably susceptible of more than
one interpre

tation,” a court m

ust “cons true[] [the te

rms] strictly against the insurer and liberally in favor of the insured.” King

v. Na tionwide Ins. Co. , 519 N.E.2d 1380, 1383 (Ohio 1988).
Withthese canons of constr uction in mind we mus t addres s two questions in this case: (1) whether the Public O fficial s Liab ility po rt io n o f t he Po li cy c ove rs the Por t Authorit y in ad dition to Port Authority officials; and (2) if so, whe ther a for mal clai m or demand must have been made aga inst an individual official or employe e in order for the Port Au

thority to obtain coverage.

A.
The first questionlends itself to a relatively stra ightforward analy sis. The Policy’s core

promise is made by t

he insure r to “the Assured.” The insur er promis es to “pa

y on behalf of the Assured” for

net losses “which the Assured shall be obligated to pay by reason of the liability [] imposed upon the Assured

. . . for damages on account of . . . Public Officials Liability .” JA 950. “Public Officials Liability ” coverage, then, cove

rs notjust “Public Officials,” but any “ Assured” who has to pay da ma ge s o n a cc ou nt of

Pu bl ic Of

fi ci al s Li ab il it y.
One such “Assured” under the Policy is the PortAu th or it y. T he Certi ficate of Insura

nce says so; Policy

Page 1 say s so; and the gen eric de finition of

“Ass ured” c ontained in the Policy says so. As such, the Port Authority en joy s P ublic Officials Liability

coverage. Attempting to c ounter this ana lysis, the defendant insura nce companies point out that the lang uage “ and/or”

in clause (a) of the gener ic definition of “Assured” indicates that the term has different

meanings depending

on the con

text in which it is used. Sometimes the term refers to the “Nam ed Ins ured” (the Port Authority

), and som

eti mes it refers to the other 12 Toledo-Lucas County, et al. v. Axa Marin e, et al. No. 02-4120

parties listed in c la use (a)—namely , the Port Authority’s “s ub si di ar y, associated, affiliated com pani es or owned and controlled

companie s, their d

uly elec ted and appointed officia ls, commissioners, officers, employ ees and volunteers while working for and on behalf of the Port.” JA 947. When it comes to Public Officials Liability , t hey arg ue, the term “Assured” refers only

to Port Authority employ ees and officia ls.
This argument, however, ignore s several more telling clues to the contract’s meaning. First and for emost, it igno r es the
more specifi c l anguage inserted in the Cer tificate of Insurance, in Policy Page 1 a nd in Endorsement

No. 1, all of whichiden tif

y the Port Authority

as an “Assured” without lim itation. Ohio law makes it c lear tha t if two contr ac t provisions are inconsistent, the specifi c, typed portion of a contract will prevail over the gene ric, f orm portion. See Malcuit v. Equi ty Oil

& Gas Funds, I

nc. , 610 N.E.2d 1044, 1046 (Ohio Ct. App. 1992). Second, the defe

ndants’ p osition ignores clause (b) of the gener ic definition of “Assured,” which specifically ide

ntifies “any off icer, director, commissioner, stockholder, partner or employee of the Na med Assur

ed, while acting inhis capaci

ty
as such,” a s an “Ass

u red.” JA 952. The identification of employees

of the Port Authority in clause (b) indicates that the “employee s” referred to in clause (a) —the clause to which the “and/or” language

appl i es —a re em pl oye es of “s ub si di ar y, ass oci ated, affiliated companies.” So while the disjunctive “or” (or, mor

e preci sely , “and/or

”) is use d with in clause (a), the Policy does not say

whether clauses (a), (b) and the others
are disjunctive or

conjunctive as they r

elate to each

ot her . In the absence of an “and” or an “ or,” or even an “and/or” betwe en any of the c lauses, the use of the word “includes”—as in, “[t]he unqualified word ‘Assured’, wherever used in [the] Policy, Includes ” the parties identified inclaus es (a) t hrough (d), J A 951– 52—su gge sts th at we
s hould read the clauses conjunctively . Doing so, the PortNo. 02-4120 Toledo-Lucas County, et al. v. Axa Marin e, et al. 13

Authority (identified in clause (a)) and it s employees (identified in clause (b)) are eac h an “Assured” for purposes of Public Officials Liability coverage.
This reading

of the pol icy

not only accord s with its te

rms and the pertinent rules of construction but it also accords with
commons ense. I

t is hard to

imagine the Port Au

thority decidingto purchase cover age for its employees but not for itself in this setting, and indeed the defend ant insurance companies have off

ered no r eason wh y a gover nmental e ntity would purchase su ch a polic

y. B ecause

state law gener ally immunizes gover

nmental e mploy ees act ing withi nthe scope of their emp loy

me nt from liability for damag es, the only functionof pub l ic officials liability cover age in most cases will be to in sur e the governmental entity itself. Compare Ohio Rev. Code Ann. § 2744.03(A)(6) (immunity f or employees

of political subdivisions), with id. § 2 744.02 (B) (liability of politic al subdivi sion for d amage s cause d by

th e wrongful acts of it s employees). Cf. City of Ste rling Heig

hts

v. United Nat’l Ins. Co. , No. 03-72773, 2004 WL 252091, at *6–8 (E.D. Mich. Feb. 11, 2004) (holding that i nsurance companies had a duty to de fen d and indemnify the City and
a public offici al under public officials liability c overage); Continental

Cas. Co. v. County of Chester , 244 F. Su p p. 2d 403, 405–06 (E.D. Pa. 2003) (hol ding t hat the insurer had a duty to defen d and inde

mnify the County

agains t civil rig

hts claims under its public officials liability cover age).

Inthe final analysis, ha

d the parties intended the Policy (oddly enough) to cover employ ee s for Public

Officia ls Lia bi li ty, bu t no t the Port Authority itself—an intention capable of being simply stated—one would expect more clarity on the poin

t t han this Policy provides. Having failed to provide the requisite clarity , the author of t he Policy, the defendant London Companies, cannot now overcome the ambigui ty- default canon of construction, which requires us to give the Port Authority the benefit of the doubt a nd read the 14 Toledo-Lucas County, et al. v. Axa Marin e, et al. No. 02-4120

Policy to cover the Port Au

thority and its employee s for Pu bl ic Of fi ci al s Li ab il it y.
B.
The second question is whether t he Port Authority may
recover “for damages on account of . . . Public O fficial s Lia bi li ty” only if a claim has a lso been made against an individual official. In our view, the Policy in gene ral and the definition of “Public

Officia ls Lia bi li ty” in particular do not provide a natural home for

such a limi

tation, a nd at all e vents th e am biguity of this interpre tation precludes us from construing th e P olicy in favor of its dra fter, the London Companies

. The Public Officials Liability provision requires an

“actual
or allege d” wrongdoing “

by a n office r [or] . . . em

ployee” “in the discharge of his/her

duties as such” and

“ claimed a

gainst him/her solely by r eason of his/her c apacity

as su ch w ith a port or h arb or c ommi ssion na

med her ein .” JA 953 (emphas is added). As an initial matter, the Policy nowher e defines the ter m “claimed.” Nor do dictionary definitions resolve th e question. One fre quently -used de finition ( “[t]o deman d, ask for, or take as one’s own”) sugg es ts that t he Policy require s a lawsui t to be filed or a demand for money to be made again st a n employee, while the other frequently-used definition (“[t]o state

to be true . . . [or to] assert or maintain”)
su gges ts that an a

llegat ion of wrongdoing

by a n emp lo ye e contain edi n a lawsuit against the Port Authority alone suffices to invoke coverage. The Am. Heritage Dictionary of the English Language 341 (4th ed. 2000).
The context in which the wo rds appear, however, undermi n es the defe

ndant insu

rance c ompanies ’ argu

ment. The phrase “claimed against” modifies “any a ctual or alleged act [or] error.” The only de finition of “claimed” that makes sense in this setting is the second one (“[t]o state to be true .

. . [or to] assert or

maint ain” ) bec ause

“ac t[s]” a

nd “e rror [s]”No. 02-4120 Toledo-Lucas County, et al. v. Axa Marin e, et al. 15

are asserte d a gainst e

mploy ees, not d

emanded of them. Indeed, in each of the five instances in which the verb “claimed” appears in the Policy, the words “alleged,” “asserted” or “main

tained” can be su

bstituted w

itho ut noti ceably alt ering t he mean ing.
Nor, contrar

y to the defe

ndant insu

rance c ompanies ’ position, does thisinterpretation render the “cla imed ag ainst” langua ge “superfluous.” The provision requires wrongdoing “claimed against [an employe e] s olely by reason of

his/her capaci ty as such.” JA 953 (emphasis added). As th e “ so le ly” langua ge suggests, this provision is designed to preclude coverag e wh en a plaintiff sues the Port Authority or an employee fo r d am ag es ca us ed by a n e mp lo ye e wh o is not actingsolely

in an off

ic ial c apacity

, which is a

perfectly under standabl e exclusion and one that gives content to t h e “claimed against” languag e an d to t he “asse rted” a gainst interpretation

of it offered by

the Port Authority. W ere the pointof this language to exclude coverage when a plaintiff decides to sue the P ort Authority for its employ ee’s wrongd oing, one would not expe c t such a significant limitation on cov erage

to be tuck

ed away in a phra se address ing the c apacity

in which the employ

ee acts

. Also unavaili

ng is the argume nt th at “o f t he ov er tw en tyfive times tha t the words ‘claim’ or ‘claims’ appear in the po li cy, never a

re they used as a

substitu t e for ‘alleged’ or ‘assert.’” London

Companies ’ Br. a

t 29. I n those ins tances, the words “claim” and “cl aims” ar e used as nouns ( e.g. , requiringthat a claim be made by the Port Authority ), not as verbs ( e.g. , requiri ng an act or error cla imed against an
em ployee). Had the London Companies used the nou n “claim” instead of the verb “claimed” in this provision, we quite agree t hat the de finition of Public Off

icials L iability might mean wha

t th ey s uggest it means—liability resulting solely from claims made against an emp lo ye e. But th ey did not use that language. 16 Toledo-Lucas County, et al. v. Axa Marin e, et al. No. 02-4120

The London Companie s also err in sugge sting tha

t this interpretation

creates a form of cove rage t hat swee ps so broadly that it would make the other forms of coverage under t he Po li cy ( e.g. , Bodily I njury and Personal I

njury ) unnecessary

because any allega tion aga inst an en

tity is inheren tly one based upon the c onduct of its individual employ ees. This argument misses the mark because the other provisions do not con

ta in th e limitation that the Public Officia ls Liability

provision has—na mel y, wrong doing alleged against an employ ee.
Inthe end, w h ile we be lieve this interpre tation re present s the better reading

of the policy, the best that c an be said of the defendant insurance companies’ contrary arguments is that they raise an ambiguity

on the point. And un der those circumst ances, as noted

above, O hio law re quires us to apply the ambiguity-de fault canon of construction an d to give the PortAuthority the b enefit of the dou bt. Public O fficial s Liab ility coverage, accord

ingly, does not necessa

rily require
a claim or demand to be made against an individua l employee; a claim or

demand a

gain st the Port Authority for damages on account of

an individual employee’s w rongdoing solely in his or he

r capac ity a s a Port Au

thority employ ee will suffice.

III. The parties have briefed severa l other issues that the district courtdi d not have an opportunity to addr ess in view of th e court’s ruling that the Port Autho rity is not an Assured under the Policy and that a lawsuit or dema nd made agains t an individual employ

ee is a pr

econditi on o f coverage. The districtcourt

did not decide whether the statute of limitations bars any of these

claims; whether the Kagy lawsuitsprovided notice of a Public Officials Liability claim before the effective date of th e P ol ic y, thus pr ec lu di ng co ve ra ge un de r t he Po li cy; and whether the NavigatorsGroup owes coverage to the Port Au th or it y. And what

the district c ourt else where d idNo. 02-4120 Toledo-Lucas County, et al. v. Axa Marin e, et al. 17

decide—that

the defendants were entitled to summary judgment on the bad-faith claims and that Coregis lacked standing to bring a bad-faith claim against the London Companies—was premised on the cou

rt’s initi al ru ling that the Pu blic Officials Liability portion of the Policy did not insure the Port Authority. Since we disag ree with that premise and since the di strict court did not reach the other issues, we le ave it to the distri ct court to addre ss these questions in the first instance.

IV.

For the foregoing reasons, we rev erse the district court’s judgment and rema

nd the ca se for f

urthe r proce edings consistent with this opinion.