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Insurer's policy breach a case of first impression

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In a case of first impression for state courts, the Indiana Court of Appeals affirmed a jury verdict against an insurance company in a breach of contract case, ruling the insured's failure to repair his building following a fire was the fault of the insurance company.

In Rockford Mutual Insurance Co. v. Terrey E. Pirtle, No. 77A01-0802-CV-94, a dispute arose over Terrey Pirtle's failure to repair or replace a historic building he owned in Terre Haute. He rented it out while restoring it and insured the building through Rockford Mutual. It was damaged in an accidental fire in November 2000.

Pirtle rejected a claim to settle for $80,000 because it wasn't enough to satisfy his mortgage or repair the building; his policy limit under Coverage A was $193,000. Rockford told Pirtle he would only be entitled to payment under the replacement cost coverage once repairs or replacement of the building had been completed. It also offered him nearly $70,000 with the rest of the $193,000 to be paid when the property was repaired.

Pirtle filed suit for breach of contract; Rockford paid him more than $86,000 for the building's actual cash value and moved for summary judgment alleging that was all he was entitled to because the building hadn't been repaired or replaced. In October 2007, a jury found Rockford breached the contract and awarded Pirtle $124,149.55 under the insurance policy and $406,136.58 in consequential damages.

On appeal, Rockford argued the terms of the policy are clear and unambiguous that all Pirtle was entitled to receive from the insurer was the $86,000 because he didn't follow the terms of the policy. But Pirtle was in a no-win situation, wrote Judge Kirsch, and had little choice but to use the funds from Rockford to satisfy the mortgage at a loss to the mortgage holder, which left nothing to start the repairs.

Indiana courts have yet to address the issue of whether an insured could be excused from performance of a condition precedent contained in a fire insurance policy. Using cases from the Court of Appeals of Michigan and the District Court in the Southern District of New York, the appellate court ruled Pirtle was excused from performing the condition precedent because Rockford's actions hindered his performance.

"We acknowledge that other courts, including our own Seventh Circuit, have held that the contract must be strictly construed to require the completion of the repair or replacement before liability under the replacement cost endorsement attaches," wrote Judge Kirsch. "... However, we are convinced that equitable principles win the day in this situation; otherwise, the repair or replacement endorsement paid for by Pirtle would be rendered illusory."

The Court of Appeals also rejected Rockford's argument that its liability should be capped at the policy limits, based on Indiana Insurance Co. v. Plummer, 590 N.E.2d 1085 (Ind. Ct. App. 1992). Rockford's motive for delayed payment is irrelevant, so its good faith argument failed, wrote Judge Kirsch. In addition, the damages awarded to Pirtle flow directly from and are proximately caused by Rockford's failure to pay. The judges also ruled the award was within the scope of the evidence.

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  1. Employers should not have racially discriminating mind set. It has huge impact on the society what the big players do or don't do in the industry. Background check is conducted just to verify whether information provided by the prospective employee is correct or not. It doesn't have any direct combination with the rejection of the employees. If there is rejection, there should be something effective and full-proof things on the table that may keep the company or the people associated with it in jeopardy.

  2. Unlike the federal judge who refused to protect me, the Virginia State Bar gave me a hearing. After the hearing, the Virginia State Bar refused to discipline me. VSB said that attacking me with the court ADA coordinator had, " all the grace and charm of a drive-by shooting." One does wonder why the VSB was able to have a hearing and come to that conclusion, but the federal judge in Indiana slammed the door of the courthouse in my face.

  3. I agree. My husband has almost the exact same situation. Age states and all.

  4. Thanks Jim. We surprised ourselves with the first album, so we did a second one. We are releasing it 6/30/17 at the HiFi. The reviews so far are amazing! www.itsjustcraig.com Skope Mag: It’s Just Craig offers a warm intimacy with the tender folk of “Dark Corners”. Rather lovely in execution, It’s Just Craig opts for a full, rich sound. Quite ornate instrumentally, the songs unfurl with such grace and style. Everything about the album feels real and fully lived. By far the highlight of the album are the soft smooth reassuring vocals whose highly articulate lyrics have a dreamy quality to them. Stories emerge out of these small snapshots of reflective moments.... A wide variety of styles are utilized, with folk anchoring it but allowing for chamber pop, soundtrack work, and found electronics filtering their way into the mix. Without a word, It’s Just Craig sets the tone of the album with the warble of “Intro”. From there things get truly started with the hush of “Go”. Building up into a great structure, “Go” has a kindness to it. Organs glisten in the distance on the fragile textures of “Alone” whose light melody adds to the song’s gorgeousness. A wonderful bloom of color defines the spaciousness of “Captain”. Infectious grooves take hold on the otherworldly origins of “Goodnight” with precise drum work giving the song a jazzy feeling. Hazy to its very core is the tragedy of “Leaving Now”. By far the highlight of the album comes with the closing impassioned “Thirty-Nine” where many layers of sound work together possessing a poetic quality.

  5. Andrew, if what you report is true, then it certainly is newsworthy. If what you report is false, then it certainly is newsworthy. Any journalists reading along??? And that same Coordinator blew me up real good as well, even destroying evidence to get the ordered wetwork done. There is a story here, if any have the moxie to go for it. Search ADA here for just some of my experiences with the court's junk yard dog. https://www.scribd.com/document/299040062/Brown-ind-Bar-memo-Pet-cert Yep, drive by shootings. The lawyers of the Old Dominion got that right. Career executions lacking any real semblance of due process. It is the ISC way ... under the bad shepard's leadership ... and a compliant, silent, boot-licking fifth estate.

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