Berkshire Hathaway Homestate Ins. Co. v. Basham

• Decision Date: 16 October 2018
• Docket Number: Court of Appeals Case No. 18A-PL-446
• Citation: 113 N.E.3d 630
• Parties: BERKSHIRE HATHAWAY HOMESTATE INSURANCE COMPANY, Appellant-Defendant, v. Christina BASHAM d/b/a Basham Family, L.P., Appellee-Plaintiff, Voldico, LLC, Andrew Vollmer, Standard Agencies, Inc., and Carol J. Jenkinson, Defendants.
• Court: Indiana Appellate Court

113 N.E.3d 630

BERKSHIRE HATHAWAY HOMESTATE INSURANCE COMPANY, Appellant-Defendant,

v. Christina BASHAM d/b/a Basham Family, L.P., Appellee-Plaintiff,Voldico, LLC, Andrew Vollmer, Standard Agencies, Inc., and Carol J. Jenkinson, Defendants.

Court of Appeals Case No. 18A-PL-446

Court of Appeals of Indiana.

FILED October 16, 2018

Rehearing Denied December 11, 2018

Attorney for Appellant: Stephen C. Wheeler, Smith Fisher Maas Howard & Lloyd, P.C., Indianapolis, Indiana

Attorneys for Appellee: Thomas M. Beeman, Beeman Law, Anderson, Indiana

Najam, Judge.

Statement of the Case

[1] Berkshire Hathaway Homestate Insurance Company ("Berkshire Hathaway") appeals the trial court's denial of its motion for partial summary judgment and grant of summary judgment for Christina Basham d/b/a Basham Family, L.P. ("Basham") on Basham's complaint, which alleged that Berkshire Hathaway had wrongfully denied insurance coverage on a detached garage.¹ Berkshire Hathaway raises one issue for our review, namely, whether the trial court erred when it denied its motion for summary judgment and entered summary judgment for Basham.²

[2] We affirm.

Facts and Procedural History

[3] Basham owns fifteen rental properties. Basham obtained an insurance policy from Berkshire Hathaway to cover the rental properties, which was effective from November 17, 2016, until November 17, 2017. The insurance policy provided, in relevant part, as follows:

A. Coverage

[Berkshire Hathaway] will pay for direct physical loss of or damage to Covered Property at the premises described in the Declarations caused by or resulting from any Covered Cause of Loss.

1. Covered Property

Covered Property, as used in this Coverage Part, means the type of property described in this section, A.1., and limited in A.2, Property Not Covered, if a Limit of Insurance is shown in the Declarations for that type of property.

a. Building, meaning the building or structure described in the Declarations, including:

(1) Completed additions[.]

Appellant's App. Vol. II at 24 (bold removed). The insurance policy also contained a section entitled "Property Not Covered," which described various items or categories of items that were not covered by the insurance policy.

[4] Berkshire Hathaway issued one insurance policy to cover all fifteen properties. In addition, Berkshire Hathaway issued declarations for each individual property. One of the covered properties is located in Elwood. The declarations for that property provided a description of the premises and the coverage provided. Under the "Description of Premises," the declarations identified the premises as "Premises Number: 15[,] Building Number: 1[.]" Id. at 23. The declarations also included an address of 800 N. 13th St., Elwood, IN 46036, and it listed the occupancy as "RENTAL DWELLINGS–OTHER THAN STUDENT HOUSING." Id.

[5] The premises in Elwood included a house and a detached garage. On December 30, 2016, a fire burned down the garage and greatly damaged the house. Basham filed a claim with Berkshire Hathaway for the damages. Berkshire Hathaway paid for the damage to the house, but it denied Basham's claim for damage to the detached garage. In particular, Berkshire Hathaway stated that "the detached garage does not meet the definition of Covered Property, as outlined by the Policy. The garage was not specifically insured on the Policy. The Policy only applies to Covered Property." Id. at 157.

[6] On April 25, 2017, Basham filed a complaint against Berkshire Hathaway in which she alleged that Berkshire Hathaway had wrongfully denied insurance coverage on the detached garage. Thereafter, on July 17, Basham filed a motion for partial summary judgment.³ In that motion, Basham alleged that the insurance policy was unambiguous and covered the garage. In the alternative, Basham contended that, even if the policy was ambiguous, the ambiguous policy should be construed in her favor to cover the garage.

[7] In response, Berkshire Hathaway asserted that the detached garage was not covered under the policy because the garage was not a completed addition. Further, Berkshire Hathaway filed a counter motion for summary judgment in which it contended that the policy was unambiguous and did not cover the detached garage. In support of their respective motions for summary judgment, both parties designated the insurance policy and declarations as evidence. After a hearing on the cross motions for summary judgment, the trial court concluded that the insurance policy was ambiguous and interpreted the policy in Basham's favor. Accordingly, the court determined that the detached garage was covered by the policy, entered summary judgment for Basham, and denied Berkshire Hathaway's motion for summary judgment. This interlocutory appeal ensued.

Discussion and Decision

[8] Berkshire Hathaway contends that the trial court erred when it denied Berkshire Hathaway's motion for summary judgment and entered summary judgment for Basham. Our standard of review is clear. The Indiana Supreme Court has explained that

[w]e review summary judgment de novo , applying the same standard as the trial court: "Drawing all reasonable inferences in favor of ... the non-moving parties, summary judgment is appropriate ‘if the designated evidentiary matter shows that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.’ " Williams v. Tharp , 914 N.E.2d 756, 761 (Ind. 2009) (quoting T.R. 56(C) ). "A fact is ‘material’ if its resolution would affect the outcome of the case, and an issue is ‘genuine’ if a trier of fact is required to resolve the parties' differing accounts of the truth, or if the undisputed material facts support conflicting reasonable inferences." Id. (internal citations omitted).

The initial burden is on the summary-judgment movant to "demonstrate [ ] the absence of any genuine issue of fact as to a determinative issue," at which point the burden shifts to the non-movant to "come forward with contrary evidence" showing an issue for the trier of fact. Id. at 761-62 (internal quotation marks and substitution omitted). And "[a]lthough the non-moving party has the burden on appeal of persuading us that the grant of summary judgment was erroneous, we carefully assess the trial court's decision to ensure that he was not improperly denied his day in court." McSwane v. Bloomington Hosp. & Healthcare Sys ., 916 N.E.2d 906, 909-10 (Ind. 2009) (internal quotation marks omitted).

Hughley v. State , 15 N.E.3d 1000, 1003 (Ind. 2014) (omission and some alterations original to Hughley ). " ‘The fact that the parties have filed cross-motions for summary judgment does not alter our standard of review, as we consider each motion separately to determine whether the moving party is entitled to judgment as a matter of law.’ " SCI Propane, LLC v. Frederick , 39 N.E.3d 675, 677 (Ind. 2015) (quoting Reed v. Reid , 980 N.E.2d 277, 285 (Ind. 2012) ).

[9] Here, the trial court entered findings of fact and conclusions thereon in its summary judgment order. While such findings and conclusions are not required in a summary judgment and do not alter our standard of review, they are helpful on appeal for us to understand the reasoning of the trial court. See Knighten v. E. Chicago Hous. Auth. , 45 N.E.3d 788, 791 (Ind. 2015).

[10] Both parties agree that coverage under the insurance policy is limited to Covered Property. But, on appeal, the parties dispute whether the detached garage was "Covered Property" under the terms of the policy. "The interpretation of an insurance policy is primarily a question of law for the court, and it is therefore a question which is particularly suited for summary judgment." Wagner v. Yates , 912 N.E.2d 805, 808 (Ind. 2009).

[11] It is well settled that

[i]nsurance polices are governed by the same rules of construction as other contracts.... When interpreting an insurance policy, our goal is to ascertain and enforce the parties' intent as manifested in the insurance contract. We construe the insurance policy as a whole and consider all of the provisions of the contract and not just the individual words, phrases or paragraphs.

Am. Access Cas. Co. v. Cincinnati Ins. Co. , 103 N.E.3d 644, 649 (Ind. Ct. App. 2018) (internal citations omitted).

[12] " ‘Policy terms are interpreted from the perspective of an ordinary policyholder of average intelligence. If reasonably intelligent persons may honestly differ as to the meaning of the policy language, the policy is ambiguous.’ " Thomson Inc. v. Ins. Co. of N. Am. , 11 N.E.3d 982, 993 (Ind. Ct. App. 2014) (quoting Gasser v. Downing , 967 N.E.2d 1085, 1087 (Ind. Ct. App. 2012) ). " ‘However, an ambiguity does not exist merely because the parties proffer differing interpretations of the policy language.’ " Id. (quoting Buckeye State Mut. Ins. Co. v. Carfield , 914 N.E.2d 315, 318 (Ind. Ct. App. 2009) ).

[13] The insurance policy provided that Berkshire Hathaway "will pay for direct physical loss of or damage to Covered Property at the premises described in the Declarations caused by or resulting from any Covered Cause of Loss." Appellant's App. Vol. II at 24. The policy further defined Covered Property, in relevant part, as the "Building, meaning the building or structure described in the Declarations" plus any "completed additions[.]" Id. (bold removed). Thus, we must determine whether the detached garage is covered under the policy as the "Building" or as a "completed addition." We first address whether the detached garage is covered as the "Building."

[14] The insurance policy explicitly defines the Building as "the building or structure described in the Declarations." Id. And the declarations for the property at issue describe the premises as "Premises Number: 15[,] Building Number: 1[.]" Id. at 23. It further describes the occupancy as "RENTAL DWELLINGS–OTHER THAN STUDENT HOUSING[.]" Id.⁴ Based on the policy's use of "the building or structure" in the singular, the declarations...