JIM BARNA LOG SYSTEMS v. GENERAL CAS. INS., 91A02-0211-CV-961.

Docket NºNo. 91A02-0211-CV-961.
Citation791 N.E.2d 816
Case DateJuly 17, 2003
CourtCourt of Appeals of Indiana

791 N.E.2d 816

JIM BARNA LOG SYSTEMS MIDWEST, INC., and Peter Rosi, Appellants-Plaintiffs,
v.
GENERAL CASUALTY INSURANCE COMPANY OF WISCONSIN, and Hoosier Insurance Company, Appellees-Defendants

No. 91A02-0211-CV-961.

Court of Appeals of Indiana.

July 17, 2003.


791 N.E.2d 819
Jerome L. Withered, Withered & Corrigan, Lafayette, IN, Attorney for Appellants

John T. Hume III, Theodore J. Blanford, Hume Smith Geddes Green & Simmons, Indianapolis, IN, Attorneys for Appellees.

791 N.E.2d 817

791 N.E.2d 818
OPINION

SHARPNACK, Judge.

Jim Barna Log Systems Midwest, Inc. ("Barna Log") and Peter Rosi appeal the trial court's grant of summary judgment to Hoosier Insurance Company and General Casualty Insurance Company of Wisconsin

791 N.E.2d 820
(collectively "Insurers") and denial of motion for summary judgment filed by Barna Log and Rosi. Barna Log and Rosi raise one issue, which we restate as whether the trial court erred by granting Insurer's motion for summary judgment and by denying Barna Log's and Rosi's motion for summary judgment. We affirm

The relevant facts designated by the parties follow. Barna Log is a seller/distributor of log home packages manufactured by Barna and Company. On July 23, 2000, Mark Grott and Barbara Grott (collectively "the Grotts") signed a contract with Barna Log for the purchase of a log home package. Rosi, acting as an agent and representative of Barna Log, contracted with the Grotts for the sale of the log home package. Barna Log hired Jerry Myers to build the Grotts' log home. On March 1, 2002, the Grotts filed a complaint against Barna Log, Barna and Company, Myers, and Rosi ("Grotts' Complaint"). The complaint included five counts, which provided, in pertinent part, that:

COUNT I
* * * * * *

16. Barna Log breached its duty to Grott by negligently, carelessly, and intentionally recommending, providing, and hiring an incompetent and unqualified builder with little or no experience in constructing log homes.

* * * * * *

19. As a direct and proximate result of the defendants' negligence, Grott suffered damages, incurred expenses, interest and costs.

20. Rosi and [Barna Log] are jointly and severally liable for the negligence as Rosi and [Barna Log] were jointly engaged in the operation of a corporation which is merely the alter ego of its officer, director, and shareholder, which failed to observe corporate formalities, which engaged in misleading conduct, which maintained inadequate records, which co-mingled funds and identities, and which is undercapitalized.

COUNT II
* * * * * *

22. The defendants breached their contract with Grott by failing to provide the materials set forth in the purchase agreement, substituting inferior and defective materials for the materials bargained for by Grott, failing to provide all of the components of the log home package bargained for by Grott, and providing specifications for a structurally unsound log home.

23. As direct and proximate result of the defendants' negligence, Grott suffered damages, incurred expenses, interest and costs.

COUNT III
* * * * * *

24. The defendants converted to their own use materials, components and products purchased by Grott pursuant to the purchase agreement.

* * * * * *

26. As a direct and proximate result of the defendants' wrongful conversion of Grott's property, Grott suffered damages and incurred expenses, interest, costs and attorney's fees.

COUNT IV
* * * * * *

28. The defendants intentionally, fraudulently, and recklessly misrepresented that Myers was a qualified, competent, bonded and insured

791 N.E.2d 821
log home builder with years of experience as a log home builder and contractor.

29. Grott reasonably relied on the defendants' misrepresentations of these past and present facts to their detriment, incurring damages, expenses, interest, attorney's fees and costs as a result of this reasonable reliance.

30. Pursuant to the Indiana Code, Grott is entitled to recover treble damages for the defendants' fraudulent conduct.

* * * * * *
COUNT V
* * * * * *

31. The defendants' acts and misrepresentations were in violation of Ind. Code § 24-5-0.5 et seq.

* * * * * *

WHEREFORE, [the Grotts], by counsel, demand judgment against [Barna Log], Barna and Company, and [Rosi] in an amount sufficient to compensate them for the damages as a result of the defendants' false advertising, including attorney's fees, expenses, costs and all just and proper relief.

Appellant's Appendix at 33-39.

Barna Log has a commercial general liability insurance policy ("CGL Policy") with Insurers. Barna Log and Rosi requested that Insurers defend and indemnify them against the allegations contained in the Grotts' Complaint. On May 15, 2002, Insurers sent a letter to Barna Log and Rosi indicating that there was no coverage under the CGL Policy for the claims alleged in the Grotts' Complaint, and that they refused to defend and indemnify Barna Log and Rosi.

On May 29, 2002, Barna Log and Rosi filed a complaint for declaratory relief against Insurers, requesting that the trial court "declare that [Insurers] have an obligation to defend and provide coverage for certain portions of the [Grotts' Complaint]." Id. at 5-6. On July 8, 2002, Insurers answered Barna Log's and Rosi's complaint, stating in part, as follows: "[Insurers] deny that they have an obligation to defend and provide coverage based upon the allegations in the [Grotts' Complaint]." Id. at 63. The Insurers also raised three affirmative defenses: (1) The terms and conditions of the insurance policy speak for themselves; (2) There has been no "occurrence" to trigger coverage as required by the policy; (3) There has been no "property damage" as defined by the policy.

On July 22, 2002, Barna Log and Rosi filed a motion for summary judgment against Insurers. Specifically, in their motion for summary judgment, Barna Log and Rosi argued that Insurers should be required to provide them with a defense and indemnity for Counts I, III, IV, and V of the Grotts' Complaint. On September 4, 2002, Insurers filed a cross motion for summary judgment arguing that they had no duty to provide Barna Log or Rosi with insurance coverage for any of the claims alleged in the Grotts' Complaint.

On September 17, 2002, the trial court conducted a hearing and on October 16, 2002, the trial court entered its final judgment granting summary judgment to Insurers. Specifically, the trial court's order provided in pertinent part, that:

The Court, being duly advised, having reviewed the record or proceedings, and having considered the statements and arguments of counsel, now FINDS and ORDERS that the Defendants' Cross Motion For Summary Judgment filed September 4, 2002 should and shall be granted and that the Plaintiffs' Motion for Summary Judgment filed July 22, 2002 should and shall be denied. The
791 N.E.2d 822
Court finds that there are no genuine issues as to any material facts and that the Defendants are entitled to Judgment as a matter of law. The Court finds the [Insurers] have no duty to defend [Barna Log and Rosi] and have no duty to provide insurance coverage to [Barna Log and Rosi] for the claims of Grott alleged in the Complaint of Declaratory Judgment.... The Court finds that [Barna Log's and Rosi's] commercial general liability insurance contract provides coverage under Section 1(b) if bodily injury or property damage is caused by an occurrence. An occurrence is defined by Section V(12) as an accident including continuous or repeated exposure to substantially the same general harmful conditions. In Black's Law Dictionary an accident is defined as an event which under the circumstances is unusual and unexpected by the person to whom it happens. According to Black's Law Dictionary, in its proper use the term accident excludes negligence. A review of the authorities cited by [Barna Log's and Rosi's] counsel and [Insurers'] counsel convinces the Court that in this case the [Insurers] owe no defense or coverage to [Barna Log and Rosi] based upon the allegations of the Declaratory Judgment Complaint. [Barna Log's and Rosi's] insurance contract does not cover an allegation regarding a claim as to Barna's alleged negligence [sic] advice. [Barna Log's and Rosi's] insurance contract does not cover intentional or reckless acts nor allegations of conversion or misrepresentation or allegations of deceptive practices. Therefore, [Insurers] are entitled to Summary Judgment against [Barna Log and Rosi] on the allegations as contained in the Complaint for Summary Judgment.

Id. at 3-4.

The sole issue is whether the trial court erred by granting Insurers' motion for summary judgment and by denying Barna Log's and Rosi's motion for summary judgment. In reviewing a decision on summary judgment, we apply the same standard as the trial court. Schrader v. Eli Lilly & Co., 639 N.E.2d 258, 261 (Ind. 1994), reh'g denied; Ind. Trial Rule 56(C). We must decide whether there is a genuine issue of material fact that precludes summary judgment and whether the moving party is entitled to judgment as a matter of law. Carie v. PSI Energy, Inc., 715 N.E.2d 853, 855 (Ind.1999). We construe the pleadings, affidavits, and designated materials in a light most favorable to the nonmovant and give careful scrutiny to assure that the losing parties are not improperly prevented from having their day in court. Hartford Acc. & Indem. Co. v. Dana Corp., 690 N.E.2d 285, 291 (Ind.Ct. App.1997), trans. denied. When there are material disputed facts, or if undisputed facts give rise to conflicting reasonable inferences that affect the outcome, they must be resolved in favor of the nonmovant. Warner Trucking, Inc. v. Carolina Cas. Ins. Co., 686 N.E.2d 102, 104 (Ind. 1997). The party appealing the grant of summary judgment has the burden of persuading this court on appeal that the trial court's ruling was erroneous. Ind. Dep't of State Revenue v. Caylor-Nickel Clinic, P.C., 587 N.E.2d 1311, 1313 (Ind.1992). The fact that...

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