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State Farm Fire & Cas. Co. v. Niswander

Court of Appeals of Indiana

April 9, 2014

STATE FARM FIRE & CASUALTY COMPANY a/s/o KENNETH BURKHART, Appellant/Plaintiff,
v.
H. H. NISWANDER, Appellee/Defendant

APPEAL FROM THE HUNTINGTON CIRCUIT COURT. The Honorable Thomas M. Hakes, Judge. Cause No. 35C01-1012-CT-1326.

ATTORNEY FOR APPELLANT: MICHAEL G. SMITH, Kahn, Dees, Donovan & Kahn, LLP, Evansville, Indiana.

ATTORNEYS FOR APPELLEE: JAMES J. SHEA, SR., DANIEL J. PALMER, ANDREW S. WILLIAMS, Fort Wayne, Indiana.

VAIDIK, Chief Judge. RILEY, J., and MAY, J., concur.

Page 296

OPINION

VAIDIK, Chief Judge

Case Summary

State Farm appeals the trial court's award of attorney's fees against it for filing a groundless lawsuit. Before the filing of its complaint against H.H. Niswander, State Farm received a report from its experts about the cause and origin of the fire involved in this case. There was no evidence in the report that H.H. Niswander was negligent or caused the fire. For two-and-a-half years, State Farm continued to litigate its claim against H.H. Niswander requiring it to incur attorney's fees. Even after State Farm's expert at a deposition testified that H.H. Niswander was not at fault, State Farm refused to dismiss the claim until the court dismissed it. We affirm the trial court's dismissal and award of attorney's fees to H.H. Niswander.

Facts and Procedural History

In January 2010 Kenneth Burkhart drove his 2006 GMC truck and parked it in his attached garage. After a short period of time, he noticed smoke emanating from his garage. He went into the garage and noticed that flames were coming from under the hood. The fire spread and eventually engulfed the garage, destroying its contents, three other cars, and a portion of his house.

According to Burkhart, the last people to enter the engine compartment were employees of H.H. Niswander, a dealership that had performed an oil change on his truck about one week before the fire.[1]

Approximately two weeks after the accident, Timothy Herndon and Walter Herndon, employed by Herndon & Associates, investigated and determined the cause of the fire. After going to Burkhart's house twice and performing a thorough investigation, they prepared a cause-and-origin report. The report concluded in February 2010, ten months before State Farm filed its complaint against H.H. Niswander, that:

Having completed an examination of the vehicle, reviewed an interview obtained from the insured who was an eyewitness to the fire, conducted research pertaining

Page 297

to the vehicle in question, reviewed the investigation with Master Mechanic Edward Nightingale of this office and based upon all of the information known at the time of the preparation of this report, it is the opinion of this Investigator that the fire was an accidental combustible fluid fire. It is further the opinion of this Investigator that the fire originated in the ignition [as a result] of oil leaking from the valve cover/gasket on the right or passenger's side engine onto hot surfaces of the manifold and upon ignition the fire extended upward and outward from that location causing the damage present. The fire is classified as an accidental fire.

Appellee's App. p. 41.

After Burkhart filed a claim with State Farm, he assigned and transferred his right to pursue recovery against H.H. Niswander to State Farm. State Farm filed a complaint against H.H. Niswander in December 2010 alleging that it was " negligent, reckless, and careless in service, thereby causing the [fire]." Id. at 2. State Farm also ...


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