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Selective Ins. Co. v. Erie Ins. Exch.

Selective Ins. Co. v. Erie Ins. Exch.

Court of Appeals of Indiana

July 30, 2014, Decided; July 30, 2014, Filed

No. 73A01-1307-PL-311

Opinion

 [*107]  OPINION - FOR PUBLICATION

BROWN, Judge

Selective Insurance Company of South Carolina ("Selective") and 500 Rangeline, LLC ("Rangeline," and collectively with Selective, "Appellants") appeal the trial court's order granting the cross-motion for partial summary judgment filed by Erie Insurance Exchange ("Erie") and denying the Appellants' motion for partial summary judgment. Additionally, Allianz Global Risks U.S. Insurance Company ("Allianz") has filed an appellee's brief in this matter as an interested party after intervening below. The Appellants raise one issue which we revise and restate as whether the court erred in granting [**2]  partial summary judgment in favor of Erie and denying the Appellants' motion for partial summary judgment. We reverse and remand.

FACTS AND PROCEDURAL HISTORY

Rangeline purchased a warehouse in late 2006 or early 2007. At the time of the purchase, the principals of Rangeline were Jon Smith, Greg Heuer, and Travis May. Rangeline did not have any other employees who managed the warehouse or actively participated in the business affairs of Rangeline other than Smith, Heuer, and May. Selective provided commercial general liability coverage for Rangeline's warehouse beginning on July 1, 2007. In August 2007, Doug Ewing, a Safety Management Specialist with Selective, visited the warehouse to conduct a risk evaluation survey, and, based on recommendations made by Ewing, May retained Gardner Fire Protection to inspect the sprinkler system at the warehouse. On October 1, 2007, Jason Gardner from Gardner Fire Protection wrote a letter to May regarding his findings and identified a number of "serious issues, including but not limited to the fact that the system had no functioning alarms," and May later asked Gardner to provide an estimate of what the cost would be to repair the issues Gardner had [**3]  identified. Appellants' Appendix at 355. Gardner Fire Protection was never hired to make repairs to the sprinkler system. Selective renewed the policy with Rangeline for the period of July 1, 2008 through July 1, 2009.

On April 30, 2008, Welch & Wilson Properties, LLC d/b/a Hammons Storage, ("Hammons") and Rangeline entered into a lease of the warehouse for the purpose of storing insulation manufactured by Knauf Insulation KnbH, ("Knauf"). By this time, Rangeline's owners were Smith and Heuer, although May remained active in  [*108]  the company and negotiated the lease with Hammons on behalf of Rangeline. Hammons prepared the first draft of the lease and sent it to Rangeline. The executed lease contains the following relevant provisions:

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14 N.E.3d 105 *; 2014 Ind. App. LEXIS 365 **; 2014 WL 3739771

SELECTIVE INSURANCE COMPANY OF SOUTH CAROLINA and 500 RANGELINE ROAD, LLC, Appellants-Defendants, vs. ERIE INSURANCE EXCHANGE, Appellee-Plaintiff, WELCH & WILSON PROPERTIES, LLC d/b/a HAMMONS STORAGE, ALLIANZ GLOBAL RISKS U.S. INSURANCE COMPANY, Appellees-Defendants.

Subsequent History: Transfer granted by Selective Ins. Co. v. Erie Ins. Exch., 2014 Ind. LEXIS 985, 21 N.E.3d 838 (Ind., 2014)

Transfer denied by Selective Ins. Co. v. Erie Ins. Exch., 2015 Ind. LEXIS 111 (Ind., Feb. 5, 2015)

Reinstated by, Transfer denied by Selective Ins. Co. v. Erie Ins. Exch., 2015 Ind. LEXIS 88 (Ind., Feb. 6, 2015)

Prior History:  [**1] APPEAL FROM THE SHELBY SUPERIOR COURT. The Honorable Charles D. O'Connor, Special Judge. Cause No. 73D01-1109-PL-33.

CORE TERMS

coverage, endorsement, insured, warehouse, leased premises, leased, sprinkler system, additional insured, premises, insulation, tenant, landlord, partial summary judgment, stored, provide coverage, custody, insurance policy, summary judgment, trial court, ownership, commercial general, property damage, duty to defend, named insured, cross-motion, repairs, bakery, personal property, designated, Indemnity

Civil Procedure, Summary Judgment, Entitlement as Matter of Law, General Overview, Appeals, Summary Judgment Review, Standards of Review, Motions for Summary Judgment, Cross Motions, Genuine Disputes, Materiality of Facts, Standards of Review, De Novo Review, Contracts Law, Contract Interpretation, Insurance Law, Claim, Contract & Practice Issues, Policy Interpretation, Question of Law, Questions of Fact & Law, Ambiguous Terms, Construction Against Insurers, Unambiguous Terms, Obligations of Parties, Insurers, Allegations in Complaints, Business Insurance, Commercial General Liability Insurance, Duty to Defend, Citations, Precedence & Publication, Publication of Opinions, Governments, Courts, Judicial Precedent, Indemnification, Insurers, Persons Insured, Additional Parties, Coverage, Business & Corporate Compliance, Contracts Law, Types of Contracts, Bailments, Torts, Lessees & Lessors, Liabilities of Lessors