Indiana Farm Bureau as Subrogee of Chester Lemler, Garry Lemler, and Zak Lemler, Appellant-Plaintiff,
CNH Industrial America, LLC and Bane-Welker Equipment, LLC, Appellees-Defendants.
from the Marshall Circuit Court The Honorable Curtis D.
Palmer, Judge Trial Court Cause No. 50C01-1710-PL-48
ATTORNEYS FOR APPELLANT Cameron A. Morgan Michelle A.
Cobourn-Baurley McNeely Stephenson Shelbyville, Indiana
ATTORNEYS FOR APPELLEE BANE-WELKER EQUIPMENT, LLC Daniel W.
Glavin Kathleen M. Erickson O'Neill McFadden &
Willett LLP Schererville, Indiana
ATTORNEYS FOR APPELLEE CNH INDUSTRIAL AMERICA, LLC Nicholas
C. Pappas Maggie L. Smith Jessica Williams Schnelker Frost
Brown Todd LLC Indianapolis, Indiana
Indiana Farm Bureau Insurance ("Farm Bureau")
appeals the trial court's grant of summary judgment in
favor of CNH Industrial America, LLC ("CNH
Industrial") and Bane-Welker Equipment, LLC
("Bane-Welker") in Farm Bureau's action seeking
subrogation from CNH Industrial and Bane-Welker for payment
Farm Bureau paid to its insureds for damages to farm
equipment. On appeal, Farm Bureau contends that the trial
court erred in granting summary judgment in favor of
Bane-Welker and CNH Industrial, specifically raising the
I. Whether Bane-Welker effectively disclaimed the implied
warranty of merchantability by the language used in the
documents signed at the time of purchase;
II. Whether the Corn Head is considered "other
property" under Indiana law such that tort recovery for
damages to the Corn Head is barred by the economic loss
III. Whether Farm Bureau's claim for negligent service of
the Combine is barred by the economic loss doctrine.
and Procedural History
Tri L Farms ("the Farm") was formed in 1985 and
operates as a commercial farm, growing, harvesting, and
selling corn and soybeans. Appellant's App. Vol.
3 at 73-75, 100. The Farm is owned and operated by Garry
Lemler ("Garry") and Zak Lemler ("Zak")
in equal partnership with their father, Chester Lemler.
Id. at 73-74, 99-100. In its operation as a
commercial farm, the Farm uses a combine to harvest its corn
and soybean crops. Id. at 81. A combine is "a
harvesting machine that heads, threshes, and cleans grain
while moving over a field."
https://www.merriam-webster.com /dictionary /combine (last
visited May 30, 2019). When harvesting crops, a combine must
have a "head" attached to the front of the combine,
which feeds the crop into the combine so that the combine can
process and harvest the crop. Appellant's App. Vol.
3 at 81-82. When the Farm harvests its corn crops, it
uses a "corn head" attached to the combine, and
without the corn head attached, a combine cannot harvest
corn. Id. at 81-82, 91-92.
The Farm likes to replace its combines and corn heads every
two or three years, and, in preparation for the 2015 harvest
season, the Farm decided to trade in its existing combine and
corn head and purchase updated models. Id. at
101-02. At that time, Garry was a salesman for Bane-Walker,
in addition to owning and operating the Farm. Id. at
77. Prior to the beginning of the 2015 harvest season, Garry
arranged for the Farm to purchase from Bane-Welker a used
Case IH 8230 combine ("the Combine") in January
2015 and a used Case IH 4412F-30 corn head ("the Corn
Head") in August 2015. Id. at 84;
Appellant's App. Vol. 4 at 70. Both the Combine
and the Corn Head had been manufactured by CNH Industrial.
Appellant's App. Vol. 2 at 20. CNH Industrial
had no involvement in the 2015 retail transactions between
Bane-Welker and the Farm.
As part of the purchase of both the Combine and the Corn
Head, the Farm executed, in January 2015, a Retail Purchase
Order and Security Agreement ("the Purchase Order")
and a Retail Installment Sale Contract and Security Agreement
("the Sale Contract") for the Combine and, in
August 2015, a Retail Purchase Order and Security Agreement
("the Purchase Order") and a Retail Installment
Sale Contract and Security Agreement ("the Sale
Contract") for the Corn Head. Appellant's App.
Vol. 3 at 56-58, 118-20; Appellant's App. Vol.
4 at 70-71, 73-75. Garry completed these forms on behalf
of Bane-Welker, as the salesperson on the transactions, and
Zak signed the documents on behalf of the Farm.
Appellant's App. Vol. 3 at 86-87, 105-06.
The Purchase Order for the Combine contained the following
provisions, informing the Farm that it must: "1. Read
this contract before you sign it;" and "4. The
additional terms and conditions set forth on the reverse
side are a part of this contract and are incorporated
herein by reference." Id. at 56 (emphasis
added). On the reverse side of the Purchase Order in the
center of the page, under the headings, "WARRANTY"
and "USED EQUIPMENT," which were in all caps and
bold typeface, the following language appeared: "USED
EQUIPMENT covered by this Purchase Order is sold AS-IS, WHERE
IS, WITH NO REPRESENTATIONS OR WARRANTIES, other than those
stated on the reverse side for equipment 5 years old or
newer." Id. at 58. The Purchase Order for the
Corn Head contained identical language. Appellant's
App. Vol. 4 at 70-71. Garry and Zak testified they
received these terms and conditions on behalf of the Farm
when they received the Purchase Order and that they
understood the terms and conditions associated with the
"USED EQUIPMENT" warranty provisions applied to
their purchase. Appellant's App. Vol. 3 at
87-88, 107-08. Both Garry and Zak also stated that they were
aware and understood that the Combine, because it was used,
did not come with any warranties. Id. at 80-81,
In addition to the Purchase Orders, the Farm also executed
the Sale Contracts as part of its purchase of the Combine and
the Corn Head. Id. at 118-20; Appellant's
App. Vol. 4 at 73-75. Each of the Sale Contracts spelled
out the financial terms and secured the financial
consideration of the transaction. Appellant's App.
Vol. 3 at 66. The first page of the Sale Contract for
the Combine provided, just above the signature lines,
"DO NOT SIGN THIS BEFORE YOU READ THE TERMS ON THE THREE
AGREEMENT PAGES (PLUS ANY ADDENDUMS), EVEN IF OTHERWISE
ADVISED." Id. at 118. At the top of the second
page of the Sale Contract, it specifically stated in all
capital letters "NO WARRANTY." Id. at 119.
It further stated, "THE EQUIPMENT IS SOLD AS IS AND WITH
ALL FAULTS . . . . NEITHER SELLER NOR MANUFACTURER MAKE ANY
OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AND
SPECIFICALLY DISCLAIM THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR PARTICULAR PURPOSE."
Id. The Sale Contract for the Corn Head contained
identical language. Appellant's App. Vol. 4 at
73-74. Garry and Zak acknowledged receiving all three pages
of the Sale Contract. Appellant's App. Vol. 3 at
On October 29, 2016, the Combine and the attached Corn Head
were being used to harvest the Farm's corn crops when the
Combine caught fire, which resulted in complete destruction
of the Combine and the Corn Head, allegedly causing damage in
the amount of $357, 699. Appellant's App. Vol. 2
at 21. At the time of this property damage, the Combine and
the Corn Head were insured under a single Farmowners Policy
issued by Farm Bureau. Appellant's App. Vol. 4
at 7. Farm Bureau provided payment to the Farm for the
property damage to the Combine and the Corn Head and then
filed a complaint, as subrogee of the Lemlers, against CNH
Industrial and Bane-Welker to recover that payment.
Appellant's App. Vol. 2 at 19-25.
In the complaint, Farm Bureau asserted a product liability
claim, seeking tort damages against CNH Industrial and
Bane-Welker for the damage to the Combine and the Corn Head.
Id. Farm Bureau also asserted a breach of implied
warranty of merchantability against Bane-Welker and a
separate negligence claim against Bane-Welker for improperly
servicing the Combine after purchase. Id. CNH
Industrial and Bane-Welker sought summary judgment on the
product liability claim, arguing the tort claim for property
damage to the Combine and the Corn Head was barred by the
economic loss doctrine. Appellant's App. Vol. 3
at 27-29; Appellant's App. Vol. 4 at 97-100. In
response, Farm Bureau conceded that the economic loss
doctrine barred any tort claim for property damage to the
Combine but asserted that its claim for damage to the Corn
Head was not barred by the economic loss doctrine because the
Corn Head is considered "other property," which is
not precluded from recovery of damages. Appellant's
App. Vol. 3 at 157-160. Bane-Welker also sought summary
judgment against the breach of warranty and negligence claims
asserted by Farm Bureau, arguing that all implied warranties
had been disclaimed and that the negligence claim against it
was barred by the economic loss doctrine. Id. at
15-37; Appellant's App. Vol. 4 at 96-108. The
trial court granted summary judgment in favor of CNH
Industrial and Bane-Welker as to all of Farm Bureau's
claims. Appellant's App. Vol. 2 at 17. Farm
Bureau now appeals.
When reviewing the grant of summary judgment, our standard of
review is the same as that of the trial court. FLM, LLC
v. Cincinnati Ins. Co., 973 N.E.2d 1167, 1173
(Ind.Ct.App. 2012) (citing Wilcox Mfg. Grp., Inc. v.
Mktg. Servs. of Ind., Inc., 832 N.E.2d 559, 562
(Ind.Ct.App. 2005)), trans. denied. We stand in the
shoes of the trial court and apply a de novo standard of
review. Id. (citing Cox v. N. Ind. Pub. Serv.
Co., 848 N.E.2d 690, 695 (Ind.Ct.App. 2006)). Our review
of a summary judgment motion is limited to those materials
designated to the trial court. Ind. Trial Rule 56(H);
Thornton v. Pietrzak, 120 N.E.3d 1139, 1142
(Ind.Ct.App. 2019), trans. denied. Summary judgment
is appropriate only where the designated evidence shows there
are no genuine issues of material fact and the moving party
is entitled to judgment as a matter of law. T.R. 56(C). For
summary judgment purposes, a fact is "material" if
it bears on the ultimate resolution of relevant issues.
FLM, 973 N.E.2d at 1173. We view the pleadings and
designated materials in the light most favorable to the
non-moving party. Id. Additionally, all facts and
reasonable inferences from those facts are construed in favor
of the non-moving party. Id. (citing Troxel
Equip. Co. v. Limberlost Bancshares, 833 N.E.2d 36, 40
(Ind.Ct.App. 2005), trans. denied). The initial
burden is on the moving party 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. Hughley v. State, 15 N.E.3d 1000, 1003
A trial court's grant of summary judgment is clothed with
a presumption of validity, and the party who lost in the
trial court has the burden of demonstrating that the grant of
summary judgment was erroneous. Henderson v. Reid Hosp.
and Healthcare Servs., 17 N.E.3d 311, 315 (Ind.Ct.App.
2014), trans. denied. We will affirm upon any theory
or basis supported by the designated materials. Id.
When a trial court grants summary judgment, we carefully
scrutinize that determination to ensure that a party was not
improperly prevented from having his or her day in court.
Implied Warranty of Merchantability
Indiana's version of the Uniform ...