LM Ins. Corp. v. Amanda Criss, 16-4761

Empire Die Casting entered a leasing agreement with Integrity Staffing to receive "leased workers"; the agreement required Empire to maintain liability insurance covering leased employees to the same extent as for direct employees and included reciprocal indemnities.
Empire purchased a commercial general liability (CGL) policy from LM Insurance; the policy covered sums the insured was legally obligated to pay for bodily injury but expressly excluded bodily injury to an "employee," including "leased workers," arising out of employment or duties related to the insured's business.
Szuhay, an Integrity-leased worker assigned to Empire, suffered severe burns while operating Empire’s equipment and sued Empire in Ohio state court; after procedural delays and a lifted bankruptcy stay limited to insurance recovery, Szuhay obtained a default judgment against Empire for $696,937.09.
Because the bankruptcy court limited Szuhay’s recovery to Empire’s insurance, Szuhay sought payment from LM Insurance; LM refused, citing the employee/leased-worker exclusion in the CGL policy.
LM sued for a declaratory judgment in federal court that it had no obligation to pay the default judgment; the district court granted judgment on the pleadings for LM and dismissed Szuhay’s counterclaims, and the Sixth Circuit affirmed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether LM must pay the default judgment against Empire under the CGL policy	Szuhay contends the policy (or the leasing/indemnity agreement as an insured-contract) obligates LM to cover his judgment	LM argues the CGL policy excludes coverage for injuries to an employee/leased worker arising out of employment, so no coverage exists	Held: LM has no obligation; the employee/leased-worker exclusion bars coverage
Whether Integrity Staffing’s status as an additional insured affects coverage	Szuhay implies additional-insured or contract provisions could create coverage	LM and the court note Szuhay obtained no judgment against Integrity Staffing and policy exclusion applies regardless	Held: Irrelevant—no claim or judgment against Integrity Staffing and exclusion controls
Whether the leasing agreement’s indemnity creates an "insured contract" triggering coverage	Szuhay argued the indemnity made the insurer responsible under the insured-contract definition	Court notes Szuhay waived this argument on appeal and, in any event, the policy exclusion would preclude recovery	Held: Waived and would not alter outcome due to exclusion
Standard of review for judgment on the pleadings and contract interpretation	Szuhay challenged dismissal; argued factual inferences favor plaintiff	LM argued legal entitlement despite pleaded facts under Rule 12(c) and clear policy language	Held: De novo review; contract language unambiguous under Ohio law, favoring LM

Poplar Creek Dev. Co. v. Chesapeake Appalachia, LLC, 636 F.3d 235 (6th Cir. 2011) (standard for Rule 12(c) review)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must be plausible)
Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility standard for complaints)
Westfield Ins. Co. v. Galatis, 797 N.E.2d 1256 (Ohio 2003) (insurance-contract interpretation principles)
W. World Ins. Co. v. Hoey, 773 F.3d 755 (6th Cir. 2014) (CGL policies serve public-at-large, not employer’s workers)
Amerisure Ins. Co. v. Orange & Blue Const., Inc., [citation="545 F. App'x 851"] (11th Cir. 2013) (distinguishing CGL from workers’ compensation/employers’ liability coverage)