[Cite as W. Res. Mut. Cas. Co. v. OK Cafe & Catering, Inc., 2013-Ohio-3397.]




                      IN THE COURT OF APPEALS OF OHIO
                          THIRD APPELLATE DISTRICT
                              MARION COUNTY




WESTERN RESERVE MUTUAL
CASUALTY COMPANY,

        PLAINTIFF-APPELLANT,                                       CASE NO. 9-12-46

        v.

OK CAFÉ & CATERING, INC., ET AL.                                   OPINION

        DEFENDANTS-APPELLEES.




                 Appeal from Marion County Common Pleas Court
                           Trial Court No. 10-CV-0284

                       Judgment Reversed and Cause Remanded

                            Date of Decision: August 5, 2013




APPEARANCES:

        Shawn W. Maestle and David L. Jarrett for Appellant

        Jeff Ratliff for Appellee, Tracey Cooperider
Case No. 9-12-46



PRESTON, P.J.

       {¶1} Plaintiff-appellant, Western Reserve Mutual Casualty Co. (“Western

Reserve”), appeals the Marion County Court of Common Pleas’ July 11, 2012

judgment entry granting summary, declaratory judgment in favor of defendant-

appellee, Tracey Cooperider (“Cooperider”). For the reasons that follow, we

reverse.

       {¶2} On October 13, 2006, Cooperider allegedly was injured on the

premises of OK Café & Catering, Inc. (“OK Café”). (Kulka Aff. ¶ 2, Doc. No. 24,

attached). From December 27, 2005 to December 27, 2006, Western Reserve

insured OK Café under a commercial general liability policy (“CGL Policy”).

(CGL Policy, Doc. No. 24, attached). Cooperider’s original attorney sent letters to

OK Café on May 10 and May 22, 2007 notifying it of his representation of

Cooperider and requesting the contact information of OK Café’s insurance

provider. (Jensen Aff. ¶ 1-2, Doc. No. 30, attached). One of OK Café’s co-

owners, Karen Gillespie, notified her insurance agent of the attorney’s May 22,

2007 letter, and the agent notified Western Reserve. (Kulka Aff. ¶ 2, Doc. No. 24,

attached); (Kulka Depo. at 44-45). On June 12, 2007, a Western Reserve claims

specialist, Thomas Kulka, sent a letter to Cooperider’s original attorney

confirming receipt of his May 22, 2007 letter. (Kulka Aff. ¶ 3, Doc. No. 24,



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Case No. 9-12-46



attached). That same day, Kulka sent a letter to OK Café notifying it that he

would be investigating the claim under a reservation of rights. (Id. ¶ 4).

       {¶3} According to Kulka, as of February 2008, Cooperider’s allegations

were unsupported by the information obtained from OK Café and the information

provided by Cooperider’s original attorney. (Id. ¶ 5). On February 7, 2008, Kulka

sent a letter to Cooperider requesting that he or his counsel contact Kulka to

discuss the claim. (Id. ¶ 6). Kulka received no response from Cooperider. (Id.).

Kulka closed the claim file after he determined that the statute of limitations had

run on Cooperider’s claim, and after he checked on November 10, 2008 with the

Marion County Clerk of Courts, who did not locate a complaint filed by

Cooperider. (Id.); (Kulka Depo. at 36-38); (Ratliff Aff. ¶ 1-3, Doc. No. 33,

attached).

       {¶4} Meanwhile, in late September or early October 2008, after no

negotiations took place and Cooperider’s claim remained unsettled, Cooperider’s

original attorney ceased representing him.       (Jensen Aff. ¶ 4, Doc. No. 30,

attached). On October 14, 2008, Cooperider filed a pro se complaint alleging that

he had suffered damages from a fall that occurred on OK Café’s premises.

(Western Reserve’s Motion for Summary Judgment (“MSJ”) at 4, Ex. E, Doc. No.

24); Cooperider v. OK Cafe & Catering, Inc., 3d Dist. Marion No. 9-09-28, 2009-

Ohio-6715, ¶ 2.     OK Café was successfully served on October 30, 2008 by

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Case No. 9-12-46



certified mail when Gillespie’s daughter and OK Café employee, Ryan Gillespie,

signed for the certified mailing containing the complaint and summons. (Id.); Id.;

(K. Gillespie Depo. at 68-69, 80-82). Although Ryan acknowledged signing for

the certified mailing, neither she nor Gillespie knew what happened to it after she

signed for it. (K. Gillespie Depo. at 68-69, 80-82); Cooperider, 2009-Ohio-6715,

at ¶ 2. Gillespie never saw the complaint or summons, and she could only assume

that they were accidentally thrown away or misfiled. (Id. at 37, 80-82); Id.

          {¶5} After OK Café failed to file an answer, Cooperider moved for default

judgment as to the issue of liability on December 4, 2008. (Western Reserve’s

MSJ at 4, Ex. E, Doc. No. 24); Cooperider, 2009-Ohio-6715, at ¶ 2. Four days

later, the trial court granted Cooperider’s motion. (Id.); Id. On February 5, 2009,

Western Reserve received from OK Café and its insurance agent notice of

Cooperider’s lawsuit and the default judgment. (Boehm Aff. ¶ 2, 5, Doc. No. 24,

attached).     Under a reservation of its rights under the CGL Policy, Western

Reserve retained an attorney for OK Café to attempt to have the default judgment

set aside and, if necessary, to represent OK Café at the damages hearing. (Id. ¶ 3,

5). On March 6, 2009, OK Café filed a motion to set aside the default judgment.

(Western Reserve’s MSJ at 4, Ex. E, Doc. No. 24); Cooperider, 2009-Ohio-6715,

at ¶ 2.



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Case No. 9-12-46



       {¶6} On March 31, 2009, the trial court denied OK Café’s motion to set

aside the default judgment, concluding that OK Café failed to demonstrate

excusable neglect. (Id.); Id. at ¶ 3. Western Reserve claims specialist, Horst

Boehm, sent a letter to Gillespie on April 6, 2009, notifying her that Western

Reserve’s investigation revealed that OK Café was served with the complaint and

summons and that OK Café failed to notify Western Reserve until after the trial

court entered default judgment, which according to Western Reserve amounted to

a failure to comply with OK Café’s obligations under the CGL Policy. (Boehm

Aff. ¶ 5, Doc. No. 24, attached). Boehm also informed Gillespie that Western

Reserve continued to reserve its right to deny coverage. (Id.).

       {¶7} The trial court held a damages hearing on June 29, 2009, which

neither Gillespie nor anyone from OK Café attended alongside OK Café’s counsel,

retained for it by Western Reserve. (Id. ¶ 6); (K. Gillespie Depo. at 40-44). On

July 7, 2009, the trial court awarded Cooperider $130,000 in damages, plus

interest at 5% per annum. (Western Reserve’s MSJ at 5, Ex. E, Doc. No. 24);

Cooperider, 2009-Ohio-6715, at ¶ 3. OK Café appealed to this Court, and, on

December 21, 2009, we affirmed the judgment of the trial court denying OK

Café’s motion to set aside the default judgment. Cooperider, 2009-Ohio-6715, at

¶ 15-17. OK Café appealed to the Supreme Court of Ohio, which on May 5, 2010,



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Case No. 9-12-46



declined to accept the appeal for review. Cooperider v. OK Café & Catering, Inc.,

125 Ohio St. 3d 1414
, 2010-Ohio-1893.

      {¶8} On March 31, 2010—before the Supreme Court declined to accept the

appeal—Western Reserve filed the underlying declaratory judgment action against

OK Café and Cooperider. (Complaint, Doc. No. 1). Western Reserve sought a

declaration that it owed neither a defense nor indemnity to OK Café, nor

indemnity to Cooperider, based on OK Café’s alleged failures to comply with the

CGL Policy. (Id.). Cooperider filed an answer on June 4, 2010, followed by an

amended answer and counterclaim with leave of court on October 4, 2010. (Doc.

Nos. 5, 10). Cooperider’s counterclaim contained two causes of action—statutory

liability pursuant to R.C. 3929.06 and bad faith. (Doc. No. 10). On October 14,

2010, Western Reserve moved to strike Cooperider’s amended answer and

counterclaim.   (Doc. Nos. 11, 15).       Western Reserve filed an answer to

Cooperider’s counterclaim on November 8, 2010. (Doc. No. 13). In a December

27, 2010 entry, the trial court allowed Cooperider’s amended answer to stand but

concluded that Cooperider had no standing to assert a counterclaim for bad faith




                                       -6-
Case No. 9-12-46



and dismissed “said counterclaim.” (Doc. No. 16).1

        {¶9} Western Reserve filed a motion for summary judgment on May 23,

2011, requesting that the trial court declare that Western Reserve was not required

to pay Cooperider or OK Café because any coverage to which OK Café may have

been entitled under the CGL Policy was void based on OK Café’s failure to satisfy

the CGL Policy’s provisions. (Doc. No. 24). On June 2, 2011, Cooperider filed a

motion for summary judgment, requesting that the trial court declare that OK Café

satisfied the provisions of the CGL Policy and that, under R.C. 3929.06, Western

Reserve was required to pay to Cooperider the judgment rendered against OK

Café. (Doc. No. 30). On June 10, 2011, Cooperider filed a memorandum in

opposition to Western Reserve’s motion for summary judgment, attaching an

affidavit of the Clerk of Court for the Marion County Court of Common Pleas.

(Doc. No. 33). Western Reserve moved to strike the Clerk’s affidavit on June 27,

2011. (Doc. No. 34). That same day, Western Reserve filed its combined reply in

support of its motion for summary judgment and memorandum in opposition to

Cooperider’s motion for summary judgment. (Doc. No. 35).


1
  It is unclear from the trial court’s December 27, 2010 entry whether it also disposed of Cooperider’s
second cause of action—statutory liability pursuant to R.C. 3929.06. R.C. 3929.06 allows successful
plaintiffs, such as Cooperider, to file postjudgment suits against a tortfeasor’s insurer. See Estate of
Heintzelman v. Air Experts, Inc., 
126 Ohio St. 3d 138
, 2010-Ohio-3264, ¶ 7. Whether the trial court’s
December 27, 2010 entry dismissed Cooperider’s entire counterclaim or only his bad faith cause of action
is immaterial because the trial court’s July 11, 2012 judgment entry, on appeal before this Court, disposed
of any R.C. 3929.06 cause of action by “finding that there is insurance coverage in this case.” (Doc. No.
42). See Westfield Cos. v. Gibbs, 11th Dist. Lake No. 2004-L-058, 2005-Ohio-4210, ¶ 12.

                                                   -7-
Case No. 9-12-46



        {¶10} Cooperider filed his reply in support of his motion for summary

judgment and his memorandum in opposition to Western Reserve’s motion to

strike on July 15, 2011. (Doc. Nos. 37-38). On August 1, 2011, Western Reserve

filed its reply in support of its motion to strike. (Doc. No. 39). On August 2,

2011, Cooperider moved the trial court to reconsider its December 27, 2010

judgment entry, in which it dismissed his counterclaim for bad faith. (Doc. No.

40). The trial court denied Cooperider’s motion for reconsideration the next day.

(Doc. No. 41).

        {¶11} On July 11, 2012, the trial court issued its summary, declaratory

judgment in favor of Cooperider and against Western Reserve, finding insurance

coverage. (Doc. No. 42). OK Café filed a “suggestion of stay” on July 23, 2012,

based on its having filed for Chapter 7 bankruptcy protection in the United States

District Court for the Northern District of Ohio. (Doc. No. 43). The trial court

granted OK Café’s request and stayed the case on July 30, 2012. (Doc. No. 44).

That same day, Western Reserve filed a motion under Civ.R. 62 to stay the

execution of judgment pending appeal. (Id.).2 Cooperider filed a memorandum in

opposition to Western Reserve’s Civ.R. 62 motion to stay on August 2, 2012.

(Doc. No. 45).



2
  The case docket does not assign a separate document number to Western Reserve’s Civ.R. 62 motion to
stay execution of judgment pending appeal.

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Case No. 9-12-46



        {¶12} On August 7, 2012, Western Reserve filed its notice of appeal and

suggestion of stay.3 (Doc. No. 47). On August 17, 2012, we stayed this appeal

due to OK Café’s pending bankruptcy proceeding. On December 21, 2012, we

vacated our August 17, 2012 judgment entry staying the appeal, reactivated the

appeal, and set a briefing schedule. Western Reserve raises two assignments of

error for our review.4 Because they are related, and because Western Reserve

addresses them together, we will address both assignments of error together.

                                Assignment of Error No. I

        The trial court erred in issuing a declaratory judgment that
        the Western Reserve CGLPolicy [sic] provided coverage for
        Cooperider’s default judgment damages.

                                Assignment of Error No. II

        The trial court erred in determining that OK Café did not
        breach the Western Reserve CGL Policy’s conditions by
        failing to notify Western Reserve of a pending lawsuit before
        a default judgment was rendered.

        {¶13} In its first and second assignments of error, Western Reserve argues

that the trial court erred when it concluded in its judgment entry granting

3
  Western Reserve’s notice of appeal indicates it is appealing July 11, 2012 and July 13, 2012 judgment
entries. (Doc. No. 47). The July 13, 2012 “judgment entry,” however, was rather a “NOTICE OF
APPEALABLE ORDER” issued by the clerk of courts to notify Western Reserve’s counsel of the July 11,
2012 judgment entry. (See Doc. No. 42). Therefore, only the final appealable order itself—the July 11,
2012 judgment entry—is before this Court.
4
  Western Reserve’s brief does not include “[a] statement of the assignments of error presented for review,”
as required by App.R. 16(A)(3). We, therefore, have discretion to disregard Western Reserve’s arguments
under App.R. 12(A)(2). Heider v. Siemens, 3d Dist. Allen No. 1-10-66, 2011-Ohio-901, ¶ 27, fn. 1.
However, we will, in the interests of justice, address the two statements that Western Reserve first
identified in its reply brief as assignments of error.

                                                    -9-
Case No. 9-12-46



summary, declaratory judgment that the CGL Policy provided coverage in this

case. Western Reserve challenges the trial court’s rejection of its argument that

OK Café voided any otherwise available coverage by breaching the CGL Policy’s

notice provisions.

       {¶14} We review a decision to grant summary judgment de novo. Doe v.

Shaffer, 
90 Ohio St. 3d 388
, 390 (2000). Summary judgment is proper where there

is no genuine issue of material fact, the moving party is entitled to judgment as a

matter of law, and reasonable minds can reach but one conclusion when viewing

the evidence in favor of the non-moving party, and the conclusion is adverse to the

non-moving party. Civ.R. 56(C); State ex rel. Cassels v. Dayton City School Dist.

Bd. of Edn., 
69 Ohio St. 3d 217
, 219 (1994).

       {¶15} The CGL Policy lists several duties of OK Café “in the event of

occurrence, offense, claim or suit”:

       SECTION IV – COMMERCIAL GENERAL LIABILITY

       CONDITIONS

       ***

       2.    Duties In The Event Of Occurrence, Offense, Claim Or Suit

       a.    You must see to it that we are notified as soon as practicable of

       an “occurrence” or an offense which may result in a claim. To the

       extent possible, notice should include:

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Case No. 9-12-46



      (1) How, when and where the “occurrence” or offense took place;

      (2) The names and addresses of any injured persons and witnesses;

      and

      (3) The nature and location of any injury or damage arising out of

      the “occurrence” or offense.

      b.    If a claim is made or “suit” is brought against any insured, you

      must:

      (1) Immediately record the specifics of the claim or “suit” and the

      date received; and

      (2) Notify us as soon as practicable.

      You must see to it that we receive written notice of the claim or

      “suit” as soon as practicable.

      c.    You and any other involved insured must:

      (1) Immediately send us copies of any demands, notices,

      summonses or legal papers received in connection with the claim or

      “suit”;

      (2) Authorize us to obtain records and other information;

      (3) Cooperate with us in the investigation or settlement of the

      claim or defense against the “suit”; and



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Case No. 9-12-46



       (4) Assist us, upon our request, in the enforcement of any right

       against any person or organization which may be liable to the

       insured because of injury or damage to which this insurance may

       also apply.

       d.   No insured will, except at that insured’s own cost, voluntarily

       make a payment, assume any obligation, or incur any expense, other

       than for first aid, without our consent.

(Emphasis sic.) (CGL Policy, Doc. No. 24, attached).

       {¶16} The CGL Policy defines “occurrence” as “an accident, including

continuous or repeated exposure to substantially the same general harmful

conditions.” (Id.). It defines “suit,” in relevant part, as “a civil proceeding in

which damages because of ‘bodily injury’, ‘property damage’ or ‘personal and

advertising injury’ to which this insurance applies are alleged.” (Id.). The CGL

Policy defines “bodily injury” as “bodily injury, sickness or disease sustained by a

person, including death resulting from any of these at any time.” (Id.).

       {¶17} In its brief, Western Reserve does not address whether Cooperider’s

lawsuit—alleging a bodily injury sustained while on OK Café’s premises—

involved a bodily injury to which coverage applied under the CGL Policy. Rather,

Western Reserve argues that because OK Café failed to satisfy its “duties,”

excerpted above, in the event of a claim or suit, any coverage that otherwise would

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Case No. 9-12-46



have applied was void. Cooperider argues that OK Café satisfied its obligations

under the CGL Policy, and that the trial court, therefore, properly concluded

coverage existed under the CGL Policy.

       {¶18} This case requires us to determine whether OK Café satisfied its

obligations under the CGL Policy. “An insurance policy is a contract whose

interpretation is a matter of law.” King Estate v. Wachauf, 3d Dist. Auglaize No.

2-12-10, 2013-Ohio-2498, ¶ 8, quoting Cincinnati Ins. Co. v. CPS Holdings, Inc.,

115 Ohio St. 3d 306
, 2007-Ohio-4917, ¶ 7 (internal quotation marks omitted). “To

determine a contract’s interpretation, a reviewing court must give effect to the

parties’ intent upon examination of the contract as a whole, guided by the

presumption that the parties’ intent is reflected by the language of the policy.” Id.,

citing Cincinnati Ins. Co. at ¶ 7. “When the language of a written contract is clear,

a court may look no further than the writing itself to find the intent of the parties.”

Id., quoting Cincinnati Ins. Co. at ¶ 7 (internal quotation marks omitted). “A

contract is unambiguous as a matter of law if it can be given a definite legal

meaning.” Id., citing Cincinnati Ins. Co. at ¶ 7. “While ambiguity in an insurance

contract is construed against the insurer and in favor of the insured, a court should

not apply this rule if it results in an unreasonable interpretation of the words of the

policy.” Id. at ¶ 9, citing Cincinnati Ins. Co. at ¶ 8.



                                          -13-
Case No. 9-12-46



      {¶19} The duties imposed on OK Café by CGL Policy Section IV,

Paragraph 2, Subparagraphs a and b—to notify Western Reserve “as soon as

practicable” of an occurrence, offense, claim, or suit—are referred to as “notice”

or “prompt-notice” requirements. See Goodyear Tire & Rubber Co. v. Aetna Cas.

& Sur. Co., 
95 Ohio St. 3d 512
, 2002-Ohio-2842, ¶ 13-14; Kelley v. State Farm

Mut. Auto. Ins. Co., 8th Dist. Cuyahoga No. 98749, 2013-Ohio-585, ¶ 16. See

also Ormet Primary Aluminum Corp. v. Employers Ins. of Wausau, 
88 Ohio St. 3d 292
, 302-303 (2000) (discussing the “many purposes” served by notice provisions

in insurance contracts). CGL Policy Section IV, Paragraph 2, Subparagraph c

imposes duties on OK Café to forward copies of legal papers to Western Reserve

and to cooperate with Western Reserve in its defense of OK Café. Courts refer to

these prompt-notice and cooperation requirements as conditions precedent to

coverage. See Goodyear Tire & Rubber Co. at ¶ 14; Kelley at ¶ 22, citing Beaver

Excavating Co. v. United States Fid. & Guar. Co., 126 Ohio App.3d 9, 16 (7th

Dist.1998). If an insured fails to satisfy one of these prompt-notice or cooperation

requirements, and if the insurer is prejudiced by the insured’s failure, then the

insurer is relieved of its obligation to provide coverage. See Ormet Primary

Aluminum Corp. at 302-305.

      {¶20} Here, the parties do not dispute that Gillespie notified her insurance

agent of Cooperider’s original attorney’s May 22, 2007 letter informing OK Café

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Case No. 9-12-46



of his representation of Cooperider “regarding an [sic] personal injury matter

which occurred [at OK Café] on October 13, 2006.” (Kulka Aff. ¶ 2, Doc. No. 24,

attached). Nor do the parties dispute that Western Reserve received a copy of

Cooperider’s original attorney’s May 22, 2007 letter “on or about June 11, 2007,”

less than a month later. (Id.). The parties do not dispute that OK Café was served

with Cooperider’s complaint and a summons on October 30, 2008. (K. Gillespie

Depo. at 68-69). Finally, they agree that OK Café did not forward a copy of the

complaint and summons to Western Reserve, and that OK Café did not notify

Western Reserve of the lawsuit until OK Café and its agent forwarded a notice of

the damages hearing to Western Reserve in early February 2009—after default

judgment on the issue of liability had been entered against OK Café on December

8, 2008. (Id. at 69); (Boehm Aff. ¶ 2, 5, Doc. No. 24, attached).

       {¶21} The parties disagree about the meaning of the language of the CGL

Policy. They spend much of their briefs disputing whether CGL Policy Section

IV, Paragraph 2, Subparagraph b required OK Café to notify Western Reserve of

Cooperider’s lawsuit after OK Café was served with the complaint and summons

on October 30, 2008. Specifically, the parties dispute the meaning of the phrase

“claim is made or ‘suit’ is brought” in Subparagraph b and whether it obligated

OK Café to notify Western Reserve of the lawsuit even after OK Café gave a copy

of Cooperider’s original attorney’s May 22, 2007 letter to its insurance agent, who

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Case No. 9-12-46



forwarded the letter to Western Reserve. The parties also disagree about whether

OK Café failed to “[c]ooperate with [Western Reserve] * * * in the * * * defense

against the “suit’ * * *,” as required by Subparagraph c(3).

       {¶22} We need not interpret Subparagraphs b or c(3) because OK Café

failed to satisfy its obligations under Subparagraph c(1), requiring OK Café to

“[i]mmediately send [Western Reserve] copies of any demands, notices,

summonses or legal papers received in connection with the claim or ‘suit’ * * *,”

and because Western Reserve was prejudiced by that failure.

       {¶23} A provision in an insurance policy compelling notice “immediately”

requires notice “within a reasonable time in light of all the surrounding facts and

circumstances.” Goodyear Tire & Rubber Co., 
95 Ohio St. 3d 512
, 2002-Ohio-

2842, at ¶ 14, quoting Ormet Primary Aluminum Corp., 88 Ohio St.3d at 303,

syllabus (internal quotation marks omitted). “While the question of whether the

insured met the notice condition is usually a question for the jury, an unexcused

significant delay may be unreasonable as a matter of law.”        Ormet Primary

Aluminum Corp. at 300. See also State Hous. Auth. Risk Pool Assn., Inc. v. Erie

Ins. Group, 11th Dist. Portage No. 2003-P-0053, 2004-Ohio-7223, ¶ 19.

       {¶24} Here, Subparagraph c(1) contains a prompt-notice provision that

required OK Café to “immediately” send to Western Reserve “any demands,

notices, summonses or legal papers received in connection with the claim or

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Case No. 9-12-46



‘suit,’” even if OK Café had previously notified Western Reserve of a claim or

suit. Cooperider does not dispute that OK Café failed to forward to Western

Reserve a copy of the summons and complaint that the clerk of courts served on

OK Café on October 30, 2008—a fact Gillespie admitted in her deposition. (See

K. Gillespie Depo. at 69). In other words, OK Café did not simply delay in

forwarding the complaint and summons to Western Reserve—it failed to forward

them at all because they were “accidentally” thrown away or misfiled, and it only

first notified Western Reserve of the lawsuit in early February 2009 by forwarding

a copy of the notice of the damages hearing. (See id. at 69, 80-82); (Boehm Aff. ¶

2, 5, Doc. No. 24, attached).

       {¶25} OK Café’s failure to forward the complaint and summons because

they were accidentally thrown away or misfiled was not excusable.             See

Cooperider, 2009-Ohio-6715, at ¶ 12, 14 (affirming the trial court’s conclusion

that OK Café’s accidental throwing away or misfiling of the complaint and

summons was not excusable neglect under Civ.R. 60(B)). Cooperider fails to

suggest any other way in which OK Café’s failure was excusable, other than to

argue that OK Café’s notice obligations ceased after it forwarded to Western

Reserve Cooperider’s original attorney’s May 22, 2007 letter.        Cooperider’s

argument ignores the independent requirement set forth in Subparagraph c(1).

We, therefore, conclude that OK Café failed as a matter of law to satisfy its

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Case No. 9-12-46



obligations under Subparagraph c(1). See Goodyear Tire & Rubber Co. at ¶ 14;

Ormet Primary Aluminum Corp. at 302-305.          See also Allstate Ins. Co. v.

Singleton, 8th Dist. Cuyahoga No. 84371, 2004-Ohio-6117, *2 (affirming

summary, declaratory judgment in favor of the insurer and concluding that the

insured’s notice to the insurer, six months after the trial court rendered default

judgment, was unreasonable).

      {¶26} We next turn to the question of whether Western Reserve was

prejudiced by OK Café’s failure to forward it copies of the complaint and

summons. We conclude that it was. “An insured’s unreasonable delay in giving

notice is presumed prejudicial to the insurer absent evidence to the contrary.”

Pennsylvania Gen. Ins. Co. v. Park-Ohio Industries, 
126 Ohio St. 3d 98
, 2010-

Ohio-2745, ¶ 21, quoting Ferrando v. Auto-Owners Mut. Ins. Co., 
98 Ohio St. 3d 186
, 2002-Ohio-7217, paragraph one of the syllabus.       The insured bears the

burden of rebutting this presumption. Erie Ins. Group, 2004-Ohio-7223, at ¶ 19.

See also Ormet Primary Aluminum Corp. at 303.

      {¶27} As a result of OK Café’s failure to forward copies of the complaint

and summons to Western Reserve as required by the CGL Policy, Western

Reserve did not receive notice of Cooperider’s lawsuit until it was too late. Had

Western Reserve received copies of the complaint and summons as the CGL

Policy had designed, it could have further investigated Cooperider’s claim,

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Case No. 9-12-46



determined the relative fault of the parties involved, and, most importantly, hired

counsel for OK Café who would have assisted OK Café in responding to the

complaint and avoiding default judgment. Singleton, 2004-Ohio-6117, at *2.

       {¶28} Instead, OK Café notified Western Reserve of the default judgment

two months after the trial court entered it. Under a reservation of rights, Western

Reserve hired counsel for OK Café who moved the trial court to set aside the

default judgment. The trial court denied that motion, we affirmed the trial court’s

decision, and the Supreme Court did not accept the appeal for review.               See

Cooperider, 2009-Ohio-6715, at ¶ 15-17, appeal not accepted, 
125 Ohio St. 3d 1414
, 2010-Ohio-1893. Had OK Café forwarded copies of the complaint and

summons, Western Reserve would have had the opportunity to participate in the

litigation and ensure OK Café avoided default judgment. OK Café’s failure to

satisfy Subparagraph c(1) deprived Western Reserve of that opportunity, which

resulted in actual prejudice to Western Reserve. Fillhart v. W. Res. Mut. Ins. Co.,

115 Ohio App.3d 200, 203-204 (3d Dist.1996), citing Thomas v. State Farm Mut.

Auto Ins. Co., 9th Dist. Summit No. 14888 (Apr. 17, 1991); Singleton, 2004-Ohio-

6117, at *2. See also Ormet Primary Aluminum Corp. at 302-303 (stating that

prompt-notice requirements allow an insurer “to step in and control the potential

litigation, protect its own interests, maintain the proper reserves in its accounts, [ ]

pursue possible subrogation claims[, and] make timely investigations of

                                         -19-
Case No. 9-12-46



occurrences in order to evaluate claims and to defend against fraudulent, invalid,

or excessive claims”).     Thus, Cooperider did not and could not rebut the

presumption of prejudice. See Ormet Primary Aluminum Corp. at 303.

       {¶29} We hold that, as a matter of law, by failing to forward copies of the

complaint and summons to Western Reserve, OK Café failed to satisfy CGL

Policy Section IV, Paragraph 2, Subparagraph c(1)—a condition to coverage—and

that failure resulted in actual prejudice to Western Reserve. We further hold that

OK Café’s failure and the resulting prejudice to Western Reserve relieved Western

Reserve of any otherwise existing obligation to provide coverage under the CGL

Policy.   Therefore, Western Reserve was entitled to an entry of summary,

declaratory judgment in its favor.

       {¶30} For the reasons above, Western Reserve’s first and second

assignments of error are sustained.

       {¶31} Having found error prejudicial to the appellant herein in the

particulars assigned and argued, we reverse the judgment of the trial court and

remand for further proceedings consistent with this opinion.

                                                          Judgment Reversed and
                                                               Cause Remanded

WILLAMOWSKI and SHAW, J.J., concur.

/jlr


                                       -20-


Case Information

Case Name: W. Res. Mut. Cas. Co. v. OK Cafe & Catering, Inc.

Citations: 2013 Ohio 3397

Court: ohioctapp

Year: 2013-08-05

This case can be cited as precedent.