Monroe Guar. Ins. Co. v. Engineered Roofing Systems, Inc.

• Decision Date: 10 January 2007
• Docket Number: No. 82A01-0603-CV-98.,82A01-0603-CV-98.
• Citation: 859 N.E.2d 754
• Parties: MONROE GUARANTY INSURANCE COMPANY, Appellant-Plaintiff, v. ENGINEERED ROOFING SYSTEMS, INC., Appellee-Defendant.
• Court: Indiana Appellate Court

859 N.E.2d 754

MONROE GUARANTY INSURANCE COMPANY, Appellant-Plaintiff, v. ENGINEERED ROOFING SYSTEMS, INC., Appellee-Defendant.

No. 82A01-0603-CV-98.

Court of Appeals of Indiana.

January 10, 2007.

Julia Blackwell Gelinas, Dean R. Brackenridge, Lucy R. Dollens, Locke Reynolds LLP, Indianapolis, IN, Attorneys for Appellant.

James A. Kornblum, Lockyear, Kornblum & Macer, LLP, Evansville, IN, Attorney for Appellee.

OPINION

BAKER, Judge.

Appellant-plaintiff Monroe Guaranty Insurance Company (Monroe Guaranty) appeals the grant of appellee-defendant Engineered Roofing System, Inc.'s (ERS) motion for relief from judgment with respect to Monroe Guaranty's declaratory judgment action on an indemnification obligation that Monroe Guaranty allegedly owed to its insured, SunSet Engineering, Inc. (SunSet). Specifically, Monroe Guaranty argues that the trial court abused its discretion in providing relief to ERS and permitting a counterclaim brought by ERS against it to proceed because the record shows that a prior summary judgment order that had been issued by the trial court constituted a final appealable judgment that disposed of all claims in the action. Concluding that the trial court's order on summary judgment amounted to only a partial summary judgment with respect to the original claim that Monroe Guaranty advanced against ERS, we affirm the trial court's grant of relief in favor of ERS and remand this cause to the trial court for further proceedings as to ERS's counterclaim against Monroe Guaranty.

FACTS¹

On May 24, 2001, Monroe Guaranty filed a complaint for declaratory judgment against ERS, SunSet, and several others with regard to allegedly defective roofing materials that had been supplied by Sun-Set. In essence, Monroe Guaranty alleged that the insurance policies that it had issued to SunSet did not cover property damage to the insured's own product. Thus, Monroe Guaranty claimed that it had no obligation to indemnify SunSet for damages regarding the repair or replacement of the materials. In response, ERS filed a counterclaim on August 13, 2001, asserting, among other things, that

7. [Said] roofing material, manufactured and sold by SunSet to ERS and thereafter sold by ERS to various customers, in many instances failed causing said customers to experience roofing leaks resulting in interior damage, lost product and other losses, all as more particularly alleged in the various lawsuits filed against SunSet and identified in Monroe's Complaint for Declaratory Judgment.

8. That ERS, in an effort to mitigate SunSet's and Monroe's liability for damages caused by the defective condition of SunSet's product, expended ... $80,698.77 in material and labor costs to effectuate temporary repairs to the premises that had experienced roof leaks due to the SunSet product.

9. That ERS's services provided to SunSet and Monroe in effectuating temporary repairs [are] a covered expense under the terms of Monroe's policies issued to SunSet.

Appellant's App. p. 38-39. As a result of the counterclaim, ERS requested damages from Monroe Guaranty in the amount of $80,698.77, prejudgment interest, and costs. In its reply to the counterclaim, Monroe Guaranty acknowledged that ERS was making a direct claim against it rather than SunSet. Moreover, Monroe Guaranty specifically denied that the material and labor that formed the basis of the counterclaim were performed at Monroe Guaranty's request.

Thereafter, Monroe Guaranty moved for partial summary judgment on September 13, 2002, as to ERS's affirmative defenses of estoppel, waiver, and laches. Monroe Guaranty asserts that it originally captioned its motion as "partial" because it was directed only at SunSet and ERS, and claims against other named parties in the action were still pending at the time.

Monroe Guaranty's motion also requested the trial court to enter a declaratory judgment in a separate action filed by ERS against SunSet in the Vanderburgh Circuit Court on Monroe Guaranty's indemnification obligation to Sunset under the insurance policies for the damages that ERS allegedly sustained. The summary judgment motion did not mention or refer to ERS's counterclaim against Monroe Guaranty. Prior to the summary judgment hearing, all other defendants had been dismissed from the case, leaving only the claims against ERS and SunSet pending at the time of the hearing.

Following a hearing on the motion for partial summary judgment, the trial court entered an order on January 11, 2005, that provided as follows:

[S]ummary judgment is granted for Plaintiff [Monroe Guaranty] regarding Defendant [ERS's] affirmative defenses of estoppel, waiver, and laches. Furthermore, this Court declares that as a matter of law that the applicable policies do not provide indemnification for Sun-Set for damages arising from the repair or replacement of SunSet's product including, but not limited to, the claim for such damages made by ERS including all damages awarded by this Court in its Judgment of December 5, 2003, in Cause No. 82C01-9809-CP325. Judgment is hereby entered accordingly.

Id. at 211-12 (emphasis added). This order did not contain a declaration by the trial court in writing expressly determining that there was no just reason for delay and directing the entry of judgment as to less than all of the issues, claims, or parties.

Thereafter, on February 18, 2005, ERS filed a motion for leave to file an amended counterclaim against Monroe Guaranty. The proposed amended counterclaim sought recovery of sums that ERS had expended relating to SunSet products. More particularly, the proposed amended counterclaim asserted that ERS—at Monroe Guaranty's request—provided labor and materials to mitigate and minimize Monroe Guaranty's liability to SunSet claimants and that Monroe Guaranty directly requested ERS to perform temporary repairs for Monroe Guaranty's benefit and failed to pay ERS for those repairs. As a result, ERS maintained that Monroe Guaranty had been unjustly enriched and that Monroe Guaranty's action with regard to ERS amounted to bad faith.

On March 14, 2005, Monroe Guaranty filed its opposition to ERS's request to amend its counterclaim, arguing: (1) because the trial court had already granted judgment as to any and all outstanding claims and parties, there was nothing left to amend and the trial court should not grant ERS's motion for leave to amend unless the judgment was set aside; (2) the issues that ERS belatedly sought to address through its motion to amend had already been conclusively addressed by the summary judgment proceedings; and (3) ERS provided no justification for its failure to file a motion for leave to amend the counterclaim until well after the entry of the summary judgment order and Monroe Guaranty would have been prejudiced if the amendment was allowed. Notwithstanding Monroe Guaranty's arguments, the trial court granted ERS's motion to file an amended counterclaim on April 4, 2005.

Treating the trial court's ruling as one made pursuant to Indiana Trial Rule 60(B), Monroe Guaranty filed a Notice of Appeal on April 22, 2005. In response, ERS moved to dismiss the appeal for lack of jurisdiction. ERS maintained that dismissal was required because the order being appealed—the grant of ERS's motion for leave to amend its counterclaim—is an interlocutory order that was not certified pursuant to Indiana Appellate Rule 14(B).

On September 30, 2005, the motions panel of this court concluded that the trial court's summary judgment ruling was a final judgment and it, therefore, denied ERS's motion to dismiss. In essence, the motions panel concluded that the trial court's grant of ERS's motion for leave to file an amended complaint after final judgment had been issued was appealable pursuant to Trial Rule 60(C). Thereafter, on November 30, 2005, this court issued an unpublished memorandum decision reversing the trial court's order granting ERS's motion for leave to file an amended counterclaim. Monroe Guar. Ins. Co. v. Engineered Roofing Sys., Inc., No. 82A04-0504-CV-220, 839 N.E.2d 814 (Ind.Ct.App. Nov. 30, 2005). This court determined that the trial court had erred in granting ERS's motion for leave to amend its counterclaim without ERS first having sought relief under Trial Rule 60(B) from the January 11, 2005, order and judgment. Slip op. at 6.

On December 30, 2005, ERS filed a petition for rehearing in this court. While awaiting a ruling on the petition, ERS filed a motion for relief from judgment in the trial court on January 10, 2006. ERS contended that:

[I]t was surprised that the trial court's order of January 11, 2005, entered on the issues raised in [Monroe Guaranty's] Motion for Partial Summary Judgment regarding its indemnification of SunSet pertaining to ERS's monetary judgment previously obtained against SunSet in the separate cause, could have been construed to have foreclosed the continuation of ERS's Counterclaim, especially in that [Monroe Guaranty] had not sought, mentioned or referred to the Counterclaim whatsoever in any of its filings preceding the entry of the Order and Judgment on its motion.

ERS did and does have a meritorious claim regarding [Monroe Guaranty's] direct liability to ERS sought under ERS's Counterclaim, as well as what would have been a defense to [Monroe Guaranty's] direct request for summary judgment on the Counterclaim.

...

Because the Counterclaim issues are unresolved and unaddressed by the parties, an order of relief from the Order and Judgment of January 11, 2005, should be entered.

To the extent that the Court's Order and Judgment on [Monroe Guaranty's] Motion for Partial Summary Judgment entered January 11, 2005, was a ruling upon that Counterclaim, whether inadvertent or not, it is in the best interest of justice that ERS [be] relieved from the judgment by the Court amending its order and Judgment to be a partial judgment on only the issues raised by [Monroe Guaranty] in its Motion for Partial Summary...