Ohio Court Recognizes $101M Lead Reduction Ordinance Subject to Lloyd's Policy

Ohio Court Recognizes $101M Lead Reduction Ordinance Subject to Lloyd’s Policy

A court order that requires Sherwin-Williams Co. payment of $101 million to the lead abatement fund, tantamount to “damage”, which is recoverable through the insurance policy of Lloyd’s of London, Ohio Court of Appeal. ruling thursday.

Cuyahoga County’s Eighth Circuit of Appeals overturned the trial court’s decision that found coverage was not granted because the Santa Clara County Supreme Court’s ruling in California was not an award for damages. The Board of Appeal stated that the term “damage” should be interpreted broadly in favor of the insured.

The court noted that a California appeals court ruled in favor of paint maker NL Industries in a similar lawsuit against underwriters Lloyds.

“Just as the NL I court found, we find that the average businessman reading the policy in question would believe that the pollution control fund constituted ‘damage’ under the relevant language of the policy,” the opinion said.

The dispute arose from a public nuisance lawsuit filed by several California counties against Sherwin-Williams, NL and ConAgra Grocery Products Co. for marketing the use of lead paint in interiors despite knowing it would eventually decompose, chip off and present public health. danger. After all appeals were heard, the lawsuit resulted in a settlement that would require each of the companies to pay $101.7 million to a pollution control fund.

Sherwin-Williams sued Lloyd seeking insurance coverage, but the Cuyahoga County Court of Common Pleas agreed with the insurer’s argument that the cut order did not amount to “damages” covered by the policy.

The Board of Appeal disagreed. The opinion states that despite the fact that the Santa Clara County Court issued a “mitigation order” rather than an “indemnification award”, the effect is the same.

The Ohio Court of Appeals noted that the California Court of Appeals gave “a thoughtful insight into the ‘damage’ mystery” and ruled in favor of the cover. Another case, heard in New York and known as NL II, was also decided in favor of the insured person.

“Returning to the present case, we note that under Ohio law, “damages” in its simple and ordinary meaning is necessarily broad enough to cover a variety of remedies, including damages, injunctive relief, restitution, and other remedies for the right of justice. the opinion says.

The ruling did not end the lawsuit; it only decides whether a California court order constitutes “damages” covered by the policy. The Court of Appeal returned the case to the Court of First Instance for further consideration.

Photo courtesy of Sherwin-Williams.

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