Global Caravan Technologies, Inc.; Christopher Douglas; Husheng Ding; Kyle Fang; Chris Tzeng; C.H. Douglas & Gray, LLC; Thomas Gray; Doris Roberts; and Red Wing Capital, LLC, Appellants-Defendants,
The Cincinnati Insurance Company, Appellee-Plaintiff
from the Marion Superior Court The Honorable James B. Osborn,
Judge Trial Court Cause No. 49D14-1709-PL-34008.
Attorneys for Appellants George M. Plews Jonathan P.
Emenhiser Plews Shadley Racher & Braun LLP Indianapolis,
Attorney for Appellee James J. Hutton Indianapolis, Indiana
Global Caravan Technologies, Inc. ("Global"),
Christopher Douglas, Husheng Ding, Kyle Fang, and Red Wind
Capital, LLC ("Red Wing"), (collectively,
"Defendants") appeal the trial court's grant of
summary judgment in favor of The Cincinnati Insurance Company
("Cincinnati") in Cincinnati's action
requesting a declaration that it had no obligation to defend
Defendants in other litigation. Defendants raise multiple
issues, which we restate as:
1. Whether Global's voluntary intervention in a claim
filed by Charles Hoefer Jr. is a "suit" under the
language of Global's insurance contract with Cincinnati;
2. Whether the insurance contract's Employment Related
Practices Exclusion ("ERP Exclusion") relieves
Cincinnati of any obligation to provide defense and
indemnification coverage to Douglas, Ding, and Fang for
AND PROCEDURAL HISTORY
In January 2013, Global was formed by Charles Hoefer Jr. and
sought to enter the recreational vehicle market. At relevant
times, Hoefer possessed experience and intellectual property
rights to materials related to manufacturing recreational
vehicles. Douglas, Ding, and Fang were investors in Global;
Douglas and Ding were executive officers of Global and Fang
was a director at Global. Red Wing is a separate business
entity owned by Douglas, Ding, Thomas Gray, Doris Roberts,
and Steve Coons. Red Wing is an investor in Global.
Cincinnati insures Global.
Through a series of events, Hoefer was removed as owner of
Global. On May 1, 2014, Hoefer filed a complaint in Marion
County ("Hoefer Litigation") against Ding, Douglas,
Fang, Red Wing, Gray, Roberts, Christopher Tzeng,
Douglas & Gray, LLC,  and Steve Coons. In that
complaint, Hoefer presented several claims, including
conspiracy, unjust enrichment, securities fraud, common law
fraud, constructive fraud, breach of fiduciary duty,
defamation, defamation per se, theft, and
interference with contractual relations.
On May 14, 2014, Global, as the policyholder, notified
Cincinnati of the Hoefer Litigation and requested defense and
indemnification for Global, Douglas, Ding, and Fang.
Cincinnati agreed to provide defense of Douglas, Ding, and
Fang, and it assigned defense counsel for Douglas, Ding, and
Fang without consulting Global. Global insisted Cincinnati
provide defense to all parties related to Global, including
Global, which was not a named defendant in the Hoefer
Litigation. Global argued the counsel assigned to Douglas,
Ding, and Fang was unacceptable due to an alleged conflict of
interest. Cincinnati agreed to assign different counsel to
Ding, Douglas, and Fang, but stated it would pay only a
portion of the defense if different counsel was selected.
Cincinnati denied Global's request for defense beyond
that of Ding, Douglas, and Fang. Global rejected
Cincinnati's response to their request and retained
separate counsel unapproved by Cincinnati.
On July 7, 2014, Global moved to intervene in the Hoefer
Litigation, arguing that some of the claims related to
incidents occurring at Global and that Hoefer sought to
obtain Global assets as part of his claims. The trial court
granted Global's request over Hoefer's objection. On
October 8, 2014, Hoefer amended his claim. The amended claim
did not include any allegations against Global. On December
1, 2014, Ding and Douglas filed offensive counterclaims
against Hoefer. Also on December 1, 2014, Global filed an
answer to Hoefer's amended complaint and asserted an
offensive counterclaim against Hoefer.
Meanwhile, in federal court, on October 8, 2014, Cincinnati
filed an action seeking declaratory judgment that it had no
duty to defend or indemnify Global in the Hoefer Litigation.
Cincinnati and Global cross-moved for summary judgment. The
district court granted summary judgment in favor of
Cincinnati, and Global appealed. The Seventh Circuit Court of
Appeals did not reach the merits of the appeal, as it
determined it did not have jurisdiction over the matter
because Hoefer was not a citizen of Indiana at the time the
district court action was filed.
While the federal claims were pending, Douglas, Ding, Fang,
and Red Wing retained Delk McNally, LLP, to defend them in
the Hoefer Litigation. Douglas, Ding, Fang, and Red Wing
incurred $50, 715.37 in attorney's fees and costs and
submitted the relevant invoices to Cincinnati for payment.
Cincinnati has not paid those invoices. As part of its
involvement in the Hoefer Litigation, Global retained Ice
Miller, LLC, and incurred $90, 661.31 in attorney's fees
and costs, which Cincinnati has not reimbursed.
On September 5, 2017, CIC filed the present action, which was
a complaint for declaratory judgment asking the trial court
to declare that CIC is not required to defend or indemnify
Defendants in the Hoefer Litigation. Defendants filed an
answer and counterclaim. On March 7, 2018, Defendants filed a
motion for partial summary judgment. On April 20, 2018, CIC
filed a cross-motion for summary judgment. The trial court
held oral argument on the motions on July 31, 2018, and
September 17, 2018. The trial court denied Defendants'
partial motion for summary judgment and granted summary
judgment in favor of CIC, finding in relevant part: (1) CIC
had no obligation to defend Global because "suit"
as defined by the insurance contract does not include
Global's act of voluntarily intervening in the Hoefer
Litigation, and (2) the ERP Exclusion relieves CIC from any
obligation to provide defense or indemnification coverage for
Douglas, Ding, and Fang.
Judgment Standard of Review
We review summary judgment using the same standard as the
trial court: summary judgment is appropriate only where the
designated evidence shows there is no genuine issue of
material fact and the moving party is entitled to judgment as
a matter of law. Rogers v. Martin, 63 N.E.3d 316,
320 (Ind. 2016). All facts and reasonable inferences are
construed in favor of the non-moving party. City of Beech
Grove v. Beloat, 50 N.E.3d 135, 137 (Ind. 2016). Where
the challenge to summary judgment raises questions of law, we
review them de novo. Rogers, 63 N.E.3d at 320.
We do not modify our standard of review when the parties make
cross motions for summary judgment. State Auto Ins. Co.
v. DMY Realty Co., LLP, 977 N.E.2d 411, 419 (Ind.Ct.App.
2012). "Instead, we must consider each motion separately
to determine whether the moving party is entitled to judgment
as a matter of law." Id. When the trial court
makes findings and conclusions in support of its order
regarding summary judgment, we are not bound by such findings
and conclusions, but they aid our review by providing reasons
for the decision. Allen Gray Ltd. P'ship IV v.
Mumford, 44 N.E.3d 1255, 1256 (Ind.Ct.App. 2015). We
will affirm a summary judgment order on any theory or basis
found in the record. Id.
Policy Interpretation Standard of Review
When interpreting an insurance policy, we give plain and
ordinary meaning to language that is clear and unambiguous.
Meridian Mut. Ins. Co. v. Auto-Owners Ins. Co., 698
N.E.2d 770, 773 (Ind. 1998). Policy language is unambiguous
if reasonable persons could not honestly differ as to its
meaning. Id. To this end, we look to see "if
policy language is susceptible to more than one
interpretation." Id. If an insurance policy
contains ambiguous provisions, they are construed in favor of
the insured. Id. "This strict construal against
the insurer is driven by the fact that the insurer drafts the
policy and foists its terms upon the customer. The insurance
companies write the policies; we buy their forms or we do not
buy insurance." Id.
to Defend Global
The insurance contract between Global and Cincinnati provides
for defense of the insured "against any 'suit'
seeking damages." (App. Vol. II at 72.) The policy
21. "Suit" means a civil proceeding in which money
damages because of "bodily injury", "property
damage" or "Personal and advertising injury"
to which this insurance applies are alleged. "Suit"
a. An arbitration proceeding in which such damages are
claimed and to which the insured must submit or does submit
with our consent;
b. Any other alternative dispute resolution proceeding in
which such damages are claimed and to which the insured
submits with our consent; or
c. An appeal of a civil proceeding.
(Id. at 85.)
The trial court determined Global's voluntary
intervention in the Hoefer Litigation did not qualify as a
"suit" under the insurance policy:
An insurer's duty to defend its insured is broader than
its duty to indemnify. Yet, the duty to defend is determined
by the examination of the "allegations of the complaint
coupled with those facts known to or ascertainable by the
insurer after reasonable investigation." "'[A]n
insurer may properly refuse to defend where an independent
investigation reveals a claim patently outside the risks
covered by the policy.'" Moreover, when a policy
exclusion applies to preclude coverage, the insurer has no
duty to defend its insured. Therefore, while an insurer's
duty to defend is broader than its duty to indemnify an
insured, it is not boundless. When an insurer has no duty to
defend, it also has no duty to indemnify its insured under
The Coverage B insuring agreement provides that [Cincinnati]
has the right and duty to defend [Global] against any
"suit" seeking to hold the named insured legally
liable for damages because of covered "personal and
advertising injury." However, [Cincinnati] has no duty
to defend insured [Global] under the [Cincinnati] Policy
unless a "suit" has been brought against the
insured for potentially covered damages in the [Hoefer
Litigation]. The term "suit" is defined in the
[Cincinnati] Policy to mean, in relevant part, "a civil
proceeding in which money damages because of 'bodily
injury,' 'property damage' or 'personal and
advertising injury' to which this insurance applies are
alleged." While [Global] is an insured, it still has the
burden to prove the Amended Complaint in the Underlying
Lawsuit is a "suit" against [Global] to satisfy the
Coverage B insuring agreement requirement.
The Defendants/Counterclaimants overcomplicate the issue of
whether Hoefer's Amended Complaint constitutes a
"suit" against [Global]. The Amended Complaint,
itself, establishes that Hoefer's claims and allegations
are only asserted against the Named Defendants, not [Global].
As proven by the designated evidence and the court record in
the Underlying Lawsuit, through motion practice Hoefer
deliberately asserted no claims for damages against [Global]
in his Amended Complaint. Like Hoefer, the
Defendants/Counterclaimants admit the Amended Complaint
asserts no claims for damages against [Global], which is
necessary to constitute a "suit" under the
[Cincinnati] Policy. Despite their admission, the
Defendants/Counterclaimants try to convince the Court that
[Global's] voluntary intervention as a Defendant to
assert a non-compulsory, offensive Counterclaim against
Hoefer in the Underlying Lawsuit renders the Amended
Complaint a "suit" against [Global]. The Court is
The Court is familiar with the procedural history of the
Underlying Lawsuit since the matter is before it. Any
characterization that this Court sua sponte ordered
[Global's] involvement in the Underlying Lawsuit is not
substantiated by the designated evidence or the court record
in the Underlying Lawsuit. As the court record demonstrates,
Hoefer sought to amend his Original Complaint only after
Hoefer opposed [Global's] motion to intervene as a
voluntary Defendant in the Underlying Lawsuit to assert a
Counterclaim against him. On September 29, 2014, Hoefer
sought leave to amend his Original Complaint to provide a
more definitive statement as to his claims upon the request
of several Named Defendants, and to add claims for piercing
the corporation veil of [Red Wing] (not [Global]), civil