MEMORANDUM OF OPINION AND ORDER

[Resolving ECF Nos. 53, 55, 56]

BENITA Y. PEARSON, District Judge.

Pending are cross-motions for summary judgment filed by Defendants Roderick Linton Belfance, LLP ("RLB") and Kristopher Immel (collectively, "RLB Defendants") (ECF No. 53), Plaintiff Wesco Insurance Company ("Wesco") (ECF No. 55), and Defendants Jason D. Wallace and Daniel R. Bache (ECF No. 56).

Wesco initiated this action for a declaratory judgment against Defendants RLB, Immel, Wallace, and Bache to determine whether Wesco had a duty to defend or indemnify Defendants in several actions filed against them under the Individuals with Disabilities Education Act ("IDEA") fee-shifting provision, 20 U.S.C. § 1415(i)(3)(B)(II) and (III).1 The parties have filed memoranda in opposition. ECF Nos. 58, 59, 60, and 61. They have also filed replies. ECF Nos. 62, 63, and 64. The Court has been advised, having reviewed the record, the parties' briefs, and applicable law. For the reasons that follow, Plaintiff's motion, ECF No. 55, is granted, and Defendants RLB, Immel, Wallace, and Bache's motions, ECF Nos. 53 and 56, are denied.

I. Factual and Procedural Background2

Wesco issued Defendant RLB two Lawyers Professional Liability insurance policies that covered individual Defendants Immel, Wallace, and Bache who were employed by RLB as employees or independent contractors for certain compensable injuries during the insured periods. ECF Nos. 51-8, 51-9. The policies at issue in the present action were valid from June 14, 2015, to June 14, 2016 (the "2015 Policy"), and June 14, 2016, to June 14, 2017 (the "2016 Policy") (hereinafter individually a "Policy" or collectively the "Policies"). The Policies provide, in part:

ECF Nos. 51-8 at PageID#: 1291; 51-9 at PageID#: 1316 (emphasis added). The Policies define "damages" to mean "judgments, awards and settlement if negotiated with the assistance and approval of the Company," and they expressly exclude "sanctions" from the definition. ECF No. 51-8 at PageID#: 1292-93; 51-9 at PageID#: 1317-18.

The Akron Board of Education (the "Akron Board"), Nordonia Hills City School District Board of Education (the "Nordonia Hills Board"), Solon City School District Board of Education (the "Solon Board"), and Cleveland Heights University Heights City School District Board of Education (the "Cleveland Heights Board") (collectively the "School Districts") filed separate complaints for recovery of fees pursuant to IDEA, 20 U.S.C. § 1415(i)(3)(B)(II) and (III) (the "IDEA fee-shifting provision"), against Defendants RLB, Immel, Wallace, and Bache, alleging that Defendants filed IDEA due process complaints that were frivolous, unreasonable, and without foundation, and that the claims asserted therein were based on factually erroneous allegations.3 ECF No. 55-1 at PageID#: 1551-58. In turn, Defendants RLB, Immel, Wallace, and Bache sought for Wesco to provide a defense to the School Districts' lawsuits (and indemnification if necessary) pursuant to the 2015 and 2016 Policies.4 5 See ECF Nos. 53 and 56. They also argue that Wesco's failure to defend and indemnify is a breach of contract.

In short, three motions for summary judgment are pending. Wesco asks for a declaration that it is not obligated to defend and indemnify any of the Defendants. ECF No. 55. Defendants RLB and Immel seek the opposite declaration against Wesco as to the Akron and Solon lawsuits6 and to recover from Wesco for an alleged breach of their insurance contract. ECF No. 53. Defendants Wallace and Bache seek a declaration insisting that Wesco defend and indemnify them as to all remaining School District lawsuits and to recover from Wesco for an alleged breach of their insurance contract. ECF No. 56.7

II. Standard of Review

Summary judgment is appropriately granted when the pleadings, the discovery and disclosure materials on file, and any affidavits show "that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. Pro. 56(a); see also Johnson v. Karnes, 398 F.3d 868, 873 (6th Cir. 2005). The moving party is not required to file affidavits or other similar materials negating a claim on which its opponent bears the burden of proof, so long as the movant relies upon the absence of the essential element in the pleadings, depositions, answers to interrogatories, and admissions on file. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The moving party must "show that the non-moving party has failed to establish an essential element of his case upon which he would bear the ultimate burden of proof at trial." Guarino v. Brookfield Twp. Trustees., 980 F.2d 399, 403 (6th Cir. 1992).

Once the movant makes a properly supported motion, the burden shifts to the non-moving party to demonstrate the existence of a genuine dispute. An opposing party may not simply rely on its pleadings; rather, it must "produce evidence that results in a conflict of material fact to be resolved by a jury." Cox v. Ky. Dep't of Transp., 53 F.3d 146, 150 (6th Cir. 1995). To defeat the motion, the non-moving party must "show that there is doubt as to the material facts and that the record, taken as a whole, does not lead to a judgment for the movant." Guarino, 980 F.2d at 403. In reviewing a motion for summary judgment, the Court views the evidence in the light most favorable to the non-moving party when deciding whether a genuine issue of material fact exists. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88 (1986); Adickes v. S.H. Kress & Co., 398 U.S. 144 (1970).

"The mere existence of some factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment. . . ." Scott v. Harris, 550 U.S. 372, 380 (2007) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986)). The fact under dispute must be "material," and the dispute itself must be "genuine." A fact is "material" only if its resolution will affect the outcome of the lawsuit. Scott, 550 U.S. at 380. In determining whether a factual issue is "genuine," the Court assesses whether the evidence is such that a reasonable jury could find that the non-moving party is entitled to a verdict. Id. ("[Summary judgment] will not lie . . . if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.")

This standard of review does not differ when reviewing cross-motions for summary judgment rather than a motion filed by only one party. U.S. SEC v. Sierra Brokerage Servs., Inc., 712 F.3d 321, 327 (6th Cir. 2013).

III. Law and Analysis

The Court first considers whether the recovery sought by the School Districts constitutes "damages" under the Policies. Put briefly, if the attorney-fee recovery sought by the School Districts is appropriately classified as "damages," then it is expressly contemplated by the insurance Policies. If the attorney-fee recovery sought by the School Districts is better classified as "sanctions," then the Policies expressly exclude it from coverage.

A. The IDEA Fee-Shifting Provision

Under IDEA, a school district can recover attorney fees and costs from an attorney who files a complaint that is "frivolous, unreasonable, or without foundation" or "continued to litigate after the litigation clearly became frivolous, unreasonable, or without foundation."8 20 U.S.C. § 1415(i)(3)(B)(i)(II). It can also recover attorney fees and costs from the student's parents or from their attorney if the suit was presented for "any improper purpose, such as to harass, to cause unnecessary delay, or to needlessly increase the cost of litigation." Id. § 1415(i)(3)(B)(i)(III).

"IDEA's fee-shifting provision is to be interpreted consistent with 42 U.S.C. § 1988, the attorney-fees provision for civil rights actions." Wikol ex rel Wikol v. Birmingham Pub. Sch. Bd. of Educ., 360 F.3d 604, 611 (6th Cir. 2004) (citing Phelan v. Bell, 8 F.3d 369, 373 (6th Cir. 1993). It is well settled that, under § 1988, a defendant may recover attorney fees from a plaintiff only when the suit was "frivolous, unreasonable, or without foundation, even though not brought in subjective bad faith." Riddle v. Egensperger, 266 F.3d 542, 547 (6th Cir. 2001) (citing Wayne v. Village of Sebring, 36 F.3d 517, 530 (6th Cir. 1994). "An award of attorney's fees against a losing plaintiff in a civil rights action is an extreme sanction, and must be limited to truly egregious cases of misconduct." Riddle, 266 F.3d at 547 (internal quotation omitted) (emphasis added).

Other federal courts have concluded that fee-shifting under IDEA is a sanction. The Ninth Circuit in R.P. ex rel. C.P. v. Prescott Unified Sch. Dist. analogized the IDEA fee-shifting provision to Rule 11: "The legislative history [of IDEA] . . . reveals that section 1415(i)(3)(B)(i)(III) `comes from another well-established Federal law: Federal Rule of Civil Procedure 11.'" 631 F.3d 1117, 1131 (9th Cir. 2011). Rule 11 "subject[s] parties to sanction for filing pleadings with an `improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation.'" Id. In a different case, the Ninth Circuit described IDEA fee-shifting as an "authorized sanction[]" that "penalizes parents or their attorney. . . ." Anchorage Sch. Dist. v. M.P., 689 F.3d 1047, 1057 (9th Cir. 2012). District courts for the District of Columbia and the District of Colorado expressly describe IDEA fee shifting as a sanction. Dist. of Columbia v. Nahass, 699 F.Supp.2d 175, 183 (D.D.C. 2010) ("acted in a sanctionable manner under 20 U.S.C. § 1415(i)(3)(B)(i)"); Smith v. Cheyenne Mountain Sch. Dist. 12, 2017 WL 2791415, at *20 (D. Colo. May 11, 2017) ("IDEA's sanction provisions").

A "sanction" is "a penalty or coercive measure that results from failure to comply with a law, rule, or order." Black's Law Dictionary (10th ed. 2014). See ECF Nos. 53-1 at PageID#: 1350-51 ("[C]ourts interpreting similar insurance provisions have defined `sanctions' as a `penalty or punishment provided as a means of enforcing obedience to a law."); 59 at PageID#: 1645 ("The term `sanction' has a clear legal meaning under Ohio law as a `penalty or coercive measure that results from failure to comply with a law, rule, or order.'"). The IDEA fee-shifting provision fits comfortably inside that definition. The language and function of 20 U.S.C. § 1415(i)(3)(B)(i)(II) and (III) mirror fee-shifting under § 1988 and Rule 11, both of which are undoubtedly "sanctions."

The Court concludes that fee-shifting under 20 U.S.C. § 1415(i)(3)(B)(i)(II) and (III) is a sanctioning operation. Whether that classification bears on Wesco's responsibility to defend and indemnify Defendants is addressed below.

B. Duty to Defend and Indemnify

The 2015 and 2016 Policies provide that Wesco is obligated to pay those sums that become Defendants "damages," and that "damages" means "judgments, awards and settlement." "Damages" expressly excludes "sanctions." ECF Nos. 55-1 at PageID#: 1559 ("Damages do not include . . . civil or criminal fines [or] sanctions. . . ."); 51-8 at PageID#: 1293; 51-9 at PageID#: 1318. The Sixth Circuit has held that an insurer is free to specify exactly what constitutes "damages" for purposes of the insurance coverage, and may include or exclude costs taxed by the court as it chooses. City of Sandusky, Ohio v. Coregis Ins. Co., 192 F. App'x 355, 359-60 (6th Cir. July 14, 2006) (affirming district court decision that attorney fees awarded under § 1988 were not "damages" or "costs" as contemplated in the language of the insurance contract) (internal citation omitted). "[W]here an insurance contract does not rely on the traditional legal definitions of `damages,' the question of whether an award fits into this category under the contract is one of state insurance law." Id.

If the terms of a contract are clear and unambiguous, a court must enforce the contract as written, giving words used in the contract their plain and ordinary meaning. See Cincinnati Indemn. Co. v. Martin, 85 Ohio St.3d 604, 710 N.E.2d 677, 679 (1999). Likewise, when an exclusionary clause in an insurance contract is clear and unambiguous, Ohio law requires that the plain language of the clause be given effect. Thomas Noe, Inc. v. Homestead Ins. Co., 173 F.3d 581 (6th Cir. 1999) (internal citation omitted). In determining the plain meaning of a contractual term, the court will read the contract as a whole and, to the extent possible, give each word its natural meaning. Hartzell Indus., Inc. v. Fed. Ins. Co., 168 F.Supp.2d 789, 793 (S.D. Ohio 2001) (citation omitted).

Because the Court finds that fee-shifting under IDEA is a sanction, there is nothing to interpret. The Policies define "damages" to include "judgments, awards and settlement," and they expressly exclude "sanctions" from that definition. See ECF Nos. 51-8, 51-9. That exclusion is unambiguous.

Applying Ohio insurance law, the Sixth Circuit has held that "where the insurer's duty to defend is not apparent from the pleadings, no duty to defend exists unless the complaint is `vague, ambiguous, nebulous or incomplete' so that a `potential for coverage' exists." See M/G Transport Serv., Inc. v. Water Quality Ins. Syndicate, 234 F.3d 974, 977 (6th Cir. 2000) (citing Zanco, Inc. v. Michigan Mut. Ins. Co., 464 N.E.2d 513, 514 (1984) (insurer has no duty to defend when an exclusion in the contract places the claim beyond the scope of the policy's coverage)).

In this case, the School Districts seek fees under the IDEA fee-shifting provision, 20 U.S.C. § 1415(i)(3)(B)(i)(II) and (III), on the ground that Defendants' due process complaints were "frivolous, unreasonable, lacked foundation, or brought for an improper purpose." ECF Nos. 53; 55-1; 56 at PageID#: 1574, 1577. Nothing about the School Districts' request is "vague, ambiguous, nebulous, or incomplete," such that a "potential for coverage" might exist. See M/G Transport Servs., 234 F.3d at 977.

In other words, the School Districts seek a sanction award against Defendants. Defendants' insurance policy does not cover actions for sanctions. Defendants' insurer, therefore, does not have a duty to defend or indemnify them in the fee actions.9

Defendants RLB and Immel argue that, even if Wesco does not cover Defendants Wallace and Bache under the Policies, it must nevertheless defend and indemnify RLB and Immel because the latter are innocent insured parties. ECF No. 53-1 at PageID#: 1357. That is, if any conduct were sanctionable, it was Wallace and Bache's conduct, not RLB and Immel's. Their argument is unavailing. Whether RLB and Immel are innocent is irrelevant to whether Wesco is obligated to defend and indemnify them in the School District Lawsuits. The School Districts' fee actions are not covered under the Policies because the subject matter of the litigation is not covered. Wesco is simply not in the business of insuring lawyers and law firms for sanction exposure (at least not under these Policies).

Because the subject matter of the insurance claims Defendants submitted to Wesco is not covered under the Policies as a matter of law, the Court grants summary judgment in favor of Wesco and hereby declares that Wesco is not obligated to defend or indemnify any Defendants in the School District Lawsuits.

IV. Conclusion

For the reasons stated above, Plaintiff's motion for summary judgment (ECF No. 55) is granted, and Defendants' motions for summary judgment (ECF Nos. 53 and 56) are denied. The Counterclaim filed by Defendant/Counter-Claimants Roderick Linton Belfance LLP and Kristopher Immel (see ECF No. 50) against Plaintiff for declaratory judgment and breach of contract, is dismissed. Counts One and Two of the Counterclaim filed by Defendants/Counter-Claimants Jason D. Wallace and Daniel R. Bache (see ECF No. 25) against Plaintiff are also dismissed.

IT IS SO ORDERED.