Perryman v. Motorist Mut. Ins. Co.

• Decision Date: 28 April 2006
• Docket Number: No. 49A02-0511-CV-1060.,49A02-0511-CV-1060.
• Parties: Thomas PERRYMAN, Individually and d/b/a Tom's Nora Automotive, Appellant, v. MOTORIST MUTUAL INSURANCE COMPANY, Appellee.
• Court: Indiana Appellate Court

846 N.E.2d 683

Thomas PERRYMAN, Individually and d/b/a Tom's Nora Automotive, Appellant, v. MOTORIST MUTUAL INSURANCE COMPANY, Appellee.

No. 49A02-0511-CV-1060.

Court of Appeals of Indiana.

April 28, 2006.

COPYRIGHT MATERIAL OMITTED

Donn H. Wray, Glenn D. Bowman, Steward & Irwin, P.C., Indianapolis, for Appellant.

Julia Blackwell Gelinas, Carrie G. Doehrmann, Lucy R. Dollens, Locke Reynolds LLP, Indianapolis, for Appellee.

OPINION

RILEY, Judge.

STATEMENT OF THE CASE

Appellant-Plaintiff, Thomas Perryman, individually and d/b/a Tom's Nora Automotive (Perryman), appeals the trial court's grant of summary judgment in favor of Appellee-Defendant, Motorist Mutual Insurance Company (Motorist), with regard to Perryman's breach of contract claim.

We affirm.

ISSUES

Perryman raises three issues on appeal, which we consolidate and restate as the following two issues:

(1) Whether the trial court properly found that Perryman's failure to discover a decision of the Indiana supreme court which affected the coverage available under his policy did not toll the applicable ten-year statute of limitations; and

(2) Whether the trial court properly found that Motorist was not equitably estopped from asserting the ten-year statute of limitations.

FACTS AND PROCEDURAL HISTORY

From December 1985 until May 1994, Perryman owned an automobile service station located at 1505 East 86th Street, Indianapolis, Indiana. On May 19, 1994, he sold the property to Westfield Investment LLC. In March of 1994, two months prior to the sale, six underground storage tanks (UST) were removed from the property. These USTs were used to store gasoline, waste oil, heating oil, and other petroleum products. After the removal, an investigation revealed that a plume of contamination had migrated off-site and into the groundwater. An investigating environmental consultant determined that the contamination consisted of gasoline, waste oil, heating oil, and other petroleum products and that the contamination resulted from leakage associated with the USTs. Remediation of the on-site and off-site contamination resulted in a cost of $159,087.30. Perryman paid these costs from the proceeds of the sale of the property and was reimbursed $62,906.95 by the Indiana Excess Liability Trust Fund.

Motorist provided primary property and casualty insurance to Perryman's property from June 1989 through June 1993, under Policy Numbers 33-13349020 and 33-133490E. On July 2, 1993, Motorist issued a renewal of the insurance policy 33-13349E for a period from June 30, 1993 to June 30, 1994 (the Garage Policy). This policy included the following provisions:

GARAGE OPERATIONS — OTHER THAN COVERED AUTOS

We 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" and resulting from "garage operations" other than the ownership, maintenance or use of covered "autos" . . .

* * *

B. EXCLUSIONS

This insurance does not apply to any of the following:

* * *

8. POLLUTION EXCLUSION APPLICABLE TO GARAGE OPERATIONS — OTHER THAN COVERED AUTOS.

"Bodily injury," "property damage" or loss, cost or expense arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of "pollutants". . .

(Appellant's App. pp. 52, 54).

In March of 1994, Perryman contacted Marlene Keith-Welfeld (Keith-Welfeld) of the Keith Insurance Agency, an agent for Motorist, to file an insurance claim for the remediation and investigation costs associated with the removal of the USTs. Keith-Welfeld advised Perryman that the coverage policy had a pollution exclusion and that his claim would be rejected.

Thereafter, sometime during the first quarter of 2004, Jacob Smith (Smith), who had been the investigating environmental consultant in March of 1994, contacted Perryman. Smith advised Perryman that because of a change in Indiana law, his 1994 remediation claim might be covered under the Garage Policy. Perryman retained counsel and placed Motorist on notice of the claim.

On December 3, 2004, Perryman filed his Complaint against Motorist, requesting a Declaratory Judgment and Damages. On May 13, 2005, Motorist filed its Motion for Summary Judgment, including Designated Evidence and Brief in Support thereof. On July 8, 2005, Perryman filed his Cross-Motion for Summary Judgment, Designated Evidence, and Memorandum in Support thereof and in Opposition to Motion for Summary Judgment. On October 6, 2005 the trial court issued its Order, denying Perryman's Cross-Motion for Summary Judgment and granting Motorist's Motion for Summary Judgment.

Perryman now appeals. Additional facts will be provided as necessary.

DISCUSSION AND DECISION

I. Standard of Review

Summary judgment is appropriate only when there are no genuine issues of material fact and the moving party is entitled to a judgment as a matter of law. Ind. Trial Rule 56(C). In reviewing a trial court's ruling on summary judgment, this court stands in the shoes of the trial court, applying the same standards in deciding whether to affirm or reverse summary judgment. American Family Mut. Ins. Co. v. Hall, 764 N.E.2d 780, 783 (Ind.Ct. App.2002), trans. denied. Thus, on appeal, we must determine whether there is a genuine issue of material fact and whether the trial court has correctly applied the law. Id. In doing so, we consider all of the designated evidence in the light most favorable to the non-moving party. Id. The party appealing the grant of summary judgment has the burden of persuading this court that the trial court's ruling was improper. Id. Accordingly, the grant of summary judgment must be reversed if the record discloses an incorrect application of the law to the facts. See Ayres v. Indian Heights Volunteer Fire Dep't, Inc., 493 N.E.2d 1229, 1234 (Ind.1986).

Insurance contracts are subject to the same rules of construction as are other contracts. Jackson v. Jones, 804 N.E.2d 155, 158 (Ind.Ct.App.2004). Generally, the construction of a written contract is a question of law for the trial court for which summary judgment is particularly appropriate. Mid State Bank v. 84 Lumber Co., 629 N.E.2d 909, 914 (Ind.Ct.App.1994). However, if the terms of a written contract are ambiguous, it is the responsibility of the trier-of-fact to ascertain the facts necessary to construe the contract. Id. Consequently, when summary judgment is granted based upon the construction of a written contract, the trial court has either determined as a matter of law that the contract is not ambiguous or uncertain, or that the contract ambiguity, if one exists, can be resolved without the aid of a factual determination. Id.

II. Discovery Rule

Perryman now contends that the trial court erred in concluding that the statute of limitations began to run in March of 1994, and expired in March of 2004, thereby barring his cause of action against Motorist which was filed on December 3, 2004. Indiana Code section 34-11-2-11 encompasses the statute of limitations applicable to an action based upon an insurance contract, and provides that:

An action upon contracts in writing other than those of the payment of money, and including all mortgages other than chattel mortgages, deeds of trust, judgments of courts of record, and for the recovery of the possession of real estate, must be commenced within ten (10) years after the cause of action accrues...

Neither party disputes the application of this statute; instead the parties disagree on when the current cause of action accrued. The question of when a cause of action accrues is generally one of law for the courts to determine. Meisenhelder v. Zipp Exp., Inc. 788 N.E.2d 924, 927 (Ind. Ct.App.2003).

Here, both parties advance the application of the discovery rule in a breach of contract claim and, in support of their argument, rely on our recent decision in Meisenhelder. The discovery rule provides that a cause of action accrues when a party knows or in the exercise of ordinary diligence could discover, that the contract has been breached or that an injury had been sustained as a result of the tortious act of another. Strauser v. Westfield Ins. Co., 827 N.E.2d 1181, 1185 (Ind.Ct.App. 2005). Although the application of the discovery rule originally found its existence in certain tort cases, it was later, under the guidance of Habig v. Bruning, 613 N.E.2d 61, 64 (Ind.Ct.App.1993) trans. denied, expanded to all tort cases and, in turn, applied to actions for breach of contract under I.C. § 34-11-2-11 by Meisenhelder, 788 N.E.2d at 930.¹ The rationale underlying the rule suggests that it is "inconsistent with our system of jurisprudence to require a claimant to bring his cause of action in a limited period in which, even with due diligence, he could not be aware a cause of action exists." Habig, 613 N.E.2d at 64 (quoting Barnes v. A.H. Robins Co., Inc., 476 N.E.2d 84, 86 (Ind.1985)).

In the case at bar, the parties do not appear to dispute the fact that Perryman became aware of his injury in March of 1994. In his designated evidence, he readily admits that in March of 1994 he contacted Keith-Welfeld to file a claim for the contamination resulting from the USTs. He added that during this telephone conversation, he attempted to file a claim for damages under the Garage Policy but was informed that the pollution exclusion provision of the policy precluded recovery. Accordingly, we conclude that Perryman was aware of the sustained injury by March of 1994.

Referencing the discovery rule, Perryman now maintains that the cause of action did not accrue when he became aware of the injury in March of 1994, but instead commenced in 2004 when he became aware of our supreme court's decision in Am. States Ins. Co. v. Kiger, 662 N.E.2d 945 (Ind.1996), reh'g denied, adopting, as an issue of first impression, the rule that an absolute pollution exclusion in an insurance policy, similar to the one in Perryman's...