ILNews

COA: insurer owed duty to defend

Jennifer Nelson
January 1, 2008
Keywords
Back to TopCommentsE-mailPrintBookmark and Share
After nearly 10 years of litigation, the Indiana Court of Appeals has reversed a grant of summary judgment in favor of an insurance company because the company couldn't show it was prejudiced by a late notice from its insured as a matter of law.

In the unanimous 27-page opinion, Tri-Etch Inc., et al v. Cincinnati Insurance Co., No. 49A02-0709-CV-827, the appellate court ruled in favor of the appellants-plaintiffs in this appeal - Tri-Etch, which provides security services; the estate of Michael Young; and Scottsdale Insurance Co., which provided insurance to Tri-Etch with a $1 million limit of liability.

The back-and-forth litigation between Tri-Etch, the estate, and Scottsdale and Cincinnati Insurance Co., which also provided a commercial general liability (CGL) and umbrella policy to Tri-Etch, began in 1999 after the estate filed a complaint against Tri-Etch.

Tri-Etch provided security for Muncie Liquors and would call a store's general manager if the store's night alarm wasn't set within 30 minutes of closing. Michael Young, an employee at the liquor store, was found beaten outside of the store after Tri-Etch called the store's owner at 3:15 a.m. The store closed at midnight and the alarm wasn't set, but Tri-Etch didn't call the general manager to make sure everything was OK at the store until 3:15 a.m. Young subsequently died of his injuries, and the complaint alleged he would have lived had Tri-Etch called at 12:30 a.m. once it realized the alarm wasn't set.

At issue in this case are two orders granted by Marion County trial courts. In 2006, the first order granted partial summary judgment in favor of Tri-Etch and the appellants on the bad faith counterclaim brought by Cincinnati. It granted partial summary judgment to the appellants finding that Young's death is covered under Cincinnati's CGL and umbrella policies and denied Scottsdale and Cincinnati's motions for summary judgment regarding Scottsdale's claim to recover 50 percent of the legal fees and costs Scottsdale paid to defend Tri-Etch.

Cincinnati claimed it didn't learn of the litigation until 2004, just before the claim was to go to trial. The insurance company informed Tri-Etch that the estate's claim wasn't covered by either of its policies with Cincinnati, so it wouldn't be responsible to pay a portion of the $2.5 million in damages the estate won against Tri-Etch.

The second order issued in 2007 granted summary judgment in favor of Cincinnati and ordered that Tri-Etch's late notice to Cincinnati was unreasonably late as a matter of law, and due to the prejudice arising from the untimely notice, the company owes no coverage or indemnity to Tri-Etch.

The Indiana Court of Appeals determined that Cincinnati wasn't prejudiced by Tri-Etch's allegedly late notice because the insurance company consistently maintained Tri-Etch wasn't entitled to coverage for the claim, wrote Chief Judge John Baker. As a result, the appellate court reversed the grant of summary judgment in favor of Cincinnati in the second order and remanded with instructions to enter summary judgment in favor of the appellants.

Regarding the first order, the judges concluded Tri-Etch is entitled to coverage pursuant to both Cincinnati's CGL and umbrella policies, requiring Cincinnati to be responsible for $1.5 million in damages the estate won.

The court also remanded the issue of Cincinnati's liability for defense costs to Scottsdale because Scottsdale defended Tri-Etch from the start of the claim.

"Because we have concluded that coverage existed under Cincinnati's policies, each of which contained duty-to-defend provisions, it logically follows that Cincinnati must pay a portion of the costs Scottsdale incurred while defending Tri-Etch during the liability litigation," the chief judge wrote.

The appellate court remanded the issue to the trial court to determine when Cincinnati received notice of the claim to determine the amount of reasonable defense costs Cincinnati should pay.
ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. "Am I bugging you? I don't mean to bug ya." If what I wrote below is too much social philosophy for Indiana attorneys, just take ten this vacay to watch The Lego Movie with kiddies and sing along where appropriate: https://www.youtube.com/watch?v=etzMjoH0rJw

  2. I've got some free speech to share here about who is at work via the cat's paw of the ACLU stamping out Christian observances.... 2 Thessalonians chap 2: "And we also thank God continually because, when you received the word of God, which you heard from us, you accepted it not as a human word, but as it actually is, the word of God, which is indeed at work in you who believe. For you, brothers and sisters, became imitators of God’s churches in Judea, which are in Christ Jesus: You suffered from your own people the same things those churches suffered from the Jews who killed the Lord Jesus and the prophets and also drove us out. They displease God and are hostile to everyone in their effort to keep us from speaking to the Gentiles so that they may be saved. In this way they always heap up their sins to the limit. The wrath of God has come upon them at last."

  3. Did someone not tell people who have access to the Chevy Volts that it has a gas engine and will run just like a normal car? The batteries give the Volt approximately a 40 mile range, but after that the gas engine will propel the vehicle either directly through the transmission like any other car, or gas engine recharges the batteries depending on the conditions.

  4. Catholic, Lutheran, even the Baptists nuzzling the wolf! http://www.judicialwatch.org/press-room/press-releases/judicial-watch-documents-reveal-obama-hhs-paid-baptist-children-family-services-182129786-four-months-housing-illegal-alien-children/ YET where is the Progressivist outcry? Silent. I wonder why?

  5. Thank you, Honorable Ladies, and thank you, TIL, for this interesting interview. The most interesting question was the last one, which drew the least response. Could it be that NFP stamps are a threat to the very foundation of our common law American legal tradition, a throwback to the continental system that facilitated differing standards of justice? A throwback to Star Chamber’s protection of the landed gentry? If TIL ever again interviews this same panel, I would recommend inviting one known for voicing socio-legal dissent for the masses, maybe Welch, maybe Ogden, maybe our own John Smith? As demographics shift and our social cohesion precipitously drops, a consistent judicial core will become more and more important so that Justice and Equal Protection and Due Process are yet guiding stars. If those stars fall from our collective social horizon (and can they be seen even now through the haze of NFP opinions?) then what glue other than more NFP decisions and TRO’s and executive orders -- all backed by more and more lethally armed praetorians – will prop up our government institutions? And if and when we do arrive at such an end … will any then dare call that tyranny? Or will the cost of such dissent be too high to justify?

ADVERTISEMENT