# County Risk Sharing Auth., Inc. v. State

> Ohio Court of Appeals · November 14, 2022 · 200 N.E.3d 1179

URL: https://www.frixlaw.com/law-library/cases/8483617

## Case

- **Court:** Ohio Court of Appeals
- **Decided:** November 14, 2022
- **Citations:** 200 N.E.3d 1179; 2022 Ohio 4043
- **Precedential status:** Published
- **Opinion:** Opinion
- **Judges:** Eklund
- **Cited by:** 1 later opinions in the Frix Law Library

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## Opinion text

[Cite as County Risk Sharing Auth., Inc. v. State, 2022-Ohio-4043.]

IN THE COURT OF APPEALS OF OHIO
ELEVENTH APPELLATE DISTRICT
GEAUGA COUNTY

COUNTY RISK SHARING CASE NO. 2022-G-0013
AUTHORITY, INC.,

Plaintiff-Appellee, Civil Appeal from the
Court of Common Pleas
- vs -

THE STATE OF OHIO, Trial Court No. 2020 P 000044
OFFICE OF THE ATTORNEY
GENERAL, et al.,

Defendants-Appellants.

OPINION

Decided: November 14, 2022
Judgment: Reversed and remanded

George V. Pilat, Mazanec, Raskin & Ryder Co., LPA, 100 Franklin’s Row, 34305 Solon
Road, Cleveland, OH 44139 (For Plaintiff-Appellee).

Jack Morrison, Jr., and Nathan P. Woodward, Amer Cunningham Co., LPA, One
Cascade Plaza, Suite 1510, Akron, OH 44308 (For Defendants-Appellants).

JOHN J. EKLUND, J.

{¶1} The familiar philosophical conundrum of what would happen if an

unstoppable force met an immovable object might aptly describe the conflict of the case

before us. Appellant, the State of Ohio, appeals the Judgment of the Geauga County

Court of Common Pleas granting Summary Judgment in favor of Appellee, the County

Risk Sharing Authority, Inc. (CORSA). The parties have stipulated to all relevant facts

and the effect of those stipulations has created an unstoppable force and an immovable
object. On the one hand, the parties stipulate that R.C. 940.07 unequivocally imposes a

duty on the State to indemnify the Geauga Soil and Water Conservation District (District)

– our unstoppable force. On the other hand, the parties have also stipulated that a valid

insurance Coverage Agreement imposes a clear duty to indemnify the District on CORSA

– our immovable object. Our resolution of this seeming quandary relies on a close reading

of the relevant statute, Constitutional considerations, and acknowledgement that we are

to presume that parties to a contract actually intend to bind themselves to mutual

obligations.

{¶2} For the reasons stated below, we reverse the Judgment of the lower court

and remand for further proceedings as outlined in this opinion.

Substantive and Procedural History

{¶3} On September 10, 2018, Gail Prunty was involved in an automobile

accident during the course and scope of her employment with the District. The accident

caused the death of a minor child and severe injuries to three others. Two separate

lawsuits were filed against the District alleging that Prunty negligently caused the

accident. The District put CORSA on notice of the lawsuits and CORSA filed answers on

behalf of the District. Then, on behalf of the District, CORSA notified the Soil and Water

Commission of the State of Ohio of the lawsuits.

{¶4} On January 15, 2020, CORSA filed a complaint for declaratory judgment

against the State of Ohio, the District, the Board of Supervisors of the Geauga Soil and

Water Conservation District (Board), and Prunty. CORSA sought a declaratory judgment

that under R.C. 940.07, the State was solely responsible to defend and indemnify the

District, Board, and Prunty in two lawsuits filed against these entities regarding the

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automobile accident caused by Prunty. This accident occurred while Prunty was in the

employ of the District.

{¶5} The State filed a Motion for a More Definite Statement under Civ.R. 12(E)

in which it challenged CORSA’s standing and for failure to state a claim under Civ.R.

12(B)(6) against the District and the Board. The trial court denied this motion and the

State filed its Answer and Counterclaim against CORSA, seeking a declaratory judgment

that CORSA was obligated to defend and indemnify the District, the Board, and Prunty

up to the $6,000,000 coverage limits provided in CORSA’s Coverage Agreement. CORSA

replied to the State’s counterclaim and the State filed a second Motion for a More Definite

Statement, which the trial court also denied.

{¶6} By agreement of the parties, discovery was held in abeyance pending

stipulations. The Stipulations of Fact resolved all pertinent questions of material fact in

this matter. The 68 Joint Stipulations of Fact included the following:

2. The Geauga County Soil and Water Conservation District
(“District”) is a political subdivision of the State of Ohio under the
authority of O.R.C. § 940.03 * * *.

***

6. Geauga County, Ohio is a member of CORSA under a written
Coverage Agreement and Memorandum of Coverage under which
CORSA provides certain protections, including automobile liability *
* *.

7. The coverage Agreement and Memorandum of Coverage issued
by CORSA to Geauga County provide certain automobile liability
coverage to the District subject to all terms, conditions, and
exclusions contained therein.

***

12. At the time of the subject accident, the District was a Covered
Party as that term is defined in the Coverage Agreement.
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***

14. Each Member of CORSA must submit an application or annual
renewal application disclosing information about the Member which
CORSA’s third-party actuary utilizes in evaluating risk and
recommending an amount to include in the Membership Contribution
that each Member will pay each year.

15. In October 2017, CORSA requested that Geauga County submit
a renewal application and other information that would allow CORSA
to process an evaluation of the risk presented by covering Geauga
County * * * including the District, for the 2018 program year.

16. Part of the information Geauga County provided to CORSA
concerned vehicles owned or used by the District * * *.”

***

49. All conditions precedent to a defense and indemnity [of the
subject tort claims,] * * * for the District, the Board, and Prunty have
been satisfied under the terms of the Coverage Agreement.

50. Based solely on the language of the Coverage Agreement and
subject to all terms, conditions, limitations, and exclusions contained
therein, CORSA would owe a defense and indemnity to the District,
for liability arising from the matters alleged [in the subject tort claims]
* * *.

***

65. Based Solely on the language of O.R.C. § 940.07, the State of
Ohio would be responsible to [defend and] indemnify the District [the
Board, and Prunty] in the amount of any judgment or settlement [in
the subject tort claims] * * * to the extent required by O.R.C.
§940.07(D).

{¶7} After the parties filed Joint Stipulations of Fact, the State filed a modified

discovery request on the issue of the terms, conditions, and limitations of CORSA’s

Coverage Agreement. CORSA’s response was not satisfactory to the State and the State

filed a motion to compel relative to its modified discovery request, which the trial court

denied.
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{¶8} The trial court’s denial of the motion to compel was without prejudice. In its

entry, the court said:

While it is probably true Defendants’ discovery inquiries are relevant
to the counterclaims on the non-State Defendants, such discovery
does not seem relevant, or to possibly lead to the discovery of
relevant information, as to the allegations of the Complaint regarding
the extent of the State’s duty to indemnify the non-State Defendants
* * *. Since resolution of this issue through dispositive motions may
render the counterclaims * * * unnecessary or somehow change
them, the Court is disposed to deny the Motion to Compel, without
prejudice, so as to not delay possible summary resolution of this
critical issue. The Discovery deadlines will be extended to permit
such discovery in the future should it become necessary to do so,
and, if Defendants are again dissatisfied with Plaintiff’s responses at
that time, another Motion to Compel will be reviewed again.

{¶9} Both the State and CORSA filed timely Motions for Summary Judgment.

Both parties filed their oppositions on May 13, 2021. Seven days later, on May 20, 2021,

the court issued its judgment entry granting CORSA’s Summary Judgment Motion at

10:18 AM. At 3:56 PM on the same day, the State timely filed a Reply to CORSA’s Brief

in Opposition to the State’s Summary Judgment Motion. The State appealed the trial

court’s decision to grant summary judgment. We reversed and remanded in Cnty. Risk

Sharing Auth., Inc. v. State, 11th Dist. Geauga No. 2021-G-0014, 2022-Ohio-164 based

on the trial court’s issuance of its judgment entry prematurely without consideration of the

State’s reply brief and for the trial court to issue a meaningful summary judgment entry.

{¶10} On remand, the trial court again granted summary judgment in favor of

CORSA. In its entry, the court concluded that R.C. 940.07 “imposes a duty upon the State

to defend and indemnify this Soil and Water Conservation district regardless of the

existence of the CORSA insurance policy.” The court said that R.C. 940.07(D)(1) was

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unambiguous in that it “does not contain any language justifying the State’s position in

this lawsuit.” The court further found that CORSA’s insurance contract insured

all the vehicle of Geauga County and its various agencies, boards,
commissions, or districts, not just the Soil and Water Conservation
District. And it is the latter district alone which enjoys the state
indemnification framework of ORC 940.07. Thus, the insurance
agreement is not illusory, even if there is an exception to its
application in this instance caused by ORC 940.07. Ultimately, even
if inclusion of this particular District within the CORSA coverage
might be characterized as unnecessary due to this particular statute,
that conclusion cannot justify ignoring the clear language of this
statute which imposes a mandatory indemnification duty on the State
to the District, the Board, and its employees.

{¶11} The State timely appealed this decision raising three Assignments of Error.

Assignments of Error and Analysis

{¶12} The State’s First Assignment of Error provides:

{¶13} “[1.] The trial court erred in granting the plaintiff-appellee’s motion for

summary judgment and denying the defendants-appellants’ motion for summary

judgment.”

{¶14} We review de novo a trial court's order granting summary

judgment. Hapgood v. Conrad, 11th Dist. Trumbull No. 2000–T–0058, 2002–Ohio–3363,

¶ 13, citing Cole v. Am. Industries & Resources Corp., 128 Ohio App.3d 546, 715 N.E.2d

1179 (7th Dist.1998). “We review the trial court's decision independently and without

deference, pursuant to the standards in Civ.R. 56(C).” Allen v. 5125 Peno, LLC, 2017-

Ohio-8941, 101 N.E.3d 484 (11th Dist.), ¶ 6, citing Brown v. Scioto Cty. Bd. of Commrs.,

87 Ohio App.3d 704, 711, 622 N.E.2d 1153 (4th Dist.1993).

{¶15} Summary judgment is appropriate when (1) no genuine issue as to any

material fact exists; (2) the party moving for summary judgment is entitled to judgment as

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a matter of law; and (3) viewing the evidence most strongly in favor of the nonmoving

party, reasonable minds can reach only one conclusion and it is adverse to the nonmoving

party. Holliman v. Allstate Ins. Co., 86 Ohio St.3d 414, 415, 715 N.E.2d 532 (1999). “The

initial burden is on the moving party to set forth specific facts demonstrating that no issue

of material fact exists and the moving party is entitled to judgment as a matter of

law.” Dresher v. Burt, 75 Ohio St.3d 280, 292–293, 662 N.E.2d 264 (1996). If the movant

meets this burden, the burden shifts to the nonmoving party to establish that a genuine

issue of material fact exists for trial. Id.

{¶16} Subject to conditions and circumstances not pertinent here, R.C. 940.07

sets forth the State’s duty to defend and indemnify soil and water conservation districts in

tort actions as follows:

(B) Except as provided in divisions (C) and (D) of this section, the
provisions of Chapter 2744. of the Revised Code apply to soil and
water conservation districts as political subdivisions of the state and
to their boards of supervisors and other officers, employees, and
agents as employees of political subdivisions of the state.

{¶17} Division (C)(1)-(2) provide that if a written request for legal representation

is submitted to the attorney general by the Ohio soil and water conservation commission,

the attorney general must defend a soil and water conservation district and employees of

the district in any tort action commenced against the district or the employee.

{¶18} Division(C)(3) provides that:

If a request for legal representation is submitted to the attorney
general pursuant to division (C)(2) of this section, divisions (A) and
(D) of section 2744.07 of the Revised Code do not apply to the soil
and water conservation district and the defense of its supervisor or
other officer, employee, or agent.

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{¶19} Division (D)(1)-(3) provide that the State shall indemnify and hold harmless

soil and water conservation districts in the amount of any judgment or settlement in a tort

action. The State is responsible to indemnify soil and water conservation district

employees in an amount up to one million dollars per occurrence regardless of the

number of persons who suffer injury, death, or loss as a result of the employee’s action.

{¶20} Division (D)(4) provides that

’’’’’(4) Division (B) of section 2744.07 of the Revised Code does not
apply to a soil and water conservation district, or to any of its
supervisors or other officers, employees, or agents, to the extent that
division (D) of this section requires the state to indemnify and hold
harmless a supervisor or other officer, employee, or agent of that
district.

{¶21} Analysis of R.C. 940.07 is a matter of first impression. R.C. 940.07 became

effective January 1, 2016, and non-substantive amendments became effective in 2018

and 2021. Geauga County submitted a coverage renewal application in October 2017

and the relevant coverage period in this case was for the “2018 program year.” In this

case, the parties have stipulated that based on CORSA’s Coverage Agreement alone,

and subject to the terms, conditions, and exclusions of the policy, CORSA would owe a

defense and indemnity to the District for the underlying lawsuits. On the other hand, the

parties have also stipulated that based solely on the language of R.C. 940.07, the State

would be responsible to defend and indemnify the District for the underlying lawsuits.

{¶22} CORSA argues that R.C. 940.07 means that the State “has the sole duty

to defend indemnify and hold harmless the district and the employees. Any obligation that

might ordinarily fall to a political subdivision under Chapter 2744 is expressly superseded

by O.R.C. § 940.07 and placed on The State.” In reference to Division (C), CORSA

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argues: that the language of R.C. 940.07(C)(1) makes the attorney general responsible

to defend soil and water conservation districts; and that R.C. 940.07(C)(2) and (3)

“overrides the general duties and responsibilities in O.R.C. § 2744.07 and specifically

puts the duty to defend the employee on the State of Ohio attorney general.”

{¶23} In reference to Division (D), CORSA argues: that R.C. 940.07(D)(1)

requires the State to provide unlimited indemnity for any judgment rendered in a tort action

pursuant to R.C. Chapter 2744; that R.C. 940.07(D)(2) requires the State to indemnify

employees of soil and water conservation districts up to one million dollars per

occurrence; and that R.C. 940.07(D)(4) “states R.C. 2744.07(B) requiring a political

subdivision to indemnify employees does not apply to soil and water conservation districts

and specifically places that burden on the State.”

{¶24} The State fully agrees that it owes a duty of defense and indemnification

under R.C. 940.07. However, the State disagrees that Chapter 940 eliminates CORSA’s

contractual obligations to indemnify the District in favor of exclusive State indemnification.

The State argues that CORSA acknowledges its contractual obligations, but seeks to

avoid those obligations by interpreting R.C. 940.07 to require the State to be the sole

indemnifier of the District and that CORSA is precluded by statute from doing so. The

State disagrees that it is the “sole” indemnifier of soil and water conservation districts and

claims that CORSA has incorrectly inserted the word “sole” into its analysis of R.C. 940.07

to reach its desired interpretation.

{¶25} Like CORSA, the State focuses its analysis on R.C. 940.07(B) which

provides that R.C. Chapter 2744 applies to soil and water conservation districts, “except

as provided in divisions (C) and (D) of this section.” However, the State argues for a

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Case No. 2022-G-0013
narrower view of the applicability of Divisions (C) and (D). The State notes that R.C.

940.07(C)(3) and (D)(4) “specifically identify those limited provisions of Chapter 2744 that

do not apply.”. Both of those provisions make an exception for the default political

subdivision defense and indemnification of soil and water conservation employees. By

operation of Divisions (C) and (D), the State, and not the political subdivision, is

responsible to defend and indemnify soil and water conservation district employees.

{¶26} The State asserts that in all other respects, R.C. Chapter 2744 continues

to apply to soil and water conservation districts. In particular, the State notes R.C.

940.07(C) or (D) do not specifically “negate void, or render inapplicable other provisions

of Chapter 2744, including R.C. 2744.08 and R.C. 2744.081, which specifically allow

political subdivisions to insure against the risk of liability to themselves or their employees

and to join risk pools such as CORSA.”

{¶27} R.C. 2744.08(A)(1) provides in pertinent part that:

A political subdivision may use public funds to secure insurance with
respect to its ’and its employees' potential liability in damages in civil
actions for injury, death, or loss to persons or property allegedly
caused by an act or omission of the political subdivision or any of its
employees in connection with a governmental or proprietary function.
The insurance may be at the limits, for the circumstances, and
subject to the terms and conditions, that are determined by the
political subdivision in its discretion.

{¶28} R.C. 2744.081(A) provides in pertinent part that:

the political subdivision may, pursuant to a written agreement and to
the extent that it considers necessary, join with other political
subdivisions in establishing and maintaining a joint self-insurance
pool to provide for the payment of judgments, settlement of claims,
expense, loss, and damage that arises, or is claimed to have arisen,
from an act or omission of the political subdivision or any of its
employees in connection with a governmental or proprietary function
and to indemnify or hold harmless the subdivision's employees
against such loss or damage.
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{¶29} To discern the meaning of legislative enactments, “we first consider the

statutory language, reading all words and phrases in context and in accordance with the

rules of grammar and common usage.” Gabbard v. Madison Local School Dist. Bd. of

Education, 165 Ohio St.3d 390, 2021-Ohio-2067, 179 N.E.3d 1169, ¶ 13, citing State ex

rel. Steele v. Morrissey, 103 Ohio St.3d 355, 2004-Ohio-4960, 815 N.E.2d 1107, ¶ 21.

The words that the General Assembly has chosen are given full effect, neither adding nor

deleting from the statutory language. Id., citing Columbia Gas Transm. Corp. v. Levin,

117 Ohio St.3d 122, 2008-Ohio-511, 882 N.E.2d 400, ¶ 19. “When the statutory language

is unambiguous, we apply it as written without resorting to rules of statutory

interpretation or considerations of public policy.” Id., citing Zumwalde v. Madeira & Indian

Hill Joint Fire Dist., 128 Ohio St.3d 492, 2011-Ohio-1603, 946 N.E.2d 748, ¶ 23-24, 26.

“In other words, our review ‘starts and stops’ with the unambiguous statutory

language.” Id., citing Johnson v. Montgomery, 151 Ohio St.3d 75, 2017-Ohio-7445, 86

N.E.3d 279, ¶ 15.

{¶30} The relevant facts of this case are not in question, nor is there a question

that, read alone, R.C. 940.07 imposes a duty to defend and indemnify the District on the

State while, read alone, CORSA’s coverage agreement would impose a duty to defend

and indemnify on CORSA. The only question that this court must resolve is whether, as

a matter of law, R.C. 940.07 requires the State to indemnify the District to the exclusion

of otherwise valid insurance coverage.

{¶31} In this case, the plain language of the R.C. 940.07 guides our conclusion.

Simply put, R.C. 940.07(C) and (D) do not “otherwise provide” that R.C. 2744.08 and R.C.

2744.081 do not apply to soil and water conservation districts. R.C. 2744.08 and R.C.

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Case No. 2022-G-0013
2744.081 allow political subdivisions to obtain insurance or to join risk pools such as

CORSA. A plain reading of R.C. 940.07 would indicate that soil and water conservation

districts may secure insurance for liability caused by the district or its employees because

Divisions (C) and (D) do not “otherwise provide.”

{¶32} The effect of R.C. 940.07(C)(3) is to remove from Ohio counties the duty

to defend a soil and water district against tort claims and imposes that duty on the State.

The effect of R.C. 940.07(D)(4) is to remove from Ohio counties the duty to indemnify and

hold harmless a soil and water district for liability or settlement of tort claims and impose

that duty on the State. What neither does is remove an insurer’s contractual duty to defend

a soil and water district against, and indemnify it for liability or settlement, of a tort claim.

{¶33} Division (C) and (D) do “otherwise provide” that R.C. 2744.07(A), (B) and

(D) do not apply. Under R.C. 2744.07(A), subject to exclusions, a political subdivision

“shall provide for the defense of an employee” in civil proceedings alleging injury or loss

caused by the act or omission of the employee. Under division (B), subject to exclusions,

political subdivisions shall indemnify and hold harmless an employee of the political

subdivision for loss or damage caused by the act or omission of the employee. Division

(D) provides for a hearing if a political subdivision refuses to provide an employee with a

defense in a civil action as described in division (A). Because the General Assembly so

specifically excluded those provisions of R.C. 2744.07, it is incumbent upon this Court to

give meaning to that.

{¶34} In addition to the exclusion of R.C. 2744.07(A), (B), and (D) stated in R.C.

940.07, CORSA would have this court also exclude R.C. 2744.08 and R.C. 2744.081.

However, the General Assembly did not similarly and clearly render those two statutes

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inapplicable to soil and water conservation districts. Our review starts and stops at this

plain reading of the statute. See Johnson v. Montgomery, 151 Ohio St.3d 75, at ¶ 15. To

adopt CORSA’s reading of the statute would result in parenthetically adding to the statute

by making the State the “sole” indemnifier of soil and water conversation districts. See

Columbia Gas Transm. Corp. v. Levin, 117 Ohio St.3d 122, at ¶ 19.

{¶35} Because R.C. 940.07 authorizes soil and water conservation districts to

obtain insurance coverage and because the State must provide unlimited indemnification,

the question before us is which defense and indemnification obligation must take

precedence.

{¶36} Both parties discuss whether CORSA’s coverage as to the district was

illusory. “A contract is illusory only when by its terms the promisor retains

an unlimited right to determine the nature or extent of his performance; the unlimited right,

in effect, destroys his promise and this makes it merely illusory.” Inskeep v. Lewis, 11th

Dist. Trumbull No. 89-T-4246, 1991 WL 77294, * 2 (May 10, 1991), quoting Century 21

Am. Landmark, Inc. v. McIntyre, 68 Ohio App.2d 126, 427 N.E.2d 534 (1st Dist.1980),

paragraph one of the syllabus. (Emphasis in original.) Illusory contracts are not

enforceable. Id. at * 3. “As a general rule, courts favor interpretations which will render

the contract valid and enforceable.” Id., citing State ex rel. Gordon v. Taylor, 149 Ohio St.

427, 79 N.E.2d 127 (1948). There is a presumption that the parties to a contract actually

intended to bind themselves to mutual obligations. Id., citing Liqui-lawn Corp. v. The

Andersons, 8th Dist. Cuyahoga No. 50240, 1986 WL 4394, *3 (Apr. 10, 1986).

{¶37} We start with the premise that knowledge of the law governing the Coverage

Agreement can be imputed to both parties. See Bradford v. B & P Wrecking Co., 171

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Case No. 2022-G-0013
Ohio App.3d 616, 2007-Ohio-1732, 872 N.E.2d 331, ¶ 64 (6th Dist.) citing Frey v. Trenor

Motor Co., 2d Dist. No. 94–CA–69, 1995 WL 502254 (August 25, 1995) (both cases

imputing knowledge of laws governing respective legal fields to parties experienced in

those fields). R.C. 940.07 was enacted in 2016 and the CORSA negotiated coverage with

Geauga County in October 2017 for the 2018 coverage period. Nevertheless, both parties

continued coverage unchanged for the District, notwithstanding the enactment of R.C.

940.07. Had CORSA held the position that it had no obligation to indemnify the District

due to R.C. 940.07 at the time it entered the Coverage Agreement with the District,

CORSA’s offer of indemnity would have been illusory as CORSA would retain an

unlimited right to determine the nature or extent of its performance.

{¶38} CORSA and the trial court both correctly observed that CORSA insures all

of the vehicles of Geauga County and its various agencies, boards, and entities. However,

the District is an independent political subdivision and is a political entity distinct from

Geauga County. R.C. 940.06(G) empowers the District to sue and be sued with respect

to contracts and torts involving their employees or agents. Although it appears that

Geauga County obtained insurance on behalf of the District, the parties stipulated that

“[a]t the time of the subject accident, the District was a Covered Party as that term is

defined in the Coverage Agreement.” Therefore, CORSA’s coverage as to the rest of

Geauga County has no bearing on CORSA’s coverage as to the District.

{¶39} Next, CORSA insured the District and the District owned vehicle that was

involved in the accident. CORSA issued an insurance card for that vehicle. CORSA

calculated, and Geauga County paid, an annual Membership Contribution based, in part,

on District owned vehicles, including the vehicle subject to the accident. CORSA’s

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coverage as to the District was intended to cover specific vehicles and the premiums

involved intended to pay for specifically assessed risk within the District.

{¶40} Finally, CORSA itself states that it has never argued that its insurance is in

“excess” to the State’s obligation to indemnify or relied on an “Other Insurance” provision

in the policy to determine that the State has the sole and primary duty to indemnify.

Instead, CORSA has argued that R.C. 940.07 itself requires the State to be the sole

indemnifier of the District. As discussed above, the statute does not say that; it is silent

on the question and does not otherwise provide that soil and water conservation districts

may not obtain insurance coverage.

{¶41} CORSA argues that the legislature could have specifically referenced

private insurance in R.C. 940.07, but did not. That is, the legislature could have limited its

duties in cases where private insurance is in place as it has in other portions of the

Revised Code. While that is true, the same could be said of CORSA. It could have written

its Coverage Agreement to say it was not obligated to cover the District, or that its

coverage is secondary in circumstances to which R.C. 940.07 applies. It did not,

notwithstanding that it did just that in cases of “Other Coverage.”

{¶42} Whether the State or CORSA specifically limited their duties does not

resolve the question before us since it cuts both ways with the same effect on both sides

of the issue. However, the parties spoke through their stipulation that the coverage

agreement obligates CORSA to indemnify the District. The law presumes that the parties

to a contract actually intended to bind themselves. Inskeep v. Lewis, 1991 WL 77294, *

2, citing Liqui-lawn Corp., 1986 WL 4394, *3. CORSA has not argued that any portion of

the Coverage Agreement relieves it of its obligation to defend and indemnify the District.

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Instead, CORSA argues that R.C. 940.07 itself requires the State to be the sole

indemnifier of the District.

{¶43} Significantly, accepting CORSA’s interpretation of R.C. 940.07, would

render CORSA’s coverage of the District illusory because CORSA would have an

unlimited right to determine the extent of its performance relative to the District.

{¶44} Related to the issue of illusory coverage is the Constitutional prohibition on

States passing laws impairing the obligation of contracts. Article One, Section 10 of the

United States Constitution provides that “[n]o state shall * * * pass any * * * Law impairing

the Obligation of Contracts.” The states lack the power to enact legislation that “shall

render a contract void or shall prohibit its performance or make its performance

impossible * * *." City of Steubenville v. Steubenville, E. Liverpool & Beaver Val. Traction

Co., 13 Ohio App. 493, 496-497 (7th Dist.1920).

{¶45} Under CORSA’s interpretation, R.C. 940.07 would render CORSA’s

coverage agreement void, or at least impaired, by denying the District (and the County)

of the benefit of the coverage for which the County paid. That would render the statute

unconstitutional under Article One, Section 10 of the United States Constitution. It is well

established that “[A] statute is presumed to be constitutional and every reasonable

presumption will be made in favor of its validity.” State ex rel. Haylett v. Ohio Bur. of

Workers' Comp., 87 Ohio St.3d 325, 328, 720 N.E.2d 901, 904 (1999). We must afford a

constitutional interpretation if one is reasonably available. State v. Carswell, 114 Ohio

St.3d 210, 2007-Ohio-3723, 871 N.E.2d 547, ¶ 7. “[A]ny doubt as to constitutionality is

resolved in favor of the validity of the statute.” State ex rel. Haylett at 328.

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{¶46} We must presume that R.C. 940.07 is constitutional and afford it a

constitutional interpretation that does not impair the validity of the coverage agreement

between CORSA and the District. Further, based on our conclusion that R.C. 940.07(C)

and (D) do not “otherwise provide” for the exclusion of R.C. 2744.08 and R.C. 2744.081,

we must give effect to CORSA’s Coverage Agreement.

{¶47} To do otherwise would be contrary to the legislature’s patent expression to

allow soil and water conservation districts to obtain defense and indemnification from

private insurance and would shield such a provider behind the State’s responsibility to

provide unlimited indemnification to soil and water conservation districts. To determine

that the State’s obligations must take precedence would render soil and water

conservation district insurance coverage meaningless, as the insurance company would

never be subject to indemnify a soil and water conservation district due to R.C. 940.07

requiring the State to provide unlimited indemnification in the amount of any judgment

that is rendered against the District in a tort action.

{¶48} This analysis resolves the parties’ apparent competing and unequivocal

stipulations. The language of the statute, tenets of contract law, and the United States

Constitution all support our conclusion that R.C. 940.07 does not impose the duty on the

State alone to defend and indemnify soil and water conservation districts. The immovable

object must give way – CORSA must defend and indemnify the District.

{¶49} R.C. 940.07 does not otherwise exclude the District from obtaining

insurance or joining a risk pool, such as CORSA. The undisputed fact is that, based on

the coverage agreement, CORSA owes defense and indemnity to the District for the

accident. Of course, should the District’s liability exceed CORSA’s policy limits, the State

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would need to provide unlimited indemnification beyond that limit. However, unless and

until that limit is reached, CORSA is responsible to defend and indemnify pursuant to the

coverage agreement.

{¶50} Accordingly, the State’s first assignment of error has merit. The trial court

erred in denying the State’s motion for summary judgment and in granting CORSA’s

motion for summary judgment.

{¶51} The State’s second assignment of error states:

{¶52} “[2.] The trial court erred in denying the defendants-appellants’ Motion for a

More Definite Statement.”

{¶53} In this assignment, the State argues that the trial court erred in not

dismissing CORSA’s declaratory action and in ruling against the State’s request for a

more definite statement. The State asserts two basic claims. First, that CORSA’s

complaint did not allege facts supporting standing to bring its declaratory judgment action.

Second, that CORSA’s complaint did not set forth any claims against the District, the

Board, or Prunty.

{¶54} We review a ruling on a motion for a more definite statement under an abuse

of discretion standard. See Sazima v. Chalko, 86 Ohio St.3d 151, 154, 712 N.E.2d 729

(1999). “The term ‘abuse of discretion’ is one of art, connoting judgment exercised by a

court which neither comports with reason, nor the record.” State v. Underwood, 11th Dist.

Lake No. 2008-L-113, 2009-Ohio-208, ¶ 30, citing State v. Ferranto, 112 Ohio St. 667,

676-678 [148 N.E. 362] (1925).” State v. Raia, 11th Dist. Portage No. 2013-P-0020, 2014-

Ohio-2707, ¶ 9. Stated differently, an abuse of discretion is “the trial court’s ‘failure to

exercise sound, reasonable, and legal decision-making.’” Id., quoting State v. Beechler,

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2d Dist. Clark No. 09-CA-54, 2010-Ohio-1900, ¶ 62, quoting Black’s Law Dictionary 11

(8th Ed.Rev.2004). “When an appellate court is reviewing a pure issue of law, ‘the mere

fact that the reviewing court would decide the issue differently is enough to find error[.] *

* * By contrast, where the issue on review has been confined to the discretion of the trial

court, the mere fact that the reviewing court would have reached a different result is not

enough, without more, to find error.’” Id., quoting Beechler at ¶ 67.

{¶55} Civ.R. 8(A) requires a complaint to contain (1) a short and plain statement

of the claim showing that the party is entitled to relief, and (2) a demand for judgment for

the relief to which the party claims to be entitled.” Civ.R. 12(E) allows a party to move for

a more definite statement if a pleading is “so vague or ambiguous that a party cannot

reasonably be required to frame a responsive pleading * * *.”

{¶56} R.C. 2721.03(A) provides that “any person whose rights, status, or other

legal relations are affected by a statute, * * * may have determined any question of

construction or validity arising under the * * * statute * * * and obtain a declaration of rights,

status, or other legal relations under it.” A plaintiff must plead three prerequisites to

declaratory relief: “(1) a real controversy between the parties, (2) justiciability, and (3) the

necessity of speedy relief to preserve the parties' rights.” ProgressOhio.org, Inc. v.

JobsOhio, 139 Ohio St.3d 520, 2014-Ohio-2382, 13 N.E.3d 1101, ¶ 19, Burger Brewing

Co., 34 Ohio St.2d at 97, 296 N.E.2d 261, citing Am. Life & Acc. Ins. Co. of Kentucky v.

Jones, 152 Ohio St. 287, 296, 89 N.E.2d 301 (1949).

{¶57} The State cites Cuyahoga Cty. Bd. Of Commrs. V. State, 112 Ohio St.3d

59, 2006-Ohio-6499, 858 N.E.2d 330 for the proposition that CORSA must suffer or be

threatened with “direct and concrete injury” in order to bring a declaratory action that

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would bind the state. Id. at ¶ 22. However, Cuyahoga is inapposite to this case. There,

the court said “that standing to attack the constitutionality of a legislative enactment exists

only where a litigant ‘has suffered or is threatened with direct and concrete injury in a

manner or degree different from that suffered by the public in general, that the law in

question has caused the injury, and that the relief requested will redress the injury.’” Id.

quoting State ex rel. Ohio Academy of Trial Lawyers v. Sheward, 86 Ohio St.3d 451, 469–

470, 715 N.E.2d 1062 (1999). Here, CORSA did not seek a declaration that R.C. 940.07

was unconstitutional.

{¶58} In its complaint, CORSA properly set forth sufficient facts which alleged a

real controversy between itself and the State relating to indemnification of the District.

That controversy turned on the construction of R.C. 940.07. Further, CORSA alleged a

justiciable case in need of speedy relief by pleading that it’s rights would be affected by

the construction of R.C. 940.07. We therefore find that the trial court did not err as to the

State’s assertion that CORSA’s complaint did not allege facts supporting standing to bring

its declaratory judgment action.

{¶59} Next, we turn to whether the trial court erred as to the State’s assertion that

CORSA’s complaint did not set forth any claims against the District, the Board, or Prunty.

{¶60} R.C. 2721.12(A) provides that “when declaratory relief is sought under this

chapter in an action or proceeding, all persons who have or claim any interest that would

be affected by the declaration shall be made parties to the action or proceeding. * * * [A]

declaration shall not prejudice the rights of persons who are not made parties to the action

or proceeding.” In this case, CORSA and the State both acknowledge a duty to indemnify

the District, the Board, and Prunty for the accident. Each party has an interest that would

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Case No. 2022-G-0013
be affected by the outcome of this case. CORSA was obligated to name those parties

with a claim or interest in the outcome of the case regardless of whether CORSA set forth

any claims against those parties. The trial court did not err in finding that CORSA’s

complaint for declaratory judgment properly included the District, the Board, and Prunty.

{¶61} Accordingly, the State’s second assignment of error is without merit.

{¶62} The State’s third assignment of error states:

{¶63} “[3.] The trial court abused its discretion in denying the defendants-

appellants’ Motion to Compel discovery.”

{¶64} The State next argues that the trial court abused its discretion in denying its

motion to compel discovery. The State requested additional discovery after the parties

completed their Joint Stipulations of Fact.

{¶65} “In the regulation of discovery, the trial court has discretionary power and

its decisions will not be overturned absent an abuse of that discretion.” Armstrong v.

Marusic, 11th Dist. No. 2001-L-232, 2004-Ohio-2594, at ¶ 17, citing Mauzy v. Kelly

Services, Inc., 75 Ohio St.3d 578, 592, 664 N.E.2d 1272. Where the production of

discovery is not relevant or necessary to determine the issues raised in summary

judgment, it is within the trial court’s discretion to deny a motion to compel discovery.

State ex rel. Cahill v. Village of Madison, 2018-Ohio-1449, 110 N.E.3d 597(11th Dist.), ¶

35, citing Brunstetter v. Keating, 11th Dist. Trumbull No. 2002-T-0057, 2003-Ohio-3270,

¶ 30.

{¶66} The trial court’s ruling on the motion to compel (see paragraph 7 above),

indicated that the requested discovery material, while relevant to counterclaims of the

non-State defendants, was not necessary to resolve the summary judgment issue of

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whether R.C. 940.07 required the State to indemnify the District to the exclusion of

otherwise valid insurance coverage. The trial court’s decision was without prejudice and

the trial court extended the discovery deadlines to allow discovery after ruling on

dispositive motions. The trial court appropriately exercised its discretion to regulate

discovery in a manner that did not prejudice the parties.

{¶67} Accordingly, the State’s third assignment of error is without merit.

{¶68} This matter is reversed and remanded for further proceedings consistent

with this opinion. CORSA must fulfill its contractual duty under the coverage agreement.

Should the liability exceed policy limits, under R.C. 940.07, the State is required to fully

and completely indemnify the District for such amounts.

THOMAS R. WRIGHT, P.J.,

CYNTHIA WESTCOTT RICE, J.,

concur.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/8483617. Public record. Not legal advice.