Allstate Ins. Co. v. Kepchar
| Citation | 592 N.E.2d 694 |
| Decision Date | 26 May 1992 |
| Docket Number | No. 04A03-9112-CV-392,04A03-9112-CV-392 |
| Parties | ALLSTATE INSURANCE COMPANY, Appellant-Supplemental Defendant Below, v. Michael D. KEPCHAR, Appellee-Plaintiff Below, v. Steve S. RUTHERFORD and Jerry Konecci, Appellees-Defendants Below. |
| Court | Court of Appeals of Indiana |
John E. Hughes, Heidi B. Jark, Hoeppner, Wagner & Evans, Valparaiso, for appellant.
Nick Katich, Mark S. Lucas, Lucas, Holcomb & Medrea, Merrillville, for appellee.
Allstate Insurance Company appeals a judgment in favor of Michael D. Kepchar, raising three issues for our review. As we reverse, we address only the following two:
I. Whether the trial court erred in denying Allstate's request for special findings of fact.
II. Whether Allstate must provide coverage under its umbrella policy if the insured has failed to satisfy conditions precedent to the policy.
We reverse.
On the evening of July 7, 1978, Michael Kepchar and Steven Rutherford were involved in a two motorcycle collision in which Kepchar was seriously injured. He filed suit against Rutherford and Rutherford's stepfather, Jerry Konecci, for negligence and negligent entrustment, respectively. The primary insurer, American Inter-Insurance Exchange ("A.I.E."), assumed the defense of Rutherford and Konecci during trial. Konecci was dismissed via judgment on the evidence, but a verdict was returned on March 23, 1984 against Rutherford in the amount of $370,000. Judgment was not entered on the verdict until April 23, 1984.
A.I.E.'s policy limits were $50,000, and counsel for Rutherford sought a settlement for the policy limits plus accrued interest after the judgment. Kepchar agreed to sign a release and satisfaction of judgment if Konecci and Rutherford would sign an affidavit stating that there was no other applicable insurance coverage. Accordingly, Konecci called Allstate to inquire about his umbrella policy but received the impression that he did not have sufficient underlying coverage to allow the umbrella coverage to become effective. A.I.E. tendered the money to Kepchar, and Rutherford signed the release, but Kepchar never received the affidavit and therefore never tendered the satisfaction of judgment.
Kepchar's counsel found out about the Allstate policy and filed a Motion for Proceedings Supplemental in an effort to collect the balance of the judgment from Allstate. After an evidentiary hearing, the trial court ordered Allstate to pay Kepchar the sum of $490,214.86 1 and Allstate appealed.
While the second of the issues enumerated above requires reversal, we also address the first as it affects our standard of review. Allstate argues that the trial court erred in denying its request for findings of fact and conclusions thereon made pursuant to Indiana Trial Rule 52(A). We noted in In re Marriage of Hudak (1981), Ind.App., 428 N.E.2d 1333, 1335 that our courts have long held findings of fact to be improper in proceedings supplemental. We reaffirmed that holding in U.S. Marketing Concepts v. Don Jacobs (1989), Ind.App., 547 N.E.2d 892, 893, rehearing denied, as did our Fourth District in First Bank v. Samocki Bros. Trucking Co. (1987), Ind.App., 509 N.E.2d 187, 189 at n. 1, transfer denied.
Allstate argues that these cases are distinguishable in that no new issues of liability were raised. It also argues this case is distinguishable because Allstate could have filed a declaratory judgment. We fail to see how these facts mandate different treatment; proceedings supplemental are intended to be summary in nature and the rule against findings serves this purpose. Samocki, supra, at 189. The trial court did not err in denying Allstate's motion for special findings.
We note, however, that the trial court did make some "observations" about the facts of the case. Accordingly, we will treat the judgment as a general judgment supported by partial findings. U.S. Marketing, supra, at 893. On appeal from a general judgment we look at the evidence most favorable to the decision of the trial court and will affirm if the decision can be sustained on any legal ground. Id.
An insurance policy is a contract, and therefore, the law of contracts applies when determining policy liabilities. Davidson v. Cincinnati Ins. Co. (1991), Ind.App., 572 N.E.2d 502, 505, transfer denied. Due to the great disparity in bargaining power between the parties, any ambiguous clauses in the policy are construed in favor of the insured. Id. Conditions precedent to coverage are strictly construed against an insurer. Motorists Mutual Ins. Co. v. Johnson (1966), 139 Ind.App. 622, 218 N.E.2d 712, 718, transfer denied. Conversely, if the language in the policy is clear and unambiguous, it should be given its plain and ordinary meaning. City of Muncie v. United Nat. Ins. Co. (1991), Ind.App., 564 N.E.2d 979, 982. An ambiguity is not established simply because controversy exists and one party asserts an interpretation contrary to that asserted by the opposing party. Id. The language of the policy must be reasonably construed by the court which may not find coverage unless the language of the policy admits liability. Id.
In support of its argument that it need not provide excess coverage here, Allstate points to the following "Conditions" set forth in the policy:
2. Notice
Upon the happening of an Occurrence reasonably likely to involve Allstate hereunder, written notice shall be given as soon as practicable to Allstate or any of its authorized agents. Such notice shall contain particulars sufficient to identify the Insured and fullest information obtainable at the time. The Insured shall give like notice of any claim made on account of such Occurrence. If legal proceedings are begun in such a case, the Insured shall forward to Allstate each paper therein or a copy thereof, received by the Insured or the Insured's representatives, together with copies of investigations with respect to such proceedings.
* * * * * *
5. Attachment of Allstate's Liability and Claim for Loss
Allstate's liability in any one Occurrence, within the coverage of this policy, shall not attach until Allstate's liability under this policy is ascertained. Claim for payment shall be made within twelve (12) months after Allstate's liability has been ascertained either by payment by or by final judgment against the Insured resulting from actual trial, or by written agreement of the Insured, the claimant and Allstate. Subject to the above provisions, additional claims for payment arising out of the same Occurrence shall be payable within thirty (30) days after the Insured has furnished Allstate with due proof thereof.
Record, p. 954. Allstate contends that it did not receive notice of the accident or any claim or lawsuit arising out of the accident until over a year after trial. Thus, it is not liable.
Kepchar counters that Allstate had notice of the accident through its agent, Ray Popyk. The record reveals that Popyk lived in the neighborhood where Rutherford and Kepchar lived and where the accident occurred. At some time within six months of the accident Popyk learned that Rutherford was involved in a motorcycle accident through a comment or comments made in passing at a neighborhood social function. However, the record also reveals that Popyk never learned any particularities involving the accident, whether injuries were minor or serious, or who was at fault in the accident. Moreover, Popyk never received any written notice of the accident (as required by the policy) or any communication from the parties until over a year after trial. Neither did Popyk receive any pleadings or papers from the litigation which arose out of the accident until over a year after it was completed. Nothing which Popyk learned from his brief conversations with his neighbors would have indicated to him that coverage under Allstate's excess insurance policy was likely to be required as a result of the accident. We are loath to hold that general neighborhood gossip will satisfy the notice requirements of an excess insurance policy. 2
Kepchar next argues that since notice was given to Allstate within 12 months of the time which the judgment became final, the insured complied with paragraph five of the conditions and therefore notice was timely. 3 He argues that paragraphs two and five are ambiguous, and thus a proper construction would be that if the insured has complied with paragraph five, notice is timely. He is mistaken. Allstate correctly observes that paragraph five refers to the filing of a claim with Allstate, not to notice of an "Occurrence," which is covered by paragraph two. Notice and the filing of a claim are two separate and distinct actions; in fact, they may be performed by two separate individuals, as where the insured gives notice of an "Occurrence" but the injured party files a claim after judgment in his favor. We need not address the issue of whether Kepchar has timely filed a claim with Allstate because we hold below that Rutherford's failure to comply with the...
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