[Cite as Motorists Mut. Ins. Co. v. Ironics, Inc., 2020-Ohio-137.]

IN THE COURT OF APPEALS OF OHIO 

SIXTH APPELLATE DISTRICT 

 WOOD COUNTY 

Motorists Mutual Insurance Company Court of Appeals No. WD-19-018 

 

 Appellee Trial Court No. 2017CV0431 

v. 

Ironics, Inc., et al. 

 Appellants 

v. 

Mercy Komar, et al. DECISION AND JUDGMENT

Third-Party Defendants Decided: January 17, 2020 

* * * * * 

 Merle D. Evans, III, for appellee. 

 Theodore M. Dunn, for appellant Ironics, Inc. 

 John Siciliano and John K. Nelson, for appellant Owens-Brockway 

 Glass Container, Inc. 

* * * * * 
2.

 

 ZMUDA, P.J. 

I. Introduction 

{¶ 1} This is an appeal from the judgment of the Wood County Court of Common 

Pleas, granting summary judgment to appellee, Motorists Mutual Insurance Company, in 

its declaratory judgment action against appellants, Ironics, Inc. and Owens-Brockway 

Glass Container Inc. Because we find that Ironics is entitled to insurance coverage and a 

defense, we reverse. 

A. Facts and Procedural Background 

{¶ 2} This appeal involves the determination of whether Ironics is entitled to 

insurance coverage under the terms of an insurance policy issued by Motorists, which 

contains a Commercial General Liability Coverage Form (the “CGL policy”) and a 

Commercial Umbrella Coverage Form (the “umbrella policy”). Ironics is the insured 

party under the policy. The relevant background facts set forth herein are taken from 

stipulations submitted to the trial court by the parties prior to the court’s decision granting 

summary judgment to Motorists. 

{¶ 3} During the fall of 2016, Ironics sold tube scale to Owens-Brockway pursuant 

to three separate purchase orders. Unbeknownst to Ironics, the tube scale, which Ironics 

had acquired from American Waste Management,1

 contained a large number of chrome 

RHM stones that were inadvertently mixed into the tube scale by American Waste 

 

1

 American Waste Management is not a party to these proceedings.
3.

Management, thereby rendering them nonconforming under the terms of the purchase 

orders. Owens-Brockway unwittingly incorporated the nonconforming tube scale into its 

glass products, which rendered the glass bottles unusable. Owens-Brockway discovered 

the defect prior to placing the bottles into the market. Because the damage done to the 

bottles is irreversible, Owens-Brockway alleges that it was required to scrap in excess of 

1,850 tons of contaminated glass containers. 

{¶ 4} As a result of the losses it sustained due to Ironics’ supply of nonconforming 

tube scale, Owens-Brockway asserted a claim against Ironics on January 20, 2017, 

alleging breach of contract, negligence, U.C.C. violations, and product liability.2

 

Thereafter, Ironics referred the matter to Motorists, seeking to obtain defense and liability 

coverage under the CGL and umbrella policies. On August 28, 2017, Motorists filed a 

complaint with the trial court, requesting a declaratory judgment that it owes no duty to 

defend or indemnify Ironics against Owens-Brockway’s claims arising out of Ironics’ 

supply of nonconforming tube scale. 

{¶ 5} Following pretrial motion practice, the parties each filed motions for 

summary judgment. Appellants argued that Motorists was obligated to provide liability 

and defense coverage under the CGL and umbrella policies to cover Owens-Brockway’s 

claim against Ironics. In response, Motorists argued that Owens-Brockway’s claim was 

 

2

 Notably, Owens-Brockway has not yet filed suit against Ironics for the recovery of its 

losses. Thus, we are confined in our analysis to Owens-Brockway’s allegations as recited 

by the parties in their stipulations. 
4.

outside the scope of the policies and therefore its liability and defense obligations were 

not triggered. The trial court ultimately agreed with Motorists, granted Motorists’ motion 

for summary judgment, and denied appellants’ motion for summary judgment. 

Appellants then filed a timely notice of appeal. 

B. Assignments of Error 

{¶ 6} On appeal, appellant assigns the following errors for our review: 

Assignment of Error No. 1: The trial court committed reversible 

error by determining that the damages claimed by Owens-Brockway do not 

constitute “property damage” as that term is defined in the insurance 

contracts purchased by Ironics. 

Assignment of Error No. 2: The trial court committed reversible 

error by determining that [Ironics’] unintended act of providing allegedly 

defective tube scale is not accidental in nature and does not constitute an 

“occurrence” as that term is defined in the insurance contracts purchased by 

Ironics. 

Assignment of Error No. 3: The trial court committed reversible 

error by determining that Owens-Brockway’s claims against Ironics fall 

within one or more of the exclusions contained in the insurance contracts 

purchased by Ironics. 

Assignment of Error No. 4: The trial court committed reversible 

error by determining that because insurance coverage has not been 
5.

triggered, Motorists has no duty to defend Ironics in any dispute, whether in 

court or in arbitration, relating to Ironics’ sale of tube scale to OwensBrockway. 

{¶ 7} Because all of appellants’ assignments of error are interrelated, we will 

address them simultaneously. 

II. Standard of Review 

{¶ 8} “We apply the de novo standard of review to a decision granting or denying 

a motion for summary judgment based on an insurance contract.” Westfield Ins. Co. v. 

Hunter, 128 Ohio St.3d 540, 2011-Ohio-1818, 948 N.E.2d 931, ¶ 12. Under the de novo 

standard, we undertake our own independent examination of the record and make our 

own decision as to whether the moving party is entitled to summary judgment. Dupler v. 

Mansfield Journal, 64 Ohio St.2d 116, 119-120, 413 N.E.2d 1187 (1980). 

{¶ 9} Summary judgment is appropriate when (1) no genuine issue as to any 

material fact exists, (2) the party moving for summary judgment is entitled to judgment 

as a matter of law, and (3) viewing the evidence most strongly in favor of the nonmoving 

party, reasonable minds can reach only one conclusion, and that is adverse to the 

nonmoving party. Civ.R. 56; Harless v. Willis Day Warehousing Co., 54 Ohio St.2d 64, 

66, 375 N.E.2d 46 (1978). 

{¶ 10} Here, there is no factual dispute. Indeed, the parties have stipulated to the 

relevant facts that govern this matter. Thus, the issue in this case is purely one of 

insurance contract interpretation. “When we face an issue of contractual interpretation, 
6.

our role ‘is to give effect to the intent of the parties to the agreement.’” Ohio Northern 

Univ. v. Charles Constr. Services, Inc., 155 Ohio St.3d 197, 2018-Ohio-4057, 120 N.E.3d 

762, ¶ 11, quoting Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216, 2003-Ohio-5849, 

797 N.E.2d 1256, ¶ 11. An insurance contract is reviewed as a whole and we presume 

that its language reflects the parties’ intent. Id., citing Kelly v. Med. Life Ins. Co., 31 

Ohio St.3d 130, 509 N.E.2d 411 (1987), paragraph one of the syllabus. A court is to look 

no further than the contract itself to determine the parties’ intent when the written 

language contained therein is clear. Id.

III. Analysis 

{¶ 11} In appellants’ assignments of error, they argue that the trial court erred in 

concluding that Ironics is not entitled to coverage under its CGL and umbrella policies. 

In response, Motorists contends that the trial court’s grant of its motion for summary 

judgment was proper because appellants cannot establish coverage under the terms of 

either the CGL policy or the umbrella policy. For ease of discussion, we will begin our 

analysis by examining appellants’ arguments under the CGL policy. We will then 

examine appellants’ arguments under the umbrella policy. 

A. Coverage Under the CGL Policy 

{¶ 12} In the coverage section of the CGL policy, the initial grant of coverage is 

set forth as follows: 

Section I – Coverages 

Coverage A Bodily Injury and Property Damage Liability 
7.

1. Insuring Agreement 

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. 

* * * 

No other obligation or liability to pay sums or perform acts or

services is covered unless explicitly provided for under Supplementary 

Payments – Coverages A and B.3 

b. 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”: 

* * * 

 

 

3

 These supplementary payments relate to the payment of court costs and associated 

expenses involved in defending the insured against claims and are not relevant here. 
8.

{¶ 13} In Section V of the CGL policy, the terms “occurrence” and “property 

damage” are defined as follows: 

13. “Occurrence” means an accident, including continuous or 

repeated exposure to substantially the same general harmful conditions. 

* * * 

17. “Property damage” means: 

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 

b. * * *. 

{¶ 14} Reading the foregoing provisions together, Motorists is only obligated 

under the CGL policy to pay for, and defend against, damages arising out of an accident 

that causes physical injury to tangible property. We ordinarily look to the allegations 

contained in the complaint filed against the insured to determine whether the insurance 

company has a duty to defend arising out an insurance policy. Motorists Mut. Ins. Co. v. 

Trainor, 33 Ohio St.2d 41, 294 N.E.2d 874 (1973), paragraph two of the syllabus. 

“[W]here the complaint brings the action within the coverage of the policy the insurer is 

required to make defense, regardless of the ultimate outcome of the action or its liability 

to the insured.” Id.

{¶ 15} In this case, Owens-Brockway has not yet filed a complaint against Ironics. 

However, the parties have stipulated that Ironics delivered nonconforming tube scale to 
9.

Owens-Brockway, giving rise to Owens-Brockway’s property damage. The parties 

disagree as to whether Ironics’ delivery of nonconforming tube scale constitutes an 

“occurrence” that caused “property damage,” as those terms are defined in the CGL 

policy. In light of our analysis below, we will not pass upon whether the delivery of 

nonconforming tube scale constitutes an “occurrence” that caused “property damage” 

under the CGL policy. Rather, we will assume, for purposes of argument, that the 

delivery of the tube scale constitutes an occurrence under the initial grant of coverage 

contained in the CGL policy. Notwithstanding this assumption, Motorists argued, and 

the trial court found, that Ironics’ coverage is excluded under several specific policy 

exclusions. One such policy exclusion is the contractual liability exclusion, which 

provides: 

{¶ 16} b. Contractual Liability 

“Bodily Injury” or “property damage” for which the insured is 

obligated to pay damages by reason of the assumption of liability in a 

contract or agreement. This exclusion does not apply to liability for 

damages: 

(1) That the insured would have in the absence of the contract or 

agreement; or 

(2) * * *. 

* * * 
10. 

{¶ 17} According to the parties’ stipulations, Owens-Brockway has asserted 

claims alleging 

breach of contract and breach of the warranties contained in the terms and 

conditions incorporated into the purchase orders based on the delivery of 

allegedly contaminated tube scale to Owens-Brockway. Owens-Brockway 

has also asserted claims for negligence, U.C.C. violations and product 

liability against Ironics based upon the delivery of allegedly contaminated 

and defective tube scale to its plants. 

{¶ 18} Clearly, the contractual liability exclusion excludes insurance coverage for 

Owens-Brockway’s contractual claims (i.e., breach of contract, breach of warranties, and 

U.C.C. claims). However, appellants argue that the exclusion does not bar coverage for 

Owens-Brockway’s claims for negligence and product liability, which sound in tort and 

not in contract. According to appellants, Owens-Brockway would be entitled to damages 

under these claims in the absence of a contract. 

{¶ 19} With respect to the tort claims alleged by Owens-Brockway, Motorists 

argues that such claims are not cognizable under Ohio’s economic-loss rule. “The 

economic-loss rule generally prevents recovery in tort of damages for purely economic 

loss.” Corporex Dev. & Constr. Mgt., Inc. v. Shook, Inc., 106 Ohio St.3d 412, 2005-

Ohio-5409, 835 N.E.2d 701, ¶ 6, citing Chemtrol Adhesives, Inc. v. Am. Mfrs. Mut. Ins. 

Co., 42 Ohio St.3d 40, 45, 537 N.E.2d 624 (1989) and Floor Craft Floor Covering, Inc. 

v. Parma Community Gen. Hosp. Assn., 54 Ohio St.3d 1, 3, 560 N.E.2d 206 (1990). 
11. 

“‘[T]he well-established general rule is that a plaintiff who has suffered only economic 

loss due to another’s negligence has not been injured in a manner which is legally 

cognizable or compensable.’” Chemtrol at 44, quoting Nebraska Innkeepers, Inc. v. 

Pittsburgh–Des Moines Corp., 345 N.W.2d 124, 126 (Iowa 1984). 

{¶ 20} The economic-loss rule “stems from the recognition of a balance between 

tort law, designed to redress losses suffered by breach of a duty imposed by law to 

protect societal interests, and contract law, which holds that ‘parties to a commercial 

transaction should remain free to govern their own affairs.’” Corporex at ¶ 6, quoting 

Chemtrol at 42. “‘Tort law is not designed * * * to compensate parties for losses suffered 

as a result of a breach of duties assumed only by agreement. That type of compensation 

necessitates an analysis of the damages which were within the contemplation of the 

parties when framing their agreement. It remains the particular province of the law of 

contracts.’” Floor Craft at 7, quoting Sensenbrenner v. Rust, Orling & Neale Architects, 

Inc., 374 S.E.2d 55, 58 (Va.1988). 

{¶ 21} Regarding product liability claims, the Supreme Court of Ohio has 

examined the economic-loss rule and stated that 

a commercial buyer seeking recovery from the seller for economic 

losses resulting from damage to the defective product itself may maintain a 

contract action for breach of warranty under the Uniform Commercial 

Code; however, in the absence of injury to persons or damage to other 
12. 

property the commercial buyer may not recover for economic losses 

premised on tort theories of strict liability or negligence. 

Chemtrol at 51. 

{¶ 22} In this case, appellants insist that Owens-Brockway has stated a claim for 

damages to “other property” by alleging damage, not only to the defective tube scale 

itself, but also to the final glass product into which the tube scale was integrated. 

Because the damages encompass property other than the tube scale provided by Ironics, 

appellants insist that the economic-loss rule does not preclude Owens-Brockway’s tort 

claims. 

{¶ 23} In response, Motorists argues that Owens-Brockway’s glass product 

constitutes an integrated product that is not distinct from the tube scale for purposes of 

the economic-loss doctrine. In support of its argument, Motorists cites HDM Flugservice 

GmbH v. Parker Hannifin Corp., 332 F.3d 1025 (6th Cir.2003). 

{¶ 24} In HDM Flugservice, the United States Court of Appeals for the Sixth 

Circuit examined Ohio’s economic-loss rule and held that the plaintiff could not recover 

in tort for damages to a helicopter that was caused by defective landing gear, because the 

landing gear was not considered separate from the helicopter. Id. at 1030-32. 

Importantly, the court characterized the landing gear that was affixed to the helicopter as 

a component material of an integrated final product. The court explained that the cause of 

a product’s malfunction is almost always a component of the product. Id. at 1031. As 

such, the court observed: 
13. 

If Ohio courts were to hold that a component is “other” property from the 

integrated product, it would allow purchasers to circumvent the economic 

loss rule in almost every case. Preventing a commercial buyer from 

recovering the damage to the product from the component manufacturer in 

tort comports with the policy behind prohibiting a purchaser recovering in 

tort for the product itself. 

Id.

{¶ 25} Relying upon the holding in HDM Flugservice, federal district courts in 

Ohio have similarly concluded that damages to a final integrated product arising out of a 

defect in one of the product’s components do not constitute injury to other property and 

are thus only recoverable in contract under the economic-loss rule. In Nationwide 

Agribusiness Ins. Co. v. CNH America LLC, N.D.Ohio No. 1:12-cv-01430, 2014 WL 

2520502 (June 4, 2014), Nationwide sued CNH America LLC after it was forced to pay 

an insurance claim totaling $252,075.56 following a fire that destroyed a tractor owned 

by its insured, Burkhart Farms. Burkhart Farms purchased the tractor from Burkhart 

Farm Center, Inc., a farm equipment dealer that originally purchased the 2010 Case IH 

STX485 tractor from CNH. The tractor contained a turbocharger manufactured by 

Cummins, Inc. 

{¶ 26} Following Nationwide’s payment of Burkhart Farm’s claim under a

casualty/property insurance policy, Nationwide filed its complaint in which it asserted 

claims against CNH and Cummins for negligence, strict liability, and breach of express 
14. 

and implied warranties. In the complaint, Nationwide alleged that CNH defectively 

designed and manufactured the tractor and Cummins defectively manufactured, designed, 

and distributed the tractor’s turbocharger. 

{¶ 27} Ultimately, CNH and Cummins filed a motion for summary judgment, in 

which they argued, inter alia, that Nationwide was barred from recovery on its negligence 

and strict liability claims by Ohio’s economic-loss rule. Id. at *9. Nationwide argued 

that the economic-loss rule did not apply because the fire damaged property other than 

the tractor, namely an in-cab GPS guidance system and an in-cab applicator system, 

which were purchased separately from the tractor and installed by Burkhart Farms after it 

purchased the tractor. Id. The court examined the “other property” argument raised by 

Nationwide in light of the holding in HDM Flugservice and found that the guidance 

system and applicator that were installed after the purchase of the tractor were integrated 

components of the tractor and did not constitute “other property” under the economic-loss 

rule. Id. at *10. Consequently, the court dismissed Nationwide’s negligence and strict 

liability claims under the economic-loss rule. Id. 

{¶ 28} Having examined the decisions in HDM Flugservice and Nationwide 

Agribusiness, we find that the reasoning contained therein is clear and persuasive. Upon 

our application of the reasoning in these cases to the facts of this case, it is clear that the 

glass products into which the nonconforming tube scale was incorporated were not “other 

property” for purposes of the application of the economic-loss rule. Consequently, the 
15. 

economic-loss rule applies in this case and bars Owens-Brockway’s negligence and 

product liability claims, leaving only the contract-based claims remaining. 

{¶ 29} Because the contract claims are excluded under the contractual liability 

exclusion contained within the CGL policy, we find that Ironics is not entitled to 

coverage under the CGL policy for the claims asserted by Owens-Brockway arising out 

of the damage caused by the nonconforming tube scale. Since the CGL insurance 

coverage is excluded, Motorists is not obligated to defend Ironics against the claims 

asserted by Owens-Brockway under the CGL policy. See Sharonville v. Am. Employers 

Ins. Co., 109 Ohio St.3d 186, 2006-Ohio-2180, 846 N.E.2d 833, ¶ 13, citing Preferred 

Risk Ins. Co. v. Gill, 30 Ohio St.3d 108, 113, 507 N.E.2d 1118 (1987) (“An insurer need 

not defend any action or any claims within the complaint when all the claims are clearly 

and indisputably outside of the contracted policy coverage.”). 

B. Coverage Under the Umbrella Policy 

{¶ 30} Having found that Ironics is not entitled to coverage under the CGL policy, 

we next examine whether any such coverage is available under the commercial umbrella 

policy. The umbrella policy contains a coverage section that provides, in relevant part: 

A. Insuring Agreement. 

We will pay on behalf of the insured the “ultimate net loss”: 

 a. In excess of the “underlying limit”: or 

 b. For an “occurrence” covered by this policy which is either 

excluded or not covered by the “underlying insurance”; 
16. 

because of “bodily injury,” “property damage,” “personal injury” or 

“advertising injury” to which this Coverage Form applies, caused by an 

“occurrence” anywhere in the world. 

{¶ 31} Under this general grant of coverage, Motorists is obligated to pay for 

Ironics’ losses that exceed the policy limits of the CGL policy. Since we have concluded 

that Ironics is not entitled to coverage under the CGL policy, the umbrella policy’s excess 

coverage provisions are not triggered under these facts. The umbrella policy also 

provides coverage for Ironics’ losses that are attributable to any “occurrence” that causes 

“property damage” and is either excluded or not covered by the CGL policy. 

{¶ 32} The umbrella policy in this case contained a more expansive definition of 

“occurrence” than did the CGL policy. Under the umbrella policy, “occurrence” is 

defined in relevant part as “[a]n accident, or a happening or event * * * which results in 

‘bodily injury’ or ‘property damage’ neither expected nor intended from the standpoint of 

the insured.” The umbrella policy provides a definition of “property damage” that is 

similar to the CGL policy’s definition of “property damage.” Under the umbrella policy, 

“property damage” is defined as follows: 

J. “Property damage” means: 

1. Physical injury to or destruction of tangible property which occurs 

during the policy period, including all resulting loss of use of that property; 
17. 

2. Loss of use of tangible property which has not been physically 

injured or destroyed provided such loss of use is caused by an “occurrence” 

during the policy period. 

{¶ 33} As already noted, the definition of “occurrence” in the umbrella policy is 

broader than that found in the CGL policy. Indeed, an occurrence in the umbrella policy 

encompasses, among other things, any event that results in unintended or unexpected 

property damage. Ironics’ supply of nonconforming tube scale to Owens-Brockway 

clearly constitutes an “event.” Because the parties have stipulated that Ironics was 

unaware of the nonconforming nature of the tube scale prior to its incorporation into 

Owens-Brockway’s glass products, we find that the property damage related to Ironics’ 

supply of nonconforming tube scale was unintended and unexpected from Ironics’ 

standpoint, thus constituting an “occurrence” as contemplated by the policy language. 

{¶ 34} In its brief to this court, Motorists acknowledges the broader definition of 

“occurrence” contained in the umbrella policy, but nevertheless contends that coverage is 

unavailable under the umbrella policy because Ironics’ supply of nonconforming tube 

scale did not cause “property damage” under the umbrella policy. Alternatively, 

Motorists urges that coverage under the umbrella policy is excluded under several policy 

exclusions. 

{¶ 35} Regarding its contention that Ironics’ supply of nonconforming tube scale 

did not cause “property damage” under the umbrella policy, Motorists claims, without 

referencing any language in the umbrella policy to support its claim, that the definition of 
18. 

“property damage” requires physical injury to property other than the product provided to 

Owens-Brockway by Ironics. Motorists cites Wisconsin Pharmacal Co., LLC v. 

Nebraska Cultures of California, Inc., 876 N.W.2d 72 (Wis.2016), in support of its 

argument. 

{¶ 36} In their brief, appellants respond to Motorists by noting that the term 

“property damage” is a defined term under the policy, and the policy definition does not 

include a requirement of physical injury to property other than the insured’s property. 

Further, appellants assert that the physical injury that occurred as a result of Ironics’ 

supply of nonconforming tube scale was not limited to the tube scale itself, but also 

encompassed Owens-Brockway’s glass products into which the tube scale was 

incorporated. 

{¶ 37} Motorists, relying upon Pharmacal, challenges appellants’ distinction 

between the nonconforming tube scale and the final integrated glass products, insisting 

that the glass products should be construed as Ironics’ product for purposes of applying 

the “property damage” definition in the umbrella policy. 

{¶ 38} In Pharmacal, a retail supplier of dietary supplements agreed to purchase 

probiotic pills containing a specific type of bacteria (Lactobacillus rhamnosus or LRA) 

from Pharmacal, a supplement manufacturer. Id. at 76. Pharmacal purchased the 

ingredients for the pills from another company, which had acquired the bacterial 

component from a separate supplier, before blending the ingredients together and 

compressing the mixture into chewable tablets. Id. Subsequently, it was discovered that 
19. 

the bacteria incorporated into the tablets was not LRA, which forced the retailer to recall 

the pills. Id. Litigation ensued, and the bacteria supplier’s insurance company moved for 

summary judgment on the issue of coverage. Id. at 77. Ultimately, the trial court agreed 

with the insurer that there was no coverage because there had been no “property damage” 

within the meaning of the applicable CGL policy. Id. The court of appeals reversed, and 

the Wisconsin Supreme Court granted the insurer’s petition for review. Id.

{¶ 39} On review before the Wisconsin Supreme Court, the court recited the 

relevant provisions of the CGL policy at issue, which included a definition of “property 

damage” similar to the one contained in the umbrella policy in this case. In particular, 

the policy in Pharmacal defined “property damage” to include “[p]hysical injury to 

tangible property.” Id. at 79. 

{¶ 40} The court began its analysis by articulating the risks intended to be insured 

by CGL policies, observing that such policies are designed to “‘cover the risk that the 

insured’s goods, products, or work will cause bodily injury or damage to property other 

than the product or the completed work of the insured.’” (Emphasis sic.) Id. at 80, 

quoting Vogel v. Russo, 613 N.W.2d 177, 182 (Wis.2000). The court then went on to 

consider whether the incorporation of the incorrect bacteria into the supplement tablets 

constituted physical injury to tangible property “other than” the bacterial component. Id. 

In addressing that question, the court found that blending the bacteria ingredient together 

with the other supplement ingredients created an “integrated system,” because the 

ingredients could not be subsequently separated from one another. Id. at 82. 
20. 

{¶ 41} The court noted that it had previously found that “damage by a defective 

component of an integrated system to either the system as a whole or other system 

components is not separable as damage to other property for which coverage is provided 

by a CGL policy,” id., citing Wausau Tile, Inc. v. County Concrete Corp., 593 N.W.2d 

445, 453-54 (Wis.1999). Based upon its holding in Wausau Tile, the court found that the 

blending of the wrong type of bacteria into the supplement pills did not constitute damage 

to other property, and therefore concluded that there was no initial grant of coverage 

under the CGL policy. Id.

{¶ 42} While factually similar to this case, Wisconsin Pharmacal is nonetheless 

distinguishable. Notably, the court in Wisconsin Pharmacal was tasked with interpreting 

the term “property damage” within the context of a CGL policy, not an umbrella policy. 

As is clear from an examination of the Wisconsin Supreme Court’s decision in 

Pharmacal, the scope of coverage provided by CGL policies factored heavily on the 

court’s determination that “property damage” was limited to damage to other property. 

Indeed, the nature of CGL policies and what they typically cover seems to be what 

motivated the Wisconsin Supreme Court to read the requirement of damage to “other 

property” into the CGL policy, as that requirement was not contained within the CGL 

policy’s express language. 

{¶ 43} Unlike the limited scope of coverage applicable to CGL policies, the 

umbrella policy in this case is, by its very terms, designed to provide broad coverage for 

claims that are not otherwise covered by Ironics’ CGL policy. In particular, the umbrella 
21. 

policy in this case obligates Motorists to pay for losses “[f]or an ‘occurrence’ covered by 

this policy which is either excluded or not covered by the ‘underlying insurance.’” Thus, 

the more restrictive form of coverage that is typical of a CGL policy like the one at issue 

in Pharmacal is not applicable to an umbrella policy like the one in this case. Given the 

differences between a CGL policy and an umbrella policy, it would be inappropriate to 

impose the Pharmacal integrated system rule here, especially where the rule itself is not 

contained in the policy language. Motorists was the drafter of the umbrella policy and, as 

such, could have included language regarding the integrated product rule from 

Pharmacal in its umbrella policy, but failed to do so. Because the policy at issue here is 

an umbrella policy that differs in language and scope from a typical CGL policy, we find 

that Pharmacal is inapposite. 

{¶ 44} The umbrella policy’s definition of “property damage” is straightforward. 

“Where an insurance policy’s provisions are clear and unambiguous, courts must apply 

the terms as written and may not enlarge the contract by implication to embrace an object 

distinct from that contemplated by the parties.” Chiquita Brands International, Inc. v. 

National Union Ins. Co., 2013-Ohio-759, 988 N.E.2d 897, ¶ 7 (1st Dist.), citing Gomolka 

v. State Auto. Mutual Ins. Co., 70 Ohio St.2d 166, 168, 436 N.E.2d 1347 (1982) and 

Equity Diamond Brokers, Inc. v. Transnatl. Ins. Co., 151 Ohio App.3d 747, 2003-Ohio1024, 785 N.E.2d 816, ¶ 11 (1st Dist.). 

{¶ 45} There is no language in the umbrella policy’s definition of “property 

damage” that excludes physical injury to the insured’s tangible property, and we are not 
22. 

free to read such a limitation into the policy. Therefore, we reject Motorists’ argument 

that “property damage” cannot exist here simply because physical injury only occurred to 

Ironics’ property. Instead, we find that the physical injury to Owens-Brockway’s glass 

product, whether such product is determined to be Ironics’ property or other property, 

constitutes “property damage” as that term is defined in the umbrella policy. Because 

Ironics’ transfer of nonconforming tube scale gave rise to this unintended and unexpected 

“property damage,” the transfer meets the definition of an “occurrence” under the 

umbrella policy. 

{¶ 46} Having concluded that Ironics’ transfer of nonconforming tube scale 

constitutes an occurrence, Ironics is entitled to coverage under the umbrella policy so 

long as such coverage is not excluded under one of the policy exclusions contained 

within the umbrella policy. Motorists cites three such exclusions that it deems applicable 

to this case, and urges us to find no coverage under the umbrella policy on account of 

these exclusions.4

 These exclusions provide as follows: 

B. Exclusions. 

This insurance does not apply to: 

* * * 

i. “Property damage” to “your product” arising out of it or any part 

of it. 

 

4

 Notably, the umbrella policy does not contain the same contractual liability exclusion 

found in the CGL policy. 
23. 

j. “Property damage” to “your work” arising out of it or any part of 

it and included in the “products-completed operations hazard.” * * * 

k. “Property damage” to “impaired property” or property that has 

not been physically injured, arising out of: 

(1) A defect, deficiency, inadequacy or dangerous condition in “your 

product” or “your work”; or 

(2) A delay or failure to by you or anyone acting on your behalf to 

perform a contract or agreement in accordance with its terms. 

{¶ 47} Initially, Motorists contends that the exclusion for property damage to 

“your product” applies to this case. Relevant here, the umbrella policy defines “your 

product” as 

1. Any goods or products, other than real property, manufactured, 

sold, handled or distributed or disposed of by: 

a. You; 

* * * . 

{¶ 48} Appellants urge that this exclusion does not apply here because the claims 

asserted by Owens-Brockway relate to property damage to the glass products, which 

were not manufactured, sold, handled, or distributed or disposed of by Ironics. On the 

other hand, Motorists asserts that the “combination of an allegedly defective ingredient 

with other ingredients constitutes a single integrated product and does not constitute 
24. 

damage to ‘other property.’ In other words, the damage was to the integrated product 

itself, and not anything else.” 

{¶ 49} Appellants’ argument aligns with the language of the “your product” 

exclusion in the umbrella policy. The glass products that were damaged in this case were 

manufactured by Owens-Brockway, not Ironics. The glass products merely contained the 

tube scale sold by Ironics. Motorists insists that the glass products should be viewed as 

an integrated system and treated as Ironics’ product. In making this argument, Motorists 

appears to be relying upon the Pharmacal decision, which we have already deemed 

inapposite because the integrated system rule adopted therein does not apply to the 

umbrella policy in this case. 

{¶ 50} Motorists also cites Park-Ohio Holdings Corp. v. Liberty Mut. Fire Ins. 

Co., 142 F.Supp.3d 556 (N.D.Ohio 2015) to support its claim that the “your product” 

exclusion applies here. In Park-Ohio, the court held that a “your product” exclusion 

similar to the one contained in the umbrella policy excluded coverage for property 

damage to defective washers that were installed in cradles by the cradle manufacturer. 

Notably, the court in Park-Ohio found that the “your product” exclusion was applicable 

only after noting that “the property damages in this case arose solely from the defect in 

the washers that [the cradle manufacturer] installed into the cradles. The washers did not 

cause damage to any other components or property, and no other defect caused property 

damage. The defective washers were [the insured’s] product.” Id. at 563. Because the 

damage in this case included not only the tube scale provided by Ironics, but also 
25. 

Owens-Brockway’s glass products into which the tube scale was incorporated, Park-Ohio

is distinguishable from the present case. Park-Ohio would be applicable in this case if 

the cradle manufacturer’s claim was for replacement of the entire cradle and not only the 

defective washer. 

{¶ 51} A plain reading of the “your product” exclusion supports appellants’ 

position that the exclusion would only apply to the nonconforming tube scale in this case. 

Even if we were to conclude that the “your product” exclusion could arguably be 

interpreted to mean what Motorists claims it means, the exclusion would still not apply, 

because the Ohio Supreme Court has directed that “[i]f provisions are susceptible of more 

than one interpretation, they ‘will be construed strictly against the insurer and liberally in 

favor of the insured.’” Sharonville v. Am. Emps. Ins. Co., 109 Ohio St.3d 186, 2006-

Ohio-2180, 846 N.E.2d 833, ¶ 6, quoting King v. Nationwide Ins. Co., 35 Ohio St.3d 208, 

519 N.E.2d 1380 (1988), syllabus. 

{¶ 52} Moreover, “an exclusion in an insurance policy will be interpreted as 

applying only to that which is clearly intended to be excluded.” Hybud Equip. Corp. v. 

Sphere Drake Ins. Co., Ltd., 64 Ohio St.3d 657, 665, 597 N.E.2d 1096 (1992). We 

cannot say that the “your product” exclusion was clearly intended to apply to a claim for 

damage to Owens-Brockway’s glass products. Rather, we find that “your product” 

means Ironics’ product, which in this case is the supplied tube scale. If Motorists wanted 

“your product” to include any product which contained the integrated tube scale, it could 

have defined it in such a way as to accomplish that objective. Having failed to do so, it 
26. 

follows that the direct and concise declarative definition of “your product” here can only 

mean the nonconforming tube scale. Therefore, we find that the “your product” 

exclusion does not apply. 

{¶ 53} Next, Motorists cites the “your work” exclusion and contends that this 

exclusion applies “[t]o the extent that Ironics provided any ‘work’ to Owens-Brockway.” 

The term “your work” is defined in the umbrella policy as follows: 

O. “Your work” means: 

1. Work or operations performed by you or on your behalf; and 

2. Materials, parts or equipment furnished in connection with such 

work or operations. 

“Your work” includes warranties or representations made at any 

time with respect to the fitness, quality, durability or performance of any of 

the items included in 1. or 2. above. 

{¶ 54} Having examined the “your work” exclusion and its definition, we find that 

this exclusion is patently inapplicable. The claims raised by Owens-Brockway against 

Ironics stem exclusively from Ironics supply of tube scale to Owens-Brockway. There is 

no indication that Ironics has performed any work for Owens-Brockway, and Motorists 

fails to identify any such work. 

{¶ 55} Finally, Motorists claims that the “impaired property” exclusion bars any 

coverage under the umbrella policy. Once again, the term “impaired property” is defined 

by the umbrella policy, which provides, in relevant part: 
27. 

E. “Impaired property” means tangible property, other than “your 

product” or “your work” that cannot be used or is less useful because: 

1. It incorporates “your product” or “your work” that is known or 

thought to be defective, deficient, inadequate or dangerous; or

2. You have failed to fulfill the terms of a contract or agreement; 

if such property can be restored to use by: 

1. The repair, replacement, adjustment or removal of “your product” 

or “your work”; or 

2. Your fulfilling the terms of the contract or agreement. 

{¶ 56} Before the trial court, appellants submitted the affidavit of Robert Hippert, 

the technical capabilities leader for Owens-Brockway, which contains the following 

testimony: 

The glass containers manufactured by Owens-Brockway were 

physically damaged by the chrome RHM stones in the contaminated tube 

scale from Ironics. In the manufacturing process, the chrome stones 

because embedded in the glass containers. * * * 

The chrome RHM stones could not be removed from the glass 

containers, meaning that those containers had incurred permanent physical 

damage and could not be restored to use by the removal or replacement of 

the Ironics component product. 
28. 

{¶ 57} This unrefuted testimony establishes that the incorporation of Ironics’ 

nonconforming tube scale into Owens-Brockway’s glass products was an irreversible 

process. That is, the integration of the tube scale into the other component parts created 

the finished glass products such that the tube scale could not be removed. At that point, 

the glass products could not be restored to use by the repair, replacement, adjustment or 

removal of the tube scale or by Ironics’ supply of conforming tube scale. As noted in the 

parties’ stipulations, the incorporation of the nonconforming tube scale into the glass 

products forced Owens-Brockway to scrap the glass products, precipitating the insurance 

claim at issue in this case. 

{¶ 58} Since the glass products could not be restored to use, they do not fit the 

definition of “impaired property” under the umbrella policy. Thus, the “impaired 

property exclusion does not apply. 

{¶ 59} Having found that the facts of this case give rise to an initial grant of 

coverage under the terms of the umbrella policy, and having further determined that none 

of the umbrella policy’s exclusions apply, we conclude that Ironics is entitled to coverage 

under the umbrella policy. Accordingly, appellants’ first three assignments of error are 

well-taken. 

{¶ 60} In appellants’ fourth assignment of error, they argue that the trial court 

erred in finding that Motorists has no duty to defend Ironics in any dispute, whether in 

court or in arbitration, relating to Ironics’ sale of tube scale to Owens-Brockway. 
29. 

Motorists’ obligation to provide a defense under the umbrella policy is contained in the 

following policy language: 

Section II – Investigation, Defense, Settlement 

A. For each “occurrence”: 

* * * 

b. For which damages are sought for “bodily injury,” “property 

damage,” “personal injury” or “advertising injury” to which this Coverage 

Form applies, which are not covered by “underlying insurance” or other 

insurance: 

1. We have the right and duty to defend any suit against the insured 

seeking damages because of “bodily injury,” “property damage,” “personal 

injury,” or “advertising injury” to which this Coverage Form applies, 

provided such suit is brought in the United States of America, its territories 

or possessions or Canada. 

{¶ 61} We have previously determined that the claims asserted by OwensBrockway stemming from the incorporation of Ironics’ nonconforming tube scale into 

Owens-Brockway’s class products constitute an “occurrence” for which damages are 

sought for “property damage.” In light of our prior determination that Ironics is not 

entitled to coverage under the CGL policy, the duty to defend provision within the 

umbrella policy applies and obligates Motorists to defend Ironics against OwensBrockway’s claims. Accordingly, appellants’ fourth assignment of error is well-taken. 
30. 

{¶ 62} In sum, we find that the trial court properly concluded that Ironics is not 

entitled to coverage or a defense under the CGL policy because the claims asserted by 

Owens-Brockway against Ironics are either barred under the CGL policy’s contractual 

liability exclusion or not cognizable pursuant to the economic-loss doctrine. However, 

we find that the trial court erred in granting summary judgment to Motorists and denying 

appellants’ motion for summary judgment, because Ironics is entitled to coverage and a 

defense under the terms of the umbrella policy. 

IV. Conclusion 

{¶ 63} Having found that the trial court erred below, we reverse the trial court’s 

grant of summary judgment in favor of Motorists and its denial of summary judgment 

against appellants. Pursuant to App.R. 16(B), we order final judgment be entered in 

favor of appellants consistent with this court’s findings. Motorists is hereby ordered to 

pay the costs of this appeal pursuant to App.R. 24. 

Judgment reversed. 

A certified copy of this entry shall constitute the mandate pursuant to App.R. 27. 

See also 6th Dist.Loc.App.R. 4. 

 
31. 

 Motorists Mutl. Ins. Co. v. 

 Ironics, Inc. v. Komar 

 C.A. No. WD-19-018 

 

Thomas J. Osowik, J. _______________________________ 

JUDGE 

Gene A. Zmuda, P. J. 

CONCUR. _______________________________ 

 JUDGE 

 

 

Christine E. Mayle, J. _______________________________ 

CONCURS, IN PART, JUDGE 

AND DISSENTS, IN PART. 

MAYLE, J. 

{¶ 64} The majority concludes that Motorists has no duty to defend or indemnify 

Ironics under its CGL policy, but must defend and indemnify Ironics under its umbrella 

policy. I agree with the majority’s ultimate decision to reverse the trial court’s judgment 

in favor of Motorists (and the trial court’s corresponding denial of summary judgment 

against appellants) with respect to the umbrella policy, and its order that final judgment 

be entered in favor of appellants with respect to those claims and cross-claims that relate 
32. 

to the umbrella policy. But, I concur in judgment only. That is because I disagree with 

the majority’s view that the relevant coverage provisions of the umbrella policy are 

somehow more expansive than the CGL policy. I do, however, agree with the majority’s 

analysis of the umbrella policy’s exclusions. 

{¶ 65} In addition, I believe that Motorists has a clear duty to defend Ironics under 

its CGL policy. For that reason, I would reverse and order that judgment be entered in 

favor of appellants with respect to those claims and cross-claims that relate to Motorists’ 

duty to defend Ironics under the CGL policy, but find that a question of fact remains 

regarding whether Motorists must indemnify Ironics for Owens-Brockway’s claims under 

the CGL policy. Accordingly, I respectfully concur, in part, and dissent, in part. 

I. CGL Policy’s Coverage Provisions 

{¶ 66} The CGL endorsement provides as follows: 

1. Insuring Agreement 

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. * * * 
33. 

b. 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” * * *. 

{¶ 67} The definitions section of the CGL endorsement provides: 

13. “Occurrence” means an accident, including continuous or 

repeated exposure to substantially the same general harmful conditions. 

* * * 

17. “Property damage” means: 

a. Physical injury to tangible property, including all resulting loss of 

use of that property. * * * 

{¶ 68} The issue here is whether Ironics may be legally obligated to pay damages 

to Owens-Brockway for “property damage” caused by an “occurrence,” as those terms 

are defined in the CGL policy. If so, Motorists must defend and indemnify Ironics 

against Owens-Brockway’s claims unless coverage is otherwise prohibited by a specific 

exclusion. 

{¶ 69} It is clear that Owens-Brockway suffered “property damage” as defined in 

the CGL policy because it incurred “[p]hysical damage to tangible property”—i.e., 

physical injury to its glass containers. Although Motorists argues that “[t]his definition 

relates to physical injury to tangible property other than the products, goods, service or 

work provided by the insured,” such limitations are not included in the CGL policy’s 
34. 

definition of “property damage.” (Emphasis in original.) As the majority correctly 

recognizes when analyzing a very similar definition of “property damage” contained in 

the umbrella policy, courts cannot read language into an insurance policy and must apply 

its express terms as written. “The cardinal rule for applying the terms in 

an insurance policy is well settled: if the terms in the policy are clear and unambiguous, 

those terms must be applied to the facts without engaging in any construction.” Hartong 

v. Makary, 106 Ohio App.3d 145, 149, 665 N.E.2d 704 (9th Dist.1995). Given that 

Owens-Brockway incurred “physical damage to tangible property”—its glass 

containers—it incurred “property damage” as that term is clearly and unambiguously 

defined in the CGL policy. 

{¶ 70} In addition, such property damage was caused by an “occurrence,” which 

the policy defines as an “accident.” Although the CGL policy does not define “accident,” 

“undefined words in an insurance policy must be afforded their plain and ordinary 

meaning.” Grange Mut. Cas. Co. v. Rosco, 146 Ohio App.3d 698, 705, 767 N.E.2d 1225 

(7th Dist.2001). “The plain and ordinary meaning of ‘accident’ is ‘an unexpected and 

undesirable event.’” Acuity, A Mut. Ins. Co. v. Siding & Insulation Co., 2016-Ohio-1381, 

62 N.E.3d 937, ¶ 13 (8th Dist.), quoting Sarrough v. Budzar, 2015-Ohio-3674, 38 N.E.3d 

921, ¶ 24 (8th Dist.). As the majority correctly concludes with respect to the umbrella 

policy, “[b]ecause the parties have stipulated that Ironics was unaware of the 

nonconforming nature of the tube scale prior to its incorporation into Owens-Brockway’s 

glass products, we find that the property damage related to Ironics’ supply of 
35. 

nonconforming tube scale was unintended and unexpected from Ironics’ standpoint, thus 

constituting an ‘occurrence’ as contemplated by the policy language.” I believe that this 

reasoning applies with equal force to the definition of “occurrence” under the CGL 

policy. That is, the record reflects that the presence of the chrome RHM stones in the 

tube scale that Ironics sold to Owens-Brockway was “an unexpected and undesirable 

event” from the standpoint of the insured. Even Motorists’ complaint for declaratory 

judgment recognizes that “Ironics was not aware that the subject tube scale had been 

contaminated with the chromite sand * * *.” 

{¶ 71} Accordingly—unless coverage is otherwise expressly excluded—the CGL 

policy requires Motorists to defend and indemnify Ironics for those sums that Ironics 

becomes legally obligated to pay as damages to Owens-Brockway because of the 

property damage it suffered. 

II. CGL Policy’s Exclusions 

{¶ 72} Motorists alleges that any liability coverage provided by the CGL policy is 

excluded by its business risks exclusions, namely (1) the contractual liability exclusion; 

(2) the “your product” exclusion; (3) the “your work” exclusion; and (4) the “impaired 

property” exclusion. In Ohio, insurance policy exclusions must be interpreted “‘as 

applying only to that which is clearly intended to be excluded.’” (Emphasis in original.) 

Safeco Ins. Co. of Am. v. White, 122 Ohio St.3d 562, 2009-Ohio-3718, 913 N.E.2d 426, 

¶ 33, quoting Hybud Equip. Corp. v. Sphere Drake Ins. Co., Ltd., 64 Ohio St.3d 657, 665, 

597 N.E.2d 1096 (1992). 
36. 

{¶ 73} The “your product,” “your work,” and “impaired property” exclusions (and 

related definitions) of the CGL policy are identical in all material respects to the “your 

product,” “your work,” and “impaired property” exclusions (and related definitions) of 

the umbrella policy. Thus, I believe that these exclusions do not preclude coverage under 

the CGL policy for the reasons stated by the majority when analyzing the nearly-identical 

exclusions of the umbrella policy. 

{¶ 74} The majority, however, concludes that coverage is precluded by the 

contractual liability exclusion of the CGL policy. That exclusion provides as follows: 

“Bodily Injury” or “property damage” for which the insured is obligated to 

pay damages by reason of the assumption of liability in a contract or 

agreement. This exclusion for damages does not apply for damages: 

That the insured would have in the absence of the contract or 

agreement; * * * (Emphasis added.) 

{¶ 75} The majority frames its analysis of this exclusion around the common-law 

economic loss rule, as articulated by the Supreme Court of Ohio in Chemtrol Adhesives, 

Inc. v. Am. Mfrs. Mut. Ins. Co., 42 Ohio St.3d 40, 45, 537 N.E.2d 624 (1989). Chemtrol, 

however, addressed “the precise question” of whether economic loss may be recovered in 

tort “where the parties are in privity of contract.” (Emphasis in original.) Id. at 49. In 

contrast, the issue before the court is whether Ironics could be liable to Owens-Brockway 

for physical damage to its glass containers even if the parties were not in privity of 

contract. Given that appellants argue that Ironics would be liable under the Ohio Product 
37. 

Liability Act, R.C. 2307.71 et seq., for product liability damages even if Ironics and 

Owens-Brockway were not in privity of contract, the court should have analyzed whether 

Owens-Brockway can assert a product liability claim under the Ohio Revised Code. This 

is especially so given that the Ohio Product Liability Act expressly “abrogate[s] all 

common law product liability claims or causes of action.” R.C. 2307.71(B). 

{¶ 76} The Ohio Product Liability Act provides that a manufacturer is liable for 

compensatory damages based on a “product liability claim” if (1) the product in question 

was “defective” in some way, (2) the defect was the proximate cause of harm for which 

the claimant seeks to recover compensatory damages, and (3) the manufacturer 

“designed, formulated, produced, constructed, created, assembled, or rebuilt * * *” the 

product that caused the harm. R.C. 2307.73(A). A “product liability claim” is defined by 

R.C. 2307.71(A)(13) as a claim that seeks compensatory damages for 

death, physical injury to person, emotional distress, or physical damage to 

property other than the product in question, that allegedly arose from any of 

the following: (a) [t]he design, formulation, production, construction, 

creation, assembly, rebuilding, testing, or marketing of that product; (b) 

[a]ny warning or instruction, or lack of warning or instruction, associated 

with that product; [or] (c) [a]ny failure of that product to conform to any 

relevant representation or warranty. 

{¶ 77} Although the majority did not analyze Owens-Brockway’s claims under the 

Product Liability Act, given its conclusion that “the glass products into which the 
38. 

nonconforming tube scale was incorporated were not ‘other property’ for purposes of the 

application of the economic-loss rule,” I believe that it would similarly conclude that 

Owens-Brockway does not allege “physical damage to property other than the product in 

question” as required for a statutory “product liability claim” under R.C. 2307.71(A)(13). 

And I would disagree. 

{¶ 78} In my view, the majority reached its conclusion based on a 

misunderstanding of the so-called “integrated system rule” as applied by the federal Sixth 

Circuit in HDM Flugservice GmbH v. Parker Hannifin Corp., 332 F.3d 1025 (6th 

Cir.2003). As stated in HDM Flugservice, the integrated system rule provides as follows: 

If the purchaser were allowed to sue component manufacturers for 

the damage to the integrated product, the purchaser would be able to 

circumvent the economic loss rule by recovering in tort instead of being 

limited to contract remedies. * * * Indeed, a mechanical device, such as a 

helicopter, is merely many components assembled into a finished product. 

When the product malfunctions, the cause will almost always be a 

component. If the Ohio courts were to hold that a component is “other” 

property from the integrated product, it would allow purchasers to 

circumvent the economic loss rule in almost every case. Preventing a 

commercial buyer from recovering the damage to the product from the 

 
39. 

component manufacturer in tort comports with the policy behind 

prohibiting a purchaser recovering in tort for the product itself. 

Id. at 1031. 

{¶ 79} In other words, because the economic loss rule prevents tort recovery for 

damage to the product itself—a concept that is fully incorporated into the Ohio Product 

Liability Act’s definition of “product liability claim” under R.C. 2307.71(A)(13)5

—it 

would circumvent the economic loss rule to allow purchasers of an integrated product to 

sue a component manufacturer because its component allegedly damaged the integrated 

product that was purchased by the plaintiff. 

{¶ 80} For example, in HDM Flugservice, the purchaser of a helicopter—i.e., an 

integrated product that included many components, including landing gear—could not 

circumvent the economic loss rule by suing the manufacturer of a particular component 

of that product (i.e., the landing gear) that allegedly caused the helicopter to crash and be 

destroyed. Likewise, in Nationwide Agribusiness Ins. Co. v. CNH America LLC, 

N.D.Ohio No. 1:12-cv-01430, 2014 WL 2520502 (June 4, 2014), the purchaser of a 

tractor—i.e., an integrated product that included many components, including a 

 

5

 In addition, the Act defines “economic loss” as “direct, incidental, or consequential 

pecuniary loss, including, but not limited to, damage to the product in question, and 

nonphysical damage to property other than that product. Harm is not ‘economic loss.’” 

(Emphasis added.) R.C. 2307.71(A)(2). Moreover, “economic loss” is recoverable under 

R.C. 2307.79 only if the claimant can otherwise recover compensatory damages for a 

“product liability claim”—which, again, requires “physical damage to property other than 

the product in question.” R.C. 2307.71(A)(13). 
40. 

turbocharger—could not circumvent the economic loss rule by suing the manufacturer of 

a particular component of that product (i.e., the turbocharger) that allegedly caused the 

tractor to catch fire and be destroyed. 

{¶ 81} Under Ohio law, the integrated product rule might have some applicability 

in this case if someone else (say, “Company Z”) had purchased a glass container from 

Owens-Brockway, the glass container shattered, and then Company Z attempted to sue 

Ironics because its component (the tube scale) had caused the glass container to shatter 

and be destroyed. If that were the case, Company Z would not be alleging “physical 

damage to property other than the product in question” as required by R.C. 

2307.71(A)(13) because, in that situation, “the product in question”—i.e., the glass 

container that Company Z purchased—would be the integrated product itself. (Emphasis 

added.) 

{¶ 82} But here, the integrated product rule has no applicability because “the 

product in question” is the allegedly-defective tube scale—not the glass containers. In 

other words, unlike the plaintiffs in HDM Flugservice and Nationwide Agribusiness,

Owens-Brockway did not purchase an integrated product. Rather, it purchased allegedlydefective raw material (tube scale) for use as a component ingredient in the manufacture 

of glass containers, which caused physical damage to Owens-Brockway’s other property 

when it was used to manufacture those glass containers. 

{¶ 83} Moreover, the Ohio Product Liability Act expressly recognizes that “raw 

materials” are “products” for purposes of a “product liability claim.” That is, the Act 
41. 

defines “product” as “any object, substance, mixture, or raw material that constitutes 

tangible personal property * * *” and that satisfies all of the following: (1) “[i]t is 

capable of delivery itself, or as an assembled whole in a mixed or combined state, or as a 

component or ingredient[;]” (2) “[i]t is produced, manufactured, or supplied for 

introduction into trade or commerce[;]” and (3) “[i]t is intended for sale or lease to 

persons for commercial or personal use.” (Emphasis added.) R.C. 2307.71(A)(12)(a). 

{¶ 84} The statute does not define “raw material.” When a term is undefined, we 

give the term its “plain and ordinary meaning.” Rhodes v. New Philadelphia, 129 Ohio 

St.3d 304, 2011-Ohio-3279, 951 N.E.2d 782, ¶ 17, citing Sharp v. Union Carbide Corp., 

38 Ohio St.3d 69, 70, 525 N.E.2d 1386 (1988). “And when interpreting the language of a 

statute, ‘[w]ords and phrases shall be read in context and construed according to the rules 

of grammar and common usage.’” Great Lakes Bar Control, Inc. v. Testa, 156 Ohio 

St.3d 199, 2018-Ohio-5207, 124 N.E.3d 803, ¶ 8, quoting R.C. 1.42. According to 

common usage, “raw material” is “crude or processed material that can be converted by 

manufacture, processing, or combination into a new and useful product * * *.” MerriamWebster’s Collegiate Dictionary 970 (10th Ed.1996). The tube scale that OwensBrockway purchased from Ironics was “raw material” that was (1) delivered to OwensBrockway “as a component or ingredient” for its glass containers, (2) manufactured for 

introduction into trade or commerce, and (3) sold to Owens-Brockway for commercial 

use. Thus, the tube scale is a “product” for purposes of a product liability claim under 

Ohio law. 
42. 

{¶ 85} Finally, in my view, Owens-Brockway has asserted a product liability 

claim against Ironics that, if successful, would not be excluded by the contractual liability 

exclusion of its CGL policy. Under R.C. 2307.73(A), a manufacturer is subject to 

liability for compensatory damages based on a “product liability claim” if (1) the 

“product” in question was defective in some way, including but not limited to “defective 

in manufacture or construction”; (2) the defect was “a proximate cause of harm for which 

the claimant seeks to recover compensatory damages”; and (3) the manufacturer 

“designed, formulated, produced, constructed, created, assembled, or rebuilt” the 

“product” in question. Moreover, a product is “defective in manufacture or construction” 

if, “when it left the control of its manufacturer, it deviated in a material way from the 

design specifications, formula, or performance standards of the manufacturer, or from 

otherwise identical units manufactured to the same design specifications, formula, or 

performance standards.” R.C. 2307.74. 

{¶ 86} Although no formal complaint has been filed yet, the parties’ written 

stipulation provides that Owens-Brockway purchased tube scale from Ironics, and then 

used the tube scale to manufacture glass containers. Subsequently, Owens-Brockway 

discovered that the glass containers contained a large number of RHM stones, which 

required Owens-Brockway to scrap in excess of 1,850 tons of glass containers and incur 

various damages. Regarding Owens-Brockway’s theories of liability, the stipulation 

expressly provides that: 
43. 

 Owens-Brockway alleges that the stones came from contaminated 

tube scale supplied by Ironics, and, as such, the subject tube scale 

was defective. 

 Owens-Brockway alleges Ironics failed to meet the specifications 

required in the purchase orders from Owens-Brockway. 

{¶ 87} So, in addition to alleging that Ironics failed to meet the specifications of 

the parties’ written contract, Owens-Brockway also alleges that the RHM stones 

“contaminated” the tube scale, which caused it to be “defective.” To me, this sufficiently 

alleges that the tube scale was “defective in manufacture or construction” under R.C. 

2307.74, meaning that Ironics would be liable if—even in the absence of the parties’ 

contract—Owens-Brockway establishes that the tube scale “deviated in a material way 

from the design specifications, formula, or performance standards of the manufacturer, or 

from otherwise identical units manufactured to the same design specifications, formula, 

or performance standards.” R.C. 2307.74. In my view, the trial court record is not fully 

developed on this issue. That is, the record does not clearly establish whether the tube 

scale deviated from any design specifications, formula, or performance standards of 

Ironics, or whether the tube scale that Ironics sold to Owens-Brockway deviated from 

“identical units” that it manufactured to those same standards. Therefore, I do not believe 

that summary judgment is warranted in favor of either party on the claims and crossclaims relating to Motorists’ duty to indemnify Ironics under the CGL policy. 
44. 

{¶ 88} But, “[a]n insurer’s duty to defend is broader than and distinct from its duty 

to indemnify.” Ohio Govt. Risk Mgt. Plan v. Harrison, 115 Ohio St.3d 241, 2007-Ohio4948, 874 N.E.2d 1155, ¶ 19, citing Socony-Vacuum Oil Co. v. Continental Cas. Co., 144 

Ohio St. 382, 59 N.E.2d 199 (1945), paragraph one of the syllabus. “The insurer must 

defend the insured in an action when the allegations state a claim that potentially or 

arguably falls within the liability insurance coverage.” Id., citing Willoughby Hills v. 

Cincinnati Ins. Co., 9 Ohio St.3d 177, 179, 459 N.E.2d 555 (1984). “However, an 

insurer need not defend any action or claims within the complaint when all the claims are 

clearly and indisputably outside the contracted coverage.” Id., citing Preferred Risk Ins. 

Co. v. Gill, 30 Ohio St.3d 108, 113, 507 N.E.2d 1118 (1987). 

{¶ 89} Here, although there is a question of fact as to whether the contractual 

liability exclusion of the CGL policy precludes coverage for whatever damages Ironics 

may become liable to pay to Owens-Brockway, Motorists has a clear duty to defend 

Ironics under the CGL policy given the broad nature of Owens-Brockway’s allegations, 

which include a product liability claim under Ohio law. 

{¶ 90} For these reasons, I respectfully concur, in part, and dissent, in part.

This decision is subject to further editing by the Supreme Court of 

Ohio’s Reporter of Decisions. Parties interested in viewing the final reported 

version are advised to visit the Ohio Supreme Court’s web site at: 

http://www.supremecourt.ohio.gov/ROD/docs/.