Roadsafe Holdings, Inc. v. Walsh Constr. Co.

• Citation: 164 N.E.3d 726
• Decision Date: 28 January 2021
• Docket Number: Court of Appeals Case No. 20A-CT-1308
• Parties: ROADSAFE HOLDINGS, INC. d/b/a Roadsafe Traffic Systems, Appellant-Third-Party Defendant, v. WALSH CONSTRUCTION COMPANY, Appellee-Defendant/Third-Party Plaintiff.
• Court: Court of Appeals of Indiana

164 N.E.3d 726

ROADSAFE HOLDINGS, INC. d/b/a Roadsafe Traffic Systems, Appellant-Third-Party Defendant,

v.WALSH CONSTRUCTION COMPANY, Appellee-Defendant/Third-Party Plaintiff.

Court of Appeals Case No. 20A-CT-1308

Court of Appeals of Indiana.

FILED January 28, 2021

Attorney for Appellant: T. Allon Renfro, Swanson, Martin & Bell, LLP, Chicago, Illinois

Attorneys for Appellee: Brandon J. Kroft, Thomas R. Benton, Cassiday Schade, LLP, Merrillville, Indiana

Najam, Judge.

Statement of the Case

[1] Boguslaw Maczuga sued Walsh Construction Company ("Walsh") for negligence. In turn, Walsh filed a third-party complaint against Roadsafe Holdings, Inc. d/b/a Roadsafe Traffic Systems ("Roadsafe"), its subcontractor, alleging breach of Roadsafe's duty to defend and indemnify Walsh in the Maczuga litigation. The trial court entered summary judgment in favor of Walsh, which Roadsafe appeals. Roadsafe presents five issues for our review, which we consolidate and restate as the following three issues:

1. Whether the trial court erred when it concluded that Roadsafe had a duty to indemnify Walsh for $60,000 Walsh paid in settlement of Maczuga's claims against Walsh.

2. Whether the trial court erred when it awarded attorney's fees and costs to Walsh related to its third-party complaint against Roadsafe.

3. Whether the trial court erred when it awarded prejudgment interest on Walsh's damages award.

[2] We affirm.

Facts and Procedural History

[3] This Court set out some of the facts and procedural history in this case in a prior related appeal as follows:

In January of 2009, Walsh, a general contractor, hired Roadsafe ... to be Walsh's subcontractor in the construction of a traffic exchange involving Interstates 65 and 80 in Lake County.

Roadsafe's work obligations included providing a safe traffic pattern through the work zone. Walsh's contract with Roadsafe required Roadsafe to indemnify Walsh for any liability resulting from Roadsafe's failure or negligence in its work. Accordingly, Walsh's contract required Roadsafe to procure a commercial general liability insurance policy ("CGL policy") that named Walsh as an additional insured on a primary and noncontributory basis.

Roadsafe obtained its CGL policy from Zurich. The CGL policy defined Roadsafe as the "Named Insured" and stated that, "[t]hroughout this policy[,] the words ‘you’ and ‘your’ refer to the Named Insured.... The word ‘insured’ means any person or organization qualifying as such under Section II—Who Is An Insured." Appellant's App. Vol. 3 at 72. An endorsement attached to the CGL policy named as additional insureds any "person and organization where required by written contract," such as Roadsafe's contract with Walsh, "but only with respect to liability for ‘bodily injury’ ... by your [Roadsafe's] acts or omissions...." Id. at 99. The CGL policy then provided as follows: "We [Zurich] will pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ ... to which this insurance applies. We will have the right and duty to defend the insured against any ‘suit’ seeking those damages." Id. at 72.

However, Roadsafe also obtained a $500,000-per-occurrence self insured retention endorsement ("the SIR endorsement") to the CGL policy. The SIR endorsement amended the CGL policy as follows:

The insurance provided by this policy is subject to the following additional provisions, which in the event of conflict with any other provisions elsewhere in the policy, shall control the application of the insurance to which this endorsement applies:

1. Self Insured Retention and Defense Costs—Your Obligations

A. The "self insured retention" amounts stated ... apply as follows:

1. If a Per Occurrence Self Insured Retention Amount is shown in this endorsement, you shall be responsible for payment of all damages and "pro rata defense costs" for each "occurrence" [ ] until you have paid damages equal to the Per Occurrence amount....

* * *

B. Defense Costs

Except for any "defense costs" that we may elect to pay, you shall pay "pro rata defense costs" as they are incurred....

C. Settlement of Claim

1. Within Self Insured Retention

If any final judgment or settlement is less than the "self insurance retention" indicated ... above, you shall have the right and obligation to settle all such claims or suits ....

* * *

Definitions—

A. "Self insured retention" means:

the amount or amounts which you or any insured must pay for all compensatory damages and "pro rata defense costs" which you or any insured shall become legally obligated to pay because of damages arising from any coverage included in the policy....

Id. at 68-71....

On June 15, 2009, Boguslaw Maczuga was injured while operating his motor vehicle through the work zone's traffic pattern. On June 27, 2011, Maczuga served Walsh with a Second Amended Complaint in which Maczuga alleged that Walsh had negligently created an unsafe traffic pattern.[ ] As a result of Maczuga's complaint, on January 18, 2012, Walsh filed a third-party complaint against Roadsafe. In its complaint, Walsh alleged, in relevant part, that Roadsafe had failed to indemnify Walsh and that Roadsafe had breached its contract with Walsh. Specifically, Walsh's third-party complaint stated that "[t]he Maczuga lawsuit seeks recovery from Walsh for its alleged negligence in connection with work that was to be performed by Road[s]afe" and that, "[f]ollowing service of process of the Maczuga lawsuit, Walsh tendered its defense and indemnity to Road[s]afe" but Roadsafe had "failed to either agree to indemnify or undertake Walsh's defense." Appellant's App. Vol. 2 at 54-55.

Thereafter, Walsh notified Zurich, pursuant to the terms of the CGL policy, of Maczuga's lawsuit and requested that Zurich defend Walsh in that suit. Zurich denied Walsh's request, and Walsh filed a complaint for declaratory judgment against Zurich in which Walsh alleged that Zurich had a duty to defend and indemnify Walsh. Id. at 61-62. Roadsafe intervened in the declaratory judgment action, and the parties moved for summary judgment. After a hearing, the trial court entered summary judgment for Zurich, stating:

Zurich has no contractual obligation to cover Walsh as an additional insured at this time. First of all, the policy is a liability policy between Zurich and Roadsafe and no person or entity has sued or even made a claim against Roadsafe for any type of negligence. Also there is a [SIR endorsement] that requires the insured to pay the first $500,000.00 of costs and damages of any claim before Zurich becomes obligated to pay out on the policy. Since there has been no claim for negligence against Roadsafe, Roadsafe has paid nothing and has made no claim under the policy.

Id. at 7.

Walsh Constr. Co. v. Zurich Am. Ins. Co. , 72 N.E.3d 957, 958-961 (Ind. Ct. App. 2017) (" Walsh I ") (some emphases removed), trans. denied. Walsh appealed the trial court's grant of summary judgment for Zurich, which we affirmed. Id. at 965. Specifically, we held that, "under the plain language of the SIR endorsement, Zurich ha[d] no obligation under the CGL policy to defend or indemnify Walsh until Roadsafe ha[d] satisfied the $500,000 SIR amount." Id.

[4] Because Roadsafe had breached its duty to defend Walsh in the Maczuga litigation, Walsh proceeded on its own and eventually executed an agreement with Maczuga to settle his claims against Walsh for $60,000. Thereafter, Walsh moved for summary judgment against Roadsafe alleging that, under the terms of the SIR endorsement in the CGL policy, Roadsafe was required to pay the $60,000 for the settlement between Walsh and Maczuga, as well as Walsh's attorney's fees and costs in litigating the Maczuga claim and the declaratory judgment action against Zurich. The trial court granted summary judgment in favor of Walsh. Following a damages hearing, the trial court ordered Roadsafe to pay to Walsh the following:

A. Settlement costs of [the] Maczuga lawsuit in the amount of $60,000.00;

B. Total fees and costs incurred in the Maczuga lawsuit in the amount of $201,603.80;

C. Total fees and costs incurred in the declaratory judgment action in the amount of $28,240.96; and D. Prejudgment interest in the amount of $134,169.43.

Appellant's App. Vol. II at 13-14.¹ This appeal ensued.

Discussion and Decision

Standard of Review

[5] Roadsafe appeals the trial court's grant of summary judgment for Walsh. As our Supreme Court has stated:

This Court reviews summary judgment orders de novo. Summary judgment is appropriate if the designated evidence shows there is no genuine issue as to any fact material to a particular issue or claim, and the moving party is entitled to judgment as a matter of law. In viewing the matter through the same lens as the trial court, we construe all designated evidence and reasonable inferences therefrom in favor of the non-moving party. Legal questions, such as contract interpretation, are well-suited for summary judgment. The party appealing the trial court's summary judgment determination bears the burden of persuading us the ruling was erroneous. Nonetheless, we "carefully scrutinize[ ] the trial court's decision to assure that the party against whom summary judgment was entered was not improperly prevented from having its day in court."

Ryan v. TCI Architects/Engineers/Contractors, Inc. , 72 N.E.3d 908, 912-13 (Ind. 2017) (citations omitted; alteration original to Ryan ). Here, the trial court made findings and conclusions to support its summary judgment order, which are not binding on this Court. See Global Caravan Technologies, Inc. v. Cincinnati Ins. Co. , 135 N.E.3d 584, 588 (Ind. Ct. App. 2019), trans. denied. Rather, "we may affirm a grant of summary judgment upon any theory supported by the evidence." Miller v. Danz , 36 N.E.3d 455, 456 (Ind. 2015).

Issue One: Indemnity

[6] Roadsafe first contends that the trial court erred when it concluded that Roadsafe was required to indemnify Walsh for the $60,000 settlement in the Maczuga lawsuit. Initially, we note...