Granger v. Auto-Owners Ins. (Slip Opinion)

[Cite as Granger v. Auto-Owners Ins., Slip Opinion No. 2015-Ohio-3279.]

NOTICE
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an advance sheet of the Ohio Official Reports. Readers are requested
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65 South Front Street, Columbus, Ohio 43215, of any typographical or
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SLIP OPINION NO. 2015-OHIO-3279
GRANGER ET AL., APPELLEES, v. AUTO-OWNERS INSURANCE ET AL.; AUTO-
OWNERS (MUTUAL) INSURANCE CO. ET AL., APPELLANTS.
[Until this opinion appears in the Ohio Official Reports advance sheets, it
may be cited as Granger v. Auto-Owners Ins., Slip Opinion No.
2015-Ohio-3279.]
Insurance—Duty to defend—Intentional-acts exclusion—Inferred-intent doctrine
not applicable when the harm is not an inherent result of an intentional
act—Emotional distress is not inherent in the nature of housing
discrimination.
(No. 2013-1527—Submitted June 25, 2014—Decided August 18, 2015.)
APPEAL from the Court of Appeals for Summit County, No. 26473,
2013-Ohio-2792.
___________________________
PFEIFER, J.
{¶ 1} In this case, we address whether an umbrella insurance policy’s
intentional-acts exclusion—through application of the inferred-intent doctrine—
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obviates the insurer’s duty to defend an insured against claims based on alleged
acts of pre-leasing housing discrimination that result in alleged emotional distress.
We hold that the particular umbrella policy at issue arguably provides coverage
for emotional-distress damages through its coverage for humiliation. We further
hold that emotional-distress damages are not inherent in a claim for
discrimination and that the inferred-intent doctrine is thus inapplicable in this
case.
Factual and Procedural Background
{¶ 2} Steve Granger and Paul Steigerwald, appellees, established a trust
together to hold certain assets; one of the assets is a rental property in Akron that
they rent to tenants on a month-to-month basis. That property consists of four
units: three in the main house and a fourth above a three-car garage that they call
a carriage house. Granger refers to himself as “the rules Nazi” and will terminate
a lease at the end of the following month if a tenant is too loud. Granger
paraphrases a clause in the rental agreement as stating, “[I]f you make noise to
disturb other tenants, your month-to-month lease will not be renewed.”
{¶ 3} Valerie Kozera alleged that she called Granger on June 7, 2010, to
inquire about renting one of the units of the property. She wanted to move closer
to her disabled mother. Granger asked Kozera who would be living in the
apartment, and she responded that she and her six-year-old son would live there.
Granger told Kozera that he does not rent to people with children and ended the
phone call. Granger maintains that he did not specifically state that he would not
lease to Kozera, but that he told her instead that the apartment “wasn’t conducive
to children.” He said, “I didn’t want her—I told her, now, if you come all the way
here and then you do rent, I said, and there’s noise, I said, you can only be here
for one month. I tell everybody that.”
{¶ 4} Kozera contacted the Fair Housing Contact Service, Inc. (“FHCS”),
which investigated Kozera’s claims by using trained testers to interact with

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Granger. One tester inquired about the property by e-mail, and Granger replied,
“Truely [sic] a lovely and large apartment and in a very well keep [sic] apartment
house. No pets or children.” Granger later sent an additional e-mail to the same
tester, stating, “Yes it is still available as I am selective as to who [sic] I rent to
and I run a background check on any possible tenant, just so you know. It is an
adult apartment house so it is quite [sic] and very will keep [sic] with no children
or pets permitted.” He sent a proposed lease to at least one tester; one of its terms
was “No children or pets are permitted—period.” Further, FHCS related that
Granger told only an African-American tester that he ran background checks on
prospective tenants because “he didn’t want a rapist in the building”; he did not
make the same comment to a Caucasian tester.
{¶ 5} Based on information from Kozera and the testers, FHCS contended
that Granger had discriminated against Kozera, an African-American, on the basis
of familial status and race in violation of 42 U.S.C. 3604 and R.C. 4112.02(H). In
March 2011, Kozera and FHCS filed a complaint in federal court against Granger
and Steigerwald, individually and in their capacities as trustees of the trust.
Kozera claimed that she had “experienced out of pocket costs and emotional
distress as a result of Defendants’ conduct”; FHCS alleged that it had “expended
its resources and was harmed in its mission by Defendants’ conduct.”
{¶ 6} There was potential coverage under two separate Auto-Owners
Insurance Group policies. Appellant Auto Owners (Mutual) Insurance Company
covered Granger, Steigerwald, and their trust under a dwelling policy that
included landlord-liability coverage. The second policy is the one at issue in this
appeal; it is an umbrella policy issued by appellant Owners Insurance Company
under which Granger is the named insured. For ease of reference, we refer to
appellants collectively as “Auto-Owners.”
{¶ 7} On May 18, 2011, Granger and Steigerwald forwarded the complaint
to their insurance agent at the Church Agency. The agency contacted Auto-

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Owners, seeking coverage under the dwelling policy only. On June 8, 2011,
Auto-Owners sent a letter to Granger and Steigerwald explaining that the
dwelling policy did not provide coverage to them. Auto-Owners pointed out that
the discrimination lawsuit did not allege any bodily injury, property damage, or
personal injury that was covered by the policy. Auto-Owners stated that
discrimination did not fall under the policy’s definition of personal injury. The
letter quoted the definition of “personal injury” from the policy:

c. Personal injury means:
(1) libel, slander, or defamation of character;
(2) false arrest, detention or imprisonment, or malicious
prosecution;
(3) invasion of privacy; or
(4) wrongful eviction or wrongful entry.

{¶ 8} The letter denying coverage did not mention the umbrella policy.
After the denial under the dwelling policy, Granger’s insurance agent, Michael
Coudriet, determined that the agency should submit a claim to Auto-Owners on
Granger’s behalf under the umbrella policy. The agency submitted the claim on
June 9, 2011. Granger and Steigerwald did not hear from Auto-Owners on the
question of coverage under the umbrella policy.
{¶ 9} On July 11, 2011, Granger and Steigerwald settled the federal case
with Kozera and FHCS for $32,500. Separate payments went to the two
plaintiffs: $5,000 to Kozera and $27,500 to FHCS.
{¶ 10} On July 22, 2011, appellees sued Auto-Owners, the Church
Agency, Inc., and Mike Coudriet for claims relating to Auto-Owners’ failure to
provide coverage. In this appeal, we address only appellees’ claim regarding
Auto-Owners’ duty to defend Granger under the umbrella policy.

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{¶ 11} The umbrella policy states:

DEFENSE—SETTLEMENT
With respect to any occurrence:
(a) not covered by underlying insurance; but
(b) covered by this policy except for the retained limit;
we will:
(a) defend any suit against the insured at our expense, using
lawyers of our choice. * * *
(b) investigate or settle any claim or suit as we think appropriate.

{¶ 12} The policy also states that Auto Owners “will pay on behalf of the
insured the ultimate net loss in excess of the retained limit which the insured
becomes legally obligated to pay as damages because of personal injury.”
{¶ 13} The definition of “personal injury” is broader in the umbrella
policy than in the dwelling policy—it includes particular damages rather than
only particular causes of action:

“Personal injury” means:
(a) bodily injury, sickness, disease, disability or shock;
(b) mental anguish or mental injury;
(c) false arrest, false imprisonment, wrongful eviction,
wrongful detention, malicious prosecution or humiliation; and
(d) libel, slander, defamation of character or invasion of
rights of privacy;
including resulting death, sustained by any person * * *.

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{¶ 14} The umbrella policy excludes coverage for intentional acts, stating,
“We do not cover * * * [p]ersonal injury or property damage expected or intended
by the insured.”
{¶ 15} Appellees filed a motion for summary judgment in the trial court
on the issue of Auto-Owners’ duty to defend Granger under the umbrella policy.
Auto-Owners filed a motion seeking summary judgment on its duty to defend and
indemnify the appellees under the policies. The trial court denied appellees’
motion and granted that of Auto-Owners.
{¶ 16} Appellees appealed, arguing that the trial court erred in granting
Auto-Owners’ motion for summary judgment on the issue of its duty to defend
Granger under the umbrella policy. The Ninth District Court of Appeals reversed.
The appellate court pointed out that “Auto–Owners defined personal injury both
in terms of certain claims, such as malicious prosecution, and in terms of resulting
harms, such as humiliation or mental anguish.” 2013-Ohio-2792, 991 N.E.2d
1254, ¶ 13. The court concluded that because Kozera claimed that she had
suffered emotional distress, “she arguably suffered humiliation, which is a
personal injury covered under the policy,” and that, therefore, “it would appear
that the federal complaint alleges a personal injury as contemplated by the
umbrella policy.” Id. at ¶ 14.
{¶ 17} The appellate court next addressed the policy’s intentional-acts
exclusion. The court drew a distinction between Granger’s intent to discriminate
and his intent to cause personal injury. The court held that the argument that the
exclusion applies because Granger intended the discrimination “ignores the plain
language of the policy”; instead, the court reasoned, “[t]he relevant inquiry under
the exclusion portion of the policy * * * is whether Mr. Granger expected or
intended Ms. Kozera to be humiliated by his conduct.” Id. at ¶ 15. The court
found that Auto-Owners had not yet made an argument on that point, let alone
introduced evidence. Id. The court also rejected the idea that the intent to injure

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could be inferred from Granger’s acts: “ ‘An insurer’s motion for summary
judgment may be properly granted when intent may be inferred as a matter of law.
In cases such as this one, where the insured’s act does not necessarily result in
harm, we cannot infer an intent to cause injury as a matter of law.’ ” Id., quoting
Allstate Ins. Co. v. Campbell, 128 Ohio St.3d 186, 2010-Ohio-6312, 942 N.E.2d
1090, ¶ 59.
{¶ 18} The court thus held that “Auto-Owners [was] not entitled to
summary judgment on the issue of whether it breached the contract by failing to
defend Mr. Granger pursuant to the umbrella policy.” Id.
{¶ 19} The cause is before this court upon the allowance of Auto-Owners’
discretionary appeal.
Law and Analysis
{¶ 20} An insurance policy is a contract; in interpreting contracts, courts
must give effect to the intent of the parties, and that intent is presumed to be
reflected in the plain and ordinary meaning of the contract language. Cincinnati
Ins. Co. v. CPS Holdings, Inc., 115 Ohio St.3d 306, 2007-Ohio-4917, 875 N.E.2d
31, ¶ 7. In this case, there are several factors in play that affect how we interpret
the policy at issue.
{¶ 21} First, this case concerns the duty to defend. The duty of an insurer
to defend an insured is a broad duty—broader than the duty to indemnify—that is
absolute when the complaint contains any allegation that could arguably be
covered by the insurance policy. Sharonville v. Am. Emps. Ins. Co., 109 Ohio
St.3d 186, 2006-Ohio-2180, 846 N.E.2d 833, ¶ 13. An exception to the absolute
duty exists when all the claims are each clearly and indisputably outside the
coverage. Id. Another way of stating the exception is that the insurer need not
provide a defense if there is no set of facts alleged in the complaint which, if
proven true, would invoke coverage for any claim. Cincinnati Indemn. Co. v.
Martin, 85 Ohio St.3d 604, 605, 710 N.E.2d 677 (1999).

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{¶ 22} In this appeal, we are also interpreting a policy exclusion; “ ‘ “an
exclusion in an insurance policy will be interpreted as applying only to that which
is clearly intended to be excluded.” ’ ” (Emphasis sic.) Westfield Ins. Co. v.
Hunter, 128 Ohio St.3d 540, 2011-Ohio-1818, 948 N.E.2d 931, ¶ 11, quoting
Sharonville at ¶ 6, quoting Hybud Equip. Corp. v. Sphere Drake Ins. Co., Ltd., 64
Ohio St.3d 657, 665, 597 N.E.2d 1096 (1992).
{¶ 23} Finally, the policy at issue is an umbrella policy:

“An umbrella policy is a policy which provides excess
coverage beyond an insured’s primary policies.” Midwestern
Indemn. Co. v. Craig (1995), 106 Ohio App.3d 158, 164, 665
N.E.2d 712. See, also, Cleveland Builders Supply Co. v. Farmers
Ins. Group of Cos. (1995), 102 Ohio App.3d 708, 657 N.E.2d 851.
Umbrella policies are different from standard excess insurance
policies, since they provide both excess coverage (“vertical
coverage”) and primary coverage (“horizontal coverage”). Am.
Special Risk Ins. Co. v. A–Best Prods., Inc. (1997), 975 F.Supp.
1019, 1022. “The vertical coverage provides additional coverage
above the limits of the insured’s underlying primary insurance,
whereas the horizontal coverage is said to ‘drop down’ to provide
primary coverage for situations where the underlying insurance
provides no coverage at all.” Id. at 1022.

Cincinnati Ins. Co., 115 Ohio St.3d 306, 2007-Ohio-4917, 875 N.E.2d 31, ¶ 5.
{¶ 24} The umbrella policy in this case contained a more expansive
definition of “personal injury” than did the dwelling policy. Its inclusion of
coverage for particular harms rather than just for particular causes of action

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creates the crux of the case: did the umbrella policy’s inclusion of coverage for
humiliation give rise to a duty to defend under the particular facts of this case?
{¶ 25} We address Auto-Owners’ propositions of law in reverse order.
We will first determine whether Kozera’s claim for “emotional distress” damages
is within the policy’s coverage for humiliation. Then, we will determine whether
any potential duty to defend is obviated by the policy’s intentional-acts exclusion.
Emotional Distress as a Form of Humiliation
{¶ 26} Auto-Owners’ second proposition of law reads as follows:

A claim for emotional distress does not constitute
“humiliation” sufficient to trigger a duty to defend under an
umbrella policy of insurance. The duty to defend can only be
triggered by actual facts, not an inference of potential recoverable
damages where no covered conduct is even alleged.

{¶ 27} The issue is whether Kozera’s allegation that she suffered
“emotional distress” was sufficient to trigger Auto-Owners’ duty to defend under
the umbrella policy. The umbrella policy in this case includes coverage for
particular harms— “sickness, disease, disability or shock; * * * mental anguish or
mental injury [and] humiliation.” We hold that Kozera’s claim of emotional
distress invoked coverage under the policy.
{¶ 28} First, emotional-distress damages were available to Kozera under
the Fair Housing Act, 42 U.S.C. 3601 et seq.:

Courts have held, under the Fair Housing Act, that plaintiffs may
recover, as compensatory damages, out-of-pocket expenses for
property damage and damages for emotional distress. * * * The
Sixth Circuit has used a “totality of the circumstances” standard in

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evaluating a plaintiff’s right to such damages in housing
discrimination cases.

Byrd v. Brandeburg, 932 F.Supp. 198, 200 (N.D.Ohio 1996).
{¶ 29} In Bishop v. Pecsok, 431 F.Supp. 34, 38 (N.D.Ohio 1976), another
case involving discrimination in housing, the court held that “[i]n calculating the
amount of compensatory damages this Court is required to consider not only out-
of-pocket expenses, but also the emotional distress and humiliation suffered by
plaintiffs.” Under R.C. 4112.99, “the availability of ‘damages’ and ‘other
appropriate relief’ fairly encompasses an award for pain and suffering, mental
anguish, humiliation, and the like.” Keys v. U.S. Welding, Fabricating & Mfg.,
Inc., N.D.Ohio No. CV91-0113, 1992 WL 218302, at *9 (Aug. 26, 1992).
{¶ 30} Does Kozera’s claim of emotional distress encompass humiliation?
The duty to defend is broad and is not dependent on magic words. We find that a
broad allegation of emotional distress arguably contains an allegation of
humiliation. As the appellate court noted, “Emotional distress has been defined as
‘[a] highly unpleasant mental reaction (such as anguish, grief, fright, humiliation,
or fury) that results from another person’s conduct[.]’ (Emphasis added.) Black’s
Law Dictionary 563 (8th Ed.2004).” 2013-Ohio-2792, 991 N.E.2d 1254, ¶ 14.
Humiliation is one of the particular reactions that falls under the umbrella of
emotional distress.
{¶ 31} The policy at issue provides coverage for certain harms, including
humiliation. Humiliation is a recognized injury in housing-discrimination cases.
Humiliation is included within the ordinary meaning of “emotional distress.”
Kozera alleged emotional distress. That was enough to establish that Kozera’s
allegation could be covered under the policy.

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Intentional-Acts Exclusion and Inferred Intent
{¶ 32} Appellants’ first proposition of law raises the question of whether
the policy’s exclusion for intentional acts obviates coverage for Granger even if
Kozera’s allegation of emotional distress was otherwise enough to trigger the duty
to defend. The appellants’ first proposition of law reads, “Discriminatory intent is
inferred as a matter of law for purposes of an intentional act exclusion under an
umbrella policy of insurance on a claim for pre-leasing housing discrimination.”
{¶ 33} Auto-Owners seeks application of the inferred-intent doctrine in
this case. The policy in this case, like most other insurance policies, contains an
intentional-acts exclusion, which relieves the obligation of Auto-Owners to
provide coverage when the harm alleged is intentionally caused by the insured.
Under the inferred-intent doctrine, “when there is no evidence of direct intent to
cause harm and the insured denies the intent to cause any harm, the insured’s
intent to cause harm will be inferred as a matter of law in certain instances.”
Campbell, 128 Ohio St.3d 186, 2010-Ohio-6312, 942 N.E.2d 1090, ¶ 9, citing
Gearing v. Nationwide Ins. Co., 76 Ohio St.3d 34, 36, 665 N.E.2d 1115 (1996),
paragraph one of the syllabus. Auto-Owners argues that it can be inferred as a
matter of law from the nature of Granger’s act—pre-leasing housing
discrimination—that Granger intended to cause Kozera’s personal injuries; thus,
since the policy “do[es] not cover * * * [p]ersonal injury or property damage
expected or intended by the insured,” there would be no duty to provide a defense
or indemnity. Applying the inferred-intent doctrine would relieve Auto-Owners
of the burden of proving intent through evidence: the evidence of intent would be
inherent in Granger’s act, there would be no genuine issue of fact regarding the
issue, and thus summary judgment would be appropriate.
{¶ 34} Campbell is the most recent of this court’s decisions on the
doctrine of inferred intent, and it discusses the development of the doctrine in
Ohio. Campbell contains two important holdings. First, Campbell recognizes

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that although this court has inferred intent only in cases in which would-be
insureds committed particularly heinous acts—the murder of a child in Preferred
Risk Ins. Co. v. Gill, 30 Ohio St.3d 108, 114–115, 507 N.E.2d 1118 (1987), and
the molestation of children in Gearing—“[a]s applied to an insurance policy’s
intentional-act exclusion, the doctrine of inferred intent is not limited to cases of
sexual molestation or homicide.” Campbell at paragraph one of the syllabus.
Second, this court held that “the doctrine of inferred intent applies only in cases in
which the insured’s intentional act and the harm caused are intrinsically tied so
that the act has necessarily resulted in the harm.” Id. at paragraph two of the
syllabus. In making that decision, this court considered but declined to adopt the
“substantially certain” test in inferred-intent cases. Under that test, a harm that
was substantially certain to result from an intentional act would fall under an
intentional-acts exclusion of an insurance policy. Instead, this court held that for
an act to fall within the doctrine, the harm must be the inherent result of an
intentional act. Id. at ¶ 56.
{¶ 35} In Campbell, the underlying act by the potential insureds was the
placement of a Styrofoam target deer on a hilly country road at night. Id. at ¶ 2.
A group of youths intentionally placed the deer in the roadway to watch the
reactions of motorists. Id. Some motorists successfully avoided the fake deer, but
one driver lost control of his vehicle and crashed; he and his passenger suffered
serious injuries. Id. This court held that the serious harm that resulted from the
act of placing the deer in the roadway was not “intrinsically tied so that the act has
necessarily resulted in the harm,” id. at ¶ 48, and remanded the case to the trial
court. There, the trier of fact would weigh the facts in evidence to determine
whether the boys intended or expected harm. Id. at ¶ 59. Any intent to harm
would be determined by the trier of fact rather than inferred as a matter of law.
{¶ 36} “In order to avoid coverage on the basis of an exclusion for
expected or intentional injuries, the insurer must demonstrate that the injury itself

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was expected or intended.” Physicians Ins. Co. of Ohio v. Swanson, 58 Ohio
St.3d 189, 569 N.E.2d 906 (1991), syllabus. We agree with the court below that
“[t]he relevant inquiry under the exclusion portion of the policy is whether the
personal injury was expected or intended. Thus, the appropriate question to ask is
whether Mr. Granger expected or intended Ms. Kozera to be humiliated by his
conduct.” (Emphasis sic.) 2013-Ohio-2792, 991 N.E.2d 1254, ¶ 15.
{¶ 37} We do not find that humiliation is so intrinsically tied to pre-
leasing discrimination that Granger’s act necessarily resulted in the harm suffered
by Kozera. Although emotional-distress damages are available to victims of
housing discrimination, such damages are not automatically awarded:

We have long held that emotional distress caused by
housing discrimination is a compensable injury under the Fair
Housing Act. See Seaton v. Sky Realty Co., 491 F.2d 634, 636-38
(7th Cir.1974). However, a court may not presume emotional
distress from the fact of discrimination. A plaintiff must actually
prove that he suffers from emotional distress and that the
discrimination caused that distress. Cf. Carey v. Piphus, 435 U.S.
247, 263-64, 98 S.Ct. 1042, 1052, 55 L.Ed.2d 252 (1978) (holding
in a procedural due process case that “neither the likelihood [of
emotional distress] nor the difficulty of proving it is so great as to
justify awarding compensatory damages without proof that such
injury actually was caused”); Spence v. Board of Education, 806
F.2d 1198, 1200-01 (3d Cir.1986) (applying the same principle in a
first amendment case).

United States v. Balistrieri, 981 F.2d 916, 931 (7th Cir.1992).

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{¶ 38} Is this case of a kind with Gill and Gearing, cases in which
insureds pled guilty to criminal acts of violence against children? We determine
that it is not. Both Gill and Gearing, in the civil cases that followed their criminal
convictions, claimed that they did not intend the civil injuries associated with
their criminal acts. Those claims rang hollow, due to the nature of their acts.
This court connected the civil claims to the underlying criminal acts, which
necessarily included the intent to harm.
{¶ 39} Here, Granger does not stand convicted of a criminal act that
includes intent to harm as an element. Although he claims that he did not know
he was violating the law, he did discriminate against Kozera. But Granger does
not claim coverage for the discrimination; he instead claims coverage for the
personal injury—the humiliation—that allegedly followed the discrimination.
Included in the plain language of this umbrella policy is coverage for certain
discrete injuries. Our only concern here is a specific harm, humiliation, and
whether Granger intended to cause it.
{¶ 40} Although Campbell holds that the inferred-intent doctrine is not
limited to cases of murder or sexual molestation, it also warns that “courts should
be careful to avoid applying the doctrine in cases where the insured’s intentional
act will not necessarily result in the harm caused by the act.” Campbell, 128 Ohio
St.3d 186, 2010-Ohio-6312, 942 N.E.2d 1090, at ¶ 48. The policy excludes
coverage when “the personal injury * * * was expected or intended.” We cannot
say that the personal injury was intended in this case, nor can we say that
emotional distress is inherent in the very nature of housing discrimination.
{¶ 41} We note that Granger did not appeal the holding below that there
was no coverage under the dwelling policy. The umbrella policy was more
expansive, but even so, it arguably covers just one aspect of the damages suffered
by Kozera. That is all that is necessary, however, to give rise to the duty to
defend. Meanwhile, under this ruling, appellants still have the ability to

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demonstrate to the trier of fact that Granger intended to cause humiliation to
Kozera. In this instance, the inferred-intent doctrine does not remove that burden.
{¶ 42} Accordingly, we affirm the judgment of the court of appeals.
Judgment affirmed.
O’CONNOR, C.J., and LANZINGER, FRENCH, and O’NEILL, JJ., concur.
O’DONNELL and KENNEDY, JJ., dissent.
____________________________
KENNEDY, J., dissenting.
{¶ 43} Respectfully, I dissent. I would hold that appellant Auto Owners
(Mutual) Insurance Company (“Auto-Owners”) had no duty to defend appellee
Steve Granger against Valerie Kozera’s discrimination lawsuit because the Auto-
Owners’ umbrella policy excluded from coverage those injuries that are expected
or intended by the insured. Accordingly, I would reverse the judgment of the
court of appeals and reinstate the trial court’s order of summary judgment in favor
of Auto-Owners.
Insurance Coverage
{¶ 44} “The duty [of the insurer] to defend [the insured] is determined by
the scope of the allegations in the [plaintiff’s] complaint.” Ward v. United
Foundries, Inc., 129 Ohio St.3d 292, 2011-Ohio-3176, 951 N.E.2d 770, ¶ 19,
citing Ohio Govt. Risk Mgt. Plan v. Harrison, 115 Ohio St.3d 241, 2007-Ohio-
4948, 874 N.E.2d 1155, ¶ 19. “If the allegations state a claim that potentially or
arguably falls within the liability insurance coverage, then the insurer must defend
the insured in the action.” Id. When the policy excludes coverage for bodily
injury or property damage that is expected or intended by the insured, the
insured’s conduct is not covered by the policy and the insurer has no duty to
defend. Preferred Risk Ins. Co. v. Gill, 30 Ohio St.3d 108, 113, 507 N.E.2d
1118 (1987). However, even “when there is no evidence of direct intent to cause
harm and the insured denies any intent to cause harm, the insured’s intent to cause

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harm will be inferred as a matter of law in certain instances” (the “inferred-intent
doctrine”). Allstate Ins. Co. v. Campbell, 128 Ohio St.3d 186, 2010-Ohio-6312,
942 N.E.2d 1090, ¶ 9, citing Gearing v. Nationwide Ins. Co., 76 Ohio St.3d 34,
665 N.E.2d 1115 (1996), paragraph one of the syllabus.
{¶ 45} In Campbell, we “clarif[ied] that the doctrine of inferred intent
applies only in cases in which the insured’s intentional act and the harm caused
are intrinsically tied so that the act has necessarily resulted in the harm.”
(Emphasis added.) Id. at ¶ 56. Justice O’Donnell disagreed with the majority’s
adoption of the “intrinsically tied” test. Id. at ¶ 76-78 (O’Donnell, J., concurring
in part and dissenting in part). He opined that the majority improperly discounted
precedent that had established a “substantial certainty” test for determining when
inferred intent applied. Id. at ¶ 77, citing Gearing at 39 and Physicians Ins. Co. v.
Swanson, 58 Ohio St.3d 189, 193, 569 N.E.2d 906 (1991). While I agree with
Justice O’Donnell’s concerns, I also recognize that the “intrinsically tied” test is
the law after Campbell.
Discrimination and Harm Are “Intrinsically Tied”

Discrimination is not simply dollars and cents * * *; it is the
humiliation, frustration, and embarrassment that a person must
surely feel when he is told that he is unacceptable as a member of
the public because of his race or color. It is equally the inability to
explain to a child that regardless of education, civility, courtesy,
and morality he will be denied the right to enjoy equal treatment,
even though he be a citizen of the United States and may well be
called upon to lay down his life to assure this Nation continues.

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Heart of Atlanta Motel, Inc. v. United States, 379 U.S. 241, 292, 85 S.Ct. 348, 13
L.Ed.2d 258 (1964) (Goldberg, J., concurring), citing S.Rep. No. 88-872, at 16
(1964).
{¶ 46} Courts have recognized that injury is inherent1 in the act of
discrimination. See Gresham v. Windrush Partners, Ltd., 730 F.2d 1417,
1423 (11th Cir.1984) (“injury may be presumed from the fact of discrimination
and violations of the fair housing statutes”); Innovative Health Sys., Inc. v. White
Plains, 931 F.Supp. 222, 238 (S.D.N.Y.1996) (“A general allegation of
discrimination embraces its inherent harms, such as stigma, insult, and the
inability to receive the same opportunities as those who do not face
discrimination”); see also Feurer v. Curators of Univ. of Missouri, E.D. Missouri
No. 4:06CV750 HEA, 2006 WL 2385260 (Aug. 17, 2006), * 2. I agree.
Auto-Owners Had No Duty to Defend
{¶ 47} The insurance policy at issue is Kozera’s umbrella policy provided
by Auto-Owners, which excludes from coverage “[p]ersonal injury or property
damage expected or intended by the insured.”
{¶ 48} Fair Housing Contact Service, Inc. (“FHCS”), a nonprofit
organization that promotes fair housing, filed a discrimination claim on behalf of
Kozera against Granger in federal court alleging a violation of the Fair Housing
Act, 42 U.S.C. 3601 et seq., which prevents discrimination in housing based on
race and familial status. 42 U.S.C. 3604. The complaint alleged that Kozera is
African-American and has a minor child. It also alleged that when Kozera called
Granger about renting a house she had seen on Craigslist, Granger asked who
would be living at the house and then said that “he would not rent the Premises to

1
“Inherent” and “intrinsic” are synonymous. “Inherent” means “structual or involved in the
constitution or essential character of something: belonging by nature or settled habit,” Webster’s
Third New International Dictionary 1163 (1986), while “intrinsic” means “belonging to the
inmost constitution or essential nature of a thing: essential or inherent and not merely apparent,
relative, or accidental,” id. at 1186.

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 SUPREME COURT OF OHIO

anyone with children.” In his deposition, Granger denied that he refused to rent
the house to Kozera.
{¶ 49} The complaint alleged that as part of its investigation of Kozera’s
case, FHCS sent testers to inquire about renting housing from Granger. Granger
allegedly made racially discriminatory remarks toward the testers.
{¶ 50} The complaint claims discrimination. See 42 U.S.C. 3604.
Because discrimination and injury are intrinsically tied, the inferred-intent
doctrine applies, which means that when Granger acted in a discriminatory
manner, he intended injury as a matter of law, for the purpose of determining
insurance coverage. Therefore, Auto-Owners had no duty to defend Granger
because the umbrella policy excludes from coverage an “injury” that is “expected
or intended by the insured.”
{¶ 51} Accordingly, I would reverse the judgment of the court of appeals
and reinstate the trial court’s grant of summary judgment in favor of Auto-
Owners. I respectfully dissent.
O’DONNELL, J., concurs in the foregoing opinion.
____________________________
McNeal, Schick, Archibald & Biro Co., L.P.A., Brian T. Winchester, and
Patrick J. Gump, for appellants.
Thomas C. Loepp Law Offices Co. and Thomas C. Loepp, for appellees.
_______________________

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