American Access Casualty Company v. Cincinnati Insurance Company

FILED
May 16 2018, 8:54 am

CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court

ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEE
Ryan O. Farner Richard R. Skiles
Thomas E. Rosta Carlo T. Girolamo
Metzger Rosta, LLP Skiles Detrude
Noblesville, Indiana Indianapolis, Indiana

IN THE
COURT OF APPEALS OF INDIANA

American Access Casualty May 16, 2018
Company, Court of Appeals Case No.
Appellant-Defendant, 29A02-1712-CT-2792
Appeal from the Hamilton
v. Superior Court
The Honorable Jonathan Brown,
Cincinnati Insurance Company, Judge
Appellee-Plaintiff. Trial Court Cause No.
29D02-1312-CT-11485

Riley, Judge.

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 STATEMENT OF THE CASE
[1] Appellant-Defendant, American Access Casualty Company (American Access),

appeals the trial court’s denial of its motion for summary judgment on

Appellee-Plaintiff’s, Cincinnati Insurance Company (Cincinnati Insurance),

third party Complaint for declaratory judgment.

[2] We affirm.

ISSUE
[3] American Access presents us with one issue on appeal, which we restate as:

Whether the business use exception in American Access’ insurance policy bars

coverage to Cincinnati Insurance.

FACTS AND PROCEDURAL HISTORY
[4] On August 4, 2013, Roland Hall (Hall), while riding a bicycle along

Cumberland Road, was struck by a vehicle driven by Jairiel Berfect (Berfect).

The vehicle driven by Berfect was owned by Demelece Stewart (Stewart). At

all times relevant to this case, both Berfect and Stewart were insured by

American Access under separate insurance policies. At the time of the

accident, Berfect was employed part-time by Advantage Home Health Care

(Advantage Home) as a home health aid and was scheduled to visit two

patients. When the incident occurred, Berfect had concluded one appointment

and was on her way to work her shift at a second patient’s residence.

Advantage Home “does not compensate home health aides for their travel time

to patient’s [sic] homes” or pay mileage for travel time. (Appellee’s App. Vol.
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 II, p. 30). “Home health aide employees are paid only for on premise services

performed at a patient’s residence.” (Appellee’s App. Vol. II, p. 30).

Advantage Home is insured by Cincinnati Insurance.

[5] Hall filed a complaint against Berfect and Advantage Home, alleging damages

resulting from the collision. 1 On February 6, 2016, Advantage Home tendered

its request to American Access to provide a defense to Advantage Home in the

cause against Hall. American Access did not respond to the tender request. On

October 18, 2016, in an effort to determine several coverage issues, Cincinnati

Insurance, as Advantage Home’s insurer, filed a third party Complaint for

declaratory judgment, seeking a judgment as to American Access’ defense and

indemnity obligations to Advantage Home and the priority of coverage as to the

respective Berfect and Stewart policies and Cincinnati’s insurance policy, and

asserting, in part, that American Access had a duty to defend Advantage Home

as “Advantage [Home] is an insured under the Berfect Policy[.]” (Appellant’s

App. Vol. II, p. 32).

[6] On January 27, 2017, Cincinnati Insurance filed a motion for summary

judgment with respect to the coverage issues. The trial court granted the

motion in the third party action and concluded that: (1) the American Access

policy issued to Stewart provided primary coverage for Berfect and Advantage

Home; (2) Berfect and Advantage Home were insureds under the American

1
The claims between Hall and Berfect were settled on April 18, 2017, and are not part of this appeal.

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 Access policy issued to Berfect; (3) as an insured under both the Stewart policy

and the Berfect policy, American Access owed Advantage Home a defense of

the claims brought by Hall; and (4) Berfect is not an insured under the

Cincinnati Insurance policy issued to Advantage Home.

[7] On May 2, 2017, American Access filed its motion for summary judgment,

together with a memorandum of law, and designation of evidence, contending

that American Access owed no duty to provide coverage as the policy excludes

coverage “if the insured vehicle in question is being used for business

purposes.” (Appellee’s App. Vol. II, p. 3). On September 7, 2017, Cincinnati

Insurance filed its response in opposition, memorandum of law, and

designation of evidence. On October 30, 2017, after a hearing, the trial court

issued its Order, denying American Access’ motion for summary judgment.

The trial court concluded, in pertinent part:

The American Access policy contains an exclusion from
coverage if the insured vehicle was being used for business use at
the time of a crash. The provision in question is as follows:

“This policy does not apply to and does not provide
coverage under Part A – ‘Bodily Injury Liability and
Property Damage Liability’ Coverage for: . . . (b) any
automobile while used in the delivery, or any activity
associated with delivery, of food, mail, newspapers,
magazines, or packages for an employer or business
or in any trade or business.

* * * * The [c]ourt finds the interpretation that harmonizes the
terms of this exclusion is that the exclusion applies when the

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 automobile is being used in delivery situations for a business. At
the time of the accident, Berfect was not delivering anything in
particular to her next customer. She was not using the vehicle for
the delivery of food, mail, newspapers, magazines or packages.
These are activities for which coverage would absolutely be
excluded. Berfect was using the vehicle to travel between work
locations for the benefit of her employer and herself. This fact is
not disputed by the parties.

Further, the [c]ourt must also harmonize the final clause of the
provision. In so doing, this [c]ourt interprets the final clause of
the provision to be a reference back to the delivery of goods.
Namely, the section that states “an employer or business or in
any trade or business” references back to the delivery element of
the provision, for which nothing was being physically delivered
by Berfect to the subsequent location she was reporting to for
work. Berfect was not being paid during her interim period
between job assignments nor was she delivering goods.

This [c]ourt is not holding that American Access cannot have a
business-use exception in a policy, just that such exception needs
to be set forth more clearly and not be ambiguous.

(Appellant’s App. Vol. II, pp. 23-25).

[8] American Access now appeals. Additional facts will be provided if necessary.

DISCUSSION AND DECISION
I. Standard of Review

[9] In reviewing a trial court’s ruling on summary judgment, this court stands in the

shoes of the trial court, applying the same standards in deciding whether to

affirm or reverse summary judgment. First Farmers Bank & Trust Co. v. Whorley,
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 891 N.E.2d 604, 607 (Ind. Ct. App. 2008), trans. denied. Thus, on appeal, we

must determine whether there is a genuine issue of material fact and whether

the trial court has correctly applied the law. Id. at 607-08. In doing so, we

consider all of the designated evidence in the light most favorable to the non-

moving party. Id. at 608. A fact is ‘material’ for summary judgment purposes if

it helps to prove or disprove an essential element of the plaintiff’s cause of

action; a factual issue is ‘genuine’ if the trier of fact is required to resolve an

opposing party’s different version of the underlying facts. Ind. Farmers Mut. Ins.

Group v. Blaskie, 727 N.E.2d 13, 15 (Ind. 2000). The party appealing the grant

of summary judgment has the burden of persuading this court that the trial

court’s ruling was improper. First Farmers Bank & Trust Co., 891 N.E.2d at 607.

When the defendant is the moving party, the defendant must show that the

undisputed facts negate at least one element of the plaintiff’s cause of action or

that the defendant has a factually unchallenged affirmative defense that bars the

plaintiff’s claim. Id. Accordingly, the grant of summary judgment must be

reversed if the record discloses an incorrect application of the law to the facts.

Id.

[10] We observe that, in the present case, the trial court entered findings of fact and

conclusions of law in support of its judgment. Special findings are not required

in summary judgment proceedings and are not binding on appeal.

AutoXchange.com. Inc. v. Dreyer and Reinbold, Inc., 816 N.E.2d 40, 48 (Ind. Ct.

App. 2004). However, such findings offer this court valuable insight into the

trial court’s rationale for its review and facilitate appellate review. Id.

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 II. Designated Evidence

[11] Prior to turning to the merits of this case, we need to address a contention

between both parties with respect to the evidence necessary to be included in

the Appellant’s Appendix. Contending that the sole issue before this court is

the interpretation of the policy’s exclusion clause and concerned about

“overwhelming the Court of Appeals with extra items that are completely

unnecessary to resolution of the issue,” American Access provided in its

Appendix only the chronological case summary, the trial court’s Order, the

third party Complaint, and American Access’ insurance policy. (Appellant’s

Reply Br. p. 8). American Access maintains that no other evidence is necessary

to decide the issue and therefore all other submissions are irrelevant. However,

should other evidence be required, American Access maintains that “Cincinnati

[Insurance] included all such material in their appendix.” (Appellant’s Reply

Br. p. 10).

[12] The purpose of the appendix in civil appeals it to provide us “only those parts of

the record on appeal that are necessary for the Court to decide the issues

presented.” Ind. Appellate Rule 50(A)(1). “The appellant’s Appendix shall

contain . . . copies of the following documents . . . (f) pleadings and other

documents from the Clerk’s Record in chronological order that are necessary

for resolution of the issues raised on appeal.” App. R. 50(A)(2)(f). When

reviewing the grant of a motion for summary judgment, we may consider only

those portions of the pleadings, depositions, and any other matter specifically

designated to the trial court for purposes of the motion for summary judgment.

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 SLR Plumbing & Sewer, Inc. v. Turk, 757 N.E.2d 193, 198 (Ind. Ct. App. 2001).

Thus, when appealing the grant or denial of a motion for summary judgment, it

is incumbent on the appellant to include “within their appellant’s appendix all

documents relating to the disposition of the motion for summary judgment,

including any documents that [appellee] designated and filed with the trial

court.” Kelly v. Levandowski, 825 N.E.2d 850, 856 (Ind. Ct. App. 2005), trans.

denied. In other words, American Access’ Appendix falls woefully short as it

omits the motion for summary judgment, the response thereto, the parties’

respective memoranda, and the designated evidence. Even though Cincinnati

Insurance submitted an Appellee’s Appendix, which was complete and

contained all designated materials necessary for this court’s review, we caution

American Access that it is the Appellant’s obligation to present an adequate

record on appeal to permit a fair and intelligent review of the issue before us.

See Rausch v. Reinhold, 716 N.E.2d 993, 1002 (Ind. Ct. App. 1999), trans. denied.

II. Exclusion of Coverage

[13] Turning to the merits of American Access’ argument, the insurance company

contends that although Cincinnati Insurance is recognized as an insured under

its policy, coverage is nevertheless precluded due to the business use exclusion.

Insurance policies are governed by the same rules of construction as other

contracts. Briles v. Wausau Ins. Companies, 858 N.E.2d 208, 213 (Ind. Ct. App.

2006). As with other contracts, the interpretation of an insurance policy is a

question of law. Id. When interpreting an insurance policy, our goal is to

ascertain and enforce the parties’ intent as manifested in the insurance contract.

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 Id. We construe the insurance policy as a whole and consider all of the

provisions of the contract and not just the individual words, phrases or

paragraphs. Id. If the language is clear and unambiguous, we give the language

its plain and ordinary meaning. Id. An ambiguity exists where a provision is

susceptible to more than one interpretation and reasonable persons would differ

as to its meaning. Id. However, an ambiguity does not exist merely because

the parties proffer differing interpretations of the policy language. Id. We must

accept an interpretation of the contract language that harmonizes the

provisions, rather than one that supports conflicting versions of the provisions.

Id. Additionally, the power to interpret contracts does not extend to changing

their terms and we will not give insurance policies an unreasonable construction

to provide additional coverage. Id.

[14] In the case at bar, the insurance policy excludes from coverage:

Any automobile while used in the delivery, or any activity
associated with delivery, of food, mail, newspapers, magazines,
or packages for an employer or business or in any trade or
business[.]

(Appellant’s App. Vol. II, p. 41). Focusing on the language of the business use

exclusion, American Access contends that “[t]he first few clauses of the

exclusion are meant to identify specific instances the exclusion is meant to

cover (i.e. delivery of food, mail, etc.) and then the last clause is meant as a

catch all to cover all other non-listed trade or business activities (i.e. or in any

trade or business).” (Appellant’s Br. p. 7). Claiming that Berfect was using the

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 vehicle for business at the time of the collision, American Access maintains that

it can deny coverage. Like the trial court, we are not persuaded.

[15] If the exclusion, as American Access claims, bars coverage every time a vehicle

is being used for business purposes, it logically includes the situation when the

vehicle is being used for delivery for a business. Such interpretation would

render the beginning of the exclusion superfluous and meaningless. Rather, in

order to harmonize all the terms of the exclusion, we find that the final clause

“any trade or business”—especially in the absence of a comma—references

back to the initial part of the clause, “delivery, or any activity associated with

delivery[.]” (Appellant’s App. Vol. II, p. 41). As such, no coverage is offered

when the vehicle is used in the delivery of items for an employer or business or

in a trade or business—with ‘business’ qualifying ‘employer’ and ‘trade.’

[16] Here, it is undisputed that Berfect was not delivering anything. At the time of

the accident, she was driving from one patient to the next. Moreover, even if

we were to interpret the exclusion as encouraged by American Access, the

business use exclusion would still not bar coverage. Pursuant to her

employment with Advantage Home, Berfect’s traveling expenses are not

reimbursed; instead, she is paid only for on-premises services performed at a

patient’s residence. Thus, her time and expense to drive from one patient to the

next are not within her employment remuneration. Accordingly, in the

situation before us, the business use exclusion of American Access’ policy has

no application. “It is well settled law that a condition or exclusion in an

insurance policy must clearly and unmistakably bring within its scope the

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 particular act or omission that will bring the condition or exclusion into play in

order to be effective, and coverage will not be excluded or destroyed by an

exclusion or condition unless such clarity exists.” Asbury v. Indiana Union Mut.

Ins. Co., 441 N.E.2d 232, 241 (Ind. Ct. App. 1982). Therefore, we affirm the

trial court’s denial of American Access’ motion for summary judgment. 2

CONCLUSION
[17] Based on the foregoing, we conclude that the business use exception in

American Access’ insurance policy is ambiguous and does not bar coverage to

Cincinnati Insurance.

[18] Affirmed.

[19] May, J. and Mathias, J. concur

2
An unpublished memorandum decision by the Appellate Court of Illinois in American Access Cas. Co. v.
Rodriguez, 2014 WL 527307 (Ill Ct. App., Febr. 6, 2014), analyzed the same exclusion under nearly identical
circumstances and rejected the same argument made by American Access in the instant case. Rodriguez was
driving her personal vehicle from one meeting for her employer to another meeting when she struck a
pedestrian. In affirming the trial court’s conclusion that the exclusion was ambiguous, the Appellate Court of
Illinois addressed the ambiguity in the exclusion as follows:
At first glance, it appears the policy exclusion at issue here only encompasses a delivery-use
exclusion to coverage, as each separate exclusion appears to be separated by subparagraphs
and not combined within subparagraphs. However, a closer look at the language of
subsection (b) reveals that it is unclear whether the phrase “or in any trade or business” is
intended to be separate from the rest of the delivery-use exclusion encompassed in
subsection (b), thereby acting as a broad business-use exclusion, or whether the “or in any
trade or business” phrase modifies the language in subsection (b) to include exclusions on
deliveries in “any trade or business.” As such, we find that the language if the exclusion in
subsection (B) of the [American Access] policy is susceptible to more than one reasonable
interpretation and, therefore, is ambiguous.
Id. at 3.

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