Ohio Security Insurance Company v. Brakefire, Incorporated

Filing 17

Memorandum Opinion and Order. Defendant's 11 motion for judgment on the pleadings is granted, and this case is dismissed. Chief District Judge Sara Lioi on 6/3/2024. (V,A)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION

OHIO SECURITY INSURANCE
COMPANY a/s/o SKYWAYS
PETROLEUM LLC DBA COMFORT INN
& SUITES,

PLAINTIFF,
vs.

BRAKEFIRE, INCORPORATED DBA
SILCO FIRE & SECURITY,

DEFENDANT.

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CASE NO. 5:24-cv-267

JUDGE SARA LIOI

MEMORANDUM OPINION
AND ORDER

This matter is before the Court on the motion of defendant Brakefire, Incorporated dba
Silco Fire & Security (“Silco”) for judgment on the pleadings, pursuant to Fed. R. Civ. P. 12(c).
(Doc. No. 11 (MJOP).) Plaintiff Ohio Security Insurance Company (“Ohio Security”) opposes the
motion (Doc. No. 12 (Opposition)), and Silco has filed a reply. (Doc. No. 14 (Reply).) For the
reasons that follow, the motion is granted and the case is dismissed.
I.

BACKGROUND
At all times relevant to the present dispute, Skyways Petroleum LLC dba Comfort Inn &

Suites (the “insured”) operated a hotel upon its commercial property located in Kent, Ohio. (Doc.
No. 1 (Complaint), at 8–91 ¶¶ 2, 7.) The insured held a policy issued by Ohio Security that

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All page number references herein are to the consecutive page numbers applied to each individual document by the
Court’s electronic filing system.

“provided coverage for, among other things, damage to the [hotel and] property[.]” (Id. at 9 ¶ 3.).
Prior to February 3, 2022, the insured “hired [Silco] to maintain the fire sprinkler system”
on its property. (Id. at 9 ¶ 6.) On February 3, 2022, a “water event” occurred in the hotel, which
caused significant water damage to the property. (Id. at 9 ¶ 7.) An investigation revealed that the
damage was due to the presence of water in the fire sprinkler system that froze and caused the
pipes to burst. (Id. at 9 ¶ 9.) According to the complaint, Silco was responsible for leaving the
water in the fire sprinkler system and causing the water damage. (Id. at 9 ¶¶ 8–9.) The insured filed
a claim with Ohio Security, and, pursuant to the terms of the policy, Ohio Security paid “substantial
sums” to the insured to cover the damage. (Id. at 9 ¶ 10.).
On January 11, 2024, Ohio Security initiated an action against Silco in state court to recover
in subrogation for the amount paid to its insured for the water damage. (See generally id.) In its
complaint, Ohio Security raises a single cause of action sounding in common law negligence. (See
id. at 10–11 ¶¶ 13–16.) In particular, Ohio Security alleges that Silco breached its duty to the
insured “to exercise reasonable care and caution in the maintenance of the fire sprinkler system”
at the hotel. (Id. at 10 ¶¶ 13–14.) The complaint further lists the ways in which Silco was allegedly
negligent in maintaining the fire sprinkler system. (See id. at 10 ¶ 14.) Ohio Security seeks
$3,740,373.10 in monetary damages, plus any future payments and costs. (Id. at 11.).
On February 12, 2024, Silco removed the action to federal court on the basis of diversity
jurisdiction. (Doc. No. 1 (Notice of Removal), at 2 ¶ 4.) Thereafter, Silco answered the complaint,
and attached to its answer the contract entered into between the insured and Silco covering the
installation, inspection, and maintenance of the fire sprinkler system. (Doc. No. 10 (Verified
Answer), at 2 ¶ 6; see Doc. No. 10-1 (Agreement), at 42–53.) Relevant to the present dispositive
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motion, under the heading of “General Terms & Conditions[,]” the contract provides, in part:
LIMITATIONS OF LIABILITY: Silco is not an insurer. The amounts payable to
Silco are based upon the value of the services and the scope of liability herein and
are unrelated to the value of the Customer’s property or property of others located
in the premises. No suit or action shall be brought against Silco more than one (1)
year after the accrual of the cause of action. In case of any claim or loss, Customer
and Silco mutually agree that their respective insurance companies shall have no
right of subrogation against the other on account thereof. If Silco is found negligent
or otherwise liable for any goods sold and/or work performed, then Silco’s liability
shall be limited to a maximum of $10,000, and this liability shall be exclusive; upon
request and with payment of an additional fee this maximum liability can be
increased and the increased limit will be set forth in a letter provided by Silco. Silco
shall not be liable for any claims for any improper and/or imperfect performance
based on the failure of any system to function effectively due to causes beyond the
control of Silco, such as wear and tear, tampering, changes to the protected areas,
failure of Customer to authorize modifications or repairs or conduct required or
recommended inspection/testing/maintenance, intentional and/or violent acts of
third parties against Customer’s employees, students, or others on the premises, and
faulty design/installation by others.
(Doc. No. 10-1, at 43, Sec. A (capitalization and underlining in original).) The answer is verified
by Silco’s authorized representative, Dave Fraser, who attested to the truth and accuracy of the
answer and its attachments, and further attested to the fact that the insured entered into the
agreement with Silco and agreed to the terms and conditions contained therein. (Doc. No. 10, at
11; see id. at 2 ¶ 6.).
In its motion, Silco argues that it is entitled to judgment in its favor on Ohio Security’s
negligence claim because the only obligation owed by Silco stems from its contract with the
insured. It is Silco’s position that the existence of a contract prevents Ohio Security, as the
insured’s subrogee, from asserting a negligence cause of action addressing the same action
governed by the contract. Additionally, Silco posits that Ohio Security’s complaint is barred by
the contract’s one-year statute of limitations and mutual waiver of the right of subrogation. (Doc.
No. 11, at 1.).
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II.

STANDARD OF REVIEW
Silco brings its motion pursuant to Rule 12(c), which provides that “[a]fter the pleadings

are closed—but early enough not to delay trial—a party may move for judgment on the pleadings.”
Fed. R. Civ. P. 12(c). The standard of review for a motion for judgment on the pleadings is the
same as for a motion to dismiss for failure to state a claim under Fed. R. Civ. P. 12(b)(6). E.E.O.C.
v. J.H. Routh Packing Co., 246 F.3d 850, 851 (6th Cir. 2001) (citing Grindstaff v. Green, 133 F.3d
416, 421 (6th Cir. 1998)). “[A]ll well-pleaded material allegations of the pleadings of the opposing
party must be taken as true, and the motion may be granted only if the moving party is nevertheless
clearly entitled to judgment.” Poplar Creek Dev. Co. v. Chesapeake Appalachia, L.L.C., 636 F.3d
235, 240 (6th Cir. 2011) (citation omitted).
“A complaint need not contain ‘detailed factual allegations.’ But it must ‘contain sufficient
factual matter, accepted as true, to state a claim to relief that is plausible on its face.’” LM Ins.
Corp. v. Criss for Estate of Szuhay, 716 F. App’x 530, 533 (6th Cir. 2017) (quoting Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007)); Ashcroft v. Iqbal, 556
U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009)). “A claim has facial plausibility when
the plaintiff pleads factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S.
at 556). “Mere labels . . . are not enough[,]” Engler v. Arnold, 862 F.3d 571, 575 (6th Cir. 2017),
and the Court also “need not accept legal conclusions in the complaint as being true[,]” Eye Ctrs.
of Am., LLC v. Series Protected Cell 1, a Series of Oxford Ins. Co. TN, LLC, No. 22-5138, 2022
WL 13983763, at *2 (6th Cir. Oct. 24, 2022) (citing Bates v. Green Farms Condo. Ass’n, 958 F.3d
470, 480 (6th Cir. 2020)), unless the complaint has “supported [them] with enough pleaded
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facts[.]” Bates, 958 F.3d at 480. Nor should a court accept as true “a legal conclusion couched as
a factual allegation[.]” Rondigo, L.L.C. v. Twp. of Richmond, 641 F.3d 673, 680 (6th Cir. 2011)
(quoting Twombly, 550 U.S. at 555).
III.

CONSIDERATION OF THE CONTRACT
As an initial matter, the Court must determine whether it may consider the terms of the

contract between Silco and the insured in ruling on the Rule 12(c) motion. The contract was not
attached to Ohio Security’s complaint, but was, instead, attached to Silco’s verified answer. (See
Doc. No. 10-1, at 42–53.) On a Rule 12(c) motion, the court may consider only the pleadings
themselves. Max Arnold & Sons, LLC v. W.L. Hailey & Co., Inc., 452 F.3d 494, 503 (6th Cir.
2006). If “matters outside the pleadings are presented to and not excluded by the court” when
ruling on a motion under Rule 12(b)(6) or 12(c), the Federal Rules require that “the motion must
be treated as one for summary judgment under Rule 56.” Fed. R. Civ. P. 12(d).
The term “pleadings” includes both the complaint and answer, Fed. R. Civ. P. 7(a), and
“[a] copy of a written instrument which is an exhibit to a pleading is a part of the pleading for all
purposes.” Fed. R. Civ. P. 10(c). “A ‘written instrument’ within the meaning of Rule 10(c), is a
document evidencing legal rights or duties or giving formal expression to a legal act or agreement,
such as a deed, will, bond, lease, insurance policy or security agreement.” Cote v. NewRez, LLC,
No. 1:18-cv-52, 2021 WL 1840563, at *3 (M.D. Tenn. May 7, 2021) (quoting Steverson v.
Walmart, No. 3:19-cv-140, 2019 WL 3822179, at *2 (M.D. Tenn. Aug. 15, 2019) (further citation
omitted)); see Instrument, Black’s Law Dictionary (5th pocket ed. 2016) (defining “instrument”
as a “written legal document that defines rights, duties, entitlements, or liabilities, such as a statute,
contract, will, promissory note, or share certificate”). It therefore follows that the Court may
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consider the complaint, the answer, and any written instrument, as that term is understood in Rule
10(c), that is attached to either pleading without the Rule 12(c) motion being converted into one
for summary judgment. See Doe v. Belmont Univ., 334 F. Supp. 3d 877, 887 (M.D. Tenn. 2018)
(citations omitted).
Here, the contract is specifically referenced in the answer and appended thereto. (Doc. No.
10 , at 2 ¶ 6 (identifying the agreement between Silco and the insured as Exhibit A); Doc. No. 101, Ex. A.) As a contract, it also clearly meets the definition of “written instrument” in Rule 10(c),
as it sets forth the legal rights, duties, and obligations of the parties to the contract; namely, Silco
and the insured. And because Ohio Security is asserting its rights in subrogation as the insured’s
subrogee, the contract also defines the legal rights, duties, and obligations of Silco and Ohio
Security. See Ohio Bur. of Workers’ Comp. v. McKinley, 956 N.E.2d 814, 820 (Ohio 2011)
(explaining that “[a] subrogated insurer stands in the shoes of the insured-subrogor and has no
greater rights than those of its insured-subrogor” (citations omitted)). Consideration of the
contract, therefore, is consistent with Rule 12(c) and Rule 10(c) of the Federal Rules of Civil
Procedure.
Additionally, Sixth Circuit case law provides that a court may consider other documents
on a Rule 12(c) motion “so long as they are referred to in the Complaint and are central to the
claims contained therein.” Bassett v. Nat’l Coll. Athletic Ass’n, 528 F.3d 426, 430 (6th Cir. 2008)
(citing Amini v. Oberlin Coll., 259 F.3d 493, 502 (6th Cir. 2001)); see also Sollenberger v.
Sollenberger, 173 F. Supp. 3d 608, 618 (S.D. Ohio 2016) (noting that even if a plaintiff neglects
to append a governing contract to the complaint, the court may consult the contract to prevent a
legally deficient claim from surviving a Rule 12(c) motion). Even though the complaint makes no
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specific reference to a “contract” between the insured and Silco, it alleges that the insured “hired
[Silco] to maintain the fire sprinkler system” on the insured’s property. (Doc. No. 1, at 9 ¶ 6.) The
Court finds that this reference to hiring Silco infers the existence of a contract between the parties.
See, e.g., Bernard v. ADS Security, L.P., No. 5:17-cv-93, 2017 WL 6604594, at *2 (W.D. Ky. Dec.
22, 2017) (explaining that reference in complaint to plaintiff “being a paying customer of
[Defendants] presupposes the existence of an agreement between the parties wherein Plaintiff paid
for services provided by [Defendants, and t]he manifestations of those agreements are the
contracts” attached to the Rule 12(c) motion). Additionally a document that defines the rights of
the parties with respect to the “water event” at issue in this action is also central to the solitary
claim in the complaint. Accordingly, Sixth Circuit case law also supports the consideration of the
contract in the context of a motion for judgment on the pleadings.
But even if documents are considered part of the pleadings, or are otherwise referred to in
the complaint and integral to the complaint’s causes of action, the Court may not consider them
“at the pleading stage if one of the parties questions the authenticity of the documents.” Rose v.
Bersa, No. 1:17-cv-252, 2020 WL 5210913, at *11 (S.D. Ohio Aug. 31, 2020) (citation omitted);
see Gascho v. Global Fitness Holdings, LLC, 918 F. Supp. 2d 708, 720 (S.D. Ohio 2013) (refusing
to consider unauthenticated copies of contracts offered in support of a motion to dismiss where the
plaintiff “presented . . . a reasonable basis to question the validity, accuracy, or completeness of
[the] documents”); see also Greenberg v. Life Ins. Co. of Va., 177 F.3d 507, 514 (6th Cir. 1999)
(“[W]hen a document is referred to in the complaint and is central to the plaintiff’s claim . . . , the
defendant may submit an authentic copy to the court to be considered on a motion to dismiss[.]”
(quotation marks and citations omitted)).
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Ohio Security does not deny the existence of a contract, and, as noted above, the complaint
allegations infer the existence of a contractual relationship between Silco and the insured.
Moreover, Ohio Security does not directly deny the authenticity of the document attached to
Silco’s verified answer as Exhibit A. Rather, it highlights the fact that the agreement “was not
signed by [the] insured nor does [Silco] submit any other proof that [the] insured ever agreed to
provisions” contained therein. (Doc. No. 12, at 3.) Silco responds by noting that the contract
specifically provides that the insured’s representative, Bilal Hussain, verbally approved the
contract and its terms and conditions on November 28, 2021. (Doc. No. 14, at 1–2 (citing Doc.
No. 10-1, at 42 (“Verbal Approval By: bilal hussain Approved On: November 28, 2021”).).
“Under Ohio law, there must be a ‘meeting of the minds’ in order to form a legally binding
contract.” CSX Transp., Inc. v. Occidental Chem. Corp., 130 F. Supp. 2d 936, 941 (S.D. Ohio
2001) (citations omitted). “Expressions of assent are generally sufficient in order to demonstrate a
meeting of the minds and Ohio law recognizes objective manifestations of intent.” Id. (citation
omitted). “Though parties ordinarily manifest their assent to a written contract by signing it, a party
may manifest its assent by some other act or conduct.” Bruzzese v. Chesapeake Expl., LLC, 998 F.
Supp. 2d 663, 674 (S.D. Ohio 2014) (citations omitted); see Tocci v. Antioch Univ., 967 F. Supp.
2d 1176, 1200 (S.D. Ohio 2013) (noting that a signature is not required to show a party’s assent to
a contract unless the contract requires signatures). “Manifestation of mutual assent to an exchange
requires that each party either make a promise or begin or render a performance . . . . The
manifestation of assent may be made wholly or partly by written or spoken words or by other acts
or by the failure to act.” Bruzzese, 998 F. Supp. 2d at 673 (quoting McSweeney v. Jackson, 691
N.E.2d 303, 308 (Ohio Ct. App. 1996) (further citation omitted) (emphasis added)).
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The Court finds that it may consider the contract attached to the verified answer in the
context of the present Rule 12(c) motion. The authenticity of the document was attested to by the
verified answer, and the verbal assent evidenced in the contract itself satisfies the requirement
under Ohio law that there was a meeting of the minds between Silco and the insured. Under these
circumstances, the Court’s consideration of this document does not convert the Rule 12(c) motion
into one for summary judgment. See Fed. R. Civ. P. 12(d).
IV.

MOTION FOR JUDGMENT ON THE PLEADINGS
Silco insists that it is entitled to judgment on the pleadings for three reasons: (1) any right

of subrogation was waived by the insured; (2) the action is time-barred because it was filed beyond
the contractually agreed upon one-year limitations period; and (3) the negligence action cannot
stand in light of the parties’ express contract. The first two reasons require consideration of the
terms and conditions of the contract between Silco and the insured; the third reason requires only
the existence of a governing contract, not consideration of any specific terms.
A. Waiver of Right of Subrogation
Ohio Security bases it right to recover from Silco upon its status as the subrogee for the
insured. “Subrogation is the right of the insurer to be put in the position of its insured in order to
pursue recovery from a third party legally responsible to the insured for a loss paid by the insurer.”
Warmack v. Arnold, 961 N.E.2d 1165, 1170 (Ohio Ct. App. 2011) (citation omitted). “Because an
insurer is subrogated to or an assignee of only the rights of its insured or assignor, the rights of the
insurer are no greater than those of its insured.” Id. (citing Auto. Ins. Co. v. Pennsylvania R.R. Co.,
14 N.E.2d 613 (Ohio 1938)); see Chemtrol Adhesives, Inc. v. Am. Mfrs. Mut. Ins. Co., 537 N.E.2d
624, 628 (Ohio 1989) (noting that “an insurer-subrogee cannot succeed to or acquire any right or
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remedy not possessed by its insured” (citation omitted)). “Consequently, a release granted by an
insured is an effective defense against later actions by an insurance company seeking to enforce
its subrogation rights.” Warmack, 961 N.E.2d at 1170 (citation omitted); see Nationwide Mut. Fire
Ins. Co. v. Solitrol, Inc., 672 N.E.2d 687, 692 (Ohio Ct. App. 1996) (“With regard to legal
subrogation, the Supreme Court has previously held that parties to a contract may modify,
extinguish or even completely destroy the right.” (citing Bogan v. Progressive Ins. Co., 521 N.E.2d
447 (Ohio 1988)); see, e.g., Valley Forge Ins. Co. v. Premier Recyclers Plastics, Inc., No. 22633,
2005 WL 3193836, at *3 (Ohio Ct. App. Nov. 30, 2005).
In Valley Forge Insurance Company, a property insurer brought an action in subrogation
against its insured’s commercial lessee, following a fire on the leased premises. The lease
contained a subrogation waiver clause that provided, “Lessor and Lessee each agree to, and hereby
to [sic], waive the rights of subrogation of their respective insurers.” 2005 WL 3193836, at *3
(quoting lease provision). The trial court granted the lessee judgment as a matter of law on the
strength of the subrogation waiver, and the appellate court affirmed. Id. Noting that it must give
effect to the parties’ expressed intent, the appellate court found that the “the intent of the parties is
made clear and unambiguous from the language used in the lease agreement[.]” Id. In fact, the
appellate court observed that it could not “imagine what could be more clear or unambiguous than
the parties stating that they agree to ‘waive the rights of subrogation of their respective insurers.’”
Id. (quoting lease provision).
In the present case, the contract provided, in relevant part:
In case of any claim or loss, Customer and Silco mutually agree that their respective
insurance companies shall have no right of subrogation against the other on account
thereof.
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(Doc. No. 10-1, at 43, Sec. A.) If possible, the waiver provision in this case is even more explicit
than the one at issue in Valley Forge Insurance Company. There is no doubt from the clear and
unambiguous language of the contract that Silco and the insured intended to extinguish any rights
held by each other’s insurance company.2 While Ohio Security complains its right of subrogation
is “itself wholly independent” of any contract between its insured and Silco (see Doc. No. 12, at 5
(citation omitted)), “Ohio courts have repeatedly held that waiver-of-subrogation provisions [in a
contract] are valid and enforceable.” Acuity v. Interstate Constr., Inc., No. 2007-P-74, 2008 WL
625097, at *2 (Ohio Ct. App. Mar. 7, 2008) (collecting cases); see Sonitrol, 672 N.E.2d at 693
(noting that “[s]ince Nationwide stood in the board’s place and the board had waived its right of
recovery against Sonitrol [in a security alarm contract], the trial court did not err in granting”
judgment as a matter of law in favor of Sonitrol). Because Ohio Security can have no rights greater
than that of its insured, and its insured clearly and unambiguously waived any right to recover in
subrogation, Silco is entitled to judgment on the pleadings for this reason alone.
B. Statute of Limitations
Ohio Security also resists Silco’s argument that the present action is time-barred by the
one-year limitations period set forth in the contract. It argues that, under Ohio law, it had four
years to bring a negligence action against Silco, and that the shortening of that right by seventyfive percent would be unreasonable. (Doc. No. 12, at 3 (citing Ohio Rev. Code § 2305.09(D)

The contract provides other evidence of the parties’ intent to eliminate the right to recover property damage in
subrogation. Under “General Terms & Conditions,” the “LIMITATIONS OF LIABILITY” clause begins by stating
that “Silco is not an insurer.” (Doc. No. 10-1, at 43, Sec. A (underlining and capitalization in original).) Continuing,
the clause provides, “[t]he amounts payable to Silco are based upon the value of the services and the scope of liability
herein and are unrelated to the value of Customer’s property or property of others located in the premises.” (Id.)
Further, the clause limits Silco’s liability to $10,000. (Id.) These qualifications and/or limitations are consistent with
the parties’ mutual waiver of subrogation.
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(providing for a four-year statute of limitations for negligence claims)).) Under Ohio law, parties
to a contract may agree to shorten the limitations period, “provided that the fixed period of
limitations is reasonable.” Thomas v. Allstate Ins. Co., 974 F.2d 706, 709 (6th Cir. 1992) (citations
omitted); see Universal Windows & Doors, Inc. v. Eagle Window & Door, Inc., 689 N.E.2d 56,
59 (Ohio Ct. App. 1996) (similar); Monreal Funeral Home, Inc. v. Farmers Ins. Co., 937 N.E.2d
159, 165 (Ohio Ct. App. 2010) (holding that “parties to a contract may agree to limit the time for
bringing an action to a period less than provided by [the] relevant statute of limitations so long as
that period is reasonable” (citations omitted)); see also Angel v. Reed, 891 N.E.2d 1179, 1181
(Ohio 2008) (stating that a contract provision limiting a statute of limitations is enforceable so long
as it is clear and unambiguous (quotation marks and citations omitted)).
There is no dispute that the “water event” that caused the damage to the insured’s property
occurred on February 3, 2022. (Doc. No. 1, at 9 ¶ 7.) Ohio Security waited almost two years (until
January 11, 2024) to bring the present action. (Id. at 8.) The contract clearly and unambiguously
provides, “No suit or action shall be brought against Silco more than one (1) year after the accrual
of the cause of action.” (Doc. No. 10-1, at 43, Sec. A.) If the one-year contractual limitations period
applies, the present action is untimely. If, however, it does not apply, then the negligence claim is
timely under the four-year limitations period for negligence claims in Ohio Rev. Code §
2305.09(D). The question is whether the one-year period is reasonable. See Angel, 891 N.E.2d at
1181; Universal Windows & Doors, 689 N.E.2d at 59 (noting that “[t]he United States Supreme
Court has stated that in the absence of a statute to the contrary, a contract can limit the time for
bringing an action if the time limit is reasonable” (citing Order of United Commercial Travelers
of Am. v. Wolfe, 331 U.S. 586, 67 S. Ct. 1355, 91 L. Ed. 1687 (1947))).
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“Ohio courts have routinely held one-year contractual limitation clauses are reasonable and
enforceable.” Smith v. City of Barberton, No. 1:20-cv-584, 2021 WL 752595, at *4 (N.D. Ohio
Feb. 26, 2021) (collecting Ohio cases); see Thomas, 974 F.2d at 710 (finding one-year limitations
period reasonable and enforceable); Axios, Inc. v. Thinkware, Inc., 1:15-cv-379, 2015 WL
5029227, at *4 (S.D. Ohio Aug. 26, 2015) (finding that one-year limitations period in licensing
agreement was enforceable under Ohio law); Brondes Ford, Inc. v. Habitec Sec., 38 N.E.3d 1056,
1089 (Ohio 2015) (“As set forth above, we have determined that the one-year limitation set forth
in paragraph 25 of the Agreement is reasonable.”). And where an insured is bound by a contractual
limitation of the time period for bringing suit, the insured’s subrogee is bound by the same
limitation. See generally Bartelmay v. Body Flex Sports, Inc., No. 4:13-cv-767, 2013 WL 3149598,
at *3 (N.D. Ohio June 18, 2013) (“Logic dictates that when an insured’s tort claim is subject to a
statute of limitations, so too is the insurer’s subrogation claim.” (citation omitted)).
Here, the language in the contract setting forth the one-year limitations period was clear,
and the “[C]ourt[ is] constrained to apply the plain language of the contract.” City of St. Marys v.
Auglaize Cty. Bd. of Commrs., 875 N.E.2d 561, 566 (Ohio 2007) (citation omitted); see also
Graham v. Drydock Coal Co., 667 N.E.2d 949, 952 (Ohio 1996) (“The intent of the parties is
presumed to reside in the language they chose to use in their agreement.” (citation omitted)). As
for reasonableness, Ohio Security argues that water damage claims often take time to investigate
prior to seeking judicial intervention. It further argues that a one-year period would not allow for
a meaningful period of settlement negotiations prior to initiating litigation. (Doc. No. 12, at 3–4.)
Yet, Ohio Security was able perform sufficient investigation to put Silco (and other potential
responsible parties) on notice of its claim in subrogation within weeks of the “water event,” leaving
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ample time to explore settlement before bringing suit. Ohio Security does not deny that, on March
15, 2022, its counsel sent Silco a letter identifying Ohio Security as the subrogee of the insured
and indicating that its investigation to date showed that water left in the fire sprinkler system was
responsible for the damage to the insured’s property. (Doc. No. 10 ¶ 7; see Doc. No. 10-2 (Letter).)
Ohio Security knew of the “water event” shortly after it occurred and certainly did not need a
lengthy discovery period to identify its potential claim against Silco. (See Doc. No. 10-2, at 1
(advising Silco that it was placing all “potentially responsible parties on notice of [Ohio Security’s]
claim”).) Under these circumstances, the Court finds that the one-year limitations period in the
contract was reasonable and enforceable. See, e.g., Universal Windows & Door, 689 N.E.2d at 59
(finding that one-year limitations period in dealer agreement was reasonable and enforceable
where plaintiff knew of the breaches immediately and had time for settlement negotiations before
bringing suit). Because the one-year limitations period is valid and enforceable, Ohio Security’s
subrogation action is also time-barred.3
C. No Independent Tort
As previously observed, Ohio Security does not challenge the existence of a contractual
relationship between Silco and the insured, and, in fact, such a relationship can be inferred from
the complaint. (See Doc. No. 1, at 9 ¶ 6 (noting that the insured “hired” Silco “to maintain the fire
sprinkler system”).) In light of the existence of a contract, Silco argues that Ohio Security’s
negligence claim is legally deficient because the duties upon which it is premised arise from the

It is worth noting that, even if the Court accepted March 15, 2022—the date of Ohio Security’s letter to Silco—as
the date the one-year limitations period began to run, the negligence claim would still be untimely. Ohio Security was
aware of the “water event” by March 15, 2022, at the latest, yet it did not file suit for another twenty-two months.
Thus, even affording a period of discovery by Ohio Security, the action would be time-barred.
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contract between Silco and the insured. (Doc. No. 14, at 3.) “[U]nder Ohio law, the existence of a
contract action generally excludes the opportunity to present the same case as a tort claim.” Wolfe
v. Cont’l Cas. Co., 647 F.2d 705, 710 (6th Cir. 1981). “[A] tort exists only if a party breaches a
duty which he owes to another independently of the contract, that is, a duty which would exist
even if no contract existed.” Id.; see Barrett-O’Neill v. Lalo, LLC, 171 F. Supp. 3d 725, 747 (S.D.
Ohio 2016) (similar) (citations omitted); see also Netherlands Ins. Co. v. BSHM Architects, Inc.,
111 N.E.3d 1229, 1236 (Ohio Ct. App. 2018) (“Where the causes of action in tort and contract are
‘factually intertwined,’ a plaintiff must show that the tort claims derive from the breach of duties
that are independent of the contract and that would exist notwithstanding the contract.” (citations
omitted)). The question of whether a duty exists is a question of law for the Court to decide. See
Mussivand v. David, 544 N.E.2d 265, 270 (Ohio 1989).
In Netherlands Insurance Company, an insurance company brought a claim in subrogation
against the company that installed a roof drain system that purportedly caused damage to property
owned by the insured. Raising a claim in negligence, the plaintiff alleged that the defendant: (1)
“Carelessly, negligently, and improperly installed the roof drain system at the Subject Property;”
(2) “Carelessly, negligently, and improperly failed to caulk the roof drain and spigot penetrations
so as not to cause harm to the Subject Property;” (3) “Failed to perform the roofing services in a
workmanlike manner;” and (4) “Otherwise, failed to exercise due care under the circumstances.”
111 N.E.3d at 1233 (citing the complaint). Rejecting the notion that the duty to perform in a
workmanlike manner was a duty owed separate and apart from the installation contract, the court
of appeals held that the plaintiff’s negligence action was precluded by a contract between the
insured and the roofing company. Id. at 1239. In so ruling, the court reasoned that, “any duty to
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perform the work correctly [is] related to the contract. The tort claim [was] intertwined in the
contract and was not independent.” Id.
Similarly, in Barrett-O’Neill, the plaintiff-homeowner brought suit against the defendantestate liquidator for damages associated with the defendant’s sale of the plaintiff’s household
goods and antiques. In addition to asserting a breach of contract claim, the plaintiff alleged that
the defendant’s actions in connection with the sale were negligent. 171 F. Supp. 3d at 747. In the
amended complaint, the homeowner alleged that the estate liquidator breached its duties owed to
the homeowner by performing a list of tasks in a negligent manner, including: failing to “properly
label, inventory, store, market and advertise” the homeowner’s goods; losing the homeowner’s
antiques and household goods; and improperly liquidating the homeowner’s antiques and goods.
Id. at 747–48 (quoting the amended complaint). The court ruled that the defendant was entitled to
judgment as a matter of law on the negligence claim because each of the “alleged duties relate only
to the parties’ contractual relationship[.]” Id. at 748.
In its complaint, Ohio Security alleges that Silco “owed a duty to [its] insured to exercise
reasonable care and caution in the maintenance of the fire sprinkler system[.]” (Doc. No. 1, at 10
¶ 13.) It further alleges that Silco “breached this duty of care by committing” a series of negligent
acts. (Id. at 10 ¶ 14.) Ohio Security argues that these individual actions represent duties, “which
all exist independent from the contract between” its insured and Silco. (Doc. No. 12, at 5.) In
particular, Ohio Security alleges in paragraph 14 of the complaint that Silco:
(a) Carelessly and negligently left water in the fire sprinkler system while maintaining
said system;
(b) Carelessly and negligently fail[ed] to warn its customer of the dangers inherent in
leaving water in the fire sprinkler system;
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(c) Carelessly and negligently fail[ed] to train, supervise and instruct its employees or
agents;
(d) Carelessly and negligently fail[ed] to follow applicable codes and standards in
maintaining the fire sprinkler system;
(e) Carelessly and negligently fail[ed] to properly drain the fire sprinkler system,
thereby creating the risk that a water event would occur; and
(f) Was otherwise careless and negligent in maintaining the fire sprinkler system.
(Doc. No. 1, at 10 ¶ 14.)
As was the case in Barrett-O’Neill and Netherlands Insurance Company, the duties Ohio
Security identifies all arise out of the parties’ contract; in this case, a contract covering the
maintenance of the fire sprinkler system. The fact that Ohio Security has alleged that Silco
performed its contract duties in a careless and negligent manner does not transform potential
contract breaches into negligent acts. “In Ohio, a breach of contract does not create a tort claim.”
Textron Fin. Corp. v. Nationwide Mut. Ins. Co., 684 N.E.2d 1261, 1270 (Ohio Ct. App. 1996)
(citation omitted). While “each contract contains a common law duty to perform the contract with
care, skill, reasonable expedience and faithfulness[,]” such a duty “only describes how a party is
to perform its contract obligations, i.e., it does not establish a duty independent of the contract.”
Dana Ltd. v. Aon Consulting, Inc., 984 F. Supp. 2d 755, 767 (N.D. Ohio 2013) (quoting Wells
Fargo Bank, N.A. v. Fifth Third Bank, 931 F. Supp. 2d 834, 840 (S.D. Ohio 2013)); see, e.g., Solid
Gold Jewelers v. ADT Sec. Sys., Inc., 600 F. Supp. 2d 956, 962 (N.D. Ohio 2007) (holding that
there is no independent tort duty to perform maintenance of alarm system with care, skill, and
faithfulness).
Ohio Security insists, however, that it has identified and pled a separate duty independent
of the maintenance contract; namely, the duty “not to damage another’s property[.]” (Doc. No. 12,
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at 5.) In support, Ohio Security cites Lucas v. Eclipse Cos., LLC, No. 23 MO 7, 2023 WL 8892516
(Ohio Ct. App. Dec. 18, 2023). In Lucas, the plaintiff-property owner entered into an agreement
allowing the defendant-construction company ingress and egress on the plaintiff’s private road
during a construction project on nearby property. Id. at *1. In exchange for this access, the
construction company agreed to move fill dirt and grade an area near the property owner’s
detached garage. Id. During the construction project, heavy machinery caused damage to the
private road as it traveled to and from the construction site, and the property owner brought suit in
negligence against the construction company. Id. at *1–2. In reversing the trial court’s grant of
summary judgment in favor of the construction company, the court of appeals found that, while
the construction company was using the property owner’s road to access its construction project,
it had “a duty of care to avoid unreasonable or foreseeable harm to others and the property of
others.” Id. at *5–6. This duty, it found, was separate and apart from the contract, which covered
the construction company’s duty to move fill dirt for the property owner. Id. at *5 (“There is no
claim [the construction company] failed to place the fill dirt as required or [it] was negligent in its
contractual duty to place the fill dirt around the detached garage.”) Had the damages stemmed
from construction company’s contractual duties (i.e., the duty to move fill dirt and grade the
homeowner’s property), the appellate court noted, the property owner would have had a cause of
action in contract for failure to perform contractual obligations in a workmanlike manner. Id.
Unlike the factual scenario presented in Lucas, Ohio Security’s alleged damages are a
direct result of Silco’s contractual obligation to maintain the fire sprinkler system. The complaint
makes clear that the damages to the property occurred due to Silco’s alleged carelessness and
negligence in performing the tasks associated with the maintenance of the fire sprinkler system.
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(See Doc. No. 1, at 10 ¶ 14.) To suggest that Silco owed a separate duty to perform those duties in
a way that resulted in no damage to the insured’s property “ignores the fact that [Silco] would owe
[Ohio Security] no duties whatsoever but for the contract.” Dana, 984 F. Supp. 2d at 767 (holding
plaintiff’s “efforts to dress up its breach-of-contract claim in language sounding in negligence is
insufficient to identify a duty independent of the contract”); see Smith, 2021 WL 752595, at *5
(noting that “[t]ort law is not designed . . . to compensate parties for losses suffered as a result of
a breach of duties assumed only by agreement” (quoting Corporex Dev. & Constr. Mgt., Inc. v.
Shook, Inc., 835 N.Ed.2d 701, 704 (Ohio 2005) (further quotation marks and citation omitted))).
Because Ohio Security has not sufficiently alleged the existence of a duty that is
independent of the underlying maintenance contract, there can be no liability in tort, and Ohio
Security’s negligence claim must be dismissed.
V. MOTION TO AMEND
As an aside, Ohio Security suggests that, should the Court find that its negligence claim is
barred by the contractual waiver of subrogation rights, it “should be permitted to amend its
Complaint to allege allegations of willful misconduct by [Silco], which would operate to create
tort liability and/or void the waiver of subrogation clause.” (Doc. No. 12, at 6 (citation omitted).)
In support, it notes that Silco’s “actions could have been willful and/or wanton, as the sprinkler
system was not properly maintained causing significant damages to be incurred.” (Id.)
Ohio Security’s request to amend is deficient in several respects. First, instead of filing a
proper motion to amend, Ohio Security buried its request at the end of its opposition brief. See
Town of Smyrna, Tenn. v. Mun. Gas Auth. of Georgia, 129 F. Supp. 3d 589, 599 n.3 (M.D. Tenn.
2015) (“[A] request for leave to amend almost as an aside, to the district court in a memorandum
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in opposition to the defendant’s motion to dismiss is . . . not a motion to amend.” (quotation marks
and citations omitted)). Second, Ohio Security failed to attach to its request a proposed amended
complaint or otherwise provide a meaningful description of the additional factual allegations it
wishes to advance. “Normally, a party seeking an amendment should attach a copy of the amended
complaint.” Kuyat BioMimetic Therapeutics, Inc., 747 F.3d 435, 444 (6th Cir. 2014). While Ohio
Security suggests that it would allege that Silco’s actions were willful, it fails to identify the factual
allegations that would support such a conclusion. At best, it suggests that because Silco’s actions
may have been negligent, it is possible that they were willful. (See Doc. No. 12, at 6.) “[D]istrict
courts are not required to engage in a guessing game as to what [the plaintiff] might plead to save
her claim.” Justice v. Petersen, No. 21-5848, 2022 WL 2188451, at *3–4 (6th Cir. June 17, 2022)
(alteration in original) (quotation marks and citations omitted). Ohio Security’s failure to file a
proper motion with a copy of a proposed amended complaint, or otherwise adequately inform the
Court of the nature of its proposed amendment requires that leave to amend be denied. See Kuyat,
747 F.3d at 444.
But even if Ohio Security had presented a properly supported motion to amend, the request
for leave would still be denied. In general, a court “should freely give leave [to amend] when
justice so requires.” Fed. R. Civ. P. 15(a)(2). “But a court need not grant a motion to amend when
the reason for amendment is improper, such as . . . futility of amendment[.]” Skatemore, Inc. v.
Whitmer, 40 F.4th 727, 737 (6th Cir. 2022) (emphasis in original) (internal quotation marks and
citation omitted). An amendment is futile when, after including the proposed changes, the
complaint still “could not withstand a Rule 12(b)(6) motion to dismiss.” Riverview Health Inst.
LLC v. Med. Mut. of Ohio, 601 F.3d 505, 512 (6th Cir. 2010) (quoting Rose v. Hartford
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Underwriters Ins. Co., 203 F.3d 417, 420 (6th Cir. 2000) (further citation omitted)).
Without decided whether Ohio Security’s unknown factual allegations relating to willful
misconduct would serve to defeat the waiver of subrogation clause, such an amendment would not
save the complaint from being dismissed as time-barred. And more fundamentally, allegations that
Silco intentionally breached its duties would not transform the “contractual nature” of Ohio
Security’s allegations into ones capable of supporting a tort claim. See Textron Fin. Corp., 684
N.E.2d at 1270 (noting that the “[t]he motive of a breaching party is irrelevant to a contract action”
(citing Wolfe, 647 F.2d at 710)); Solid Gold Jewelers, 600 F. Supp. 2d at 960 (“Under Ohio law,
‘it is no tort to breach a contract, regardless of motive.’” (quoting Canderm Pharm., Ltd v. Elder
Pharms., Inc., 862 F.2d 597, 602 (6th Cir. 1988) (further citations omitted))). Because the
proposed amendment would not defeat a motion to dismiss Ohio Security’s request for leave to
amend is denied for this additional reason.
VI.

CONCLUSION
For the foregoing reasons, Silco’s motion for judgment on the pleadings is granted, and

this case is dismissed.
IT IS SO ORDERED.

Dated: June 3, 2024
HONORABLE SARA LIOI
CHIEF JUDGE
UNITED STATES DISTRICT COURT

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