ST. JOSEPH BANK & T. CO., SO. BEND, IND. v. SUN INS. CO. OF NY

• Decision Date: 23 August 1974
• Docket Number: Civ. No. 72 S 108.
• Citation: 380 F. Supp. 890
• Parties: ST. JOSEPH BANK AND TRUST COMPANY, SOUTH BEND, INDIANA, Plaintiff, v. SUN INSURANCE COMPANY OF NEW YORK et al., Defendants.
• Court: U.S. District Court — Northern District of Indiana

380 F. Supp. 890

ST. JOSEPH BANK AND TRUST COMPANY, SOUTH BEND, INDIANA, Plaintiff, v. SUN INSURANCE COMPANY OF NEW YORK et al., Defendants.

Civ. No. 72 S 108.

United States District Court, N. D. Indiana, South Bend Division.

August 23, 1974.

Gerald A. Kamm, Bruce H. Stewart, Doran, Manion, Boynton & Kamm, South Bend, Ind., for plaintiff.

William T. Means, Bingham, Loughlin & Means, Mishawaka, Ind., Julius Denenberg, Denenberg, Tuffley & Thorpe, Southfield, Mich., for defendant Sun Ins. Co. of N. Y.

Frederick F. Thornburg, John T. Mulvihill, Thomas L. Murray, Thornburg, McGill, Deahl, Harman, Carey & Murray, South Bend, Ind., for defendants Detroit Ins. Agency and Alexander & Alexander.

MEMORANDUM

GRANT, District Judge.

Plaintiff brought this action against the above-named defendants seeking to recover the loss it incurred when its funds were robbed from an armored truck belonging to Indiana Armored Service, Inc. Named as defendants were Sun Insurance Company of New York and its representatives, Detroit Insurance Agency, and Alexander and Alexander, Inc., who had issued an insurance policy covering the losses of Indiana Armored Service. Although the policy did not cover this particular loss, plaintiff has alleged that Detroit Insurance Agency, a subsidiary of Alexander and Alexander, Inc., acting as agent of Sun Insurance Company, had induced the plaintiff to use the services of Indiana Armored Service, Inc., by misinforming plaintiff about the coverage in Indiana Armored Service's policy. Plaintiff alleged that defendants were liable for misinforming plaintiff, for negligently informing plaintiff of the full scope of the policy, for undertaking the responsibility of advising plaintiff about the policy and failing to do so fully and, finally, that defendants have waived their rights to assert any avoidance under the policy.

Plaintiff subsequently filed a petition for permission to file additional paragraphs of complaint, seeking to add to its complaint the allegation of fraudulent misrepresentation and a corresponding claim for punitive damages. Plaintiff's allegation of fraudulent misrepresentation closely corresponds to its allegation of misrepresentation contained in Count I of its complaint. Granting of plaintiff's petition will allow this court to consider the propriety of summary judgment in view of all of plaintiff's allegations. Accordingly, plaintiff's petition for permission to file added paragraphs of complaint is hereby granted pursuant to Rule 15(a), F.R. Civ.P., in the interest of justice.

Defendant Sun Insurance Company's motion for summary judgment alleges that, based upon the pleadings and the depositions of plaintiff's executives, it has been established that there are no genuine issues of fact in dispute and that Defendant Sun Insurance Company is entitled to summary judgment as a matter of law. In its motion defendant argues that it has been established that (1) no material misrepresentation was made to the plaintiff, (2) the alleged misrepresentation did not induce or effect plaintiff's actions, (3) plaintiff did not rely to its detriment upon the alleged misrepresentation, (4) plaintiff would not have been justified in any reliance which it would have placed on the alleged misrepresentation, (5) the coverage under the insurance policy in question could not be expanded by waiver and estoppel, and (6) Defendant Sun Insurance Company could not be bound or held liable for any misrepresentations which Defendant Detroit Insurance Agency might have made. Defendants Detroit Insurance Agency and Alexander and Alexander, Inc., joined in Defendant Sun Insurance Company's motion for summary judgment except that they denied that summary judgment could be granted on plaintiff's sixth contention that Defendant Detroit Insurance Agency had no authority as an agent to bind Defendant Sun Insurance Company.

The defendants' first three contentions in support of the motions for summary judgment are all directed to the question of whether the misrepresentation alleged in plaintiff's complaint did in fact effect plaintiff's actions and thereby cause any injury to plaintiff. Plaintiff's complaint rests solely on claims of fraudulent misrepresentation, negligence and contract. In order to state a claim for fraudulent misrepresentation it is essential that there be a material misrepresentation and that a plaintiff acted to its detriment in reliance thereon. Grisson v. Moran, Ind.App., 290 N.E.2d 119, 123-124 (1972). Also, in order to assert the doctrine of estoppel there must be a representation and the plaintiff must have acted to its detriment in reliance thereon. Damler v. Baine, 114 Ind.App. 534, 51 N.E.2d 885, 889 (1943). Finally, an action for negligence requires that the negligent act be the proximate cause of plaintiff's injury. Haney v. Meyer, 139 Ind.App. 663, 215 N.E.2d 886, 889 (1966). Accordingly, it is evident that all three claims in plaintiff's complaint require that the alleged misrepresentation did in fact induce plaintiff's use of the Indiana Armored Service and thereby cause plaintiff's loss.

Plaintiff first began using Indiana Armored Service, Inc., to transport its funds on March 1, 1963, pursuant to a written contract. From March, 1963, until September 1, 1971, Indiana Armored Service had been insured by Insurance Company of North America, (INA). Plaintiff...