Auto-Owners Insurance Company v. Travis Shroyer ( 2019 )


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  •                                                                          FILED
    Jun 19 2019, 8:42 am
    CLERK
    Indiana Supreme Court
    Court of Appeals
    and Tax Court
    ATTORNEY FOR APPELLANT                                     ATTORNEY FOR APPELLEE
    Stephen C. Wheeler                                         P. Gregory Cross
    Smith Fisher Maas Howard & Lloyd,                          The Cross Law Firm, P.C.
    P.C.                                                       Muncie, Indiana
    Indianapolis, Indiana
    IN THE
    COURT OF APPEALS OF INDIANA
    Auto-Owners Insurance                                      June 19, 2019
    Company,                                                   Court of Appeals Case No.
    Appellant,                                                 18A-CT-1330
    Appeal from the Henry Circuit
    v.                                                 Court
    The Honorable Bob A. Witham,
    Travis Shroyer,                                            Judge
    Appellee.                                                  Trial Court Cause No.
    33C01-1407-CT-22
    Pyle, Judge.
    Court of Appeals of Indiana | Opinion 18A-CT-1330| June 19, 2019                             Page 1 of 11
    Statement of the Case
    [1]   Brena Berardicelli (“Berardicelli”), on behalf of her three-year-old son (“J.B.”),
    filed a complaint for damages, alleging that Travis Shroyer (“Shroyer”) caused
    injuries to J.B. by negligently operating a skid loader on his premises. Shroyer’s
    homeowner’s insurance company, Auto-Owners Insurance Company (“Auto-
    Owners”), denied coverage for the accident as well as any duty to indemnify or
    defend Shroyer.
    [2]   Shroyer brought an insurance coverage declaratory judgment action requesting
    Auto-Owners indemnify and defend him pursuant to the Personal Liability
    Protection Coverage under his homeowner’s insurance policy (the “Policy”).
    In response, Auto-Owners filed a motion for summary judgment alleging that it
    had no duty to indemnify or defend Shroyer’s liability claims because the
    undisputed evidence demonstrates that J.B. was an “insured” under the Policy
    and that, as a matter of law, the coverage for bodily injury to J.B. was excluded.
    The trial court denied Auto-Owners’ motion for summary judgment.
    [3]   On appeal, Auto-Owners argues that the trial court erred in denying the motion
    and that it was entitled to summary judgment as a matter of law because J.B.
    qualifies as an “insured” under the Policy. Concluding that J.B. was an
    “insured” as defined in the Policy at the time of the accident, we reverse the
    denial of summary judgment and remand to the trial court to enter judgment in
    favor of Auto-Owners.
    [4]   We reverse and remand.
    Court of Appeals of Indiana | Opinion 18A-CT-1330| June 19, 2019         Page 2 of 11
    Issue
    Whether the trial court erred in denying summary judgment to
    Auto-Owners.
    Facts
    [5]   Beginning in the summer of 2013 until April 2014, Berardicelli and her two
    sons resided with Shroyer at his residence. Berardicelli and Shroyer were
    “together” and shared a bedroom at the residence. (App. Vol. 2 at 194). On
    April 26, 2014, Shroyer moved a Caterpillar skid loader out of his barn.
    Shroyer planned to use the skid loader to move stone, put in a garden, and do
    some other landscaping. At some point, Shroyer “thought he had backed over
    the pile of dirt he had just left behind him, but got off the machine to check and
    noticed [J.B.’s] battery operated four-wheeler under the machine and [J.B.]
    laying on the ground injured.” (App. Vol. 2 at 183). As a result, J.B. suffered
    serious injuries.
    [6]   Property-Owners Insurance Company, which is an affiliate of Auto-Owners,
    insured Shroyer. The Policy identifies the insured premises as Shroyer’s
    residence, which was the location of the accident. The Policy provides personal
    liability coverage with limits of $500,000 for each occurrence. The Policy
    provides liability coverage as follows:
    Coverage E – Personal Liability. We will pay all sums any
    insured becomes legally obligated to pay as damages because of
    or arising out of bodily injury or property damage caused by an
    occurrence to which this coverage applies.
    Court of Appeals of Indiana | Opinion 18A-CT-1330| June 19, 2019          Page 3 of 11
    ***
    We will settle or defend, as we consider appropriate, any claim
    or suit for damages covered by this policy. We will do this at our
    expense, using attorneys of our choice. This agreement to settle
    or defend claims or suits ends when we have paid the limit of
    our liability.
    (App. Vol. 2 at 145, 146) (emphasis in original). Furthermore, the Policy
    contains certain exclusions from liability coverage:
    Coverage E – Personal Liability does not apply:
    ***
    (6) to bodily injury or personal injury to any insured.
    (App. Vol. 2 at 148) (emphasis in original). The Policy defines “bodily injury”
    as “physical injury, sickness or disease sustained by a person including resulting
    death of that person.” (App. Vol. 2 at 128). The Policy defines “occurrence” as
    “an accident that results in bodily injury or property damage and includes, as
    one occurrence, all continuous or repeated exposure to substantially the same
    generally harmful conditions.” (App. Vol. 2 at 129) (emphasis in original).
    [7]   The Policy defines an “insured” as “any other person under the age of 21
    residing with [the named insured] who is in [the named insured’s] care . . . .”
    (App. Vol. 2 at 128) (emphasis omitted). The term “care” is not defined in the
    Policy. Additionally, separate and specific to the Personal Liability Protection
    section, an insured also means, with respect to any vehicle covered by the
    Policy, “any other person you permit to use the vehicle while on an insured
    premises.” (App. Vol. 2 at 129) (emphasis in original).
    Court of Appeals of Indiana | Opinion 18A-CT-1330| June 19, 2019         Page 4 of 11
    [8]    A few days after the accident, on April 29, 2014, Shroyer submitted a claim to
    Auto-Owners regarding the accident. Auto-Owners informed Shroyer that no
    coverage existed for the accident because J.B. “resided at the insured premises
    with his mother and Shroyer (and was an ‘insured’ under the Policy, thereby
    triggering certain Policy Exclusions).” (App. Vol. 2 at 109).
    [9]    In July 2014, Berardicelli, on behalf of J.B., filed the instant lawsuit (“the
    Lawsuit”) against Shroyer, alleging that J.B. was injured on Shroyer’s property
    by Shroyer’s operation of a machine. Berardicelli later filed a “First Amended
    Complaint for Damages with Jury Demand” against Shroyer in August 2015.
    (App. Vol. 2 at 21). On October 9, 2015, Shroyer filed his answer. Auto-
    Owners continued to deny coverage for the accident.
    [10]   On March 14, 2016, Shroyer filed a “Third-Party Complaint on Insurance
    Contract” against Auto-Owners requesting that the trial court enter a
    declaratory judgment stating that Auto-Owners must defend and indemnify him
    in the Lawsuit. (App. Vol. 2 at 30). Auto-Owners answered on May 10, 2016.
    [11]   On October 9, 2017, Auto-Owners filed a “Motion for Summary Judgment and
    Designation of Evidence in Support Thereof.” (App. Vol. 2 at 206). On the
    same date, Auto-Owners also filed a “Brief in Support of Motion for Summary
    Judgment.” (App. Vol. 2 at 89). Auto-Owners argued that it has no duty to
    indemnify or defend Shroyer’s liability claims because the undisputed evidence
    demonstrated that J.B. was an insured under the Policy and that as a matter of
    law, any coverage for bodily injury to J.B. was excluded.
    Court of Appeals of Indiana | Opinion 18A-CT-1330| June 19, 2019           Page 5 of 11
    [12]   Auto-Owners designated several affidavits, exhibits, and depositions in support
    of its position. This evidence included testimony that Berardicelli was not
    employed, did not pay rent, and did not contribute to any household expenses
    or utilities. Shroyer “[t]old [her she] didn’t have to” pay anything, and he took
    care of the expenses himself. (App. Vol. 2 at 194). In addition to providing
    money to Berardicelli, Shroyer purchased diapers and “necessities” for her two
    sons. (App. Vol. 2 at 202). Shroyer typically told Berardicelli if the sons
    needed to be disciplined; however, he “might have told them to sit in the
    timeout chair or something like that.” (App. Vol. 2 at 204).
    [13]   In response, Shroyer filed his “Brief in Opposition to Motion for Summary
    Judgment” and designated evidence in support of his position that J.B. was not
    an insured under the Policy. Included in this evidence was Shroyer’s own
    testimony that he was never involved in any of the decision-making regarding
    the various needs of the children. He also testified that he never watched them.
    Likewise, Berardicelli testified that when she had an errand to run, she “always
    had [the boys] with [her].” (App. Vol. 3 at 48). She also testified that she took
    care of the discipline and if an issue did arise, she would “take care of it.”
    (App. Vol. 3 at 48). Furthermore, she stated that she provided food for her
    children through “food stamps[.]” (App. Vol. 3 at 57).
    [14]   The trial court held a hearing on Auto-Owners’ motion for summary judgment
    and denied the motion. The trial court did not make any specific findings or
    conclusions regarding its denial of the motion. At the request of Auto-Owners,
    Court of Appeals of Indiana | Opinion 18A-CT-1330| June 19, 2019           Page 6 of 11
    the trial court certified its denial of summary judgment for interlocutory appeal,
    and our Court accepted jurisdiction.
    Decision
    [15]   Auto-Owners appeals the trial court’s denial of summary judgment. Auto-
    Owners contends that J.B. was an “insured” under the Policy, resulting in the
    exclusion of any coverage for bodily injury to J.B. Auto-Owners presents two
    theories on appeal. First, Auto-Owners asserts that J.B. was in Shroyer’s care,
    thus making him an insured under one definition in the Policy. Second, Auto-
    Owners argues that the accident and injuries arose out of J.B.’s use of a covered
    vehicle with Shroyer’s permission on the insured premises, thus making him an
    insured under another separate definition in the Policy. Because the designated
    evidence shows that J.B. was in Shroyer’s care and qualifies as an insured under
    the first theory, we need not address the merits of Auto-Owners’ second theory.
    [16]   When reviewing the grant or denial of summary judgment, we apply the same
    test as the trial court: summary judgment is appropriate only where the
    designated evidence shows there is no genuine issue of material fact and the
    moving party is entitled to judgment as a matter of law. Hughley v. State, 
    15 N.E.3d 1000
    , 1003 (Ind. 2014); Ind. Trial Rule 56(C). “Insurance policies are
    governed by the same rules of construction as other contracts. As with other
    contracts, the interpretation of an insurance policy is a question of law.” Briles
    v. Wasusau Ins. Companies, 
    858 N.E.2d 208
    , 213 (Ind. Ct. App. 2006) (citations
    omitted). Further, the “[c]onstruction of a written contract is a question of law
    for which summary judgment is particularly appropriate.” Weidman v. Erie Ins.
    Court of Appeals of Indiana | Opinion 18A-CT-1330| June 19, 2019          Page 7 of 11
    Group, 
    745 N.E.2d 292
    , 297 (Ind. Ct. App. 2001). And where the challenge to
    summary judgment raises questions of law, we review them de novo. Rogers v.
    Martin, 
    63 N.E.3d 316
    , 320 (Ind. 2016).
    [17]   In ruling on a motion for summary judgment, not only all facts but also all
    “‘reasonable inferences drawn from those facts are construed in favor of the
    nonmoving party.’” Auto-Owners Ins. Co. v. Harvey, 
    842 N.E.2d 1279
    , 1289 (Ind.
    2006) (quoting Colonial Penn Ins. Co. v. Guzorek, 
    690 N.E.2d 664
    , 667 (Ind.
    1997)). A party seeking appellate reversal of the denial of summary judgment
    must demonstrate that the designated evidentiary matter negates the existence
    of any genuine issue of material fact and that the moving party is entitled to
    judgment as a matter of law. T.R. 56(C); Cinergy Corp. v. Assoc. Elec. & Gas Ins.
    Servs., Ltd., 
    865 N.E.2d 571
    , 574 (Ind. 2007).
    [18]   The parties do not dispute that Auto-Owners would not have to provide
    coverage for bodily injury if J.B. was an “insured.” Instead, they dispute the
    existence of a genuine issue of material fact as to whether J.B. was an insured
    under the Policy by virtue of being in Shroyer’s “care.” Although the term
    “care” is undefined in the Policy, the Indiana Supreme Court has previously
    reviewed the definition of “care” as used in an insurance policy. In Holiday
    Hospitality Franchising, Inc. v. AMCO Ins. Co., 
    983 N.E.2d 574
     (Ind. 2013), a
    minor was molested at a hotel by a hotel employee. The minor’s parents were
    not at the hotel, and the minor was staying in a room rented to his friend’s
    mother. The hotel’s insurance policy excluded coverage for molestation “by
    Court of Appeals of Indiana | Opinion 18A-CT-1330| June 19, 2019         Page 8 of 11
    anyone of any person while in the care, custody or control of the insured.” Id.
    at 576. The phrase “care, custody, or control” was not defined in the policy.
    [19]   In discerning the meaning of “care” as used in an insurance policy, the court
    noted that the dictionary definition of “care” was defined as “[t]he function of
    watching, guarding, or overseeing.” Id. at 579 (citing Webster’s II New College
    Dictionary 168 (1995)). Using this definition, the supreme court focused on the
    child’s status and held that the child was in the hotel’s “care” for purposes of
    the insurance policy, as it was undisputed that the minor was molested by a
    hotel employee while he was a guest at the hotel, was staying in a room rented
    to the mother of his friend, and was in the room behind a locked door when the
    employee entered and molested him.
    [20]   Turning to this case, when we focus on the child’s status, as did our supreme
    court in Holiday Hospitality, we conclude that J.B. was an insured under the
    Policy at the time of the accident. As defined in the Policy, an insured means
    “any other person under the age of 21 residing with [the named insured] who is
    in [the named insured’s] care . . . .” (App. Vol. 2 at 128) (emphasis omitted). It
    is undisputed that J.B., three years old at the time, was under the age of 21 and
    was residing with Shroyer. Both Shroyer and Berardicelli testified about J.B.’s
    age and that J.B., his brother, and Berardicelli lived with Shroyer at the insured
    premises from the summer of 2013 until April 2014.
    [21]   It is also undisputed that Berardicelli did not work while living with Shroyer
    and was not responsible for paying rent, sharing in any of the utilities, or
    Court of Appeals of Indiana | Opinion 18A-CT-1330| June 19, 2019          Page 9 of 11
    household expenses because Shroyer “[t]old [her she] didn’t have to.” (App.
    Vol. 2 at 194). Rather, Shroyer took care of the expenses himself and provided
    Berardicelli with money because they “were together.” (App. Vol. 2 at 194).
    Further, Shroyer purchased a vehicle for Berardicelli and paid for its
    maintenance and gas. Shroyer testified that he provided diapers and other
    “necessities” for J.B. and his brother. (App. Vol. 2 at 202). Although Shroyer
    would typically tell Berardicelli if the brothers needed to be disciplined, he
    “might have told them to sit in the timeout chair or something like that.” (App.
    Vol. 2 at 204). Thus, by providing a place to live, transportation, financial
    support, and other necessities, Shroyer engaged in “the function of watching,
    guarding, or overseeing[]” the various needs and overall well-being of J.B. See
    Holiday Hospitality, 983 N.E.2d at 579.
    [22]   Shroyer’s argument that Berardicelli possessed the “sole responsibility”
    concerning the watching, guarding or overseeing of J.B. is unconvincing.
    (Shroyer’s Br. 18). The concept of “care” is not a mutually exclusive concept.
    See, e.g., Holiday Hospitality, 983 N.E.2d at 580-581 (holding that hotel guest
    molested by hotel employee was under the “care, custody or control” of the
    hotel, within the meaning of a similar insurance coverage exclusion, despite
    also being in the care of his friend's mother). Although J.B. was in the care of
    his mother Berardicelli, he was still, as a matter of law, in Shroyer’s care.
    [23]   Auto-Owners has demonstrated that the designated evidence negates the
    existence of any genuine issue of material fact and is entitled to judgment as a
    matter of law. Thus, under the Policy, J.B. was an insured at the time of the
    Court of Appeals of Indiana | Opinion 18A-CT-1330| June 19, 2019          Page 10 of 11
    accident and any coverage for bodily injury to J.B. is excluded. Accordingly,
    we reverse the trial court’s denial of summary judgment and remand with
    instructions to grant summary judgment in favor of Auto-Owners.
    [24]   Reversed and remanded.
    Najam, J., and Altice, J., concur.
    Court of Appeals of Indiana | Opinion 18A-CT-1330| June 19, 2019      Page 11 of 11
    

Document Info

Docket Number: Court of Appeals Case 18A-CT-1330

Judges: Pyle

Filed Date: 6/19/2019

Precedential Status: Precedential

Modified Date: 10/6/2023