Court Opinion

ID: 5135776
Source: CourtListenerOpinion
Date Created: 2021-12-17 02:00:35.99966+00
Date Added: 2024-06-11T08:23:51.161719
License: Public Domain

NOT RECOMMENDED FOR PUBLICATION
                               File Name: 21a0586n.06

                                       Case No. 20-2189

                           UNITED STATES COURT OF APPEALS
                                FOR THE SIXTH CIRCUIT

                                               )                               FILED
 NEW HAMILTON LIQUOR STORE,                                               Dec 16, 2021
                                               )
 INC.; MR. K & HAMILTON, LLC,                                         DEBORAH S. HUNT, Clerk
                                               )
                                               )
        Plaintiffs - Appellants,
                                               )
                                                    ON APPEAL FROM THE UNITED
                                               )
 v.                                                 STATES DISTRICT COURT FOR THE
                                               )
                                                    EASTERN DISTRICT OF MICHIGAN
                                               )
 AMGUARD INSURANCE COMPANY,
                                               )
                                               )
        Defendant - Appellee.
                                               )

BEFORE: CLAY, GIBBONS, and BUSH, Circuit Judges.

       JULIA SMITH GIBBONS, Circuit Judge. An arsonist set New Hamilton Liquor Store on

fire on August 28, 2016. The store was insured by AmGuard under a policy contract with a

modifying Protective Safeguard Endorsement that required New Hamilton to install an “Automatic

Fire Alarm.” AmGuard denied New Hamilton’s property damage claim under the policy, asserting

that New Hamilton did not have an automatic fire alarm. New Hamilton then sued AmGuard for

breach of contract in the Wayne County Circuit Court, and AmGuard removed the case to the

Eastern District of Michigan.

       After the parties filed cross-motions for summary judgment, the district court held the

contract was unambiguous and determined that New Hamilton did not have an automatic fire alarm

as required by the insurance policy. The district court accordingly granted AmGuard’s motion for

summary judgment and denied New Hamilton’s motion. Because the Protective Safeguard
Case No. 20-2189, New Hamilton Liquor Store v. AmGuard Ins. Co.

Endorsement is unambiguous in its requirement of an automatic fire alarm and reasonable minds

could not find that New Hamilton had such an automatic alarm, we affirm.

                                                  I

       New Hamilton Liquor Store, Inc. and Mr. K & Hamilton, LLC (“New Hamilton”) brought

a breach of contract action after their insurance carrier, AmGuard Insurance Company

(“AmGuard”), denied New Hamilton’s property insurance claim for damages arising out of a fire.

Talib Hermiz purchased New Hamilton Liquor Store, Inc. d/b/a Mr. K’s Food and Liquor, located

at 12150 Hamilton Avenue, in March 2009. Hermiz met with insurance agent Rod Kathawa three

times in April or May of 2016, and they decided on an AmGuard insurance plan. AmGuard issued

the insurance policy to New Hamilton effective July 21, 2016 through July 21, 2017. The alarm

system at New Hamilton consisted of three motion-sensor alarm devices that were installed and

maintained by National Alarm, Inc. The alarm devices were mounted in separate locations: above

the front entry door, in the back storage area above the entry door, and at the cashier’s area behind

the liquor counter.

       On August 27, 2016, New Hamilton’s employees armed the alarm system and locked the

building at 11:49 P.M. At 3:51 A.M. on August 28, 2016, all three alarms went off within a span

of five seconds after detecting motion. The alarms notified National Alarm that there was

movement in the building, and National Alarm placed two calls to the store at 3:51 A.M. National

Alarm then called the local police department at 3:52 A.M. The police department dispatched an

officer to the scene. The Highland Park Fire Department (“HPFD”) received an alarm call at

3:54 A.M. requesting a response to a commercial building fire at 12150 Hamilton Avenue. The

police department allegedly placed the call to the fire department.

                                                -2-
Case No. 20-2189, New Hamilton Liquor Store v. AmGuard Ins. Co.

       The fire department arrived on the scene at 3:58 A.M. and forced entry into the building

through the locked door to extinguish the fire. Nathan Erwin of the HPFD testified that the

firefighters were able to extinguish the active flames within the first ten to fifteen minutes of their

arrival, but that the fire was not “under control” until 6:10 A.M. DE 36-8, Pls.’ Mot. Summ. J.,

Page ID 2053. Erwin investigated the origin and cause of the fire on behalf of the HPFD and

determined that the fire had been intentionally set. He testified that someone had climbed onto the

roof of the building, cut a rectangular hole in the roof, poured gasoline through the hole, and ignited

the gasoline with a Molotov cocktail.        Hermiz, the building’s owner, was not involved in

committing the arson, and the identity of the arsonists is unknown.

       New Hamilton submitted a claim to AmGuard for its losses resulting from the fire.

AmGuard denied liability for all damages, stating that based on its investigation, a review of the

facts of the claim, and the insurance policy, New Hamilton had not complied with the protective

safeguards endorsement to the policy. The contract between New Hamilton and AmGuard

contained a one-page modifier, titled “Protective Safeguard Endorsement” (“PSE”). DE 36-2,

Pls.’ Mot. Summ. J., Page ID 2029. The headline of this PSE stated, in bolded capital letters,

“THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.” Id.

Beneath the headline, a table indicated that the “Protective Safeguards Symbols Applicable” was

code “P-2” and the “Description of ‘P-9’ if Applicable” was “Local Burglar Alarm Local Fire

Alarm.” Id. The contract modifier appeared as follows:

                                                 -3-
Case No. 20-2189, New Hamilton Liquor Store v. AmGuard Ins. Co.

               2. Failed to maintain any protective safeguard listed in the Schedule above,
                  and over which you had control, in complete working order.

Id. New Hamilton’s owner, Hermiz, testified that he read the PSE when he signed the policy

contract, but he “[did] not understand it 100 percent.” DE 37-11, Def.’s Mot. Summ. J., Page ID

2373.

        In denying New Hamilton’s claim, AmGuard stated it had inspected the premises and

retained an investigator, and this “inspection/investigation did not disclose any evidence of an

automatic fire alarm system at the premises.” DE 36-10, Pls.’ Mot. Summ. J., Page ID 2064.

AmGuard added, “[t]he first call came in as a 911 call reporting smoke coming from the building”;

“[t]he second call was received by the police department as a motion detector”; and “[f]irst

responders did not hear any alarms typical with a fire/smoke alarm system.” Id. AmGuard

concluded New Hamilton’s burglar alarm system monitored by National Alarm did not constitute

an “automatic fire alarm either connected to a central station or reporting to a public or private fire

alarm station,” and accordingly denied all liability for damages sustained in the fire. Id.

        New Hamilton sued AmGuard for breach of contract in the Wayne County Circuit Court

for the State of Michigan and AmGuard removed the case to the United States District Court for

the Eastern District of Michigan. New Hamilton alleged that at the time of the fire, it had an

automatic fire alarm system connected to a central station that complied with AmGuard’s PSE. It

argued that its alarm system detected the fire at the building without human intervention and

reported the activity to a central station that notified public authorities. New Hamilton asserted it

directly or substantially complied with the PSE, and in the alternative, that “automatic fire alarm”

is ambiguous and its interpretation must be construed in New Hamilton’s favor. New Hamilton

and AmGuard filed cross-motions for summary judgment.

                                                 -5-
Case No. 20-2189, New Hamilton Liquor Store v. AmGuard Ins. Co.

       The district court interpreted the plain language of the contract under Michigan state law

and held that the contract was not ambiguous. DE 48, Order, Page ID 3903, 3905–06. It then

determined New Hamilton’s alarm “was an automatic burglary alarm, not an automatic fire alarm.”

Id. at 3906. The court held that even if the PSE were ambiguous, New Hamilton “would still be

unable to demonstrate a material dispute of fact as to the overwhelming extrinsic evidence against

them.” Id. at 3907. Because New Hamilton failed to maintain an automatic fire alarm, in

contravention to the PSE, the court granted AmGuard’s motion for summary judgment and denied

New Hamilton’s. The court also denied New Hamilton’s motion for reconsideration.

                                                 II

       The district court’s grant of summary judgment is reviewed de novo. Equitable Life Assur.

Soc’y of the United States v. Poe, 143 F.3d 1013, 1015 (6th Cir. 1998). We will affirm the district

court if the record “shows that there is no genuine issue as to any material fact and that the movant

is entitled to judgment as a matter of law.” Fed. R. Civ. Pro. 56(a). We view the facts and

reasonable factual inferences in the light most favorable to the nonmoving party. Matsushita Elec.

Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). “A genuine issue of material fact

exists when there are ‘disputes over facts that might affect the outcome of the suit under the

governing law.’” V & M Star Steel v. Centimark Corp., 678 F.3d 459, 465 (6th Cir. 2012) (quoting

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).            A denial of a motion for

reconsideration is ordinarily “reviewed for an abuse of discretion, but where [the] motion seeks

reconsideration of a grant of summary judgment . . . we conduct a de novo review.” Bd. of Tr. of

the Plumbers, Pipe Fitters & Mech. Equip. Serv., Loc. Union No. 392 Pension Fund v. B & B

Mech. Servs., Inc., 813 F.3d 603, 608 (6th Cir. 2015) (citation omitted).

                                                -6-
Case No. 20-2189, New Hamilton Liquor Store v. AmGuard Ins. Co.

       Federal courts sitting in diversity jurisdiction, as we are here, “are to apply state substantive

law and federal procedural law.” Hanna v. Plumer, 380 U.S. 460, 465 (1965). The relevant state

substantive law comes from Michigan, where “issues concerning the proper interpretation and

application of a contract of insurance” are also reviewed de novo. Cohen v. Auto Club Ins. Ass’n,

463 Mich. 525, 528, 620 N.W.2d 840, 842 (2001).

                                                 III

       Because reasonable minds could not disagree as to the unambiguous nature of the property

insurance contract between New Hamilton and AmGuard, and because that New Hamilton did not

have an automatic fire alarm as required by the contract, we affirm.

                                                  A

       Under Michigan law, an insurance contract must be enforced in accordance with its terms.

Upjohn Co. v. New Hampshire Ins. Co., 438 Mich. 197, 207, 476 N.W.2d 392, 398 (1991). A

court may not hold an insurance company liable for a risk that it did not assume. Auto–Owners

Ins. Co. v. Churchman, 440 Mich. 560, 567, 489 N.W.2d 431, 434 (1992). A court reviewing an

insurance policy dispute should not create ambiguity in an insurance policy where the terms of the

contract are clear and precise. Id. “The language of a contract must be construed according to its

plain and ordinary meaning, rather than technical or constrained constructions.” Solo v. United

Parcel Serv. Co., 819 F.3d 788, 794 (6th Cir. 2016) (citing Dillon v. DeNooyer Chevrolet Geo,

217 Mich. App. 163, 550 N.W.2d 846, 848 (1996)). “Every word, phrase, and clause in a contract

must be given effect, and contract interpretation that would render any part of the contract

surplusage or nugatory must be avoided.” McCoig Materials, LLC v. Galui Const., Inc., 295 Mich.

App. 684, 694, 818 N.W.2d 410, 416 (2012).

                                                 -7-
Case No. 20-2189, New Hamilton Liquor Store v. AmGuard Ins. Co.

       “The fact that a policy does not define a relevant term does not render the policy

ambiguous.” Henderson v. State Farm Fire & Cas. Co., 460 Mich. 348, 354, 596 N.W.2d 190,

194 (1999) (citation omitted). A contract is ambiguous when its words may reasonably be

understood in different ways. Farm Bureau Mut. Ins. Co. of Mich. v. Nikkel, 460 Mich. 558, 566,

596 N.W.2d 915, 919 (1999). “A court may establish the meaning of a term through a dictionary

definition,” Fitch v. State Farm Fire & Cas. Co., 211 Mich. App. 468, 472, 536 N.W.2d 273, 275

(1995), but reviewing courts “do not ascribe ambiguity to words simply because dictionary

publishers are obliged to define words differently to avoid possible plagiarism.” Henderson, 460

Mich. at 354–55 (citing Upjohn Co., 438 Mich. at 209 n.8). When the language at issue “is clear

and unambiguous, its meaning is a question of law.” Port Huron Educ. Ass’n. v. Port Huron Area

Sch. Dist., 452 Mich. 309, 323, 550 N.W.2d 228, 237 (1996). However, if the language is “unclear

or susceptible to multiple meanings, interpretation becomes a question of fact.” Id.; see also

Henderson, 460 Mich. at 596 (explaining that “if reasonable minds could disagree about the

conclusions to be drawn from the facts, a question for the factfinder exists”).

       The Michigan Supreme Court has clarified that “[t]he rule of reasonable expectations

clearly has no application to unambiguous contracts.” Wilkie v. Auto-Owners Ins. Co., 469 Mich.

41, 60, 664 N.W.2d 776, 786 (2003). An individual’s alleged “reasonable expectations” cannot

supersede a contract’s clear language because the policyholder cannot claim to have reasonably

expected something other than the plain language of the contract. Id. at 62. If the language is

ambiguous, however, then “longstanding principles of contract law require that the ambiguous

provision be construed against the drafter.” Id. at 61 (quoting Singer v. American States Ins.,

245 Mich. App. 370, 381 n.8, 631 N.W.2d 34 (2001)).

                                                -8-
Case No. 20-2189, New Hamilton Liquor Store v. AmGuard Ins. Co.

       We must first determine whether there was an ambiguity in the insurance policy contract

between New Hamilton and AmGuard. The PSE required New Hamilton to have an “Automatic

Fire Alarm, protecting the entire building, that is: (1) Connected to a central station; or

(2) Reporting to a public or private fire alarm station.” DE 36-2, Pls.’ Mot. Summ. J., Page ID

2029. Although the PSE defined certain terms, such as “automatic sprinkler system,” it did not

define the term “automatic fire alarm.” Id. But the absence of a definition does not alone render

the policy ambiguous. See Henderson, 460 Mich. at 354. The parties do not dispute the language

in the PSE—they dispute what that language reasonably means.

       New Hamilton argues the PSE is ambiguous because its “automatic fire alarm” requirement

reasonably has multiple interpretations. New Hamilton asserts that under the PSE, an “automatic

fire alarm” was only required to be a system that “‘protected the entire building’ and, without

human intervention, reported to a ‘central station.’” CA6 R. 21, Appellant Br., at 29. New

Hamilton argues its alarm system met those requirements because (1) the system detected motion

and radiating heat energy; (2) it did so seconds after the fire was ignited; (3) the system reported

numerous alarms to National Alarm’s central station; (4) National notified the police, who notified

the fire department; (5) the fire department arrived at the building within seven minutes of the

system’s first alarm; and (6) the fire department “controlled” the fire within ten to fifteen minutes

of arrival.1 Essentially, because its motion sensor alarm system detected the fire in the building

and alerted National Alarm that there was motion inside the store, New Hamilton argues it was an

automatic fire alarm.

1
  The record indicates that the firefighters were able to “extinguish” the active flames within the
first ten to fifteen minutes of their arrival at 3:58 A.M., but that the fire was not “under control”
until 6:10 A.M. DE 36-8, Pls.’ Mot. Summ. J., Page ID 2053.
                                                -9-
Case No. 20-2189, New Hamilton Liquor Store v. AmGuard Ins. Co.

       AmGuard argues that New Hamilton’s motion-sensor alarm system was a burglar alarm that

was automatic. AmGuard emphasizes that the system was not designed to alert for fires and did not

protect the entire building. It points to National Alarm’s Customer Activity Report from August 28,

2016, which registered that a burglar alarm and a motion detector had been activated—indicating

suspicion of an intruder, not of a fire. This is why, AmGuard argues, National Alarm contacted the

Detroit Police Department and not a local fire department. AmGuard notes “[t]here was no direct

contact between National Alarm and the Fire Department.” CA6 R. 22, Appellee Br., at 15.

AmGuard argues that even if New Hamilton’s burglar alarm system did activate during this fire, it

does not constitute an “automatic fire alarm” in the plain, everyday understanding of a fire alarm.

       The district court found “fire alarm” was an unambiguous term. The court turned to various

dictionary definitions, including Merriam Webster (defining a fire alarm as “a device that makes

a loud sound to warn people when there is a fire”), the Longman Dictionary (defining a fire alarm

as “a piece of equipment that makes a loud noise to warn people of a fire in a building”), and the

Oxford English Dictionary (defining a fire alarm as “a device or system designed to raise the alarm

in the event of a fire, typically by emitting a loud noise”). DE 48, Order, Page ID 3905 (citations

omitted). The court stated that each of these three definitions commonly has “a sense that the term

‘fire alarm’ unambiguously refers to a device meant to alert people of the presence of a fire.” Id.

This doomed New Hamilton’s argument, as its motion-sensor alarm system would not have

warned anyone in the building of a fire: the alarm was set only in the evenings, after the individuals

in the building left for the night, because it alerted to any human presence. It was a burglary alarm

meant to prevent unwanted intrusions, not to protect against fires, otherwise it would continuously

operate during business hours while individuals were present in the building. The court noted that

the New Hamilton alarm system’s status as a burglary alarm is why the alarms were “clustered

                                                - 10 -
Case No. 20-2189, New Hamilton Liquor Store v. AmGuard Ins. Co.

around the entrance to the building”; why National Alarm received a notification of “INTERIOR

BURG”; and why National Alarm dispatched the police department—not the fire department—to

the scene. Id. at 3906.

        We affirm the district court’s holding that “automatic fire alarm” is unambiguous. “True

linguistic ambiguities are rather ‘rare in contract cases.’” Stryker Corp. v. Nat’l Union Fire Ins.

Co. of Pittsburgh, PA, 842 F.3d 422, 426 (6th Cir. 2016) (citing E. Allen Farnsworth, “Meaning”

in the Law of Contracts, 76 Yale L.J. 939, 954 (1967)). Here, the PSE required business owners

to install an automatic fire alarm protecting the entire building that either (1) connected to a central

station, or (2) reported to a public or private fire alarm station. A reasonable person with an

ordinary understanding of the English language would understand the phrase “automatic fire

alarm” to mean an alarm that is designed to detect fires and alert any nearby persons to the fire.

This comports with the various dictionary definitions of “fire alarm” found in Merriam Webster,

the Longman Dictionary, and the Oxford English Dictionary, each of which emphasizes the

function of a fire alarm system as warning people about the danger of a fire through a loud noise.

See Merriam Webster, “Fire Alarm,” https://www.merriam-webster.com/dictionary/fire%20alarm

(last visited Sept. 30, 2021); Longman, “Fire Alarm,” https://www.ldoceonline.com/

dictionary/fire-alarm 20alarm (last visited Sept. 30, 2021); Oxford English Dictionary, “Fire

Alarm,” https://www.oed.com/view/Entry/70512?rskey=tswxLo&result=1&isAdvanced=false (last

visited Sept. 30, 2021). Under Michigan state law, this is unambiguous because the phrase cannot

be reasonably understood in a different way. Nikkel, 460 Mich. at 566.

        New Hamilton argues that the PSE is also ambiguous because under the “P-9” section of

the schedule table, it states “Local Burglar Alarm Local Fire Alarm.” CA6 R. 21, Appellant Br.,

at 52–53. New Hamilton asserts this constitutes an ambiguity because it indicates that one system

                                                 - 11 -
Case No. 20-2189, New Hamilton Liquor Store v. AmGuard Ins. Co.

can serve as both a burglar and fire alarm. But this argument fails. Under Michigan law, every

word and phrase of a contract is given effect and the contract is interpreted as a whole. McCoig

Materials, 295 Mich. App. at 694. Here, reading the PSE in its entirety, “P-2” is a required

protective safeguard and it refers specifically to an “automatic fire alarm.” To adopt New

Hamilton’s reasoning that “P-9” is ambiguous because it could be read to not require a fire alarm

would render “P-2” meaningless and ignore the plain and ordinary meaning of the contract.

       Furthermore, although New Hamilton’s owner, Hermiz, indicated that he “[did] not

understand [the PSE] 100 percent,” DE 37-11, Def.’s Mot. Summ. J., Page ID 2373, insured

individuals are charged with knowledge of the terms and conditions of their insurance policies.

Casey v. Auto Owners Ins. Co., 273 Mich. App. 388, 396, 729 N.W.2d 277, 284 (2006). It is well-

established in Michigan law that “an insured is obligated to read his or her insurance policy and

raise any questions about the coverage within a reasonable time after the policy is issued.” Id. at

394–95.

       Despite finding that the PSE was unambiguous, the district court went on to analyze

extrinsic evidence in determining whether there was a material dispute of fact. When a contract is

unambiguous, the reviewing court looks only to “the four corners of the written instrument” and

does not consider extrinsic evidence in determining the parties’ intent. Zurich Ins. Co. v. CCR &

Co., 226 Mich. App. 599, 607, 576 N.W.2d 392, 396 (1997). When language is clear and

unambiguous, determining its meaning is a question of law. Port Huron Educ. Ass’n., 452 Mich.

at 323. Because here the contract is unambiguous, the determination of the parties’ intent is not at

issue and interpretation is a question of law. Therefore, there is no need to consider extrinsic

evidence such as Hermiz’s understanding of the contract.

                                               - 12 -
Case No. 20-2189, New Hamilton Liquor Store v. AmGuard Ins. Co.

                                                 B

         The insurance contract, as modified by the PSE, required New Hamilton to have a

functioning automatic fire alarm system. This alarm system had to protect the entire building and

had to be either “(1) Connected to a central station; or (2) Reporting to a public or private fire

alarm station.” DE 36-2, Pls.’ Mot. Summ. J., Page ID 2029. Possession and maintenance of an

automatic fire alarm was “a condition of this insurance.” Id. New Hamilton’s alarm system

consisted of three motion-detecting alarm devices that were installed by and connected to National

Alarm, Inc. The alarm devices were mounted in separate locations: above the front entry door, in

the back storage area above the entry door, and at the cashier’s area behind the liquor counter.

New Hamilton’s service agreement with National Alarm began in June 2004, before Hermiz

purchased the store. The agreement stipulates that National Alarm would install and maintain

service on an alarm system. The agreement specifies that the alarm system is a “Burglar Alarm”

and a “Hold Up Alarm” by marking an “X” for those categories; it also specifies the alarm system

is “Cellular Back up” by listing it under “other.” DE 37-9, Def.’s Mot. Summ. J., Page ID 2228.

The “Fire Alarm” category is located between “Burglar Alarm” and “Hold Up Alarm,” and it is

not marked. Id. This alone is a clear indication that the alarm system was not an automatic fire

alarm.

         The evening before the fire, on August 27, 2016, New Hamilton employees shut down the

store for the night by arming the alarm system and locking the building. Automatic fire alarms do

not need to be armed; they are always operating because fires can occur at any time, not just after-

hours. If the fire had started at 3:51 P.M. rather than 3:51 A.M., the motion-sensing alarm system

would not have been active. When the three devices activated at 3:51 A.M. on August 28, 2016,

they connected to National Alarm’s central station. But where a fire alarm system would have

                                               - 13 -
Case No. 20-2189, New Hamilton Liquor Store v. AmGuard Ins. Co.

indicated to National Alarm that a fire had broken out at the store, the National Alarm Customer

Activity Report reflects that New Hamilton’s alarms registered the incident as “INTERIOR BURG

‘ZN5 BACKROOM MOTION’”; “INTERIOR BURG ‘ZN4 OFFICE MOTION’”; and

“INTERIOR BURG ‘ZN3 STORE MOTION.’” DE 36-6, Pls.’ Mot. Summ. J., Page ID 2041.

The alarms alerted National Alarm to motion and a potential burglary, not to the presence of heat,

smoke, or fire. National Alarm placed two calls to the store to see if the motion sensor devices had

been mistakenly activated, and then called the local police department at 3:52 A.M. The police

department dispatched an officer to the scene, and it is believed that the police ultimately called the

HPFD at 3:54 A.M. First responders did not hear any alarms as would be typical with a fire or smoke

alarm system. These facts further confirm New Hamilton’s burglar alarm system was not an

automatic fire alarm system.

       Michigan courts define a “condition precedent” as a “fact or event which the parties intend

to exist or take place before this is a right to performance.” Hy King Assocs., Inc. v. Versatech

Mfg. Indus., Inc., 826 F. Supp. 231, 238 (E.D. Mich. 1993) (citing MacDonald v. Perry, 342 Mich.

578, 70 N.W.2d 721 (1955)). Here, the maintenance of an automatic fire alarm is a condition

precedent to receiving coverage because subpart B specifies that AmGuard “will not pay for loss

or damages caused by or resulting from fire if, prior to the fire, you . . . [f]ailed to maintain any

protective safeguard listed in the Schedule above.” DE 36-2, Pls.’ Mot. Summ. J., Page ID 2029.

       New Hamilton’s briefings repeatedly emphasize that the fire department arrived on the

scene by 3:58 A.M., “within seven minutes of the system’s first alarm.” CA6 R. 21, Appellant’s

Br., at 25. Because its alarm system in due course resulted in the fire department being notified of

the fire and arriving to extinguish the fire, New Hamilton asserts that it substantially complied

with the PSE’s requirement that it maintain an automatic fire alarm, and that it therefore

                                                - 14 -
Case No. 20-2189, New Hamilton Liquor Store v. AmGuard Ins. Co.

substantially complied with the conditions precedent to insurance coverage. In its Order Denying

Plaintiffs’ Motion for Reconsideration, the district court expressly rejected New Hamilton’s

argument that conditions precedent, like the requirement of an automatic fire alarm in their policy’s

PSE, need only be satisfied by substantial performance. On appeal, New Hamilton asserts that

whether the doctrine of substantial performance applies to an express condition precedent in a

Protective Safeguards Endorsement is an issue of first impression for this court, and it urges us to

reverse the district court’s holding. But we need not decide this matter because even if substantial

performance is applicable here, New Hamilton’s motion sensor alarm devices do not substantially

comply with the PSE.

       Here, the relevant question is not whether New Hamilton’s alarm system eventually

resulted in the fire department’s arrival at the scene; rather, it is whether the alarm system notified

a central station or a public or private fire alarm station about the fire. New Hamilton’s motion-

sensing devices did not, in fact, notify National Alarm that there was a fire at the premises. We

need not determine whether the doctrine of substantial performance applies to an express condition

precedent in a protective safeguard endorsement because New Hamilton was not in actual or

substantial compliance with the PSE.

                                                  IV

       We affirm the district court’s grant of AmGuard’s motion for summary judgment and its

denial of New Hamilton’s motion for summary judgment. The district court correctly held that

the policy’s modifying Protective Safeguard Endorsement is unambiguous in its requirement of an

automatic fire alarm. New Hamilton’s alarm system was not an automatic fire alarm system, and

it therefore was not in compliance with the policy. A court may not hold an insurance company

liable for a risk that it did not assume, and accordingly AmGuard is not liable here.

                                                - 15 -