Cromer v. Sefton
| Decision Date | 18 September 1984 |
| Docket Number | No. 1-184A9,1-184A9 |
| Citation | 471 N.E.2d 700 |
| Parties | Kathy CROMER, Plaintiff-Appellant, v. Minnie SEFTON and Westfield Insurance Company, Defendant-Appellees. |
| Court | Indiana Appellate Court |
Mark W. McNeely, J. Lee McNeely, McNeely & Sanders, Shelbyville, for plaintiff-appellant.
Karl F. Walker, Rolfes, Garvey, Walker & Robbins, Greensburg, for defendants-appellees.
Plaintiff-appellant, Kathy Cromer, appeals a summary judgment entered by the Decatur Circuit Court in favor of Westfield Insurance Company.
We reverse.
Minnie Sefton (Sefton) allegedly assaulted Kathy Cromer (Cromer) on May 23, 1979 and was subsequently convicted of battery. A liability insurance policy written by Westfield Insurance Company (Westfield) was in force concerning Sefton, but it excluded coverage for intentional torts. Cromer brought her action against Sefton on October 10, 1979, alleging that Sefton "negligently, unlawfully and maliciously struck plaintiff ...", and in that suit, she was represented by Mark McNeeley of the law firm of McNeeley and Sanders. Attorney Dennis Harrold, of the law firm of Soshnick & Bate, entered an appearance for Sefton on December 3, 1979. Later, Karl F. Walker of the law firm of Rolfes, Garvey, Walker & Robbins, representing Westfield and continuing to do so in the summary judgment action, entered his appearance for Sefton on June 23, 1980, and Harrold withdrew. Harrold re-entered his appearance on September 15, 1980, and Meanwhile Westfield, by Walker, filed a suit for declaratory judgment against Sefton in another cause number to determine coverage, alleging that the tort was intentional and therefore excluded from coverage. This suit was defended by Harrold, who claimed that Westfield must defend even if the suit was groundless or even fraudulent, for the cause of action was proceeding on negligence. The court found for Sefton and ordered Westfield to defend and assume liability for any negligent acts on Sefton's part. The declaratory judgment was not appealed.
Walker subsequently withdrew on September 16, 1980.
On March 3, 1982, Sefton, by Harrold, and Cromer, by McNeeley, filed a stipulation "that Minnie Sefton negligently struck plaintiff", and on the same day Cromer filed a covenant not to execute against Sefton, but reserved therein the right to proceed against Westfield. The next day Harrold withdrew and Walker, for Westfield, again re-entered the case for Sefton.
Thereafter on August 20, 1982, Walker, for Sefton, filed a motion for summary judgment which alleged that there was no genuine issue of any material fact concerning plaintiff's claim and that the defendant, Minnie Sefton, is entitled to judgment as a matter of law. Evidentiary material filed in support of the motion was (1) a request that the court consider its record containing the covenant not to execute and the stipulation of liability; (2) Karl Walker's affidavit which brought the insurance policy into the record, and (3) a certified copy of Sefton's conviction for battery. No counter-affidavits or evidentiary materials were filed. The memorandum attached to the motion advanced the argument that (1) because of the covenant not to execute, Sefton is not "legally obligated to pay sums as damages", as stated in the policy, and therefore, Westfield is not liable; (2) since Sefton was convicted of battery, such conviction was a judicial determination of an intentional act on the part of Sefton, and therefore, without the necessity of further litigation against Westfield as "apparently contemplated by plaintiff's attorney", there remained no genuine issue of fact as between plaintiff and the Westfield Companies.
Cromer also filed her motion for summary judgment unsupported by affidavits or evidentiary material. On September 30, 1982, Harrold again re-entered his appearance for Sefton. Westfield, then by Walker, on October 19, 1982 filed a "Motion for Substitution of Party", stating that pursuant to Ind.Rules of Procedure, Trial Rule 25, it was to be substituted as the real party in interest, to be joined with original defendant, Minnie Sefton. Cromer objected because Westfield was not the real party in interest, and further contended that it is plaintiff's choice as to whom she may legally sue in court. Cromer alleged that Westfield's interest was not ripe at this point prior to judgment and that Minnie Sefton's defense would not be impaired by counsel representing her in her own name. The trial court granted Westfield's Motion for Substitution and "joins them as a defendant".
Thereafter, on December 7, 1982, Westfield filed a motion to resubmit the August 20, 1982 motion for summary judgment which Walker had filed on behalf of Sefton. Cromer objected to the motion. Other than the motion to resubmit the August 20th motion for summary judgment, Westfield filed no pleading, counterclaim or cross-petition of any form, nor did it even file a motion for summary judgment in its name as a party. Cromer for its part, had never filed any amended complaint and had not demanded any relief from Westfield in this suit. In spite of this, on July 18, 1983, the trial court ruled that "plaintiff take nothing by her complaint against the defendant, Westfield Insurance Company".
The issues framed by Westfield's motion for summary judgment were (1) because of the covenant not to execute, Sefton is not legally obligated to pay sums as damages, as stated in the policy; therefore, Westfield is not liable; (2) since Sefton was convicted The trial court granted the motion for summary judgment without stating its reasons. Additional issues, such as the procedural posture of the case, intervention, res judicata and the denial of Cromer's motion for summary judgment are raised by appellants.
of battery, such conviction was a judicial determination of an intentional act on the part of Sefton and such conduct is an exclusion under the terms of its policy; (3) the stipulation of liability and covenant not to execute violated the cooperation clause in the policy.
With great difficulty, we have attempted to separate and restate the questions raised in the appeal as follows:
I. Whether the trial court erred in permitting Westfield to intervene in the personal injury action.
II. Whether the trial court erred in entering a summary judgment for Westfield, merely upon a motion to renew Sefton's previous motion for summary judgment, when the motion was not based on any pleading, and no claim was made or had matured against Westfield.
III. In entering summary judgment, whether the trial court erred in determining that the tort was intentional solely on the basis of Sefton's criminal conviction.
IV. Whether the mere execution of a covenant not to execute and stipulation of liability is a proper basis for summary judgment where the record indicates abandonment.
V. Whether the declaratory judgment action was res judicata as to the issues raised upon the motion for summary judgment.
VI. Whether the court erred in failing to grant Cromer's motion for summary judgment on the issue of liability.
Westfield filed its "motion for substitution of a party" and stated therein that the motion was filed pursuant to T.R. 25, to be substituted as real party in interest. Trial Rule 25 is inapplicable here because it only governs the substitution of parties in the case of death, incompetency, or transfer of interest. Ind.Rules of Procedure, Trial Rule 24 permits intervention of right when the applicant is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect his interest in the property, fund, or transaction. When there is a common issue of law or fact, T.R. 24(B) allows permissive intervention. T.R. 24(C) provides:
Westfield's motion stated no grounds. However, for purpose of discussion, we accept the fact that the motion was for intervention under T.R. 24.
Indiana has held that a tort action on a contract theory by an injured third party directly against the liability carrier is inappropriate. Martin v. Levinson, (1980) Ind.App., 409 N.E.2d 1239. Nevertheless, a successful personal injury plaintiff can bring an action against the liability carrier if it refuses to honor its contract. Bennett v. Slater, (1972) 154 Ind.App. 67, 289 N.E.2d 144. However, a judgment creditor has no standing to bring a suit directly against the liability carrier for an amount in excess of its policy limits based on a negligent handling of a claim, where the insured has not assigned the claim and refuses to bring suit. The reason for this conclusion is that there is no duty or fiduciary relation running from the insurer to the injured plaintiff. The insurer's only duty is to the insured on its contract. Bennett, supra, 154 Ind.App. at 74, 289 N.E.2d 144.
Snodgrass v. Baize, (1980) Ind.App. 405 N.E.2d 48 is particularly instructive. Baize shot and injured Snodgrass and was convicted of a crime. Snodgrass, in an action based partly in negligence, recovered judgment against Baize on the negligence count, and in a later proceedings supplemental wherein the insurer was made a party, the insurer was permitted to defend on the ground that the injury was "expected or intended from the standpoint of the insured". Thus, the insurer argued, coverage was excluded under the terms of the policy. Snodgrass, supra, at 51.
The Court of Appeals affirmed the trial court's judgment for the insurer. In particular, the court held that the tort trial holding was not res judicata against the insurer as to the issue of coverage under the policy. The court noted that there was a conflict of interest in...
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