Indiana Ins. Co. v. Sentry Ins. Co., 3-1281A337

Citation437 N.E.2d 1381
Decision Date29 July 1982
Docket NumberNo. 3-1281A337,3-1281A337
PartiesINDIANA INSURANCE COMPANY, (Cross-Defendant Below), Appellant, v. SENTRY INSURANCE COMPANY (Cross-Plaintiff Below); Town & Country Home Improvement Company, Inc., (Plaintiff Below; Non-participating Appellee); Delmar L. Hall and Elizabeth Hall (Defendants Below; Non-participating Appellees); First State Savings and Loan Association (Defendant Below; Non-participating Appellee); and Ted Sikora (Defendant Below; Non-participating Appellee), Appellees.
CourtCourt of Appeals of Indiana

Spangler, Jennings, Spangler, Dougherty, P. C., Merrillville, for appellant; Timothy M. Swan, Merrillville, of counsel.

Robert H. Mittelman, Chicago, Ill., Peter B. Stewart, Indianapolis, for appellee Sentry Ins. Co.; Clausen, Miller, Gorman, Caffrey & Witous, P. C. Pro Hac Vice, Chicago, Ill., Stewart, Irwin, Gilliom, Fuller & Meyer, Indianapolis, of counsel.

STATON, Judge.

This case involves a dispute between two insurance companies as to whether liability for a fire loss should be apportioned between them. Both the Indiana Insurance Company and the Sentry Insurance Company had issued policies covering a house being sold on contract by the Hills to the Halls. The Indiana Insurance policy listed the Hills as the named insured and a savings and loan in the mortgage clause. The Sentry Insurance policy listed the Halls as the named insured. It also stated that since the property was being sold on contract that the Hills' interest was also insured without any increase in the amount of insurance. Both policies contained clauses such that the insurance company will be pro rata liable with any other insurance on the property. 1

The property was damaged by fire. The Halls vacated the property. At the request of the Hills, the Town & Country Home Improvement Company, Inc. repaired the home. It brought suit against Indiana Insurance and Sentry Insurance on their respective policies to recover the monies it had expended to repair the house. All interests other than the interest of the Halls 2 in the insurance policies were eventually assigned to Town & Country.

Sentry Insurance, in answer to the complaint, tendered to the trial court the full amount claimed and cross claimed against Indiana Insurance for the amount it determined to be the pro rata share of the loss owed by Indiana Insurance. The trial court disbursed the funds to Town & Country, extinguished the insured parties' rights under the insurance policies, and continued the issues between Indiana Insurance and Sentry Insurance concerning pro rata liability under the terms of the policies. Motions for summary judgment were filed by both insurance companies. On summary judgment, the trial court ordered Indiana Insurance to pay its pro rata share of the claim to Sentry Insurance because Sentry Insurance was entitled to contribution. Sentry Insurance also recovered prejudgment interest from Indiana Insurance.

On appeal, Indiana Insurance raises the following issues: 3

(1) Did the trial court grant summary judgment when issues of material fact existed?

(2) Did the trial court err in ordering proration of the loss between Indiana Insurance and Sentry Insurance?

(3) Did the trial court err by making special findings of fact and conclusions of law that were unsupported by the evidence?

(4) Did the trial court err by awarding prejudgment interest to Sentry Insurance?

We affirm. 4

I. Material Fact

Indiana Insurance argues that the trial court erred when it granted the summary judgment motion of Sentry Insurance because there was a genuine issue of material fact. It argues that Sentry Insurance had the burden of establishing the nonexistence of a genuine issue of material fact before summary judgment could be granted.

The purpose underlying the summary judgment procedure is to terminate those causes of action which have no factual dispute and which may be determined as a matter of law. This procedure is an aid in eliminating undue burdens upon litigants and exposing spurious causes. However, the summary judgment procedure must be applied with extreme caution so that a party's right to the fair determination of a genuine issue is not jeopardized; mere improbability of recovery by the plaintiff does not justify summary judgment for a defendant. Bassett v. Glock (1977), 174 Ind.App. 439, 368 N.E.2d 18, 20-21.

The summary judgment procedure is an application of the law to the facts when no factual dispute exists. The party seeking the summary judgment, therefore, has the burden to establish that there is no genuine issue as to any material fact. Any doubt as to a fact, or an inference to be drawn therefrom, is resolved in favor of the party opposing the motion for summary judgment. Poxon v. General Motors Acceptance Corp. (1980), Ind.App., 407 N.E.2d 1181, 1184.

A fact is material if its resolution is decisive of either the action or a relevant secondary issue. Lee v. Weston (1980), Ind.App., 402 N.E.2d 23, 24. The factual issue is genuine if it can not be foreclosed by reference to undisputed facts. That is, a factual issue is genuine if those matters properly considered under Ind.Rules of Procedure, Trial Rule 56 evidence a factual dispute requiring the trier of fact to resolve the opposing parties' differing versions. Stuteville v. Downing (1979), Ind.App., 391 N.E.2d 629, 631.

Although TR. 56 permits the introduction of affidavits, depositions, admissions, interrogatories and testimony to aid the court in the resolution of the motion for summary judgment, the procedure involved is not a summary trial. Bassett v. Glock, supra. In determining whether there is a genuine issue of material fact, the court considers those facts set forth in the opposing party's affidavits as true, and liberally construes the products of discovery in favor of the opposing party. And finally, all pleadings, evidence, and inferences therefrom are viewed in the light most favorable to the opposing party. Poxon v. General Motors Acceptance Corp., supra. In reviewing a grant of summary judgment, this Court uses the same standard applicable to the trial court. Richards v. Georg Boat & Motors, Inc. (1979), Ind.App., 384 N.E.2d 1084, 1090. (Trans. denied.) We must reverse the grant of a summary judgment motion if the record discloses an unresolved issue of material fact or an incorrect application of the laws to those facts. Id.

Indiana Insurance argues that few facts were before the trial court. It reaches this conclusion by a strict interpretation of the word "pleadings" in TR. 56. Indiana Insurance argues that the trial court was limited to the facts set forth in the pleadings; it defines "pleadings" by reference to TR. 7(A). 5 Such a restrictive reading of TR. 56 is not entirely correct. In addition to considering affidavits, interrogatories, admissions, and depositions the trial court may also consider evidence that would be admissible in a trial of the cause. Middlekamp v. Hanewich (1977), 173 Ind.App. 571, 364 N.E.2d 1024, 1030-31. (Trans. denied.)

Therefore, the trial court could consider the insurance policies of Indiana Insurance and Sentry Insurance to determine questions relating to who was insured by the policies and the interests insured. Contrary to the assertion of Indiana Insurance, there existed no issue of material fact on these issues.

Indiana Insurance argues that a genuine issue of material fact exists whether the assignment of interest in the Indiana Insurance policy by Hill to Town & Country is valid and also whether the assignment of interest in the Sentry Insurance policy by Hill to Town & Country is valid. If the assignments are valid, Indiana Insurance also questions the nature and extent of the assignments.

There is not a genuine issue of material fact regarding the validity of the assignments. If Indiana Insurance did not believe that the assignment of the Hills' interest in the Indiana Insurance policy was valid, it was required by TR. 9(C) 6 to specifically deny that the assignment was valid because a valid assignment of Hills' interest in the Indiana Insurance policy was a condition precedent going to the ability of Town & Country to sue and to Sentry Insurance maintaining its cross claim against Indiana Insurance. TR. 9(C) also requires Indiana Insurance to have specifically denied that the nature and extent of the assigned interest was insufficient for Town & Country to bring suit. Since Indiana Insurance failed to deny the validity of the assignment and allege that the assigned interest was insufficient for Town & Country to bring suit, neither Town & Country nor Sentry Insurance was required to present proof of a valid assignment of the Hills' interest in the Indiana Insurance policy or to prove the nature and extent of the assigned interest.

The above reasoning also applies to the assignment of the interest of the Hills in the Sentry Insurance policy. Also, when the trial court distributed the money that Sentry Insurance had paid into the court, it had to determine that the money was owed by Sentry Insurance to Town & Country. This would necessitate a finding that the assignment of the interest in the Sentry Insurance policy was valid. Such a finding would then become the law of the case as to the parties. 7 Kritsidimas v. Sheskin (1980), 411 A.2d 370, 371; Thomas Bros. Inc. v. Secretary of State of Michigan (1981), 107 Mich.App. 805, 310 N.W.2d 249, 252; Jones v. State (1981), 79 A.D.2d 273, 436 N.Y.S.2d 489, 490; Albert v. Guerrero (1980), 103 Misc.2d 530, 426 N.Y.S.2d 393, 394. See Schmal v. Ernst (1979), Ind.App., 387 N.E.2d 96, 98; See McCubbens v. O'Banion (1977), 172 Ind.App. 576, 361 N.E.2d 191, 193. Since Indiana Insurance was a party at the time of the disbursement of the funds, it is bound by the law of the case. The validity of the assignment of the interest in the Sentry Insurance policy could not be questioned by Indiana Insurance.

Indiana Insurance argues that genuine...

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