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City settles with insurance company on coverage suit

YOUNGSTOWN — City officials accepted a $150,000 settlement from its former insurance company that sued the city contending it wasn’t responsible for any financial claims, which could be as high as $5 million, in a wrongful death lawsuit because it wasn’t notified of the case for almost five years.

The $150,000 payment from U.S. Specialty Insurance Co. (USSIC) resolves the federal case the company filed June 9, 2022, that it wasn’t going to cover the city on its liability policy — which ran from Dec. 31, 2016, to Dec. 31, 2018 — on a wrongful death case.

Any amount awarded in the wrongful death lawsuit above that $150,000 — not including the legal fees in the USSIC case — would be the responsibility of the city.

U.S. District Court Judge John R. Adams ruled Sept. 14, 2023, that USSIC was not responsible for coverage because of the city’s “significant missteps and mistakes that cannot be undone” in the wrongful death lawsuit. Adams also mentioned the city’s “extreme incompetence,” including not reporting the incident to USSIC for nearly five years.

The city appealed Adams’ decision to the U.S. Court of Appeals for the Sixth Circuit. The case was dismissed Sept. 23 after the settlement.

City Law Director Lori Shells Simmons and Emily Anglewicz, of the Roetzel & Andress law firm representing the city in the case, couldn’t be reached Tuesday to comment.

Thomas Morar of Youngstown was injured June 17, 2017, while riding a motorcycle on Oak Street Extension on the city’s East Side when a tree fell on him. Morar died April 2, 2019, at the age of 80.

Cheryl Durig of Newton Falls, the executor of Morar’s estate, sued Youngstown on June 14, 2019, in Mahoning County Common Pleas Court for economic damages, pain and suffering, and wrongful death arising out of the accident.

The Durig lawsuit states Morar “suffered significant injuries, great pain of both his body and mind, emotional distress, humiliation, loss of dignity, loss of enjoyment of life and incurred medical treatment” as a result of the accident.

Also, the lawsuit states the city was aware that the tree that fell on Morar was in poor condition, and, even though it was on city property, city officials did nothing to address it.

The city was served June 25, 2019, and filed its answer Aug. 2, 2019, without raising any defenses regarding immunity from liability under state law. Local governments in Ohio are entitled to raise immunity from liability as a defense in most court cases in which it is performing a government or proprietary function.

The city filed a motion Dec. 17, 2021, in opposition to Durig’s motion for judgment. The city motion “contained only four pages of substantive argument based solely on immunity despite the fact that the city had failed to raise the affirmative defense at any time prior,” Adams’ decision reads.

Prior to an unsuccessful Feb. 14, 2022, mediation, Durig’s attorney demanded a $5 million payment, which the city opposed.

After that, then-city Law Director Jeff Limbian, according to Adams’ decision, considered hiring outside counsel because the law department “didn’t have the staffing to accommodate what was, in my estimation, turning into a very large case.”

Adams noted that Limbian “was unaware that the case involved a death until after mediation” despite “the wrongful death complaint being filed nearly two and a half years prior.”

The city hired attorneys from Roetzel & Andress as outside legal counsel on March 18, 2022, to replace James Vivo, the city’s first assistant law director who was handling the case.

The Roetzel & Andress attorneys sent an April 7, 2022, letter to USSIC “providing notice of the pending lawsuit and requesting defense and indemnity. The city concedes this letter was the first time it provided notice to” the insurance company, Adams wrote.

In the Morar wrongful death lawsuit, Thomas Pokorny, a visiting judge assigned to the common pleas court case, overruled on April 28, 2022, the city’s request to assert the immunity defense. The city appealed that decision May 6, 2022, to the state’s 7th District Court of Appeals.

In a 2-1 decision on Dec. 7, the appeals court ruled against the city and that Pokorny made the right ruling. After the city requested the court reconsider, it rejected the request Feb. 29 in a 2-1 decision to overturn Pokorny’s ruling.

The city filed a notice of appeal April 15 to the Ohio Supreme Court, which decided July 26 to accept the case.

Regarding the federal case, USSIC notified the city May 9, 2022, that it was denying coverage stating Youngstown “breached the policy’s notice provision, resulting in forfeiture of coverage.”

On the same day, it filed the federal lawsuit stating it wasn’t told of the Durig lawsuit until April 7, 2022, and therefore “owes no coverage for the matter under the policy.”

“USSIC disputes that coverage exists for the lawsuit under the (city’s) policy,” the lawsuit read.

The insurance company also wrote that the city made a number of legal errors in how it handled the case in addition to taking too long to inform it of the lawsuit.

The city filed a counterclaim May 31, 2022.

In his decision, Adams wrote: “The city failed to give timely notice here and the ‘unexcused significant delay’ was unreasonable as a matter of law. There is no dispute that the incident occurred on Sept. 6, 2017, the lawsuit was filed June 14, 2019, and the city did not notify (USSIC) until April 7, 2022. At its core, this case is little more than the city attempting to get a second bite at the proverbial apple to cover up its extreme incompetence in litigating the case up to that point of finally hiring outside counsel who notified” the insurance company.

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