FILED
Oct 30 2018, 6:31 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE
Stephen C. Wheeler Douglas A. Mulvaney
Smith Fisher Maas Howard & Lloyd, David T. Stutsman
P.C. Elkhart, Indiana
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Auto-Owners Insurance October 30, 2018
Company, Court of Appeals Case No.
Appellant-Defendant, 18A-CT-852
Appeal from the Elkhart Superior
v. Court
The Honorable Charles Carter
William Long, as Administrator Wicks, Judge
of the Estate of Theodore Long, Trial Court Cause No.
and Ellen Long, Individually, 20D05-1706-CT-142
Appellees-Plaintiffs,
______________________________
Dean Loucks and The Art of
Design,
Defendants.1
1
While neither Loucks nor The Art of Design participates in this appeal, Indiana Appellate Rule 17(A)
provides that a party of record in the trial court “shall be a party on appeal.”
Court of Appeals of Indiana | Opinion 18A-CT-852 | October 30, 2018 Page 1 of 7
Bradford, Judge.
Case Summary
[1] While working at a United States Postal Service processing facility, Theodore
Long was exposed to a hazardous substance shipped by The Art of Design (“the
Insured”) in violation of certain postal regulations. This appeal arises out of a
declaratory judgment action filed by Long’s Estate (“the Estate”) to determine
the applicable limits of the Insured’s commercial general liability insurance
policy (“the Policy”) issued by Auto-Owners Insurance Company (“Auto-
Owners”). The parties filed competing motions for summary judgment, with
Auto-Owners arguing that the applicable Policy limits were $1,000,000 and the
Estate arguing that the applicable Policy limits were $2,000,000. The trial court
granted summary judgment in favor of the Estate, finding that the $2,000,000
Policy limits applied. Because we conclude that the $1,000,000 policy limits
apply, we reverse and remand with instructions for the trial court to enter
judgment in favor of Auto-Owners.
Facts and Procedural History
[2] In February of 2009, an employee of the Insured mailed a box containing ten
bottles of a chemical product known as Medium Reducer AMR-2712 (“the
Reducer”) to an individual located in Florida. The Reducer contained toxic
chemicals such as toluene. During the shipping process, the box was passed
Court of Appeals of Indiana | Opinion 18A-CT-852 | October 30, 2018 Page 2 of 7
through a conveyor system known as a secondary induction-singulator (“the
Singulator”) at a Postal Service processing facility in Allen Park, Michigan.
[3] While passing through the Singulator, the box broke open and the bottles
spilled out of the box. One of the bottles was damaged and leaked onto a
conveyor belt, releasing toxic fumes. As he worked to clean up the spill, Long
observed that the box was not labeled as containing hazardous materials and
had been sealed only by a piece of masking tape.
[4] During the clean-up process, Long was overcome by the fumes and later went
to the hospital. The Estate claims that he was permanently disabled as a result
of injuries sustained when he was exposed to the chemical fumes. The Estate
also claims that the exposure to the Reducer was a direct and proximate cause
of his death on June 24, 2016.
[5] After investigating the spill, Postal Service employees determined that the
Insured had violated Postal Service regulations relating to both the labeling and
packaging of hazardous materials. Specifically, the Insured had failed to
properly label the box to indicate that it contained hazardous materials and to
package the Reducer in such a way as to prevent the box from breaking and the
bottles from leaking. Had the box been properly labeled, it would not have
been put through the Singulator but, rather, would have been hand-sorted.
[6] On June 19, 2017, the Estate filed a declaratory judgment action seeking a
determination of the applicable Policy limits provided in the Policy. The Estate
Court of Appeals of Indiana | Opinion 18A-CT-852 | October 30, 2018 Page 3 of 7
and Auto-Owners filed competing summary judgment motions. Following a
hearing, the trial court entered summary judgment in favor of the Estate.
Discussion and Decision
[7] Auto-Owners appeals from the trial court’s grant of summary judgment to the
Estate.
Our standard of review for a trial court’s grant of a motion for
summary judgment is well[-]settled. Summary judgment is
appropriate only where there is no genuine issue of material fact
and the moving party is entitled to judgment as a matter of law.
All facts and reasonable inferences drawn from those facts are
construed in favor of the nonmovant. Our review of a summary
judgment motion is limited to those materials designated to the
trial court. We must carefully review a decision on summary
judgment to ensure that a party was not improperly denied its
day in court.
MacGill v. Reid, 850 N.E.2d 926, 928 (Ind. Ct. App. 2006) (internal citations
omitted). “The fact that the parties made cross motions for summary judgment
does not alter our standard of review.” Id. “When considering cross motions
for summary judgment, we consider each motion separately, construing the
facts most favorably to the non-moving party in each instance and determine
whether the moving party is entitled to judgment as a matter of law.” Id. at
929.
[8] Auto-Owners contends that the trial court erred in interpreting the Policy.
Specifically, Auto-Owners claims that the trial court erred in finding that there
Court of Appeals of Indiana | Opinion 18A-CT-852 | October 30, 2018 Page 4 of 7
were two occurrences under the terms of the Policy. It is undisputed that the
applicable Policy limits in this case are directly related to the number of
occurrences causing injury. The parties agree that if there was only one
occurrence, the $1,000,000 limit applies, and if there were two occurrences, the
$2,000,000 limit applies.
[9] “Interpretation of an insurance contract is a question of law which is
particularly well-suited for disposition by summary judgment.” Adkins v.
Vigilant Ins. Co., 927 N.E.2d 385, 389 (Ind. Ct. App. 2010). “We review an
insurance policy using the same rules of interpretation applied to other
contracts, namely if the language is clear and unambiguous we will apply the
plain and ordinary meaning.” Id. “An insurance policy is ambiguous where a
provision is susceptible to more than one interpretation and reasonable persons
would differ as to its meaning.” Id. “An ambiguity, however, does not exist
merely because the parties favor different interpretations.” Id. Upon review,
we accept “an interpretation of the contract language that harmonizes the
provisions rather than the one which supports a conflicting version of the
provisions.” Id. The power to interpret insurance contracts “does not extend to
changing their terms, and we will not give insurance policies an unreasonable
construction to provide added coverage.” Id.
[10] The Policy at issue defines an occurrence as “an accident, including continuous
or repeated exposure to substantially the same general harmful conditions.”
Appellant’s App. Vol. II p. 43. We considered an identical definition of an
occurrence in Thomson Inc. v. Insurance Co. of North America, 11 N.E.3d 982 (Ind.
Court of Appeals of Indiana | Opinion 18A-CT-852 | October 30, 2018 Page 5 of 7
Ct. App. 2014). In Thomson, we adopted the “cause theory” of determining the
number of occurrences causing injury, under which “the number of occurrences
is determined by referring to the cause or causes of the damages.” 11 N.E.3d at
1005 (internal citation omitted).
[11] In this case, it is undisputed that the box contained hazardous materials as
defined by Postal Service and, as a result, the Insured was required to follow
certain procedures when mailing the box. The designated materials establish
that the box was not properly labeled or packaged. The crux of the parties’
disagreement is whether the violations should be considered collectively, i.e.,
one occurrence, or separately, i.e., two occurrences.
[12] While the Insured failed to both properly label and package the box, there was
only one accident that resulted from the Insured’s failure to take appropriate
preventative measures to avoid a spill. Stated differently, although the Insured
did two things wrong in shipping the package, the wrongdoing resulted in one
spill, i.e., “one proximate, uninterrupted, and continuing cause which resulted
in” Long’s injury. See id. at 1001; see also Estate of Flemming v. Air Sunshine, Inc.,
311 F.3d 282, 297 (3d Cir. 2002) (providing that where the decedent survived a
plane crash but subsequently drowned when allegedly negligent acts caused the
plane to sink, the plane crash and the events stemming from the crash all
constituted a single accident, resulting in a single occurrence under the terms of
the applicable insurance policy). We therefore conclude there was only one
occurrence under the terms of the Policy. Accordingly, we reverse the
Court of Appeals of Indiana | Opinion 18A-CT-852 | October 30, 2018 Page 6 of 7
judgment of the trial court and remand with instructions for the court to enter
summary judgment in favor of Auto-Owners.
[13] The judgment of the trial court is reversed and remanded with instructions.
Bailey, J., and Mathias, J., concur.
Court of Appeals of Indiana | Opinion 18A-CT-852 | October 30, 2018 Page 7 of 7
Auto-Owners Insurance Company v. William Long, as Administrator of the Estate of Theodore Long, and Ellen Long, Individually, Dean Loucks and The Art of Design
Combined Opinion