Court Opinion

ID: 6762250
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:32:46.912503+00
Date Added: 2024-06-11T16:02:37.449193
License: Public Domain

H. Brown, J.
In this case, we must decide whether public policy prohibits an employer from insuring against tort claims by employees in cases where the employer did not intend to injure the employee but knew that injury was substantially certain to occur. For the reasons which follow, we find that it does not.
I
We begin our discussion with an analysis of the nature of employer intentional torts. In Van Fossen v. Babcock & Wilcox Co. (1988), 36 Ohio St. 3d 100, 522 N.E. 2d 489, paragraphs five and six of the syllabus, we adopted, in effect, the definition of an “intentional tort” contained in 1 Restatement of the Law 2d, Torts (1965) as the law of Ohio. Under this standard, an intentional tort occurs when “* * * the actor desires to cause consequences of his act, or * * * he believes that the consequences are substantially certain to result from it.” 1 Restatement of the Law 2d, Torts (1965) 15, Section 8A. This definition encompasses two different levels of intent. The first level, which we will refer to as “direct intent,” is where the actor does something which brings about the exact result desired. Irf the second, the actor does something which he believes is substantially certain to cause a particular result, even if the actor does not desire that result.1
It appears that most employer intentional torts, including the claim pled in the instant case, fall into the latter category.2 Where the employer’s al*176leged tortious actions were not taken with deliberate intent to injure the employee, and where the damages sought are to compensate for injury rather than to punish wrongdoing, the public policy argument for depriving the employer of insurance protection is not compelling.
All liability insurance protects the tortfeasor from economic loss resulting from legal liability. Prosser & Keeton, The Law of Torts (5 Ed. 1984) 585, Section 82 (“Prosser”); Keeton & Widiss, Insurance Law (1988) 517, Section 5.4(c)(5) (“Keeton”). At one time, liability insurance was attacked on public policy grounds “as an encouragement to antisocial conduct and a relaxation of vigilance toward the rights of others, by relieving the actual wrongdoer of liability. * * *” Prosser, supra, at 585, Section 82. As tort law evolved toward an emphasis on victim compensation, id. at 7, Section 2, and “it became apparent that no dire consequences in fact resulted,” id. at 586, Section 82, public policy came to favor liability insurance for negligent acts as a means of assuring that innocent persons are made whole. This policy of assuring victim compensation has been extended to “wanton” and “reckless” torts. Keeton, supra, at 524-525, Section 5.4(d)(3).
It is often said that public policy prohibits liability insurance for intentional torts. Keeton, supra, at 519, Section 5.4(d)(1). This statement is based on “the assumption that such conduct would be encouraged if insurance were available to shift the financial cost of the loss from the wrongdoer to his insurer. * * *” Farbstein & Stillman, Insurance for the Commission of Intentional Torts (1969), 20 Hastings L.J. 1219, 1245-1246. However, this blanket prohibition “makes no distinctions as to the various forms of intentional wrongdoing and does not admit the possibility that some torts might not be particularly encouraged if insurance were available for them.” Id. at 1251. The better view is to prohibit insurance only for those intentional torts where “the fact of insurance coverage can be related in some substantial way to the commission of wrongful acts of that character. * * *” Isenhart v. General Cas. Co. (1962), 233 Ore. 49, 52-53, 377 P. 2d 26, 28; Farbstein & Stillman, supra, at 1251-1253. In the case of a “direct intent” tort, the presence of insurance would encourage those who deliberately harm another. In torts where intent is inferred from “substantial certainty” of injury, the presence of insurance has less effect on the tortfeasor’s actions because it was not the tortfeasor’s purpose to cause the harm for which liability is imposed. See Indiana Lumbermens Mut. Ins. Co. v. Brandum (Ind. App. 1981), 419 N.E. 2d 246, 248. In the latter situation, the policy of assuring victim compensation should prevail.3
*177The General Assembly, implicitly by its enactment of R.C. 4121.80 in 1986, made a sweeping declaration of public policy in this area. Division (E) of the statute establishes a statewide insurance fund, to be administered by the Industrial Commission, which pays all claims arising out of employer intentional torts (whether the intent is found to be “direct” or “substantially certain”). See R.C. 4121.80(B) and (G)(1). Whatever the wisdom of this enactment,4 it is an expression by the public’s elected representatives that such insurance is not against public policy.5
In other states, legislative enactments fund an employer’s exposure to intentional torts at the “substantially certain” level. Such torts are covered by statutory workers’ compensation, leaving the employee free to sue the employer at common law only for “direct intent” torts. See, e.g., Mingachos v. CBS, Inc. (1985), 196 Conn. 91, 491 A. 2d 368; Sullivan v. Liberty Mut. Ins. Co. (Fla. App. 1979), 367 So. 2d 658, certiorari denied (Fla. 1979), 378 So. 2d 350; Provo v. Bunker Hill Co. (D. Idaho 1975), 393 F. Supp. 778; Collier v. Wagner Castings Co. (1980), 81 Ill. 2d 229, 408 N.E. 2d 198; Hildebrandt v. Whirlpool Corp. (Minn. 1985), 364 N.W. 2d 394; Noonan v. Spring Creek Forest Products, Inc. (Mont. 1985), 700 P. 2d 623; Crespi v. Ihrig (1984), 99 App. Div. 2d 717, 472 N.Y. Supp. 2d 324, affirmed (1984), 63 N.Y. 2d 716, 480 N.Y. Supp. 2d 205, 469 N.E. 2d 526; Kittell v. Vermont Weatherboard, Inc. (1980), 138 Vt. 439, 417 A. 2d 926.
Accordingly, we hold that public policy does not prohibit an employer from securing insurance against compensatory damages sought by an employee in tort where the employer’s tortious act was one performed with the knowledge that injury was substantially certain to occur.
II
Fireman’s argues that the Endorsement does not provide coverage for employer intentional tort claims against Normandy.
We are not persuaded. The Endorsement appears to have been written specifically for Ohio employers. By its terms, it extends coverage to “damages because of bodily injury * * * sustained by any employee of the Insured arising out of and in the course of his employment by the Insured * * *” and deletes the exclusions in the Policy. On its face, that coverage reaches the claim in this case. The Endorsement specifically excludes damages covered by statutory compensation systems such as workers’ compensation, damages “on account of bodily injury to * * * any employee employed in violation of law,” and assault and battery “committed by or at the direction of the Insured.” Nowhere in this extensive list of de*178tailed exclusions is there mention of employer intentional torts under Blankenship. If Fireman’s meant to exclude employer intentional torts from its coverage, it should have said so. Further, if such coverage is excluded, the insured is left with essentially no coverage in return for the premiums paid to secure the supplemental endorsement.6
This case is distinguishable from Wedge Products, Inc. v. Hartford Equity Sales Co. (1987), 31 Ohio St. 3d 65, 31 OBR 180, 509 N.E. 2d 74. Wedge concerned a general liability policy which limited coverage to injuries “neither expected nor intended” by the employer, and specifically excluded coverage for claims by employees arising out of the course of their employment. Id. at 67, 31 OBR at 181-182, 509 N.E. 2d at 75-76. We held that this policy did not provide coverage for employer intentional torts. Id. at 67, 31 OBR at 182, 509 N.E. 2d at 76. The policy in Wedge did not contain the supplemental endorsement at issue in the instant case.
For the foregoing reasons, we reverse the judgment of the court below and reinstate the judgment of the trial court ordering Fireman’s to satisfy the consent judgment between Harasyn and Normandy.

Judgment reversed.

Moyer, C.J., Sweeney, Douglas, Wright and Re snick, JJ., concur.
Holmes, J., dissents from the syllabus and Part I of opinion, and concurs in Part II and the judgment.

 In criminal law, these two levels of intent are treated as distinct mental states. What we refer to as “direct intent” is similar to the culpable mental state of “purposeful” in R.C. 2901.22(A). What we refer to as “substantially certain” is similar to the culpable mental state existing when a person acts “knowingly” in R.C. 2901.22 (B).

 See, e.g., Schump v. Firestone Tire & Rubber Co. (1989), 44 Ohio St. 3d 148, 541 N.E. 2d 1040 (allegation that employer knew failure of tire was substantially certain to occur); Hunter v. Shenango Furnace Co. (1988), 38 Ohio St. 3d 235, 236, 527 N.E. 2d 871, 872 (allegation that employer “allowed a condition to exist * * * that was substantially likely to cause injury * * *”); Kunkler v. Goodyear Tire & Rubber Co. (1988), 36 Ohio St. 3d 135, 136, 522 N.E. 2d 477, 478 (intentional tort alleged where employer told employee to operate machine despite danger of explosion); Pariseau v. Wedge Products, Inc. (1988), 36 Ohio St. 3d 124, 125, 522 N.E. 2d 511, 512-513 (employer alleged to have known that safety device on punch press was malfunctioning); Jones v. VIP Development Co. (1984), 15 Ohio St. 3d 90, 95-96, 15 OBR 246, 250-251, 472 N.E. 2d 1046, 1051-1052 (two consolidated cases: [1] alleged failure to warn employees of presence of dangerous condition, [2] alleged removal of safety device from coal chute); but, see, Jones, supra, at 91-92, 15 OBR at 247, 472 N.E. 2d at 1049 (the third consolidated case alleged deliberate misrepresentation by employer of health effects of acid fumes); Blankenship, supra, at 608-609, 23 O.O. 3d at 505, 433 N.E. 2d at 574 (alleged deliberate misrepresentation by employer of health effects of chemicals used in workplace).

 The consent judgment in the instant case appears to be for compensatory damages only. Punitive damages are therefore not at issue. It should be noted, however, that because punitive damages are awarded to punish and deter the tortfeasor rather than to compensate the victim, see Detling v. Chockley (1982), 70 Ohio St. 2d 134, 24 O.O. 3d 239, 436 N.E. 2d 208, there is a different and much stronger public policy interest against insurance coverage which would indemnify the tortfeasor against punitive damages. State Farm Mut. Ins. Co. v. Blevins (1990), 49 Ohio St. 3d 165, 551 N.E. 2d 955; Prosser, supra, at 13, Section 2; see, also, Farbstein & Stillman, supra, at 1252 (treble-damage remedies would lose their deterrent effect if indemnity were allowed).

 One commentator has criticized the intentional tort fund created by R.C. 4121.80 as eliminating “the deterrent factor that is present when * * * [employers] are personally accountable for their actions.” Comment, Intentional Torts by Employers in Ohio, the General Assembly’s Solution: Ohio Revised Code Section 4121.80 (1987), 56 U. Cin. L. Rev. 247, 262. The commentator advocates basing the intentional tort fund premium on the employer’s record of misconduct as a means of preserving the deterrent effect of common-law damages. Id.

 We are not, by our holding in the instant case, expressing any opinion on the constitutionality of any portion of R.C. 4121.80.

 At oral argument, counsel for Fireman’s said that the Endorsement was designed to cover “dual capacity” tort claims, assault and battery cases, and injuries occurring to employees working out of state. The argument is' specious. The Endorsement contains no language restricting its application in this manner. Further, “dual capacity” torts appear to be covered by the basic Policy, without need of the Endorsement.