Monroe Guar. Ins. Co. v. Langreck

• Decision Date: 25 October 2004
• Docket Number: No. 53A01-0401-CV-10.,53A01-0401-CV-10.
• Citation: 816 N.E.2d 485
• Parties: MONROE GUARANTY INSURANCE COMPANY, Appellant-Plaintiff, v. Angela M. LANGRECK, The Board of Trustees of Indiana University, Michelle Kistner, Adam Schaum, Michael Schaum, Barbara Schaum, Anne Hiduke, Andrew Hiduke, Frances Fischer, Valerie Hiduke, Terry Hiduke, Rosemary Hiduke, and State Farm Mutual Automobile Insurance Company as Subrogee of Erin Punter, Appellees-Defendants.
• Court: Indiana Appellate Court

816 N.E.2d 485

MONROE GUARANTY INSURANCE COMPANY, Appellant-Plaintiff, v. Angela M. LANGRECK, The Board of Trustees of Indiana University, Michelle Kistner, Adam Schaum, Michael Schaum, Barbara Schaum, Anne Hiduke, Andrew Hiduke, Frances Fischer, Valerie Hiduke, Terry Hiduke, Rosemary Hiduke, and State Farm Mutual Automobile Insurance Company as Subrogee of Erin Punter, Appellees-Defendants.

No. 53A01-0401-CV-10.

Court of Appeals of Indiana.

October 25, 2004.

Todd J. Kaiser, Matthew S. Effland, Ogletree Deakins Law Firm, Indianapolis, IN, Attorneys for Appellant.

David J. Mallon, Jr., L. Alan Whaley, Katherine A. Winchester, Ice Miller Indianapolis, IN, Attorneys for Appellee, the Board of Trustees of Indiana University.

OPINION

BARNES, Judge.

Case Summary

Monroe Guaranty Insurance Company ("Monroe") appeals the trial court's entry of summary judgment against it and in favor of Indiana University ("IU")¹ the Indiana University Rowing Club ("IURC"), and several individual defendants in Monroe's declaratory judgment action regarding insurance coverage for an automobile accident involving several IU students. We affirm.

Issues

Monroe essentially presents two issues on appeal, which we restate as:

I. whether the trial court erred in refusing to retroactively reform Monroe's policy so as to exclude the accident from coverage under the policy; and

II. whether the trial court erred in concluding that Monroe's policy was primary with respect to the accident and that a policy issued by TIG Insurance Company was not primary, but excess to Monroe's policy.

Facts

On April 30, 1999, Angela Langreck, an IU student and member of IURC, was driving a passenger van to a rowing meet in Wisconsin when she lost control of the vehicle. It flipped, and several passengers sustained severe injuries and some were also ejected from the van. The Van was borrowed from a pool of vehicles owned by IU; IURC paid IU to rent the van. Several injured persons filed lawsuits against IU, IURC, Langreck, and Mark Wilson, the IURC coach.

At the time of the accident, a Monroe commercial general liability ("CGL") policy was in effect that listed "Recognized Student Groups" at IU, one of which is IURC, as the named insureds; IU was an additional insured under the policy. Appellant's App. p. 210. The Monroe policy included a "Non-owned and Hired Auto Liability" endorsement, which deleted the standard CGL policy's automobile liability exclusion and which provided:

[W]e will pay all sums an insured legally must pay as damages because of "bodily injury" or "property damage" to which this insurance applies, caused by an "accident" which occurs during the policy period and arising out of the maintenance or use of a "hired auto" by you or your employees in the course of your business; and/or the use of any "non-owned auto" in your business by any person other than you.

Id. at 234. The endorsement also stated, "[t]his insurance is excess over any of the other insurance, whether primary, excess, contingent or on any other basis, that is covering the auto as an owned auto." Id. at 235. "Non-owned auto" was defined to mean "any `auto' you do not own, lease, hire or borrow which is used in connection with your business." Id. "Hired auto" was defined to mean "any `auto' you lease, hire, or borrow." Id. "You" was defined to mean the policy's named insureds, which would have included IURC but not IU because it was an additional, not named, insured. Id. at 215. Approximately four months after the accident, Monroe attempted to reform these definitions to provide, "`non-owned auto' and `hired auto' does not include any `auto' that is owned by, hired by or rented to the trustees of Indiana University." Id. at 249. Additionally, Monroe wanted this reformation to be made retroactive, effective prior to the date of the accident. IU did not agree to make the reformation retroactive.

Also at the time of the accident, IU was the named insured on a "Municipal Retained Amount Policy" issued by TIG that had a maximum coverage limit of $25 million. Id. at 265. The "retained amount" was $1 million and was defined to mean "the amount retained by the Insured or the amount of underlying insurance for damages and Claims Expense arising out of any incident covered by the TIG policy. Id. at 283. The policy essentially had two parts, one of which referred to the $1 million amount as self-insurance, and a second part that listed a schedule of underlying insurance and included the Monroe policy and its limit of $1 million as "General Liability" insurance. Id. at 291. The TIG policy included automobile liability coverage. IU also has a self-insurance program whereby it provides $100,000 in indemnity for students who are involved in accidents while driving an IU vehicle.

After the injured individuals began filing lawsuits, IU, IURC, Langreck, and Wilson tendered the suits to Monroe for defense and indemnity. Monroe then filed a declaratory judgment complaint seeking a ruling that it was not required to defend and indemnify the parties because its policy should be retroactively reformed to exclude coverage or, alternatively, that any coverage under the Monroe policy would be excess to the TIG policy. Langreck, IURC, and Wilson moved for summary, judgment against Monroe; Monroe filed a cross-motion for summary judgment.² On November 10, 2003, the trial court granted Langreck's, IURC's, and Wilson's motions for summary judgment and denied Monroe's cross-motion.

This appeal ensued. Originally, IURC, Wilson, and IU all participated in this appeal, with IURC and Wilson filing one appellee's brief and IU filing another. However, we subsequently granted IURC's and Wilson's motion to dismiss Monroe's appeal, but as to them only, based upon settlement of the underlying lawsuits against Langreck, Wilson, IURC, and IU, and payment of $1 million by Monroe on behalf of Langreck, Wilson, and IURC. Because Monroe expressly reserved its right to appeal the trial court's grant of summary judgment with respect to IU and to recoup the $1 million payment from IU and/or TIG when it settled, we did not dismiss the appeal in its entirety, and IU remains a party in it.³

Analysis

Our standard of review for a trial court's grant of a motion for summary judgment is well-settled and the same as that used in the trial court: summary judgment is appropriate only where the designated evidence shows that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. RMJ Enterprises, Inc. v. Scottsdale Ins. Co., 808 N.E.2d 159, 162 (Ind.Ct.App. 2004). "The moving party must designate sufficient evidence to eliminate any genuine factual issues, and once the moving party has done so, the burden shifts to the nonmoving party to come forth with contrary evidence." Id. We must accept as I true those facts alleged by the nonmoving party, construe the evidence in favor of the nonmoving party, and resolve all doubts against the moving party. Id.

I. Reformation

At this point in the litigation, Monroe concedes that absent retroactive reformation of its policy, it provides some level of coverage for the accident at issue in this case. Langreck, as a student member of IURC, qualified as a named insured under the policy. At the time of the accident, she was driving a vehicle either "hired" or "non-owned" by her or IURC; IU owned the vehicle and IURC had paid to use it. Although Monroe claims it was not intended that coverage would be available in a situation such as this, it points to nothing in the policy language that reflected this intent. In other words, Monroe does not assert that IURC "owned" the vehicle or that coverage is precluded because IU, an "additional" but not "named" insured, "owned" the vehicle. The accident falls under the coverage terms of the "non-owned" and "hired" auto liability endorsement as written at the time of the accident.

We now turn to the first issue before us: whether the trial court erroneously granted summary judgment against Monroe on the issue of retroactively reforming its insurance policy. In Indiana, courts may reform written documents in only two well-defined situations: (1) where there is a mutual mistake—meaning there has been a meeting of the minds, an agreement actually entered into, but the document in its written form does not express what the parties actually intended; or (2) where there has been a mistake by one party, accompanied by fraud or inequitable conduct by the remaining party. Plumlee v. Monroe Guar. Ins. Co., 655 N.E.2d 350, 356 (Ind.Ct.App.1995), trans. denied. There is no allegation of fraud or inequitable conduct by IU or IURC in this case; thus, we focus solely on whether there was mutual mistake accompanying the issuance of the Monroe policy. In such a case, there can be no reformation unless it is proven that both parties were mistaken in the use of the terms to be corrected and that both parties agreed to the contract sought to be substituted for that to be set aside. Id. Reformations for mistakes are only available if they are mistakes of fact, not mistakes of law. Estate of Spry v. Greg & Ken, Inc., 749 N.E.2d 1269, 1275 (Ind.Ct.App.2001). Equity should not intervene and courts should not grant reformation if the party seeking reformation failed to read the instrument or, if it was read, failed to give heed to its plain terms. Id.

Resolution of this issue is fact-based; i.e., whether there is any designated evidence to support Monroe's claim of mutual mistake. Monroe designated no evidence that any person involved with the issuance of the policy, whether from Monroe, IU, or the intermediary insurance agency, had any recollection at all of discussions regarding the "non-owned" and "hired" automobile endorsement, let alone any discussions regarding the endorsement's intended scope. Two representatives from IU's risk management office testified in depositions that there were no discussions regarding...