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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. So if I am reading it right, only if and when African American college students agree to receive checks labeling them as "Negroes" do they receive aid from the UNCF or the Quaker's Educational Fund? In other words, to borrow from the Indiana Appellate Court, "the [nonprofit] supposed to be [their] advocate, refers to [students] in a racially offensive manner. While there is no evidence that [the nonprofits] intended harm to [African American students], the harm was nonetheless inflicted. [Black students are] presented to [academia and future employers] in a racially offensive manner. For these reasons, [such] performance [is] deficient and also prejudice[ial]." Maybe even DEPLORABLE???

  2. I'm the poor soul who spent over 10 years in prison with many many other prisoners trying to kill me for being charged with a sex offense THAT I DID NOT COMMIT i was in jail for a battery charge for helping a friend leave a boyfriend who beat her I've been saying for over 28 years that i did not and would never hurt a child like that mine or anybody's child but NOBODY wants to believe that i might not be guilty of this horrible crime or think that when i say that ALL the paperwork concerning my conviction has strangely DISAPPEARED or even when the long beach judge re-sentenced me over 14 months on a already filed plea bargain out of another districts court then had it filed under a fake name so i could not find while trying to fight my conviction on appeal in a nut shell people are ALWAYS quick to believe the worst about some one well I DID NOT HURT ANY CHILD EVER IN MY LIFE AND HAVE SAID THIS FOR ALMOST 30 YEARS please if anybody can me get some kind of justice it would be greatly appreciated respectfully written wrongly accused Brian Valenti

  3. A high ranking Indiana supreme Court operative caught red handed leading a group using the uber offensive N word! She must denounce or be denounced! (Or not since she is an insider ... rules do not apply to them). Evidence here: http://m.indianacompanies.us/friends-educational-fund-for-negroes.364110.company.v2#top_info

  4. A high ranking bureaucrat with Ind sup court is heading up an organization celebrating the formal N word!!! She must resign and denounce! http://m.indianacompanies.us/friends-educational-fund-for-negroes.364110.company.v2#top_info

  5. ND2019, don't try to confuse the Left with facts. Their ideologies trump facts, trump due process, trump court rules, even trump federal statutes. I hold the proof if interested. Facts matter only to those who are not on an agenda-first mission.

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