Oriani v. Reach Out Disposal, L.L.C., 2016 Ohio 7392

Background

Guy and Elise Oriani owned a building and leased part of it month-to-month to Axelrod Rubbish Recycling/Reach Out Disposal, which was required by lease to carry commercial general liability insurance from Century Surety for Mar. 15, 2012–Mar. 15, 2013.
Axelrod operated a garbage-hauling/recycling business on the premises, accumulated large amounts of garbage, stopped paying rent (Nov. 1, 2012–Jan. 31, 2013), and ceased operations in Jan. 2013, leaving tons of garbage that attracted rats and allegedly created a health nuisance.
The Orianis incurred cleanup costs and discovered structural damage to the building; they sued Axelrod and others for breach of contract, nuisance, trespass, and sought coverage under Axelrod’s Century policy as additional insureds.
The trial court entered default judgment against Axelrod for $286,908.97. The Orianis then sought indemnification from Century under the policy; Century sought a declaratory judgment that the policy provided no coverage and moved for summary judgment.
Century argued the Orianis were not insureds and that multiple policy exclusions bar coverage (contractual-liability, pollutants, damage to property you own/rent/occupy, and damage to your product/work). The trial court granted Century summary judgment; the Orianis appealed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Orianis are insureds / entitled to coverage under Century policy	Orianis claimed third-party liability coverage as nonparty claimants/indemnitees under Axelrod’s policy	Century argued Orianis are not named insureds/additional insureds and thus not entitled to favorable construction; policy does not cover them	Held: Orianis are not insureds; courts construe ambiguities for policyholder, not third-party claimant; Century met burden to show exclusions apply
Whether damages constitute "bodily injury" or "property damage" under policy	Orianis argued garbage posed a threat of bodily injury and cleanup/structural harm fits property damage	Century argued no actual bodily injury occurred (only potential), and some damages were purely economic (rent, fees) outside coverage	Held: No evidence of actual bodily injury; $75,000 of judgment (unpaid rent and attorney fees) are purely economic and not covered; remainder possibly property damage but subject to exclusions
Whether Damage-to-Property exclusion (j.(1)) bars coverage for structural damage or cleanup costs while Axelrod occupied premises	Orianis argued structural damage and cleanup may have occurred after Axelrod stopped occupying and thus exclusion inapplicable; also asserted ambiguity due to separate rented-premises limit	Century argued exclusion j.(1) excludes property damage to property you own/rent/occupy; j.(2) excludes damage after abandonment; policy language unambiguous	Held: Evidence shows structural damage and nuisance cleanup occurred while Axelrod occupied premises; exclusion j.(1) applies to structural damage; j.(2) would apply if abandonment occurred. No ambiguity; exclusions bar coverage
Whether cleanup costs to prevent harm to third parties are covered despite exclusion j.(1)	Orianis argued exclusion j.(1) does not apply when expenses are incurred to prevent/mitigate third‑party damage	Century relied on exclusion j.(2) and the clear grant/exclusion language to deny coverage	Held: Court need not decide j.(1) exception because j.(2) excludes coverage for premises sold/given away/abandoned; exclusionary language precludes coverage for cleanup costs as well

Key Cases Cited

Zivich v. Mentor Soccer Club, 82 Ohio St.3d 367 (summary judgment standard and Civ.R. 56 principles)
Temple v. Wean United, 50 Ohio St.2d 317 (procedural standard for summary judgment)
Grafton v. Ohio Edison Co., 77 Ohio St.3d 102 (de novo review of summary judgment)
Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216 (ambiguities in policy construed for policyholder, not third‑party claimant)
Neal‑Pettit v. Lahman, 125 Ohio St.3d 327 (insurer bears burden to show exclusions apply)
Continental Ins. Co. v. Louis Marx & Co., 64 Ohio St.2d 399 (insurance exclusions must be clear)
Moorman v. Prudential Ins. Co. of Am., 4 Ohio St.3d 20 (clarity required for enforceable exclusions)