Court Opinion

ID: 6774488
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:48:05.942105+00
Date Added: 2024-06-11T16:02:46.843362
License: Public Domain

Cook, J.,
dissenting. I respectfully dissent because I disagree with the majority’s interpretation of this contract.
Section 8.01 of the stock purchase agreement in question is entitled “Indemnification by Seller.” Subsection 8.01(c) requires National City to defend, indemnify and hold Case and its personnel harmless for any damage suffered or incurred by reason of the conduct of the business by National City or any other activity of National City occurring on or prior to the closing date, excepting Excluded Claims. “Excluded Claims” are defined in section 8.03 of the stock purchase agreement. Subsection 8.03(c) specifically excludes any claim related to the conduct of business by National City occurring prior to the closing date that arises as a result of the wrongdoing of insiders. “Insiders” is defined in Article III of the stock purchase agreement to specifically include H.E. Schmidt III, who is the alleged wrongdoer in virtually every allegation concerning Case in the Roush complaint.
Because the claims asserted against Case in the Roush litigation squarely fall into the subsection 8.03(c) exception, National City has no duty to defend Case. The majority’s conclusion to the contrary is based on an isolated reading of *349section 8.03 of the stock purchase agreement rather than an interpretation of that agreement as a whole.
In reaching its conclusion, the majority emphasizes that the language of section 8.03 does not include “duty to defend.” To have included that language in section 8.03, however, would have been redundant. Section 8.01 itself excepts National City’s duty to defend, indemnify and hold Case harmless in situations that are the subject of an Excluded Claim as defined in section 8.03. Section 8.03, in turn, merely reiterates its purpose as expressed in section 8.01, stating that “no indemnification under the provisions of this Article VIII shall be made with respect to any Damages suffered or incurred with respect to any of the following * * (Emphasis added.) The exception is created in subsection 8.01(c). Section 8.03 defines the activities included in that exception.
There is no reason for the contract to restate in section 8.03 the duties owed by National City to Case under section 8.01, as section 8.01 creates a general duty to defend, indemnify and hold the buyer harmless from the types of damages set forth in that section. Nor is the scope of the exception created in section 8.01(c) limited by the absence of the term “defend” in section 8.03. Instead, the phrase “indemnification under the provisions of this Article VIII” merely references section 8.01, which includes within the ambit of “Indemnification by Seller” the duties to indemnify, defend and hold Case harmless for certain activity. Subsection 8.01(c) expressly excepts National City’s duties to indemnify, defend and hold Case harmless with respect to the types of activity defined as Excluded Claims in section 8.03.
The situation is analogous to an insurer’s duty to defend its insured under an insurance contract. Allegations in a complaint stating a claim which is potentially or arguably within the policy coverage invokes the duty to defend unless defense of that claim is specifically excluded. Zanco, Inc. v. Michigan Mut. Ins. Co. (1984), 11 Ohio St.3d 114, 11 OBR 413, 464 N.E.2d 513. National City’s duty to defend the claims appearing from allegations in the Roush complaint is specifically excluded through the operation of subsection 8.01(c) and subsection 8.03(c) of the stock purchase agreement. As such, the appellate court correctly concluded that National City owes Case no duty to defend against the allegations contained in the Roush complaint.
Therefore, I would affirm the appellate court’s judgment.