The Siemientkowskis bought a new home built by Moreland Homes and they insured the home with State Auto Insurance Company. They were later told by their next door neighbor that, while the home was being built, the contractors damaged the neighbor's septic system and contents from the system spilled onto the Siemientkowskis' site. The Siemientkowskis had, prior to finding out about the septic system leak, been experiencing illnesses and health problems shortly after entering their home. They believed that the septic leak was the cause of the problems. Testing later revealed that their property and its groundwater were contaminated by the septic system incident.

The Siemientkowskis requested help from Moreland Homes, their city government and other parties, but they never received any responses. 15 months after sending the unanswered requests, the Siemientkowskis abandoned their home. At the same time, they wrote State Auto, their insurer, about their decision to move. The Siemientkowskis explained that remaining in the contaminated home would be a health hazard. The same letter included a claim for loss of use of their home.

A couple of months after leaving their home, the Siemientkowskis sued three dozen parties in connection with their abandoned home's contamination. While the suit named Moreland Homes, it did not include State Auto, their neighbor (whose septic tank was the source of the contaminants) nor State Farm, the neighbor's home insurer. Shortly after the suit was filed, State Auto denied their loss of use claim, stating that it was due to a pollution loss, so it was ineligible for coverage. After another 18 months passed, the Siemientkowskis sued State Auto and State Farm. The suit included nearly a dozen allegations and it sought more than $360,000 in damages.

Both State Auto and State Farm filed for declaratory judgments. State Auto asked that the claim be dismissed because it was filed after the filing period stated in their policy had passed. State Farm argued that the claim was invalid because, as third parties, the Siemientkowskis had no contractual right to file a direct action. The Siemientkowskis appealed after a trial court approved the insurer's separate motions.

The appellate court reviewed the Siemientkowskis’ several arguments against each insurer. The arguments against their own insurer, State Auto, focused on charges of bad faith and fraud for not responding to their initial loss of use claim. The higher court found that the charges were unsupported, mainly because the insurer cited unambiguous policy language that barred coverage. In the court's opinion, bad faith/fraud can only arise when there's a question that an insurer has failed to act properly to a valid coverage issue. Further, the court also agreed with the insurer that the Siemientkowskis’ action was also filed too late under the State Auto policy provisions.

Concerning their allegations against State Farm, the higher court was also unpersuaded. Essentially, the court focused on the Siemientkowskis’ failure to, first, file a claim against State Farm's policyholder (the neighbor who owned the damaged septic tank). Allowing the Siemientkowskis to pursue direct action against State Farm would violate the plain provisions of the State Farm policy as well as state law.

Both of the trial court rulings, granting summary judgment in favor of insurers State Farm and State Auto were affirmed.

Ronald J. Siemientkowski et al., Plaintiffs-Appellants, v. State Farm Insurance Company et al., Defendants-Appellees. Ohio Court of Appeals. No. 85323. Filed August 18, 2005. Affirmed. CCH Personal and Commercial Liability Cases Paragraph 1,093.