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Indiana Restorative Dentistry, P.C. v. Laven Ins. Agency, Inc.

Supreme Court of Indiana

March 12, 2015

INDIANA RESTORATIVE DENTISTRY, P.C., Appellant (Plaintiff),
v.
THE LAVEN INSURANCE AGENCY, INC. AND PROASSURANCE INDEMNITY CO., INC. F/K/A THE MEDICAL ASSURANCE CO., INC., Appellees (Defendants)

As corrected June 2, 2015.

Page 261

Appeal from the Marion Superior Court, No. 49D03-1010-PL-46336. The Honorable Patrick L. McCarty. On Petition to Transfer from the Indiana Court of Appeals, No. 49A05-1212-PL-627.

ATTORNEYS FOR APPELLANT: George M. Plews, Todd G. Relue, Plews Shadley Racher & Braun LLP, Indianapolis, IN.

ATTORNEY FOR AMICUS CURIAE, INDEPENDENT INSURANCE AGENTS OF INDIANA, INC.: Richard S. Pitts, Indianapolis, IN.

ATTORNEYS FOR APPELLEE, THE LAVEN INSURANCE AGENCY, INC.: Philip E. Kalamaros, Brad R. Pero, Hunt Suedhoff Kalamaros LLP, St. Joseph, MI.

ATTORNEYS FOR APPELLEE, PROASSURANCE INDEMNITY CO., INC.: David C. Jensen, John P. Twohy, Eichhorn & Eichhorn, LLP, Hammond, IN; Brett T. Clayton, Eichhorn & Eichhorn, LLP, Indianapolis, IN.

Rush, Chief Justice. Dickson, Rucker, David, and Massa, JJ., concur.

OPINION

Page 262

Rush, Chief Justice.

After a fire, a dentist's office discovered that the contents coverage of its insurance policy--a policy it had maintained for over thirty years--was inadequate to cover the loss. The insurance agent and the insured now dispute whether their long-term relationship was a special relationship that obligated the agent to advise the insured about its coverage. The parties also dispute whether their past dealings show a " meeting of the minds" on an implied contract, requiring the agent to procure a policy that would cover all losses to office contents.

On summary judgment review, we hold that the designated evidence supports conflicting inferences on whether the parties enjoyed a special relationship that created a duty to advise. As for the implied contract to procure full coverage, we hold that the record does not show any discussion between the parties on the matter, much less a meeting of the minds. We therefore reverse in part and affirm in part the trial court's order granting partial summary judgment.

Facts

Indiana Restorative Dentistry, P.C., (" IRD" ) insured its office under a policy issued by ProAssurance Indemnity Company, Inc., (" ProAssurance" ) and procured through the Laven Insurance Agency, Inc. (" Laven" ). IRD had initially purchased its policy from Hepler-Smith Insurance, Inc., in 1978-an insurance agency that later changed its name and eventually merged with Laven in 1997. In October 2009, a fire destroyed the entire IRD office. The value of the lost office con-tents was $704,394.35, which included equipment and technology used in IRD's prosthodontist laboratory. IRD submitted an insurance claim to ProAssurance for the lost office contents under its building personal property policy. The policy included coverage for office contents and had a limit of $204,371. ProAssurance paid this limit, which left IRD with an approximately $500,000 shortfall. Additional facts will be provided as necessary.

Procedural History

IRD sued Laven and ProAssurance in tort and contract, hoping to recoup the shortfall under several theories. First, it

Page 263

alleged Laven breached a tort duty, arising out of a " special relationship" with IRD, to advise IRD of adequate coverage. IRD also alleged breach of contract for Laven's failure to procure either $350,000 in total office contents coverage, specifically, or full coverage for the entire $704,394.35 loss, generally. Finally, it alleged ProAssurance was vicariously liable for Laven's omissions.

The complicated procedural posture of this case narrows the scope of the issues before this Court. All parties moved for summary judgment, but the trial court partially granted only motion and summarily denied IRD's and Laven's. On ProAssurance's motion, the trial court first concluded that Laven had no duty to advise based on a special relationship because the parties had " an arms-length relationship typical of that which exists between an insurance agency and an insured." It also concluded that Laven had no " contractual duty to provide insurance that would have fully covered the fire losses sustained by IRD," and that ProAssurance was not " vicariously liable for the alleged acts or omissions of Laven." IRD moved to correct error and to reconsider in light of newly discovered evidence. But the trial court denied both motions, reaffirmed its prior order, and entered it as a partial final judgment under Trial Rule 54(B)--thereby allowing an appeal " upon this or other issues resolved by the judgment."

Though the order granting summary judgment for ProAssurance was appealable, it was only partial because it did not expressly address one of IRD's four claims: whether Laven had a contractual duty to procure $350,000 in office contents coverage. Instead, the trial court dealt with that claim by denying IRD's and Laven's separate motions for summary judgment--both of which raised the $350,000 question. The trial court then certified both denials for interlocutory appeal, App. R. 14(B)(1), but the Court of Appeals did not accept jurisdiction, App. R. 14(B)(2). Without a final judgment on that claim under Trial Rule 56(C), or a partial final judgment under Rule 54(B), both interlocutory appeals ended when the Court of Appeals refused jurisdiction. Consequently, even though the parties inserted the issue of Laven's contractual duty to procure $350,000 into this appeal, it remains pending before the trial court. IRD successfully appealed only the trial court's partial summary judgment order for ProAssurance. We address only the three claims disposed of in that order.

IRD, meanwhile, appealed that partial summary judgment order, and the Court of Appeals reversed on all three claims. Ind. Restorative Dentistry, P.C. v. Laven Ins. Agency, Inc.,999 N.E.2d 922 (Ind.Ct.App. 2013), reh'g denied. It found no genuine issues of material fact and granted summary judgment for IRD, holding that a special relationship existed between Laven and IRD, which created a duty to advise, and that no implied contract existed between Laven and IRD " to procure full coverage insurance based on its past dealings ...


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