Sinmier, LLC v. Everest Indemnity Ins. Co.

RECOMMENDED FOR PUBLICATION Pursuant to Sixth Circuit I.O.P. 32.1(b) File Name: 26a0295p.06 UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT ┐ SINMIER, LLC, │ Plaintiff-Appellant, │ > No. 25-4018 │ v. │ │ EVEREST INDEMNITY INSURANCE COMPANY; BEARING │ INSURANCE GROUP, LLC, fka Bankers Insurance, │ LLC; EVERSPORTS & ENTERTAINMENT INSURANCE, │ INC., oka Specialty Insurance Group, │ Defendants-Appellees. │ ┘ Appeal from the United States District Court for the Northern District of Ohio at Toledo. No. 3:19-cv-02854—James R. Knepp II, District Judge. Argued: October 20, 2026 Decided and Filed: November 2, 2026 Before: GIBBONS, SUTTON, and DAVIS, Circuit Judges. _________________ COUNSEL ARGUED: Matthew I. Henzi, ASHERKELLY LAW, PLLC, Southfield, Michigan, for Appellant. Daniel F. Gourash, SEELEY SAVIDGE EBERT & GOURASH CO., LLP, Westlake, Ohio, for Appellees Everest Indemnity Insurance Company and EverSports & Entertainment Insurance, Inc. R. Christopher Yingling, NICOLA, GUDBRANSON & COOPER, LLC, Cleveland, Ohio, for Appellee Bearing Insurance Group. ON BRIEF: Matthew I. Henzi, ASHERKELLY LAW, PLLC, Southfield, Michigan, for Appellant. Daniel F. Gourash, Robert D. Anderle, Clare C. Moran, SEELEY SAVIDGE EBERT & GOURASH CO., LLP, Westlake, Ohio, for Appellees Everest Indemnity Insurance Company and EverSports & Entertainment Insurance, Inc. R. Christopher Yingling, NICOLA, GUDBRANSON & COOPER, LLC, Cleveland, Ohio, for Appellee Bearing Insurance Group, LLC.  No. 25-4018 Sinmier, LLC v. Everest Indemnity Ins. Co., et al. Page 2 _________________ OPINION _________________ SUTTON, Circuit Judge. Sinmier, a commercial real estate lender, loaned Vintro Hotels and Resorts funds to purchase a resort in Sandusky, Ohio, and recorded a mortgage as security. When Vintro defaulted on its obligation, Sinmier discovered that the resort’s insurance policies left its mortgagee interest unprotected. Vintro and Sinmier executed a settlement agreement that released Vintro’s mortgage debt and transferred a deed in lieu of foreclosure to Maui Sands in Sinmier’s name. Because Sinmier still had not recovered all of its original investment, it brought this action in its capacity as mortgagee against Vintro’s insurance broker, one of Vintro’s insurance providers, and an underwriter. The district court granted summary judgment to the defendants. Seeing no error, we affirm. I. Sinmier is a commercial real estate lender. In 2018, it loaned Vintro Hotels and Resorts, a hotel operator, seven million dollars to purchase the Maui Sands Resort and Waterpark in Sandusky, Ohio, via an Open-End Mortgage and Security Agreement. Sinmier recorded a mortgage on September 7, 2018. Obligated by contract to insure the property, Vintro used Bankers, an insurance broker, to identify various avenues of coverage. Bankers contacted a wholesale insurance broker to seek quotes on Vintro’s behalf. Two insurance companies, Everest and Berkley, entered the picture. Both insurance companies eventually proposed policies. On August 23, 2018, Berkley issued a policy, but it soon cancelled the policy when Vintro did not make a down payment at the proposed closing. Everest likewise issued a policy effective August 23, 2018. When the closing failed to occur on time, Everest also cancelled its policy and told the wholesale broker it would have to re-write the policy. On October 16, Bankers asked the wholesale broker to obtain a revised policy quote with an effective date of October 19, 2018. Everest issued a second policy, but it listed Sinmier only  No. 25-4018 Sinmier, LLC v. Everest Indemnity Ins. Co., et al. Page 3 as an additional insured, not as a mortgagee, under the commercial general liability portion of the agreement. This time around, the closing of the sale of Maui Sands occurred as planned. Then came a rough Ohio winter. Located on Lake Erie, Maui Sands suffered. A frozen pipe burst and caused major flooding. Two HVAC systems located on the roof froze, and then (surprisingly) caught fire, leaving a smoky, humid waterpark. Still more wind-generated and cold-related losses mounted at Maui Sands. On January 26, 2019, Vintro submitted an insurance claim to Everest. The insurance company advanced $350,000 to Vintro while it processed the claim. Vintro and Everest ultimately settled Vintro’s policy claim for an additional $775,000 in June 2019. In March 2019, after Vintro defaulted on its loan obligation, Sinmier sued Vintro. See Complaint at 3–7, Sinmier, LLC v. Vintro Hotels & Resorts Ohio LLC, No. 19-cv-705 (N.D. Ohio Mar. 29, 2019). Sinmier sought relief based on claims of breach of contract, fraud, and intentional misrepresentation, and looked to foreclose on the property. In October 2019, the parties settled. As part of this settlement agreement, Vintro provided Sinmier a deed in lieu of foreclosure to Maui Sands. The deed was “considered payment in full of Vintro’s monetary obligations under the Note or Mortgage.” R.119-1 at 6. In addition, the agreement required Vintro and Inderjit Grewal—Vintro’s owner—to pay Sinmier $627,375 within nine months, secured by a consent judgment. The deed in lieu of foreclosure noted that Vintro and Grewal “will receive a release of liability on the note” as consideration for their conveyance of Maui Sands to Sinmier. R.76-1 at 2. After executing the settlement agreement and accepting the deed in lieu of foreclosure, Sinmier filed this lawsuit against Bankers, Everest, and EverSports.  No. 25-4018 Sinmier, LLC v. Everest Indemnity Ins. Co., et al. Page 4 As to Bankers, Sinmier sought relief based on breach of contract as a third-party beneficiary, negligence, negligence per se, misrepresentation, and fraud. As to Everest, Sinmier sought relief as a third-party beneficiary based on breach of contract and liability for EverSports’s negligence as Everest’s agent. As to EverSports, Sinmier sought relief as a third- party beneficiary based on breach of contract. The district court granted summary judgment to each defendant and entered final judgment. II. We give fresh review to the district court’s summary judgment orders and draw all reasonable factual inferences in favor of the non-movant, Sinmier. See Peffer v. Stephens, 880 F.3d 256, 260, 262 (6th Cir. 2018). All agree that Ohio law governs the case, meaning that we must “predict what the Ohio Supreme Court would do if confronted with” this question. Himmel v. Ford Motor Co., 342 F.3d 593, 598 (6th Cir. 2003). In the absence of an on-point Ohio Supreme Court decision, we may look to decisions of the Ohio intermediate courts. Lukas v. McPeak, 730 F.3d 635, 638 (6th Cir. 2013). The key issue on appeal is whether the settlement agreement extinguished Sinmier’s insurable mortgagee interest. If the agreement ended that interest, Sinmier has no basis for relief because it brought each of these claims in its capacity as a mortgagee. And Sinmier has forfeited any argument that its negligence claims exist independently of its mortgagee interest. A mortgagee’s insurable interest exists to protect payment of the debt and dissipates when the borrower pays the debt or the lender releases it. A mortgage gives rise to an insurable interest in a mortgagee—here, Sinmier. See N. Assurance Co. v. Nat’l Guarantee & Fin. Co., 21 Ohio Law Abs. 641, 643 (Ct. App. 1936). This interest extends, however, only “to the amount of [the] debt.” McDonald v. Black’s Adm’r, 20 Ohio 185, 194 (1851). A mortgage does not etch into stone the mortgagee’s insurable interest. When the underlying debt decreases, the mortgagee’s insurable interest reduces in tandem. And when the debt ends, the mortgagee’s insurable interest ends. Barwick v. State Farm Fire & Cas. Ins. Co., No. 24526, 2011-Ohio-  No. 25-4018 Sinmier, LLC v. Everest Indemnity Ins. Co., et al. Page 5 5689, ¶¶ 35–36 (Ct. App. Nov. 4, 2011); see also Lee v. Royal Indem. Co., 108 F.3d 651, 656 (6th Cir. 1997). In Barwick, a bank holding a mortgage purchased the underlying home at a sheriff’s sale after a fire loss. 2011-Ohio-5689 ¶ 36. The Ohio Court of Appeals held that the amount the bank received in the sale partially extinguished its interest in any insurance proceeds. Id. In reaching this conclusion, the court leaned on a Tennessee Supreme Court decision to the same effect. See id. ¶¶ 34–36 (discussing Benton Banking Co. v. Tenn. Farmers Mut. Ins. Co., 906 S.W.2d 436, 439 (Tenn. 1995)). While “[t]he mortgagee’s interest in the insurance proceeds is recognized as security for the payment of the debt,” Benton Banking explained, that reality lasts only as long as the debt does. 906 S.W.2d at 439. “[O]nce the debt is paid by some other means, any right to the insurance is thereby extinguished.” Id. This is not a new idea. What Ohio and Tennessee do in this area matches what other States do and indeed turns on a foundational principle of insurance law. See, e.g., Nationwide Mut. Fire Ins. Co. v. Wilborn, 279 So.2d 460, 463 (Ala. 1973); Fireman’s Fund Mortg. Corp. v. Allstate Ins. Co., 838 P.2d 790, 795 (Alaska 1992) (noting that “most courts have held that a subsequent foreclosure by a mortgagee either partially or completely divests the mortgagee of its rights under the insurance contract”); Burritt Mut. Sav. Bank of New Britain v. Transamerica Ins. Co., 428 A.2d 333, 338 (Conn. 1980); Power Bldg. & Loan Ass’n v. Ajax Fire Ins. Co., 164 A. 410, 411 (N.J. 1933) (“[A]fter the foreclosure sale and the satisfaction of the plaintiff’s debt, it ceased to have any interest as mortgagee in the premises covered by the policy.”); 5A J. Appleman, Insurance Law and Practice § 3403, at 302 (1970) (“[T]he full or partial extinguishment of the mortgage debt itself, whether prior to or subsequent to the loss, will preclude, to the extent thereof, any recovery on the policy by the mortgagee.”); 5 Couch on Insurance 2d §§ 29:75–77 (1960). Gauged by this well-established standard, Sinmier extinguished its insurable interest in the property when it signed the settlement agreement and accepted a deed to Maui Sands in lieu of foreclosure. Vintro, Grewal, and Sinmier agreed that the conveyance “shall be considered payment in full of Vintro’s monetary obligations under the Note or Mortgage.” R.119-1 at 6. To the same end, the parties agreed that, “[u]pon receipt of the Deed in Lieu of Foreclosure, Sinmier  No. 25-4018 Sinmier, LLC v. Everest Indemnity Ins. Co., et al. Page 6 shall fully release Vintro from any liability or responsibility it may have to pay any deficiency amount following the sale of Maui Sands, whether by foreclosure sale or otherwise.” R.119-1 at 5. In freely and voluntarily ending Vintro’s mortgage debt to it, Sinmier likewise ended its insurable interest as a mortgagee. That means Sinmier’s claims against Bankers, Everest, and EverSports fail as a matter of law. Each claim rises or falls with the existence or absence of a mortgagee interest. Sinmier did not possess any other interest in Maui Sands. It was not an owner. It was not an investor. It was a “mere creditor, who ha[d] a specific lien on the property for the payment of [its] debts.” Rands v. Kendall, 15 Ohio 671, 680 (1846). Release of the mortgage debt “destroy[ed]” its mortgagee interest “as to all the world.” Id. Sinmier’s claims all turn on the same proposition: The defendants wronged it when they issued insurance policies that came and went without protecting its mortgagee interest. In the absence of such an interest, its claims against the defendants are not cognizable ones. Trying to fend off this conclusion, Sinmier argues that the settlement agreement and the deed arrangement created ambiguous, conflicting terms. While the settlement agreement purported to fully release Vintro’s mortgage debt obligation, the deed provided that “the Mortgage shall remain a valid lien on the Property after the recordation of this Deed, and shall not merge into Grantee’s title to the Property or otherwise be impaired by reason of the delivery or recordation of this Deed.” R.76-1 at 2–3. But Sinmier did not make this argument below. In the district court, Sinmier thought the Settlement Agreement was clear. R.392 at 19 (“[t]he clear language of the Settlement Agreement”); R.392 at 21 (“If a contract’s terms are unambiguous, a court may not interpret the contract in a manner inconsistent with those terms.”). Sinmier therefore forfeited this argument. See Scottsdale Ins. Co. v. Flowers, 513 F.3d 546, 552 (6th Cir. 2008). The argument fails on the merits anyway. Sinmier, notably, does not mention another sentence in the deed in lieu of foreclosure: “There shall be no merger of the fee title to the Property and the lien of the Mortgage on the Property unless and until [Sinmier], at its option and in its sole discretion, elects to cause the lien of the Mortgage to be extinguished by releasing it, foreclosure, or otherwise.” R.76-1 at 3. That’s just what the settlement agreement does. The  No. 25-4018 Sinmier, LLC v. Everest Indemnity Ins. Co., et al. Page 7 agreement by its terms “fully release[s]” any of Vintro’s deficiency liability and views the deed in lieu of foreclosure as “payment in full” under the note or mortgage. R.372-6 at 70–71. Sinmier separately argues that the release came with conditions that preserved Vintro’s mortgage debt. The agreement, it is true, said that the “Parties will subsequently determine the allocation of any of those insurance proceeds and determine to what extent those proceeds should be paid to Sinmier or retained by [Vintro and Grewal].” R.372-6 at 68. But this language does not preserve the mortgage debt. It simply reserves the rights of Sinmier, Vintro, and Grewal to divvy up insurance proceeds among themselves after the fact. The agreement, it is also true, obligates Vintro and Grewal to pay $627,375 to Sinmier. But this payment was secured by a consent judgment, not by the preservation of the existing mortgage interest. That Sinmier apparently has not fully recovered this amount concerns Vintro, not the three defendants, and concerns the remaining value, if any, of the consent judgment. These realities do not undo the agreement’s language stating that it fully extinguishes the mortgage debt. Sinmier points out that the Everest policy reserves a mortgage holder’s “right to receive loss payment even if the [mortgage holder] has started foreclosure or similar action on the building or structure.” R.76-15 at 32. Because the policy does not have a provision terminating a mortgage holder’s right at the conclusion of foreclosure proceedings, Sinmier adds, it must permit this recovery. But, as the district court explained, “[t]hese are simply not the facts here.” R.418 at 3. Sinmier did not start a “similar action” by signing the settlement agreement and accepting the deed in lieu of foreclosure. It ended the action. The deed in lieu of foreclosure was “payment in full” under the mortgage. R.119-1 at 6. As its name spells out, a deed in lieu of foreclosure amounts to an alternative to foreclosure. When the parties signed the deed and title passed to Sinmier, the possibility of foreclosure (and the mortgagee interest) ended. That explains why the policy permits a mortgage holder to recover for covered losses only “as interests may appear.” R.76-15 at 32. When the settlement agreement extinguished Sinmier’s mortgagee interest, those “interests” no longer “appear[ed].” Even if the settlement agreement extinguished its insurable interest, Sinmier insists that the claim that Bankers negligently failed to notify it when Berkley cancelled its policy survives. Because Berkley canceled its policy in October 2018, a year before the deed in lieu of  No. 25-4018 Sinmier, LLC v. Everest Indemnity Ins. Co., et al. Page 8 foreclosure conveyed Maui Sands to Sinmier, Sinmier maintains that the extinguishment problem does not touch this claim. The problem with this argument is that Sinmier forfeited it by failing to raise it below. Scottsdale Ins. Co., 513 F.3d at 552. While Sinmier referred to this claim below, it did not present this argument below: that the claim survived the extinguishment of its insurable interests. Apparently appreciating the point, Sinmier says that it “implicitly” raised this theory before the district court. Reply Br. 5. But, as a general rule, implicit theories of relief do not count as preserved theories of relief. Thurman v. Yellow Freight Sys., Inc., 90 F.3d 1160, 1172 (6th Cir. 1996) (parties forfeit arguments “raised vaguely” or “not squarely presented to the trial court”). Even if it lacked a mortgagee interest, Sinmier claims that one other claim survives—that Bankers negligently failed to secure mortgagee insurance coverage. Noting that Everest paid property loss benefits to Vintro in June 2019 and that Sinmier did not sign the settlement agreement until that October, Sinmier claims that the elimination of its mortgagee interest does not affect the claim. In the first place, Sinmier forfeited this claim as well. On appeal, it does not point to any time or place when it raised this argument below. That counts as a forfeiture. Scottsdale Ins. Co., 513 F.3d at 552. In the second place, the argument lacks merit. If Bankers had properly protected its mortgagee interest, Sinmier maintains, the early 2019 insurance proceeds would have been fixed, vested, and no longer contingent on other events. Yet Barwick presented a similar chronology, and it made no difference to the outcome of that case. The Barwicks’ home caught fire, the Barwicks defaulted on their mortgage loan, the bank recouped part of its loan at a sheriff’s sale, and the bank’s subsequent right to receive fire loss proceeds diminished in kind. See Barwick, 2011-Ohio-5689 ¶¶ 2–4. Even though a fire loss can leave a mortgagee “vested with rights under an insurance policy, subsequent partial or full extinguishment of the debt giving rise to the insurable interest will reduce the . . . mortgagee’s interest . . . to the extent that the debt has been satisfied.” Id. ¶ 35. As in Barwick, so too here. Any claim that Bankers owed Sinmier insurance proceeds would not have ripened until the insurable event occurred. And by then,  No. 25-4018 Sinmier, LLC v. Everest Indemnity Ins. Co., et al. Page 9 whether in this instance or in Barwick, the amount owed would have been reduced or eliminated based on whether the debt had been partly or fully satisfied. We affirm.