Court of Appeals of Ohio, Fifth District, Richland
MILESTONE INVESTMENT ENTERPRISES, INC. Plaintiff-Appellant
MOUNT VERNON FIRE INSURANCE CO., et al. Defendant-Appellee
from the Richland County Court of Common Pleas, Case No.
Plaintiff-Appellant J. JEFFREY HECK The Heck Law Offices,
Defendant-Appellee LORREE L. DENDIS Williams & Petro Co.,
JUDGES: Hon. William B. Hoffman, P.J Hon. Craig R. Baldwin,
J. Hon. Earle E. Wise, Jr., J.
Appellant Milestone Investment Enterprises, Inc. appeals the
summary judgment entered by the Richland County Common Pleas
Court dismissing its claims for breach of contract, bad
faith, negligence, and breach of fiduciary duty against
Appellee Mount Vernon Fire Insurance Co.
OF THE FACTS AND CASE
At some point prior to 2012, Appellant acquired a three-story
commercial building with six storefronts in Mansfield, Ohio.
Appellant is owned by John Dilts, an attorney, and Eric
Johnson, who owns a pawn shop. When Appellant refinanced the
property with First Merit Bank, the bank required Appellant
to obtain property insurance.
Because of the age of the building and the fact the second
and third stories were gutted, the property was not eligible
for a conventional policy. Appellant's insurance agent,
Dumbaugh Insurance Agency, asked for help form the Ohio
Insurance Exchange to obtain suitable coverage for
Appellant's building. The Ohio Insurance Exchange
referred Dumbaugh to a wholesale insurance broker, Morstan
General Insurance Agency.
Morstan obtained coverage for Appellant from Appellee
effective August 16, 2012. However, a condition of the policy
was Appellee would have the property inspected in order to
inform Appellant of any repairs necessary to keep the
policy's coverage in place. The property was later
inspected by Lynne Miller, an independent contractor.
Based on the inspection, Appellee sent an email to Appellant
and the insurance agents on October 15, 2012, which stated,
in pertinent part:
recently conducted inspection has developed the following
• Install functioning and operational ABC type fire
extinguishers, full charged and tagged in all units. Fire
extinguishers must be mounted at a height between 39 & 42
inches from the floor to be made available in case of an
• A three foot clearance must be maintained between
storage and the electrical panel in the basement of area of
Rocky's Pub & Grill.
• Open junction boxes and exposed electrical wiring was
visible throughout the basement storage area of the jewelry
store. In addition, wiring relics were left over from
previous electrical installations. Obtain the services of a
licensed and insured electrical contractor to remove the old
wiring and install proper junction boxes.
• A structural engineer must be hired to inspect the
balconies on the second and third floor levels and the fire
escapes in the rear of the building to ensure they can be
• The second and third floors have begun
renovations resulting in the removal of walls. Unprotected
vertical openings must be protected in accordance with NFPA
101 29.3, 8.6 (The first floor exit leading to the outside
exit). The stairway leading from the second floor to the
third floor must be protected by an [sic] one hour
fire resistant barrier with one hour fire
rated doors. In addition, any openings in the floor must be
closed to prevent rapid fire spread throughout the
combustible construction. The stairwell is open through the
floors on all sides.
• The trash dumpster must be maintained at least 35 feet
from the building.
• Obtain certificates of general liability insurance
from all commercial tenants leasing space within your
building. These certificates must be obtained when the tenant
moves in and on a yearly basis thereafter.
• Please comply with the recommendations and confirm in
writing by signing and returning this form within 45 days to
avoid cancellation of your policy. (Emphasis added).
After negotiation, Appellee relented on the fourth and sixth
bullet points. John Dilts was concerned complying with bullet
point five, quoted in bold above, would be expensive.
Consequently, Appellant, through ...