Gregg v. Cooper, 61A05-0312-CV-604.

• Citation: 812 N.E.2d 210
• Decision Date: 27 July 2004
• Docket Number: No. 61A05-0312-CV-604.,61A05-0312-CV-604.
• Parties: Jeffrey A. GREGG and Mike Simpson and United Farm Family Mutual Insurance Company, Appellants-Defendants, v. Jeffrey A. COOPER and Brenda L. Cooper, Appellees-Plaintiffs.
• Court: Court of Appeals of Indiana

812 N.E.2d 210

Jeffrey A. GREGG and Mike Simpson and United Farm Family Mutual Insurance Company, Appellants-Defendants, v. Jeffrey A. COOPER and Brenda L. Cooper, Appellees-Plaintiffs.

No. 61A05-0312-CV-604.

Court of Appeals of Indiana.

July 27, 2004.

David L. Clark, Clark & Steedman, Evansville, IN, Attorney for Appellants.

Keith L. Johnson, Terre Haute, IN, Attorney for Appellees.

OPINION

SHARPNACK, Judge.

In this consolidated appeal, United Farm Family Mutual Insurance Co. ("United Farm") appeals the trial court's declaratory judgment in favor of Jeffrey A. Cooper ("Cooper") and Brenda L. Cooper (collectively, "the Coopers") and the denial of its motion to correct error, and Mike Simpson appeals the trial court's denial of his motion for summary judgment. United Farm and Simpson raise two issues, which we restate as:

I. Whether the trial court's findings of fact and conclusions thereon granting declaratory judgment to the Coopers on the issue of coverage under the insurance policy issued by United Farm are clearly erroneous; and

II. Whether the trial court erred by denying Simpson's motion for summary judgment.

We reverse and remand.

The relevant facts follow. This litigation arose as a result of a tractor-vehicle collision between Jeffrey A. Gregg and Cooper in which Cooper suffered personal injuries. Gregg sometimes helped his father-in-law, Simpson, with Simpson's farming operations, although he helped more during the planting and harvesting seasons than the rest of the year. Simpson did not pay Gregg for his help on the farm, but Gregg was "welcome to use anything [Simpson] ha[d]." Appellants' Appendix at 76. Gregg had "free access to the tractor anytime he wanted" because of the family relationship. Id. at 33.

On June 12, 1998, Gregg was moving bales of hay from Ralph Bruin's property in Parke County, Indiana to Gregg's nearby property to feed his own cattle. Gregg was using Simpson's tractor to move the bales across a county road. At the same time that Gregg was using the tractor to move his bales, Cooper was operating his vehicle on the county road, and Gregg and Cooper collided.

Simpson was insured under a policy with United Farm ("Policy"). Part IV of the Policy provided:

If a claim is made or a suit is brought against any insured for compensatory damages because of bodily injury or property damage caused by an occurrence to which this coverage applies, we:

1. pay up to our limit of liability for the compensatory damages for which any insured is legally liable ...

Appellees' Appendix at 10. Further, the Policy provided:

POLICY DEFINITIONS

You, your—means the person or persons shown on the declarations page of this policy as Named Insured(s) and that person or person's spouse if a resident of the same household....

* * * * * *

Insured—means:

* * * * * *

2. Under Part IV only:

* * * * * *

e. any of your employees while acting within the scope of their duties as such in operations covered by this policy;

* * * * * *

g. with respect to any vehicle to which this policy applies, any person while operating the vehicle with an insured's permission in your farming operations.

Appellants' Appendix at 98. The Policy also defines a farm employee as:

Farm employee—means any insured's employee who performs duties in connection with your farming operations, including any person working for any insured under an insured's direction through an exchange labor agreement. Farm employee does not include:

1. you or any of your unmarried children under the age of 18 residing in your household;

2. any employee while engaged in any insured's business.

Id. at 99.

The Coopers filed a complaint against Gregg, Simpson, and United Farm. In Count I, the Coopers alleged that Cooper was injured as a result of Gregg's and Simpson's negligence.¹ The Coopers alleged that Gregg was an "agent/employee" of Simpson. Id. at 88. In Count II, the Coopers requested a declaratory judgment that the Policy provided liability coverage for the accident.

Simpson filed a motion for summary judgment as to Count I and argued that Gregg was not his employee or agent at the time of the accident. The trial court denied Simpson's motion for summary judgment.² A bench trial was held on Count II, the declaratory judgment count. United Farm argued that Gregg was not an insured under the Policy. The trial court entered judgment in favor of the Coopers, in part, as follows:

FINDINGS OF FACT

* * * * * *

4. The policy defines "farm employees" to mean any employee who performs duties in connection with the farming operations, including any person working for an insured under an insured's direction through an exchange labor agreement. The Court finds that Gregg performs duties in connection with the farming operation, and that the policy clearly contemplates an exchange of equipment for labor being a part of the farming operation. The policy does not define, or in any way limit the terms, "farming operation" nor "exchange labor agreement." "Insured" section "e" clearly contemplates insuring any permissive user of a covered vehicle so long as the use is related in any way to Simpson's farm operation.

5. On June 12, 1998, Gregg was a "farm employee" under the policy because a) Gregg provided labor in exchange for use of Simpson's tractor, and b) Gregg's use of the tractor was at all times subject to Simpson's direction and control.

6. Gregg's use of Simpson's tractor on June 12, 1998, was the consideration for his labor which created the exchange labor agreement, and thus any usage was part and parcel of Simpson's farming operation. Specifically, Gregg had worked for Simpson for years on the farm, particularly during the planting and harvest seasons. In exchange Gregg was allowed to use the involved farm tractor to, among other things, collect hay for Gregg's cattle. This is exactly what occurred on June 12, 1998. Farm Family acknowledges this farming custom by including such agreements in its policy definition of "farm employee."

7. The operation of the farm tractor by Gregg on June 12, 1998, was in connection with an exchange labor agreement so that Gregg would be considered a farm employee under the policy and the permissive use of the tractor a part of the farming operation.

8. Simpson testified that he had the absolute right to control Gregg's use of the tractor at the time and knew that Gregg (along with Simpson's son) was using the tractor to harvest hay. The test for determining a master-servant relationship is whether one has the right to direct and control the conduct at the time of this incident. There is no legal requirement that Simpson actually exert control or otherwise direct the conduct in question so long as Simpson had the right to do so. Simpson had the right to direct and control the conduct of Gregg regarding the tractor's usage on June 12, 1998.

9. The policy provides coverage to Gregg while operating Simpson's farm tractor with his permission and under his control in exchange for Gregg's labor, all as a part and in connection with the Simpson's farming operation.

* * * * * *

CONCLUSIONS OF LAW

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4. On June 12, 1998, [Gregg] was an insured under [United Farm's] policy number XX-X-XXXXXXX and such policy therefore affords coverage for any occurrence for which Gregg is liable.

5. The law is in favor of the [Coopers] and against [United Farm].

* * * * * *

JUDGMENT

The Court finds the law and facts are with the [Coopers] and against [United Farm] and declares that [Gregg] was an insured under the insurance policy issued by [United Farm], policy number XX-X-XXXXXXX, and that the policy affords liability coverage for the conduct of [Gregg] on June 12, 1998, as alleged in [the Coopers'] complaint.

Id. at 20-23. United Farm filed a motion to correct error, which the trial court denied.

I.

The first issue is whether the trial court's findings of fact and conclusions thereon granting declaratory judgment to the Coopers that Gregg was insured under the Policy issued by United Farm are clearly erroneous. The trial court here requested proposed findings of fact and conclusions thereon on its own motion. Sua sponte findings control only as to the issues they cover. Yanoff v. Muncy, 688 N.E.2d 1259, 1262 (Ind.1997). When a trial court has made findings of fact, we review the sufficiency of the evidence using a two-step process. Id. First, we must determine whether the evidence supports the trial court's findings of fact. Id. Second, we must determine whether those findings of fact support the trial court's conclusions of law. Id. We will set aside the findings only if they are clearly erroneous. Id. "Findings are clearly erroneous only when the record contains no facts to support them either directly or by inference." Id. "A judgment is clearly erroneous if it applies the wrong legal standard to properly found facts." Id.

In applying this standard, we neither reweigh the evidence nor judge the credibility of the witnesses. Pitman v. Pitman, 721 N.E.2d 260, 263-264 (Ind.Ct.App.1999), trans. denied. Rather, we consider the evidence that supports the judgment and the reasonable inferences to be drawn therefrom. Id. To make a determination that a finding or conclusion is clearly erroneous, our review of the evidence must leave us with the firm conviction that a mistake has been made. Yanoff, 688 N.E.2d at 1262. On the other hand, a general judgment will control as to the issues upon which there are no findings. Id. "A general judgment entered with findings will be affirmed if it can be sustained on any legal theory supported by the evidence." Id.

United Farm challenges the trial court's interpretation of the insurance policy. Insurance policies are governed by the same rules of construction as other contracts. Bosecker v. Westfield Ins. Co., 724 N.E.2d 241, 243 (Ind.2000). "When interpreting an insurance policy, our goal is to ascertain and enforce the parties' intent as manifested in the insurance contract." Burkett v. Am....