Property-Owners Insurance Company v. Gerald T. Powers and Phyllis J. Powers (mem. dec.)

MEMORANDUM DECISION
Jul 22 2015, 9:37 am
Pursuant to Ind. Appellate Rule 65(D), this
Memorandum Decision shall not be regarded as
precedent or cited before any court except for the
purpose of establishing the defense of res judicata,
collateral estoppel, or the law of the case.

ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEES
Stephen C. Wheeler GERALD T. POWERS AND PHYLLIS
Smith Fisher Maas Howard & Lloyd, J. POWERS
P.C. Michelle A. Spahr
Indianapolis, Indiana Richard A. Norris
Cynthia E. Lasher
Norris Choplin Schroeder LLP
Indianapolis, Indiana

ATTORNEYS FOR APPELLEES
MELISSA FREEMAN REALTY, INC.,
REALTY GROUP-FREEMAN, LLC
d/b/a PRUDENTIAL INDIANA
REALTY GROUP, RITA WILLIAMS,
AND MELISSA FREEMAN

Robert T. Thopy
Eric M. Glasco
McNeely Stephenson
Shelbyville, Indiana

IN THE
COURT OF APPEALS OF INDIANA

Property-Owners Insurance July 22, 2015
Company, Court of Appeals Case No.
73A05-1501-PL-2
Appellant-Plaintiff,
Appeal from the Shelby Circuit
v. Court

The Honorable Charles D.
O’Connor, Judge

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 Gerald T. Powers and Phyllis J.
Case. No. 73C01-1405-PL-14
Powers, et. al.,
Appellees-Defendants

Crone, Judge.

Case Summary
[1] Gerald T. Powers sustained injuries while being shown a residential property

listed for sale by Prudential Indiana Realty Group (“Prudential”). Gerald and

his wife, Phyllis J. Powers (collectively “the Powerses”), sued numerous

defendants, including Prudential, for negligence. Thereafter, Prudential’s

liability insurer, Property-Owners Insurance Company (“Property-Owners”),

filed a declaratory judgment action alleging that, pursuant to a specific

endorsement to the insurance policy provided to Prudential, there is no

insurance coverage for defense or indemnity under the circumstances and that

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 the Powerses have no right to recover from Property-Owners. 1 Subsequently,

the Powerses, as well as other defendants, filed motions for judgment on the

pleadings asserting that the policy endorsement relied upon by Property-

Owners to deny coverage is inapplicable to the premises upon which Gerald

was injured. The trial court issued its order granting the motions for judgment

on the pleadings, concluding that the policy endorsement relied upon by

Property-Owners is inapplicable to deny coverage. Property-Owners appeals

that ruling. We reverse and remand.

Facts and Procedural History
[2] On or about September 5, 2011, Gerald sustained bodily injuries while being

shown a house for sale on Blanchard Street in Shelbyville (“Blanchard Street

Property”). The Powerses filed an amended complaint for negligence against

numerous defendants, including Prudential, the real estate listing agent for the

1
In addition to naming the Powerses as defendants in the declaratory judgment action, Property-Owners
named: U.S. Bank National Association, as Trustee Under the Securitization Servicing Agreement dated as
of July 1, 2005 Structured Asset Securities Corporation, Structured Asset Investment Loan Trust Mortgage
Pass-Through Certificates, Series 2005-HE2; Melissa Freeman Realty, Inc.; Realty Group-Freeman, LLC
d/b/a Prudential Indiana Realty Group; Altisource Solutions, Inc.; Altisource Fulfillment Operations, Inc.;
Altisource; RealHome Services and Solutions, Inc., d/b/a Altisource Homes; Altisource Portfolio Solutions
S.A.; Altisource Portfolio Solutions, Inc.; Altisource U.S. Holdings, Inc.; Altisource Holdings, LLC; Real
Estate Servicing Solutions, LLC; Real Estate Servicing Solutions, Inc.; Altisource Portfolio Solutions
S.A.R.L.; Ocwen Loan Servicing, LLC; Ocwen Financial Corporation; Rita Williams; Melissa Freeman;
David Craig; Usher & Associates, Inc.; and Field Connections, LLC. The trial court refers to the additional
defendants collectively in separate groups, namely the “U.S. Bank Defendants” and the “Prudential
Defendants,” and we will do so as well where necessary. Although the Powerses and some of whom the trial
court referred to as the Prudential Defendants are the only defendants who have appeared and filed briefs on
appeal, all of the named defendants remain parties to this appeal pursuant to Indiana Appellate Rule 17(A).
See Barnette v. U.S. Architects, LLP, 15 N.E.3d 1, 8 (Ind. Ct. App. 2014) (noting that Appellate Rule 17(A)
operates on its own force to make all parties in the trial court parties on appeal whether such parties
participate actively or not).

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 Blanchard Street Property, alleging that the defendants were negligent in failing

to maintain safe premises, in constructing and/or maintaining a dangerous or

defective staircase, and in failing to warn of the dangerous condition of the

staircase on the Blanchard Street Property. Thereafter, Property-Owners,

Prudential’s liability insurer, filed a complaint for declaratory judgment alleging

that it has no duty to provide insurance coverage, defend, or indemnify the

Prudential Defendants for any claims brought by the Powerses. Property-

Owners attached the insurance policy issued to Prudential by Property-Owners

and Prudential’s listing contract for the Blanchard Street Property to its

complaint for declaratory judgment.

[3] The “Businessowners Insurance Policy” issued to Prudential by Property-

Owners (the “Businessowners Policy”) includes Endorsement 54638, titled

“Limitation of Real Estate Operations,” which provides:

It is agreed that with respect to any real estate operation, the insurance
provided under the Businessowners Liability Coverage Form applies
only to “bodily injury”, “property damage”, “personal injury”, and
“advertising injury” arising out of:
1. that part of a premises used by you for general office purposes; and
2. a premises:
a. which you do not own, operate, rent or manage;
b. which is not in your care, custody or control; or
c. for which you do not act as an agent for rent collection
or in a supervisory capacity;
if such premises is listed with you for sale or rental.
All other terms and conditions of the policy apply.

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 Appellant’s App. at 162. Property-Owners alleged that on February 1, 2011,

Rita Williams, a real estate agent and broker-salesperson for Prudential, signed

a listing contract for the Blanchard Street Property that included the following

language:

3. Broker agrees to assume the care, custody and management of the
property, including but not limited to performing the following:
A. Input listing in appropriate MLS;
B. Install signage;
C. Answer calls/emails from buyers/agents;
D. Conduct open houses when necessary;
E. To inspect the property at least once each week and take
reasonable and prudent action to prevent any damage to the
property including, but not limited to, damage caused by
fire, vandalism, and weather conditions, and notify Seller
immediately by telephone in the event of any emergency, code
violation or damage related to the property; and ….

Id. at 169-170. Property-Owners alleged that Prudential required all listings

brought in by its broker-salespersons to be the property of Prudential, that all

such listings be listed in Prudential’s name, and that, pursuant to the listing

contract, Prudential assumed the care, custody, or control of the Blanchard

Street Property. Accordingly, Property-Owners sought judgment declaring that

no insurance coverage, defense, or indemnity is afforded to Prudential pursuant

to the Businessowners Policy and, specifically, Endorsement 54638.

[4] The Powerses filed a motion for judgment on the pleadings asserting that

Endorsement 54638 is inapplicable to the Blanchard Street Property where

Gerald was injured, and thus cannot be a basis to deny coverage under the
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 Businessowners Policy. Specifically, the Powerses argued that, based upon the

declarations pages of the Businessowners Policy, Endorsement 54638 applies

only to Prudential’s business office because that “building” is listed on the

declarations pages as the only “building” and “location” to which Endorsement

54638 applies. Id. at 92. The Prudential Defendants joined in that motion.

The U.S. Bank Defendants also filed a motion for judgment on the pleadings

asserting that Endorsement 54638 is inapplicable to deny coverage. Following

separate hearings, the trial court granted the motions and entered judgment on

the pleadings against Property-Owners. Property-Owners now appeals.

Discussion and Decision
[5] Property-Owners appeals the trial court’s entry of judgment on the pleadings on

its complaint for declaratory judgment. 2 We apply a de novo standard of

review to a trial court’s ruling on an Indiana Trial Rule 12(C) motion for

judgment on the pleadings. Consol. Ins. Co. v. Nat’l Water Serv., LLC, 994 N.E.2d

1192, 1196 (Ind. Ct. App. 2013), trans. denied. “We accept as true the well-

pleaded facts alleged in the complaint, and base our ruling solely on the

pleadings.” Id. A motion for judgment on the pleadings should not be granted

unless it is clear from the face of the complaint that under no circumstances

could relief be granted. Id. To the extent that interpretation of a contract is

2
If an insurer has made an independent determination that it has no duty to defend, it must protect its
interest by either filing a declaratory judgment action for a judicial determination of its obligations or hiring
independent counsel to defend its insured under a reservation of rights. Freidline v. Shelby Ins. Co., 774 N.E.2d
37, 42 n.6 (Ind. 2002).

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 involved, “we may look to both the complaint and the attached contract for

purposes of determining the appropriateness of the court’s ruling on the motion

for judgment on the pleadings.” Eskew v. Cornett, 744 N.E.2d 954, 957 (Ind. Ct.

App. 2001) (noting that Ind. Trial Rule 9.2(A) requires a written document

upon which the action is premised to be attached to the complaint), trans.

denied. When allegations of a pleading are inconsistent with terms of a written

contract attached as an exhibit, the terms of the contract must prevail over a

contrary allegation. Id.

[6] Insurance contracts are governed by the same rules of construction as other

contracts, and their interpretation is a question of law which we address de

novo. Justice v. Am. Family Mut. Ins. Co., 4 N.E.3d 1171, 1175 (Ind. 2014). Our

goal when interpreting an insurance policy is to ascertain and enforce the

parties’ intent as manifested in the insurance contract. Erie Ins. Exch. v. Sams, 20

N.E.3d 182, 187 (Ind. Ct. App. 2014), trans. denied (2015). When interpreting

an endorsement to an insurance policy, “the endorsement ‘must be read

together, construed, and reconciled with the policy to give effect to the whole.’”

Matsen v. AMCO Ins. Co., 953 N.E.2d 566, 569 (Ind. Ct. App. 2011) (quoting

Stevenson v. Hamilton Mut. Ins. Co., 672 N.E.2d 467, 473 (Ind. Ct. App. 1996),

trans. denied (1997)), trans. denied (2012). “We construe the policy and relevant

endorsements from the perspective of an ordinary policy holder of average

intelligence, and if reasonably intelligent people may interpret the policy’s

language differently, the policy is ambiguous.” Id. (citation and quotation

marks omitted). “However, an ambiguity does not exist merely because the

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 parties proffer differing interpretations of the policy language.” Buckeye State

Mut. Ins. Co. v. Carfield, 914 N.E.2d 315, 318 (Ind. Ct. App. 2009), trans. denied

(2010).

[7] If no ambiguity exists, the language of the contract is given its plain and

ordinary meaning. Bradshaw v. Chandler, 916 N.E.2d 163, 166 (Ind. 2009). “An

insurance policy that is unambiguous must be enforced according to its terms,

even those terms that limit an insurer’s liability.” Haag v. Castro, 959 N.E.2d

819, 824 (Ind. 2012) (citation and quotation marks omitted).

[8] We begin our review of the insurance contract here by ascertaining the purpose

and intent of the Businessowners Policy, and specifically Endorsement 54638.

In purchasing the Businessowners Policy, Prudential sought and received

general liability coverage for its real estate sales business located at “703 N.

Harrison Street” in Shelbyville (“Harrison Street Business Office”).

Endorsement 54638 then provides additional liability coverage for the

operations of the real estate business not otherwise provided by the

Businessowners Policy. Indeed, contrary to the Prudential Defendants’

assertion, Endorsement 54638 is an extension of coverage and not an exclusion.

Endorsement 54638 provides additional coverage, although subject to some

limitations, for bodily injury, property damage, personal injury, and advertising

injury “arising out of” “that part of a premises used by [Prudential] for general

office purposes” and “premises listed with [Prudential] for sale or rental.”

Appellant’s App. at 162. In short, the purpose and intent of Endorsement

54638, in part, is for certain coverages to follow the real estate operation outside

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 of its already-covered Harrison Street Business Office, to premises listed by

Prudential for sale or rental.

[9] In moving for judgment on the pleadings, the Powerses and the Prudential

Defendants argued that, based upon the declarations pages of the

Businessowners Policy, Endorsement 54638 was limited in its application to

the Harrison Street Business Office, and therefore could not be relied upon to

deny coverage for personal injuries sustained at the Blanchard Street Property.

The declarations pages of the Businessowners Policy contain a summary of the

list of coverage limits as well as a list of applicable forms. The forms are listed

in categories titled “Forms that Apply to All Locations,” “Additional Forms for

This Location,” and “Additional Forms for this Building.” Id. at 91-92.

Endorsement 54638 is listed only under the “Additional Forms for This

Building” category. The only “building” or “location” referenced on the

declarations pages is the address of the Harrison Street Business Office. Thus,

the Powerses and the Prudential Defendants claim that Endorsement 54638 is

inapplicable to the Blanchard Street Property “location” where Gerald was

injured.

[10] The Powerses and the Prudential Defendants assert that if Property-Owners

wished for Endorsement 54638 to apply to a “building” or “location” other

than the Harrison Street Business Office, such as the Blanchard Street Property,

Property-Owners should have included Endorsement 54638 in the list of forms

that apply to “All Locations.” This argument wholly misses the mark. First,

whether a form applies to “All Locations,” “This Location,” or “This Building”

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 is irrelevant in this case because there is only one “location” and only one

“building” referenced in this insurance policy: the Harrison Street Business

Office. 3

[11] The category under which Property-Owners has placed Endorsement 54638 on

the declarations pages is of no consequence here. In arguing that Endorsement

54638 is inapplicable to the Blanchard Street Property, the Powerses and the

Prudential Defendants appear to equate the term “location” used on the

declarations pages with the term “premises” used in Endorsement 54638. A

careful reading of the Businessowners Policy indicates that the terms “location”

and “premises” mean very different things in these contexts. As already stated,

there is only one “location” insured by this insurance policy, and that location

is the Harrison Street Business Office. Endorsement 54638 extends additional

coverage to certain “premises,” including “premises listed with [Prudential] for

sale or rental.” Id. at 162. Accordingly, Endorsement 54638 is not limited in its

application to the Harrison Street Business Office. We reject the suggestion

that we should read the unambiguous term “location” as used on the

declarations pages in a vacuum and without reference to the language used in

Endorsement 54638. It is well settled that insurance policy provisions,

including endorsements, must be read together, construed, and reconciled with

the policy to give effect to the whole. Matsen, 953 N.E.2d at 569.

3
Presumably, if Prudential had multiple business offices and/or buildings, the declarations pages would have
had multiple addresses listed as “locations.”

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[12] If we were to read the Businessowners Policy as the Powerses and the

Prudential Defendants suggest, Endorsement 54638 would be a meaningless

provision as it would provide no coverage at all for injuries arising out of

premises listed by Prudential for sale or rental. It is axiomatic that if a

provision is inapplicable to a premises to deny coverage as argued by the

Powerses and the Prudential Defendants, it would also be inapplicable to

provide coverage, meaning that Endorsement 54638 would be an illusory

endorsement. Clearly, a policy endorsement drafted for real estate operations

and meant specifically to cover premises listed for sale or rental would not be

limited in its application to the realty business office. That would render the

endorsement’s coverage meaningless and without effect. Our charge is to

construe the language of a contract so as not to render any words, phrases, or

terms ineffective or meaningless. Thomson Inc. v. Ins. Co. of N. Am., 11 N.E.3d

982, 994 (Ind. Ct. App. 2014), trans. denied (2015).

[13] By its unambiguous terms, the insurance coverage provided by Endorsement

54638 is not limited to the Harrison Street Business Office. Thus, accepting as

true the well-pleaded facts alleged in Property-Owners’ complaint for

declaratory judgment, we cannot say that it is clear from the face of the

complaint that under no circumstances could relief be granted. Accordingly,

judgment on the pleadings against Property-Owners is not warranted. We

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 reverse the trial court’s entry of judgment on the pleadings and remand for

further proceedings consistent with this opinion. 4

[14] Reversed and remanded.

Brown, J., and Pyle, J., concur.

4
We conclude only that the coverage provided by Endorsement 54638 is not limited to the Harrison Street
Business Office and that Endorsement 54638 applies and provides coverage, subject to some limitations, to
premises listed by Prudential for sale or rental. We need not and do not reach the question of whether
Endorsement 54638 extends liability coverage for the injuries sustained on the Blanchard Street Property
under the circumstances presented in this case. We also note that in its complaint for declaratory judgment,
in addition to Endorsement 54638, Property-Owners identified additional bases that it claimed could support
the denial of coverage. We make no conclusions regarding those additional bases.

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