Nationwide Mut. Ins. Co v. Pinnacle Baking Co., Inc.
2014 Ohio 1257
Ohio Ct. App.2014Background
- Nationwide sued Pinnacle for declaratory judgment after Pinnacle reported theft of bakery equipment and supplies from leased premises on November 17, 2010.
- Pinnacle operated a commercial bakery but ceased production in May 2008 and had not sold baked goods since then.
- Pinnacle's premises still contained ovens, mixers, freezers, racks, and other equipment but lacked perishable raw materials (flour, eggs, butter) necessary to produce baked goods.
- Pinnacle submitted a proof of loss valuing stolen items at about $103,018.67 and moved for summary judgment, arguing the vacancy exclusion did not apply because the premises contained equipment sufficient for customary operations.
- Nationwide moved for summary judgment contending the tenant-vacancy definition applied: the building lacked “enough business personal property” (including stock/raw materials) to conduct customary operations, so theft coverage was excluded.
- The trial court granted Pinnacle’s summary-judgment motion; the appellate court reversed, holding the premises were vacant under the policy because necessary stock/raw materials were absent.
Issues
| Issue | Plaintiff's Argument (Nationwide) | Defendant's Argument (Pinnacle) | Held |
|---|---|---|---|
| Whether the leased unit was "vacant" under the policy's tenant-vacancy provision | Vacant because premises lacked sufficient business personal property (notably raw materials/finished goods) to conduct customary bakery operations | Not vacant because premises contained equipment/fixtures sufficient to resume customary operations (could obtain perishables quickly) | Held vacant: absence of raw materials/stock (part of "business personal property") means not enough property to conduct customary operations, so vacancy exclusion applies |
Key Cases Cited
- Alexander v. Buckeye Pipe Line Co., 53 Ohio St.2d 241 (1978) (insurance-contract interpretation is a question of law)
- Hybud Equip. Corp. v. Sphere Drake Ins. Co., Ltd., 64 Ohio St.3d 657 (1992) (exclusions construed narrowly; contract interpretation rules apply)
- Gomolka v. State Auto. Mut. Ins. Co., 70 Ohio St.2d 166 (1982) (contract terms given plain and ordinary meaning)
- King v. Nationwide Ins. Co., 35 Ohio St.3d 208 (1988) (ambiguous policy provisions construed against insurer)
- Cincinnati Indemn. Co. v. Martin, 85 Ohio St.3d 604 (1999) (clear, unambiguous policy language enforced as written)
- Westfield Ins. Co. v. Hunter, 128 Ohio St.3d 540 (2011) (insurer must prove its interpretation is the only reasonable one to defeat coverage)