Stacy Berliner and Wesley Lambert Represent United Policyholders in Amicus Brief Supporting Policyholder

Insurance Recovery Practice Co-Chair Stacy RC Berliner and Litigation Practice Chair Wesley Lambert are noted in Law360’s article “3 Insurance Appeals To Watch At State High Courts In March” as representing United Policyholders in an amicus brief supporting policyholder Ironics Inc. in Motorists Mutual Insurance Co. v. Ironics Inc. et al. (2020-0306, Ohio Supreme Court). United Policyholders is also represented by its own Amy Bach, and William G. Passannante and John M. Leonard of Anderson Kill PC.

Mutual Insurance Co. asked the Ohio Supreme Court to reverse a state appeals panel's January 2020 decision obligating it to defend policyholder Ironics Inc. against claims its product (tube scale) caused damage to Owens-Brockway’s bottles. Specifically, Ironics used another company, Foundry Sand, to screen the tube scale before sending it to Owens-Brockway, which used it to color its bottles. Foundry Sand accidentally contaminated the tube scale with stone and when used to color Owens-Brockway’s bottles, caused the bottles to break easily. Owens-Brockway had to destroy 1,850 tons of the damaged bottles. On March 4, the Ohio high court will hear arguments in a dispute over whether the inclusion of the allegedly faulty component in a product results in property damage that is covered by liability insurance.

Background: Motorists Mutual declined to defend Ironics against Owens-Brockway’s claims, insisting that this was not an accidental "occurrence" under commercial general liability and umbrella policies it sold the company. Moreover, the insurer argued that Owens-Brockway's bottles did not sustain any damage when the tainted tube scale was added to them.  The appellate panel, however, found that Motorists Mutual's defense duty WAS triggered under the umbrella policy, which defined an occurrence broadly. The panel noted that Ironics' allegedly faulty work qualified as an event, and because the company did not expect or intend the tube scale to be contaminated, defense coverage is available. The policyholder also asks the Court to reject the integrated systems rule stating that if the insurer intended to exclude coverage for integrated products, as the policy author, it could have explicitly done so in the policy – but it did not. 

United Policyholders filed an amicus brief supporting Ironics, arguing, among other positions, that a decision in Motorists Mutual's favor would "set a dangerous new precedent" permitting insurers "to engage in post-loss underwriting restricting" policies' coverage.

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