A building owned by 3371 Reading burned down during renovations. The insurer, Ohio Casualty, denied the claim because the insured had not erected a fence around the construction site as required by the policy’s Protective Devices Endorsement. The district court granted summary judgment to the insurers on all claims, including breach of contract, bad faith, fraudulent inducement, and a violation of the Ohio Deceptive Trade Practices Act.

The court applied Ohio law to interpret the insurance policy, noting that provisions must be construed in favor of the insured if ambiguous but applied as written if unambiguous. The court found that while the policy required a fence that completely surrounds the jobsite, the physical layout of the property made compliance impossible because the building shared a wall with a neighbor. The court held that the fencing provision was illusory and unenforceable under Ohio law because performance was impossible. The court rejected the dissent’s argument that a three-sided fence would suffice, stating the policy required a complete enclosure. The court also affirmed the lower court’s dismissal of bad faith and fraud claims, noting that negligence in drafting the policy does not constitute fraud and that the ODTPA does not apply to consumer fraud claims in this context.

We are simply assuming that there is and then holding that it is unenforceable because performance was impossible.

3371 Reading, LLC v. Liberty Mut. Grp., Inc., No. 25-3439, at 6 (6th Cir. 2026)

The doctrine of impossibility of performance applies only where an interceding, unforeseen event renders performance impossible.

Paul G. Readler

Insurers in the Sixth Circuit must now recognize that fencing requirements in insurance policies may be unenforceable if the physical layout of the property makes complete enclosure impossible, even if the policy language appears clear.