Ohio’s appeals court just ruled insurers can’t always bring out-of-state construction firms into local courts – jurisdiction matters, even in big coverage fights.
An Ohio appeals court has weighed in on a jurisdictional tug-of-war involving a construction accident, multiple companies, and a web of insurance coverage questions. The decision, handed down on August 11, 2025, offers a lesson for insurers and construction firms navigating projects that cross state lines.
The story starts in New York, where Horseheads Real Property, LLC, a Delaware-based property owner, hired Clouse Construction Corp. from Ohio to build a massive warehouse. Clouse, looking to protect itself, secured insurance from Cincinnati Insurance Company (CIC), also based in Ohio. The project soon became a multi-party affair, with CGreen LLC managing construction and Quantum Impact Steel handling the warehouse’s steelwork.
Trouble struck in July 2022, when a Quantum employee was injured after part of the building collapsed. Lawsuits quickly followed in New York, with the injured worker suing Horseheads, Clouse, and another contractor, LCP Group, Inc. Horseheads also took legal action against Clouse, claiming negligence and seeking to be reimbursed for any losses.
Back in Ohio, CIC decided to get ahead of the claims and filed a lawsuit in Seneca County, aiming to clarify its insurance obligations. CIC wanted a ruling that it didn’t have to cover certain parties, including Ohio Logistics, Ltd. and Horseheads, under its policies. The insurer’s argument centered on whether these companies qualified as “insureds” or “additional insureds” under the terms of the policy, a common sticking point in construction insurance disputes.
But not everyone was keen to fight this battle in Ohio. CGreen and LCP, both based in New York, pushed back, arguing they had no real business presence in Ohio and shouldn’t be dragged into court there. They pointed out that their only connection to Ohio was through Clouse, and all their work took place in New York.
The Ohio trial court agreed, ruling that simply working with an Ohio contractor on a New York project wasn’t enough to justify an Ohio lawsuit. Routine business communications and payments from Ohio didn’t tip the scales, especially since the contracts involved said that any disputes should be handled in New York courts. The court dismissed CIC’s claims against CGreen and LCP.
CIC appealed, hoping to convince the higher court that any business dealings with an Ohio company should be enough to establish jurisdiction. The appellate judges, however, saw it differently. On August 11, they affirmed the lower court’s decision, emphasizing that CGreen and LCP’s roles were limited to the New York project and that they hadn’t chosen to do business in Ohio. The fact that the contracts called for disputes to be settled in New York only reinforced their position.
For CIC, this means the company can’t pursue its declaratory judgment action against CGreen and LCP in Ohio. The case now heads back to the trial court to address the remaining parties who didn’t challenge the court’s authority.
The ruling serves as a timely reminder for insurers and commercial construction firms: when projects cross state lines, the details in contracts and insurance policies are crucial. Understanding where coverage disputes can be litigated – and the limits of state court jurisdiction – can make all the difference when claims arise. For insurance professionals, this case underscores the importance of clear policy language and careful attention to jurisdictional issues in multi-state operations.
