Meridian Mut. Ins. Co. v. Purkey

Decision Date14 June 2002
Docket NumberNo. 29A02-0106-CV-348.,29A02-0106-CV-348.
Citation769 N.E.2d 1179
PartiesMERIDIAN MUTUAL INSURANCE COMPANY, Appellant-Plaintiff, v. Jon B. PURKEY d/b/a Purkey's Heating & Cooling, Joe Collins, Debbie Collins, Michael J. Lorren d/b/a Lorren & Company, Phillip Hendricks, Brenda Hendricks, and United Farm Family Mutual Insurance Company, Appellees-Defendants.
CourtIndiana Appellate Court

Stephen J. Peters, Stewart & Irwin, P.C., Indianapolis, IN, Attorney for Appellant.

James J. Hutton, Hannon Centers Roop & Hutton, P.C. Indianapolis, IN, Attorney for Amicus Curiae Metropolitan Property and Casualty Insurance Company.

James T. Ferrini, Barbara I. Michaelides, Clausen Miller P.C., Chicago, IL, Richard L. Norris, Norris, Choplin & Schroeder, LLP, Indianapolis, IN, Attorney for Appellee Michael J. Lorren d/b/a Lorren & Company.

John M. Mead, Leeuw & Doyle, P.C., Indianapolis, IN, Attorney for Appellees Phillip Hendricks, Brenda Hendricks, and United Farm Family Mutual Insurance Company.

OPINION

BROOK, Chief Judge.

Case Summary1

Appellant-plaintiff Meridian Mutual Insurance Company ("Meridian") appeals the trial court's entry of summary judgment in favor of appellees-defendants Jon B. Purkey d/b/a Purkey's Heating & Cooling ("Purkey"),2 Joe Collins and Debbie Collins ("the Collinses"), Michael J. Lorren d/b/a Lorren & Company ("Lorren"), Phillip Hendricks and Brenda Hendricks ("the Hendrickses"), and United Farm Family Mutual Insurance Company ("United") (collectively, "Appellees"). We reverse.

Issue

Meridian raises a single issue for review, which we restate as whether the trial court erred in granting summary judgment in favor of Appellees.

Facts and Procedural History

The relevant facts most favorable to Meridian as the party opposing summary judgment indicate that Purkey operated Purkey's Heating & Cooling as a sole proprietorship and was insured by Meridian under a commercial general liability policy ("the Policy"). The Policy excluded coverage for bodily injury or property damage "arising out of the ownership, maintenance, use or entrustment to others of any aircraft, `auto' or watercraft owned or operated by or rented or loaned to any insured." Appellant's App. at 27, 27A. In 1996, Purkey purchased a 1988 Ford Bronco ("the Bronco") for both business and personal use.

On or a few days before April 2, 1997, having smelled gasoline and seen "drips of gas" under the vehicle, Purkey determined that the Bronco had developed a gas leak. Id. at 161A. Purkey "didn't know what was wrong with [the gas tank]"; once he "got the gas out [he] wanted to drop the tank and find out where it was actually leaking from." Id. at 167A. Once Purkey "found out what the problem was that's when [he could decide] whether ... [he] could fix it [him]self or [whether he needed] to buy a new one or [whether he needed] to take it someplace." Id. If the repair was minor, Purkey intended to fix the gas tank himself. See id. The gas leak did not "render the Bronco inoperable in any way," but Purkey wanted to fix the leak to "return the vehicle to an efficient operating machine." Id. at 168. Purkey planned to continue driving the licensed and plated Bronco after fixing the leak. On April 2, 1997, Purkey backed the Bronco into a garage he rented from Lorren in an apartment building at 200 West Jackson Street in Cicero, Indiana. Purkey began siphoning gas from the tank on the left-hand side of the Bronco into an open container. As "the act of the siphoning effect was taking place," id. at 173,3 Purkey was leaning on the Bronco's tailgate looking forward through the windshield at the "[b]eautiful day" when he and his clothes caught fire. Id. at 162, 165. Purkey extinguished the flames on his clothes, id. at 169, but not before suffering second degree burns to his hands and fingers and first degree burns to his face and lower lip. Lorren's App. at 4. Purkey ran into the adjacent office to tell his secretary "that there was an explosion over there," Appellant's App. at 164, then drove the Bronco out of the garage. The fire in Purkey's garage melted the Bronco's taillights and spare tire cover and destroyed Lorren's apartment building at 200 West Jackson Street, where the Collinses resided. The fire spread to and destroyed other buildings, including 160 West Jackson Street, where the Hendrickses resided.

On December 12, 1997, the Collinses sued Purkey for negligence, alleging that the pilot light of Purkey's gas furnace had ignited the gas fumes in his garage. On December 11, 1998, Lorren sued Purkey for negligence, waste, and breach of contract, claiming that Purkey had caused or allowed a fire to occur.4 On March 29, 1999, as the Hendrickses' subrogee, United sued Purkey for negligence, claiming that "the fumes of the siphoned gasoline ignited and set the entire building ablaze." Appellant's App. at 66.

On December 22, 1998, Meridian filed a complaint against Appellees for declaratory judgment, requesting that the trial court determine that it owed no obligation to Purkey under the Policy vis-à-vis the fire and that the Policy did not cover the remaining Appellees' claims. On April 21, 1999, Meridian filed an amended complaint in which it alleged that "[a]s a direct result of Purkey's maintenance and repairs upon the gasoline tank upon his Ford Bronco, an explosion and fire was caused which destroyed the apartment building at 200 West Jackson in Cicero, Indiana." Id. at 11. On June 15, 2000, Lorren filed a motion for summary judgment as to Meridian's amended complaint. On August 30, 2000, Meridian filed a cross-motion for summary judgment against Appellees and a memorandum in opposition to Lorren's summary judgment motion. On October 16, 2000, Lorren filed a memorandum in opposition to Meridian's cross-motion for summary judgment, and United filed an opposing memorandum two weeks later. On November 27, 2000, Meridian filed a consolidated reply to all pending summary judgment motions.

On May 2, 2001, the trial court issued two rulings that it later clarified upon Meridian's motion. In its July 16, 2001, order on Meridian's motion to clarify, the trial court stated that it had intended to "fully and finally dispose of any issues in this cause" by denying Meridian's summary judgment motion and by entering final summary judgment in favor of Appellees and against Meridian. Id. at 273. Meridian now appeals.

Discussion and Decision
Standard of Review

When reviewing an entry of summary judgment, we apply the same standard as the trial court. Burkett v. Am. Family Ins. Group, 737 N.E.2d 447, 451 (Ind.Ct. App.2000).

Summary judgment is appropriate when the evidentiary matter designated to the trial court shows both that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law. We will affirm a summary judgment on appeal if it is sustainable under any theory or basis found in the evidentiary matter designated to the trial court. Additionally, when material facts are not in dispute, our review is limited to determining whether the trial court correctly applied the law to the undisputed facts. When there are no disputed facts with regard to a motion for summary judgment and the question presented is a pure question of law, we review the matter de novo. Consequently, because the interpretation of a contract is a matter of law, cases involving the interpretation of insurance contracts are particularly appropriate for summary judgment.

Id. at 451-52 (citations and internal quotation marks omitted).

In considering the pleadings and evidence sanctioned by Indiana Trial Rule 56(C), we may not decide their weight or credibility. See Shelter Mut. Ins. Co. v. Barron, 615 N.E.2d 503, 505 (Ind.Ct.App. 1993),

trans. denied. "All evidence must be construed in favor of the opposing party, and all doubts as to the existence of a material issue must be resolved against the moving party." Id. "The fact that the parties make cross-motions for summary judgment does not alter our standard of review. Instead, we must consider each motion separately to determine whether the moving party is entitled to judgment as a matter of law." Indiana Farmers Mut. Ins. Group v. Blaskie, 727 N.E.2d 13, 15 (Ind.Ct.App.2000). "The trial court's grant of summary judgment is clothed with a presumption of validity and the appellant bears the burden of proving that the trial court erred." Bamberger & Feibleman v. Indianapolis Power & Light Co., 665 N.E.2d 933, 936 (Ind.Ct.App. 1996).

In Erie Insurance Co. v. Adams, 674 N.E.2d 1039 (Ind.Ct.App.1997), trans. denied, we noted that

[t]he interpretation of an insurance contract is a question of law for the court. And, language in an insurance contract which is clear and unambiguous should be given its plain and ordinary meaning. Indiana courts have repeatedly noted that insurers are free to limit liability "in any manner not inconsistent with public policy, and an unambiguous exclusionary clause is ordinarily entitled to construction and enforcement." However, exceptions, limitations and exclusions must be plainly expressed in the policy. The exclusionary clause must clearly and unmistakably bring within its scope the particular act or omission that will bring the exclusion into play, and any doubts as to the coverage shall be construed against the contract drafter.

Id. at 1041 (citations omitted); see also Cent. Indiana Carpenters Welfare Fund v. Ellis, 412 N.E.2d 865, 870 (Ind.Ct.App. 1980)

(stating that where an insurer seeks to avoid liability under an exclusion, "the insurer is generally said to have the burden of proving facts establishing the applicability of the limiting provision").

When construing an insurance policy, we may not extend insurance coverage beyond that provided in the contract, nor may we rewrite the clear and unambiguous language of the insurance contract. This court strives to ascertain and enforce the intent manifested in the policy.... The fact that the parties
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