[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-Brockwa y 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, In c. 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 en titled to insurance coverage under the terms of an insurance policy issue d by Motorists, which contains a Commercial General Liability Coverage Form (the “CGL policy”) and a Commercial Umbrella Coverage Form (the “umbrella policy”). Iro nics is the insured party under the policy. The relevant background facts set fort h 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-Brock way 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 term s of the purchase orders. Owens-Brockway unwittingly incorporated the nonconform ing tube scale into its glass products, which rendered the glass bottles unusable. Owe ns-Brockway discovered the defect prior to placing the bottles into the market. Becau se the damage done to the bottles is irreversible, Owens-Brockway alleges that it was req uired 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 o f 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 t o obtain defense and liability coverage under the CGL and umbrella policies. On August 28, 20 17, Motorists filed a complaint with the trial court, requesting a declaratory judgme nt that it owes no duty to defend or indemnify Ironics against Owens-Brockway’s claims ari sing out of Ironics’ supply of nonconforming tube scale. {¶ 5} Following pretrial motion practice, the parties each filed moti ons for summary judgment. Appellants argued that Motorists was obligat ed to provide liability and defense coverage under the CGL and umbrella policies to cov er Owens-Brockway’s claim against Ironics. In response, Motorists argued that Owen s-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-Brockwa y’s allegations as recited by the parties in their stipulations.4. outside the scope of the policies and therefore its liability a nd defense obligations were not triggered. The trial court ultimately agreed with Motorist s, 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 revie w: Assignment of Error No. 1: The trial court committed reversibl e error by determining that the damages claimed by Owens-Brockway do not constitute “property damage” as that term is defined in the ins urance contracts purchased by Ironics. Assignment of Error No. 2: The trial court committed reversibl e error by determining that [Ironics’] unintended act of providin g allegedly

defective tube scale is not accidental in nature and does not c onstitute an

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

Ironics. Assignment of Error No. 3: The trial court committed reversibl e error by determining that Owens-Brockway’s claims against Ironi cs 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 reversibl e error by determining that because insurance coverage has not be en5. triggered, Motorists has no duty to defend Ironics in any dispu te, whether in court or in arbitration, relating to Ironics’ sale of tube scal e to OwensBrockway. {¶ 7} Because all of appellants’ assignments of error are interrelate d, 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. Un der the de novo standard, we undertake our own independent examination of the r ecord and make our own decision as to whether the moving party is entitled to summ ary 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 st ipulated to the relevant facts that govern this matter. Thus, the issue in thi s case is purely one of insurance contract interpretation. “When we face an issue of c ontractual 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 syl labus. A court is to look no further than the contract itself to determine the parties’ i ntent 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 C GL 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 coverag e under the terms of either the CGL policy or the umbrella policy. For ease of disc ussion, we will begin our analysis by examining appellants’ arguments under the CGL polic y. 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 Liability7. 1. Insuring Agreement a. We will pay those sums that the insured becomes legally obli gated to pay as damages because of “bodily injury” or “property damag e” 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 damage s for “bodily injury” or “property damage” to which this insurance do es not apply.

* * * No other obligation or liability to pay sums or perform acts or services is covered unless explicitly provided for under Supple mentary Payments – Coverages A and B.3 b. This insurance applies to “bodily injury” and “property dama ge” 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 co sts and associated expenses involved in defending the insured against claims and a re not relevant here.8. {¶ 13} In Section V of the CGL policy, the terms “occurrence” and “pro perty damage” are defined as follows: 13. “Occurrence” means an accident, including continuous or repeated exposure to substantially the same general harmful con ditions.

* * * 17. “Property damage” means: a. Physical injury to tangible property, including all resultin g 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 ob ligated under the CGL policy to pay for, and defend against, damages ar ising out of an accident that causes physical injury to tangible property. We ordinaril y look to the allegations contained in the complaint filed against the insured to determi ne 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 agai nst Ironics. However, the parties have stipulated that Ironics delivered non conforming tube scale to9. 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 cause d “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 liabi lity 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 liabili ty in a contract or agreement. This exclusion does not apply to liabil ity 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 asse rted claims alleging

breach of contract and breach of the warranties contained in th e terms and conditions incorporated into the purchase orders based on the d elivery of allegedly contaminated tube scale to Owens-Brockway. Owens-Bro ckway 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 d oes not bar coverage for Owens-Brockway’s claims for negligence and product liability, w hich 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, Moto rists argues that such claims are not cognizable under Ohio’s economi c-loss rule. “The economic-loss rule generally prevents recovery in tort of damag es 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 h as suffered only economic loss due to another’s negligence has not been injured in a mann er 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 du ty 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. T hat type of compensation necessitates an analysis of the damages which were within the c ontemplation of the parties when framing their agreement. It remains the particula r 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 h as examined the economic-loss rule and stated that a commercial buyer seeking recovery from the seller for economi c losses resulting from damage to the defective product itself ma y maintain a contract action for breach of warranty under the Uniform Commer cial Code; however, in the absence of injury to persons or damage to other12. property the commercial buyer may not recover for economic loss es 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 scal e 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 produ ct constitutes an integrated product that is not distinct from the tube scale for purposes of the economic-loss doctrine. In support of its argument, Motori sts 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 pl aintiff could not recover in tort for damages to a helicopter that was caused by defectiv e 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 pro duct. Id. at 1031. As such, the court observed:13. If Ohio courts were to hold that a component is “other” propert y 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 manufac turer in tort comports with the policy behind prohibiting a purchaser re covering 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 integrate d product arising out of a defect in one of the product’s components do not constitute inj ury to other property and are thus only recoverable in contract under the economic-loss r ule. 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 i t was forced to pay an insurance claim totaling $252,075.56 following a fire that d estroyed a tractor owned by its insured, Burkhart Farms. Burkhart Farms purchased the t ractor from Burkhart Farm Center, Inc., a farm equipment dealer that originally purc hased 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 compla int in which it asserted claims against CNH and Cummins for negligence, strict liability , and breach of express14. and implied warranties. In the complaint, Nationwide alleged t hat CNH defectively designed and manufactured the tractor and Cummins defectively m anufactured, 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 dama ged 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 propert y” under the economic-loss

rule. Id. at *10. Consequently, the court dismissed Nationwide’s neglig ence 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 per suasive. 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 inco rporated were not “other property” for purposes of the application of the economic-loss rule. Consequently, the15. economic-loss rule applies in this case and bars Owens-Brockway ’s negligence and product liability claims, leaving only the contract-based claim s 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 th e CGL insurance coverage is excluded, Motorists is not obligated to defend Iron ics 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, ci ting Preferred

Risk Ins. Co. v. Gill , 30 Ohio St.3d 108, 113, 507 N.E.2d 1118 (1987) (“An insurer n eed not defend any action or any claims within the complaint when a ll 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 th e commercial umbrella policy. The umbrella policy contains a coverage section that p rovides, 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, cause d 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 u mbrella 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 def inition of “occurrence” than did the CGL policy. Under the umbrella polic y, “occurrence” is defined in relevant part as “[a]n accident, or a happening or e vent * * * which results in ‘bodily injury’ or ‘property damage’ neither expected nor inten ded from the standpoint of the insured.” The umbrella policy provides a definition of “pr operty damage” that is similar to the CGL policy’s definition of “property damage.” U nder 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 o f that property;17. 2. Loss of use of tangible property which has not been physical ly 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 umbrell a policy is broader than that found in the CGL policy. Indeed, an occurren ce in the umbrella policy encompasses, among other things, any event that results in unintended or unexpected property damage. Ironics’ supply of nonconforming tube scale t o Owens-Brockway clearly constitutes an “event.” Because the parties have stipu lated 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 dama ge related to Ironics’ supply of nonconforming tube scale was unintended and unexpecte d from Ironics’ standpoint, thus constituting an “occurrence” as contemplated b y 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 o f nonconforming tube scale did not cause “property damage” under the umbrella policy . Alternatively, Motorists urges that coverage under the umbrella policy is excl uded under several policy

exclusions. {¶ 35} Regarding its contention that Ironics’ supply of nonconforming tube scale did not cause “property damage” under the umbrella policy, Moto rists claims, without referencing any language in the umbrella policy to support its claim, that the definition of18. “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 p olicy 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 occurr ed 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 g lass 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 (Lactoba cillus rhamnosus or LRA) from Pharmacal, a supplement manufacturer. Id. at 76. Pharmacal purchased the ingredients for the pills from another company, which had acqui red the bacterial component from a separate supplier, before blending the ingredi ents together and compressing the mixture into chewable tablets. Id . Subsequently, it was discovered that19. the bacteria incorporated into the tablets was not LRA, which f orced the retailer to recall the pills. Id. Litigation ensued, and the bacteria supplier’s insurance comp any 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 b een 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 in to the supplement tablets constituted physical injury to tangible property “other than” t he bacterial component. Id. In addressing that question, the court found that blending the bacteria ingredient together with the other supplement ingredients created an “integrated sy stem,” because the ingredients could not be subsequently separated from one anothe r. 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 who le or other system components is not separable as damage to other property for whi ch 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 pill s did not constitute damage to other property, and therefore concluded that there was no in itial 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 heavi ly on the court’s determination that “property damage” was limited to dam age to other property. Indeed, the nature of CGL policies and what they typically cove r seems to be what motivated the Wisconsin Supreme Court to read the requirement o f damage to “other property” into the CGL policy, as that requirement was not cont ained 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 umbrella21. policy in this case obligates Motorists to pay for losses “[f]o r an ‘occurrence’ covered by this policy which is either excluded or not covered by the ‘und erlying 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 c ase. Given the differences between a CGL policy and an umbrella policy, it wou ld 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 pro duct rule from

Pharmacal in its umbrella policy, but failed to do so. Because the poli cy at issue here is an umbrella policy that differs in language and scope from a ty pical CGL policy, we find

that Pharmacal is inapposite. {¶ 44} The umbrella policy’s definition of “property damage” is straig htforward. “Where an insurance policy’s provisions are clear and unambiguo us, courts must apply the terms as written and may not enlarge the contract by implic ation 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 “pr operty damage” that excludes physical injury to the insured’s tangible property, and we are not22. free to read such a limitation into the policy. Therefore, we reject Motorists’ argument that “property damage” cannot exist here simply because physica l injury only occurred to Ironics’ property. Instead, we find that the physical injury t o Owens-Brockway’s glass product, whether such product is determined to be Ironics’ prop erty or other property, constitutes “property damage” as that term is defined in the um brella policy. Because Ironics’ transfer of nonconforming tube scale gave rise to this unintended and unexpected “property damage,” the transfer meets the definition of an “occ urrence” under the umbrella policy. {¶ 46} Having concluded that Ironics’ transfer of nonconforming tube s cale constitutes an occurrence, Ironics is entitled to coverage unde r the umbrella policy so long as such coverage is not excluded under one of the policy e xclusions contained within the umbrella policy. Motorists cites three such exclusi ons that it deems applicable to this case, and urges us to find no coverage under the umbrel la 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 contrac tual liability exclusion found in the CGL policy.23. j. “Property damage” to “your work” arising out of it or any p art of it and included in the “products-completed operations hazard.” * * * k. “Property damage” to “impaired property” or property that h as 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 behal f to perform a contract or agreement in accordance with its terms. {¶ 47} Initially, Motorists contends that the exclusion for property d amage to “your product” applies to this case. Relevant here, the umbrel la policy defines “your product” as 1. Any goods or products, other than real property, manufacture d, 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 gla ss products, which were not manufactured, sold, handled, or distributed or dispose d of by Ironics. On the other hand, Motorists asserts that the “combination of an alleg edly defective ingredient with other ingredients constitutes a single integrated product and does not constitute24. 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 prod uct” exclusion in the umbrella policy. The glass products that were damaged in this case were manufactured by Owens-Brockway, not Ironics. The glass product s merely contained the tube scale sold by Ironics. Motorists insists that the glass p roducts should be viewed as an integrated system and treated as Ironics’ product. In makin g this argument, Motorists appears to be relying upon the Pharmacal decision, which we have already deemed inapposite because the integrated system rule adopted therein d oes 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 t he “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 co verage for property damage to defective washers that were installed in cradles by t he 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 c radles. 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 b y Ironics, but also25. Owens-Brockway’s glass products into which the tube scale was i ncorporated, 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 enti re cradle and not only the

defective washer. {¶ 51} A plain reading of the “your product” exclusion supports appell ants’ position that the exclusion would only apply to the nonconformi ng tube scale in this case. Even if we were to conclude that the “your product” exclusion c ould arguably be interpreted to mean what Motorists claims it means, the exclusi on would still not apply, because the Ohio Supreme Court has directed that “[i]f provisio ns are susceptible of more than one interpretation, they ‘will be construed strictly again st 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 interpre ted 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 intend ed to apply to a claim for damage to Owens-Brockway’s glass products. Rather, we find tha t “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 integ rated tube scale, it could have defined it in such a way as to accomplish that objective. Having failed to do so, it26. 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 th at this exclusion applies “[t]o the extent that Ironics provided any ‘w ork’ to Owens-Brockway.” The term “your work” is defined in the umbrella policy as follo ws: 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 s uch work or operations. “Your work” includes warranties or representations made at any time with respect to the fitness, quality, durability or perfor mance of any of

the items included in 1. or 2. above. {¶ 54} Having examined the “your work” exclusion and its definition, w e find that this exclusion is patently inapplicable. The claims raised by Owens-Brockway against Ironics stem exclusively from Ironics supply of tube scale to O wens-Brockway. There is no indication that Ironics has performed any work for Owens-Bro ckway, and Motorists fails to identify any such work. {¶ 55} Finally, Motorists claims that the “impaired property” exclusio n bars any coverage under the umbrella policy. Once again, the term “impa ired property” is defined by the umbrella policy, which provides, in relevant part:27. E. “Impaired property” means tangible property, other than “you r product” or “your work” that cannot be used or is less useful b ecause: 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 agreem ent; if such property can be restored to use by: 1. The repair, replacement, adjustment or removal of “your prod uct” or “your work”; or 2. Your fulfilling the terms of the contract or agreement. {¶ 56} Before the trial court, appellants submitted the affidavit of R obert Hippert, the technical capabilities leader for Owens-Brockway, which con tains 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 s tones because embedded in the glass containers. * * * The chrome RHM stones could not be removed from the glass containers, meaning that those containers had incurred permanen t physical damage and could not be restored to use by the removal or repla cement 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 w as an irreversible process. That is, the integration of the tube scale into the o ther 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 t ube scale. As noted in the parties’ stipulations, the incorporation of the nonconforming t ube scale into the glass products forced Owens-Brockway to scrap the glass products, pre cipitating 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. T hus, the “impaired property exclusion does not apply. {¶ 59} Having found that the facts of this case give rise to an initia l grant of coverage under the terms of the umbrella policy, and having fur ther determined that none of the umbrella policy’s exclusions apply, we conclude that Iro nics is entitled to coverage under the umbrella policy. Accordingly, appellants’ first thre e 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 i n any dispute, whether in court or in arbitration, relating to Ironics’ sale of tube scal e to Owens-Brockway.29. Motorists’ obligation to provide a defense under the umbrella p olicy 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 thi s Coverage Form applies, which are not covered by “underlying insurance” o r other

insurance: 1. We have the right and duty to defend any suit against the in sured seeking damages because of “bodily injury,” “property damage,” “personal injury,” or “advertising injury” to which this Coverage Form ap plies, 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 Owens

Brockway stemming from the incorporation of Ironics’ nonconform ing tube scale into Owens-Brockway’s class products constitute an “occurrence” for which damages are sought for “property damage.” In light of our prior determinat ion that Ironics is not entitled to coverage under the CGL policy, the duty to defend p rovision within the umbrella policy applies and obligates Motorists to defend Ironi cs 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 Ir onics 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 ent itled 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 t rial 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 j udgment be entered in favor of appellants consistent with this court’s findings. Mot orists 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 pur suant to App.R. 27. See also 6th Dist.Loc.App.R. 4.31. M otorists Mutl. Ins. Co. v. Ir onics, 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 Iro nics under its umbrella policy. I agree with the majority’s ultimate decision to rever se the trial court’s judgment in favor of Motorists (and the trial court’s corresponding deni al of summary judgment against appellants) with respect to the umbrella policy, and it s order that final judgment be entered in favor of appellants with respect to those claims and cross-claims that relate32. 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 th e umbrella policy are somehow more expansive than the CGL policy. I do, however, agr ee with the majority’s analysis of the umbrella policy’s exclusions. {¶ 65} In addition, I believe that Motorists has a clear duty to defen d Ironics under its CGL policy. For that reason, I would reverse and order tha t judgment be entered in favor of appellants with respect to those claims and cross-clai ms that relate to Motorists’ duty to defend Ironics under the CGL policy, but find that a qu estion of fact remains regarding whether Motorists must indemnify Ironics for Owens-Br ockway’s claims under the CGL policy. Accordingly, I respectfully concur, in part, a nd 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 “prop erty damage” to which this insurance applies. We will have the righ t 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” s eeking 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 con ditions.

* * * 17. “Property damage” means:

a. Physical injury to tangible property, including all resulting l oss of use of that property. * * * {¶ 68} The issue here is whether Ironics may be legally obligated to p ay damages to Owens-Brockway for “property damage” caused by an “occurrenc e,” as those terms are defined in the CGL policy. If so, Motorists must defend an d indemnify Ironics against Owens-Brockway’s claims unless coverage is otherwise pr ohibited by a specific

exclusion. {¶ 69} It is clear that Owens-Brockway suffered “property damage” as d efined in the CGL policy because it incurred “[p]hysical damage to tangib le property”—i.e., physical injury to its glass containers. Although Motorists ar gues 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 include d in the CGL policy’s34. definition of “property damage.” (Emphasis in original.) As t he majority correctly recognizes when analyzing a very similar definition of “propert y damage” contained in the umbrella policy, courts cannot read language into an insura nce 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 polic y are clear and unambiguous, those terms must be applied to the facts without engaging in an y construction.” Hartong v. Makary , 106 Ohio App.3d 145, 149, 665 N.E.2d 704 (9th Dist.1995). Gi ven that Owens-Brockway incurred “physical damage to tangible property”— its glass containers—it incurred “property damage” as that term is clearl y 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 d oes 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 wit h 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 incorporati on into Owens-Brockway’s glass products, we find that the property damage related to Iro nics’ supply of35. nonconforming tube scale was unintended and unexpected from Iro nics’ standpoint, thus constituting an ‘occurrence’ as contemplated by the policy lang uage.” I believe that this reasoning applies with equal force to the definition of “occurr ence” 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 unexpect ed and undesirable event” from the standpoint of the insured. Even Motorists’ com plaint for declaratory judgment recognizes that “Ironics was not aware that the subjec t 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 t hose sums that Ironics becomes legally obligated to pay as damages to Owens-Brockway b ecause of the property damage it suffered. II. CGL Policy’s Exclusions {¶ 72} Motorists alleges that any liability coverage provided by the C GL policy is excluded by its business risks exclusions, namely (1) the contr actual 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” exclus ions (and related definitions) of the CGL policy are identical in all mat erial 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 anal yzing 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 exclus ion provides as follows: “Bodily Injury” or “property damage” for which the insured is o bligated to pay damages by reason of the assumption of liability in a contr act or agreement. This exclusion for damages does not apply for damag es: 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 c ommon-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 l oss 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 b e 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 li able under the Ohio Product37. Liability Act, R.C. 2307.71 et seq., for product liability dama ges even if Ironics and Owens-Brockway were not in privity of contract, the court shoul d have analyzed whether Owens-Brockway can assert a product liability claim under the O hio 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 c ause of harm for which the claimant seeks to recover compensatory damages, and (3) the manufacturer “designed, formulated, produced, constructed, created, assemble d, or rebuilt * * *” the product that caused the harm. R.C. 2307.73(A). A “product lia bility 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 physic al damage to property other than the product in question, that allegedly aro se from any of the following: (a) [t]he design, formulation, production, cons truction, creation, assembly, rebuilding, testing, or marketing of that p roduct; (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 co nform to any relevant representation or warranty. {¶ 77} Although the majority did not analyze Owens-Brockway’s claims u nder the Product Liability Act, given its conclusion that “the glass pro ducts into which the38. nonconforming tube scale was incorporated were not ‘other prope rty’ 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 oth er 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 a pplied 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 fo r the damage to the integrated product, the purchaser would be ab le 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. Preven ting a commercial buyer from recovering the damage to the product from the39. component manufacturer in tort comports with the policy behind prohibiting a purchaser recovering in tort for the product itse lf.

Id. at 1031. {¶ 79} In other words, because the economic loss rule prevents tort re covery 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 da maged 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 lan ding 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 componen ts, including a

5 In addition, the Act defines “economic loss” as “direct, incid ental, 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 i s not ‘economic loss.’” (Emphasis added.) R.C. 2307.71(A)(2). Moreover, “economic los s” is recoverable under R.C. 2307.79 only if the claimant can otherwise recover compens atory damages for a “product liability claim”—which, again, requires “physical dama ge to property other than the product in question.” R.C. 2307.71(A)(13).40. turbocharger—could not circumvent the economic loss rule by sui ng 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 app licability 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 g lass container to shatter and be destroyed. If that were the case, Company Z would not b e 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 ques tion”—i.e., the glass container that Company Z purchased—would be the integrated prod uct itself. (Emphasis added.) {¶ 82} But here, the integrated product rule has no applicability beca use “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 ingr edient in the manufacture of glass containers, which caused physical damage to Owens-Broc kway’s other property when it was used to manufacture those glass containers. {¶ 83} Moreover, the Ohio Product Liability Act expressly recognizes t hat “raw materials” are “products” for purposes of a “product liability claim.” That is, the Act41. 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 intend ed 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 und efined, 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 interp reting the language of a statute, ‘[w]ords and phrases shall be read in context and cons trued 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 th at can be converted by manufacture, processing, or combination into a new and useful p roduct * * *.” 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 container s, (2) manufactured for introduction into trade or commerce, and (3) sold to Owens-Broc kway for commercial use. Thus, the tube scale is a “product” for purposes of a pro duct liability claim under

Ohio law.42. {¶ 85} Finally, in my view, Owens-Brockway has asserted a product liab ility claim against Ironics that, if successful, would not be exclude d by the contractual liability exclusion of its CGL policy. Under R.C. 2307.73(A), a manufact urer is subject to liability for compensatory damages based on a “product liabilit y 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 proximat e cause of harm for which the claimant seeks to recover compensatory damages”; and (3) th e manufacturer “designed, formulated, produced, constructed, created, assemble d, or rebuilt” the “product” in question. Moreover, a product is “defective in ma nufacture 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 speci fications, formula, or performance standards.” R.C. 2307.74. {¶ 86} Although no formal complaint has been filed yet, the parties’ w ritten stipulation provides that Owens-Brockway purchased tube scale f rom Ironics, and then used the tube scale to manufacture glass containers. Subsequen tly, Owens-Brockway discovered that the glass containers contained a large number o f RHM stones, which required Owens-Brockway to scrap in excess of 1,850 tons of gla ss containers and incur various damages. Regarding Owens-Brockway’s theories of liabil ity, 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 specification s required in the purchase orders from Owens-Brockway. {¶ 87} So, in addition to alleging that Ironics failed to meet the spe cifications 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 co nstruction” under R.C. 2307.74, meaning that Ironics would be liable if—even in the ab sence of the parties’ contract—Owens-Brockway establishes that the tube scale “deviat ed in a material way from the design specifications, formula, or performance standar ds 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 tria l 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 perf ormance 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 t he CGL policy.44. {¶ 88} But, “[a]n insurer’s duty to defend is broader than and distinc t 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 syllab us. “The insurer must defend the insured in an action when the allegations state a cl aim 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 complai nt 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 co ntractual liability exclusion of the CGL policy precludes coverage for wh atever damages Ironics may become liable to pay to Owens-Brockway, Motorists has a cle ar duty to defend Ironics under the CGL policy given the broad nature of Owens-Br ockway’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 Cour t of Ohio’s Reporter of Decisions. Parties interested in viewing th e final reported version are advised to visit the Ohio Supreme Court’s web site at: http://www.supremecourt.ohio.gov/ROD/docs/.