Court Opinion

ID: 2971151
Source: CourtListenerOpinion
Date Created: 2015-09-22 16:29:55.439913+00
Date Added: 2024-06-11T11:43:34.065991
License: Public Domain

RECOMMENDED FOR FULL-TEXT PUBLICATION
                Pursuant to Sixth Circuit Rule 206                    2    Toledo-Lucas County, et al. v.               No. 02-4120
        ELECTRONIC CITATION: 2004 FED App. 0128P (6th Cir.)                Axa Marine, et al.
                    File Name: 04a0128p.06
                                                                                          _________________
UNITED STATES COURT OF APPEALS                                                                 COUNSEL
                  FOR THE SIXTH CIRCUIT                               ARGUED: Steven R. Smith, CONNELLY, JACKSON &
                    _________________                                 COLLIER, Toledo, Ohio, M. Charles Collins, EASTMAN &
                                                                      SMITH LTD., Toledo, Ohio, for Appellants. Jack C. Hsu,
 TOLEDO-LUCAS COUNTY              X                                   CHRISTENSEN & EHRET, Chicago, Illinois, Stephen D.
 PORT AUTHORITY ; COREGIS          -                                  Hartman, KERGER & KERGER, Toledo, Ohio, for
 INSURANCE CO .,                   -                                  Appellees. ON BRIEF: Steven R. Smith, Janine Thompson
                                   -  No. 02-4120                     Avila, Tammy Geiger Lavalette, CONNELLY, JACKSON &
         Plaintiffs-Appellants, -                                     COLLIER, Toledo, Ohio, M. Charles Collins, Robert J.
                                    >                                 Gilmer, Jr., EASTMAN & SMITH LTD., Toledo, Ohio, for
                                   ,
            v.                     -                                  Appellants. Jack C. Hsu, Kirsten R. Waack, CHRISTENSEN
                                   -                                  & EHRET, Chicago, Illinois, Stephen D. Hartman, Richard
 AXA MARINE & AVIATION             -                                  M. Kerger, KERGER & KERGER, Toledo, Ohio, Mark E.
                                                                      Christensen, CHRISTENSEN & EHRET, Chicago, Illinois,
 INSURANCE (UK), LTD ., et al., -                                     for Appellees.
        Defendants-Appellees. -
                                   -                                                      _________________
                                  N
      Appeal from the United States District Court                                            OPINION
       for the Northern District of Ohio at Toledo.                                       _________________
      No. 99-07320—James G. Carr, District Judge.
                                                                          SUTTON, Circuit Judge. At issue in this insurance-
                    Argued: March 11, 2004                            coverage dispute is the scope of a “Ports Liability Policy” (the
                                                                      “Policy”) that the Toledo-Lucas County Port Authority
               Decided and Filed: May 6, 2004                         purchased from a group of insurance companies in 1994. The
                                                                      Policy covers, among other things, “Public Officials
  Before: MOORE, SUTTON, and FRIEDMAN, Circuit                        Liability,” which is defined as “any actual or alleged act,
                    Judges.*                                          error, . . . omission and/or breach of duty by an officer and/or
                                                                      . . . employee [of the Port Authority] . . . in the discharge of
                                                                      his/her duties . . . and claimed against him/her solely by
                                                                      reason of his/her capacity as such with [the Port Authority].”
                                                                      This appeal presents two questions about the scope of the
                                                                      provision: (1) whether the Public Officials Liability portion
    *                                                                 of the policy covers the Port Authority as well as Port
    Daniel M. Friedman, Circuit Judge of the United States Court of   Authority officials and employees, and (2) if so, whether a
Appeals for the Federal Circuit, sitting by designation.

                                1
No. 02-4120             Toledo-Lucas County, et al. v.      3    4      Toledo-Lucas County, et al. v.              No. 02-4120
                                  Axa Marine, et al.                    Axa Marine, et al.

formal claim or demand must be made against an individual            VOLUNTEERS WHILE WORKING FOR AND ON
official or employee in order for the Port Authority to invoke       BEHALF OF THE PORT.
the coverage. The better reading of the Policy, in our view,
is that it covers the Port Authority as well as Port Authority       All other terms and conditions remain unchanged.
officers and employees and that a formal demand or claim
against an individual official is not a condition of coverage.   JA 947. The Certificate of Insurance similarly says that the
Because the district court held otherwise and granted            Policy is “[i]n favor of [the] Toledo-Lucas County Port
summary judgment in favor of the defendant insurance             Authority and as per Endorsement No. 1.” JA 946.
companies on this basis, we reverse the judgment below and
remand the case for further proceedings consistent with this      The Policy also includes a form definition of “Assured,”
opinion.                                                         which provides that “[t]he unqualified word ‘Assured’”
                                                                 means:
                              I.
                                                                     (a) The Named Assured and/or subsidiary, associated,
                              A.                                     affiliated companies or owned and controlled companies,
                                                                     their duly elected and appointed officials,
  The Toledo County Port Authority is a public entity                commissioners, officers, employees and volunteers while
organized under Ohio law. See Ohio Rev. Code Ann.                    working for and on behalf of the Port, as now or hereafter
§ 4582.01 et seq. In 1994, the Port Authority purchased a            constituted . . .
“Ports Liability Policy” from the London Companies—a
group of 12 insurance companies located in several foreign           (b) any officer, director, commissioner, stockholder,
countries. The Policy identifies the following as the insured        partner or employee of the Named Assured, while acting
parties:                                                             in his capacity as such . . . .

  ASSURED: Toledo-Lucas County Port Authority and as             JA 951–52.
  per Endorsement No.1.
                                                                    Given an effective date of May 22, 1994 through May 22,
JA 948. Endorsement No.1 in turn states:                         1995, the Policy provides (1) occurrence-based coverage for
                                                                 bodily injury, personal injury, property damage, advertising
  It is hereby understood and agreed that the Named              liability and additional expenses and (2) claims-made
  Assured shall read:                                            coverage for public officials liability. Occurrence-based
                                                                 coverage applies when “a negligent or omitted act occurred
  TOLEDO-LUCAS COUNTY PORT AUTHORITY                             during the period of the policy, whatever the date of claim
  AND ANY SUBSIDIARY, ASSOCIATED,                                against the insured,” while claims-made coverage applies
  AFFILIATED COMPANIES OR OWNED AND                              when “a negligent or omitted act is discovered and brought to
  CONTROLLED COMPANIES, THEIR DULY                               the attention of the insurance company during the period of
  ELECTED AND APPOINTED OFFICIALS,                               the policy, no matter when the act occurred.” 1 Lee R. Russ
  COMMISSIONERS, OFFICERS, EMPLOYEES AND                         & Thomas F. Segalla, Couch on Insurance § 1:5 (3d ed.
No. 02-4120                Toledo-Lucas County, et al. v.      5   6        Toledo-Lucas County, et al. v.            No. 02-4120
                                     Axa Marine, et al.                     Axa Marine, et al.

2003); see St. Paul Fire & Marine Ins. Co. v. Barry, 438 U.S.          caused by or arising out of any occurrence at any of the
531, 535 n.3 (1978).                                                   Assured’s premises, and/or by operations and/or
                                                                       activities anywhere in the world.
  The core promise of the Policy states:
                                                                   JA 950 (emphasis added).
  I.     INSURING AGREEMENTS:
                                                                     After stating the insurance companies’ promise to “pay on
  1.     COVERAGE                                                  behalf of the Assured . . . for damages on account of . . .
                                                                   Public Officials Liability,” the Policy specifically defines
  In the event of an occurrence happening during the               “Public Officials Liability”:
  annual period of this policy but, in respect of Public
  Officials Liability in the event that notice of an                   6.    PUBLIC OFFICIALS LIABILITY
  occurrence is first made in writing by and/or against the
  Assured and received by Underwriters or Underwriters’                The words “Public Officials Liability”, wherever used
  representatives set forth in Item 4 of the Declarations              herein, shall mean any actual or alleged act, error, mis-
  during the annual period of this policy, Underwriters will           statement, neglect, omission and/or breach of duty
  pay on behalf of the Assured for that amount of Ultimate             (including, but not limited to, misfeasance, malfeasance
  Net Loss which the Assured shall be obligated to pay by              and/or non-feasance) by an officer and/or commissioner
  reason of the liability:                                             and/or employee and/or committee member in the
                                                                       discharge of his/her duties as such and claimed against
       (a) Imposed upon the Assured by law, including all              him/her solely by reason of his/her capacity as such with
           Protection and Indemnity risks of whatsoever                a port or harbor commission named herein.
           nature . . .                                                Notwithstanding when the actual or alleged event giving
                                                                       rise to a claim under this section of the policy may have
  for damages on account of:                                           or be deemed to have occurred, Underwriters shall only
                                                                       be liable for a claim of which the/an Assured first
       (i) Bodily Injury                                               receives, within the term specified in this policy, written
                                                                       notice from any party intending to hold the/an Assured
       (ii) Personal Injury                                            responsible for any wrongful act as enumerated above.
       (iii) Property Damage                                       JA 953.
       (iv) Advertising Liability                                     In view of the Policy’s $3 million limit, the Port Authority
       (v) Public Officials Liability                              purchased additional insurance. The first excess policy was
                                                                   issued by a group of insurance companies (the “Navigators
       (vi) Additional Expenses                                    Group”) composed of Navigators Insurance Company, The
                                                                   Reinsurance Company of New York, Christiana General
                                                                   Insurance Corporation of New York, Colonia Insurance
No. 02-4120             Toledo-Lucas County, et al. v.      7    8    Toledo-Lucas County, et al. v.              No. 02-4120
                                  Axa Marine, et al.                  Axa Marine, et al.

Company, Employers Mutual Casualty Company and                   liability arising from “airport activities.” All parties now
Farmers Mutual Hail Insurance Company of Iowa. The               agree that the stated reason for withholding coverage was
second excess policy was issued by Coregis Insurance             incorrect and that Public Officials Liability coverage under
Company.                                                         the Policy does include airport activities.
                             B.                                     Numerous other lawsuits followed, all containing similar
                                                                 allegations against the Port Authority and many of its
  Between 1993 and 1998, several lawsuits were filed against     individual employees. After McQuade, even the Kagy
the Port Authority concerning the operation of the Toledo        plaintiffs amended their complaint to include allegations and
Express Airport—more specifically, concerning the noise          claims against individual Port Authority employees as well as
created by Burlington Air Express’s flights in and out of the    the Port Authority itself.
airport. The first of these lawsuits was filed in June 1993 by
Joseph and Winifred Kagy and several other citizens of              By February 8, 1996, however, all of the claims against the
Fulton County, Ohio. The Kagy plaintiffs claimed nuisance,       individual Port Authority employees had been dismissed for
inverse condemnation and violations of equal protection by       failure to state a claim, leaving only the claims against the
the Port Authority, but did not allege any specific wrongful     Port Authority. In September 1999, faced with an imminent
acts by Port Authority employees and did not name any Port       state-court jury trial on the issue of damages to the property
Authority employees as defendants.                               owners, the Port Authority settled the remaining claims for
                                                                 $4.6 million.
  On July 20, 1994, Richard and Jane McQuade filed a
second lawsuit, which did name individual Port Authority           While this settlement ended the noise-related litigation
employees as well as the Port Authority itself as defendants.    against the Port Authority, it did not end the coverage dispute
The complaint alleged that the named employees (and other        between the Port Authority and its insurers. Without
unnamed employees) of the Port Authority committed fraud         admitting liability, the London Companies paid the Port
and other wrongful acts in enticing Burlington Air Express to    Authority’s attorney’s fees and defense costs for the period
establish a hub at the Toledo Express Airport. The complaint     during which claims were pending against individual
further alleged that the Port Authority employees acted at all   employees, but refused to pay for anything after the claims
times as agents of the Port Authority, that the Port Authority   against the individual employees had been dismissed in
acted by and through its employees, and that the Port            February 1996, including any of the $4.6 million settlement.
Authority was liable for the intentional, reckless and/or        The excess insurance providers, the Navigators Group and
negligent acts of its employees.                                 Coregis, followed suit, refusing to provide coverage under
                                                                 their policies.
  Within days of the filing of the McQuade lawsuit, the Port
Authority notified the London Companies of the suit and
asked the London Companies to determine whether the suit
was covered by the Policy, including its provision for Public
Officials Liability coverage. The London Companies
withheld coverage, asserting that the Policy did not cover
No. 02-4120              Toledo-Lucas County, et al. v.       9    10   Toledo-Lucas County, et al. v.               No. 02-4120
                                   Axa Marine, et al.                   Axa Marine, et al.

                              C.                                   of their capacity as a port or harbor officer, commissioner,
                                                                   employee, or committee member.” Id. “By specifying that an
   On May 21, 1999, the Port Authority filed this state-law        act be carried out by an individual, and that a claimant make
diversity lawsuit against the London Companies, Navigators         a demand of that individual,” the court continued, the term
and Coregis, claiming that the companies had reneged on            “‘Assured’” under the Public Officials Liability coverage
their insurance obligations. As this is a suit between citizens    “refers to any of the enumerated assureds who are individuals
of different States and countries—the Port Authority is an         rather than entities.” Id. at 853.
Ohio public entity, Coregis is an Indiana corporation with its
principal place of business in Illinois, the London Companies         Bolstering this interpretation, the district court explained,
are organized and headquartered in foreign countries and the       is the Policy’s form definition of the term “Assured,” which
Navigators Group is composed of companies organized and            includes “[t]he Named Assured and/or” a number of other
having principal places of business in New York, California        parties. Id. The court concluded that “the term ‘Assured’
and Iowa—diversity jurisdiction exists under 28 U.S.C.             cannot always be properly substituted by ‘Port Authority’, as
§ 1332. After the filing of this lawsuit, Coregis agreed to        the word ‘or’ conveys.” Id. Lastly, “[b]ecause . . . the
provide coverage and paid $3.45 million of the cost of the         London Companies’ public officials coverage is not invoked
settlement. After providing this coverage, Coregis realigned       in this case,” the court reasoned that “there can be no excess
itself as a co-plaintiff in the case, then claimed that            public officials liability under the Navigators’ policy.” Id.
Navigators was responsible for the entire amount paid by
Coregis. The Port Authority and Coregis eventually amended           In a separate order, the district court granted summary
their joint complaint to add a claim of bad faith denial of        judgment to the London Companies and Navigators on the
coverage. Both sides moved for summary judgment.                   bad-faith claims, reasoning that without the possibility of
                                                                   coverage in the first instance, Ohio law recognizes no claim
    On May 9, 2001, the district court granted summary             for bad faith denial of coverage. The court entered a final
judgment in favor of the London Companies and Navigators.          judgment in favor of the defendants.
In the district court’s view, the Public Officials Liability
provision applies only to claims against individual                 Plaintiffs timely appealed the district court’s judgment,
employees, not to claims against the Port Authority as an          which we review de novo. See Henry v. Wausau Bus. Ins.
entity. Toledo-Lucas County Port Authority v. Axa Marine &         Co., 351 F.3d 710, 713 (6th Cir. 2003).
Aviation Ins., 147 F. Supp. 2d 849, 852 (N.D. Ohio 2001)
(“[O]f the enumerated ‘Assureds’, only individual persons                                        II.
receive coverage for acts under [the Public Officials Liability]
portion of the policy.”). Acknowledging that under Ohio law          The parties agree that Ohio law governs this dispute. When
ambiguous provisions of an insurance policy drafted by the         the “terms of an insurance policy are clear and unambiguous,”
insurer must be construed in favor of the insured, the court       Ohio law requires a court to “appl[y] [them] to the facts
held that the terms of the Policy were clear and unambiguous.      without engaging in any construction.” Ledyard v. Auto-
“The language requires two things,” the district court             Owners Mut. Ins. Co., 739 N.E.2d 1, 3 (Ohio Ct. App. 2000)
reasoned: “first, a[] [wrongful] act by one or some individuals    (citation and quotation omitted). Conversely, when the
. . . , and second, a claim against those individuals by reason    insurer has drafted the contract and the “provisions of a
No. 02-4120               Toledo-Lucas County, et al. v.        11    12   Toledo-Lucas County, et al. v.              No. 02-4120
                                    Axa Marine, et al.                     Axa Marine, et al.

contract of insurance are reasonably susceptible of more than         parties listed in clause (a)—namely, the Port Authority’s
one interpretation,” a court must “construe[] [the terms]             “subsidiary, associated, affiliated companies or owned and
strictly against the insurer and liberally in favor of the            controlled companies, their duly elected and appointed
insured.” King v. Nationwide Ins. Co., 519 N.E.2d 1380,               officials, commissioners, officers, employees and volunteers
1383 (Ohio 1988).                                                     while working for and on behalf of the Port.” JA 947. When
                                                                      it comes to Public Officials Liability, they argue, the term
  With these canons of construction in mind we must address           “Assured” refers only to Port Authority employees and
two questions in this case: (1) whether the Public Officials          officials.
Liability portion of the Policy covers the Port Authority in
addition to Port Authority officials; and (2) if so, whether a          This argument, however, ignores several more telling clues
formal claim or demand must have been made against an                 to the contract’s meaning. First and foremost, it ignores the
individual official or employee in order for the Port Authority       more specific language inserted in the Certificate of
to obtain coverage.                                                   Insurance, in Policy Page 1 and in Endorsement No. 1, all of
                                                                      which identify the Port Authority as an “Assured” without
                                A.                                    limitation. Ohio law makes it clear that if two contract
                                                                      provisions are inconsistent, the specific, typed portion of a
    The first question lends itself to a relatively straightforward   contract will prevail over the generic, form portion. See
analysis. The Policy’s core promise is made by the insurer to         Malcuit v. Equity Oil & Gas Funds, Inc., 610 N.E.2d 1044,
“the Assured.” The insurer promises to “pay on behalf of the          1046 (Ohio Ct. App. 1992).
Assured” for net losses “which the Assured shall be obligated
to pay by reason of the liability [] imposed upon the Assured           Second, the defendants’ position ignores clause (b) of the
. . . for damages on account of . . . Public Officials Liability.”    generic definition of “Assured,” which specifically identifies
JA 950. “Public Officials Liability” coverage, then, covers           “any officer, director, commissioner, stockholder, partner or
not just “Public Officials,” but any “Assured” who has to pay         employee of the Named Assured, while acting in his capacity
damages on account of Public Officials Liability.                     as such,” as an “Assured.” JA 952. The identification of
                                                                      employees of the Port Authority in clause (b) indicates that
  One such “Assured” under the Policy is the Port Authority.          the “employees” referred to in clause (a)—the clause to which
The Certificate of Insurance says so; Policy Page 1 says so;          the “and/or” language applies—are employees of “subsidiary,
and the generic definition of “Assured” contained in the              associated, affiliated companies.” So while the disjunctive
Policy says so. As such, the Port Authority enjoys Public             “or” (or, more precisely, “and/or”) is used within clause (a),
Officials Liability coverage.                                         the Policy does not say whether clauses (a), (b) and the others
                                                                      are disjunctive or conjunctive as they relate to each other. In
   Attempting to counter this analysis, the defendant insurance       the absence of an “and” or an “or,” or even an “and/or”
companies point out that the language “and/or” in clause (a)          between any of the clauses, the use of the word
of the generic definition of “Assured” indicates that the term        “includes”—as in, “[t]he unqualified word ‘Assured’,
has different meanings depending on the context in which it           wherever used in [the] Policy, Includes” the parties identified
is used. Sometimes the term refers to the “Named Insured”             in clauses (a) through (d), JA 951–52—suggests that we
(the Port Authority), and sometimes it refers to the other            should read the clauses conjunctively. Doing so, the Port
No. 02-4120              Toledo-Lucas County, et al. v.      13    14    Toledo-Lucas County, et al. v.                  No. 02-4120
                                   Axa Marine, et al.                    Axa Marine, et al.

Authority (identified in clause (a)) and its employees             Policy to cover the Port Authority and its employees for
(identified in clause (b)) are each an “Assured” for purposes      Public Officials Liability.
of Public Officials Liability coverage.
                                                                                                    B.
   This reading of the policy not only accords with its terms
and the pertinent rules of construction but it also accords with     The second question is whether the Port Authority may
common sense. It is hard to imagine the Port Authority             recover “for damages on account of . . . Public Officials
deciding to purchase coverage for its employees but not for        Liability” only if a claim has also been made against an
itself in this setting, and indeed the defendant insurance         individual official. In our view, the Policy in general and the
companies have offered no reason why a governmental entity         definition of “Public Officials Liability” in particular do not
would purchase such a policy. Because state law generally          provide a natural home for such a limitation, and at all events
immunizes governmental employees acting within the scope           the ambiguity of this interpretation precludes us from
of their employment from liability for damages, the only           construing the Policy in favor of its drafter, the London
function of public officials liability coverage in most cases      Companies.
will be to insure the governmental entity itself. Compare
Ohio Rev. Code Ann. § 2744.03(A)(6) (immunity for                    The Public Officials Liability provision requires an “actual
employees of political subdivisions), with id. § 2744.02(B)        or alleged” wrongdoing “by an officer [or] . . . employee” “in
(liability of political subdivision for damages caused by the      the discharge of his/her duties as such” and “claimed against
wrongful acts of its employees). Cf. City of Sterling Heights      him/her solely by reason of his/her capacity as such with a
v. United Nat’l Ins. Co., No. 03-72773, 2004 WL 252091, at         port or harbor commission named herein.” JA 953 (emphasis
*6–8 (E.D. Mich. Feb. 11, 2004) (holding that insurance            added). As an initial matter, the Policy nowhere defines the
companies had a duty to defend and indemnify the City and          term “claimed.” Nor do dictionary definitions resolve the
a public official under public officials liability coverage);      question. One frequently-used definition (“[t]o demand, ask
Continental Cas. Co. v. County of Chester, 244 F. Supp. 2d         for, or take as one’s own”) suggests that the Policy requires
403, 405–06 (E.D. Pa. 2003) (holding that the insurer had a        a lawsuit to be filed or a demand for money to be made
duty to defend and indemnify the County against civil rights       against an employee, while the other frequently-used
claims under its public officials liability coverage).             definition (“[t]o state to be true . . . [or to] assert or maintain”)
                                                                   suggests that an allegation of wrongdoing by an employee
  In the final analysis, had the parties intended the Policy       contained in a lawsuit against the Port Authority alone
(oddly enough) to cover employees for Public Officials             suffices to invoke coverage. The Am. Heritage Dictionary of
Liability, but not the Port Authority itself—an intention          the English Language 341 (4th ed. 2000).
capable of being simply stated—one would expect more
clarity on the point than this Policy provides. Having failed          The context in which the words appear, however,
to provide the requisite clarity, the author of the Policy, the    undermines the defendant insurance companies’ argument.
defendant London Companies, cannot now overcome the                The phrase “claimed against” modifies “any actual or alleged
ambiguity-default canon of construction, which requires us to      act [or] error.” The only definition of “claimed” that makes
give the Port Authority the benefit of the doubt and read the      sense in this setting is the second one (“[t]o state to be true .
                                                                   . . [or to] assert or maintain”) because “act[s]” and “error[s]”
No. 02-4120              Toledo-Lucas County, et al. v.     15    16    Toledo-Lucas County, et al. v.               No. 02-4120
                                   Axa Marine, et al.                   Axa Marine, et al.

are asserted against employees, not demanded of them.                The London Companies also err in suggesting that this
Indeed, in each of the five instances in which the verb           interpretation creates a form of coverage that sweeps so
“claimed” appears in the Policy, the words “alleged,”             broadly that it would make the other forms of coverage under
“asserted” or “maintained” can be substituted without             the Policy (e.g., Bodily Injury and Personal Injury)
noticeably altering the meaning.                                  unnecessary because any allegation against an entity is
                                                                  inherently one based upon the conduct of its individual
  Nor, contrary to the defendant insurance companies’             employees. This argument misses the mark because the other
position, does this interpretation render the “claimed against”   provisions do not contain the limitation that the Public
language “superfluous.” The provision requires wrongdoing         Officials Liability provision has—namely, wrongdoing
“claimed against [an employee] solely by reason of his/her        alleged against an employee.
capacity as such.” JA 953 (emphasis added). As the “solely”
language suggests, this provision is designed to preclude           In the end, while we believe this interpretation represents
coverage when a plaintiff sues the Port Authority or an           the better reading of the policy, the best that can be said of the
employee for damages caused by an employee who is not             defendant insurance companies’ contrary arguments is that
acting solely in an official capacity, which is a perfectly       they raise an ambiguity on the point. And under those
understandable exclusion and one that gives content to the        circumstances, as noted above, Ohio law requires us to apply
“claimed against” language and to the “asserted” against          the ambiguity-default canon of construction and to give the
interpretation of it offered by the Port Authority. Were the      Port Authority the benefit of the doubt. Public Officials
point of this language to exclude coverage when a plaintiff       Liability coverage, accordingly, does not necessarily require
decides to sue the Port Authority for its employee’s              a claim or demand to be made against an individual
wrongdoing, one would not expect such a significant               employee; a claim or demand against the Port Authority for
limitation on coverage to be tucked away in a phrase              damages on account of an individual employee’s wrongdoing
addressing the capacity in which the employee acts.               solely in his or her capacity as a Port Authority employee will
                                                                  suffice.
   Also unavailing is the argument that “of the over twenty-
five times that the words ‘claim’ or ‘claims’ appear in the                                     III.
policy, never are they used as a substitute for ‘alleged’ or
‘assert.’” London Companies’ Br. at 29. In those instances,         The parties have briefed several other issues that the district
the words “claim” and “claims” are used as nouns (e.g.,           court did not have an opportunity to address in view of the
requiring that a claim be made by the Port Authority), not as     court’s ruling that the Port Authority is not an Assured under
verbs (e.g., requiring an act or error claimed against an         the Policy and that a lawsuit or demand made against an
employee). Had the London Companies used the noun                 individual employee is a precondition of coverage. The
“claim” instead of the verb “claimed” in this provision, we       district court did not decide whether the statute of limitations
quite agree that the definition of Public Officials Liability     bars any of these claims; whether the Kagy lawsuits provided
might mean what they suggest it means—liability resulting         notice of a Public Officials Liability claim before the effective
solely from claims made against an employee. But they did         date of the Policy, thus precluding coverage under the Policy;
not use that language.                                            and whether the Navigators Group owes coverage to the Port
                                                                  Authority. And what the district court elsewhere did
No. 02-4120             Toledo-Lucas County, et al. v.   17
                                  Axa Marine, et al.

decide—that the defendants were entitled to summary
judgment on the bad-faith claims and that Coregis lacked
standing to bring a bad-faith claim against the London
Companies—was premised on the court’s initial ruling that
the Public Officials Liability portion of the Policy did not
insure the Port Authority. Since we disagree with that
premise and since the district court did not reach the other
issues, we leave it to the district court to address these
questions in the first instance.
                            IV.
  For the foregoing reasons, we reverse the district court’s
judgment and remand the case for further proceedings
consistent with this opinion.