# Sinmier, LLC v. Everest Indemnity Insurance Company

> District Court, N.D. Ohio · March 30, 2023

URL: https://www.frixlaw.com/law-library/cases/10371869

## Case

- **Court:** District Court, N.D. Ohio
- **Decided:** March 30, 2023
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OHIO
WESTERN DIVISION

SINMIER LLC, CASE NO. 3:19 CV 2854

Plaintiff,

v. JUDGE JAMES R. KNEPP II

EVEREST INDEMNITY INSURANCE
CO., et al.,
MEMORANDUM OPINION AND
Defendants. ORDER

INTRODUCTION
Currently pending before the Court are four fully briefed motions for summary judgment
brought by Defendants Everest Indemnity Insurance Company and EverSports & Entertainment
Insurance1 against Plaintiff Sinmier LLC.2 Three of these motions seek partial summary
judgment on contractual issues (Docs. 288), the rights of a mortgage holder (Doc. 290), and
damages (Doc. 304). The fourth motion seeks summary judgment on all claims brought by
Sinmier against Everest and EverSports (Doc. 306). Relatedly pending is Defendant Alternative
Risk Company’s Motion for Summary Judgment against Sinmier. (Doc. 383).
For the reasons discussed below, the Court GRANTS EverSports and Everest’s Motion
for Summary Judgment (Doc. 306) and DENIES AS MOOT their Motions for Partial Summary

1. EverSports & Entertainment Insurance was previously called Specialty Insurance Group
(“SIG”). See Doc. 168. For consistency and clarity, the Court will refer to this party as
EverSports herein, even when referencing documentation pre-dating the name change.

2. Also pending before the Court are Sinmier’s Motion for Summary Judgment against Berkley
(Doc. 311); Berkley’s Motion for Summary Judgment against Sinmier (Doc. 342); and Bankers’
Motion for Summary Judgment against Sinmier (Doc. 372). These motions will be addressed in a
subsequent opinion.
Judgment (Docs. 288, 290, 304). The Court further GRANTS Alternative Risk’s Motion for
Summary Judgment (Doc. 383).
BACKGROUND
This case arises out of wind and water damage to a water park and hotel property.
Plaintiff Sinmier was the mortgagee/lender to Vintro Hotels and Resorts Ohio, LLC, on a seven

million dollar loan to purchase the Maui Sands Resort and Waterpark in Sandusky, Ohio. A
mortgage was filed on September 7, 2018. See Doc. 76-2. The facts relevant to the pending
motions are as follows.
Events Leading to Policy
In July 2018, Vintro contacted Michael Barnum of Bankers Insurance LLC to inquire
about insurance coverage for the property. (Barnum Depo., at 232-35). Bankers is an
independent insurance agent with no affiliation to Everest. See id. at 230-31.3
First Everest Policy
On August 1, 2018, Barnum contacted Chad Brown of Alternative Risk – a wholesale

insurance broker – to seek insurance quotes for Vintro. See Doc. 307-2, at 67. In an email,
Barnum told Brown that Vintro was attempting to close on the property on August 3 and was
seeking coverage as of that day. Id. He attached an executive summary of the property, an
unsigned Acord insurance application, and a waterpark/slide supplement. See id. at 67-68; 70-
105; Allen Depo., at 89-91.

3. As an independent insurance agent, Bankers usually provides information regarding its clients’
insurance needs to various insurers or brokers in order to obtain quotes or proposals to provide
the requested coverage. See Barnum Depo., at 243; Allen Depo., at 73-74. If a client accepts a
particular quote, Bankers instructs the insurer or broker to bind the coverage, and the insurer
issues a binder and then an insurance policy. (Allen Depo., at 75-76).
Linda Allen of Bankers testified the Acord application identified the insurance Vintro
sought through Bankers. (Allen Depo., at 96-100). This application included various sections
such as “Applicant Information”, “Umbrella/Excess”, “Commercial General Liability”, and
“Property”. (Allen Depo., at 96-100). On each of these sections, the area identifying an
“Additional Interest” was blank. See Ex. 53, Doc. 307-2, at 71, 75, 80, 83, 84, 86, 87. In several

of the sections, the “Additional Interest” section offered a “mortgagee” as a potential additional
interest; the box was not checked. Id. at 71, 80, 83, 84, 86, 87.
Brown, on behalf of Alternative Risk, forwarded this information to multiple insurers to
solicit quotes for coverage. (Brown Depo., at 114); (Ex. 330, Doc. 307-3, at 98-102). Also on
August 1, 2018, Alternative Risk sent the Application and Executive Summary to EverSports.
(Ex. 418, Doc. 307-4, at 60-61). EverSports is a managing general agent for Everest and has
underwriting authority on Everest’s behalf. (Speidel Depo., at 12).
Bankers later told Alternative Risk, which told EverSports, that the closing date had been
postponed to August 10. See Ex. 419, Doc. 307-4, at 98-104.

On August 20, 2018, Bankers told Alternative Risk that a different insurer, Berkley, was
quoting coverage for the property, and that Alternative Risk would be binding the general
liability, liquor liability, and lead umbrella. (Doc. 307-3, at 75); (Brown Depo., at 46-47).
Alternative Risk also conveyed to EverSports Bankers’ request to “add back in” business
personal property and business income loss. (Doc. 307-3, at 87). Bankers provided Alternative
Risk with a new Accord application dated August 20, 2018. (Doc. 307-3, at 77-86). Like the
previous application, the “Additional Interest” areas of the application were left blank. (Doc.
307-3, at 78, 81, 82, 84, 85).
Also on August 20, 2018, Lee Friedman of Vintro emailed Barnum of Bankers to state, “I
also need to make sure the lender is an additional insured: Sinmier, llc.” (Ex. 366, Doc. 307-5, at
5); (Friedman Depo., at 14-15). Barnum replied to ask “Additional Insured or Loss
Payee/Mortgagee? Or both?”; Friedman responded, “Just additional insured”. (Ex. 366, Doc.
307-5, at 5).

On August 21, 2018, Alternative Risk forwarded the requested quote from EverSports to
Bankers. (Ex. 60, Doc. 307-2, at 178-245).
Also on August 21, 2018, Barnum emailed Allen stating he “spoke to the insured”, who
wanted to reduce business income coverage and that “He does have 2 additional insureds to add:
Sinmier, LLC [and] Sun Development, LLC.”4 (Ex. 8, Doc. 307-1, at 17-18); Allen Depo., at 36.
That same day, Friedman emailed Barnum again:
Mike the lender information.

SINMIER, LLC, its successors and/or assigns
30201 Orchard Lake Rd. #120
West Bloomfield, MI 48334
\
They also want the following:
“additional insured” on liability and “mortgagee” on property is the norm in Ohio

AI

so the sun development use the hotel address for them.

(Doc. 307-5, at 8). Barnum forwarded this email to Allen. Id.
On August 23, 2018, Allen of Bankers emailed Brown of Alternative Risk to accept the
quote for coverage and request coverage be bound effective that same day, as provided by the
quote. (Ex. 60, Doc. 307-2, at 178-79). She further noted:
5) Add the following as AI

4. Sun Development’s interest is not at issue here.
a. Sinmier LLC Its Successors and/or assigns, 30201 Orchard Lake Rd. #120,
West Bloomfield MI 48334

b. Sun Development, LLC 5513 Milan Rd. Sandusky OH 44870

Id. She attached to the email the signed August 20, 2018, Acord application; as with the previous
applications, the sections to identify an “Additional Interest” were blank. (Doc. 307-2, at 209-
45).
Brown forwarded this email to Daniel Speidel at EverSports. (Ex. 332, Doc. 307-4, at
17). Speidel testified he understood the “add the following as AI” instruction to mean he “was
being told to add Sinmier and Sun Development as additional insureds to the general liability”
because “[i]t’s kind of just industry lingo to use AI as additional insured.” (Speidel Depo., at 73-
74). Brown testified he did not recall having any discussions with Speidel or anyone else at
EverSports about adding a mortgagee to any of the policies. (Brown Depo., at 122-23).
Everest issued an insurance policy, effective August 23, 2018. (Ex. 62, Doc. 307-2, at
246-390). Sinmier and Sun Development were listed as Additional Insureds under the
Commercial General Liability portion of the policy (Doc. 307-2, at 354-55); no mortgage holders
or loss payees were listed (Doc. 307-2, at 265).
On September 14, 2018, Brown of Alternative Risk emailed Speidel of EverSports to
note the closing on the property had not yet occurred. (Doc. 307-3, at 89). Speidel responded that
EverSports could not change the effective date on a bound policy, and thus it would need to “do
a Cancel/Re-Write.” Id.
Second Everest Policy
On October 16, 2018, Barnum of Bankers emailed Brown of Alternative Risk requesting
a revised quote for an effective date of October 19, 2018, and with several changes in coverage:
-Property Changes
o Revise property coverage for building 1 to as follows:
 Building limit - $6,000,000
 BPP limit - $1,244,000 (same as before)
 BI EE limit - $500,000 on ¼ monthly limitation
o Remove property coverage for building 2 and building 3. They have
decided on the design option to demolish and rebuild new versus remodel.
o Add $1mil coverage for waterpark property/equipment
o The property coverage of the waterpark equipment was previously insured
under our other builders risk policy. However, we are going to hold off on
purchasing coverage for that until construction begins.

-General Liability Changes
o Due to the changed plans of demo buildings instead of remodel, the gross
receipts are going to be significantly less over the next 12 months. After
construction is complete, the following year should be more in line with
prior projections. Please revise the GL to be based on the following
exposure basis:
 Hotel - $1,800,000
 Restaurant - $200,000
(Doc. 307-1, at 23). Brown did not receive an Acord application with this email, nor did he recall
any communication with anyone at Bankers regarding the need to identify Sinmier as a
mortgagee or any party as an additional interest. (Brown Depo., at 146).
Barnum, Allen, and Brown testified they understood this email listed the coverage Vintro
sought and for which Bankers sought quotes. (Barnum Depo., at 343-44); (Allen Depo., at 141-
43); (Brown Depo., at 140-44). Brown forwarded this email to Drew Ott at EverSports to obtain
a quote consistent therewith. (Brown Depo., at 144); (Ex. 331, Doc. 307-3, at 103).
EverSports provided Alternative Risk a quote for a policy from Everest the following
day, October 17, 2018 (Speidel Depo., at 95-96; Brown Depo., at 145-46; Ex. 425, Doc. 307-4,
at 121-32); Alternative Risk sent the quote to Bankers (Brown Depo., at 145-46).
In an October 19, 2018, email, Bankers (Barnum) directed Alternative Risk (Brown) to
bind the coverage as quoted. (Ex. 69, Doc. 307-2, at 391). Attached to this email were the quotes
– signed by Inderjit Grewal on behalf of Vintro on October 18 – along with terrorism exclusion
forms, signed statement of values, and liquor application. Id. at 391-415. Alternative Risk
(Brown) passed this request to EverSports (Ott / Speidel). (Ex. 426, Doc. 307-4, at 136).
EverSports sent Alternative Risk the policy numbers for the package and the excess policies
(Doc. 307-4, at 137); Alternative Risk forwarded these to Bankers at 10:10 a.m. on October 19
(Doc. 307-2, at 66).

On October 22, 2018, EverSports provided the binder to Alternative Risk, which then
provided it to Bankers on October 24, 2018. (Brown Depo., at 97-98); (Doc. 307-3, at 66-74);
(Doc. 307-3, at 90-95). The email from EverSports to Alternative Risk said “***Please
REVIEW this binder for accuracy and notify us immediately if there are any discrepancies or
errors.” (Doc. 307-3, at 90) (emphasis in original). The correspondence from Alternative Risk to
Bankers contained the following language: “Agent is responsible for reviewing the binder and
policy for accuracy”. The binder itself stated:
This binder contains a broad outline[]of coverage and does not include all the
term[s], conditions and exclusions of the policy (or policies) that may be issued to
you. The policy (or policies) contains the full and complete agreement with regard
to coverage. Please review the policy (or policies) thoroughly with your broker
upon receipt and notify us promptly in writing if you have any questions.

(Doc. 307-3, at 69, 91). The binder listed endorsement and exclusion policy forms, including
additional insured forms under the general liability section; there is no mention of a mortgagee or
loss payee interest. Id. at 72-73. In a terms and conditions section, the binder stated it was
“conditioned upon [EverSports]’s receipt and review of the additional underwriting information
identified below”, including a “Completed, Signed, and Dated Application.” Id. at 71-72.
Vanjay Tomic, an Alternative Risk employee who performed “processing tasks”, testified
that her training regarding policy verification and binders included “that [a] mortgagee can be on
the application and . . . we are supposed to search for it on the application.” (Doc. 363-3, at 12-
13).
Later on October 22, Allen emailed Brown “the signed apps for the Package and
Umbrella for this risk.” (Doc. 307-2, at 417). Attached were revised Acord applications, dated
October 17, 2018, and signed by Grewal on October 19, 2018, at 15:51. Id. at 420-47. In the

Application Information Section of the form, under “Premises Information”, four buildings were
identified and numbered – the Family Suites building, the Maui West Hotel, the Cabana
building, and the Waterpark. Id. at 421. These applications contained revisions to the “Additional
Interest” section of the forms. In the Application Information Section of the form, under
“Additional Interest”, the box for “mortgagee” was checked and “Sinmier LLC” was identified.
Id. at 421. The remainder of the Additional Interest sections (including a reference or loan
number, lien amount, interest end date, and “interest in item number”) were left blank. Id.; see
also id. at 424 (ACORD 45 “Additional Interest Schedule” form listing same information).
Under the “Property Section” and “Equipment Floater Section” of the revised forms, the

“Additional Interest” section remained blank. Id. at 433, 434, 440. In the property section, the
box next to the words “Additional Interest” and before “Acord 45 attached for additional names”
is not checked. Id. at 433, 434. By contract, in the “Equipment Floater Section” (where “loss
payee” or “lienholder” are options under “Additional Interest” but “mortgagee” is not) a box is
checked next to this text: “ADDITIONAL INTEREST / CERTIFICATE RECIPIENTS [X]
ACORD 45 Attached.” Id. at 430.
Speidel testified specifically regarding these forms:
Q: Okay. Would this application have been important to you as the
underwriter as respects how the policy ultimately was issued?
A: The policy - - the application itself, yes. This particular box being checked
in the general section of the application, potentially not.

Q: Why is that?

A: Well, it’s listing a mortgagee on a general section. It’s not on a property
section. So we wouldn’t know what buildings or what types of coverage that
mortgagee would even apply to.

* * *

Q: . . . Is this Additional Interest Schedule of importance to you as an
underwriter in writing the policy?

A: It could be.

Q: All right. Why is that?

A: We would want to ensure that what we’re being asked to include is
included in the policy.

(Speidel Depo., at 90-92). Speidel’s testimony continued, responding to questions about an “X”
on the form next to “Acord 45 Attached.”
Q: . . . And there’s no particular party listed under any of those three boxes; is
that right?

A: That’s correct.

Q: All right. But there is an X under the box called “Acord 45 Attached.” Do
you see that?

A: I do.

Q: All right. Is that of underwriting importance to you?

A: If it were something we weren’t already instructed on, it could be, but we
via email had been instructed to include an additional insured to the GL.

* * *

Q: Okay. Were you asked to list an additional insured by Mr. Brown?

A: Yes.
Q: Okay. And can you tell me where that was?

A: It’s in another exhibit, but it’s an email from Mr. Brown to myself
requesting Sinmier and Sun Development be added as additional insureds.

Q: Okay. Was that the one - - one of the ones that we talked about earlier?

A: I believe it was for the original policy bind order.

Q: Okay. The original policy bind order you recall stating that they wanted
them to be listed as additional insured.

A: Correct.

(Speidel Depo., at 93-94).
Alternative Risk contacted Bankers on October 30, 2018, to identify certain missing
information in the application. (Doc. 307-2, at 457-58). On November 6, 2022, Bankers sent the
revised and signed Acord applications to Alternative Risk. (Doc. 307-2, at 457); (Brown Depo.,
at 152-53); (Allen Depo., at 174).
On November 14, 2018, Alternative Risk received a copy of the Everest Policy; it
emailed Bankers a copy the following day. See Brown Depo., at 105; Allen Depo., at 174-75;
Doc. 307-2, at 574. In the email, Alternative Risk stated: “Please review and check the policy for
any errors or discrepancies. If you find any, please notify us immediately so that we can inform
the carrier and get the corrective endorsement(s) issued.” (Doc. 307-2, at 574). The policy as
issued listed Sinmier and Sun Development as additional insureds on the Commercial General
Liability Coverage part of the policy. See id. at 518, 519. Sinmier was not otherwise listed on the
policy.
Barnum did not recall if he reviewed the policy upon receipt (Barnum Depo., at 167), and
Allen testified she had never reviewed it (Allen Depo., at 175). Brown testified Alternative Risk
does not review the quotes it receives from insurance companies, but “rel[ies] on the retail agent
to review and make sure that things are adequate.” (Brown Depo., at 44).; see also Brown Depo.,
at 74 (“we totally rely on the retail agent as the insured’s representative to look and be sure that
things are correct”). Alternative Risk does a “high level overview checking [the policy] against
the quote and binder.” Id. at 76.
Insurance Claim

In January 2019, Vintro submitted a claim to Everest based on wind and water damage.
(Doc. 307-1, at 24). Everest advanced remediation funds to Vintro during the claims process.
(Barron Depo., at 185-90); see also Doc. 307-8, at 11-13 (sworn statements in proof of loss and
related emails). Statements Grewal executed in conjunction therewith attested that “no other
person had any interest therein or encumbrance thereon.” (Doc. 307-8, at 11, 13). In June 2019,
Vintro and Everest entered into a settlement agreement to resolve the claim. (Doc. 295). Sinmier
was not included in this process.
Mortgage Default / Foreclosure
Vintro defaulted on its loan, and Sinmier instituted a foreclosure action. Sinmier, LLC v.

Vintro Hotels & Resorts, Ohio LLC, No. 19 CV 705 (N.D. Ohio). That case ultimately settled.
By way of the settlement, Sinmier received a deed in lieu of foreclosure to the property, an
assignment of interest regarding insurance claims/proceeds, the promise of a monetary payment
of $627,375.00, a consent judgment, and the release of escrow funds. See Doc. 119-1.
Sinmier’s Claims Against Everest, EverSports, and Alternative Risk
Sinmier subsequently brought the instant suit against Bankers, Berkley, Alternative Risk,
EverSports, and Everest.
Against Everest, Sinmier brings claims of Breach of Contract – Third-Party Beneficiary
(failure to list Sinmier as mortgagee) (Count I); Declaratory Judgment (Count XI); and Agency
Liability (for the acts/omissions of EverSports and Alternative Risk) (Count VIII). (Doc. 76, at
12-13; 22). Against Alternative Risk, Sinmier brings a Breach of Contract – Third-Party
Beneficiary claim (Count IV) and a Negligence claim (Count VI). Id. at 17, 19-20.
In Count I, Sinmier asserts “Vintro ordered Bankers to list Sinmier as mortgagee on its
policies and signed Acord applications”, “Everest / [EverSports] accepted the applications which

listed Sinmier as a mortgagee[,] and there was a contract between Vintro and Everest /
[EverSports] whereby Everest / [EverSports] had agreed to list Sinmier as a mortgagee on the
property section of the Everest policy.” Id. at 12. Sinmier further seeks a declaratory judgment
against Everest (Count XI). Id. at 25-26.
In Count VIII, Sinmier makes an Agency Liability claim, asserting EverSports and
Alternative Risk were agents of Everest who “accepted signed applications for insurance from
Vintro on behalf of Everest which stated that Sinmier was to be listed as mortgagee on the
property coverage part of the Everest Policy”, Alternative Risk or EverSports “bound property
insurance coverage for Vintro and Sinmier”, and Everest is liable for Alternative Risk and

EverSports’ acts or omissions, “to wit, not procuring coverage as ordered by Bankers and
Vintro.” Id. at 22.
In Count IV, Sinmier asserts it was a Third-Party Beneficiary to a contract between
Alternative Risk and Bankers to procure insurance coverage. Id. at 17.
In Count VI, Sinmer asserts a negligence claim against Alternative Risk for, in essence,
failing to ensure Sinmier was identified as a mortgagee on the insurance policy. Id. at 19-20.
STANDARD OF REVIEW
Summary judgment is appropriate where there is “no genuine issue as to any material
fact” and “the moving party is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c).
When considering a motion for summary judgment, the Court must draw all inferences from the
record in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 587 (1986). The Court is not permitted to weigh the evidence or
determine the truth of any matter in dispute; rather, the Court determines only whether the case
contains sufficient evidence from which a jury could reasonably find for the nonmoving party.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986). The moving party bears the
burden of proof. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). This burden “may be
discharged by ‘showing’—that is, pointing out to the district court—that there is an absence of
evidence to support the nonmoving party’s case.” Id. Further, the nonmoving party has an
affirmative duty to direct the Court’s attention to those specific portions of the record upon
which it seeks to rely to create a genuine issue of material fact. See Fed R. Civ. P. 56(c)(3)
(noting the court “need consider only the cited materials”).
DISCUSSION
In their motion for summary judgment on all claims, Everest and EverSports argue

Sinmier cannot establish there was a contract to add Sinmier as a mortgagee on the Everest
Policy, and thus all of its claims based on that purported contract fail as a matter of law. See
Docs. 306, 307. It further contends Sinmier’s agency claim related to Alternative Risk and
EverSports’s actions is barred by the economic loss doctrine. See id.; Doc. 383. Alternative Risk
also argues the economic loss doctrine bars Sinmier’s claims against it and that Sinmier cannot
establish Alternative Risk owed Sinmier any duty upon which to base a negligence claim. See
Doc. 383. Finally, Alternative Risk argues it is entitled to summary judgment on the third-party
beneficiary claim.
For the reasons discussed below, the Court finds Everest and EverSports, as well as
Alternative Risk, are entitled to summary judgment.
Contract
Everest/EverSports contend Sinmier’s contract-based claims against it must fail because
Sinmier cannot prove the existence of a contract between Vintro and Everest/EverSports to

include Vintro as a mortgagee on the policy.
“[A]n insurance policy is a contract between an insured and the insurer.” Pilkington N.
Am., Inc. v. Travelers Cas. & Sur. Co., 112 Ohio St. 3d 482, 487 (2006). The interpretation and
construction of a written contract are questions of law. Alexander v. Buckeye Pipe Line Co., 53
Ohio St. 2d 241 (1978). “The purpose of contract construction is to discover and effectuate the
intent of the parties. The intent of the parties is presumed to reside in the language they chose to
use in their agreement.” Graham v. Drydock Coal Co., 76 Ohio St. 3d 311, 313 (1996). The
Court is to “honor the plain meaning of the policy’s language ‘unless another meaning is clearly
apparent from the contents of the policy.’” Ohio N. Univ. v. Charles Constr. Servs., Inc., 155

Ohio St. 3d 197, 199 (2018) (quoting Westfield Ins. Co. v. Galatis, 100 Ohio St. 3d 216, 219
(2003)).
To succeed on a breach of contract claim under Ohio law, a plaintiff must establish the
“existence of a contract, performance by the plaintiff, breach by the defendant, and damage or
loss to the plaintiff.” Doner v. Snapp, 98 Ohio App. 3d 597, 600 (1994). “Essential elements of
a contract include an offer, acceptance, contractual capacity, consideration (the bargained for
legal benefit and/or detriment), a manifestation of mutual assent and legality of object and of
consideration.” Kostelnik v. Helper, 96 Ohio St. 3d 1, 3 (2002) (internal quotation and citation
omitted). “A meeting of the minds as to the essential terms of the contract is a requirement to
enforcing the contract.” Id. at 4.
The parties do not dispute that the final issued policy – the second Everest Policy – does
not list Sinmier as a mortgagee. And Sinmier does not present evidence or argument in support
of its assertion in the Amended Complaint that “[Alternative Risk] and/or [EverSports] had

binding authority for Everest and bound coverage including Sinmier as mortgagee” (Doc. 76, at
¶ 67) (emphasis added). The binder does not mention Sinmier or any mortgagee. See Doc. 307-3,
at 66-74. Thus, the dispute at present is whether there is evidence of a separate contract between
Vintro and Everest to list Sinmier as a mortgagee on the second Everest policy. See Doc. 76, at ¶
63 (asserting a breach of the contract between Vintro and Everest / [EverSports] to include
Sinmier as a mortgagee on the property insurance”).
Everest and EverSports contend Sinmier cannot create a genuine issue of material fact
regarding the existence of this contract. They argue Sinmier cannot establish there was any
mutual assent or meeting of the minds between Vintro and Everest regarding listing it as a

mortgagee on the property coverage part of the policy or as a loss payee on the inland marine
coverage portion of the policy. In opposition, Sinmier contends evidence of such a contract (to
list Sinmier as a mortgagee on the property portion of the policy5) exists in the form of (1) the
Acord application submitted after the binder and before issuance of the policy, and (2) the fact
that Sinmier was listed on the liability portion of the policy. The Court finds neither creates a
genuine issue of material fact.

5. In opposition, Sinmier does not present an argument regarding the inland marine coverage part
of the policy, but only argues it should have been included as a mortgagee on the property part of
the policy. See Doc. 363.
First, Sinmier contends the final Acord application, submitted after the binder issued, and
before the policy, demonstrates an issue of fact regarding mutual assent because that application
identifies Sinmier as mortgagee. That is, it contends that because the binder required the
completed application as a subjectivity, Sinmier argues, “it shows that the application was what
was needed to finalize the issuance of the Policy.” (Doc. 363, at 11).6 But the Acord application

to which Sinmier points does not instruct Everest to list Sinmier as a mortgagee or loss payee on
the property section of the policy. Although the application does identify Sinmier as a mortgagee
in the additional interest section of the “Applicant Information Section” (Doc. 307-2, at 421), it
contained no such indication for any mortgagee or loss payee specifically in the Property Section
(Doc. 307-2, at 433-44). The boxes for “mortgagee” and “loss payee” are not checked, nor is the
box checked referencing the attached Acord 45 form which listed Sinmier as a mortgagee. There
can be no meeting of the minds over something that was never requested, and none of the
correspondence or dealings between the parties leading up to issuance of the policy instructed
Everest to list Sinmier as a mortgagee on the property portion of the policy.

Second, Sinmier asserts there is evidence from which a jury could find Everest
accidentally listed Sinmier as an additional insured on the liability portion of the policy, rather
than a mortgagee on the property part, because the final signed application only requested
mortgagee status, not additional insured status. That is, it contends this is evidence Everest
mistakenly listed Sinmier improperly and this inconsistency demonstrates an issue of fact
regarding whether there was a meeting of the minds to list Sinmier as a mortgagee. The problem
with this argument is that Sinmier points to no evidence supporting it, and Everest/EverSports

6. Sinmier emphasizes the temporary nature of the binder. See Doc. 363, at 13-15. But Everest
and EverSports do not contend otherwise, nor does the fact that a binder is temporary create a
genuine issue of material fact regarding a meeting of the minds to list Sinmier as a mortgagee on
the property coverage part of the final policy.
point to evidence demonstrating this action was intentional and based on the prior
correspondence and email instruction to list Sinmier as an additional insured on the general
liability part of the policy. See Doc. 307-2, at 178-79; Doc. 307-4, at 17 (email from Allen to
Brown, which was forwarded to Speidel); (Speidel Depo., at 73-75, 93-94); (Doc. 307-2, at 246-
390 (first Everest policy)); (Doc. 307-3, at 66-74 (binder)). The Court finds Sinmier’s

speculation insufficient to establish an issue of fact.
Even in the light most favorable to Sinmier, this evidence does not demonstrate a
question of fact regarding a meeting of the minds between Vintro and Everest to list Sinmier as a
mortgagee on the insurance policy. Sinmier has therefore failed to establish an issue of fact
regarding the existence of the contract upon which Counts I, VIII, and XI of its Second Amended
Complaint against Everest and EverSports are based.7
Because the Court finds Everest and EverSports have demonstrated there is no genuine
issue of material fact regarding the purported contract upon which Counts I, VIII, and XI of the
Amended Complaint is based, their other motions for partial summary judgment relative to that

purported contract (Docs. 288, 290, 304) are denied as moot.

7. Count VIII is an agency claim. However, it is based upon the same factual allegations that
EverSports and Alternative Risk were agents of Everest who “accepted signed applications for
insurance from Vintro on behalf of Everest which stated that Sinmier was to be listed as
mortgagee on the property coverage part of the Everest Policy”, Alternative Risk or EverSports
“bound property insurance coverage for Vintro and Sinmier”, and Everest is liable for
Alternative Risk and EverSports’ acts or omissions, “to wit, not procuring coverage as ordered
by Bankers and Vintro.” (Doc. 76, at 22). As set forth above, Sinmier has failed to establish a
genuine issue of material fact about the basis for this claim. Moreover, as the Court finds below
that Alternative Risk is entitled to summary judgment on the underlying negligence claim upon
which the agency claim is based, Everest is entitled to summary judgment on the agency claim
on that basis.
Negligence / Agency Liability for Negligence (Counts VI and VIII)
Everest and EverSports also separately move for summary judgment on Count VIII of the
Amended Complaint, and Alternative Risk moves for summary judgment on Count VI. Count VI
asserts a negligence claim against Alternative Risk. Count VIII asserts an agency liability claim
against Everest for the actions of Alternative Risk and EverSports. Everest, EverSports, and

Alternative Risk all argue the economic loss doctrine bars the claims asserted; Alternative Risk
further argues that as a wholesale broker, it owed no duty to Sinmier upon which a negligence
claim can be based. The Court finds summary judgment appropriate as to these claims.
Count VI asserts a negligence claim against Alternative Risk on the basis that “Sinmier
was known to [Alternative Risk] and was readily identifiable to it as a mortgagee on the
Property”; “Sinmier was readily identifiable, direct and intended as a party to be covered for the
building”; and “[a]s an insurance broker, [Alternative Risk] had a duty to exercise good faith and
reasonable diligence in obtaining insurance for the insured and mortgagee as ordered by Bankers,
and to procure coverage as ordered.” (Doc. 76, at 19-20). It further asserts Alternative Risk owed

Sinmier the following duties:
a) To procure coverage as ordered.

b) To properly process Acord applications for insurance to effectual coverages desired
and/or promised or agreed to.

c) To clarify with Bankers any coverage issues so as to notify the insureds of gaps in
coverage.

d) To promptly obtain and review the Everest Policy so as to confirm that coverage was
issued as ordered and consistent with the signed applications submitted.

e) To follow-up with [EverSports]/Everest about the Everest package policy and to send
[the] same to Bankers so as to be deliverable to Vintro.
f) To review proposals issued by [EverSports]/Everest to confirm that Sinmier was listed as
mortgagee as it had requested.

g) To act as a reasonably prudent insurance broker.

h) To exercise due caution and care so as to avoid losses to Sinmier occasioned by its
negligence.
(Doc. 76, at 20).
Relatedly in Count VIII, Sinmier asserts Alternative Risk and/or EverSports “accepted
signed applications for insurance from Vintro on behalf of Everest which stated that Sinmier was
to be listed as mortgagee on the property coverage part of the Everest Policy” and Alternative
Risk and EverSports are agents of Everest and Everest is liable for their acts or omissions in “not
procuring coverage as ordered by Bankers and Vintro”. (Doc. 76, at 22).
Everest and EverSports, along with Alternative Risk, contend Sinmier’s claims in this
regard are barred by the economic loss doctrine because they seek economic damages only for
claims arising under contract and not from any independent tort duty.8 Alternative Risk further
contends Sinmier cannot establish Alternative Risk – as a wholesale insurance broker – owed
any duty to Sinmier at all.
Sinmier does not dispute that it seeks economic losses, but responds that the economic
loss doctrine does not bar its claims because an independent duty was breached. It contends Ohio
law recognizes a separate tort cause of action for negligent procurement against an insurance
agent by a direct, intended, and specifically identifiable third-party beneficiary. It distinguishes
the cases cited by Everest / EverSports and Alternative Risk as involving claims by the insured

8. Everest disputes that Alternative Risk is an agent of Everest, but asserts “that issue need not be
decided here where summary judgment is proper regardless of any alleged agency status”. (Doc.
307, at 31 n.14).
itself (and thus a party to contract), rather than a third-party beneficiary thereof. Sinmier further
contends Alternative Risk owed it a duty to procure coverage.
“The economic-loss rule generally prevents recovery in tort of damages for purely
economic loss.” Corporex Dev. & Constr. Mgmt., Inc. v. Shook, Inc., 106 Ohio St. 3d 412, 414
(Ohio 2005) (citing Chemtrol Adhesives, Inc. v. American Mfrs. Mut. Ins. Co., 42 Ohio St. 3d 40,

45 (Ohio 1989)). Specifically, “[t]he well-established general rule is that a plaintiff who has
suffered only economic loss due to another’s negligence has not been injured in a manner which
is legally cognizable or compensable.” Chemtrol Adhesives, 42 Ohio St. 3d at 44. The rule is
based on the idea that tort law is “designed to redress losses suffered by breach of a duty
imposed by law to protect societal interests”, while contract law “holds that ‘parties to a
commercial transaction should remain free to govern their own affairs.’” Corporex Dev., 106
Ohio St. 3d at 414 (citing in part Chemtrol Adhesives, 42 Ohio St. 3d at 44).
The economic loss rule has been specifically applied to bar negligence claims by an
insured against an insurance broker for failure to procure coverage. See All Erection & Crane

Rental Corp. v. Acordia Nw., Inc., 162 F. App’x 554, 559-60 (6th Cir. 2006) (dismissing
negligence claims by insured against both retail broker and wholesale broker); see also
Momentive Specialty Chem., Inc. v. Chartis Specialty Ins. Co., 2012 WL 832288, at *4 (S.D.
Ohio) (“It has been repeatedly held that regardless of the general duty owed by an insurance
broker to an insured to exercise diligence in obtaining insurance, the economic loss doctrine bars
pure negligence claims (and professional negligence claims) against insurance companies, agents
or brokers.”) (footnote omitted); Mafcote, Inc. v. Genatt Assocs., Inc., 2007 WL 527870, at *6
(S.D. Ohio). The “inability to recover under an insurance policy for injury or damage is an
economic loss . . . [E]nding up with an insufficient insurance policy cannot be considered
personal injury or property damage and must, therefore, be characterized as an economic loss.”
Potts v. Safeco Ins. Co., 2010 WL 1839738, at *3 (Ohio Ct. App.).
There is an exception to the economic loss rule for claims “based upon a tort duty
independent of contractually created duties.” Pavlovich v. Nat’l City Bank, 435 F.3d 560, 569
(6th Cir. 2006) (citing Corporex Dev., 835 N.E.2d at 705); see also Burke v. Time Ins. Co., 2011

WL 2600673, at *2 (S.D. Ohio) (“An exception to the economic loss doctrine exists when there
is a preexisting duty in tort.”) (citing Haddon View Inv. Co. v. Coopers & Lybrand, 70 Ohio St.
2d 154, (Ohio 1982)). “[A] tort claim based upon the same actions as those upon which a breach-
of-contract claim is based will exist independently of the contract action ‘only if the breaching
party also breaches a duty owed separately from that created by the contract, that is, a duty owed
even if no contract existed.’” 425 Beecher, L.L.C. v. Unizan Bank, Nat’l Ass’n, 186 Ohio App.
3d 214, 230 (Ohio Ct. App. 2010) (internal quotation omitted. This exception has been applied in
the context of intentional torts, fraud, and negligent misrepresentation. See, e.g., Mulch Mfg., Inc.
v. Advanced Polymer Sol., LLC, 947 F. Supp. 2d 841, 856-57 (S.D. Ohio 2013) (collecting

cases).
Sinmier argues it falls within the independent duty tort exception based on a claim for
negligent procurement against an insurance agent by a direct, intended, and specifically
identifiable third-party beneficiary to a policy. For this proposition, it cites Minor v. Allstate, 111
Ohio App. 3d 16 (1996) and Emahiser v. Complete Coverage Insurance, LLP, 53 F. Supp. 3d
1025 (N.D. Ohio). In Minor, a mother obtained homeowner’s insurance for a home that she
owned, but was occupied only by her daughter, who was not named on the policy. 111 Ohio
App. 3d at 18-19. Following a burglary, the daughter filed a claim, which the insurance company
denied because she was not a listed insured. The daughter sued the insurance agent for negligent
procurement. The evidence revealed the agent understood, or should have understood, the
mother wished for the policy to include or benefit her daughter. The mother testified she was
“sure” she told the agent that her daughter was residing in the home; the daughter testified she
was physically present with her mother and the agent when the three specifically discussed how
much coverage to obtain, and the contents of the home primarily belonged to the daughter. Id. at

21. The court concluded that under these facts “[t]he evidence reasonably supports an inference
that [the agent] knew that [the mother] wished to benefit [the daughter] with insurance coverage
for her personal property when she asked [the agent] to procure insurance to protect the
residence premises. [The agent’s] undertaking to procure insurance implies a promise that the
coverage he obtained would provide that benefit.” Id. at 22.
In Emahiser, another Judge of this court found that “[t]he implication of Minor is that a
third party may maintain a negligent procurement claim where the third party is a readily
identifiable and known beneficiary at the time the agent procured insurance.” 53 F. Supp. 3d at
1029-30.9 The court found, however, in the context of a suit against a tortfeasor’s insurance

agent regarding an automobile accident, that “the driving public at large” was not a sufficiently
specific intended beneficiary. Id. at 1031. It ultimately held that a negligence claim by an injured
driver against the tortfeasor’s insurance agent “is too far attenuated under the facts . . . because
Plaintiff does not have standing to pursue a negligent procurement claim against Defendant” and
noted “Defendant’s alleged negligence created for Plaintiff a risk of economic loss only—i.e., a

9. Other courts have distinguished Minor in the context of the economic loss doctrine, explaining
that the defense was not raised in that case. See Mafcote, Inc. v. Genatt Assocs., Inc., 2007 WL
527870, at *6 (S.D. Ohio) (“Mafcote, for its part, relies on cases which have recognized a
negligence cause of action against an insurance broker or agent for failure to procure insurance. .
. . [citing, inter alia, Minor], however, it does not appear from the analysis and discussion in any
of these cases that the defendant agents and brokers therein raised the economic loss doctrine as
a defense to liability against the negligence claims.”).
risk that Plaintiff would be unable to collect on a judgment entered against [the tortfeasor].” Id.
(citing Corporex Dev.., 835 N.E.2d 701).
The Court finds – consistent with the above analysis – that Sinmier has not established a
genuine issue of material fact regarding whether it was a direct, intended, and specifically
identifiable third-party beneficiary to the Policy, because it has not established there was a

contract between Vintro and Everest to list Sinmier as a mortgagee or that Alternative Risk was
specifically instructed that Sinmier was to be so identified. As such, even assuming arguendo the
inapplicability of the economic loss doctrine to this particular situation, Sinmier has not
established a genuine issue of material fact that it falls within the exception it identifies thereto –
a third-party beneficiary negligent procurement claim against Alternative Risk.
This is consistent with Daniel James, in which the Sixth Circuit held a wholesale broker
cannot be held liable to an insured for a gap in coverage if the plaintiff could demonstrate neither
“a special relationship between [the wholesale insurance broker and the agent] nor the
foreseeability of [the plaintiff’s] injury.” Daniel James Ins. Agency, Inc. v. Floyd W. of

Louisiana, Inc., 145 F.3d 1330 (6th Cir. 1998) (unpublished). Its rationale applies equally here:
There is no evidence that [the retail broker] was required to use [the wholesale
broker] to place its business or contracted with or relied on [the wholesale broker]
to advise it on placing its business. Further, [the wholesale broker] had no direct
contact with [the insured]. . . . [The insured] did not rely on [the wholesale
broker] to provide its expertise or knowledge in obtaining extra expense
insurance. No special relationship [existed] between [the wholesale broker] and
[the retail broker].

* * *

Here, it was not reasonably foreseeable that the client of an experienced,
sophisticated, and professional retail insurance agent, such as [the retail broker],
would be under insured if a wholesale insurance broker, such as [the wholesale
broker], did not review and compare the client’s other policies with the retail
agent’s proposed change request for a gap in coverage. This situation simply does
not present an unreasonable risk of harm to either the client or the retail insurance
agent.

Id. Although Daniel James involved the failure to identify a gap in coverage as opposed to a
failure-to-procure coverage claim, the chain of communication and parties’ roles supports the
same result. Here, Alternative Risk had no contact with Vintro; it only communicated through
Bankers. There was no duty extending from Alternative Risk to Sinmier, Vintro’s lender, where
there was no special relationship or foreseeability of injury.
Sinmier has failed to identify any other independent duty Alternative Risk owed to
Sinmier on which to base a negligence claim. As such, the economic loss doctrine applies and
Alternative Risk is entitled to summary judgment on Count VI. So too is Everest entitled to
summary judgment on Count VIII.10
Breach of Contract – Third-Party Beneficiary (Count IV)
In Count IV, Sinmier brings a claim against Alternative Risk contending “Bankers and
[Alternative Risk] contracted for the placing of commercial property insurance for Vintro
whereby Sinmier was to be listed as a mortgagee on the Everest Policy”; “Sinmier was a direct
and intended beneficiary to the contract between [Alternative Risk] and Bankers to include
Sinmier as a mortgagee on the Everest Policy”; and that “[i]n failing to procure property
coverage mortgagee status for Sinmier, [Alternative Risk] breached its contractual obligations to
Bankers, resulting in damage to Sinmier.” (Doc. 76, at 17).

10. In Count VIII, Sinmier asserts Alternative Risk and/or EverSports “accepted signed
applications for insurance from Vintro on behalf of Everest which stated that Sinmier was to be
listed as mortgagee on the property coverage part of the Everest Policy”, Alternative Risk and
EverSports are agents of Everest, and Everest is liable for their acts or omissions in “not
procuring coverage as ordered by Bankers and Vintro”. (Doc. 76, at 22). Because the economic
loss doctrine precludes liability on the part of Alternative Risk, Everest cannot be held liable on
agency principles. See, e.g., Faieta v. World Harvest Church, 891 N.E.2d 370, 400 (“where
an agent is not liable, the principal is also not liable”).
In moving for summary judgment, Alternative Risk argues the third-party beneficiary
contract claim fails as a matter of law because (1) “there is no evidence of a contract between
[Alternative Risk] and Bankers . . . [Sinmier] cannot be an intended third-party beneficiary of a
non-existent contract.”; and (2) even if there is a contract, Sinmier cannot establish that contract
was primarily entered to benefit Sinmier. (Doc. 383). In conjunction with its first argument,

Alternative Risk notes that Sinmier attached no such contract (between Alternative Risk and
Bankers) to its Second Amended Complaint. Id. at 15 n.7. Sinmier responds to the second
argument, contending it is not required, under Ohio law, to prove the contract was primarily
entered to benefit it, but “[r]ather, the law is that the third-party must directly benefit rather than
incidentally.” (Doc. 390). It does not address Alternative Risk’s argument regarding failure to
identify the contract. In Reply, Alternative Risk repeats its first argument and notes that Sinmier
did not respond thereto: “Plaintiff’s Opposition fails to address a fundamental requirement of its
third-party beneficiary claim – the existence of a contract involving [Alternative Risk]”. (Doc.
398).

The Court agrees with Alternative Risk – Sinmier has failed to identify evidence to
establish a genuine issue of material fact regarding whether there was a contract between
Alternative Risk and Bankers upon which Sinmier could base a third-party beneficiary claim. See
United Tel. Co. of Ohio v. C.J. Mahan Constr. Co., 63 Ohio App. 3d 437, 443 (1989) (“There
was no contract between plaintiff and ODOT upon which defendant could claim to be a third-
party beneficiary.”). As such, summary judgment is granted to Alternative Risk on Count IV.
CONCLUSION
For the foregoing reasons, good cause appearing, it is
ORDERED that Everest and EverSports Motion for Summary Judgment on All
Plaintiff’s Claims (Doc. 306) be, and the same hereby is, GRANTED; and it is
FURTHER ORDERED that Everest and EverSports’ Motions for Partial Summary
Judgment (Docs. 288, 290, and 304), be and the same hereby are, DENIED AS MOOT; and it is
FURTHER ORDERED that Alternative Risk’s Motion for Summary Judgment (Doc.

383), be and the same hereby is, GRANTED.

s/ James R. Knepp II
UNITED STATES DISTRICT JUDGE

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10371869. Public record. Not legal advice.