Peabody Energy Corp. v. Roark

• Decision Date: 30 August 2012
• Docket Number: No. 14A01–1112–CT–555.,14A01–1112–CT–555.
• Citation: 973 N.E.2d 636
• Parties: PEABODY ENERGY CORPORATION, Peabody Coal Company, LLC, and Black Beauty Coal Company, Appellants–Defendants and Third–Party Plaintiffs, v. Richard F. ROARK, Appellee–Plaintiff, and Beelman Truck Company, Appellee–Third–Party Defendant, and North American Capacity Insurance Company, Appellee–Third–Party Counterclaim Plaintiff and Third–Party Defendant.
• Court: Indiana Appellate Court

973 N.E.2d 636

PEABODY ENERGY CORPORATION, Peabody Coal Company, LLC, and Black Beauty Coal Company, Appellants–Defendants and Third–Party Plaintiffs,

v.Richard F. ROARK, Appellee–Plaintiff,andBeelman Truck Company, Appellee–Third–Party Defendant,

and

North American Capacity Insurance Company, Appellee–Third–Party Counterclaim Plaintiff and Third–Party Defendant.

No. 14A01–1112–CT–555.

Court of Appeals of Indiana.

Aug. 30, 2012.

Patrick A. Shoulders, Jean M. Blanton, Ziemer Stayman Weitzel & Shoulders, Evansville, IN, Karl L. Mulvaney, Nana Quay–Smith, Bingham Greenbaum Doll, LLP, Indianapolis, IN, Attorneys for Appellants.

Todd A. Croftchik, Seipp & Flick, LLP, Lake Mary, FL, Attorney for Appellee, Beelman Truck Company.

Julia Blackwell Gelinas, Maggie L. Smith, Dean R. Brackenridge, Carrie G. Doehrmann, Frost Brown Todd, LLC, Indianapolis, IN, Attorneys for Appellee, North American Capacity Insurance Company.

OPINION

BARNES, Judge.

Case Summary

Peabody Energy Corporation, Peabody Coal Company, LLC, and Black Beauty Coal Company (collectively, “Peabody”) appeal the trial court's grant of summary judgment in favor of Beelman Truck Company (“Beelman”) and North American Capacity Insurance Company (“NAC”). We affirm in part, reverse in part, and remand.

Issue

The dispositive issue we address is whether Peabody is an additional insured under an insurance policy issued by NAC.

Facts

Peabody owns property in Daviess County where it conducts mining operations, and Beelman is a trucking company. Beelman and Peabody entered into a Master Performance Agreement (“MPA”), which became effective on April 5, 2005, and continued for an initial term of one year. The MPA defined Peabody as “Owner” and Beelman as “Contractor.” App. p. 280. The MPA provided in part:

18. INDEMNITY AND INSURANCE.

A. Contractor agrees to indemnify, defend, and hold harmless Owner, its parent, subsidiaries, affiliates and related companies and the officers, directors, shareholders and employees of such companies (collectively “Owner”) against any and all claims, damages, losses and expenses, including attorney's fees and other legal expenses, by reason of liability imposed or claimed to be imposed by law for damage because of bodily injury (including death) or on account of damage to property, sustained by any person or persons, arising out of or in consequence of the performance of the work called for by the Contract whether or not such bodily injuries, death, or damage to property arise or are claimed to have arisen in whole or in part out of the negligence or any other grounds of legal liability, including violation of any duty imposed by a statute, or ordinance or regulation, on the part of Contractor, the subcontractors, and the employees or agents of Contractor and the subcontractor (but excluding however, any liability caused by the sole negligence or willful misconduct of employees or agents of Owner).[¹

B. Contractor shall obtain and continue in force, during the term of the Contract at its own expense, the following insurance coverages:

1. Workers' Compensation and Occupational Disease Disability insurance as required by the laws of the state wherein the work is to be performed.

2. Employer's Liability insurance with limits of $500,000 each occurrence, unless the laws of the state in which the work is to be performed precludes an independent right of action by an employee against an employer under common law.

3. Comprehensive Automobile Liability insurance with limits of $1,000,000 Bodily injury and Property Damage combined single limit.

4. Comprehensive General Liability and Property Damage insurance including Operations, Protective, Products/Completed Operations, Broad Form Property Damage, and Contractual Liability coverages with limits of $1,000,000 Bodily injury and Property Damage combined single limit.

C. All insurance policies must contain an unqualified provision that the insurance carrier will give Owner 30 days prior notice in writing of any cancellation, change or lapse in such policy(s).

D. All insurance policies shall name Owner, its parent, subsidiaries, affiliates and related companies, as additional insureds with respect to losses or claims arising out of, or directly or indirectly related to, the performance of this Contract.

E. The parties hereto acknowledge that Contractor's insurance shall be the primary coverage under the Contract.

F. Prior to commencement of any work hereunder, Contractor shall furnish to Owner (in form satisfactory to Owner) a Certificate of Insurance showing that the requirements of this Paragraph 17[sic] have been satisfied.

Id. at 281.

Beelman had a commercial general liability insurance policy (“the Policy”) with NAC, which was effective from December 1, 2004, to December 1, 2005. The Policy contained an additional insured endorsement that provided:

This endorsement modifies insurance provided under the following:

COMMERCIAL GENERAL LIABILITY COVERAGE PART.

SCHEDULE

Name of Person or Organization:

Any person or organization to which you are obligated by virtue of written contract to provide insurance such as is afforded by this policy, but only with respect to (1) occurrences taking place after such written contract has been executed and (2) occurrences resulting from work performed by you during the policy period.

(if no entry appears above, information required to complete this endorsement will be shown in the Declarations as applicable to this endorsement.)

WHO IS AN INSURED (Section II) is amended to include as an insured the person or organization shown in the Schedule as an insured but only with respect to liability arising out of your operations or premises owned by or rented to you.

Id. at 209 (emphasis added). A certificate of liability insurance was issued to Peabody referencing the Policy by number. The certificate named Peabody as the certificate holder and provided, “Certificate holder is an additional insured with respect to the auto and general liability.” Id. at 289.

Richard Roark was employed by Beelman as a truck driver. On June 22, 2005, while working for Beelman, Roark delivered a load of ash from a power plant to Peabody's mine. Roark backed the Beelman truck into a spot at the mine to dump the load of ash. Roark got out of the truck to release the air brakes, which were controlled by switches on the side of the trailer. As he walked toward the middle of the trailer to release the switches, the ground gave away, and Roark went down into the ground past his knee.

On May 29, 2007, Roark filed a complaint against Peabody alleging that its negligence caused injuries to his left foot. On March 25, 2009, Peabody demanded coverage from NAC. In response, NAC determined that “Peabody is only an additional insured with respect to liability arising out of Beelman's operations or premises owned by or rented to Beelman.” Id. at 182. NAC concluded that Roark's claim did not arise “from Beelman's work” and, therefore, NAC had no duty to defend or indemnify Peabody. Id.

Peabody eventually filed a third-party complaint in Roark's lawsuit requesting indemnification from Beelman, alleging that Beelman had breached the MPA, and seeking declaratory judgment regarding NAC's obligation to provide coverage based on the Policy. Beelman and NAC denied the allegations, and NAC sought a declaratory judgment against Peabody. Peabody filed a motion for partial summary judgment against NAC. NAC and Beelman also filed motions for summary judgment against Peabody. After the matter was fully briefed and a hearing was conducted, the trial court entered final judgment in favor of Beelman and NAC and against Peabody. The trial court summarized its twenty-five pages of findings and conclusions as follows:

A. The MPA excludes, [sic] and Beelman Truck Co. therefore has no duty to indemnify, defend or hold Black Beauty harmless when the sole allegations of negligence are against Black Beauty. The fact that Black Beauty will defend those allegations by alleging that Plaintiff was comparatively negligent does not operate to change that outcome.

B. The only potential risk that needs to be insured against in this case is Black Beauty's own negligent maintenance of its own premises. That is the only negligence alleged in the Plaintiff's Complaint and it is the only negligence for which Black Beauty could be held legally responsible. Paragraph 18 of the MPA does not create or impose a contractual obligation on Beelman, to insure against that specific risk, i.e. the requisite meeting of the minds was lacking.

C. Because Beelman had no contractual duty to insure Black Beauty against claims/losses that Black Beauty negligently maintained its own premises, the insurance policy that is the subject of the Motions for Summary Judgment filed by North American Capacity and Black Beauty is not triggered. Because the MPA does not trigger Beelman's North American Capacity insurance policy, Black Beauty's claims against North American [C]apacity fail.

D. This case will return to its original procedural posture, Black Beauty defending itself against allegations that it negligently maintained premises that it owned and that were under its sole control.

Id. at 40. Peabody now appeals.

Analysis

Peabody argues that the trial court improperly granted NAC's and Beelman's motions for summary judgment and denied its motion for summary judgment. “We review an appeal of a trial court's ruling on a motion for summary judgment using the same standard applicable to the trial court.” Perdue v. Gargano, 964 N.E.2d 825, 831 (Ind.2012). “Therefore, summary judgment is appropriate only if the designated evidence reveals ‘no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.’ ” Id. (quoting Ind. Trial Rule 56(C)). Our review of summary judgment is limited to evidence designated to the trial court. Id. (citing T.R. 56(H)). All facts and reasonable inferences drawn from the evidence...