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Indianapolis Airport Auth. v. Travelers Prop. Cas. Co. of Am.

United States Court of Appeals for the Seventh Circuit

December 9, 2016, Argued; February 17, 2017, Decided

No. 16-2675


 [*359]  HAMILTON, Circuit Judge. In this diversity-jurisdiction case, the Indianapolis Airport Authority sued Travelers Property Casualty Company of America over Travelers' partial denial of a claim for coverage arising from an airport construction accident that occurred in 2007. On motions for summary judgment, the district court interpreted the insurance contract in favor of Travelers on several issues. Following summary judgment, the Airport Authority's case was narrowed to a claim for unreimbursed inspection costs associated with the incident. Then, two weeks before trial was set to begin on that claim, the [**2]  district court entered an evidentiary order that effectively precluded the Airport Authority from proving that sole remaining claim. The Airport Authority sought entry of final judgment so that it could appeal, and the district court entered judgment in Travelers' favor. On the Airport Authority's appeal, we affirm in part and reverse in part the district court's summary judgment order, and we vacate the evidentiary order for further consideration in light of this opinion.

I. Factual and Procedural Background

Plaintiff Indianapolis Airport Authority owns and operates the Midfield Terminal, a passenger terminal that opened for business on November 11, 2008. The Midfield Terminal project cost over $1 billion—and like any project of such magnitude, it had its share of setbacks. In January 2007, two shoring towers were being used to lift steel trusses to the roof of the terminal. Those shoring towers failed, causing a portion of the terminal's roof structure to drop by about twelve inches. As a result of that "Shoring Tower Incident," work on the terminal stopped temporarily. The Airport Authority incurred millions of dollars in inspection and repair costs, as well as ancillary costs traceable [**3]  to the incident. Yet despite the set-back, the project remained largely on schedule. Before the Shoring Tower Incident, the terminal had been scheduled to open for business on September 28, 2008. It ultimately opened 44 days later, on November 11, 2008.

Construction of the Midfield Terminal project was insured by a commercial inland marine policy underwritten by defendant, Travelers. Unlike most insurance policies for consumers, the policy was not a boilerplate contract of adhesion but was instead a customized policy negotiated by the parties. The policy included three categories of coverage at issue in this litigation: (1) builders' risk (the "General Coverage Provision"); (2) soft costs (the "Soft Cost Provision"), particularly bond interest in excess of the budgeted amount; and (3) expenses to reduce the amount of loss, known a little awkwardly as ERAL (the "ERAL Provision"), an additional coverage feature that paid for certain expenses incurred by the Airport Authority to reduce delay and mitigate soft costs. The policy also included other coverages and coverage extensions that are not at issue here. We have considered the breadth and complexity of the policy in evaluating the scope [**4]  of the provisions that are at issue, particularly the General Coverage Provision.

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849 F.3d 355 *; 2017 U.S. App. LEXIS 2856 **; 96 Fed. R. Serv. 3d (Callaghan) 1213; 2017 WL 657437


Subsequent History: On remand at, Objection overruled by Indianapolis Airport Auth. v. Travelers Prop. Cas. Co. of Am., 2017 U.S. Dist. LEXIS 189616 (S.D. Ind., Nov. 16, 2017)

Prior History:  [**1] Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. 1:13-cv-01316-JMS-MPB — Jane Magnus-Stinson, Chief Judge.

Indianapolis Airport Auth. v. Travelers Prop. Cas. Co. of Am., 2016 U.S. Dist. LEXIS 67171 (S.D. Ind., May 23, 2016)Indianapolis Airport Auth. v. Travelers Prop. Cas. Co. of Am., 178 F. Supp. 3d 745, 2016 U.S. Dist. LEXIS 49523 (S.D. Ind., Apr. 13, 2016)


Airport, costs, soft, coverage, district court, deductible, insured, Terminal, Shoring, Tower, bond interest, expenses, witnesses, budgeted, summary judgment, planned, proof of loss, opened, damages, inspection, parties, schedules, hybrid, period of delay, completion, projected, dollar, insurance policy, reasonable speed, opening day

Civil Procedure, Summary Judgment, Motions for Summary Judgment, Cross Motions, Appeals, Standards of Review, De Novo Review, Summary Judgment Review, Standards of Review, Insurance Law, Claim, Contract & Practice Issues, Policy Interpretation, Contracts Law, Contract Interpretation, Business & Corporate Compliance, Contracts Law, Contract Conditions & Provisions, Conditions Precedent, Claims Made Policies, Notice Requirements, Standards of Performance, Substantial Performance, Defenses, Demurrers & Objections, Affirmative Defenses, Waiver, Pleading & Practice, Pleadings, Amendment of Pleadings, Contract Interpretation, Intent, Abuse of Discretion, Evidence, Admissibility, Procedural Matters, Rulings on Evidence, Discovery, Methods of Discovery, Expert Witness Discovery, Testimony, Lay Witnesses, Opinion Testimony, Remedies, Damages, Types of Evidence, Testimony