Cameron v. Frances Slocum Bank & Trust Co.

• Citation: 628 F. Supp. 966
• Decision Date: 27 February 1986
• Docket Number: No. S 85-303.,S 85-303.
• Parties: Emmlee K. CAMERON, Plaintiff, v. FRANCES SLOCUM BANK & TRUST COMPANY, and State Automobile Insurance Association and Glassley Agency of Whitley, Indiana, and Larry J. Rice, Wabash County Sheriff, Defendants.
• Court: U.S. District Court — Northern District of Indiana

628 F. Supp. 966

Emmlee K. CAMERON, Plaintiff, v. FRANCES SLOCUM BANK & TRUST COMPANY, and State Automobile Insurance Association and Glassley Agency of Whitley, Indiana, and Larry J. Rice, Wabash County Sheriff, Defendants.

No. S 85-303.

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

February 27, 1986.

Philip A. Clancey, Traverse City, Mich., for plaintiff.

Donald R. Metz, Wabash, Ind., for Frances Slocum Bank.

Mark W. Gray, Indianapolis, Ind., for State Auto. Ins.

Charles W. McNagny, Fort Wayne, Ind., for Glassley Agency of Whitley, Indiana.

MEMORANDUM AND ORDER

GRANT, Senior District Judge.

This matter comes before the Court on defendants' (Frances Slocum Bank & Trust Company's, State Automobile Insurance Association's and Glassley Agency's) Motions for Summary Judgment¹ and defendant's (Frances Slocum Bank & Trust Company's) Motion for Attorney's Fees. For the reasons set forth below, the Court grants the defendants' motions.

Facts

Under FED.R.CIV.P. 56(c), summary judgment may only be granted if "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as matter of law." FED.R.CIV.P. 56(c). Thus, summary judgment serves as a vehicle with which the court "can determine whether further exploration of the facts is necessary." Hahn v. Sargent, 523 F.2d 461, 464 (1st Cir.1975), cert. denied, 425 U.S. 904, 96 S.Ct. 1495, 47 L.Ed.2d 754 (1976).

In making this determination, the court must draw all inferences from the established or asserted facts in favor of the nonmoving party. Peoples Outfitting Co. v. General Electric Credit Corp., 549 F.2d 42 (7th Cir.1977). However, a party opposing the motion may not rest on the mere allegations of his pleadings or the bare contentions that an issue of fact exists. Posey v. Skyline Corp., 702 F.2d 102, 105 (7th Cir.1983), cert. denied, 464 U.S. 960, 104 S.Ct. 392-93, 78 L.Ed.2d 336 (1983). See Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). See generally, C. Wright, Law of Federal Courts, § 99 (4th ed. 1983); 6 Moore's Federal Practice, § 56.15 (2d ed. 1983).

Even if there are some disputed facts, where the undisputed facts are the material facts involved and those facts show one party is entitled to judgment as a matter of law, summary judgment is appropriate. Egger v. Phillips, 710 F.2d 292, 296-97 (7th Cir.1983), cert. denied, 464 U.S. 918, 104 S.Ct. 284, 78 L.Ed.2d 262 (1983). Further, if the court resolves all factual disputes in favor of the nonmoving party and still finds summary judgment in favor of the moving party is correct as a matter of law, then the moving party is entitled to summary judgment in his favor. Id. at 297. See also, Bishop v. Wood, 426 U.S. 341, 348 n. 11, 96 S.Ct. 2074, 2079 n. 11, 48 L.Ed.2d 684 (1976).

Ezpeleta v. Sisters of Mercy Health Corporation, 621 F.Supp. 1262, 1265 (N.D.Ind. 1985).

With these principles in mind, the Court, having reviewed the depositions, transcripts and numerous pleadings in the instant case, finds the relevant facts to be as follows:

From 1970 to 1974, plaintiff, Cameron, worked as a licensed real estate broker in Indianapolis, Indiana. Cameron left the real estate profession and began working with her father, Schultz, who manufactured and sold fire trucks and other fire equipment. In 1976, Cameron and Schultz purchased the property at issue in this lawsuit. The two secured a $20,000 mortgage from defendant, Frances Slocum Bank & Trust Company hereinafter referred to as the Bank, and procured fire insurance thereon from defendant, State Automobile Insurance Association hereinafter referred to as SAIA, through its agent Mark Glassley, during business as defendant, Glassley Insurance Agency hereinafter referred to as Glassley Agency. Schultz moved his fire truck manufacturing business into part of the building on the property, and Indiana Water Company rented part of the building as a pumping station. At the time, Cameron sat on the Board of Directors of her father's company, E.L. Schultz & Company.

The mortgage, executed by Cameron, Schultz and the Bank on December 3, 1976, provided in pertinent part that Cameron and Schultz would pay all taxes, assessments and liens against the property, that Cameron and Schultz would keep the buildings on the property in good repair, and that Cameron and Schultz would maintain fire and extended coverage insurance on the property. The mortgage made Cameron and Schultz responsible for attorney's fees incurred by the Bank to protect its interest in the property. The mortgage allowed the Bank to declare the indebtedness due and collectible and to foreclose on the property if Cameron and Schultz failed to meet any of their obligations under the mortgage.

Cameron and Schultz received insurance coverage which extended from December three of each year to December three of the next year. Their yearly policies described the property as: "one story brick with steel rafters, approved roof, building occupied as a light manufacturer and Indiana Water Co. Pumping Station...." Coverage under the policy became suspended "while a described building, whether intended for occupancy by owner or tenant, is vacated or unoccupied beyond a period of sixty consecutive days...." Cameron kept the policies in her possession.

Before issuing the original policy in 1976, agent Phil Glassley toured the building with Schultz, saw the fire truck and pumping operations, and was told that the Water Company was using the building as a pumping station. When agent Phil Glassley visited the building shortly before Schultz filed bankruptcy in late 1979 or early 1980, Schultz again represented that the Water Company was using the building.

In 1979, Cameron became the sole owner of the property. At that time, the Indiana Water Company still rented part of the building as a pumping station, and Schultz still used part to build his fire trucks. However, in late 1979, the Water Company informed Schultz, in a letter which Cameron later read, that they were vacating the building, and that they would pay their share of the taxes and insurance premium until they had completely vacated.

Prior to 1981, the Water Company removed its pumping equipment from the building and ceased to make rent, taxes and insurance payments. Also prior to 1981, Schultz's bankruptcy caused him to discontinue his fire truck manufacturing business. Neither the Water Company nor Schultz returned to the building. The Water Company, however, maintained a water tank, an underground reservoir and underground pipes on the remainder of the property.

In December 1980, Cameron failed to pay her insurance premium. Glassley Agency canceled the policy and gave notice to Cameron and the Bank. The Bank contacted Cameron and insisted that she reinstate the insurance on the property immediately or face foreclosure. Cameron contacted Glassley Agency and asked that the policy be rewritten at once. After receiving the premium, agent Phil Glassley filled out an application for insurance on Cameron's property. The application sought insurance from January 15, 1981 to January 15, 1982. The application no longer noted Schultz's fire truck manufacturing business as an occupant of the building because agent Phil Glassley knew of Schultz's bankruptcy. The application listed the Water Company as the only tenant in the building because Schultz had represented that the Water Company was a tenant when agent Phil Glassley visited the building in late 1979 or early 1980. On the application, agent Phil Glassley related, among other things, that the building was in good repair, that the building had been insured under another policy which had been canceled for nonpayment of the premium, that he had visited the risk and that he recommended issuing insurance. An unknown individual signed Cameron's name on the application. The Glassley Agency sent the application to SAIA, and a new policy issued. Cameron never reviewed the application, but did receive the policy which described, as all other policies had, the premises as occupied by Indiana Water Co. Pumping Station. Cameron received similar policies in 1982, 1983 and 1984.

After the Water Company vacated the building, Cameron stored some personal belongings in it. However, she never found a tenant to replace the Water Company. The building gradually fell into disrepair due to vandals and to lack of maintenance. In February 1984, the City of Wabash police informed the City of Wabash Building Commissioner that the building was becoming a safety concern. Upon inspection, the Commissioner found broken doors and windows, overgrown brush and weeds, litter and disrepair. On March 2, the Commissioner contacted Cameron who was living in Traverse City, Michigan. The Commissioner informed Cameron about the condition of the building and asked that something be done about it. Discussions with Cameron proved fruitless. On May 3, 1984, the Commissioner posted signs on the property declaring it to be dangerous and unsafe. Cameron received notice of this action. Further discussion followed in June, but the building and property continued to deteriorate. The fire which caused the damage giving rise to this lawsuit occurred on June 30, 1984.

Because the building had been unoccupied and vacant for more than sixty days, SAIA disclaimed coverage for the fire loss in a July 30, 1984 letter. On August 10, 1984, the Bank began state court foreclosure proceedings against the property because Cameron had failed to make mortgage payments after June 1984, and because the Bank had paid back taxes on the property. Three days later, Cameron filed a sworn statement of proof of loss with SAIA describing the building as occupied by the Water Company. The Bank submitted a proof of loss to SAIA on March 13, 1985. SAIA sent the Bank a...