Mid-American Fire & Cas. Co. v. Shoney's
| Decision Date | 03 March 2006 |
| Docket Number | No. 49A02-0503-CV-235.,49A02-0503-CV-235. |
| Citation | 843 N.E.2d 548 |
| Parties | MID-AMERICAN FIRE & CASUALTY COMPANY, Appellant-Third Party Defendant, v. SHONEY'S INC. and SHN Properties, LLC, individually and as assignees of Miriam Hedrick and the Estate of Donald E. Hedrick, Appellees-Third Party Plaintiffs, and Johnson Oil, LLC, Appellee-Defendant. |
| Court | Indiana Appellate Court |
Michael E. Brown, Ginny L. Peterson, Kightlinger & Gray, LLP, Indianapolis, for Appellant.
Brent W. Huber, Brian J. Paul, Fred R. Biesecker, Ice Miller, Indianapolis, for Appellees Shoney's Inc. and SHN Properties, LLC.
Christopher J. Braun, John M. Ketcham, Plews Shadley Racher & Braun, Indianapolis, for Appellee Johnson Oil, LLC.
Shoney's Inc. and SHN Properties (collectively, "Appellees") petition for rehearing on Mid-American v. Shoney's, No. 49A02-0503-CV-235, slip. op. at 16-17, 836 N.E.2d 1062 (Ind.Ct.App. Oct. 5, 2005). In that opinion, we held that the Homeowner's Policy at issue did not cover the remediation costs for a petroleum contamination that occurred on property located at 5010 South East Street in Indianapolis, Indiana. In reaching this conclusion, we incorrectly applied the standard policy exclusions, as opposed to those listed in the policy enhancement, to Appellees' claim for personal injury coverage and, thus, we did not address the "business pursuits" exceptions to coverage. However, because we determine that Appellees' claim to liability coverage for remediation costs are excluded from both the standard policy—with respect to the property damage coverage claim—and the policy enhancements—with regard to the personal injury coverage claim—we find our initial analysis to be of no consequence to our ultimate holding in the case. As such, we grant rehearing vacate our original opinion, but nevertheless reverse the trial court's partial grant of summary judgment to Appellees and remand for an entry of partial summary judgment in favor of Mid-American.
At the trial level, Appellees sought liability coverage for the remediation costs in question under the "`property damage' coverage part and the `personal injury' coverage part" of Donald Hedrick's Homeowner's Policy with Mid-American. Appellees' Br. at 16. The property damage coverage part is governed by the standard Homeowner's Policy, which provides:
SECTION II LIABILITY COVERAGES
COVERAGE E If a claim is made or a suit is brought against any insured for damages
PERSONAL because of bodily injury or property damage to which this coverage
LIABILITY applies, we will
a. pay up to our limit of liability for the damages for which the insured
is legally liable; and
b. provide a defense at our expense by counsel of our choice. We may
make any investigation and settle any claim or suit that we decide is
appropriate. Our obligation to defend any claim or suit ends when
the amount we pay for damages resulting from the occurrence equals
our limit of liability
Appellant's App. at 187 (emphasis in original). However, this liability coverage does not apply, in part, to property damage "arising out of business pursuits of any insured or the rental or holding for rental of any part of any premises by any insured."1 Id. (emphasis in original).
The personal injury coverage part is controlled by the enhanced policy provisions, which provides:
Under Coverage E—Personal Liability, the definition bodily injury is amended to include personal injury. "Personal injury" means injury arising out of one or more of the following offenses:
1. false arrest, detention or imprisonment, or malicious prosecution;
2. libel, slander or defamation of character; or
3. invasion of privacy, wrongful entry.
Id. at 174 (emphasis added).2 The standard Section II Policy Exclusions are inapplicable to the personal injury coverage. Rather, the personal injury coverage does not apply, in pertinent part, to "injury arising out of the business pursuits of any insured." Id.
As a result, the personal liability section of the Homeowner's Policy at issue excludes coverage for both property damage and personal injury, which arise out of the business pursuits of the insured. Accordingly, to determine whether Appellees' claim to liability coverage for remediation costs is covered by the Policy, we must decide whether the property damage—i.e., the site contamination—and the personal injury—i.e., the contaminant's wrongful entry into the soil—arose out of Hedrick's business pursuits.
In that vein, Appellees first maintain that, because Hedrick merely owned a piece of land on which a gas station had formerly been operated, the property damage and personal injury did not arise out of Hedrick's business pursuit, assuming one exists. In particular, Appellee's claim that the ownership was not the efficient and predominating cause of the damage or injury. See, e.g., Meridian Mut. Ins. Co. v. Purkey, 769 N.E.2d 1179, 1188 (Ind.Ct.App.2002) (). We find this argument unpersuasive.
Here, no one argues that Hedrick personally placed the underground storage tanks in the ground, failed to properly close them, or otherwise caused them to leak. Instead, Hedrick's personal liability stems from the mere facts that: (1) he owned the Property at a time when leakage occurred; and (2) during the course of his ownership, there was soil and groundwater contamination. See Ind.Code § 13-23-13-8.3 Therefore, Hedrick's ownership of the Property serves as the basis for his liability and is the efficient and predominating cause of the property damage or personal injury in dispute. As a consequence, if Hedrick's ownership of the Property constituted a "business pursuit," then the property damage or personal liability at issue is excluded from coverage. We now address the business pursuit exclusions.
Appellees argue that the source of Hedrick's livelihood was his employment as a college professor and, therefore, his ownership of the Property did not rise to the level of a business pursuit. While the Homeowner's Policy defines the term "business" to include "trade, profession, or occupation," it does not provide a definition for the phrase "business pursuit." Appellant's App. at 179. In Am. Family Mut. Ins. Co. v. Bentley, 170 Ind.App. 321, 329, 352 N.E.2d 860, 865 (1976), another panel of this Court held that "an insured is engaged in a business pursuit only when he pursues a continued or regular activity for the purpose of earning a livelihood." See also Asbury v. Ind. Union Mut. Ins. Co., 441 N.E.2d 232, 237 (Ind.Ct.App.1982) () . Therefore, in Indiana, a business pursuit requires a continued or regular activity for the purpose of earning a livelihood. See also BLACK'S LAW DICTIONARY 200 (6th ed.1990) (...
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