Hoosier Ins. Co. v. AUDIOLOGY FOUNDATION
| Decision Date | 09 April 2001 |
| Docket Number | No. 79A04-0004-CV-144.,79A04-0004-CV-144. |
| Citation | 745 N.E.2d 300 |
| Parties | HOOSIER INSURANCE COMPANY, Appellant-Plaintiff, v. AUDIOLOGY FOUNDATION OF AMERICA and American Speech-Language Hearing Association, Appellee-Defendant. |
| Court | Indiana Appellate Court |
John T. Hume, III, Edward F. Harney, Jr., Hume, Smith, Geddes, Green & Simmons, LLP, Indianapolis, IN, Robert F. Johnson, Lee Anne N. Conta, Cook & Franke S.C., Milwaukee, WI, Attorneys for Appellant.
Robert M. Gippin, Karen Kelly Grasso, Thompson, Hine & Flory, LLP, Cleveland, OH, Thomas H. Busch, Hoffman, Luhman & Busch, Lafayette, IN, Attorneys for Appellee.
Hoosier Insurance Company ("Hoosier") appeals the trial court's order denying its motion for summary judgment and granting Audiology Foundation of America's ("AFA's") cross-motion for partial summary judgment. We affirm.
Hoosier raises three issues for our review which we restate as whether the trial court erred when it denied its motion for summary judgment and granted AFA's cross-motion for partial summary judgment with respect to:
1. Whether the advertising injury provisions of Hoosier's policy provide coverage to AFA for claims of false advertising, false designation of origin, and unfair competition;
AFA is a not-for-profit corporation based in West Lafayette. At one time, AFA promoted a re-credentialing program where, for a fee, it would review documentation from a practicing audiologist and confer a credential of Doctor of Audiology, or Au.D., upon him or her based on his or her education and practical experience. The re-credentialing program was intended to be temporary, lasting only until the time that AFA anticipated that the Au.D. would be the standard entry-level degree for audiologists. AFA obtained an insurance policy with Hoosier which contained coverage and exclusions with respect to business liability, including advertising injury liability. There were a total of three policies issued, one for each of the following policy periods: August 1, 1995 to August 1, 1996; August 1, 1996 to August 1, 1997; August 1, 1997 to August 1, 1998.2
The coverage portion of the policy stated that R. 85. Further, the policy stated that the insurance applied to an "`advertising injury' caused by an offense committed in the course of advertising [AFA's] goods, products or services...." Id. However, the policy also identified exclusions, and stated that the insurance did not apply, among other things, to an advertising injury that arose "out of oral or written publication of material, if done by or at the direction of the insured with knowledge of its falsity...." R. 89.
An advertising injury was defined in the policy as meaning:
As a result of its re-credentialing program, AFA was sued by ASHA in the United States District Court for the District of Maryland. In its complaint against AFA, ASHA alleged that the activities engaged in by AFA constituted "false advertising, false designation of origin, and unfair competition in violation of Section 43(a) of the federal Lanham Act and the common law of the State of Maryland." R. 44.3
AFA notified Hoosier of ASHA's suit against it. Thereafter, Hoosier issued a preliminary letter to AFA which stated, "[b]ased upon a review of the policies issued by Hoosier, the complaint and the applicable facts provided to date, the policies do not provide coverage for the claims alleged in the complaint." R. 96. Hoosier additionally informed AFA in this letter that there were a number of reasons that coverage could be reduced or excluded, among them, the fact that the complaint did not seek damages; that there was not an advertising injury; that the policy excluded an advertising injury that arose out of material done by or at the direction of the insured with knowledge of its falsity or the willful violation of a penal statute or ordinance committed with the consent of the insured; and that the claims alleged in the complaint were barred to the extent that they seek indemnity in excess of the applicable limits of the policies. The letter also directed that in order for Hoosier to complete its evaluation of the claim, AFA needed to provide Hoosier with specific information and documents. AFA did forward basic information about AFA and copies of its newsletters to Hoosier.
Hoosier responded to AFA by stating that none of the offenses listed under the definition of advertising injury were alleged in ASHA's complaint and therefore, its initial position remained unchanged and it was denying coverage. After further correspondence between AFA and Hoosier, Hoosier filed a complaint for declaratory judgment against both AFA and ASHA seeking a determination that the policies did not provide coverage for the claims alleged by ASHA and thus, Hoosier did not have a duty to defend or indemnify AFA in the underlying action.
Before AFA filed an appearance in the declaratory judgment action, Hoosier entered into a stipulation with ASHA which stated that ASHA was not seeking money damages in the underlying action. The stipulation was filed with the trial court and ASHA was dismissed from the declaratory judgment action. AFA was not a party to the stipulation.
AFA filed an answer and a counterclaim alleging that Hoosier had the duty to defend and indemnify AFA for the claims asserted in the underlying action and that Hoosier acted in bad faith in denying AFA a defense or indemnification.
Hoosier filed a motion for summary judgment, asserting that there was no genuine issue of material fact in that: none of the claims fell within the coverage of the Hoosier policies, the knowledge of falsity exclusion applied, and ASHA was not seeking damages within the meaning of the policies; thus, Hoosier contended that it did not have a duty to defend or indemnify AFA and was entitled to judgment in its favor on its complaint as a matter of law. Additionally, Hoosier requested summary judgment in its favor on AFA's counterclaim for bad faith. AFA subsequently filed its motion in opposition to Hoosier's motion for summary judgment and its cross-motion for partial summary judgment. AFA asserted that there was no genuine issue of material fact in that: the claims alleged by ASHA constituted advertising injuries of either misappropriation of style of doing business or infringement of copyright, title or slogan, the knowledge of falsity exclusion did not apply, and ASHA did seek money damages in the underlying action; therefore, AFA contended that Hoosier was obligated to defend or indemnify AFA in the underlying action and AFA was entitled to judgment as a matter of law. Further, AFA asserted that it should be allowed to pursue its bad faith claim against Hoosier.
After oral argument before the trial court, the trial court denied Hoosier's motion for summary judgment and granted AFA's cross-motion for partial summary judgment on Hoosier's complaint for declaratory judgment. The trial court stated, in its order, that it found "no genuine issues of material fact concerning the coverage to be afforded to AFA under the Hoosier policy, but [found] such issues concerning AFA's allegations of bad faith concerning Hoosier." R. 214. Essentially, the trial court granted summary judgment in favor of AFA on Hoosier's complaint and denied summary judgment to Hoosier on AFA's counterclaim regarding bad faith. Thus, the only remaining claim between the parties is the bad faith claim. Hoosier now appeals.
Additional facts will be provided as necessary.
The purpose of summary judgment is to end litigation where no factual dispute exists and which may be determined as a matter of law. Choung v. Iemma, 708 N.E.2d 7, 11 (Ind.Ct.App.1999). On review of a trial court's decision to grant or deny summary judgment, our standard of review is well settled. We apply the same standard of review as the trial court: we must decide whether there is a genuine issue of material fact and whether the moving party is entitled to judgment as a matter of law. Fawcett v. Gooch, 708 N.E.2d 908, 909 (Ind.Ct.App.1999).
Summary judgment is appropriate only if "the evidence sanctioned by Ind. Trial Rule 56(C) shows that there is no genuine issue of material fact and the moving party deserves judgment as a matter of law." Id. (citing Blake v. Calumet Constr. Corp., 674 N.E.2d 167, 169 (Ind. 1996)). The party moving for summary judgment has the burden of making a prima facie showing that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law. Choung, 708 N.E.2d at 11. Once these two requirements are met by the moving party, the burden then shifts to the non-moving party to show...
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