## Facts

- Kimberly Neal-Pettit was injured in a March 27, 2003 automobile collision and sued Linda Lahman for personal injuries.
- The complaint alleged Lahman, intoxicated and fleeing an earlier collision, struck Neal-Pettit’s vehicle.
- A jury awarded Neal-Pettit $113,800 in compensatory damages and $75,000 in punitive damages.
- Based on a finding of malice, the jury also awarded attorney’s fees; the trial court set fees at $46,825 and awarded $10,084.96 in litigation expenses.
- Lahman was insured under an Allstate automobile liability policy covering amounts the insured became legally obligated to pay as damages because of bodily injury, but excluding “punitive or exemplary damages, fines or penalties.”
- Allstate paid compensatory damages, interest, and expenses, but refused to pay punitive damages and attorney’s fees.
- Neal-Pettit filed a supplemental complaint against Allstate seeking payment of the attorney-fee award.

## Issues

1. Whether an attorney-fee award assessed against an insured in a bodily-injury tort action, awarded in conjunction with punitive damages, is covered as “damages because of bodily injury” under the policy.
2. Whether the policy exclusion for “punitive or exemplary damages, fines or penalties” also excludes attorney’s fees awarded alongside punitive damages.
3. Whether Ohio public policy bars insurance coverage for attorney’s fees awarded solely as a result of an award of punitive damages.

## Decision

- The Supreme Court of Ohio affirmed the court of appeals.
- Attorney’s fees awarded in connection with punitive damages are distinct from punitive damages.
- The Allstate policy’s coverage for “damages because of bodily injury” included the attorney-fee award assessed against the insured in the bodily-injury action.
- The exclusion for “punitive or exemplary damages, fines or penalties” did not bar coverage for attorney’s fees because the policy did not expressly exclude them.
- Ohio public policy prohibiting indemnification for punitive damages did not prohibit insurance coverage for the related attorney-fee award.

## Legal Principles

- Attorney’s fees awarded due to a defendant’s malice in a tort action are treated as compensatory and distinct from punitive damages, even when fees are awarded because punitive damages are warranted.
- Liability policy language covering amounts the insured is legally obligated to pay “as damages because of bodily injury” may encompass consequential financial obligations arising from the bodily injury, including an attorney-fee award payable to the injured plaintiff.
- An exclusion for “punitive or exemplary damages, fines or penalties” does not exclude attorney’s fees absent clear policy language expressly doing so; ambiguities are construed against the insurer.
- Public policy that bars insurance coverage for punitive damages does not automatically extend to attorney’s fees awarded in connection with punitive damages where the punitive damages themselves remain uncovered.

## Conclusion

The Ohio Supreme Court held that an auto insurer could be required to pay an attorney-fee award entered against its insured in a bodily-injury action, even when the fees were awarded in connection with punitive damages, because the fees are compensatory and not excluded by policy language or Ohio public policy.


Neal-Pettit v. Lahman, 125 Ohio St. 3d 327 (Ohio 2010)