Rule 206 ELECTRONIC CITATION: 2004 FED App. 0128P (6th Cir.) File Name: 04a0128p.06… v. Axa Marine & Aviation Insurance (uk), Ltd.

*Daniel M. Friedman, Circuit Judge of the United States Court of
Appeals for the Federal Circuit, sitting by designation.
1
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2004 FED App. 0128P (6th Cir.)
File Name: 04a0128p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
TOLEDO-LUCAS COUNTY
PORT AUTHORITY; COREGIS
INSURANCE CO.,
Plaintiffs-Appellants,
v.
AXA MARINE & AVIATION
INSURANCE (UK), LTD., et al.,
Defendants-Appellees.
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No. 02-4120
Appeal from the United States District Court
for the Northern District of Ohio at Toledo.
No. 99-07320—James G. Carr, District Judge.
Argued: March 11, 2004
Decided and Filed: May 6, 2004
Before: MOORE, SUTTON, and FRIEDMAN, Circuit
Judges.*
2 Toledo-Lucas County, et al. v.
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No. 02-4120
_________________
COUNSEL
ARGUED: Steven R. Smith, CONNELLY, JACKSON &
COLLIER, Toledo, Ohio, M. Charles Collins, EASTMAN &
SMITH LTD., Toledo, Ohio, for Appellants. Jack C. Hsu,
CHRISTENSEN & EHRET, Chicago, Illinois, Stephen D.
Hartman, KERGER & KERGER, Toledo, Ohio, for
Appellees. ON BRIEF: Steven R. Smith, Janine Thompson
Avila, Tammy Geiger Lavalette, CONNELLY, JACKSON &
COLLIER, Toledo, Ohio, M. Charles Collins, Robert J.
Gilmer, Jr., EASTMAN & SMITH LTD., Toledo, Ohio, for
Appellants. Jack C. Hsu, Kirsten R. Waack, CHRISTENSEN
& EHRET, Chicago, Illinois, Stephen D. Hartman, Richard
M. Kerger, KERGER & KERGER, Toledo, Ohio, Mark E.
Christensen, CHRISTENSEN & EHRET, Chicago, Illinois,
for Appellees.
_________________
OPINION
_________________
SUTTON, Circuit Judge. At issue in this insurance-
coverage dispute is the scope of a “Ports Liability Policy” (the
“Policy”) that the Toledo-Lucas County Port Authority
purchased from a group of insurance companies in 1994. The
Policy covers, among other things, “Public Officials
Liability,” which is defined as “any actual or alleged act,
error, . . . omission and/or breach of duty by an officer and/or
. . . employee [of the Port Authority] . . . in the discharge of
his/her duties . . . and claimed against him/her solely by
reason of his/her capacity as such with [the Port Authority].”
This appeal presents two questions about the scope of the
provision: (1) whether the Public Officials Liability portion
of the policy covers the Port Authority as well as Port
Authority officials and employees, and (2) if so, whether a

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formal claim or demand must be made against an individual
official or employee in order for the Port Authority to invoke
the coverage. The better reading of the Policy, in our view,
is that it covers the Port Authority as well as Port Authority
officers and employees and that a formal demand or claim
against an individual official is not a condition of coverage.
Because the district court held otherwise and granted
summary judgment in favor of the defendant insurance
companies on this basis, we reverse the judgment below and
remand the case for further proceedings consistent with this
opinion.
I.
A.
The Toledo County Port Authority is a public entity
organized under Ohio law. See Ohio Rev. Code Ann.
§ 4582.01 et seq. In 1994, the Port Authority purchased a
“Ports Liability Policy” from the London Companies—a
group of 12 insurance companies located in several foreign
countries. The Policy identifies the following as the insured
parties:
ASSURED: Toledo-Lucas County Port Authority and as
per Endorsement No.1.
JA 948. Endorsement No.1 in turn states:
It is hereby understood and agreed that the Named
Assured shall read:
TOLEDO-LUCAS COUNTY PORT AUTHORITY
AND ANY SUBSIDIARY, ASSOCIATED,
AFFILIATED COMPANIES OR OWNED AND
CONTROLLED COMPANIES, THEIR DULY
ELECTED AND APPOINTED OFFICIALS,
COMMISSIONERS, OFFICERS, EMPLOYEES AND
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VOLUNTEERS WHILE WORKING FOR AND ON
BEHALF OF THE PORT.
All other terms and conditions remain unchanged.
JA 947. The Certificate of Insurance similarly says that the
Policy is “[i]n favor of [the] Toledo-Lucas County Port
Authority and as per Endorsement No. 1.” JA 946.
The Policy also includes a form definition of “Assured,”
which provides that “[t]he unqualified word ‘Assured’”
means:
(a) The Named Assured and/or subsidiary, associated,
affiliated companies or owned and controlled companies,
their duly elected and appointed officials,
commissioners, officers, employees and volunteers while
working for and on behalf of the Port, as now or hereafter
constituted . . .
(b) any officer, director, commissioner, stockholder,
partner or employee of the Named Assured, while acting
in his capacity as such . . . .
JA 951–52.
Given an effective date of May 22, 1994 through May 22,
1995, the Policy provides (1) occurrence-based coverage for
bodily injury, personal injury, property damage, advertising
liability and additional expenses and (2) claims-made
coverage for public officials liability. Occurrence-based
coverage applies when “a negligent or omitted act occurred
during the period of the policy, whatever the date of claim
against the insured,” while claims-made coverage applies
when “a negligent or omitted act is discovered and brought to
the attention of the insurance company during the period of
the policy, no matter when the act occurred.” 1 Lee R. Russ
& Thomas F. Segalla, Couch on Insurance § 1:5 (3d ed.

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2003); see St. Paul Fire & Marine Ins. Co. v. Barry, 438 U.S.
531, 535 n.3 (1978).
The core promise of the Policy states:
I. INSURING AGREEMENTS:
1. COVERAGE
In the event of an occurrence happening during the
annual period of this policy but, in respect of Public
Officials Liability in the event that notice of an
occurrence is first made in writing by and/or against the
Assured and received by Underwriters or Underwriters’
representatives set forth in Item 4 of the Declarations
during the annual period of this policy, Underwriters will
pay on behalf of the Assured for that amount of Ultimate
Net Loss which the Assured shall be obligated to pay by
reason of the liability:
(a) Imposed upon the Assured by law, including all
Protection and Indemnity risks of whatsoever
nature . . .
for damages on account of:
(i) Bodily Injury
(ii) Personal Injury
(iii) Property Damage
(iv) Advertising Liability
(v) Public Officials Liability
(vi) Additional Expenses
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caused by or arising out of any occurrence at any of the
Assured’s premises, and/or by operations and/or
activities anywhere in the world.
JA 950 (emphasis added).
After stating the insurance companies’ promise to “pay on
behalf of the Assured . . . for damages on account of . . .
Public Officials Liability,” the Policy specifically defines
“Public Officials Liability”:
6. PUBLIC OFFICIALS LIABILITY
The words “Public Officials Liability”, wherever used
herein, shall mean any actual or alleged act, error, mis-
statement, neglect, omission and/or breach of duty
(including, but not limited to, misfeasance, malfeasance
and/or non-feasance) by an officer and/or commissioner
and/or employee and/or committee member in the
discharge of his/her duties as such and claimed against
him/her solely by reason of his/her capacity as such with
a port or harbor commission named herein.
Notwithstanding when the actual or alleged event giving
rise to a claim under this section of the policy may have
or be deemed to have occurred, Underwriters shall only
be liable for a claim of which the/an Assured first
receives, within the term specified in this policy, written
notice from any party intending to hold the/an Assured
responsible for any wrongful act as enumerated above.
JA 953.
In view of the Policy’s $3 million limit, the Port Authority
purchased additional insurance. The first excess policy was
issued by a group of insurance companies (the “Navigators
Group”) composed of Navigators Insurance Company, The
Reinsurance Company of New York, Christiana General
Insurance Corporation of New York, Colonia Insurance

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Company, Employers Mutual Casualty Company and
Farmers Mutual Hail Insurance Company of Iowa. The
second excess policy was issued by Coregis Insurance
Company.
B.
Between 1993 and 1998, several lawsuits were filed against
the Port Authority concerning the operation of the Toledo
Express Airport—more specifically, concerning the noise
created by Burlington Air Express’s flights in and out of the
airport. The first of these lawsuits was filed in June 1993 by
Joseph and Winifred Kagy and several other citizens of
Fulton County, Ohio. The Kagy plaintiffs claimed nuisance,
inverse condemnation and violations of equal protection by
the Port Authority, but did not allege any specific wrongful
acts by Port Authority employees and did not name any Port
Authority employees as defendants.
On July 20, 1994, Richard and Jane McQuade filed a
second lawsuit, which did name individual Port Authority
employees as well as the Port Authority itself as defendants.
The complaint alleged that the named employees (and other
unnamed employees) of the Port Authority committed fraud
and other wrongful acts in enticing Burlington Air Express to
establish a hub at the Toledo Express Airport. The complaint
further alleged that the Port Authority employees acted at all
times as agents of the Port Authority, that the Port Authority
acted by and through its employees, and that the Port
Authority was liable for the intentional, reckless and/or
negligent acts of its employees.
Within days of the filing of the McQuade lawsuit, the Port
Authority notified the London Companies of the suit and
asked the London Companies to determine whether the suit
was covered by the Policy, including its provision for Public
Officials Liability coverage. The London Companies
withheld coverage, asserting that the Policy did not cover
8 Toledo-Lucas County, et al. v.
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No. 02-4120
liability arising from “airport activities.” All parties now
agree that the stated reason for withholding coverage was
incorrect and that Public Officials Liability coverage under
the Policy does include airport activities.
Numerous other lawsuits followed, all containing similar
allegations against the Port Authority and many of its
individual employees. After McQuade, even the Kagy
plaintiffs amended their complaint to include allegations and
claims against individual Port Authority employees as well as
the Port Authority itself.
By February 8, 1996, however, all of the claims against the
individual Port Authority employees had been dismissed for
failure to state a claim, leaving only the claims against the
Port Authority. In September 1999, faced with an imminent
state-court jury trial on the issue of damages to the property
owners, the Port Authority settled the remaining claims for
$4.6 million.
While this settlement ended the noise-related litigation
against the Port Authority, it did not end the coverage dispute
between the Port Authority and its insurers. Without
admitting liability, the London Companies paid the Port
Authority’s attorney’s fees and defense costs for the period
during which claims were pending against individual
employees, but refused to pay for anything after the claims
against the individual employees had been dismissed in
February 1996, including any of the $4.6 million settlement.
The excess insurance providers, the Navigators Group and
Coregis, followed suit, refusing to provide coverage under
their policies.

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C.
On May 21, 1999, the Port Authority filed this state-law
diversity lawsuit against the London Companies, Navigators
and Coregis, claiming that the companies had reneged on
their insurance obligations. As this is a suit between citizens
of different States and countries—the Port Authority is an
Ohio public entity, Coregis is an Indiana corporation with its
principal place of business in Illinois, the London Companies
are organized and headquartered in foreign countries and the
Navigators Group is composed of companies organized and
having principal places of business in New York, California
and Iowa—diversity jurisdiction exists under 28 U.S.C.
§ 1332. After the filing of this lawsuit, Coregis agreed to
provide coverage and paid $3.45 million of the cost of the
settlement. After providing this coverage, Coregis realigned
itself as a co-plaintiff in the case, then claimed that
Navigators was responsible for the entire amount paid by
Coregis. The Port Authority and Coregis eventually amended
their joint complaint to add a claim of bad faith denial of
coverage. Both sides moved for summary judgment.
On May 9, 2001, the district court granted summary
judgment in favor of the London Companies and Navigators.
In the district court’s view, the Public Officials Liability
provision applies only to claims against individual
employees, not to claims against the Port Authority as an
entity. Toledo-Lucas County Port Authority v. Axa Marine &
Aviation Ins., 147 F. Supp. 2d 849, 852 (N.D. Ohio 2001)
(“[O]f the enumerated ‘Assureds’, only individual persons
receive coverage for acts under [the Public Officials Liability]
portion of the policy.”). Acknowledging that under Ohio law
ambiguous provisions of an insurance policy drafted by the
insurer must be construed in favor of the insured, the court
held that the terms of the Policy were clear and unambiguous.
“The language requires two things,” the district court
reasoned: “first, a[] [wrongful] act by one or some individuals
. . . , and second, a claim against those individuals by reason
10 Toledo-Lucas County, et al. v.
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No. 02-4120
of their capacity as a port or harbor officer, commissioner,
employee, or committee member.” Id. “By specifying that an
act be carried out by an individual, and that a claimant make
a demand of that individual,” the court continued, the term
“‘Assured’” under the Public Officials Liability coverage
“refers to any of the enumerated assureds who are individuals
rather than entities.” Id. at 853.
Bolstering this interpretation, the district court explained,
is the Policy’s form definition of the term “Assured,” which
includes “[t]he Named Assured and/or” a number of other
parties. Id. The court concluded that “the term ‘Assured’
cannot always be properly substituted by ‘Port Authority’, as
the word ‘or’ conveys.” Id. Lastly, “[b]ecause . . . the
London Companies’ public officials coverage is not invoked
in this case,” the court reasoned that “there can be no excess
public officials liability under the Navigators’ policy.” Id.
In a separate order, the district court granted summary
judgment to the London Companies and Navigators on the
bad-faith claims, reasoning that without the possibility of
coverage in the first instance, Ohio law recognizes no claim
for bad faith denial of coverage. The court entered a final
judgment in favor of the defendants.
Plaintiffs timely appealed the district court’s judgment,
which we review de novo. See Henry v. Wausau Bus. Ins.
Co., 351 F.3d 710, 713 (6th Cir. 2003).
II.
The parties agree that Ohio law governs this dispute. When
the “terms of an insurance policy are clear and unambiguous,”
Ohio law requires a court to “appl[y] [them] to the facts
without engaging in any construction.” Ledyard v. Auto-
Owners Mut. Ins. Co., 739 N.E.2d 1, 3 (Ohio Ct. App. 2000)
(citation and quotation omitted). Conversely, when the
insurer has drafted the contract and the “provisions of a

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contract of insurance are reasonably susceptible of more than
one interpretation,” a court must “construe[] [the terms]
strictly against the insurer and liberally in favor of the
insured.” King v. Nationwide Ins. Co., 519 N.E.2d 1380,
1383 (Ohio 1988).
With these canons of construction in mind we must address
two questions in this case: (1) whether the Public Officials
Liability portion of the Policy covers the Port Authority in
addition to Port Authority officials; and (2) if so, whether a
formal claim or demand must have been made against an
individual official or employee in order for the Port Authority
to obtain coverage.
A.
The first question lends itself to a relatively straightforward
analysis. The Policy’s core promise is made by the insurer to
“the Assured.” The insurer promises to “pay on behalf of the
Assured” for net losses “which the Assured shall be obligated
to pay by reason of the liability [] imposed upon the Assured
. . . for damages on account of . . . Public Officials Liability.”
JA 950. “Public Officials Liability” coverage, then, covers
not just “Public Officials,” but any “Assured” who has to pay
damages on account of Public Officials Liability.
One such “Assured” under the Policy is the Port Authority.
The Certificate of Insurance says so; Policy Page 1 says so;
and the generic definition of “Assured” contained in the
Policy says so. As such, the Port Authority enjoys Public
Officials Liability coverage.
Attempting to counter this analysis, the defendant insurance
companies point out that the language “and/or” in clause (a)
of the generic definition of “Assured” indicates that the term
has different meanings depending on the context in which it
is used. Sometimes the term refers to the “Named Insured”
(the Port Authority), and sometimes it refers to the other
12 Toledo-Lucas County, et al. v.
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parties listed in clause (a)—namely, the Port Authority’s
“subsidiary, associated, affiliated companies or owned and
controlled companies, their duly elected and appointed
officials, commissioners, officers, employees and volunteers
while working for and on behalf of the Port.” JA 947. When
it comes to Public Officials Liability, they argue, the term
“Assured” refers only to Port Authority employees and
officials.
This argument, however, ignores several more telling clues
to the contract’s meaning. First and foremost, it ignores the
more specific language inserted in the Certificate of
Insurance, in Policy Page 1 and in Endorsement No. 1, all of
which identify the Port Authority as an “Assured” without
limitation. Ohio law makes it clear that if two contract
provisions are inconsistent, the specific, typed portion of a
contract will prevail over the generic, form portion. See
Malcuit v. Equity Oil & Gas Funds, Inc., 610 N.E.2d 1044,
1046 (Ohio Ct. App. 1992).
Second, the defendants’ position ignores clause (b) of the
generic definition of “Assured,” which specifically identifies
“any officer, director, commissioner, stockholder, partner or
employee of the Named Assured, while acting in his capacity
as such,” as an “Assured.” JA 952. The identification of
employees of the Port Authority in clause (b) indicates that
the “employees” referred to in clause (a)—the clause to which
the “and/or” language applies—are employees of “subsidiary,
associated, affiliated companies.” So while the disjunctive
“or” (or, more precisely, “and/or”) is used within clause (a),
the Policy does not say whether clauses (a), (b) and the others
are disjunctive or conjunctive as they relate to each other. In
the absence of an “and” or an “or,” or even an “and/or”
between any of the clauses, the use of the word
“includes”—as in, “[t]he unqualified word ‘Assured’,
wherever used in [the] Policy, Includes” the parties identified
in clauses (a) through (d), JA 951–52—suggests that we
should read the clauses conjunctively. Doing so, the Port

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Authority (identified in clause (a)) and its employees
(identified in clause (b)) are each an “Assured” for purposes
of Public Officials Liability coverage.
This reading of the policy not only accords with its terms
and the pertinent rules of construction but it also accords with
common sense. It is hard to imagine the Port Authority
deciding to purchase coverage for its employees but not for
itself in this setting, and indeed the defendant insurance
companies have offered no reason why a governmental entity
would purchase such a policy. Because state law generally
immunizes governmental employees acting within the scope
of their employment from liability for damages, the only
function of public officials liability coverage in most cases
will be to insure the governmental entity itself. Compare
Ohio Rev. Code Ann. § 2744.03(A)(6) (immunity for
employees of political subdivisions), with id. § 2744.02(B)
(liability of political subdivision for damages caused by the
wrongful acts of its employees). Cf. City of Sterling Heights
v. United Nat’l Ins. Co., No. 03-72773, 2004 WL 252091, at
*6–8 (E.D. Mich. Feb. 11, 2004) (holding that insurance
companies had a duty to defend and indemnify the City and
a public official under public officials liability coverage);
Continental Cas. Co. v. County of Chester, 244 F. Supp. 2d
403, 405–06 (E.D. Pa. 2003) (holding that the insurer had a
duty to defend and indemnify the County against civil rights
claims under its public officials liability coverage).
In the final analysis, had the parties intended the Policy
(oddly enough) to cover employees for Public Officials
Liability, but not the Port Authority itself—an intention
capable of being simply stated—one would expect more
clarity on the point than this Policy provides. Having failed
to provide the requisite clarity, the author of the Policy, the
defendant London Companies, cannot now overcome the
ambiguity-default canon of construction, which requires us to
give the Port Authority the benefit of the doubt and read the
14 Toledo-Lucas County, et al. v.
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No. 02-4120
Policy to cover the Port Authority and its employees for
Public Officials Liability.
B.
The second question is whether the Port Authority may
recover “for damages on account of . . . Public Officials
Liability” only if a claim has also been made against an
individual official. In our view, the Policy in general and the
definition of “Public Officials Liability” in particular do not
provide a natural home for such a limitation, and at all events
the ambiguity of this interpretation precludes us from
construing the Policy in favor of its drafter, the London
Companies.
The Public Officials Liability provision requires an “actual
or alleged” wrongdoing “by an officer [or] . . . employee” “in
the discharge of his/her duties as such” and “claimed against
him/her solely by reason of his/her capacity as such with a
port or harbor commission named herein.” JA 953 (emphasis
added). As an initial matter, the Policy nowhere defines the
term “claimed.” Nor do dictionary definitions resolve the
question. One frequently-used definition (“[t]o demand, ask
for, or take as one’s own”) suggests that the Policy requires
a lawsuit to be filed or a demand for money to be made
against an employee, while the other frequently-used
definition (“[t]o state to be true . . . [or to] assert or maintain”)
suggests that an allegation of wrongdoing by an employee
contained in a lawsuit against the Port Authority alone
suffices to invoke coverage. The Am. Heritage Dictionary of
the English Language 341 (4th ed. 2000).
The context in which the words appear, however,
undermines the defendant insurance companies’ argument.
The phrase “claimed against” modifies “any actual or alleged
act [or] error.” The only definition of “claimed” that makes
sense in this setting is the second one (“[t]o state to be true .
. . [or to] assert or maintain”) because “act[s]” and “error[s]”

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are asserted against employees, not demanded of them.
Indeed, in each of the five instances in which the verb
“claimed” appears in the Policy, the words “alleged,”
“asserted” or “maintained” can be substituted without
noticeably altering the meaning.
Nor, contrary to the defendant insurance companies’
position, does this interpretation render the “claimed against”
language “superfluous.” The provision requires wrongdoing
“claimed against [an employee] solely by reason of his/her
capacity as such.” JA 953 (emphasis added). As the “solely”
language suggests, this provision is designed to preclude
coverage when a plaintiff sues the Port Authority or an
employee for damages caused by an employee who is not
acting solely in an official capacity, which is a perfectly
understandable exclusion and one that gives content to the
“claimed against” language and to the “asserted” against
interpretation of it offered by the Port Authority. Were the
point of this language to exclude coverage when a plaintiff
decides to sue the Port Authority for its employee’s
wrongdoing, one would not expect such a significant
limitation on coverage to be tucked away in a phrase
addressing the capacity in which the employee acts.
Also unavailing is the argument that “of the over twenty-
five times that the words ‘claim’ or ‘claims’ appear in the
policy, never are they used as a substitute for ‘alleged’ or
‘assert.’” London Companies’ Br. at 29. In those instances,
the words “claim” and “claims” are used as nouns (e.g.,
requiring that a claim be made by the Port Authority), not as
verbs (e.g., requiring an act or error claimed against an
employee). Had the London Companies used the noun
“claim” instead of the verb “claimed” in this provision, we
quite agree that the definition of Public Officials Liability
might mean what they suggest it means—liability resulting
solely from claims made against an employee. But they did
not use that language.
16 Toledo-Lucas County, et al. v.
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No. 02-4120
The London Companies also err in suggesting that this
interpretation creates a form of coverage that sweeps so
broadly that it would make the other forms of coverage under
the Policy (e.g., Bodily Injury and Personal Injury)
unnecessary because any allegation against an entity is
inherently one based upon the conduct of its individual
employees. This argument misses the mark because the other
provisions do not contain the limitation that the Public
Officials Liability provision has—namely, wrongdoing
alleged against an employee.
In the end, while we believe this interpretation represents
the better reading of the policy, the best that can be said of the
defendant insurance companies’ contrary arguments is that
they raise an ambiguity on the point. And under those
circumstances, as noted above, Ohio law requires us to apply
the ambiguity-default canon of construction and to give the
Port Authority the benefit of the doubt. Public Officials
Liability coverage, accordingly, does not necessarily require
a claim or demand to be made against an individual
employee; a claim or demand against the Port Authority for
damages on account of an individual employee’s wrongdoing
solely in his or her capacity as a Port Authority employee will
suffice.
III.
The parties have briefed several other issues that the district
court did not have an opportunity to address in view of the
court’s ruling that the Port Authority is not an Assured under
the Policy and that a lawsuit or demand made against an
individual employee is a precondition of coverage. The
district court did not decide whether the statute of limitations
bars any of these claims; whether the Kagy lawsuits provided
notice of a Public Officials Liability claim before the effective
date of the Policy, thus precluding coverage under the Policy;
and whether the Navigators Group owes coverage to the Port
Authority. And what the district court elsewhere did

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decide—that the defendants were entitled to summary
judgment on the bad-faith claims and that Coregis lacked
standing to bring a bad-faith claim against the London
Companies—was premised on the court’s initial ruling that
the Public Officials Liability portion of the Policy did not
insure the Port Authority. Since we disagree with that
premise and since the district court did not reach the other
issues, we leave it to the district court to address these
questions in the first instance.
IV.
For the foregoing reasons, we reverse the district court’s
judgment and remand the case for further proceedings
consistent with this opinion.

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