[Cite as Gallagher Sharp, L.L.P. v. Miller Goler Faeges Lapine, L.L.P., 2019-Ohio-2113.]

 

COURT OF APPEALS OF OHIO 

EIGHTH APPELLATE DISTRICT 

COUNTY OF CUYAHOGA 

GALLAGHER SHARP, L.L.P., : 

 Plaintiff-Appellee, : 

 No. 107483 

 v. : 

 

MILLER GOLER FAEGES LAPINE, : 

L.L.P., ET AL., 

 

 Defendants-Appellants. : 

 

JOURNAL ENTRY AND OPINION 

 JUDGMENT: AFFIRMED

RELEASED AND JOURNALIZED: May 30, 2019 

 

Civil Appeal from the Cuyahoga County Court of Common Pleas 

Case No. CV-16-869606 

 

Appearances: 

Gallagher Sharp, L.L.P., Richard C.O. Rezie, Theresa A. 

Richthammer, and Iva M. Cindric, for appellees. 

Gibbs Law Firm, P.A., and Kimberly Y. Smith Rivera, for 

appellant. 

 
MARY J. BOYLE, P.J.: 

Defendants-appellants, Miller Goler Faeges Lapine, L.L.P. (“MGFL”) 

and Robert Schwartz (collectively “defendants”) appeal from the trial court’s order 

granting summary judgment to plaintiff-appellee, Gallagher Sharp, L.L.P. 

(“Gallagher Sharp”).1 They raise four assignments of error for our review: 

1. The trial court erred in granting summary judgment to Gallagher on 

its breach of contract count because there was no contract between 

Gallagher [Sharp] and MGFL. 

2. The trial court erred in granting summary judgment to Gallagher 

[Sharp] on its breach of contract count because Schwartz was not an 

“insured” under the insurance policy at issue. 

3. The trial court erred in granting summary judgment to Gallagher 

[Sharp] on its breach of contract count because the court failed to 

construe the insurance policy in favor of the policyholder. 

4. The trial court erred in denying summary judgment to MGFL on 

Gallagher [Sharp]’s breach of contract count because there was no 

contract and there was no breach. 

Finding no merit to its assignments of error, we affirm. 

 

 1 This appeal is a companion case to the appeal in Gallagher Sharp, L.L.P. v. 

Schwartz, 8th Dist. Cuyahoga No. 107493. In its appeal, Gallagher Sharp raises one 

assignment of error: “The trial court erred when it denied Plaintiff-Appellant Gallagher 

Sharp LLP’s motion for summary judgment against Defendant-Appellee Robert D. 

Schwartz and found that claim against him moot in light of the judgment entered against 

[MGFL].” 
I. Procedural History and Factual Background

A. Schwartz’s employment with MGFL 

Schwartz began working for MGFL as “of counsel” on August 15, 

2006.2 As part of the arrangement, MGFL agreed to provide Schwartz with 

“professional liability coverage for current acts during the time of [his] affiliation[.]” 

During his time with MGFL, Schwartz represented Quirino DiPaolo 

in litigation related to DiPaolo’s construction business. The first case was filed in 

Montgomery C.P. No. 2007 CV 05589 (“the Montgomery County case”) against 

DiPaolo and his business in July 2007, and Schwartz entered an appearance by filing 

responsive pleadings — specifically a stipulation for leave to plead and an answer to 

the complaint — in that case in August and September 2007. A second case was filed 

against DiPaolo and his business in October 2007 in Cuyahoga C.P. No. CV-07-

639473 (“the Cuyahoga County case”). 

On October 15, 2007, Schwartz ended his “of counsel” relationship 

with MGFL. 

On December 1, 2007, Schwartz and MGFL attorney, Steven Miller, 

met with DiPaolo regarding his litigation. After that meeting, on December 14, 

2007, MGFL sent a letter to DiPaolo stating that the firm would not represent him 

in the cases related to DiPaolo’s business. Miller, however, filed two motions for 

extension of time in the Cuyahoga County case, on December 3 and 19, 2007. On 

 2 In its brief, MGFL states that “[w]hen Schwartz first affiliated with the firm, the 

firm name was Miller Goler Faeges LLP[,] * * * [but] was subsequently changed to” its 

current name. 
those motions, Miller noted that Miller was not appearing on behalf of DiPaolo, “but 

merely presenting this Motion to protect and preserve [DiPaolo’s] right and 

opportunity to respond to the Complaint.” Miller also filed a notice of counsel’s 

change of address on December 21, 2007, in the Montgomery County case. No 

pleadings after that time were filed on behalf of DiPaolo in the case against him. 

On February 21, 2008, the plaintiff suing DiPaolo in the Cuyahoga 

County case moved for default judgment against DiPaolo and his company, and the 

trial court held a hearing, during which DiPaolo and his counsel failed to appear, 

and the trial court awarded the plaintiff default judgment. In February 2009, 

DiPaolo moved through different counsel to vacate the default judgment based on 

inexcusable neglect. The trial court denied his motion. DiPaolo appealed that 

decision in CB Group, Inc. v. Starboard Hospitality, L.L.C., 8th Dist. Cuyahoga No. 

93387, 2009-Ohio-6652. In December 2009, we agreed with DiPaolo on appeal and 

reversed the trial court’s decision, ordering it to grant DiPaolo relief from judgment 

under Civ.R. 60(B). Specifically, we found that Schwartz and MGFL attorney Steven 

Miller “abandoned their representation of him” and that those actions constituted 

inexcusable neglect. Id. at ¶ 19-26. Thus, the default judgment was vacated and the 

matter returned to the trial court for further proceedings. 

On June 3, 2008, a judgment for the amount of $271,935.52 plus 

interest was entered against DiPaolo in the Montgomery County case after the 

plaintiff moved for partial summary judgment. DiPaolo moved to vacate that 
judgment based on Schwartz’s neglect, but the trial court overruled his motion in 

September 2009. 

B. DiPaolo’s Malpractice Lawsuit Against Schwartz and MGFL 

Based on the two judgments entered against him, in February 2009, 

DiPaolo filed a complaint against Schwartz and “Doe Law Firm L.L.P.” in Trumbull 

C.P. No. 2009 CV 547 (“the Trumbull County case”). DiPaolo alleged that Schwartz 

worked for Doe Law Firm L.L.P. and that Schwartz as well as “other principals” from 

Doe Law Firm L.L.P. represented him in certain litigation. DiPaolo alleged that Doe 

Law Firm L.L.P. and Schwartz committed legal malpractice in the form of client 

abandonment for the default judgments awarded in the cases in Montgomery and 

Cuyahoga counties, and sought damages of at least $25,000, as well as attorney fees, 

interests, and costs. 

In March 2009, MGFL’s insurance carrier, Chubb Group of Insurance 

Companies (“Chubb”) received notice of DiPaolo’s action. MGFL obtained an 

insurance policy (“the Policy”) with Chubb in April 2008. 

The Policy is a “claims made policy, which applies only to ‘claims’ first 

made during the ‘policy period[.]’” The policy period was from April 15, 2008 

through April 15, 2009. The Policy referred to MGFL as “the Firm” and to Chubb as 

“the Company,” and it included the following relevant provisions and definitions: 

Claim means * * * a written demand or written request for monetary 

damages or non-monetary relief [or] * * * a civil proceeding 

commenced by the service of a complaint or similar pleading * * * 

against an Insured for a Wrongful Act[.] 
Defense Costs means that part of Loss consisting of reasonable 

costs, charges, fees (including attorneys’ fees * * *) and expenses * * * 

incurred in defending any Claim[.] * * * 

Insured means the Firm and any Insured Person, 

Insured Person means any natural person * * * who was, now is or 

shall become designated (as evidenced in the Firms’ records) as counsel 

or of counsel by the Firm * * * but only while acting in his * * * capacity 

as such. 

Loss means the amount that an Insured becomes legally obligated to 

pay as a result of any covered Claim, including but not limited to 

damages * * *, judgments, settlements, pre-judgment and postjudgment interest and Defense Costs. * * * 

Wrongful Act means any actual or alleged act, error or omission 

committed, attempted, or allegedly committed or attempted, solely in 

the performance of or failure to perform Professional Services by 

the Firm or by an Insured Person acting in his * * * capacity as such 

on behalf of the Firm. 

(Emphasis sic.) 

The Policy contained the following Insuring Clause: “[Chubb] shall pay Loss on 

behalf of an Insured on account of any Claim first made against such Insured during 

the Policy Period * * * for a Wrongful Act committed by the Insured before or during 

the Policy Period.” It also contained the following “Retention Amount” provision: 

The Company’s liability under this Policy shall apply only to that part 

of covered Loss on account of each Claim * * * which is excess of the 

applicable Retention Amount[, $50,000.] * * * In the event that any 

Insured Person is unwilling or unable to bear the Retention Amount it 

shall be the obligation of the Firm to bear such Retention Amount 

uninsured and at its own risk. 

(Emphasis sic.) 

Additionally, the policy contained a “Defense and Settlement” provision in the Ohio 

Small Law Firm Endorsement attached to the policy: 
The Company shall have the right and duty to defend any Claim

covered by this Policy. Coverage shall apply even if any of the 

allegations are groundless, false or fraudulent. The Company shall 

assign counsel to defend the Insured. 

(Emphasis sic.) 

In April 2010, DiPaolo amended his complaint in the Trumbull 

County case, substituting MGFL for Doe Law Firm L.L.P. 

Pursuant to the policy, Chubb determined that the claims against 

Schwartz and MGFL were covered, and Chubb retained Gallagher Sharp to 

represent Schwartz in DiPaolo’s malpractice action, the Trumbull County case. 

Gallagher Sharp filed a notice of appearance on behalf of Schwartz in June 2010. In 

January 2012, the claims against Schwartz ended in a settlement, and the case was 

dismissed. MGFL represented itself in the action and was dismissed in September 

2010 based on statute-of-limitations grounds. 

In March 2011, Gallagher Sharp sent Chubb an invoice for its 

representation of Schwartz, which Chubb then forwarded to MGFL. MGFL refused 

payment in a letter to Gallagher Sharp, claiming that it was not obligated to pay 

Gallagher Sharp’s invoice. 

Gallagher Sharp directly contacted MGFL about payment of its 

invoice in March 2011, April 2011, and February 2012. MGFL continued to refuse 

to pay. 
In March 2012, MGFL sent a letter to Chubb claiming that Schwartz 

was not an “Insured Person” and was not covered under the policy and, therefore, 

that MGFL was not required to pay Gallagher Sharp’s invoice. 

In May 2012, a senior claims officer from Chubb sent a letter to MGFL 

about Gallagher Sharp’s outstanding legal fees and expenses and stated that 

“[p]ayment of [Gallagher Sharp’s] fees and expenses is the responsibility of the 

Insureds.” Chubb’s letter also stated that Schwartz was an “Insured Person” under 

the policy and that the policy covered the allegations against Schwartz because 

Plaintiff in the DiPaolo action expressly alleged that Mr. Schwartz “was 

an employee, agent, principal or associate of [MGFL] at all times 

material.” Moreover, the complaint alleges, among other things, that 

Defendants (including Mr. Schwartz): (a) failed to clearly disclose his 

relationship with [MGFL]; (b) failed to take reasonable steps to notify 

Plaintiff of the status of the pending litigation; (c) failed to clearly 

advise Plaintiff of the extent of Defendants’ representation; (d) failed to 

clearly inform Plaintiff of the legal consequences of not filing 

responsive pleadings; (e) failed to take reasonable steps to protect 

Plaintiff’s interest in pending litigation after apparently undertaking a 

duty to do so. Nothing in Plaintiff’s Complaint suggests that these 

allegations are limited to the time period after Mr. Schwartz’s 

departure from [MGFL], and the Complaint cannot reasonably be so 

interpreted. 

The letter maintained that under the Policy, MGFL was “obligated to pay any portion 

of the retention that Mr. Schwartz may be unwilling or unable to pay” and that 

MGFL’s “prompt payment to Gallagher Sharp of $42,634.51 * * * will satisfy 

[MGFL’s] contractual retention obligation.” 

 

 
 C. Gallagher Sharp Sues MGFL for Payment 

On September 26, 2016, Gallagher Sharp filed a complaint against 

MGFL and Schwartz for one count of breach of contract and one count of unjust 

enrichment, requesting $39,117 plus interest in Cuyahoga C.P. No. CV-16-869606. 

Gallagher Sharp alleged that defendants “engaged [Gallagher Sharp] through a 

policy of professional liability insurance to provide legal services to and for the 

benefit of [defendants] with respect to a malpractice action filed against 

[defendants].” Gallagher Sharp alleged that it “was engaged to provide services to 

[defendants] pursuant to a policy of Insurance issued by non-party Chubb 

Insurance.” Gallagher Sharp stated that defendants failed to pay the retainer and 

deductible amounts under the insurance policy, thereby breaching the contract and 

becoming unjustly enriched. 

 MGFL initially moved to dismiss the complaint. The trial court 

denied its motion. 

Schwartz and MGFL filed separate answers, and MGFL also filed a 

counterclaim against Gallagher Sharp for abuse of process and frivolous conduct 

and sought compensatory damages in excess of $25,000 with interest, punitive 

damages, attorney fees, and other appropriate relief. 

Gallagher Sharp filed a motion to dismiss MGFL’s counterclaim, 

which the trial court denied. Gallagher Sharp subsequently filed an answer to 

MGFL’s counterclaim. 
MGFL filed a motion for summary judgment on Gallagher Sharp’s 

claims against it. Gallagher Sharp also filed a motion for summary judgment on its 

claims against MGFL as well as a motion for summary judgment on its claims 

against Schwartz and a motion for summary judgment as to MGFL’s counterclaim. 

The parties opposed each other’s motions. Schwartz did not file a motion for 

summary judgment, but did oppose Gallagher Sharp’s motion on the claims against 

him. 

In June 2018, the trial court issued a journal entry and opinion. It 

first granted summary judgment to Gallagher Sharp on its claims against MGFL. 

The trial court found that, based on the definitions and terms under the Chubb 

Insurance Policy, “MGFL is responsible to pay the attorneys’ fees of Gallagher 

[Sharp] as an included loss under the Chubb Policy.” It stated, “There is no question 

that Chubb under the Ohio Small Law Firm Endorsement, chose counsel to 

represent Schwartz, that there was no objection lodged by MGFL to that 

appointment and that Gallagher [Sharp] performed legal services in defending and 

settling the case.” As a result, the trial court granted judgment to Gallagher Sharp 

against MGFL in the amount of $39,117 “with interest at the legal rate with court 

costs to [MGFL].” 

The trial court denied Gallagher Sharp’s motion for summary 

judgment against Schwartz “because [Schwartz] was not the policyholder but only 

an included insured under the Chubb Policy and [because] it is rendered moot by 

[the grant of summary judgment to Gallagher on its claims against MGFL].” 
Finally, the trial court dismissed MGFL’s counterclaim against 

Gallagher Sharp “with prejudice in its entirety.” It found that that Gallagher Sharp’s 

lawsuit had a “legitimate basis” and that there was no frivolous conduct or abuse of 

process.3

It is from this judgment that MGFL now appeals. On appeal, 

Gallagher Sharp also raises a cross-assignment of error, stating that it was entitled 

to summary judgment against MGFL under an unjust-enrichment theory.4 

II. Law and Analysis 

In all of its assignments of error, MGFL challenges the trial court’s 

order granting Gallagher Sharp summary judgment on Gallagher Sharp’s claims 

against it. MGFL argues that the trial court’s order granting summary judgment to 

Gallagher Sharp was improper because (1) there was no contract between MGFL 

and Gallagher Sharp, (2) Schwartz was not an “Insured” under MGFL’s insurance 

policy, (3) even if there was a contract, MGFL did not breach it, and (4) the trial 

court failed to construe the contract in favor of MGFL, the policyholder. 

 

 3 MGFL filed a motion for stay of execution of judgment and any proceedings to enforce 

judgment pending appeal, which the trial court granted. 

 4 Gallagher Sharp also appealed, challenging the trial court’s decision denying it 

summary judgment against Schwartz; however, this appeal only concerns the grant of 

summary judgment to Gallagher Sharp on its claims against MGFL. See companion case, 

Gallagher Sharp, 8th Dist. Cuyahoga No. 107493.
A. Standard of Review

An appellate court reviews a trial court’s decision to grant summary 

judgment de novo. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 

241 (1996). De novo review means that this court independently “examine[s] the 

evidence to determine if as a matter of law no genuine issues exist for trial.” Brewer 

v. Cleveland Bd. of Edn., 122 Ohio App.3d 378, 383, 701 N.E.2d 1023 (8th 

Dist.1997), citing Dupler v. Mansfield Journal, 64 Ohio St.2d 116, 413 N.E.2d 1187 

(1980). In other words, we review the trial court’s decision without according the 

trial court any deference. Smith v. Gold-Kaplan, 8th Dist. Cuyahoga No. 100015, 

2014-Ohio-1424, ¶ 9, citing N.E. Ohio Apt. Assn. v. Cuyahoga Cty. Bd. of Commrs., 

121 Ohio App.3d 188, 699 N.E.2d 534 (8th Dist.1997). 

Under Civ.R. 56(C), summary judgment is properly granted when (1) 

“there is no genuine issue as to any material fact”; (2) “the moving party is entitled 

to judgment as a matter of law”; and (3) “reasonable minds can come to but one 

conclusion, and that conclusion is adverse to the party against whom the motion for 

summary judgment is made[.]” Harless v. Willis Day Warehousing Co., 54 Ohio 

St.2d 64, 66, 375 N.E.2d 46 (1978). Because it ends litigation, courts should 

carefully award summary judgment only after resolving all doubts in favor of the 

nonmoving party and finding that “reasonable minds can reach only an adverse 

conclusion” against the nonmoving party. Murphy v. Reynoldsburg, 65 Ohio St.3d 

356, 358-359, 604 N.E.2d 138 (1992). 
“The burden of showing that no genuine issue exists as to any material 

fact falls upon the moving party. Once the moving party has met his burden, it is 

the nonmoving party’s obligation to present evidence on any issue for which that 

party bears the burden of production at trial.” Robinson v. J.C. Penney Co., 8th Dist. 

Cuyahoga Nos. 62389 and 63062, 1993 Ohio App. LEXIS 2633, 14 (May 20, 1993), 

citing Harless and Wing v. Anchor Media, Ltd. of Texas, 59 Ohio St.3d 108, 570 

N.E.2d 1095 (1991). “The moving party is entitled to summary judgment if the 

nonmoving party fails to establish the existence of an element essential to that 

party’s case and on which that party will bear the burden of proof at trial.” 

Brandon/Wiant Co. v. Teamor, 125 Ohio App.3d 442, 446, 708 N.E.2d 1024 (8th 

Dist.1998), citing Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 

265 (1986). 

C. Contract 

In its first assignment of error, MGFL argues that the trial court erred 

in granting summary judgment to Gallagher Sharp because there was no contract 

between it and Gallagher Sharp. In its second assignment of error, MGFL argues 

that the trial court’s order granting summary judgment was improper because 

Schwartz was not an “Insured Person” under the Policy. Because both assignments 

of error concern whether a contract exists, we will discuss them together. 

“It is well established that a contract is binding only upon the parties 

to the contract and those in privity with them and that an action for breach of 

contract can be maintained only by the parties to the contract or those deriving 
rights from the contracting parties.” Ohio Savs. Bank v. H.L. Vokes Co., 54 Ohio 

App. 68, 71, 560 N.E.2d 1328 (8th Dist.1989), citing Cincinnati, Hamilton & Dayton 

R.R. Co. v. Bank, 54 Ohio St. 60, 42 N.E. 700 (1896). “[F]or a third party to maintain 

an action for breach of contract, the nonsignatory must be an intended third-party 

beneficiary of the agreement.” Cleveland-Akron-Canton Advertising Coop. v. 

Physician’s Weight Loss Ctrs. of Am., 184 Ohio App.3d 805, 2009-Ohio-5699, 922 

N.E.2d 1012, ¶ 19 (8th Dist.), citing Mergenthal v. Star Banc Corp., 122 Ohio App.3d 

100, 701 N.E.2d 383 (12th Dist.1997). “Ohio cases have held that a third-party 

beneficiary may maintain an action based upon the contract which contains the 

promise for his benefit.” Chitlik v. Allstate Ins. Co., 34 Ohio App.2d 193, 196, 299 

N.E.2d 295 (8th Dist.1973). 

“Courts generally presume that a contract’s intent resides in the 

language the parties chose to use in the agreement.” Huff v. FirstEnergy Corp., 130 

Ohio St.3d 196, 2011-Ohio-5083, 957 N.E.2d 3, ¶ 12, citing Shifrin v. Forest City 

Ents., Inc., 64 Ohio St.3d 635, 597 N.E.2d 499 (1992). “Ohio law thus requires that 

for a third party to be an intended beneficiary under a contract, there must be 

evidence that the contract was intended to directly benefit that third party. 

Generally, the parties’ intention to benefit a third party will be found in the language 

of the agreement.” Id. “The third party need not be named in the contract, as long 

as he is contemplated by the parties to the contract and sufficiently identified. Nor 

need the third party accept the contract, or even acknowledge its existence.” Chitlik 

at 196. 
In Huff, the Ohio Supreme Court adopted the “intent to benefit” test 

to determine whether a party is an intended beneficiary of a contract. Under that 

test, 

“if the promisee intends that a third party should benefit from the 

contract, then that third party is an ‘intended beneficiary’ who has 

enforceable rights under the contract. If the promisee has no intent to 

benefit a third party, then any third-party beneficiary to the contract is 

merely an ‘incidental beneficiary,’ who has no enforceable rights under 

the contract.” Id. at ¶ 11, quoting Norfolk & Western Co. v. United 

States, 641 F.2d 1201 (6th Cir.1980). 

While Gallagher Sharp did not sign and is not specifically named in 

the policy, the policy clearly obligates MGFL to pay the retention amount, which 

includes defense costs and attorney fees, when a claim for a wrongful act is filed 

against the firm or an insured person. To reiterate, the policy contained the 

following retention amount provision, which stated: 

[Chubb’s] liability under this Policy shall apply only to that part of 

covered Loss on account of each Claim * * * which is excess of the 

applicable Retention Amount[, $50,000.] * * * In the event that any 

Insured Person is unwilling or unable to bear the Retention Amount it 

shall be the obligation of [MGFL] to bear such Retention Amount 

uninsured and at its own risk. 

The policy defined “Defense Costs” as 

“that part of Loss consisting of reasonable costs, charges, fees 

(including attorneys’ fees * * *) and expenses * * * incurred in defending 

any Claim” and defined “Loss” as “the amount that an Insured becomes 

legally obligated to pay as a result of any covered Claim, including but 

not limited to damages * * *, judgments, settlements, pre-judgment 

and post-judgment interest and Defense Costs.” 

By agreeing that MGFL would pay for defense costs and attorney fees, 

MGFL and Chubb intended to benefit the attorney(s) representing either MGFL or 
an insured person when a claim arose. Further, the policy was a professional liability 

policy, the entire purpose of which was to insure MGFL and its insured persons 

against claims of malpractice. To do that, MGFL and Chubb agreed that Chubb 

would “assign counsel to defend the Insured” and that MGFL would pay the 

retention amount. That agreement reflects that MGFL and Chubb contemplated 

that the attorney(s) defending MGFL or its insured persons (Schwartz) would be 

paid for, i.e., benefit from, its representation. Accordingly, we find that Gallagher 

Sharp is a third-party intended beneficiary and, therefore, has enforceable rights 

under the policy. 

In support of its position that Gallagher Sharp is not an intended 

beneficiary, MGFL cites to Old Republic Ins. Co. v. Sidley & Austin, 702 F.Supp. 207 

(N.D.Ill.1988). While Old Republic supports MGFL’s position, we decline to follow 

that court’s decision. Old Republic interpreted Illinois contract law, not Ohio 

contract law, and faced a dissimilar set of circumstances to that in this case. Further, 

we disagree with Old Republic’s analysis of intended third-party beneficiary law. We 

find that the policy in this case establishes that Gallagher Sharp is a third-party 

beneficiary and has enforceable rights under the policy. Gallagher Sharp 

represented Schwartz pursuant to the insurance policy, and it is entitled to payment 

pursuant to the insurance policy. 

It is also clear from the policy that Schwartz is an “Insured Person.” 

MGFL’s argument to the contrary centers on the fact that Schwartz was not “of 

counsel” and unaffiliated with MGFL during the wrongful acts that DiPaolo sued for 
and, therefore, was not an insured person and not eligible for coverage under the 

policy. MGFL’s argument, however, relates to whether Schwartz was covered under 

the policy or whether Chubb had a duty to defend Schwartz, a determination that 

was left to Chubb. Chubb found that DiPaolo’s February 2009 claim in the Trumbull 

County case triggered coverage for Schwartz under MGFL’s policy, even though 

MGFL claimed that Schwartz was not an “Insured Person” under the insurance 

policy in a letter on March 21, 2012. In fact, Chubb disagreed with MGFL’s 

interpretation of the contract in its responsive May 14, 2012 letter to MGFL, stating: 

The March 21 Letter asserts that Mr. Schwartz was not in any way 

affiliated with, or acting in the name or on behalf of [MGFL] at the time 

of the actions complained of. However, Plaintiff in the DiPaolo action 

expressly alleged that Mr. Schwartz “was an employee, agent, 

principal or associate of [MGFL] at all times material.” Moreover, 

the complaint alleges, among other things, that Defendants (including 

Mr. Schwartz): (a) failed to clearly disclose his relationship with 

[MGFL]; (b) failed to take reasonable steps to notify Plaintiff of the 

status of the pending litigation; (c) failed to clearly advise Plaintiff of 

the extent of Defendants’ representation; (d) failed to clearly inform 

Plaintiff of the legal consequences of not filing responsive pleadings; 

(e) failed to take reasonable steps to protect Plaintiff’s interest in 

pending litigation after apparently undertaking a duty to do so. 

Nothing in Plaintiff’s Complaint suggests that these allegations are 

limited to the time period after Mr. Schwartz’s departure from [MGFL], 

and the Complaint cannot reasonably be so interpreted. 

In light of the foregoing, contrary to your assertion in the March 21 

Letter, Mr. Schwartz is an Insured Person, the matters alleged in the 

DiPaolo Action do involve Professional Services, and the DiPaolo 

Action did assert a Wrongful Act, as those terms are defined in the 

Policy. Accordingly, the DiPaolo Action did constitute a Claim against 

Mr. Schwartz triggering coverage under the Policy. Gallagher Sharp 

defended Mr. Schwartz pursuant to that coverage. 

You also stated in the March 21 Letter that “it appears that Chubb paid 

Gallagher Sharp[.]” In fact, Chubb has not paid these fees and expenses 
sought by Gallagher Sharp. Payment of these fees and expenses is the 

responsibility of the Insureds. 

(Emphasis sic.) 

Furthermore, whether Schwartz was entitled to coverage under 

MGFL’s insurance policy is not at issue. Whether the coverage was, in fact, 

appropriate was something that MGFL could have resolved through a declaratory 

judgment action. MGFL, however, did not file such an action or seek such a 

declaration before Chubb hired Gallagher Sharp to represent Schwartz and before 

Gallagher Sharp incurred attorney fees and expenses related to that representation. 

To the extent that MGFL argues that it had no notice that Chubb hired Gallagher 

Sharp, MGFL knew that Chubb was required to “assign counsel to defend the 

Insured” under the policy. Further, Gallagher Sharp entered an appearance on 

behalf of Schwartz in the malpractice action on June 2010, two months after MGFL 

was named as a defendant in that action, and participated in the proceedings three 

months before MGFL’s motion to dismiss was granted. 

Finally, we agree with Chubb’s determination of coverage. 

Where the insurer’s duty to defend is not apparent from the pleadings 

in the action against the insured, but the allegations do state a claim 

which is potentially or arguably within the policy coverage, or there is 

some doubt as to whether a theory of recovery within the policy 

coverage has been pleaded, the insurer must accept the defense of the 

claim. 

Willoughby Hills v. Cincinnati Ins. Co., 9 Ohio St.3d 177, 177, 459 N.E.2d 555 

(1984). “The duty to defend is further heightened when the insurer expressly states 
that it will defend claims that are groundless, false, or fraudulent.” Sharonville v. 

Am. Emp. Ins. Co., 109 Ohio St.3d 186, 2006-Ohio-2180, 846 N.E.2d 833, ¶ 13. 

Here, DiPaolo’s complaint alleged that Schwartz and MGFL 

committed wrongful acts before and during the policy period. The policy is clear 

that “Insured Person” included “any natural person * * * who was * * * designated 

* * * as ‘counsel’ or ‘of counsel’ by the Firm.” Schwartz was designated by MGFL as 

“of counsel” in August 2006. Further, as the trial court noted, the claim against 

Schwartz was made during the policy period, and the policy was a “claims policy” 

which applied to “claims first made during the policy period” “regardless of the date 

or dates of the alleged occurrence” of malpractice. In fact, the insurance clause in 

the policy states that the policy covers “a Wrongful Act committed by the Insured 

before or during the Policy Period” and that the “[c]overage shall apply even if any 

of the allegations are groundless, false or fraudulent.” (Emphasis added.) 

Therefore, we find that Schwartz was an “Insured Person,” his alleged wrongful acts 

were covered under the policy, and Chubb had a duty to defend Schwartz. 

The central issue, therefore, is who is responsible for paying Gallagher 

Sharp. The policy is clear that MGFL must pay the retention amount if Schwartz is 

unable or unwilling to pay.5 Chubb retained Gallagher Sharp to represent Schwartz, 

an “insured person” under the policy. Therefore, MGFL is required to pay Gallagher 

Sharp’s attorney fees if Schwartz is unable or unwilling to pay. 

 5 MGFL does not argue on appeal that Schwartz is able or willing to pay the 

retention amount. 
We find that the policy’s requirement that MGFL (or Schwartz) pay 

for attorney fees evidences Chubb’s and MGFL’s intent to benefit Gallagher Sharp. 

The payment of those attorney fees constitutes a benefit to Gallagher Sharp. 

Without finding that Gallagher Sharp is a third-party beneficiary, it would seem 

impossible for Gallagher Sharp to obtain the payment for its representation. 

Accordingly, we find no genuine issues of material fact and overrule 

MGFL’s first and second assignments of error. We also overrule MGFL’s fourth 

assignment of error to the extent it relies on the argument that there was not a 

contract between MGFL and Gallagher Sharp because, as discussed above, 

Gallagher Sharp is an intended third-party beneficiary and has enforceable rights 

under the policy. 

D. Breach 

In its fourth assignment of error, MGFL argues that because there was 

no contract between Gallagher Sharp and MFGL, there was no breach. 

We previously found, however, that Gallagher Sharp was a thirdparty intended beneficiary under the Chubb insurance contract and therefore had 

enforceable rights under the policy. By refusing to pay Gallagher Sharp’s invoice for 

its representation of Schwartz, which Gallagher Sharp was retained to do pursuant 

to the insurance contract, MGFL breached its duty to pay for the retention amount 

that Schwartz was unable or unwilling to pay. 
Accordingly, we find no genuine issues of material fact and overrule 

MGFL’s fourth assignment of error to the extent that it argues that it did not breach 

its contractual duties. 

E. Construing Insurance Policy in Favor of MGFL 

In its third assignment of error, MGFL argues that, “to the extent that 

an ambiguity could be found in the [insurance policy’s language],” the trial court 

erred in granting summary judgment to Gallagher Sharp on its claim for breach of 

contract because the trial court failed to construe the Chubb Insurance policy in 

favor of the policyholder, MGFL. 

We have previously recognized that “‘[w]here the terms of an 

insurance policy are clear and unambiguous, those terms must be applied to the 

facts without engaging in any construction. * * * In other words, the plain meaning 

of unambiguous language will be enforced as written.’” Ledyard v. Auto Wonders 

Mut. Ins. Co., 137 Ohio App.3d 501, 505, 739 N.E.2d 1 (8th Dist.2000), quoting 

Nationwide Mut. Ins. Co., 112 Ohio App.3d 712, 679 N.E.2d 1189 (9th Dist.1996). 

Insurance policies are generally interpreted by applying rules of 

contract law. Burris v. Grange Mut. Cos. (1989), 46 Ohio St. 3d 84, 89, 

545 N.E.2d 83. If the language of the insurance policy is doubtful, 

uncertain, or ambiguous, the language will be construed strictly against 

the insurer and liberally in favor of the insured. Faruque v. Provident 

Life & Acc. Ins. Co. (1987), 31 Ohio St. 3d 34, 508 N.E.2d 

949. However, the general rule of liberal construction cannot be 

employed to create an ambiguity where there is none. Karabin v. State 

Auto. Mut. Ins. Co. (1984), 10 Ohio St. 3d 163, 166-167, 462 N.E.2d 

403. If the terms of a policy are clear and unambiguous, the 

interpretation of the contract is a matter of law. Inland Refuse 

Transfer Co. v. Browning-Ferris Industries of Ohio, Inc. (1984), 15 

Ohio St. 3d 321, 474 N.E.2d 271. 
Id. 

MGFL does not point to any part of the Chubb insurance policy that 

is ambiguous, and after review, we find nothing ambiguous about the policy. MGFL 

seems to argue that because the trial court “failed in its duty to give effect to the 

unambiguous language of the Policy and intent of the parties[,]” it thereby 

“construed the Policy against MGFL and reached the unreasonable conclusion that 

MGFL must pay Gallagher’s fees for defending Schwartz for his alleged acts after his 

departure from MGFL.” We disagree. 

As stated above, the policy unambiguously requires MGFL to pay the 

retention amount, which includes defense costs and attorney fees, if Schwartz is 

unable or unwilling to cover the costs himself. The trial court’s reading of the 

insurance policy’s plain language was reasonable in our view and nothing from the 

trial court’s opinion suggests that it found any ambiguity or construed anything 

against MGFL. 

Accordingly, we find no genuine issues of material fact and overrule 

MGFL’s third assignment of error. 

Judgment affirmed. In light of our affirmance, we find that Gallagher 

Sharp’s cross-assignment of error arguing that it was entitled to summary judgment 

under a theory of unjust enrichment is moot. 

It is ordered that appellee recover from appellants costs herein taxed. 

The court finds there were reasonable grounds for this appeal. 
It is ordered that a special mandate be sent to said court to carry this judgment 

into execution. 

A certified copy of this entry shall constitute the mandate pursuant to Rule 27 

of the Rules of Appellate Procedure. 

 

MARY J. BOYLE, PRESIDING JUDGE 

KATHLEEN ANN KEOUGH, J., and 

RAYMOND C. HEADEN, J., CONCUR