The trial court’s dismissal of a declartory judgment action after the mortgage company failed to prove the loss or entitlement to damages was affirmed. Erie Ins. Co. v. F St. Investments, LLC, 2025 Ohio App. LEXIS (Ohio Ct. App. Oct. 14, 2025).

MR DLB Properties LLC was in the business of property restoration and renovation. MR DLB executed a mortgage on three properties as secuirty for payment on a note issued by mortgagee F Street. As a condition of the mortgage, MR DLB obtained commercial liability insurance coverage with Erie. The policy provided $908,100 in replacement/repair property coverage and listed F Street as first mortgagee.

One of the properties sustained fire damage. MR DLB submitted a claim reflecting a total loss for the property. Erie disputed the claim and filed a complaint seeking a declaration of its rights under the policy. The complaint named F Street as first mortgagee on the property. F Street counterclaimed requesting that the court declare the existence of a valid, enforceable contract between the parties and find that Erie breached the contract with MR DLB by refusing to pay the full amount of benefits available for the covered loss.

All parties filed motions for summary judgment. The court granted Erie’s motion against MR DLB based upon numerous misrepresentations in the insurance application, voiding the policy as to MR DLB.

Reviewing Erie’s and F Street’s summary judgment motions, the trial court concluded that F Street, as first mortgagee, was entitled to payment under the policy’s mortgage clause. A hearing was conducted to determine the amount of the loss. After the hearing, the trial court entered judgment dismissing F Street’s argument that it was entitled to damages equal to the full amount of the mortgage debt. Further, F Street failed to provide evidence of loss as required under the policy, meaning it could not recover. While F Street’s expert presented evidence regarding the payoff on the mortgage, $450,000, the expert failed to demonstrate that the damages to the property necessitated a rebuild, the condition of the property prior to the fire, and whether the replacement items valued in the expert’s testimony and report even existed in the property prior to the fire. F Street appealed.

The policy stated, “‘Loss’ shall be payable to mortgagees named in the ‘Declarations’, to the extent of their interest and in the order of precedence.” Further, the mortgagee had the duty to furnish proof of loss if the insured failed to do so. Finally, the policy specified that the property’s coverage was for “replacement cost” which restricted payment to damaged or destroyed property actually repaired or replaced and limited recovery to the less of the amount of insurance applicable to the damaged property, the costs or replacement, or the amount actually spent in repairing or replacing the property.

Here, F Street failed to present any evidence on the extent of damage to the property, the cost to repair the property , or whether the property was, in fact, a total loss. Accordingly, the trial court did not err when it dismissed the action.