United Farm Family Mutual Insurance Company, Appellant-Plaintiff,
Stacy B. Matheny, Earl R. Matheny, and the Estate of Phillip Preston Chase by and through Ana Marie Chase, Personal Representative of the Estate of Phillip Preston Chase, Appellees-Defendants
from the Perry Circuit Court The Honorable Lucy Goffinet,
Judge Trial Court Cause No. 62C01-1702-CT-99
Attorney for Appellant Lewis S. Wooton Wooton Hoy, LLC
Attorneys for Appellee Mark K. Phillips Michael K. Phillips
Phillips and Phillips, P.C. Boonville, Indiana
United Farm Family Mutual Insurance Company
("United") appeals the trial court's denial of
its motion for summary judgment. United contends the trial
court's conclusion Stacy Matheny ("Stacy") and
Earl Matheny ("Earl") lived in separate residences
was in error. We reverse and remand with instructions.
and Procedural History
Stacy is Earl's son. Stacy lives in an apartment on the
second floor of Earl's house. Stacy has lived under the
same roof as his father since approximately 2000, excepting
some time Stacy spent in prison. While Stacy was imprisoned
and after Earl's wife died, Earl closed off access
between the upstairs and downstairs of his home and rented
the second floor to other people as an apartment. Thereafter,
access to the upstairs apartment was via two separate
entryways at the front and the back of the house. The
upstairs apartment consisted of two bedrooms, a living room,
and space for a kitchen; however, no appliances were ever
installed to make the kitchen area functional for meal
To gain access to the downstairs where Earl lived, one must
enter from outside and have a key. Stacy and his siblings all
had keys to the part of the house where Earl lived. Stacy
usually ate breakfast and lunch with Earl in Earl's
living area. The two men also typically ate dinner together.
Stacy was unemployed and did not have a driver's license.
Earl paid Stacy's living expenses, did not collect rent
from him, and transported him on errands.
Earl had several long guns and a handgun. When Stacy was
released from prison, Earl thought Stacy was not allowed to
live in a house with guns. Earl stored his long guns off-site
but kept his handgun with him for personal protection. Earl
kept the gun under his pillow and took it with him in a bag
when he travelled.
Earl had three mobile homes that he rented to other people.
Pete Paris rented one of the homes. Phillip Chase frequently
visited Paris; however, both Earl and Stacy had told Chase he
was not welcome on the property. Earl and Stacy did not want
Chase there because Chase allegedly manufactured drugs on the
On March 14, 2016, Earl and Stacy were headed into town when
Earl noticed Paris had accumulated more than thirty bags of
trash at the back of the mobile home. Earl and Stacy stopped
so Earl could tell Paris to clean it up. When Earl pulled up
to the mobile home, Stacy noted Chase's car was beside
the home. Paris came outside, and Stacy told him to have
Chase come out to talk. As they were waiting for Chase, Earl
was worried the men would fight. When Chase came out, he and
Stacy moved toward the back of Earl's truck to talk.
Stacy shot Chase in the head with Earl's handgun. Chase
died. Earl did not know when or how Stacy obtained his gun.
On May 13, 2016, Chase's Estate ("Estate") sued
Stacy and Earl for wrongful death alleging Stacy had
"knowingly or intentionally shot" Chase, (App.
Vol. II at 14), and Earl had been negligent in storing and
safe-keeping the handgun and in not controlling his son when
a special relationship existed between the men. This special
relationship, the Estate alleged, arose from the fact Earl
knew Stacy had a history of violent and criminal activity,
had been in prison for shooting someone, had an
"emotional and/or mental disturbance,"
(id. at 15), and was prohibited from owning or using
a handgun because he is a convicted felon.
Earl had homeowner's insurance with United, and United
represented Earl in the negligence claim; however, on
February 13, 2017, United filed a complaint for declaratory
judgment alleging it was not obligated to defend or indemnify
Earl or Stacy in the wrongful death suit because the policy
included an exclusion for damages that were the result of a
Earl's insurance policy with United stated:
claim is made or a suit is brought against an
"insured" for damages because of "bodily
injury" or "property damage" caused by an
"occurrence" to which this coverage applies, we
1. Pay up to our limit of liability for the damages for which
the "insured" is legally liable. Damages include
prejudgment interest awarded against the "insured";
2. Provide a defense at our expense by counsel of our choice,
even if the suit is groundless, false or fraudulent. We may
investigate and settle any claim or suit that we decide is
appropriate. Our duty to settle or defend ends when the
amount we pay for damages ...