OPINION
Plaintiff St. Marys Foundry appeals from an order awarding summary judgment to Defendant Employers Insurance of Wausau, after Plaintiff filed a complaint in federal diversity jurisdiction under 28 U.S.C. § 1332 for declaratory judgment pursuant to 28 U.S.C. §§ 2201-2202, seeking a declaration that it was entitled to insurance coverage for lost income following a warehouse fire. For the reasons set forth below, we AFFIRM the district court’s order.
FACTS
Plaintiff is located in St. Marys, Ohio, and manufactures metal castings for customers in a wide variety of industries. The castings range in size from 500 to 60,000 pounds, and Plaintiff makes them by pouring molten iron into sand molds. The sand molds are formed from wood “patterns.” Each pattern is custom made to produce a particular casting. Plaintiff cannot manufacture castings without patterns. The patterns Plaintiff uses to make castings are owned by Plaintiffs customers. Consistent with industry practice, Plaintiff stores the patterns when not using them. Plaintiff stored approximately 4000 patterns in a warehouse known as the Pattern Storage Warehouse.
On February 10, 2000, Defendant issued Business Property Policy No. 226100053729 (“the Policy”) to Plaintiff providing insurance coverage for various interests including the Pattern Storage Warehouse. The Policy provided coverage for Plaintiffs property interests during the *991 period from February 1, 2000 to February 1, 2001. As drafted and issued by Defendant, the Policy provided separate units of insurance for separate property interests, including coverage for real property, personal property, loss of income, additional expense, and equipment breakdown. The unit has terms set forth in separate coverage forms.
The Policy begins with a Declarations section which sets forth the total annual premium along with the Policy limits and deductibles. Immediately following the Declarations are the separate coverage forms. The Loss of Income Form provides, in pertinent part:
1. COVERAGE
We will pay for:
A. Loss of income; or,
B. Necessary expenses which you incur to resume, or to maintain your ability to resume, normal operations, not exceeding the amount by which your loss of income is reduced;
that you sustain during a period of recovery, resulting from a covered loss, up to the limit of liability shown on the DECLARATIONS.
(J.A. at 56) (emphasis in original.) Under the Policy, “covered loss” means a “loss to covered property at a covered location re suiting from a peril insured against.” The Policy also includes a “Property Not Covered Endorsement” (“PNC Endorsement”), which expressly excludes coverage for patterns, dyes, and molds not owned by Plaintiff. The PNC Endorsement, however, modifies only the Personal Property Form.
On April 20, 2000, a fire destroyed the Pattern Storage Warehouse. As a result, Plaintiff suffered a loss of income in excess of $900,000. Plaintiff concedes that the Policy does not cover the value of its customers’ patterns, but claims entitlement to coverage for its business losses that resulted from the loss of the patterns.
When Defendant disagreed with Plaintiffs theory of coverage, Plaintiff filed a complaint for declaratory judgment in Ohio’s Auglaize County Court of Common Pleas seeking a declaration that it was entitled to coverage for lost income. Pursuant to 28 U.S.C. §§ 1441 and 1446, Defendant removed the action to the United States District Court for the Northern District of Ohio.
Both parties filed cross motions for summary judgment on the issue of Plaintiffs coverage for loss of income under the Policy. On September 28, 2001, the district court denied Plaintiffs motion and granted Defendant’s.
On October 25, 2001, Plaintiff filed a timely notice of appeal.
DISCUSSION
We review summary judgment
de novo. Eastman Kodak Co. v. Image Technical Servs., Inc.,
[t]he mere existence of a scintilla of evidence in support of the plaintiffs position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff. The judge’s inquiry, therefore, unavoidably asks whether reasonable jurors could find by a preponderance of evidence that the plaintiff is entitled to a verdict.
I.
In Ohio, normal rules of contract construction apply to the interpretation of insurance policies.
Weiss v. St. Paul Fire & Marine Ins. Co.,
When an insurance policy includes ambiguous exclusions, “ ‘a general presumption arises to the effect that that which is not clearly excluded from the operation of such contract is included in the operation thereof.’ ”
Moorman v. Prudential Ins. Co. of Am.,
The basis of this rule is that the insurer — who formulates the insurance contract and proffers it to the insured for the ostensible benefit of the insured in the event of a loss — is responsible for the language employed. Furthermore, the purpose of the contract being to provide insurance coverage, an interpretation of doubtful terms which construes the language to provide such coverage tends to effectuate the presumed good faith intent of the contracting parties.
Burdett,
To restate the applicable law simply: we use ordinary principles of contract interpretation to determine whether an exclusion in an insurance policy is ambiguous. If the exclusion is ambiguous, we construe it in favor of affording coverage to the insured.
Plaintiff argues that the PNC Endorsement, which excludes coverage for patterns, only modifies the Personal Property Form. It does not, under Plaintiffs theory, modify the Loss of Income Form, which would mean that loss of income due to the destruction of the patterns is covered by the Loss of Income Form.
Plaintiffs position ignores the clear language of the Loss of Income Form. The Loss of Income form only includes loss of income “resulting from a covered loss.” (J.A. at 56) (emphasis in original.) Under the Policy, “covered loss” means a “loss to covered property at a covered location resulting from a peril insured against.” (J.A. at 72.) None of the other forms (Real Property, Additional Expense, Equipment Breakdown) have anything to do with the patterns. Thus, it appears fairly straightforward that the PNC Endorsement excludes the patterns from the property coverage, and the Policy only reimburses loss of income “resulting from a covered loss.” (J.A. at 56) (emphasis in original.)
This exception is unambiguous, which means Plaintiff may not have the benefit of interpretive doctrines that require us to read an ambiguous exclusion in favor of coverage.
1
See, e.g., Ramada Inn Ramogreen, Inc. v. Travelers Indem. Co.,
II.
Despite the Policy’s plain language, Plaintiff launches a fusillade of unpersuasive arguments, each of which attempts to demonstrate that the patterns are a “covered loss.”
First, Plaintiff argues that
Burdett Oxygen Co.,
Second, Plaintiff argues that when Defendant intended for an endorsement to modify coverage under the Loss of Income Form, the Policy made the modification explicit. Plaintiff then gives two examples: the Law and Ordinance Extension of Coverage Endorsement and the Molten Material Extension. Each endorsement makes clear which forms it modifies through a series of checked boxes. On the Law and Ordinance Extension of Coverage Endorsement, the following items are cheeked:
(X) REAL PROPERTY FORM, WB1010
(X) PERSONAL PROPERTY' FORM, WB1020
(X) LOSS OF INCOME FORM, WB1030
(X) ADDITIONAL EXPENSE FORM, WB1040
( ) LOSS OF RENTS FORM, WB1050
( ) EQUIPMENT BREAKDOWN FORM, WB1060
(J.A. at 90.) The Molten Material Extension contains a similar series of check-boxes.
Plaintiffs argument fails to account for the difference between policy exclusions (like the PNC Endorsement) and policy extensions (like the Molten Material and Law and Ordinance Extensions). A check-box on the PNC Endorsement would not have made sense because, without property coverage for the patterns, there was no loss of income coverage for them in the first place. Once the Policy excluded the patterns from property coverage, loss of income coverage was automatically excluded because patterns were no longer covered property.
With policy extensions like the Molten Metal and Law and Ordinance, the “Loss of Income” cheek-box reflects an option to add loss of income coverage to the extensions. The multiple check boxes allow the insured to choose what additional types of coverage will apply to the Extensions. One could purchase, for instance, a Molten Metal Extension for physical damage to property only, or, by checking the “Loss of Income” box, a Molten Metal Extension that includes Loss of Income coverage as well.
The Policy expressly excludes Loss of Income coverage for costs not resulting *995 from a “covered loss,” and the presence of. check-boxes to modify the scope’ of policy extensions does not create ambiguity in either the Loss of Income Form or the PNC Exclusion.
Third, Plaintiff attempts to show that the Loss of Income Form protects personal property and loss of income as separate interests. If this is true, according to Plaintiff, the exclusion of personal property coverage in the PNC Exclusion would not necessarily modify the loss of income interest protected by the Loss of Income Form. Plaintiff notes that the Additional Deductibles Endorsement states that loss of income and personal property coverage are “separate units of insurance.” (J.A. at 88.) It does not follow, however, that the Loss of Income Form protects both loss of income flowing from loss of personal property and other kinds of loss of income. “Personal property” is not itself a separate interest covered by the Loss of Income Form. 2 Plaintiffs attempt to parse the Policy into separate pieces fails to overcome Plaintiffs fundamental problem: the Loss of Income Form covers only losses from “covered property,” and the PNC Exclusion renders the patterns uncovered.
Fourth, the parties do not dispute that the Pattern Storage Warehouse was covered property at a covered location, destroyed by a covered peril. 3 Plaintiff takes this to mean that it has suffered a “covered lofts.” This interpretation fails because the Policy provides loss of income coverage only for income losses “resulting from a covered loss.” (J.A. at 56) (emphasis added.) Plaintiff lost income because the fire destroyed its customers’ patterns, not because the Pattern Storage Warehouse burned. Had the conflagration destroyed the Warehouse but not its contents, presumably Plaintiff would not have lost any income at ail. The income loss “resulted” from the destruction of the uncovered patterns, not the destruction of the covered Pattern Storage Warehouse. 4
Fifth, without citation, Plaintiff claims that its intangible “business operation” constitutes “covered property” under the Policy. Significantly, Plaintiff failed to raise this argument below. We generally “cannot consider an issue not passed on below.”
Hormel v. Helvering,
The rule against considering an issue not passed on below is not jurisdictional, but a prudential guideline the Supreme Court termed a “rule of procedure.”
Hor
*996
mel,
We exercise our discretion to rule on an issue not decided below only in “exceptional cases.”
Estate of Quirk v. Comm’r,
[propounding new arguments on appeal in attempting to prompt us to reverse the trial court — arguments never considered by the trial court — is not only somewhat devious, it undermines important judicial values. The rule disciplines and preserves the respective functions of the trial and appellate courts. If the rule were otherwise, we would be usurping the role of the first-level trial court with respect to the newly raised issue rather than reviewing the trial court’s actions. By thus obliterating any application of a standard of review, which may be more stringent than a de novo consideration of the issue, the parties could affect their chances of victory merely by calculating at which level to better pursue their theory. Moreover, the opposing party would be effectively denied appellate review of the newly addressed issue, save in the rare instances of Supreme Court review. In order to preserve the integrity of the appellate structure, we should not be considered a “second shot” forum, a forum where secondary, back-up theories may be mounted for the first time.
Id. at 757. No exceptional circumstances exist here. Plaintiff had the opportunity to raise its “business operation” argument below, but simply failed to do so. Thus, we will not consider it now.
Sixth, Plaintiff argues that because patterns are the heart of a foundry’s business, Plaintiff reasonably expected that there would be coverage for any loss of income resulting from damage to the patterns. Put differently, Plaintiff reasonably expected coverage for its loss of income because the foundry’s operation depended on the patterns such that the foundry and the patterns are “mutually dependent and if one fails, the other[ ] ordinarily sufferfs].”
Studley Box & Lumber Co. v. Nat’l Fire Ins. Co.,
Plaintiff correctly notes that in
Andersen v. Highland House,
For the same reason, the “mutual dependency” theory of
Studley Box
does not help Plaintiff. In
Studley Box,
the insured’s policy included business interruption insurance for a particular set of buildings.
Studley Box,
For all the forgoing reasons, we AFFIRM the district court’s order.
Notes
. Plaintiff concedes that the PNC Endorsement "withdraws insurance coverage for the cost of replacing the patterns owned by St. Marys' customers that were destroyed in the fire.” (PL’s Br. at 16.) To reiterate the point, the patterns' property value was uninsured, which means their loss is not "covered” by the Policy. The Loss of Income Form then makes clear that coverage only extends to loss of income resulting from “covered” losses.
. Personal property losses are covered, logically, by the Personal Property Form.
. Defendant properly compensated Plaintiff more than $1,000,000 for damage to the Pattern Storage Warehouse itself.
. The loss of income at issue in this case “resulted from" the loss of the warehouse only in the most attenuated sense. Here, the loss of the expressly excluded patterns proximately caused the income loss. Even assuming, arguendo, that the destruction of the patterns would not have occurred but for the loss to the covered warehouse, it would carry causation too far to find coverage for an income loss so indirectly incurred.
. With respect to the
Andersen
decision, we observe that although the Ohio Supreme Court concluded that “[t]he legal effect of the reasonable belief on the part of Highland House and RMI is comparable to the effect of the reasonable-expectations doctrine,”
. Plaintiff concedes this by describing Andersen's holding this way: “based on the ambiguous language in the policy, the [Andersen] Court concluded that the insured could reasonably expect that its insurer would defend and indemnify it against claims related to potential premises hazards and that these types of claims would not be denied based on the ambiguous pollution exclusion.” (Pl.’s Reply Br. at 5) (emphasis added).