ASKREN HUB STATES PEST CONT. SERVICES, INC. v. Zurich Ins. Co.

• Decision Date: 21 December 1999
• Docket Number: No. 49A02-9902-CV-133.,49A02-9902-CV-133.
• Citation: 721 N.E.2d 270
• Parties: ASKREN HUB STATES PEST CONTROL SERVICES, INC., Appellant-Plaintiff, v. ZURICH INSURANCE COMPANY and Zurich American Insurance Group, Appellee-Defendant.
• Court: Indiana Appellate Court

721 N.E.2d 270

ASKREN HUB STATES PEST CONTROL SERVICES, INC., Appellant-Plaintiff, v. ZURICH INSURANCE COMPANY and Zurich American Insurance Group, Appellee-Defendant.

No. 49A02-9902-CV-133.

Court of Appeals of Indiana.

December 21, 1999.

C. Dennis Wegner, Jeffrey K. Orr, C. Dennis Wegner & Assoc., P.C., Indianapolis, Indiana, Attorneys for Appellant.

Robert A. Anderson, Richard A. Smikle, Ice, Miller, Donadio & Ryan, Indianapolis, Indiana, Attorneys for Appellee.

OPINION

ROBB, Judge

Askren Hub States Pest Control Services ("Askren") appeals the trial court's grant of summary judgment in favor of Zurich Insurance Company and Zurich American Insurance Group (collectively "Zurich") in a breach of contract action. We affirm.

Issue

Askren raises a single issue for our review, which we restate as: whether the trial court properly granted Zurich's motion for summary judgment.

Facts and Procedural History

The undisputed facts and the facts most favorable to the non-movant reveal that Zurich issued a commercial general liability policy (the "CGL policy") to Askren, which was effective for one year commencing on August 14, 1993. Zurich renewed the policy for an additional year on August 14, 1994. The annual premium for the renewal policy was $8,319.00. The CGL policy contained several endorsements, including a pest control damage liability coverage form (the "pest control form") and a commercial general liability coverage form (the "CGL coverage form").

On April 14, 1994, an individual employed by Askren as a pesticide applicator performed a termite inspection on a private residence located in Tilden, Indiana. At the time of the inspection, Charles Hurst was in the process of purchasing the home that Askren was inspecting for termites. After inspecting the home, the Askren employee prepared a written report which concluded that there was no visible evidence of infestation from wood-destroying insects, such as termites, in the home. Relying on Askren's report, Hurst later purchased the home. On May 23, 1994, Hurst's realtor notified Askren via telephone that Hurst and another pest control company had found termites in the home. Askren did not notify Zurich of this telephone call from Hurst's realtor.

On May 31, 1994, the owner and president of Askren, Alan Askren ("Alan"), and the employee who performed the initial termite inspection of the residence visited Hurst at his home. During this visit, Alan found evidence of past termite damage and live termite infestation in Hurst's home. Alan also found evidence of damage to the home which appeared to have resulted from water rot. Askren did not notify Zurich of its discoveries at Hurst's home.

On August 11, 1994, Hurst's attorney sent Askren a letter requesting that the pest control company contact him regarding the termite infestation of Hurst's home. Askren did not forward this letter to Zurich. On August 31, 1994, Alan and Hurst spoke via the telephone and agreed to meet at Hurst's home on September 1, 1994. At that meeting, Alan promised Hurst that Askren would repair the visible termite damage and treat his home for termites. Askren did not notify Zurich of the meeting nor of the remedial measures that Askren promised to undertake at Hurst's home.

In late September or early October, Askren treated Hurst's home for termites and repaired or replaced portions of residence containing visible evidence of termite damage without obtaining the consent of Zurich. Askren did not preserve the evidence of the termite damage to the Hurst home nor did it document the damages prior to making the repairs to the residence. Later, Askren refused Hurst's request that Askren repair the hidden termite damage to his home.

On November 8, 1994, Askren notified its insurance agent of Hurst's claim. However, Zurich denied coverage to Askren for Hurst's claim under the CGL policy on February 24, 1995. On July 6, 1995, Hurst filed a complaint against Askren in the Hendricks Circuit Court alleging negligence and breach of contract. On July 10, 1995, Askren's attorney sent Zurich a copy of the Hurst complaint and requested that Zurich assume Askren's defense in that litigation. On August 16, 1995, Zurich notified Askren that it would not assume the pest control company's defense of Hurst's lawsuit.

Subsequently, Askren retained counsel to defend it against Hurst's lawsuit. On August 23, 1996, the Hendricks Circuit Court entered judgment in favor of Hurst and against Askren in the amount of $40,000.00 plus costs. On October 1, 1996, Askren requested Zurich to either pay the full amount of the judgment entered against it in the Hendricks Circuit Court or assume the cost of the appeal to this court. Zurich refused both of Askren's requests. Consequently, Askren filed a lawsuit in the Marion Superior Court against Zurich for breach of contract. Thereafter, Zurich moved for summary judgment which was later granted by the trial court. This appeal ensued.

Discussion and Decision

I. Standard of Review for Summary Judgment

The purpose of summary judgment is to terminate litigation about which there can be no factual dispute and which may be determined as a matter of law. Bastin v. First Indiana Bank, 694 N.E.2d 740, 743 (Ind.Ct.App.1998), trans. denied. When reviewing a grant or denial of summary judgment, this court applies the same standard as does a trial court. USA Life One Ins. Co. v. Nuckolls, 682 N.E.2d 534, 537 (Ind.1997). Summary judgment should be granted only if the designated evidentiary material shows that there is no genuine issue of material fact and the moving party is entitled to summary judgment as a matter of law. Ind. Trial Rule 56(C); Hoskins v. Sharp, 629 N.E.2d 1271, 1276 (Ind.Ct.App.1994). On review, we may not search the entire record to support the judgment, but may only consider that evidence which had been specifically designated to the trial court. North Snow Bay, Inc. v. Hamilton, 657 N.E.2d 420, 422 (Ind.Ct.App.1995). The party appealing the denial of summary judgment has the burden of persuading this court on appeal that the trial court's ruling was erroneous. See Warner Trucking, Inc. v. Carolina Cas. Ins. Co., 686 N.E.2d 102, 104 (Ind. 1997)

. We resolve any doubt about a fact or any inference to be drawn from it in favor of the nonmoving party. Claxton v. Hutton, 615 N.E.2d 471, 473 (Ind.Ct.App. 1993). Although the trial court made findings of fact and conclusions of law, it does not change the nature of our review of summary judgment. The entry of specific facts and conclusions in a summary judgment order aids our review by providing us with a statement of reasons for the trial court's decision, but it has no other effect. P.M.S., Inc. v. Jakubowski, 585 N.E.2d 1380, 1381 (Ind.Ct.App.1992).

II. The CGL Policy

Askren contends that the CGL policy issued by Zurich to Askren covers property damage arising from Askren's negligent termite inspection of a residence. We agree.

A. Coverage of the CGL Policy

Askren contends that the CGL policy clearly covers damages resulting from its negligent termite inspection of a residence. Specifically, Askren argues that the pest control form is part and parcel of the CGL policy, and that the pest control form clearly and unambiguously covers damages resulting from Askren's negligent termite inspection of a residence. In the alternative, Askren argues that even if the pest control form does not cover such damages, the CGL coverage form which is part and parcel of the CGL policy clearly and unambiguously covers damages resulting from Askren's negligent termite inspection of Hurst's home.

Zurich contends that neither the CGL coverage form nor the pest control form covers the damages arising from Askren's negligent inspection of Hurst's home. Zurich also argues that it had no duty to defend or indemnify Askren under the CGL policy because Hurst's complaint against Askren is akin to a legal malpractice claim, and the CGL policy does not cover such professional malpractice.

Our initial inquiry is to determine whether the damage to the Hurst home occurred during the time period that Askren was insured by Zurich. Zurich issued a commercial general liability insurance policy to Askren, policy number GLO1457936-02F, which was effective from August 14, 1993 to August 14, 1994. R. 253. The insurance policy issued by Zurich to Askren was renewed by Askren under policy number GLO XXXXXXX-XX, which was effective from August 14, 1994 to August 14, 1995.¹ R. 16. Askren conducted the initial termite inspection of the Hurst home on April 14, 1994. R. 52. Thus, Askren was insured by Zurich under the CGL policy on April 14, 1994, the date that Askren conducted the negligent termite inspection of Hurst's home.

Because we have determined that Askren was insured by Zurich on the date that it negligently conducted the termite inspection of Hurst's home, we must now determine whether the insurance policy issued by Zurich to Askren covers damages resulting from Askren's negligent termite inspection of a residence. Under Indiana law, a contract for insurance is subject to the same rules of interpretation as are other contracts. Eli Lilly & Co. v. Home Ins. Co., 482 N.E.2d 467, 470 (Ind. 1985). The interpretation is "primarily a question of law for the court, even if the policy contains an ambiguity needing resolution." Tate v. Secura Ins., 587 N.E.2d 665, 668 (Ind.1992). If the language in the insurance policy is clear and unambiguous, then it should be given its plain and ordinary meaning. Id. An unambiguous insurance policy must be enforced according to its terms, even those terms that limit an insurer's liability. Selleck v. Westfield Ins. Co., 617 N.E.2d 968, 970 (Ind.Ct.App. 1993), trans. denied.

However, if the language of the policy is ambiguous, then the court may apply the rules of construction in interpreting the language. Eli Lilly, 482 N.E.2d at 470. An ambiguity does not arise merely because the two parties proffer...