ERIC COX and PEA COCKS CORP. d/b/a COX'S PUB, Appellants-Plaintiffs,
MAYERSTEIN-BURNELL CO., INC. d/b/a MBAH INSURANCE and JEFF CLUTE, Appellees-Defendants
APPEAL FROM THE TIPPECANOE SUPERIOR COURT. The Honorable Randy J. Williams, Judge. Cause No. 79D01-1206-CT-41.
ATTORNEY FOR APPELLANTS: JEFFREY O. MEUNIER, Carmel, Indiana.
ATTORNEYS FOR APPELLEES: CYNTHIA M. LOCKE, TARA STAPLETON LUTES, Cantrell Strenski & Mehringer, LLP, Indianapolis, Indiana.
NAJAM, Judge. BAILEY, J., and PYLE, J., concur.
STATEMENT OF THE CASE
Eric Cox and Pea Cocks Corp. d/b/a Cox's Pub (" Cox's Pub" or " the Pub" ) appeal the trial court's grant of summary judgment in favor of Jeff Clute and Mayerstein-Burnell Co., Inc. d/b/a MBAH Insurance (" MBAH" ). Cox and the Pub present two issues for our review, which we revise and restate as the following three issues:
1. Whether Cox has standing, in his individual capacity, to pursue his negligence claims in this appeal.
2. Whether Clute, as MBAH's agent, had a special relationship with Cox and Cox's Pub such that he had a duty to advise regarding the adequacy of the Pub's insurance coverage.
3. Whether, despite not having a duty to advise in the first instance, Clute nevertheless assumed that duty.
We hold that Cox had standing to pursue his negligence claims, but we apply our supreme court's recent opinion in Hughley v. State, 15 N.E.3d 1000 (Ind. 2014), and affirm the trial court's grant of summary judgment in favor of Clute and MBAH.
FACTS AND PROCEDURAL HISTORY
Cox became the president of Cox's Pub in May 2003 when his father, who had purchased the Pub in 1996, died. Julie Burton, a longtime employee of the Pub, managed the routine operations of the business. Among other things, Burton was responsible for the procurement and maintenance of business insurance, an obligation that afforded her the attendant authority to make necessary representations on behalf of the Pub.
Until May 2010, Cox's Pub maintained a business insurance policy through Society
Insurance (" Society" ) that had policy limits of $383,000 for losses to the Pub's building. During this period, in August 2008, Clute, an insurance producer for MBAH, solicited Cox's Pub with an offer to quote a business insurance policy and was referred to Burton. After a scheduled meeting, Burton informed Clute that Cox's Pub would stay with Society. The two had no further contact at that time.
Between August 2008 and May 2010, Cox's Pub settled a wrongful death lawsuit, which resulted in higher premiums under the Society policy. Cox's Pub could not afford these premiums, and, in May 2010, Burton let the Society policy lapse for failure to pay premiums. Later, in August 2010, Burton contacted Clute, told him about the Society policy's premiums, and informed him that Cox's Pub was currently uninsured. She stated that the Pub needed insurance but, due to financial difficulties, desired to keep its premiums as low as possible. The two scheduled an in-person meeting at Cox's Pub. Burton also informed Cox that, as a result of the settlement, Cox's Pub could no longer afford Society's increased premiums but that Clute could keep the Pub's premiums approximately the same as what the Pub had paid prior to the settlement.
During their meeting, Burton provided Clute with a copy of the Society policy's declarations page and requested the same coverage under a new policy. Burton also provided Clute with other information necessary for Clute to obtain a quote. Clute later summarized this information, which
included such information as the nature of the business, owner of building, and number of prior claims. Ms. Burton also provided information regarding the square footage and age and construction type of the building, any improvements, and whether [the] building has a sprinkler system, an alarm system, fire extinguishers, and deep fryers. Ms. Burton provided information regarding Cox's Pub's procedures for dealing with intoxicated persons, fight prevention, and age identification. Finally, Ms. Burton provided information regarding the amount of coverage limits Cox's Pub needed for the building and business personal property.
Appellant's App. at 64-65.
Clute submitted this information, via the Acord application, to Illinois Casualty Company, which used it to prepare a commercial building valuation report (" Valuation" ). The Valuation estimated a replacement cost value for the Pub building at $265,049. Nonetheless, following Burton's instructions to provide a quote in line with the Society policy, Clute presented Burton with a quote from Illinois Casualty with building coverage limits of $354,000 and a yearly premium of $4,032. The following day, after a conversation with Burton, Clute presented Burton with a second quote, also from Illinois Casualty, based on the Valuation. It had building coverage limits of $265,000 and a yearly premium of $3,880. Throughout the process, Burton made clear to Clute that Cox's Pub was struggling financially, needed to save money, and wanted to keep the Pub's premiums as low as possible.
The final decision regarding the Pub's coverage
belonged to Burton, and Clute
did not personally offer an opinion about the value of the Pub
building. Clute did, however, tell Burton that Illinois Casualty believed that
it could adequately insure the Pub building for $265,000. Nevertheless, Clute
did not advise Burton about which policy Cox's Pub should take, and, when
presented with both quotes, Burton ultimately purchased the policy with the
$265,000 limits. Less than one month later, on September 8, a fire destroyed
Cox's Pub submitted a claim to Illinois Casualty, and, subsequently, Cox, individually, and the Pub jointly filed a complaint against Clute and MBAH. The complaint included negligence and breach of contract claims, which were based on Cox and the Pub's allegations that the insurance proceeds were insufficient to cover the replacement cost of the building. Cox and the Pub alleged that the true replacement cost exceeded $500,000, which left them unable to rebuild and continue the business. Clute and MBAH moved for summary judgment, which the trial court granted following a hearing. This appeal ensued.
DISCUSSION AND DECISION
Cox's Pub contends that the trial court erred when it entered summary judgment for MBAH and Clute. Our standard of review for summary judgment appeals is well established.
We review summary judgment de novo, applying the same standard as the trial court: " Drawing all reasonable inferences in favor of . . . the non-moving parties, summary judgment is appropriate 'if the designated evidentiary matter shows that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.'" Williams v. Tharp, 914 N.E.2d 756, 761 (Ind. 2009) (quoting T.R. 56(C)). " A fact is 'material' if its resolution would affect the outcome of the case, and an issue is 'genuine' if a trier of fact is required to resolve the parties' differing accounts of the truth, or if the undisputed material facts support conflicting reasonable inferences." Id. (internal citations omitted).
The initial burden is on the summary-judgment movant to " demonstrate the absence of any genuine issue of fact as to a determinative issue," at which point the burden shifts to the non-movant to " come forward with contrary evidence" showing an issue for the trier of fact. Id. at 761-62 (internal quotation marks and substitution omitted). And " [a]lthough the non-moving party has the burden on appeal of persuading us that the grant of summary judgment was erroneous, we carefully assess the trial court's decision to ensure that he was not improperly denied his day in court." Mc ...