Indiana Farmers Mut. Ins. Co. v. Imel

• Decision Date: 10 November 2004
• Docket Number: No. 39A01-0404-CV-162.,39A01-0404-CV-162.
• Citation: 817 N.E.2d 299
• Parties: INDIANA FARMERS MUTUAL INSURANCE COMPANY, Appellant-Plaintiff, v. Richard L. IMEL and Carrie Smith, as parent and as guardian of A.T., a minor, Appellee-Defendant.
• Court: Indiana Appellate Court

817 N.E.2d 299

INDIANA FARMERS MUTUAL INSURANCE COMPANY, Appellant-Plaintiff, v. Richard L. IMEL and Carrie Smith, as parent and as guardian of A.T., a minor, Appellee-Defendant.

No. 39A01-0404-CV-162.

Court of Appeals of Indiana.

November 10, 2004.

Rodney L. Scott, New Albany, IN, Attorney for Appellant.

Mary Jean Stotts, Joas & Stotts, Madison, IN; Nancy C. Jacobs, Jenner, Auxier & Jacobs, LLP, Madison, IN, Attorney for Appellee.

OPINION

RILEY, Judge.

STATEMENT OF THE CASE

Appellant-Plaintiff, Indiana Farmers Mutual Insurance Company (Indiana Farmers), appeals the trial court's grant of summary judgment in favor of Appellees-Defendants, Richard L. Imel (Imel) and Carrie Smith (Smith), the latter as parent and as guardian of A.T., a minor, with regard to their claim for liability coverage under an insurance policy.

We affirm.

ISSUES

Indiana Farmers raises two issues on appeal, which we consolidate and restate as the following issue: whether the trial court erred in concluding that the residency requirement contained in the liability coverage exclusion provision of Indiana Farmers' insurance policy applies only to a policyholder's relatives and not to persons in the policyholder's care or persons in the care of the policyholder's relatives.

FACTS AND PROCEDURAL HISTORY

Smith is the mother and legal guardian of A.T., a minor born in 1994. She divorced A.T.'s father, David Tinker (Tinker), prior to A.T.'s birth. Ever since he was an infant, by agreement, A.T. was allowed to stay with Tinker's mother, Marilyn Imel (Marilyn), and stepfather, Imel (collectively, the Imels), on their farm, located in Madison, Indiana. A.T. typically visits the Imels twice each month, and his visits have included both single day visits and overnight weekend visits.

While A.T. stays at the Imels' farm, his mother typically does not attend, and Marilyn then becomes A.T.'s primary caregiver. During his visits, A.T. has to abide by rules set by the Imels, who have full authority to care for him and discipline him as needed. Furthermore, A.T. brings his own clothes and favorite toys with him. When spending the night, he stays in the Imels' guest bedroom, used by all of the Imels' guests.

On March 28, 2002, A.T. was visiting the Imels for the weekend. That day, Imel, accompanied by A.T., walked over to the barn where Imel planned to move a cow with the assistance of Richard Miller. At that time, Imel was supervising A.T. While attempting to load the cow into the trailer, the cow behaved unexpectedly, running towards the corner of the barn where Imel had instructed A.T. to wait. The cow ran over A.T., resulting in bodily injury. At the time of the accident, Imel carried an insurance policy with Indiana Farmers, which provided liability and medical payment coverage. The liability coverage was limited by the following provision:

2. Additional Exclusions That Apply Only to Coverage L—Coverage L does not apply to:

a. "bodily injury" to "you", and if residents of "your" household, "your" relatives and persons in "your" care or in the care of "your" resident relatives.

(Appellant's App. p. 57). On December 9, 2002, Indiana Farmers filed a Complaint for Declaratory Judgment, requesting the trial court to declare that there was no duty to defend or indemnify Imel against a liability claim as there was no coverage for A.T.'s bodily injuries because he was in the Imels' care at the time of the accident and thus excluded from coverage. Subsequently, on June 23, 2003, Indiana Farmers filed a Motion for Partial Summary Judgment with respect to the policy's liability coverage. Indiana Farmers did not contest coverage under the medical payment portion of Imel's policy. On July 21, 2003, Smith filed a Response to Indiana Farmers' Motion for Partial Summary Judgment and, at the same time, filed a Cross-Motion for Summary Judgment, requesting the trial court to find that coverage existed under both the liability and medical payments portions of the insurance policy. On January 27, 2004, all parties presented arguments during the hearing on the motions for summary judgment. Thereafter, on February 13, 2004, the trial court issued its Order, granting Smith's cross-motion for summary judgment and denying Indiana Farmers' motion for partial summary judgment.

Indiana Farmers now appeals. Additional facts will be provided as necessary.

DISCUSSION AND DECISION

Indiana Farmers contends that the trial court erred by denying its motion for partial summary judgment. Specifically, they first maintain that the application of the liability exclusion provision of the policy does not require A.T. to be a resident of the Imel household. Instead, they assert that the policy excludes coverage for bodily injury to A.T. regardless whether he is a resident of the Imels' household, since he was in the care of Imel at the time of the accident. Furthermore, Indiana Farmers claims that even if A.T. was required to be a resident for the exclusion provision to be triggered, the trial court erred in concluding that he was not a resident because the facts support a finding of dual residency for the purpose of insurance coverage.

I. Standard of Review

Summary judgment is appropriate only when there are no genuine issues of material fact and the moving party is entitled to a judgment as a matter of law. Ind. Trial Rule 56(C). In reviewing a trial court's ruling on summary judgment, this court stands in the shoes of the trial court, applying the same standards in deciding whether to affirm or reverse summary judgment. American Family Mut. Ins. Co. v. Hall, 764 N.E.2d 780, 783 (Ind.Ct. App.2002),trans. denied. Thus, on appeal, we must determine whether there is a genuine issue of material fact and whether the trial court has correctly applied the law. Id. In doing so, we consider all of the designated evidence in the light most favorable to the non-moving party. Id. The party appealing the grant of summary judgment has the burden of persuading this court that the trial court's ruling was improper. Id. Accordingly, the grant of summary judgment must be reversed if the record discloses an incorrect application of the law to the facts. See Ayres v. Indian Heights Volunteer Fire Dep.'t, Inc., 493 N.E.2d 1229, 1234 (Ind.1986).

Insurance contracts are subject to the same rules of construction as are other contracts. Jackson v. Jones, 804 N.E.2d 155, 158 (Ind.Ct.App.2004). Generally, the construction of a written contract is a question of law for the trial court for which summary judgment is particularly appropriate. Mid State Bank v. 84 Lumber Co., 629 N.E.2d 909, 914 (Ind.Ct.App.1994). However, if the terms of a written contract are ambiguous, it is the responsibility of the trier-of-fact to ascertain the facts necessary to construe the contract. Id. Consequently, when summary judgment is granted based upon the construction of a written contract, the trial court has either determined as a matter of law that the contract is not ambiguous or uncertain, or that the contract ambiguity, if one exists, can be resolved without the aid of a factual determination. Id.

II. Liability Coverage

A. Exclusion Language

Indiana Farmers contend that the trial court erred in granting summary judgment to Imel and Smith. In particular, the insurance company alleges that the application of the policy's exclusion of liability provision clearly does not require A.T. to be a resident of the Imel household. Rather, they claim it to be sufficient for A.T. to be in Imel's care in order for Indiana Farmers to deny coverage under the liability section of the policy.

As stated before, the policy language at issue reads as follows:

2. Additional Exclusions That Apply Only to Coverage L—Coverage L does not apply to:

a. "bodily injury" to "you", and if residents of "your" household, "your" relatives and persons in "your" care or in the care of "your" resident relatives.

(Appellant's App. p. 57). With regard to the interpretation of the provisions of an insurance policy, we acknowledge that some special rules of construction of insurance contracts have been developed due to the disparity in bargaining power between insurers and insureds. See Jackson, 804 N.E.2d at 158

. In this light, we have held that if a contract is clear and unambiguous, the language therein must be given its plain meaning. Vann v. United Farm Family Mut. Ins. Co., 790 N.E.2d 497, 502 (Ind.Ct.App.2003),

trans. denied. On the other hand, where there is ambiguity, insurance policies are to be construed strictly against the insurer and the policy language is to be viewed from the standpoint of the insured. Jackson, 804 N.E.2d at 158. Furthermore, an exclusionary clause must clearly and unmistakably express the particular act or omission that will bring the exclusion into play. Vann, 790 N.E.2d at 502.

Here, to aid us in our review of the policy language, the parties do not proffer and our research did not reveal any reported decisions in Indiana addressing the issue facing us today. As such, the question presented by Indiana Farmers is a matter of first impression in this jurisdiction. Nevertheless, in support of their respective arguments, Indiana Farmers, Smith, and Imel direct us to the same three cases of foreign jurisdiction. The common denominator of these referenced cases with the instant case is the close similarity in the insurance policy's language. The liability exclusion provision in the foreign jurisdiction cases reads as: liability coverage does not apply to "bodily injury to you, and if residents of your household, your relatives, and persons under the age of 21 in your care or in the care of your resident relatives." (emphasis added).

Interpreting this exclusion, the Minnesota supreme court in Reinsurance Association of Minnesota v. Hanks, 539 N.W.2d 793 (Minn.1995), noted that the third comma in the exclusion clearly separates the word "relatives" from the words "any other person under 21 in your care ..." Id....