2 2 - Supreme Court of Ohio and the Ohio Judicial System THE SUPREME COURT OF OHIO CHIQUITA BRANDS...

IN THE SUPREME COURT OF OHIO

CHIQUITA BRANDS INTERNATIONAL, INC.

Plaintiff-Appellant

-vs-

NATIONAL UNION FIRE INSURANCECOMPANY OF PITTSBURGH, PA.

Defendant-Appellee

Case No. 6 2 2On Appeal from theCourt of Appealsof Hamilton CountyFirst Appellate District

Court of AppealsCase No. C-120019

MEMORANDUM IN SUPPORT OF JURISDICTION OFPLAINTIFF-APPELLANT CHIQUITA BRANDS INTERNATIONAL, INC.

Yvette McGee Brown (0030642)Jones Day325 John H. McConnell BlvdSuite 600Columbus, OH [email protected]

Stuart Dornette (0002955)Taft Stettinius & Hollister

LLP425 Walnut Street;Suite 1800Cincinnati, OH [email protected]

William P. Skinner (2313-2013)Covington & Burling LLP1201 Pennsylvania Ave., NWWashington, DC [email protected] of Record

Attorneys for Plaintiff-Appellant Chiquita Brands International, Inc.

Richard H. Nicolaides, Jr.Barbara I. MichaelidesAgelo L. ReppasBates Carey Nicolaides LLP191 North Wacker DriveSuite 2400Chicago, IL 60606312-762-3100

Joseph W. Borchelt (75387)Reminger525 Vine StreetSuite 1700Cincinnati, OH [email protected]

Attorneys for Defendant-Appellee National Union Fire Insurance Companyof Pittsburgh Pa.

April 18, 2013

APR ^ 8 Z013

CLkRK OF C®uRT__. .-_jSUPREME C0URIT OF OHIO

flLED

TABLE OF CONTENTS

TABLE OF AUTHORITIES . . . . . . . .. . . . . . . . . . . . . . . . ... .. . . . . . . . . .. . . . . .. .. . . .. .. . . . . . .. . . . .. . .. . ............. ii

THIS CASE PRESENTS ISSUES OF PUBLIC AND GREAT GENERAL 1NTEREST ............. 1

STATEMENT OF THE CASE AND RELEVANT FACTS ......................................................... 4

ARGUMENT IN SUPPORT OF PROPOSITIONS OF LAW ....................................................... 8

Proposition of Law No. 1: Under standard-form CGL policies and Ohio law, an insureris obligated to pay defense costs for tort claims alleging intentional conduct whenother allegations or evidence demonstrate it is possible the policyholder did notexpect or intend to cause bodily injury . .............................................................................. 8

Proposition of Law No. 2: Under standard-form CGL policies that provide coverage forbodily injury caused by an occurrence that takes place in the coverage territory,coverage depends on the location of the occurrence rather than the location of theinj ury . . . . . . . .. . . .. . . .. . . .. . . . .. . . . .. .. .. . . . . . . . . .. . . . . . . . . .. . . . .. .. .. .. . .. . . .. .. .. . . .. . . . . .. . . . .. .. .. . . . .. .. . . . .. . . .. . . ... . . 12

CONCLUSION ............................................................................................................................. 15

OPINION OF COURT OF APPEALS AND JUDGMENT ENTRY (March 8, 2013)

CERTIFICATE OF SERVICE

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TABLE OF AUTHORITIES

Page(s)

Federal Cases

Ace Am. Ins. Co. v. RC2 Corp.,600 F.3d 763 (7th Cir. 2010) ...................................................................................................14

CA CI Int'l, Inc. v. St. Paul Fire & Marine Ins. Co.,566 F.3d 150 (4th Cir. 2009) ...................................................................................................14

Drake v. Richerson,N.D. Ohio No. 5:11CV1898, 2012 WL 2681413 (Ju1y 6, 2012) .........................................1, 12

State Cases

Allstate v. Campbell,128 Ohio St.3d 186, 2010-Ohio-6312, 942 N.E.2d 1090 ..........................................1, 9, 10, 11

Buckeye Union Ins. Co. v. New Eng. Ins. Co.,87 Ohio St.3d 280, 1999-Ohio-67, 720 N.E.2d 495 ..................................................................9

City of Sharonville v. Am. Emps. Ins. Co.,109 Ohio St.3d 186, 2006-Ohio-2180, 846 N.E.2d 833 ....................................................11, 13

Littleton v. Good Samaritan Hosp. & Health Ctr.,

39 Ohio St.3d 86, 529 N.E.2d 449 (1988) ...............................................................................10

Physicians Ins. Co. v. Swanson,58 Ohio St.3d 189, 569 N.E.2d 906 (1991) ............................••...•.•••••••••••••••••••••••••••••••••.••••••••••9

Preferred Mutual Insurance Co. v. Thompson,23 Ohio St.3d 78, 491 N.E.2d 68$ (1986) ................................. . ........... ......... ..... .:. .........1 1 , 1 2

Safeco Ins. Co. v. White,122 Ohio St.3d 562, 2009-Ohio-3718, 913 N.E.2d 426 ............................................3, 9, 13, 14

State Farm Mut. Auto. Ins. Co. v. Gourley,10th Dist., No. 12AP-200, 2012-Ohio-4909 ..................................................................1, 10, 12

Federal Statutes

Alien Tort Statute, 28 U.S.C. § 1350 ...................................................................................6, 11, 13

.........................................................................................Antiterrorism Act, 18 U.S.C. § 2331 6, 10

THIS CASE PRESENTS ISSUES OF PUBLIC AND GREAT GENERAL INTEREST

This case presents important and recurring questions of insurance law: when does an

insurer have a duty to defend a policyholder against lawsuits alleging intentional conduct? The

questions arise under standard-form commercial general liability ("CGL") policies, in common

use throughout Ohio, that provide coverage for lawsuits seeking damages for "bodily injury"

caused by an "occurrence" subject to an exclusion for bodily injury "expected or intended from

the standpoint of the insured." The court of appeals held that National Union is not obligated to

pay defense costs even though: ( 1) the underlying tort suits assert both negligence and intentional

tort claims, and (2) the trial court found, based on an extensive evidentiary record, that Chiquita

did not intend to cause bodily injury, but that-as to Chiquita-any harm was "unintended and

accidental." T.d. 265, Attachment C, at pp. 2-3, 5.

In this case, the court of appeals held that allegations of intentional conduct are outcome-

determinative and that it is irrelevant that there are also negligence allegations and evidence from

which the trial court concluded that Chiquita acted for the purpose of saving lives. The First

District's approach in this case is fundamentally at odds with that of the Tenth District in State

Farm Mut. Auto. Ins. Co. v. Gourley, 10th Dist., No. 12AP-200, 2012-Ohio-4909. The Tenth

District concluded that, under this Court's decision in Allstate v. Campbell, 128 Ohio St.3d 186,

2010-Ohio-6312, 942 N.E.2d 1090, coverage for defense costs requires an evaluation of

evidence about the actual facts and that the standard is whether any reasonable jury could

conclude that the insured did not expect or intend to cause harm. Accord Drake v. Richerson,

N.D. Onio No. 5:11C V1898, 2012 WL 2681413 (July 6, 2012).

These are issues of public and great general interest because they affect almost all Ohio

companies and the people who work for them. Standard-form CGL policies provide coverage

for tort claims against both companies and their directors, officers and employees. In this case,

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the tort plaintiffs, in addition to suing Chiquita, have also sued individual defendants, including

Fernando Aguirre, Cyrus Freidman, and Keith Lindner, former CEOs of Chiquita; Roderick

Hills, a former director of Chiquita (and a former chairman of the SEC); and Robert Olson, a

former general counsel of Chiquita. The Court should grant review to provide guidance to lower

courts about these issues.

This case also presents an important and unsettled question regarding the proper

interpretation of "coverage territory" provisions found in commercial general liability policies.

From 1966 to 1986, the standard form policy stated that the "insurance only applies to bodily

injury ... which occurs ... within the policy territory." See T.d. 225, Attachments A-B. As

dictated by the plain language of these policies, courts adopted a "place of injury" test to

determine whether a policyholder was entitled to coverage. In 1986, however, the form language

was changed to require that "[t]he `bodily injury' ...[be] caused by an occurrence that takes

place in the `coverage territory."' Id., Attachment C. Finding "no Ohio cases directly on point,"

the court of appeals looked to out-of-state decisions applying the laws of other states, and held

that the "place of injury" test still applies-thus rendering the 1986 change in the form policy

language meaningless. Op. 9-12 ¶¶ 22-27.

The court's interpretation of the "coverage territory" provision will have a significant

impact on policyholders. The 1986 change in policy language shifted the focus from the location

of the injury to the location of the occurrence that caused the injury. That change reflects the

reality of modern business in which actions of companies in the United States can have effects

.,+ 1.,o,.A the tnrr nlaintiffs allege that the actions of- ..,throughout the woria. That reaiity .^^ ^dell^ 11^1^: ___

Chiquita executives in Cincinnati-deciding that the company's Colombian subsidiary should

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make extortion payments to armed groups in Colombia for the purpose of saving lives-is the

proximate cause of more than 4,000 murders in Colombia.

Although this Court has not decided this question, its decisions strongly suggest that the

court of appeals reached the wrong result. The court of appeals should have begun its analysis

by looking to the policy language. That language plainly requires a "place of occurrence" test,

not a "place of injury" test. Had the court of appeals taken this approach, it would have been

clear that National Union is obligated to provide a defense because the relevant occurrence took

place within the United States. This Court recently held that when, as in this case, tort plaintiffs

allege that the policyholder's negligence resulted in a third party's committing an intentional tort,

the policyholder's allegedly negligent acts constitute the relevant occurrence. See Safeco Ins.

Co. v. White, 122 Ohio St.3d 562, 2009-Ohio-3718, 913 N.E.2d 426. The occurrence in this case

was therefore within the coverage territory because Chiquita's allegedly negligent conduct took

place in Cincinnati.

In short, the trial court found, based on an extensive evidentiary record, that "Chiquita

never intended to harm anyone," and that it is therefore entitled to coverage for defense costs

because a finder of fact in the tort suits might conclude that the adoption of the payments policy

by Chiquita executives in Cincinnati was negligent (i.e., that a reasonable and prudent company

would not have adopted such a policy). T.d 265, Attachment D, at pp. 2-3. The court of appeals

did not take issue with the trial court's factual findings, but nevertheless reversed the decision.

According to the court of appeals, evidence about the what, why, and where of Chiquita's

c+'.llr^rv"n stand, ', - iconduct is irre levant. This ,., decision, ii `;^ n^ ad t ^ wil-l have neffects on

policyholders. The Court should grant jurisdiction and decide both of these important issues;

Chiquita's ultimate right to defense coverage depends on the resolution of both issues.

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STATEMENT OF THE CASE AND RELEVANT FACTS

Chiquita seeks a declaratory judgment concerning National Union's obligation to provide

insurance coverage for defense costs that it has incurred and will incur in connection with certain

tort lawsuits, and an award of damages for breach of those obligations. The underlying tort

lawsuits include both negligence and intentional tort claims alleging that Chiquita is liable for the

deaths of more than 4,000 people in Colombia who were allegedly murdered by various armed

groups because its former Colombian subsidiary, Banadex, made payments to these groups. The

groups had threatened to kill Banadex employees if the payments were not made. Chiquita

adopted the policy that Banadex should make the payments to save the lives of its employees.

In the late 1980s and early 1990s, the FARC and other left-wing guerilla groups were

engaged in violent conflict with the Colombian government and each other for control of the

banana-growing zones in Columbia. These groups posed a real threat to Banadex, as evidenced

by the instances in which they threatened, kidnapped, or killed Banadex employees. The

Colombian army and police lacked the resources to protect Banadex employees or property from

attacks by these groups.

In 1989, Banadex received its first extortion demand from the FARC. Banadex sought

instructions about how to respond from Chiquita executives in Cincinnati. Chiquita executives

discussed and decided this question in Cincinnati. It was clear to them that the FARC would kill

Banadex employees if the payments were not made, and that there would be additional demands

in the future both from the FARC and from other armed groups. Accordingly, Chiquita

^;. o^ i„ (^'inrinr^at i n^,adP the pc,licy decision that Banadex should make payments asexecu ^iJv^ ^^^ ...,.^.^.^ K

necessary to protect the lives of its employees.

Banadex made payments to several different armed groups from the time the corporate

policy was established in 1989 until the last payment in early 2004. From approximately 1989 to

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1997, the payments were typically made to the FARC and other left-wing guerilla groups.

Beginning in about 1997, the left-wing groups were gradually pushed out of the banana-growing

zones, and their demands for payment tapered off and then ended. In or about 1997, the leader

of the AUC, a right wing paramilitary group, summoned a Banadex manager to a house in

Medellin, and told him that Banadex must stop paying the guerillas and instead pay the AUC.

As the Department of Justice has acknowledged, the AUC's leader "sent an unspoken but clear

message that failure to make the payments could result in physical harm to Banadex personnel

and property." T.p. JTX 43, ¶ 21. Thereafter, Banadex made several payments to the AUC. At

about the same time, Banadex also began making payments to organizations called convivirs,

which were licensed by the government of Colombia and were supposed to provide services

analogous to a Neighborhood Watch group. Banadex later came to suspect that at least a portion

of the money paid to convivirs was being transferred to the AUC, but continued making the

payments to save the lives of its employees.

Prior to February 2003, Chiquita was repeatedly advised by both inside and outside

counsel that its payments policy was legal under the law of Colombia and was never advised that

the policy was illegal under U.S. law. In February 2003, a lawyer in Chiquita's law department

discovered that the AUC had been put on an official U.S. list of terrorist organizations on

September 9, 2001. This designation meant that payments to the AUC that were made after that

date were illegal under U.S. law. All of the payments to the AUC that were made during the

period of the National Union policies at issue in this case were made prior to July 31, 2000, and

were therefore legal under U.S. law.

Shortly after discovering that the AUC was designated a terrorist organization, Chiquita

voluntarily disclosed to senior officials of the United States Department of Justice that Banadex

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had made payments to armed groups in Colombia for the purpose of saving the lives of its

employees. In response to Chiquita's request for guidance, a senior Justice Department official

acknowledged "that the issue of continued payments was complicated." T.p. JTX 43, ¶ 62. In

January 2004, shortly before it sold Banadex, Chiquita ended the 1989 policy by instructing

Banadex to stop making payments to armed groups. In March 2007, Chiquita agreed to plead

guilty to making payments to a designated terrorist organization without having first obtained a

license from the government of the United States and to pay a fine of $25 million.

A few months after Chiquita's plea agreement, the first underlying tort lawsuit was filed

in June 2007. The record in this case includes complaints in seven underlying tort lawsuits

brought on behalf of Colombian citizens under the Alien Tort Statute, 28 U.S.C. § 1350

("ATS"), and two lawsuits brought on behalf of U.S. citizens who allege bodily injury or death

during the period of the National Union policies under the Antiterrorism Act, 18 U.S.C. § 2331

("ATA"). These lawsuits seek damages from Chiquita on behalf of more than 4,000 persons

who were allegedly murdered by armed groups in Colombia, including both left-wing guerilla

groups and right-wing paramilitary groups. All of the lawsuits are based on the payments that

Banadex made to the armed groups. The lawsuits allege that Chiquita should be liable because it

conspired with the armed groups to have people murdered; they also allege, in the alternative,

that Chiquita should be liable because payments were made to the armed groups or because

Chiquita was reckless in its dealings with such groups. See, e.g., T.p. JTX 38, ¶ 937.

In September 2008, Chiquita filed this action seeking, among other things, a declaratory

to reimburse Chiauita for defense costs in. that its primary insurers ^^a<V., a".^ obligation - ^judgment

the underlying tort lawsuits. Chiquita thereafter entered into settlement agreements with primary

insurers other than National Union under which those insurers agreed to reimburse Chiquita for a

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substantial portion of its defense costs. Following (1) extensive discovery that included the

production of voluminous documents by Chiquita and the depositions of numerous Chiquita

witnesses, (2) summary judgment motions in 2009; and (3) a two-phase bench trial in 2010, the

trial court ruled that National Union has an obligation to reimburse Chiquita for all reasonable

defense costs incurred in those tort lawsuits that seek damages for any bodily injury that

allegedly occurred during the period of one of its policies. Relying on "the entirety of the record

in this case," the trial court found that the relevant "occurrence" was Chiquita's policy that

Banadex should make payments as necessary to protect the lives of its employees, and that this

occurrence took place in Cincinnati where the policy was adopted. T.d. 265, at p. 1. The trial

court also found that Chiquita adopted the payments policy for the purpose of saving lives and

did not intend to cause harm.

Chiquita had a single policy, during the coverage period ofNational Union, to make payments to the FARC, AUC, and anumber of other groups. The purpose of these payments was toprotect the property and employees of Chiquita and its subsidiaries.... The decision to make payments to these groups wasintentional but there was no intent to hurt others. Any harm thatcame from these payments was, as to Chiquita and its subsidiaries,unintended and accidental. . . . There is no evidence that Chiquitawas trying to accomplish anything with the policy of paying thesegroups but the protection of its employees and property.

Id., Attachment C, at pp. 2-3, 5.

The court of appeals reversed for two reasons. First, the court held that that National

Union has no duty to pay defense costs because "the conduct alleged in the complaints for which

Chiquita sought coverage and defense did not constitute `occurrences' within the meaning of the

policy language." Op. 8¶ 18. In reaching this result, the court acknowledged that the

underlying complaints included negligence claims, but stated that "those causes of action were

all based on Chiquita's alleged intentional conduct." Id. According to the court, "[t]he

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complaints did not allege conduct that could be reasonably construed as negligent or accidental."

Id. Because Chiquita's conduct did not constitute an "occurrence," the court reasoned, it need

not address the policy's "expected or intended" exclusion. Id. ¶ 19.

Second, the court of appeals reversed based on the policy's "coverage territory" clause.

Adopting a "place of injury" test applied by courts in other states, the court concluded that

National Union was required to pay Chiquita's defense costs only if the injuries occurred in the

United States, Puerto Rico, or Canada. Id. at 9-12 ¶¶ 20-28. Because the alleged injuries took

place in Colombia, "the events that inflicted the harm ... in Col[o]mbia ... were the

`occurrences' as defined in the policies as a matter of law." Id. at 12 ¶ 28. Accordingly,

National Union has no duty to provide a defense because "the conduct in the underlying

complaints was not within the scope of coverage." Id.

ARGUMENT IN SUPPORT OF PROPOSITIONS OF LAW

Proposition of Law No. 1: Under standard-form CGL policies and Ohio law, an insurer is

obligated to pay defense costs for tort claims alleging intentional conduct when otherallegations or evidence demonstrate it is possible the policyholder did not expect or intend

to cause bodily injury.

The court of appeals held that National Union does not have to pay Chiquita's defense

costs because the negligence claims in the underlying tort complaints "were all based on

Chiquita's alleged intentional conduct." Op. 8¶ 18. This Court should grant review to eliminate

confusion about three fundamental principles of Ohio law. First, whether a policyholder acted

intentionally is irrelevant; what matters is whether it acted with intent to harm. Second, an

insurer is obligated to provide defense coverage for tort complaints under which the plaintiffs

could recover damages without proving that the policyholder expected or intended to injure

anyone. Third, a policyholder's right to defense coverage depends on evidence about the facts

and not just on allegations made by plaintiffs' lawyers.

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1. The court of appeals erred in attempting to separate the issues of whether there

was an "occurrence" under the policies and whether coverage was unavailable because Chiquita

had "expected or intended" to cause bodily injury. Id. at 8¶ 19. This Court has made clear that

the analysis for both issues is effectively the same. See, e.g., Physicians Ins. Co. v. Swanson, 58

Ohio St.3d 189, 569 N.E.2d 906 (1991) (under both policies that provide coverage for accidents

and policies that have "expected or intended" exclusions, the test is whether the insured expected

or intended to cause harm and not whether the insured committed an intentional act); accord

Allstate, 128 Ohio St.3d 186, 2010-Ohio-6312, 942 N.E.2d 1090, at ¶ 41. Indeed, National

Union has conceded that "the analysis is the same under either provision." NU Br. 18. The

analysis is the same because, as this Court has repeatedly recognized, "many unintended injuries

result from intentional acts." Allstate, at ¶ 38; see also Buckeye Union Ins. Co. v. New Eng. Ins.

Co., 87 Ohio St.3d 280, 283, 720 N.E.2d 495 (1999); Safeco, 122 Ohio St.3d 562, 2009-Ohio-

3718, 913 N.E.2d 426, at ¶ 21 ("if the injury was not intentionally caused, then it was

accidentally suffered") (internal quote omitted). Accordingly, the court should have considered

whether Chiquita intended to cause bodily harm, not just whether its actions were intentional.

In Allstate, this Court suggested that there are only two ways for an insurance company to

establish that the insured intended the relevant harm: (1) based on evidence demonstrating that

the insured-in fact-intended to cause the harm (a question that the Allstate Court remanded in

that case); or (2) based on evidence demonstrating that the insured intentionally committed an act

that is so intrinsically harmful that it necessarily resulted in the harm.

riere, the First District tried to ca ,7e a thir d path. I?el.y ing on a series of pre-Allstate

court of appeals decisions (see Op. 7, ¶ 17), the First District concluded that where the actions

are intentional and the underlying allegations constitute a "mere insinuation" of negligence, the

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acts could not have been "negligent or accidental." In other words, because there was no dispute

about the intentional nature of the acts themselves, the court of appeals determined that no

further inquiry was necessary. As pointed out above, this approach is fundamentally inconsistent

with the decision of the Tenth District in Gourley, which interpreted Allstate to require an

evaluation of evidence about the actual facts as well as the allegations.

2. Had the court properly focused on whether Chiquita intended to cause bodily

harm, it should have agreed with the trial court that the negligence claims were not all based on

allegations that Chiquita intended to harm. To be sure, the underlying complaints include

allegations that Chiquita intended to harm. But there is no dispute that some of the claims seek

to hold Chiquita liable without establishing intent to harm. Indeed, National Union conceded

this point in the court of appeals. NU Br. 20 (arguing that the "vast majority" of claims are

based on allegations that Chiquita intended harm, while acknowledging that "[t]he small balance

of remaining claims and allegations" allege only intentional conduct). Even without this

concession, the underlying complaints refute any suggestion that the tort plaintiffs allege only

that Chiquita acted with an intent to harm. For example, some of the wrongful death claims

allege that Chiquita is liable because it "paid" the armed groups who committed the murders, or

because it was "reckless in dealing with" them. See, e.g., T.p. JTX 38, ¶ 937.

Moreover, each of the underlying lawsuits includes claims under which-as a matter of

law-liability could be imposed on Chiquita on the basis of negligence rather than intentional

wrongdoing. The ATA lawsuits include wrongful death claims under the law of one or more

<^,;^^, r^,;^,,;ra could be found liable on the basis ofstates in the r.un•ted ra^ ^at es, pursuant^* ^ ^o ^^•_•^^^ ^^^-n^-^w^

negligence. See, e.g., Littleton v. Good Samaritan Hosp. & Health Ctr., 39 Ohio St.3d 86, 529

N.E.2d 449 (1988) (under Ohio law, damages for wrongful death may be imposed for

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negligence). The ATS lawsuits assert tort claims under the law of Colombia, which also imposes

liability based on negligence. As a result, the inclusion of allegations that Chiquita intended to

harm are irrelevant to the negligence claims because plaintiffs can prevail on those claims even if

they fail to prove that Chiquita intended to cause injury or death. An insurer must provide a

defense unless "the claims are clearly and indisputably outside of the contracted policy

coverage." City ofSharonville v. Am. Emps. Ins. Co., 109 Ohio St.3d 186, 2006-Ohio-2180, 846

N.E.2d 833, at ¶ 13. That demanding test cannot be satisfied based on unproven allegations that

are unnecessary to some of the causes of action asserted against the policyholder.

3. The court of appeals also focused solely on allegations in the complaints, while

ignoring the substantial evidence in the record of both the summary judgment motions and the

bench trial from which the trial court made factual findings that-as to Chiquita-any harm was

"unintended and accidental." Prior decisions of this Court strongly suggest that evidence about

the actual facts should be considered in cases concerning coverage for defense costs. See, e.g.,

Allstate, 128 Ohio St.3d 186, 2010-Ohio-6312, 942 N.E.2d 1090, at ¶ 62 (remanding case to trial

court for "a factual inquiry ... to determine whether [the insureds] intended or expected the

harm that resulted from their intentional actions"). For example, in Preferred Mutual Insurance

Co. v. Thompson, 23 Ohio St.3d 78, 491 N.E.2d 688 (1986), this Court held that the insurer had

to provide defense coverage because the policyholder testified that he shot the tort plaintiff in

self-defense. The Court acknowledged that the merits of that defense should be resolved in the

underlying tort case rather than the coverage case, but held that the existence of such evidence

meant that the insured was entitl^d to coverage for defPnSP costs because it was at least possible

that the insured was not an intentional wrongdoer. Id. at 81-82 & n.4. This is the standard that

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was applied in Gourley, 10th Dist., 2012-Ohio-4909, and Drake, N.D. Ohio, 2012 WL 2681413

(July 6, 2012).

The decision of the court of appeals is both a reflection of existing-and a source of

future-uncertainty about an area of law that is important to all Ohio corporations and citizens.

This Court should grant review to clarify Ohio law on these important points.

Proposition of Law No. 2: Under standard-form CGL policies that provide coverage for

bodily injury caused by an occurrence that takes place in the coverage territory, coverage

depends on the location of the occurrence rather than the location of the injury.

While conceding that there are "no Ohio cases directly on point," the court of appeals

held that National Union has no duty to pay defense costs based on the policy's "coverage

territory" provision. Op. 9-12 ¶¶ 22-27. Adopting a "place of injury" test, the court concluded

that Chiquita is not entitled to defense costs because the injuries for which the tort plaintiffs seek

damages occurred in Colombia, not in the United States. This ruling is contrary to the policy

language and at odds with basic principles of Ohio law.

The "place of injury" test adopted by the court of appeals conflicts with the policy

language. The National Union policies use standard-form CGL language first adopted in 1986

that provides coverage if "[t]he `bodily injury' . . . is caused by an occurrence that takes place in

the `coverage territory." See T.p. JTX 6-13; and T.d. 225, Attachment C. Prior to 1986, the

»>standard CGL form provided coverage if "bodily injury ... occurs ... in the policy territory.

T.d. 225, Attachments A-B. Two points are clear from the text of the 1986 form language used

in the National Unior. policies: (1) the occurrence is an event that causes bodily injury, not the

bodily injury itself; and (2) it is the occurrence, not the bodily injury, that must take place in the

coverage territory. The plain language of the poli cy therefore dictates a "place of occurrence"

test, not a "place of injury" test. Moreover, even if this provision were ambiguous-which it is

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not-the ambiguity must be resolved in favor of coverage for Chiquita. See Sharonville, 109

Ohio St.3d 186, 2006-Ohio-2180, 846 N.E.2d 833, at ¶ 6 (ambiguous provisions "will be

construed strictly against the insurer and liberally in favor of the insured" (internal quotation

marks and citation omitted)).

Properly interpreted, the "coverage territory" clause requires a court to determine where

the relevant "occurrence" took place. This Court's decision in Safeco makes clear that the

occurrence for the purposes of an insurance policy is the cause, viewed from the perspective of

the policyholder, of the policyholder's potential liability for the bodily injury at issue in the

underlying tort case. Safeco, 122 Ohio St.3d 562, 2009-Ohio-3718, 913 N.E.2d 426, at ¶¶ 24-27.

Thus, when the allegations are that the policyholder's conduct caused a third party to commit an

intentional tort, the relevant occurrence is the policyholder's conduct, not the conduct of the

third-party intentional tortfeasor. Id. Accordingly, the relevant occurrence in this case is the

payments policy that Chiquita executives adopted in Cincinnati in 1989 and maintained in effect

until early 2004.

The trial court found that the payments policy was the source of Chiquita's potential

liability in the tort claims and that it was adopted in Cincinnati. The court of appeals did not

suggest that these findings were clearly erroneous. Nor could it. Witnesses testified that

Chiquita adopted the payments policy in Cincinnati to save lives, but Banadex made the

payments, and neither Chiquita nor Banadex engaged in violence or asked the armed groups to

do so. There was no evidence to the contrary. Most of the complaints expressly allege that

: _..: „,,.«..^ <a 41.° r^Na,^=^^.,.^^^ mant s• The • .senior execut • ves of Cl^i^qu^ 4 aapy^.,^eu ^^^., T^-T^0-T Proffer, wh^ch the complaints

rely upon, also recites that senior executives of Chiquita approved the payments. Indeed, the

plaintiffs in the ATS cases have argued that "the conduct giving rise to the injury felt in

-14-

Colombia occurred in Ohio" and that Ohio law may apply "because the decisions made by

Chiquita in Ohio arguably violated the conduct-regulating norms of Ohio law." T.d. 252,

Attachment A, at 18. They have also asserted that Chiquita's actions were "conducted in Ohio"

and that they "were not masterminded in Colombia." Id. at 19. As a result, had the court of

appeals properly interpreted the policy language, it should have affirmed the trial court's ruling

that the occurrence took place in the coverage territory.

Rather than following Safeco, the court of appeals attempted to distinguish it, but the

court's purported distinctions are unpersuasive. First, the court noted that, in this case, the third

party who committed the intentional tort was not an insured under the policy, whereas in Safeco

the third party was also an insured. Op. 7 ¶ 16. But the third party's status as an insured in

Safeco made it more difficult for the policyholders to show that they were entitled to coverage,

because the other insured's intentional misconduct arguably provided a basis for denying

coverage as to all insureds. As a result, the fact that Chiquita's policies do not also cover the

third parties who committed intentional torts-the armed Colombian groups-makes the

coverage determination easier in this case. Second, the court stated that "[t]he negligence claims

against Chiquita arise from its own intentional acts, not the acts of another insured party." Id.

As discussed above, the relevant question is whether Chiquita intended to cause harm, not

whether its acts were intentional. See supra pp. 9-10. Moreover, the underlying complaints

make clear that Chiquita did not murder anyone in Colombia. The allegations are that-as a

result of Chiquita's conduct in Ohio-armed groups in Colombia committed murders.

riavirig p°urpolled to distiiiguish Safeco, the co,,,'t of appeals relied on decisions of out-of-

state courts applying the laws of other states. Op. 9-12 ¶¶ 22-28 (discussing Ace Am. Ins. Co, v.

RC2 Corp., 600 F.3d 763, 767-68 (7th Cir. 2010) (applying Illinois law); CACIInt'l, Inc. v. St.

- 15-

Paul Fire & Marine Ins. Co., 566 F.3d 150 (4th Cir. 2009) (applying Virginia law)). Those

decisions assert that there is a "rule" extraneous to the language of the insurance policies that

requires that the place of an occurrence be determined by reference to the place where the injury

occurred. The courts derived this "rule" from older decisions by other courts that were

interpreting different policies with different language under the law of different states. Many of

those decisions were issued before 1986, when the standard form policies expressly provided that

the policies would only apply to bodily injury or property damage that occurred in the policy

territory. Under Ohio law, insurance policies are contracts that should be interpreted in

accordance with their terms. The language of the standard form used in the policies at issue in

this case was amended in 1986 to make clear that insurers are obligated to provide coverage for

claims for bodily injuries that take place outside the U.S. if such injuries are allegedly caused by

an occurrence that took place in the United States. In this case-as the trial court found-the

relevant occurrence took place in the United States.

CONCLUSION

For the foregoing reasons, this case involves issues of public and great general interest.

The Court should accept jurisdiction and review these important issues on the merits.

Yvette McGee Brown (0030642) Stuart Dornette (0002955)Jones Day Taft Stettinius & Hollister

325 John H. McConnell Blvd LLPSuite 600r_ i___ nu ^LOIUfflb'^15, vii 4

2Y 2 1 v

614-281-3867

425 Walnut StreetClµite 1 800

Cincinnati, OH 45202513-357-9353

Respectfully submitted,

wy^'t^r.w^ ^ J Lw^William P. Skinner (2313-2013)Robert A. Long (2358-2013)Mark W. Mosier (3833-2013)Covington & Burling LLP1201 Pennsylvania Ave., NWWashington, DC 20004202-662-5470

Attorneys for Plaintiff-Appellant Chiquita Brands International, Inc.

IN THE COURT OF APPEALS

FIRST APPELLATE DISTRICT OF OHIO

HAMILTON COUNTY, OHIO

CHIQUITA BRANDS . APPEAL NO. C-120019

INTERNATIONAL, INC., TRIAI. NO. A-o8o8934

Plaintiff-Appellee,

vs.

NATIONAL UNION FIREINSURANCE COMPANY OFPITTSBURGH, PA.,

OPINION.

PRESENTED TO THE CLERKOF COURTS FOR FILING

Third-Party Defendant-Appellant,

and

FEDERAL INSURANCE COMPANY,et al.,

Defendants/Third-PartyPlaintiffs.

MAR 0 ti ZG' :3

COURT OF APPEALS

Civil Appeal From: Hamilton County Court of Common Pleas

Judgment Appealed From Is: Reversed and Cause Remanded

Date of Judgment Entry on Appeal: March 6, 2013

Jacobs, Kleinman, Seibel & McNally and Kenneth F. Seibel, and Covington &

Burling, LLP, and William P. Skinner, for Plaintiff-Appellee,

Bates Carey Nicolaides LLP, Richard H. Nicolaides, Jr., Barbara L. Michaelides,

Agelo L. Reppas, and Reminger and Joseph W. Borchelt, for Third-Party Defendant-

Appellant.

Please note: this case has been removed from the accelerated calendar.

1

OHIO FIRST DISTRICT COURT OF APPEALS

DRqMLACx.Ex, Judge.

{¶1} Plaintiff-appellee Chiquita Brands International, Inc. ("Chiquita"),

filed a declaratory judgment action against defendants/third-party plaintiffs, Federal

Insurance Company, American Motorists Insurance Company, and Lumbermens

Mutual Casualty Company. In its complaint, Chiquita asked the trial court to declare

that the insurance companies had a duty to defend Chiquita in numerous tort claims

that had been filed against it. Those claims alleged that from 1989 through 2004,

Chiquita had illegally financed terrorist groups in Columbia, and that the plaintiffs in

those suits had suffered damage as a result of the terrorists' operations. Chiquita

also contended that the insurance companies had breached the insurance contracts

for failing to provide defenses and coverage in the underlying tort actions.

{¶2} Federal, American Motorists and Lumbermens Mutual filed a third-

party complaint against third-party defendant-appellant National Union Fire

Insurance Company of Pittsburgh, PA ("National Union"), which had insured

Chiquita under a series of one-year policies from July 1992 to July 20oo. They asked

the court to declare that National Union had a duty to defend Chiquita in the

underlying tort actions, and that, to the extent the court might find. that they had a

duty to defendant Chiquita, they were entitled to contribution and indemnity from

National Union.

{13} National Union then asserted a direct claim against Chiquita, asking

n thP° __ '_ ._^_°*iithe court to d-ecl- are tn-, at. •.it ,ai ,a not hav-- a d--u^ ,^ to}o de.e^=°'.,l or ;^nif, Cl:^iq--•---^lita i--- the

underlying suits, and that if it did, it was entitled to contribution from the other three

2


insurance companies. Chiquita then filed a counterclaim against National Union,

alleging that it, too, had a duty to defend Chiquita in the underlying suits.

{¶4} While the case was pending, Chiquita settled with Federal, American

Motorists and Lumbermens Mutual. Both Chiquita and National Union filed

motions for summary judgment. The trial court granted Chiquita's motion in part.

It held that National Union had a duty to defend Chiquita in the underlying suits as a

matter of law. The court also found that issues of fact existed as to other issues in the

case, and denied the motions for summary judgment on those issues.

{¶5} After a bench trial, the trial court determined the amount of defense

costs for which National Union was required to reimburse Chiquita. It also found

that National Union was responsible for all losses that occurred during the time its

policies were effective. National Union has filed a timely appeal from that judgment.

{4R6} National Union presents two assignments of error for review. In its

first assignment of error, it contends that the trial court erred in finding that it had a

duty to defend Chiquita in the underlying lawsuits. It argues that the underlying

actions do not allege an "occurrence" as defined in the policies because Chiquita

faced liability only for intentional conduct. It also argues that all the injuries for

which Chiquita faced liability occurred in Columbia, outside of the National Union's

policies' coverage territory. This assignment of error is well taken.

{1f7} An insurance policy is a contract, and the relationship between the

insurer and the insured is purely contractual in nature. I'Vai3onwidc'• Mu.t. i1-ts• 170• -V.

Marsh, 15 Ohio St.3d 107, 109, 472 N.E.2d io6i (1984). The interpretation and

construction of insurance policies is a matter of law to be determined by the court

3


using rules of construction and interpretation applicable to contracts generally.

Gomolka v. State Auto. Ins. Co., 7o Ohio St.2d 166, 167-168, 436 N.E.2d 1347 (1982),

Equity Diamond Brokers, Inc. v. Transnatl. Ins. Co., i5l Ohio App.3d 747, 2003-

Ohio-1o24, 785 N.E.2d. 816, ¶ 1o (ist Dist.). Where an insurance policy's provisions

are clear and unambiguous, courts must apply the terms as written and may not

enlarge the contract by implication to embrace an object distinct from that

contemplated by the parties. Gomolka at 168; Equity Diamond Brokers at 1( ii.

{1[8} An insurer's duty to defend is broader than the duty to indemnify.

Sharonville v. Amer. Emp. Ins. Co., io9 Ohio St.3d 186, 20o6-Ohio-218o, 846

N.E.2d 833, ¶ 13; Westfield Ins. Co. v. Factfinder Mkting. Research, Inc., i68 Ohio

App=3d 391, 2oo6-Ohio-4380, 86o N.E.2d 145, 115 (ist Dist.). When the allegations

in the complaint or any allegations arising after the complaint state a claim that is

potentially within the policy coverage, the insurer must accept the defense of the

claim, regardless of the ultimate outcome or the insurer's ultimate liability.

Sharonville at ¶ 13; Willoughby Hills v. Cincinnati Ins. Co., 9 Ohio St.3d 177, 179,

459 N.E.2d 555 (1984); Westfield Ins. at ¶ 15. When an insurer must provide a

defense on a claim, it must defend the insured on all the other allegations, regardless

of whether they are related to the insurance-policy coverage. Sharonville at ¶ 13;

Westfield Ins. at 115.

{19} But a duty to defend does not attach where the conduct alleged is

1 YT- - . r ^i .,. r ^ +q ^1indisputably outside the scope of coverage. ..^r^aronuule at ¶^^, ►^^ es^r eLu ns. at ¶41 ^5=

The insured bears the burden to show that its loss was covered under the policy.

Chicago Title ins. Co. v. Huntington Natl. Bank, 87 Ohio St.3d 270, 273, 719 N.E.2d

4


955 (1999); Fairfield Machine Co., Inc. v. Aetna Cas. & Sur. Co., 7th Dist. No. 2000

CO 14, 2001-Ohio-34o7, 1 22; Sterling Merchandise Co. v. Hartford Ins. Co., 30

Ohio App.3d 131, 137-138, 5o6 N.E.2d 1192 (9th Dist.i986).

t¶10} In this case, the policy covers "bodily injury" if the "bodily injury ***

is caused by an occurrence that takes place in the coverage territory." An

"occurrence" is "an accident, including continuous or repeated exposure to

substantially the same general harmful conditions." Thus, the policies cover only

accidental occurrences, not intentional acts. See Gearing v. Nationwide Ins. Co., 76

Ohio St.3d 34,38, 665 N.E.2d 1115 (1996).

{¶11} Further, Ohio public policy generally prohibits obtaining insurance to

cover damages caused by intentional torts. Id. Thus, inherent in a policy's definition

of "occurrence" is the concept of an incident of an accidental, as opposed to an

intentional, nature. Id.; Morner v. Giuliano, 167 Ohio APP.3d 785, 20o6-Ohio-2943,

857 N.E.2d 602, 1I 25 (12th Dist.). "Liability insurance does not exist to relieve

wrongdoers of liability for intentional, antisocial or criminal conduct." Gearing at

38.

t¶12} In finding that National Union had a duty to defend Chiquita, the trial

court examined the complaints in the underlying actions. It stated that "[t]hese

complaints all make serious allegations of intentional even malicious conduct against

Chiquita. However, each complaint, to some extent makes allegations of negligence.

- - ..^s win

,i on t tne^ir

_•_ tcia_:uu^^.. oiru^viit .,a,.^.±;....i= 1

I have no idea whether the Plaintitt prevaiva=

misconduct and/or negligent misconduct. Those are questions for a trier of fact to

determine." It went on to find that based solely on the allegations in those

5


complaints, National Union owed Chiquita a defense. We disagree with the court's

reasoning.

{T13} In finding that National Union owed Chiquita a duty to defend, the

trial court relied on Safeco Ins. Co. of Am. v. White, 122 Ohio St.3d 562, 2oo9-Ohio-

3718, 913 N.E.2d 426. In that case, 17-year-old Benjamin White stabbed Casey

Hilmer, the 13-year-old daughter of Steven and Megan Hilmer. Id. at 1 5. The

Hilmers sued Benjamin and his parents, Lance and Diana White, raising multiple

claims, including battery against Benjamin. and negligent supervision, negligent

entrustment, and negligent infliction of emotional distress against Lance and Diana.

A jury found in favor of the Hilmers. The Whites had a homeowner's policy and a

separate umbrella policy with Safeco Insurance Company of America. Safeco argued

that it had no duty to defend Lance and Diana White because any claim against them

arose out of their son's intentional act.

{¶14} The Supreme Court held:

1. When a liability insurance policy defines an "occurrence" as an

"accident," a negligent act committed by an insured that is predicated

on the commission of an intentional tort by another person, e.g.,

negligent hiring or negligent supervision, qualifies as an "occurrence."

2. Insurance-policy exclusions that preclude coverage for injuries

expected or intended by an insured, or injuries arising out of or caused

by the insured's intentional or illegal acts, do not preclude coverage for

the negligent actions of other insureds under the same policy that are

6


predicated on the commission of those intentional or illegal acts, e.g.

negligent hiring or negligent supervision. (Emphasis added.)

Id. at paragraphs one and two of the syllabus.

{¶15} While acknowledging that the policy exclusions relating to intentional

and illegal acts "plainly applied" to Benjamin's acts, the Supreme Court emphasized

the "separate nature" of the negligent-supervision and negligent-entrustment torts

against his parents. To succeed on those claims, the Hilmers had to show that Lance

and Diana had breached their duty to supervise Benjamin and not to entrust him

with a dangerous instrument, and that those breaches proximately caused their

injuries. Id, at 134-35• The court stated, "In this case, neither Lance nor Diane

intentionally injured Casey Hilmer. From their perspective, the injury was

accidental, and thus the act that caused her injury constitutes an "occurrence" as

defined in the policies they purchased from Safeco." Id. at ¶ 27.

{¶16} In this case, the negligence claims in the underlying suits do not stem

from the negligent actions of an insured arising from the intentional act of another

insured. The negligence claims against Chiquita arise from its own intentional acts,

not the acts of another insured party. Therefore, the holding in Safeco does not

apply. See Sanders U. Nationwide Mut. Ins. Co., 8th Dist. No. 95228, 2ols.-Ohio-

1933, ¶ 18-20.

{4f17} Further, the trial court stated that Safeco applied without examining

the nature of the underlying negligence claims. "Tne mere insinuation of negiigerice

in a civil suit complaint cannot transform what are essentially intentional torts into

something 'accidental' that might be covered by insurance." Snowden v. Hastings

7


Mut. Ins. Co., 177 Ohio App.3d 209, 2oo8-Ohio-1540, 894 N.E.2d 336, 1 13 (7th

Dist.). Accord Motorists Mut. Ins. Co. v. Merrick, iith Dist. Nos. 98-T-o188 and

98-T-oi89, 1999 Ohio App. LEXIS 5240, *8 (Nov. 5, 1999); Snelt v. Kataflas, 2d

Dist. No.17440,1g99 Ohio App. LEXIS 997, *13 (Mar.19,1999).

{¶18} Our review of the record shows that although the underlying

complaints set forth some causes of action sounding in negligence, those causes of

action were all based on Chiquita's alleged intentional conduct. The complaints

alleged that Chiquita was both directly and vicariously liable for the deaths and

injuries of numerous people through murder, torture, kidnapping and other

atrocities. They claimed that Chiquita aided and abetted, conspired with, and

particiated in a joint criminal enterprise with the terrorists. The complaints did not

allege conduct that could be reasonably construed as negligent or accidental.

Therefore the conduct alleged in the complaints for which Chiquita sought coverage

and defense did not constitute "occurrences" within the meaning of the policy

language.

{¶19} We note that the National Union policies also contained exclusions for

"bodily injury" or "property damage„ "expected or intended from the standpoint of

the insured." We need not reach the issue of whether those exclusions apply because

we hold that the conduct alleged in the underlying cases did not constitute

"occurrences." Because the conduct in those complaints was outside the scope of

coverage, National Union did not have a duty to defend Chiquita in the underiying

suits or to indemnify Chiquita should it eventally be found to be liable for damages in

those suits.

8

OHIO FIRST DISTRICT COURT OF APPEALS.

{¶20} National Union also argues that all the injuries for which Chiquita

faced liability occurred in Columbia, outside of its policies' coverage territory. We

agree. National Union's policies stated that it would pay damages for injuries caused

by an "occurrence" in "the coverage territory." The policies defined the "coverage

territory" as "[t]he United States of America (including its territories and

possessions), Puerto Rico and Canada." Chiquita had purchased policies from the

settling insurance companies to cover its foreign liability.

{¶21} In ruling on the motions for summary judgment, the trial court stated

that "[t]he allegations of negligence in the various complaints meet the coverage

territory requirement in all the insurance policies at issue since the negligence may

well have taken place within the coverage territory." Following a bench trial, the trial

court found that the decision to pay the terrorist groups was made at Chiquita's

corporate headquarters in Cincinnati, Ohio. The employees in Columbia simply

implemented that policy with the goal of protecting Chiquita's employees and

property. Therefore, the trial court concluded, the location of the occurrence was

within the coverage territory. We disagree with that conclusion.

(¶22} We find no Ohio cases directly on point, but the "great weight of case

law" from other jurisdictions holds that "it is the location of the injury-not some

precipitating cause-that determines the location of the event for purposes of

insurance coverage." ACE Am. Ins. Co. v. RC2 Corp., Inc., 6oo F.3d 763, 768 (7th

Cir.2010). Accord CACIInternatl., Inc. v. St. Paul Fire & Nlarine Ins. Co., 666 r.3d

150, i66-i57 (4th Cir.2009).

9


{¶23} The issue frequently arises in cases involving the place of an

"occurrence," such as where, as in the present case, an injury is sustained outside of

the United States because of some act or omission in the United States and the

disputed policy limits coverage to the United States. "The location of an `occurrence'

is determined by the place where the injury happened; it does not matter that a

precipitating event took place elsewhere." Farmers Alliance Mut. Ins. Co. v.

Salazar, 77 F.3d 1291, 1296 (loth Cir.1996). See also DeWitt v. Nationwide Mut.

Fire Ins. Co., 1o9 Ohio App.3d 716, 720-721, 672 N.E.2d 1104 (llth Dist.1996);

Flintcote Co. v. Gen. Acc. Assurance Co. of•Canada, 41o F.Supp.2d 875, 891-892

(N.D.Ca1.20o6).

{¶24} For example, in ACE, the insurance policy contained an exclusion for

occurrences that took place in the United States. The underlying suits involved

products using lead paint that were sold and used exclusively in the United States,

but manufactured in China. The insurance company argued that the "occurrence"

took place in the United States where purchasers of the products were exposed to

lead paint. The manufacturer argued that the "occurrence" took place in China

where the negligent acts that "caused" the harm took place.

{¶25} The federal district court accepted the manufacturer's argument. It

found that notwithstanding the exclusion, the policies potentially extended coverage

for injuries that occurred in the United States if some negligent act in the process of

the product's manufacturing that caused harm occurred in another country.

Therefore, it held that the insurance company had a duty to defend the

manufacturer.

10


{1126} The Seventh Circuit Court of Appeals reversed, stating that "the

policies are clear that the `occurrence' that triggers coverage takes place where the

actual event that inflicts the harm takes place. And based on the undisputed facts in

this case, the `occurrence" here happened at the location (or locations) of the

exposure itself: within the United States," ACEAm. Ins., 6oo F.3d at 769. The court

went on to state that accepting the manufacturer's argument "would allow it to sweep

any domestic event into its international policies so long as it posited some

antecedent negligent act that occurred someplace outside the United States." Id.

{¶27} Similarly, in CACI, CACI argued that its insurance company had a duty

to defend it in lawsuits relating to claims of abuse and torture at prisons in Iraq even

though the insurance policies limited coverage to the United States and Canada. The

Fourth Circuit Court of Appeals rejected that argument, stating:

[E]ven assuming that the complaint alleges activities that happened in

the United States, the great weight of case law holds that it is the

location of the injury-not of some precipitating cause-that

determines the location of the event for purposes of insurance

coverage. The reasons for a "place of injury" test are clear. As the

district court noted, applying a "cause in fact" test would let plaintiffs

sweep any number of worldwide events into the ambit of a domestic

policy as long as the underlying complaint alleged negligent

supervision. Therefore, a causal test would create a windfaii for the

insured and render "the insurer responsible for a liability for which it

had not contracted." If domestic policies could be stretched to this

11


extent, global policies would become superfluous and territorial

coverage limitations would lose their meaning. (Citations omitted.)

CACI Internatl., 566 F.3d at 156-157, quoting Keystone Automated Equip. Co, v.

Reliance Ins. Co., 369 Pa.Super. 472, 535 A.2d 648, 652 (Pa.Super.Ct.i988).

{1[28} We agree with the reasoning of these courts. In this case, the events

that inflicted the harm alleged in the underlying complaints took place in Columbia.

Those events were the "occurrences" as defined in the policies as a matter of law.

Chiquita's decision to pay the terrorists was merely a precipitating event.

Consequently, the "occurrences" did not happen in United States, the coverage

territory. Therefore, the conduct in the underlying complaints was not within the

scope of coverage, and National Union had no duty to provide Chiquita a defense in

the underlying suits.

{129} In sum, we find no issues of material fact. Construing the evidence

most strongly in Chiquita's favor, reasonable minds can come to but one

conclusion-that National Union did not have a duty to defend Chiquita in the

underlying suits because those suits did not allege conduct that constituted an

"occurrence" in the coverage territory. National Union was entitled to judg -mentas a

matter of law, and the trial court erred in failing to grant summary judgment in favor

of National Union. See Temple v. Wean United, Inc., 5o Ohio St.2d 317, 327, 364

N.E.2d 267 (1977); Greene v. Whiteside, i81 Ohio App.3d 253, 2oo9-Ohio-741, 9o8

N.E.2d 975, ¶ 23 (lst Dist.) The court further erred in granting partial summary

judgment in favor of Chiquita, and in holding a bench trial on the alleged factual

issues.

i2


{¶30} Consequently, we sustain National Union's first assignment of error,

and we reverse the trial court's judgment in favor of Chiquita. We remand the matter

to the trial to enter judgment in favor of National Union, and to consider whether

National Union is entitled to repayment of any defense costs it has already paid.

{¶31} Our ruling on National Union's first assignment of error renders its

second assignment of error moot, and we decline to address it. See App.R.

12(A)(1)(c); Internatl. Assn. of Bridge, Structural, Ornamental & Reinforcing Iron

Workers, Local 372 v. Sunesis Constr. Co., 183 Ohio App.3d 438, 2009-Ohio-3729,

917 N.E.2d 343,1f 26 (i.st Dist.).

Judgment reversed and cause remanded.

Hu.nEaRAvDT, P.J., and HEvnorr, J., concur.

Please note:The court has recorded its own entry on the date of the release of this opinion.

13

CERTIFICATE OF SERVICE

The undersigned hereby certifies that he has directed that Chiquita's notice of appeal and

memorandum in support of jurisdiction, including the attached copy of the opinion and judgment

entry of the court of appeals, be served by e-mail and First Class Mail on the following:

Richard H. Nicolaides, Jr.Barbara I. MichaelidesAgelo L. ReppasBates Carey Nicolaides LLP191 North Wacker Drive, Suite 2400Chicago, IL 60606(312) [email protected]@[email protected]

Joseph W. Borchelt (0075387)Reminger525 Vine Street, Suite 1700Cincinnati, OH 45202(513) [email protected]

Counsel for Defendant-Appellee National Union Fire Insurance Co. of Pittsburgh, Pa.

William P. Skinner

April 18, 2013

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