The University of Findlay can continue to seek about $325,000 from an insurance company for the costs to replace nearly 75 percent of the grass on campus that was killed when the wrong pesticide was used, and Ohio appeals court ruled.

USA Lawns, Inc. and its former president Brad Martin paid the university $250,000 in cash and labor after its insurer denied a claim to cover the April 2014 mishap. Martin argued his company entered into a settlement after the claim denial, and has objected to the university’s lawsuit against the company as a tactic to attempt to collect more money from the insurance company.

The Third District Court of Appeals last week affirmed a judgment by the Hancock County Common Pleas Court awarding the university $324,077. The court recognized that the university and USA Lawns entered into a “Covenant Not to Execute Judgment in Excess of Insurance Proceeds,” and that any money recouped by the school would have to come neither from USA Lawns nor Martin, but from Celina Mutual Insurance Company. Martin argued the agreement made the lawsuit pointless because Celina already has refused to cover USA Lawns.

Blades Destroyed by Bullseye
In its brief filed with the Third District, the university explained that USA Lawns was hired to do a two-step pesticide application on campus grass in the spring. The company first put down Dimension, a crab grass control pesticide, which was part of the plan. The second application was a pesticide called Battleship that killed weeds, but not grass. Instead, the company’s pesticide applicator mistakenly used Bullseye, which kills both weeds and grass. The university claimed that 300,000 square feet of grass was killed, reporting at the time that it represented about 75 percent of the grass on campus.

The university and Martin discussed a plan to address the school’s concern that it needed the grass replaced very soon because of upcoming graduation ceremonies, and late spring was the height of its student recruitment operations. The use of Dimension hampered the ability to use grass seed to replace the lawns and that new grass would come up “in little sprouts to form a little green haze” and that it would not be until the fall that grass would return to it full thickness.

Dimension would not impact the placement of more expensive sod, which Martin suggested in the denied claim by Celina Insurance.

Repair Agreement Wilts
In June 2014, the university and USA Lawns entered their covenant. Martin supervised the repairs of the grounds and part of the $250,000 the company was to provide to the school included $51,000 in labor. USA Lawns also paid $68,000 to another landscaping firm to do repairs, and paid $130,000 the school to cover part of its costs. The university stated it spent $324,077 of its own money to replace the grass.

As part of the agreement, USA Lawns agreed that the university would file a lawsuit against the company with the understanding that the intent was to seek damages from the company’s insurer. USA agreed to cooperate with the university. The agreement additionally stated that the school could attempt to sue the insurance company directly if it wished, and that any judgment the university would win against USA would be limited to the collection of insurance proceeds.

When the university filed its lawsuit as stated in the agreement, USA Lawns objected. The company asked for summary judgment in its favor, arguing that almost a year after the agreement, the university knew that Celina Insurance would not pay, and that even if it won a judgment against USA Lawns there is nothing to collect. The trial court denied the company’s request, allowing the university to pursue its nearly $325,000 in damages. USA Lawns appealed to the Third District.

Sodding Costs Sought
Writing for the Third District, Judge John R. Willamowski noted that in the covenant USA Lawns acknowledged that it is aware that under Ohio law, the only way the university can seek reimbursement from Celina Insurance is by suing the company. Only after a judgment is entered against a company can the university pursue the insurance company with legal action, he explained.

Judge Willamowski also rejected the company’s argument that covenant was an “accord and satisfaction” that established the university could seek no further damages from USA Lawns after it contributed $250,000 in cash and labor to the repair cost. He wrote the covenant included a provision to file a lawsuit to seek the insurance proceeds.

“Since the agreement included the lawsuit, the Appellants cannot claim that the suit violates the agreement,” the Third District opinion stated.

At the trial, Martin testified that the only way for the university to replace its grass to meet its needs was to use sod. Collectively the company and the school spent about $444,000 to do the repair. The Third District concluded that while the covenant may prevent the USA Lawns from having to pay any more, it cannot stop the university from seeking the money from the insurance company.

The Third District remanded the case to the common pleas court for further proceedings.
Judges William R. Zimmerman and Stephen R. Shaw concurred in the decision.

Univ. of Findlay v. Martin, 2017-Ohio-7016.

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