FILED
Oct 16 2018, 8:50 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE
Stephen C. Wheeler Thomas M. Beeman
Smith Fisher Maas Howard & Lloyd, Beeman Law
P.C. Anderson, Indiana
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Berkshire Hathaway Homestate October 16, 2018
Insurance Company, Court of Appeals Case No.
Appellant-Defendant, 18A-PL-446
Appeal from the Madison Circuit
v. Court
The Honorable David A. Happe,
Christina Basham d/b/a Basham Judge
Family, L.P., The Honorable Kevin M. Eads,
Appellee-Plaintiff, Magistrate
Trial Court Cause No.
48C04-1704-PL-38
Voldico, LLC, Andrew Vollmer,
Standard Agencies, Inc., and
Carol J. Jenkinson,
Defendants.
Najam, Judge.
Court of Appeals of Indiana | Opinion 18A-PL-446 | October 16, 2018 Page 1 of 11
Statement of the Case
[1] Berkshire Hathaway Homestate Insurance Company (“Berkshire Hathaway”)
appeals the trial court’s denial of its motion for partial summary judgment and
grant of summary judgment for Christina Basham d/b/a Basham Family, L.P.
(“Basham”) on Basham’s complaint, which alleged that Berkshire Hathaway
had wrongfully denied insurance coverage on a detached garage.1 Berkshire
Hathaway raises one issue for our review, namely, whether the trial court erred
when it denied its motion for summary judgment and entered summary
judgment for Basham.2
[2] We affirm.
Facts and Procedural History
[3] Basham owns fifteen rental properties. Basham obtained an insurance policy
from Berkshire Hathaway to cover the rental properties, which was effective
from November 17, 2016, until November 17, 2017. The insurance policy
provided, in relevant part, as follows:
A. Coverage
1
Voldico, LLC; Andrew Vollmer; Standard Agencies, Inc.; and Carol J. Jenkinson, named defendants
below, do not participate in this appeal.
2
Basham cross appeals and asserts that the trial court erred when it concluded that the insurance policy was
ambiguous. However, because we must determine whether the contract was ambiguous in order to address
Berkshire Hathaway’s claim, we need not separately address Basham’s contention on cross-appeal.
Court of Appeals of Indiana | Opinion 18A-PL-446 | October 16, 2018 Page 2 of 11
[Berkshire Hathaway] will pay for direct physical loss of or
damage to Covered Property at the premises described in the
Declarations caused by or resulting from any Covered Cause
of Loss.
1. Covered Property
Covered Property, as used in this Coverage Part, means
the type of property described in this section, A.1., and
limited in A.2, Property Not Covered, if a Limit of
Insurance is shown in the Declarations for that type of
property.
a. Building, meaning the building or structure described in
the Declarations, including:
(1) Completed additions[.]
Appellant’s App. Vol. II at 24 (bold removed). The insurance policy also
contained a section entitled “Property Not Covered,” which described various
items or categories of items that were not covered by the insurance policy.
[4] Berkshire Hathaway issued one insurance policy to cover all fifteen properties.
In addition, Berkshire Hathaway issued declarations for each individual
property. One of the covered properties is located in Elwood. The declarations
for that property provided a description of the premises and the coverage
provided. Under the “Description of Premises,” the declarations identified the
premises as “Premises Number: 15[,] Building Number: 1[.]” Id. at 23. The
declarations also included an address of 800 N. 13th St., Elwood, IN 46036,
Court of Appeals of Indiana | Opinion 18A-PL-446 | October 16, 2018 Page 3 of 11
and it listed the occupancy as “RENTAL DWELLINGS–OTHER THAN
STUDENT HOUSING.” Id.
[5] The premises in Elwood included a house and a detached garage. On
December 30, 2016, a fire burned down the garage and greatly damaged the
house. Basham filed a claim with Berkshire Hathaway for the damages.
Berkshire Hathaway paid for the damage to the house, but it denied Basham’s
claim for damage to the detached garage. In particular, Berkshire Hathaway
stated that “the detached garage does not meet the definition of Covered
Property, as outlined by the Policy. The garage was not specifically insured on
the Policy. The Policy only applies to Covered Property.” Id. at 157.
[6] On April 25, 2017, Basham filed a complaint against Berkshire Hathaway in
which she alleged that Berkshire Hathaway had wrongfully denied insurance
coverage on the detached garage. Thereafter, on July 17, Basham filed a
motion for partial summary judgment.3 In that motion, Basham alleged that
the insurance policy was unambiguous and covered the garage. In the
alternative, Basham contended that, even if the policy was ambiguous, the
ambiguous policy should be construed in her favor to cover the garage.
[7] In response, Berkshire Hathaway asserted that the detached garage was not
covered under the policy because the garage was not a completed addition.
3
Basham also included separate claims against other defendants in her complaint. But her motion for
partial summary judgment was limited to her claims against Berkshire Hathaway.
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Further, Berkshire Hathaway filed a counter motion for summary judgment in
which it contended that the policy was unambiguous and did not cover the
detached garage. In support of their respective motions for summary judgment,
both parties designated the insurance policy and declarations as evidence. After
a hearing on the cross motions for summary judgment, the trial court concluded
that the insurance policy was ambiguous and interpreted the policy in Basham’s
favor. Accordingly, the court determined that the detached garage was covered
by the policy, entered summary judgment for Basham, and denied Berkshire
Hathaway’s motion for summary judgment. This interlocutory appeal ensued.
Discussion and Decision
[8] Berkshire Hathaway contends that the trial court erred when it denied Berkshire
Hathaway’s motion for summary judgment and entered summary judgment for
Basham. Our standard of review is clear. The Indiana Supreme Court has
explained that
[w]e 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).
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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) (omission and some
alterations original to Hughley). “‘The fact that the parties have filed cross-
motions for summary judgment does not alter our standard of review, as we
consider each motion separately to determine whether the moving party is
entitled to judgment as a matter of law.’” SCI Propane, LLC v. Frederick, 39
N.E.3d 675, 677 (Ind. 2015) (quoting Reed v. Reid, 980 N.E.2d 277, 285 (Ind.
2012)).
[9] Here, the trial court entered findings of fact and conclusions thereon in its
summary judgment order. While such findings and conclusions are not
required in a summary judgment and do not alter our standard of review, they
are helpful on appeal for us to understand the reasoning of the trial court. See
Knighten v. E. Chicago Hous. Auth., 45 N.E.3d 788, 791 (Ind. 2015).
[10] Both parties agree that coverage under the insurance policy is limited to
Covered Property. But, on appeal, the parties dispute whether the detached
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garage was “Covered Property” under the terms of the policy. “The
interpretation of an insurance policy is primarily a question of law for the court,
and it is therefore a question which is particularly suited for summary
judgment.” Wagner v. Yates, 912 N.E.2d 805, 808 (Ind. 2009).
[11] It is well settled that
[i]nsurance polices are governed by the same rules of
construction as other contracts. . . . When interpreting an
insurance policy, our goal is to ascertain and enforce the parties’
intent as manifested in the insurance contract. 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.
Am. Access Cas. Co. v. Cincinnati Ins. Co., 103 N.E.3d 644, 649 (Ind. Ct. App.
2018) (internal citations omitted).
[12] “‘Policy terms are interpreted from the perspective of an ordinary policyholder
of average intelligence. If reasonably intelligent persons may honestly differ as
to the meaning of the policy language, the policy is ambiguous.’” Thomson Inc.
v. Ins. Co. of N. Am., 11 N.E.3d 982, 993 (Ind. Ct. App. 2014) (quoting Gasser v.
Downing, 967 N.E.2d 1085, 1087 (Ind. Ct. App. 2012)). “‘However, an
ambiguity does not exist merely because the parties proffer differing
interpretations of the policy language.’” Id. (quoting Buckeye State Mut. Ins. Co.
v. Carfield, 914 N.E.2d 315, 318 (Ind. Ct. App. 2009)).
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[13] The insurance policy provided that Berkshire Hathaway “will pay for direct
physical loss of or damage to Covered Property at the premises described in the
Declarations caused by or resulting from any Covered Cause of Loss.”
Appellant’s App. Vol. II at 24. The policy further defined Covered Property, in
relevant part, as the “Building, meaning the building or structure described in
the Declarations” plus any “completed additions[.]” Id. (bold removed). Thus,
we must determine whether the detached garage is covered under the policy as
the “Building” or as a “completed addition.” We first address whether the
detached garage is covered as the “Building.”
[14] The insurance policy explicitly defines the Building as “the building or structure
described in the Declarations.” Id. And the declarations for the property at
issue describe the premises as “Premises Number: 15[,] Building Number:
1[.]” Id. at 23. It further describes the occupancy as “RENTAL
DWELLINGS–OTHER THAN STUDENT HOUSING[.]” Id.4 Based on the
policy’s use of “the building or structure” in the singular, the declarations
reference to building number 1, and the fact that the declarations page
specifically describes the category of occupancy as “rental dwellings,” it is clear
that the only building described in the declarations is the residential building.
And, under the plain language of the insurance policy, only the “building or
structure described in the Declarations” is covered as the “Building.” Id.
4
The contract also included a section titled “Property Not Covered,” which contained a lengthy list of
specific items or categories of items that were not covered by the policy. There is no dispute that that section
of the policy did not specifically exclude detached garages.
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Because the garage is not the building or structure described in the declarations,
it is not covered under the policy as the “Building.”
[15] Still, Basham contends that the detached garage is covered under the policy as
the “Building” because it is a building located at the address provided in the
declarations. But the insurance policy is clear. It does not say that it covers any
building at the address. Rather, the insurance policy only covers “Covered
Property” at the premises, which is “the building or structure described in the
Declarations.” Id. (emphasis added). And, again, the declarations describe the
residential dwelling, not the garage. However, our conclusion that the detached
garage is not covered as the “Building” does not end our inquiry. We must also
consider whether the detached garage is a completed addition under the policy.
[16] The insurance policy does not define the term “completed addition,” although a
term is not ambiguous simply because it is not defined. See Thompson Inc., 11
N.E.3d at 993. Berkshire Hathaway asserts that the detached garage is not a
completed addition because it is not physically attached to the house. To
support its contention, Berkshire Hathaway relies on the definition of
“addition” found in Merriam-Webster’s online dictionary, which defines an
“addition” as “a part added (as to a building or residential section).” Merriam-
Webster, https://www.merriam-webster.com/dictionary/addition (last visited
October 2, 2018). Based on that definition and the fact that “[t]he term
‘completed additions’ is listed under the term ‘building’” in the insurance
policy, Berkshire Hathaway contends that any completed addition must be
physically attached to the building in order to be insured as “Covered
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Property.” Appellant’s Br. at 19. And because the garage is not physically
attached to the house, Berkshire Hathaway asserts that the insurance policy is
unambiguous and does not cover the garage.
[17] We cannot agree that the term “completed addition” under the policy can only
mean that a garage must be physically attached to the building to be insured.
While an addition can be defined as “a part added” to a building, Merriam-
Webster, supra, that term can also be defined as an “annex.” Black’s Law
Dictionary 46 (10th ed. 2014). And an “annex” is “a subsidiary supplementary
structure either part of or separate from a main structure.” Webster’s Third New
Int’l Dictionary 87 (2002) (emphasis added).
[18] We conclude that the term “completed addition” does not have a single
meaning. As Berkshire Hathaway suggests, a “completed addition” can refer to
a structure that is physically attached to a building. But that term can also refer
to a supplementary structure that is separate from a building. Thus, Berkshire
Hathaway’s reliance on one definition to the exclusion of another is misplaced.
An ordinary policy holder of average intelligence could interpret the term
“completed addition” to mean either an attached or separate structure. See
Thomson Inc., 11 N.E.3d at 993. Because reasonably intelligent people may
honestly differ as to the meaning of “completed addition,” that term is
ambiguous. See id.
[19] It is well settled that where there is an ambiguity, “insurance policies are to be
construed strictly against the insurer.” Id. Because the term “completed
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addition” is ambiguous, we strictly construe it against Berkshire Hathaway.
Thus, the detached garage is covered under the insurance policy, and the trial
court did not err when it entered summary judgment for Basham and when it
denied Berkshire Hathaway’s motion for summary judgment. We therefore
affirm the trial court.
[20] Affirmed.
Crone, J., and Pyle, J., concur.
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