COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 71216 AEROSOL SYSTEMS, INC. ET AL. : : JOURNAL ENTRY PLAINTIFF-APPELLANT : CROSS-APPELLEE : AND v. : : OPINION WELLS FARGO ALARM SERVICES : : DEFENDANT-APPELLEE : CROSS-APPELLANT : DATE OF ANNOUNCEMENT OF DECISION: APRIL 23, 1998 CHARACTER OF PROCEEDING: Civil appeal from Court of Common Pleas, Case No. CV-281647. JUDGMENT: AFFIRMED. DATE OF JOURNALIZATION: APPEARANCES: For Plaintiff-appellant: Steven G. Janik, Esq. Christian M. Williams, Esq. Janik & Dunn 8223 Brecksville Road, Bldg. Two Cleveland, Ohio 44141-1371 For Defendant-appellee: David C. Tryon, Esq. David A. Bell, Esq. Porter, Wright, Morris & Arthur 1700 Huntington Building 925 Euclid Avenue Cleveland, Ohio 44115 -2- SWEENEY, JAMES D., J.: Plaintiff-appellant cross-appellee Aerosol System, Inc. (Aerosol) appeals from a jury verdict in favor of the defendant- appellee cross-appellant Wells Fargo Alarm Services, Inc. (Wells Fargo). The appellant, who contracted with the appellee for the provision of fire alarm services, filed suit seeking recovery from losses suffered after a fire at its facility in Macedonia, Ohio. Since the record and the transcript for this case are voluminous, only the essential facts are set forth herein, and, where necessary, additional facts are given in the individual assignments of error. On December 13, 1992, the appellee received a fire alarm ignal from Aerosol's Macedonia facility. As permitted under the rovisions of the contract, Wells Fargo first contacted a esignated employee of Aerosol, and subsequently notified the acedonia Fire Department. The fire ultimately caused pprox imately $15,700,000.00 in property damages. The appellant onte nded that the appellee should have investigated trouble ign als received in the days and hours prior to the fire alarm ign al and that the fire itself originated from within the lectri cal panel controlling the Wells Fargo alarm system. The ppe llee argued that the origin of the fire was not within the lect rical panel and the decisions regarding the trouble signals ere not improper. Prior to the fire, Wells Fargo received numerous trouble i gnals from its fire alarm system at the appellant's plant. By -3- esign, the alarm system has an internal monitoring system. This ystem issues a trouble signal to report possible maintenance roblems. A trouble signal may be sounded for many reasons, nc luding a short circuit along the heat detector wires; a power utag e for the factory's electrical line which normally supplies he alarm system's energy; low power for the back-up battery; or elephone line problems. These maintenance signals are transmitted o Wells Fargo's central operating station where the operators must es pond in some manner. A trouble signal cannot impair the ystem' s ability to detect fires or to transmit an actual fire larm signal. The central operating system has two computers, the central u ltiple processor (CMP) and the operations information system OIS). Upon receipt of a trouble signal the CMP emits a high- i tched noise and activates a warning light; the OIS beeps. The perator must press the acknowledgment button on the CMP and key in response on the OIS. The trouble signal will either lock in, ndi cating that the condition causing the trouble signal must be orrected, or will automatically reset, meaning the condition ausing the trouble signal has ceased. On December 10, 1992, Wells Fargo received five trouble ignals from the Aerosol facility in Macedonia. Although 61 more ign als were received between December 12, 1992 and December 13, 9 92, there were no signals received in the six hours before the ire signal was received. Each of these maintenance signals eceived at the central operating station automatically reset. -4- On the afternoon of December 12, 1992, the operator prepared service order for a service technician to investigate the Aerosol rouble signals. The investigation had not begun before the fire larm signal sounded. In addition, at approximately 3:00 p.m., an erosol employee telephoned Wells Fargo requesting reactivation of he Halon gas detection system. During this conversation the mployee asked if everything was in order. The operator responded hat everything was okay (T. 1049). Yvonn e Musgrave, an employee of Wells Fargo, testified that h e was assigned as a central station operator from 7:00 a.m. to :00 p.m on December 12, 1992. She also stated that Wells Fargo as both service training manuals and a newer policy and procedure odules available for employees to review. Appellant's counsel ross-examined Ms. Musgrave closely regarding the instructions iven in both the manual and in the modules as to the response equired when a trouble signal is received. Edward Schaefer, an electrical engineer who investigates the auses and origins of electrical fires, testified for the ppellant. On cross-examination he stated that Robert Taylor and enneth Wolf were hired by Home Insurance to investigate the fire T. 1333). Mr. Schaefer conversed with both Taylor and Wolf egarding their investigation. Taylor and Wolf physically removed bjects from the Aerosol factory (T. 1335). It became evident urin g Schaefer's cross-examination that Taylor and Wolf had emo ved objects from the facility immediately after the fire and -5- hat later investigators did not have access to those objects (T. 333-1354). Donald Dragony, the chief financial officer for the Alex Sill ompany, a licensed public insurance adjusting firm, testified on ehalf of the appellant. He stated that the Alex Sill Company was eimb ursed for their work on behalf of Aerosol on a contingency asis . On cross-examination, Mr. Dragony testified that the ompany was acting as an advocate for Aerosol in its claim against ome Insurance. The amount the firm was paid was tied to the mount they could persuade Home Insurance to pay Aerosol (T. 811). he Alex Sill Company received a fee of approximately $785,000 for ts work. In addition, the company was hired, for a separate fee, y Home Insurance to assist in the lawsuit (T. 839-840). Larry Sheldon, of the Alex Sill Company, testified that under ero sol's policy with Home Insurance, Aerosol was limited to the epl acement costs for like kind and quality or the closest va ilable thereto (T. 1573). If Aerosol chose not to replace a iece of equipment, its recovery would be limited to the actual ash value of that equipment. If Aerosol replaced equipment with better and more costly machine, Aerosol could recover the eplacement cost of the equipment comparable to what was lost (T. 574). It was Mr. Sheldon's opinion that Aerosol did not attempt o recover for the cost of new, more expensive equipment (T. 1583). The jury was given the following interrogatory: Did Aerosol r ove by a preponderance of the evidence that the conduct of any ell s Fargo employee or employees relating to Aerosol was wanton -6- isc onduct? The jury unanimously responded in the negative, and nanimously entered judgment for the appellee. The appellant sets forth five assignments of error. The first hree assignments of error will be considered together. The appellant's first, second and third assignments of error: THE COURT OF COMMON PLEAS ERRED BY FAILING TO INSTRUCT THE JURY THAT AEROSOL COULD RECOVER IN WANTON MISCONDUCT FOR WELLS FARGO'S RECKLESSNESS. THE COURT OF COMMON PLEAS ERRED BY FAILING TO INSTRUCT THE JURY THAT AEROSOL WAS NOT REQUIRED TO PROVE THAT WELLS FARGO ACTED WITH INTENT TO INJURE IN ORDER TO RECOVER FOR WELLS FARGO'S WANTON MISCONDUCT. THE COURT OF COMMON PLEAS ERRED BY FAILING TO INSTRUCT THE JURY THAT AEROSOL COULD RECOVER IN TORT FOR WELLS FARGO'S WANTON MISCONDUCT IRRESPECTIVE OF WELLS FARGO'S COMPLIANCE WITH ITS CONTRACT WITH AEROSOL. In each of these assignments of error, the appellant argues hat the trial court improperly instructed the jury on the issue of anton misconduct. In the first assignment of error, the appellant ont ends that the court improperly used the charge for wanton iscond uct as given in the 1 Ohio Jury Instruction (1996) 140, ecti on 7.90. The appellant asserts that the court should have iven an instruction which comports with the definition of ecklessness given in the Restatement 2d of Torts, Section 500. -7- The trial court gave the following instruction on the issue of anton misconduct1. This instruction mirrors the wanton misconduct nstruction in 1 Ohio Jury Instructions (1996) 140, section 7.90: Wanton misconduct may be defined as follows: Quote, Wanton conduct must be under such surrounding circumstances and existing conditions that the party do ing the act or failing to act must be aware from his knowledge of such circumstances and conditions that his conduc t will probably result in injury. Wanton misconduct implies a failure to use any care for the plaint iff and an indifference to the consequences when the probability that harm would result from such failure is great, such probability is known or ought to have been known to the defendant (T. 3437). The following instruction was requested by the appellant and ejected by the trial court: Wanton misconduct must be under such surrounding circumstances and existing conditions that the party doing the act or failing to act must be aware, from his knowledge of such circumstances and conditions, that his conduc t will probably result in injury. Wanton misconduct implies a failure to use any care whatsoever toward s those to whom a duty of care is owed and a reckless indifference to the consequences, when the probability that harm would result from such failure is grea t, and such probability is known, or ought to have been known, to the defendant. On appeal, the appellant argues that, rather than its proposed ury instruction on wanton misconduct, the court should have given n instruction which defines wanton misconduct in terms of eckles sness as defined in the Restatement 2d of Torts, Section 00. In its proposed jury instruction 20, the appellant requested he jury be instructed that Wells Fargo showed reckless 1The same instruction was given, without objection, during voir dir (T. 210). However, appellant timely objected prior to the jury retiring to deliberate as required by Civ.R. 51. -8- ndifference to the consequences of failing to act, and therefore s liable for its wanton misconduct. The appellant argues that his request was sufficient to place before the court the issue of efining wanton misconduct as recklessness. The appellant also rgues, seemingly in the alternative, that if proposed jury nstr uction 20 was not sufficient to place the issue before the ourt, then it was plain error for the court to fail to instruct he jury that wanton misconduct is not the failure of any care hatsoever,but rather is the reckless disregard for the safety of thers. In the second assignment of error, the appellant argues that he court erred to the prejudice of the appellant in failing to nstruct the jury that intent to injure is not an element of wanton isconduct. Likewise, in the third assignment of error the ppellant argues that it was prejudiced by the court's failure to nstruc t the jury on the distinction between tort and contract, pec ifically, the court should have instructed the jury that the ppellee might be liable in tort even though it complied with all rovisions of the contract. It is within the sound discretion of a trial court to refuse o admit proposed jury instructions which are either redundant or mm aterial to the case. Bostic v. Connor (1988), 37 Ohio St.3d 44, syllabus 2. An abuse of discretion connotes more than an rror of law or judgment; it implies that the court's attitude is nreasonable, arbitrary or unconscionable. Wilmington Steel rodu cts, Inc. v. Cleve. Elec. Illum. Co. (1991), 60 Ohio St.3d -9- 20, 121, quoting Huffman v. Hair Surgeon, Inc. (1985), 19 Ohio t.3d 83, 87. In examining errors in a jury instruction, a reviewing court ust consider the jury charge as a whole and must determine whether he jury charge probably misled the jury in a matter materially ffecting the complaining party's substantial rights. Kokitka v. ord Motor Co. (1995), 73 Ohio St.3d 89, 93, citing to Becker v. ake Cty. Mem. Hosp. West (1990), 53 Ohio St.3d 202, 208. In the case sub judice,the court based its instruction on the old ing in Hawkins v. Ivy (1977), 50 Ohio St.2d 114, where the ou rt refused to define wanton conduct as a disposition to erve rsity and instead determined that wanton misconduct occurs here the conduct is a failure to exercise any care whatsoever oward those to whom a duty of care is owed, and the failure occurs nder circumstances in which there is great probability that harm ill result. The appellant's argument that the definition of wanton isconduct given in Hawkins, supra, has been superceded by Thompson . McNeill (1980), 53 Ohio St.3d 102, is unpersuasive. The ppella nt contends that the Ohio Supreme Court has replaced the efinition of wanton conduct given in Hawkins with the definition f recklessness as given in the Restatement of Torts 2d. The court n Thompson, addressing itself to the limited question of injuries ccurri ng within the context of sporting events, noted that the estatementof Torts 2d supports the view that different standards f care should apply to those who inflict injuries in the course of -10- game as opposed to those who inflict injuries under ordinary ircumstances. Whil e this court must acknowledge that in a footnote the homps on Court stated that the term reckless is often used nterchan geably with willful and wanton, we must also ckn owledge that the Ohio Supreme Court, in Gladon v. Greater lev eland Regional Transit Auth. (1996), 75 Ohio St.3d 312, 319, ited Hawkins, supra, for the definition of wanton conduct.2 Thus, his court finds that the trial court did not abuse its discretion n relying on the definition of wanton misconduct as given in both awkins, supra and Gladon, supra. Since the trial court did not err in instructing the jury on he issue of wanton misconduct, it could not have been plain error o refuse to charge the jury either as the appellant requested at ri al in its proposed wanton misconduct charge, or as implied in ts requested instruction 20. Having found that the court properly instructed the jury as to he definition of wanton misconduct, this court is unwilling to ind that the trial court erred in failing to instruct the jury as o what does not comprise wanton misconduct; i.e., that intent to njure is not an element, or that wanton misconduct does not equire a breach of contract. Where, as here, the court properly nstructed the jury as to the definition of wanton misconduct, 2While the Supreme Court issued a plurality opinion in Gladon, supra, there was no discussion in the concurring or dissenting opinions as to the definition of wanton. -11- here is no error in refusing to enter into a potentially limitless eries of instructions which are not relevant. Bostic, supra. The appellant's first, second, and third assignments of error re overruled. The fourth assignment of error: THE COURT OF COMMON PLEAS ABUSED ITS DISCRETION BY EXCLUDING WELLS FARGO'S TRAINING MAN UAL, WHICH EVIDENCED WELLS FARGO'S DUTIES TO AEROSOL AND WELLS FARGO'S RECKLESS AND WANTON BREACH OF SUCH DUTIES. The appellant asserts that the trial court erred when it xcluded from evidence the appellee's training manual. While there as testimony that the manual was outdated, testimony also revealed hat the manual was physically in Wells Fargo's central station and vailable for reference by employees. In Rigby v. Lake County (1991), 58 Ohio St.3d 269, the Supreme ourt reaffirmed the longstanding test for appellate review of dmission of evidence: Ordinarily, a trial court is vested with broad discretion in determining the admissibility of evidence in any particular case, so long as such discretion is exercised in line with the rules of procedure and evidence. The admission of relevant evidence pursuant to Evid. R. 401 rests within the sound discretion of the trial court. E.g., State v. Sage (1987), 31 Ohio St.3d 173, 31 OBR 375, 510 N.E.2d 343, paragraph two of the syllabus. An appellate court which reviews the trial court's admission or exclusion of evidence must limit its review to whether the lower court abused its discretion. State v. Finnerty (1989), 45 Ohio St.3d 104, 107, 543 N.E.2d 1233, 1237. As this court has noted many times, the term abuse of discretion connotes more than an error of law; it implies that the court acted unre asonably, arbitrarily or unconscionably. E.g., Blakemore v. Blakemore (1983), 5 Ohio St.3d 217, 219, 5 OBR 481, 482, 450 N.E.2d 1140, 1142. -12- ince the trial court has such broad discretion, the appellate ourt should be slow to interfere unless the court has clearly bus ed its discretion and a party has been materially prejudiced her eby. Cleveland v. Petko (1996), 112 Ohio App.3d 670, 676, uoting Shimola v. Cleveland (1992), 89 Ohio App.3d 505, 511. The rial court must determine whether the probative value of certain vidence and/or testimony is substantially outweighed by the danger f unfair prejudice, or of confusing or misleading the jury. Id. The trial court here permitted the appellant to read igni ficant portions of the manual into evidence; witnesses were ross-examined regarding the manual; and selected portions of the a nual were admitted into evidence. In addition, it may well be hat the court was attempting to limit the sheer volume of ocumentary evidence placed before the jury. Under the ircumstances present in this case, the refusal to admit the entire anual was a decision clearly within the trial court's discretion. The appellant's fourth assignment of error is overruled. The appellant's fifth assignment of error: THE COURT OF COMMON PLEAS ABUSED ITS DISCRETION BY ADMITTING EVIDENCE OF AEROSOL'S INSURANCE WITH HOME AND EVIDENCE OF HOME'S ALLEGED SPOLIATION OF EVIDENCE. The appellant argues that the visiting trial judge erred in dmitting evidence regarding the appellant's insurance in violation f a pre-trial ruling on a motion in limine. The appellant ontends that evidence of compensation from a collateral source is -13- ot admissible, and that its admission in this case was so rejudicial as to require a new trial. During direct examination of the first witness, the appellant uestioned Edwin Roth, the chairman and chief executive officer of erosol, regarding the impact the business sustained as a result of he fire. Roth testified that because of the fire, Aerosol spent ts money and was not in a position to complete its expansion rogram (T. 462). The appellant objected, and a side bar was onducted. No record was made of the side bar conversation or the ourt's ruling on the objection. On cross-examination, the ppellant elicited testimony that while the appellant's funds were nitial ly used to rebuild the Aerosol facility, the company was nsured at the time of the fire, and that the appellant was eimbursed by insurance proceeds (T. 463-465). The appellant's bje ctions were overruled by the trial judge. Subsequently, the estimo ny of various witnesses referred to the fact that the ppellant was insured at the time of the fire loss. The trial judge gave the following instruction to the jury egarding insurance: Dur ing the course of this trial you've heard references to insurance and insurance proceeds. Aerosol had what is referred to as a business interruption insurance and extra expense insurance coverage designed to compensate aerosol for any losses it sustained during the period reasonably necessary to restore the facility. Aerosol's property insurer paid aerosol $15.7 million for property damage, extra expenses incurred durin g the period of restoration and for lost business due to the fire. -14- Aerosol maintains further that it sustained certain loss es for which it has not been compensated. Aerosol claim s that the insurance proceeds did not cover the long-term effect that the fire had on its business, which arose after the facility was fully up and running. You are not to speculate as to any financial arrangements between Aerosol and its insurance company as to how any sums recovered will be divided. Such arran gements have no bearing on your assessment of the damages sustained by Aerosol in this case. Under the law of the State of Ohio, a third party wrong-doer may not benefit from the fact an injured party procured insurance to cover itself against a future loss of risk. There should be no reduction in damages based upon the fact that Aerosol received compensation from its insurances for losses resulting from the fire. If, based on a preponderance of the evidence, Aero sol has proven to you it has suffered damages over and above the amount it received from its insurance company , you may award such sums. In determining the amoun t of damages sustained by Aerosol, you're not required, nor should you automatically reduce such reco very by the amount of the insurance payment if the evidence presented supports that contrary result. You are to determine based upon a preponderance of the evidence the total amount of loss sustained by Aerosol as a result of the fire and allegedly caused by wanton misconduct of Wells Fargo. The fact that an insurance company has paid Aerosol a certain amount does not mean that Aerosol's recovery in this case is or should be limited to such amount (T. 3439-3440). It is well established that the jury is presumed to follow the nstr uctions of law given them by the trial court. Stokes v. eimaris (1996), 111 Ohio App.3d 176, citing to Bell v. Mt. Sinai ed. Ctr. (1994), 95 Ohio App.3d 590. While not specified in the civil rules, a motion in limine eque sts a ruling limiting the introduction of evidence during rial. The Ohio Supreme Court has held that the effect of granting -15- motion inlimine is to temporarily prohibit any reference to the vidence which is the subject of the motion. State v. Grubb (1986), 8 Ohio St.3d 199. It is incumbent upon the party temporarily estr icted from introducing the evidence to seek introduction by roffer or otherwise in order to enable the court to make a final ete rmination as to admissibility and to preserve the record for urposes of appeal. Id. Since the order is interlocutory, a isiting trial judge may reverse the granting of a motion in limine y the assigned judge. Webster v. Oglebay Norton Co. (Jan. 25, 995), Cuyahoga App. No. 65502, unreported. As indicated in the fourth assignment of error, an appellate ourt which reviews the trial court's admission or exclusion of vi dence must limit its review to whether the lower court abused ts discretion. Rigby, supra. This court must be slow to nterfere unless the court has clearly abused its discretion since h e trial court is in the best position to determine whether the robative value of the evidence is substantially outweighed by the anger of unfair prejudice, or of confusing or misleading the jury. etko, supra. While the judge to whom the case was assigned granted the ppellant's motion in limine regarding evidence of insurance, the rial judge hearing the case permitted the evidence. Even though here is no specific statement contained in the transcript ndicating that the original ruling on the motion was reversed, the eversal is evident given testimony that was admitted. The trial -16- ou rt was within its discretion to rule on the motion at trial. ebster, supra. The next question is whether or not the trial judge entered he proper ruling. In Pryor v. Webber (1970), 23 Ohio St.3d 104, yllabus 2, the Supreme Court held that the collateral source rule s an exception to the general rule of compensatory damages in a ort action, and evidence of compensation from collateral sources s not admissible to diminish the damages for which a tortfeasor ust pay for his negligent act. The court, while not directly ddressing the issue, did not find the short cautionary instruction iven to the jury at the time the evidence was admitted to be ufficient to avoid prejudice to the plaintiff. More recently, in Ede v. Atrium S. OB-GYN, Inc. (1994), 71 hio St.3d 124, the court confronted the issue of permitting vidence regarding insurance to be placed before a jury. The court ound it permissible in a medical malpractice action to question an xpe rt witness regarding the fact that his insurance carrier was he same as that of the defendant. The court found the evidence of ias to be probative and to outweigh any potential prejudice that vidence of insurance might cause. The court stated that too often courts have a Pavlovian esponse to insurance testimony - immediately assuming prejudice, nd that it is naive to believe that today's jurors do not already ssume in a malpractice case that the defendant doctor is covered y insurance. Id.at 71. The legal charade protecting juries from nformation they already know keeps hidden from them relevant -17- nformationthat could assist them in making their determinations. d e, supra. Although this court is fully cognizant that the Ede ourt was not considering a question regarding a collateral source, he comments of the court regarding the knowledge base of today's urors are equally applicable. In the case sub judice, the trial court was faced with a omp lex set of facts. The appellant purchased insurance, and tilized the proceeds to rebuild a facility with modern equipment. he Alex Sill Company, hired by the appellant to value the fire amage, appraised the replacement cost and actual cash value of the achinery, furniture, fixtures, and stock inventory. The adjusters etermine whether the equipment was repairable or a total loss, and hen gather information from manufacturers and suppliers (T. 1572). he question of witness bias is evident, particularly where the ublic adjusters received compensation on a contingency basis. In addition, the fire investigators hired by the insurance ompany failed to ensure that vital evidence was preserved. These ssue s were proper topics for cross-examination and the evidence dmit ted provided the jury with information relevant in reaching he ir determination. Given the facts in this particular case it ould have been extremely difficult to stave off the jury from nowing that the appellant had protected itself with insurance. However, even given these complex facts, the admission of the vidence regarding insurance might be questionable absent the t rong language of the jury instruction given by the court. The rial court, who was best able to evaluate the danger of confusing -18- r misleading the jury, chose to admit the evidence as background nfo rmation and then instruct the jury not to consider the nsur ance benefits when making its determination. The court's nstruction to the jury was both detailed and complete, and esigned to prevent any prejudice from accruing to the appellant. The jury is presumed to have followed the trial court's nstruction, Stokes, supra. Based upon the complexity of this itig ation and the totality of the circumstances, this court oncludes that the trial court's admission of evidence on insurance as not an abuse of discretion. Lastly, the appellant argues that the trial court erred in er mitting the appellee to question witnesses regarding the poliation of evidence by the insurance company fire investigators. hile it is clear that the assigned judge and the trial court both rohibited the appellant's experts from using as a basis for expert estimo ny any evidence which was not available to the appellee, hes e rulings did not prohibit the appellee from arguing that ecause evidence was destroyed, the cause of the fire could not be actually determined. The trial court did not abuse its discretion n permitting such evidence. The appellant's fifth assignment of error is overruled. The appellee's assert two cross-assignments of error. The first cross-assignment of error: THE TRIAL COURT ERRONEOUSLY DENIED WELLS FARGO'S MOTIONS FOR DIRECTED VERDICT AT THE CLOSE OF THE PLAINTIFF'S CASE (TR. 2131-33), AND AT THE CLOSE OF ALL THE EVIDENCE (TR. 3268-69). -19- Because each of the appellant's assignments of error have been verrul ed, this cross assignment of error is overruled as moot. ee Weston v. Weston Paper & Mfg. Co. (1996), 74 Ohio St.3d 377, 80. Th e appellee cross-appellant's second cross-assignment of rror: THE TRIAL COURT ERRONEOUSLY DISMISSED WELLS FARGO'S COUNTERCLAIM FOR CONTRACTUAL INDEMNITY, FOR ITS EXPENSES IN DEFENDING AGAIN ST HOME'S CLAIMS IN ITS OWN NAME AND IN THE NAMES OF AEROSOL AND SCR (R. 107, 155). The appellee cross-appellant asserts that pursuant to aragraph 12 of the contract, it is entitled to recover from the p pellant cross-appellee its expenses, costs and attorney fees ncu rred defending the claim of Home Insurance. The appellee ross -appellant asserts that because Home Insurance is not a ignator to the contract, the appellant cross-appellee is required o indemnify, defend, and hold it harmless from any claim asserted y Home. The appellant cross-appellee argues that Home Insurance has no ndependentclaims against Wells Fargo, but rather, is involved in his action only derivatively, as Aerosol's insurer. Since Home nsur ance has merely stepped into the shoes of its insured, the ppel lant cross-appellee is not liable for the appellee cross- ppellant's expenses, costs and attorney fees. Paragraph 12 of the contract states: IN THE EVENT ANY PERSON NOT A PARTY TO THIS AGREEMENT SHAL L MAKE ANY CLAIM OR FILE ANY LAWSUIT AGAINST WELLS FARG O ALARM FOR FAILURE OF ITS EQUIPMENT OR SERVICE IN -20- ANY RESPECT, WHETHER OR NOT CAUSED BY THE NEGLIGENCE, ACTIVE OR PASSIVE, OF WELLS FARGO ALARM, THEN THE SUBSCRIBER AGREES TO INDEMNIFY, DEFEND AND HOLD HARMLESS WELLS FARGO ALARM FROM ANY AND ALL SUCH CLAIMS AND LAWSUITS INCLUDING THE PAYMENT OF ALL DAMAGES, EXPENSES, COSTS AND ATTORNEYS' FEES. The Supreme Court defined subrogation in Brogan v. Progressive as. Ins. Co. (1988), 36 Ohio St.3d 22,3 where it held that: The legal doctrine of subrogation has long been recognized as an insurer's derivative right. In the case of Newcomb v. Cincinnati Ins. Co. (1872), 22 Ohio St. 382, subrogation was defined as follows: Where a loss, covered by insurance, is occ asioned by a wrong-doer, the underwriter, after reimbursing it in specie, or making compen sation in money, is, in a proper case, entitl ed to be subrogated, quoad hoc, to the right of the assured against the wrong-doer. This is of the highest equity; for whereas the loss is, in the first instance, that of the insured, after reimbursement or compensation, it becomes the loss of the insurer. Id. at 387, relying upon the opinion of Lord Hardwick in Randal v. Cockran (1748), 1 Ves. Sen. 98, 27 Eng. Rep. 916. he Brogan court went on to state that, it is axiomatic to the octrine of subrogation that the rights of the insurer are no reater than those of the insured... Id. at 29, 30. In State Farm ut. Auto. Ins. Co. v. Webb (1990), 54 Ohio St.3d 61, 64, the court ound that traditional principles of subrogation have long been eco gnized as an insurer's derivative right. Pursuant to the octr ine of subrogation, the subrogated carrier steps into the 3Brogan was modified and explained in McDonald v. Republic of Franklin Ins. Co. (1989) 45 Ohio St.3d 27, but only with respect to the definition of consent by an insurance company to a settlement. -21- hoes of its insured. Motorist Mut. Ins. Co. v. Bill (1978), 56 hio St.2d 258. From these cases it may be concluded that while Home nsurance was not a signator to the contract, it had an equitable ight to attempt to recover its losses from Wells Fargo. The law s clear that Home Insurance may only assert claims and defenses pen to its insured, no more, no less. This result works no rejudice to the appellee cross-appellant who receives the benefit f its contractual agreement with Aerosol: no claims were asserted gainst it other than those which Aerosol was entitled to assert. otwithstanding paragraph 12 of the contract, the appellant cross- ppellee's insurance company was entitled to assert its subrogation nterest in this litigation. The appellee cross-appellant's second assignment of error is verruled. The judgment of the trial court is affirmed. -22- It is ordered that appellee cross-appellant recover of ppellant cross-appellee its costs herein taxed. The Court finds there were reasonable grounds for this appeal. It is ordered that a special mandate issue out of this Court irecti ng the Common Pleas Court to carry this judgment into xecution. A certified copy of this entry shall constitute the mandate ursuant to Rule 27 of the Rules of Appellate Procedure. xceptions. ATRICIA A. BLACKMON, A.J., and ERRENCE O'DONNELL, J., CONCUR. ______________________________ JAMES D. SWEENEY JUDGE .B. This entry is an announcement of the court's decision. See pp.R. 22(B), 22(D) and 26(A); Loc.App.R. 27. This decision will e journalized and will become the judgment and order of the court ursuant to App.R. 22(E) unless a motion for reconsideration with upporting brief, per App.R. 26(A), is filed within ten (10) days f the announcement of the court's decision. The time period for eview by the Supreme Court of Ohio shall begin to run upon the ourn alization of this court's announcement of decision by the .