Eighth District Paints a New Picture of Damages for Sherwin Williams Thumbnail

Eighth District Paints a New Picture of Damages for Sherwin Williams

On September 1, 2022, the Court of Appeals for the Eighth Appellate District reversed the Cuyahoga County Court of Common Pleas and held that monies ordered to pay to abate a public nuisance for lead paint constitute damages which are recoverable under an insurance policy. In The Sherwin-Williams Company v. Certain Underwriters at Lloyd’s London, 2022-Ohio-3031, the issue was whether Sherwin-Williams’ insurers must indemnify the company for lead paint abatement litigation pending in California. In underlying litigation, Sherwin-Williams, along with two other paint manufacturers, were ordered to pay more than $400 million into an abatement fund to be used by various California cities to mitigate the dangers caused by lead paint. In December 2020, the lower court granted summary judgment in favor of the insurers and against Sherwin-Williams, holding Sherwin-Williams was not entitled to coverage under the policies because the abatement order did not constitute “recoverable damages.” The Court of Appeals disagreed, noting that “Ohio courts determining insurance coverage issues have included in the ordinary dictionary definition of ‘damages’ equitable relief, which includes the costs of government expenditures for environmental cleanup.” According to the Court, the “plain and ordinary meaning” or damages is “necessarily broad enough to encompass a variety of remedies, including compensatory damages, injunctive relief, restitution, and other equitable relief.” In addition, the Court explained that “an ordinary businessperson reading the policies at issue would believe that the Abatement Fund constitutes “damages” under the relevant policy language.” The Court further held that Sherwin-Williams presented an occurrence under the policies at issue. The decision is expected to be appealed to the Ohio Supreme Court.

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