Christopher Schmidt v. Indiana Insurance Co., C&F Insurance Group, Llc, and Bart Stith

Jan 14 2015, 9:31 am

FOR PUBLICATION

ATTORNEYS FOR APPELLANT: ATTORNEYS FOR APPELLEES:
RICHARD R. FOX Attorneys for Indiana Insurance Co.
KRISTI FOX JOHN C. TRIMBLE
STEVEN A. GUSTAFSON LEWIS S. WOOTEN
The Law Office of Richard R. Fox MICHAEL R. GIORDANO
New Albany, Indiana Lewis Wagner LLP
Indianapolis, Indiana

Attorneys for C&F Insurance, LLC and
Bart Stith
RICHARD T. MULLINEAUX
CRYSTAL G. ROWE
ASHLEY GILLENWATER EADE
Kightlinger & Gray, LLP
New Albany, Indiana

IN THE
COURT OF APPEALS OF INDIANA
CHRISTOPHER SCHMIDT, )
)
Appellant-Plaintiff, )
)
vs. ) No. 22A01-1403-PL-135
)
INDIANA INSURANCE COMPANY, )
C&F INSURANCE GROUP, LLC, and )
BART STITH, )
)
Appellees-Defendants. )

APPEAL FROM THE FLOYD SUPERIOR COURT
The Honorable Susan L. Orth, Judge
Cause No. 22D01-1104-PL-455

January 14, 2015

OPINION - FOR PUBLICATION

MAY, Judge
 Christopher Schmidt appeals summary judgment for Indiana Insurance, C&F

Insurance Group, and Bart Stith (collectively, “Appellees”). He presents multiple issues for

our review, which we consolidate and restate as whether the trial court erred in granting

summary judgment because there were genuine issues of material fact. We reverse in part,

affirm in part, and remand.

FACTS AND PROCEDURAL HISTORY1

In December 2004, Schmidt inherited property that included a house at 1526 E. Oak

Street in New Albany, Indiana (“the Oak Street Property”). He allowed his cousin to live in

the house and did not obtain insurance on the property at that time. In early 2009, Schmidt’s

cousin moved out of the residence. Approximately two months later, Schmidt started

receiving calls from the police department and animal control about animals left on the

property and odors emanating from the house.

On July 1, 2009, the local animal control agency was called to the Oak Street Property.

Animal Control Officer Carrie Mooser observed:

Looking through side door window, house appears to be full of trash, debris,
furniture. Feces and garbage is apparent covering floor. Smell coming from
inside house is foul and unbearable to breathe in. Can see two dogs inside
house, both appear to be extremely emaciated. Upon entering house, securing
both dogs in ACO truck. Dogs are covered in fleas and walking through house
and yard, I quickly became covered in fleas, to the point of extreme discomfort
from flea bites. In back room of house, off kitchen, found a dead dog, also
covered with fleas.

(App. at 105.) Based on these discoveries, the Floyd County Health Department investigated

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on the same day and determined the house was unfit for human habitation. After the house

was condemned, no one was permitted to enter unless they were cleaning it. Schmidt

indicated he began cleaning the premises at some time after the condemnation.

In April 2010, Schmidt contacted Stith, who was an agent with C&F Insurance Group,

about purchasing insurance for the Oak Street Property. Stith and Schmidt met, and Stith

asked Schmidt a series of questions, which he entered into a computer database that

generated a “Dwelling Fire Application” with Indiana Insurance. The application indicated

the Oak Street Property was “a primary dwelling occupied daily by a tenant” and was not

undergoing “renovation or construction[.]” (Id. at 261.) Schmidt indicated Stith was a “very

meticulous person,” (id. at 181), and Stith went over the contents of the application with him.

Stith testified he saw Schmidt sign the application.2 Based on the application Stith submitted

for Schmidt, Indiana Insurance issued Schmidt a dwelling fire policy for the Oak Street

Property.3

On June 22, 2010, the Oak Street Property burned while Schmidt was on vacation with

his family in Florida. Schmidt immediately reported the loss to Indiana Insurance. Indiana

Insurance issued a Reservation of Rights letter because it suspected arson. On February 26,

2011, after conducting an investigation, Indiana Insurance notified Schmidt that it had

“decided to exercise its right to rescind this policy and render it void ab initio (from the

1
We held oral argument November 21, 2014, in French Lick, as part of the Defense Trial Counsel of Indiana
(DTCI) Conference. We thank DTCI and French Lick Springs Hotel for their hospitality and commend
counsel for the quality of their oral advocacy.
2
Stith died before the trial court entered judgment.
3
At some point during the meeting, Schmidt also applied for and purchased vehicle insurance and homeowners
insurance for his primary residence.
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beginning)” because Schmidt had falsified information on the application regarding the

tenancy and habitability of the property. (Id. at 261.) Indiana Insurance returned the

premiums Schmidt had paid on the policy.

On April 1, 2011, Schmidt sued Stith, Indiana Insurance, and C&F, alleging Stith and

C&F (collectively, “Agents”) “falsely and wilfully or negligently made false representations

as to the occupancy status of the house” on his application for insurance. (Id. at 11.)

Schmidt alleged he was entitled to damages under the Crime Victims Relief Act because

Agents engaged in forgery and insurance fraud. Finally, Schmidt asked the trial court to

require Indiana Insurance to reinstate the insurance on the Oak Street Property and pay his

claim.

On May 25, 2011, and June 13, 2011, Agents and Indiana Insurance answered. On

June 20, 2013, Agents moved for summary judgment, and on June 28, Indiana Insurance did

the same. Schmidt responded, and on February 28, 2014, the trial court held a hearing on the

matter. On March 11, 2014, the trial court granted summary judgment for Appellees,

finding:

1. Indiana Law is clear that a “material misrepresentation or omission of
fact in an insurance application, relied on by the insurer in issuing the policy,
renders the coverage voidable at the insurance company’s option. Colonial
Penn Ins. Co. v Guzorek, 690 N.E. 2d 664, 672 (Ind. 1997).
2. Plaintiff’s claim was properly denied because of the representation
made to Indiana Insurance Company that the property would be tenanted and
was not undergoing renovations at the time the insurance was issued and that
such misrepresentation was material.
3. Further, Plaintiff failed to respond to Defendants’ argument that even if
he did not make the misrepresentations in his application, he still failed to
prove the essential elements of causation and damages to proceed with his
negligence claim.
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 4. Plaintiff failed to provide by evidence or statement that any insurance
company would have issued a policy on a house in its state and condition.
5. Without proof of these key elements, there are no genuine issues of
material fact.

(Id. at 8-9) (errors in original).

DISCUSSION AND DECISION

Our standard of review for summary judgment is well-established:

We review summary judgment de novo, applying the same standard as
the trial court: “Drawing all reasonable inferences in favor of . . . the non-
moving parties, summary judgment is appropriate ‘if the designated
evidentiary matter shows that there is no genuine issue as to any material fact
and that the moving party is entitled to judgment as a matter of law.’”
Williams v. Tharp, 914 N.E.2d 756, 761 (Ind. 2009) (quoting T.R. 56(C)). “A
fact is ‘material’ if its resolution would affect the outcome of the case, and an
issue is ‘genuine’ if a trier of fact is required to resolve the parties’ differing
accounts of the truth, or if the undisputed material facts support conflicting
reasonable inferences.” Id. (internal citations omitted).
The initial burden is on the summary-judgment movant to “demonstrate
the absence of any genuine issue of fact as to a determinative issue,” at which
point the burden shifts to the non-movant to “come forward with contrary
evidence” showing an issue for the trier of fact. Id. at 761-62 (internal
quotation marks and substitution omitted). And “[a]lthough the non-moving
party has the burden on appeal of persuading us that the grant of summary
judgment was erroneous, we carefully assess the trial court’s decision to ensure
that he was not improperly denied his day in court.” McSwane v. Bloomington
Hosp. & Healthcare Sys., 916 N.E.2d 906, 909-10 (Ind. 2009) (internal
quotation marks omitted).

Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014). Therefore, for the trial court to properly

grant summary judgment, the movants must have “made a prima facie showing that their

designated evidence negated an element of the nonmovants’ claims, and, in response, the

nonmovants must have failed to designate evidence to establish a genuine issue of material

fact.” Cox v. Mayerstein-Burnell Co., Inc., 19 N.E.3d 799, 804 (Ind. Ct. App. 2014).

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“Summary judgment should not be granted when it is necessary to weigh the evidence.”

Bochnowski v. Peoples Fed. Sav. & Loan Ass’n, 571 N.E.2d 282, 285 (Ind. 1991).

In Hughley, the State moved for summary judgment in a civil case involving the

forfeiture of cash and a vehicle seized during Hughley’s arrest. In response, Hughley filed an

affidavit indicating the cash and vehicle were not used to commit the crimes for which he

was convicted, and thus should not be forfeited. Our Indiana Supreme Court held:

That evidence is sufficient, though minimally so, to raise a factual issue to be
resolved at trial, and thus to defeat the State’s summary-judgment motion. An
issue of material fact “is ‘genuine’ if a trier of fact is required to resolve the
parties’ differing accounts of the truth.” Defendant’s designated evidence
clears that low bar. The State’s designations establish a circumstantial case . . .
that Defendant’s substantial cash was proceeds of or used for dealing. But his
sworn testimony by affidavit is direct evidence to the contrary, and so the fact
finder must reconcile the credibility of those two accounts.

Hughley, 15 N.E.3d at 1004-5 (citations omitted).

1. Agents

Schmidt argues the Agents negligently procured the insurance policy for him and

forged his signature on the application for insurance. In their motion for summary judgment,

Agents argued Schmidt “made material misrepresentations in his insurance application.”

(App. at 59.) In support of their arguments, Agents cited to portions of Stith’s deposition

where he testified Schmidt did not tell him the property was uninhabitable and he witnessed

Schmidt sign the application for insurance, thereby indicating Schmidt’s answers were “true,

complete, and correct.” (Id. at 61.) Agents asserted they would not have submitted the

application if Schmidt had indicated the true state of the property and, thus, they are entitled

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to judgment as a matter of law.4

Schmidt designated portions of two of his depositions, statements in his Verified

Complaint, and the materials that were part of the Agents’ motion for summary judgment, in

support of there being an issue of material fact about whether he told Stith of the condition of

the property and whether he signed the insurance application. In his depositions, Schmidt

indicated he told Stith the house was not occupied, he was cleaning it up, and there had been

animals on the premises. Schmidt testified he did not remember signing the insurance

application.

As Schmidt designated additional evidence that created genuine issues of material

fact, that is, whether he told Stith about the condition of the property and whether someone

forged his signature on his application, summary judgment is precluded. See Hughley, 15

N.E.3d at 1004-5. Accordingly, we reverse the summary judgment for Agents and remand

for further proceedings.

2. Indiana Insurance Company

In his Verified Complaint, Schmidt argued Indiana Insurance wrongfully denied his

claim, and he asked that his policy be reinstated so that Indiana Insurance would provide

coverage for his fire claim. In its motion for summary judgment, Indiana Insurance argued it

properly denied Schmidt’s claim, properly rescinded the policy, and acted in good faith when

doing so. In Colonial Penn Ins. Co. v. Guzorek, 690 N.E.2d 664, 674 (Ind. 1997), our

4
Alternatively, Agents argued Schmidt did not show he was harmed by any negligence on Agents’ part, as no
carrier would have issued insurance on the Oak Street Property given its condition at the time of the
application. As we conclude summary judgment was improperly granted, we need not consider this issue.
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Indiana Supreme Court held “the insurer may rely on representations of fact in the

application without investigating their truthfulness” and “has no duty to look beneath the

surface” of the representations made in the application. Schmidt did not respond to Indiana

Insurance’s Motion for Summary Judgment. Thus, Hughley does not apply, and summary

judgment was appropriate for Indiana Insurance based on Guzorek.

CONCLUSION

Summary judgment was not proper for Agents because Schmidt designated evidence

that gave rise to a genuine issue of material fact. However, as Schmidt did not do so in

response to Indiana Insurance’s motion for summary judgment, summary judgment for

Indiana Insurance was proper.

Reversed in part, affirmed in part, and remanded.

NAJAM, J., and PYLE, J., concur.

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