COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 73584 CHIROPRACTIC CLINIC OF : SOLON, INC. : : JOURNAL ENTRY PLAINTIFF-APPELLANT : : AND v. : : OPINION NATIONAL CHIROPRACTIC : MUTUAL INSURANCE CO., : ET AL. : : DEFENDANTS-APPELLEES : DATE OF ANNOUNCEMENT OF DECISION: DECEMBER 10, 1998 CHARACTER OF PROCEEDING: Civil appeal from Common Pleas Court, No. CV-327440. JUDGMENT: AFFIRMED. DATE OF JOURNALIZATION: APPEARANCES: For Plaintiff-Appellant: Dennis P. Zapka, Esq. Maguire, Schneider, Zapka & Leuchtag 250 Spectrum Building 6060 Rockside Woods Boulevard Cleveland, OH 44131-7300 For Defendants-Appellees Alan T. Radnor, Esq. National Chiropractic William J. Pohlman, Esq. Mutual Insurance Company: Vorys, Sater, Seymour & Pease 52 East Gay Street P.O. Box 1008 Columbus, OH 43216-1008 -2- For Defendants-Appellees Walter R. Matchinga, Esq. Buckeye Union Insurance Joseph R. Tira, Esq. Company and Continental Quandt, Giffels & Buck Co., Insurance Company: L.P.A. 800 Leader Builing 526 Superior Avenue, East Cleveland, OH 44114-1460 -3- TIMOTHY E. McMONAGLE, P.J.: Plaintiff-appellant Chiropractic Clinic of Solon ( appellant ) appeals the judgment of the Cuyahoga County Court of Common Pleas wherein the court denied appellant's motion for summary judgment on its declaratory request and its claim of bad faith and, further, granted judgment in favor of defendants-appellees National Chiropractic Mutual Insurance Co. ( NCMIC ) and Buckeye Union Insurance Company/Continental Insurance Co. ( Buckeye/ Continental ). For the reasons stated below, we affirm the decision of the trial court. This action follows an underlying complaint on account filed in Bedford Municipal Court on July 21, 1991 by the Chiropractic Clinic of Solon against Dale Kutsko. Kutsko answered and asserted a counterclaim against the Clinic. The Clinic tendered the defense of the counterclaim to its insurers NCMIC and Buckeye/Continental. Each appellee refused to accept the defense of the asserted counterclaim on the basis that the substance of the counterclaim was not included within the policy coverages. In the underlying action, the trial court granted judgment on the pleadings and dismissed Kutsko's counterclaim. That decision by the trial court was upheld by this court of appeals in Chiropractic Clinic of Solon v. Kutsko (1994), 92 Ohio App.3d 608. The underlying action proceeded to trial resulting in judgment for the Clinic on its claim on account against Kutsko. This court of appeals affirmed the decision of the trial court in Chiropractic Clinic of Solon v. Kutsko (Dec. 5, 1996), Cuyahoga App. No. 70119, unreported. -4- On January 24, 1997, appellant initiated the within matter by filing a complaint seeking a judicial declaration that both NCMIC and Buckeye/Continental were obligated to provide a defense for the counterclaim asserted by Kutsko against it pursuant to the terms of their policies. Appellant further sought punitive damages from these insurers for the bad faith demonstrated by their refusal to provide a defense to the Kutsko counterclaim. After full briefing on the issues, the trial court denied appellant's motion for summary judgment and declared that neither appellee insurer NCMIC nor Buckeye/Continental had a duty to defend appellant on the Kutsko counterclaim as the counterclaim was neither potentially nor arguably within either policy's coverage. The trial court further granted summary judgment in favor of appellees on all appellant's claims against them. Appellant timely appeals this judgment of the trial court and advances six assignments of error for our review. I. THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT TO THE APPELLEE, NATIONAL CHIROPRACTIC MUTUAL INSURANCE COMPANY, AS TO THE COVERAGE ISSUE. II. THE TRIAL COURT ERRED IN DENYING APPELLANT'S MOTION FOR SUMMARY JUDGMENT AS TO THE COVERAGE CLAIMS AGAINST NATIONAL CHIROPRACTIC MUTUAL INSURANCE COMPANY. III. THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT TO THE APPELLEES, BUCKEYE UNION INSURANCE COMPANY AND CONTINENTAL INSURANCE COMPANY, AS TO THE COVERAGE ISSUE. IV. THE TRIAL COURT ERRED IN DENYING APPELLANT'S MOTION FOR SUMMARY JUDGMENT AS TO THE COVERAGE CLAIMS AGAINST BUCKEYE -5- UNION INSURANCE COMPANY AND CONTINENTAL INSURANCE COMPANY. V. THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT TO APPELLEE, NATIONAL CHIRO- PRACTIC MUTUAL INSURANCE COMPANY, AS TO THE BAD FAITH CLAIM. VI. THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT TO APPELLEES, BUCKEYE UNION INSURANCE COMPANY AND CONTINENTAL INSURANCE COMPANY, AS TO THE BAD FAITH CLAIM. In its first four assignments of error, appellant essentially contends that the trial court erred in its declaration that each appellee owed no duty to defend appellant in its defense of the Kutsko counterclaim by finding that the counterclaim did not contain a claim which was potentially or arguably within coverage of either policy. Specifically, appellant contends that the counterclaim asserted against it by Kutsko arguably states a claim for chiropractic malpractice which is potentially covered by the medical malpractice policy issued to it by appellee NCMIC and, further, appellant contends that the Kutsko counterclaim states two causes of action against it which are potentially or arguably within the coverage of its general liability policy issued by appellee Buckeye/Continental, a claim for malicious prosecution and liable and/or slander. Moreover, appellant contends that the trial court erred in granting summary judgment pursuant to Civ.R. 56(C) in favor of appellees on its claim for bad faith as against appellees for their failure to defend. The issues in this matter constitute questions of law and as such our review is de novo. This court reviews the lower court's -6- grant of summary judgment de novo. Brown v. Scioto Bd. of Commrs. (1993), 87 Ohio App.3d 704. An appellate court applies the same test as a trial court which test is set forth in Civ.R. 56(C) which specifically provides that before summary judgment may be granted it must be determined that: (1) No genuine issue as to any material fact remains to be litigated; (2) the moving party is entitled to judgment as a matter of law; and, (3) it appears from the evidence that reasonable minds can come to but one conclusion, and viewing such evidence most strongly in favor of the party against whom the motion for summary judgment is made, that conclusion is adverse to that party. Temple v. Wean United Inc. (1977), 50 Ohio St.2d 317, 327. Moreover, it is well settled that the party seeking summary judgment bears the burden of showing that no genuine issue of material fact exists for trial. Celotex Corp. v. Catrett (1987), 477 U.S. 317, 330; Dresher v. Burt (1996), 75 Ohio St.3d 280. Doubts must be resolved in favor of the nonmoving party. Murphy v. Reynoldsburg (1992), 65 Ohio St.3d 356, 358-359. In accordance with Civ.R. 56(E), a nonmovant may not rest on the mere allegations or denials of his pleading but must set forth specific facts showing there is a genuine issue for trial. Chaney v. Clark Cty. Agricultural Soc. (1993), 90 Ohio App.3d 421. The nonmoving party must produce evidence on any issue for which that party bears the burden of production at trial. Dresher, supra; Celotex, supra at 322. The question of whether an insurer has a duty to defend is a question of law. Heritage Mutual Ins. Co. v. Ricart Ford, Inc. -7- (1995), 105 Ohio App.3d 261, 266. Therefore, we review the decision of the trial court de novo. Harris, Joliff & Michel, Inc. v. Motorists Mut. Ins. Co. (1970), 21 Ohio App.2d 81. The test for an insurer's duty to defend is the scope of the allegations of the complaint against the insured; the duty exists if the complaint brings the action within coverage regardless of the ultimate outcome. Motorist Mutual Ins. Co. v. Trainor (1973), 33 Ohio St.2d 41, paragraph 2 of the syllabus; Ins. Co. of N. Am. v. Travelers Ins. Co. (1997), 118 Ohio App.3d 302, 312. Further, an insurer has a duty to defend if the allegations do state a claim which is potentially or arguably within the policy coverage. Sanderson v. Ohio Edison Co. (1994), 69 Ohio St.3d 582, 585-586, quoting Willoughby Hills v. Cincinnati Ins. Co. (1984), 9 Ohio St.3d 177, 180. Conversely, an insurer is not obligated to defend where a complaint contains no allegation that states a claim potentially or arguably within the policy coverage. Wedge Products, Inc. v. Hartford Equity Sales Co. (1987), 31 Ohio St.3d 65, 68. Finally, as in the policies sub judice, the duty to defend can be made even more expansive by the insurer's promise in the policy to defend the insured even against claims which are groundless, false, or fraudulent but would be insured if proven true. Ohio Casualty Ins. Co. v. Joseph Sylvester Construction Company(Sept. 30, 1991) Trumbull App. No. 90-T-4439, unreported at 11. However, a policy holder can succeed on a bad faith claim only if it can prove that the insurer, in denying a request for coverage, lacked reasonable justification for its position. See -8- Zoppo v. Homestead Ins. Co. (1994), 71 Ohio St.3d 552, paragraph one of the syllabus. The central question in the matter before us is whether the Kutsko counterclaim contains claims which are potentially or arguably within the insurance policy coverages thereby requiring a duty to defend of either appellee. The Kutsko counterclaim against appellant alleged in its entirety as follows: Defendant, Dale Kutsko, reavers and realleges all of the affirmative allegations and averments contained in his foregoing Answer to the extent that same are applicable herein and for their (sic) Counterclaim against Plaintiff says that the treatment for which Plaintiff requests payment was not medically necessary and that Plaintiff's actions in charging for said treatment and thereafter filing suit to collect same is an unfair or deceptive consumer sales practice as defined by Ohio Revised code Section 1345.02 and an unconscionable consumer sales practice as defined in Ohio Revised code Section 1345.03. Kutsko, in his prayer for relief on his counterclaim, prayed that he *** be awarded judgment on his Counterclaim in the amount of three (3) times his actual damages or Two Hundred Dollars ($200.00) whichever is greater, plus reasonable attorney fees and costs incurred in pursing (sic) this action. Appellant argues that this counterclaim alleges two separate causes of action: 1) treatment for which appellant requested payment was not medically necessary and 2) appellant's actions for charging for said treatment and thereafter filing suit to collect same constituted an unfair or deceptive consumer sales practice in violation of the Consumer Sales Practices Act. Appellant argues -9- that the crux of Kutsko's counterclaim against it was not limited to a commercial dispute but it rather encompassed potential claims for medical malpractice, malicious prosecution, and libel and/or slander, as well as violations of the Consumer Sales Practices Act. In the underlying action, this court reviewed the Kutsko counterclaim characterizing the claim as follows: *** [D]efendant set forth a counterclaim, seeking damages pursuant to the CSPA. Therein, it was alleged that the treatment for which plaintiff requested payment was not medically necessary, and that plaintiff's actions in charging for said treatment and thereafter filing suit to collect constituted an unfair or deceptive consumer sales practice. Chiropractic Clinic of Solon v. Kutsko (1994), 92 Ohio App.3d 608, 610. In determining whether the trial court properly dismissed the counterclaim on the pleadings, our court found that as the Consumer Sales Practices Act did not apply to this transaction, the trial court did not err in dismissing the Kutsko counterclaim for alleged violation of the Consumer Sales Practices Act. In 1994, the counterclaim was appropriately dismissed by the trial court and that dismissal was affirmed by this court without any further consideration that potential claims for chiropractic malpractice, malicious prosecution, libel and/or slander remained to be litigated. A plain reading of Kutsko's counterclaim and his prayer for relief counterclaim lead us to conclude now, as this court has concluded before, that Kutsko asserted only a single claim against -10- appellant, one for a violation of the Consumer Sales Practices Act pursuant to R.C. 1345.01 et seq, constituting a commercial dispute. Appellant concedes that coverage for a violation of Consumer Sales Practices Act is not encompassed by the policies issued by NCMIC or Buckeye/Continental. NCMIC provided chiropractic malpractice coverage to appellant pursuant to a policy which provides in the Coverage Agreement in pertinent part as follows: The company will pay on behalf of the insured, all sums within the applicable limits of its liability, which the insured shall become legally obligated to pay as damages because of injury arising out of the rendering of, or failure to render, during the policy period, professional services in the practice of the chiropractic profession ***. The defense clause provides that NCMIC: *** shall have the right and duty to defend any suit against the insured seeking damages on account of such injury, even if the allegations of the suit are groundless, false or fraudulent ***. Finally, the policy of appellee NCMIC defines injury as bodily injury, sickness, or disease sustained by any one person but shall not include claims of false imprisonment, false arrest, libel, slander, defamation, invasion of privacy, sexual assault, or impropriety ***. Appellant advances numerous theories by which he asserts that the Kutsko counterclaim, although inartfully drafted, encompasses allegations sounding in chiropractic malpractice for bodily injury or for a derivative claim for relief. Appellant asserts that it is beyond cavil that an allegation that services were not medically necessary falls within the claim arising out of the failure to -11- render professional services. We do not find it so. Upon a careful review of the record and review of the arguments made by appellant, we reject these theories and conclude that the Kutsko counterclaim does not reveal any allegation which can be reasonably construed to encompass a bodily injury due to the rendering of or failure to render professional chiropractic services. Accordingly, we find that the trial court properly found that the Kutsko counterclaim neither potentially nor arguably falls within the scope of the NCMIC insurance policy coverage and, therefore, NCMIC had no duty to defend appellant on the counterclaim brought by Kutsko against it. Appellant's first and second assigned errors are without merit. Further, because no coverage potentially or arguably existed here and NCMIC had no duty to provide appellant a defense, NCMIC had a reasonable justification to deny a defense of the counterclaim. As such, we find no issue of fact remained and the trial court did not err in granting summary judgment to appellee NCMIC on appellant's claim of bad faith against it. Appellant's fifth assigned error is without merit. Appellee Buckeye/Continental Insurance provided general liability insurance coverage to appellant pursuant to the following provisions pertinent to this appeal: Defending claims and lawsuits. If a claim is made or a lawsuit is brought which is covered by this policy, we will defend the claim or lawsuit, even if the claim or lawsuit proves to be groundless, false or fraudulent. In defending a claim or suit, we may conduct any investigations we consider necessary, and make any settlements we consider advisable. -12- * * * Bodily Injury and Property Damage. We will pay any amounts up to your Limit of coverage for which you or anyone else covered under your Liability Coverages becomes liable as a result of bodily injury or property damage that is caused by an accident. *** Appellant specifically relies on the section of the policy which provides: Personal Damages. We will pay any amounts, up to your Limit of Coverage, for which you or anyone else covered under your Liability Coverages becomes liable as a result of any of the following offense committed in the course of your business and while the policy is in effect: the false arrest, detention or imprisonment of anyone. malicious prosecution. oral or written publication of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services, unless the libel, slander or disparagement was made in the course of your adver- tising, broadcasting, publishing or telecasting activities. Appellant argues that the Kutsko counterclaim encompasses inappropriate conduct on the part of appellant in its establishment of the debt and its filing of a suit to collect the debt and, as such, amounts to a claim of abuse of process and is covered within the coverage of a claim of malicious prosecution. Moreover, appellant asserts that the scope of the allegation in the counterclaim is one made by Kutsko for libel and slander on the part of appellant for creating inaccurate credit reports against him. We reject appellant's characterization of the counterclaim -13- and reassert that, as we determined above, the Kutsko counterclaim, whether artfully or inartfully drafted, set forth only a single claim for damages, that claim brought pursuant to the Consumer Sales Practices Act as set forth in R.C. 1345.01 et seq. A violation of the Consumer Sales Practices Act does not constitute a claim for either bodily injury or property damage. Moreover, the Kutsko counterclaim fails to comport with the requirements for asserting a claim of malicious civil prosecution. Finally, we find the counterclaim fails to comport with the requirements for asserting a claim for defamation encompassing either libel and/or slander. Thus, we conclude that the allegations of the Kutsko counterclaim are outside the scope of coverage of the Buckeye/Continental insurance policy. Accordingly, we find that the trial court properly determined that the policy of appellee Buckeye/Continental does not require a defense of the allegations contained in the Kutsko counterclaim. Appellant's third and fourth assignments of error are without merit. Further, because appellee Buckeye/Continental had reasonable justificationto deny defense of the counterclaim, we find that no issue of fact remains on appellant's claim of bad faith against Buckeye/Continental and the trial court did not err in granting summary judgment in its favor. Accordingly, we find appellant's sixth assigned error to be without merit. Judgment affirmed. -14- It is ordered that appellees recover of appellant their costs herein taxed. The court finds there were reasonable grounds for this appeal. It is ordered that a special mandate issue out of this court directing the Common Pleas Court to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. TIMOTHY E. McMONAGLE PRESIDING JUDGE PATTON, J. and SPELLACY, J., CONCUR. N.B. This entry is an announcement of the court's decision. See App.R. 22(D) and 26(A); Loc.App.R. 22(B), 22(D) and 26(A); Loc.App.R. 27. This decision will be journalized and will become the judgment and order of the court pursuant to App.R. 22(E) unless a motion for reconsideration with supporting brief, per App.R. 26(A), is filed within ten (10) days of the announcement of the court's decision. The time period for review by the Supreme Court of Ohio shall begin to run upon the journalization of this court's .