Argonaut Midwest Insurance Company v. DLC Services, Inc., DLC Landscape & Snow Removal, Inc., Gateway Arthur, Inc., Emmes Realty Services, LLC, Jane Jones and Gary Jones (mem. dec.)
95 N.E.3d 208
| Ind. Ct. App. | 2017Background
- On Feb. 15, 2014 Jane slipped on ice in a shopping-center parking lot and was injured.
- Jane and Gary Jones sued Wiseway, Gateway Arthur, Emmes, and DLC Landscape on July 28, 2015 alleging negligence stemming from the fall.
- Argonaut insured DLC Services (parent/related to DLC Landscape). DLC Services did not notify Argonaut of the incident or the lawsuit.
- Argonaut first learned of the fall and the Jones lawsuit on Feb. 1, 2016, when other defendants’ insurer contacted Argonaut and demanded a defense.
- Argonaut filed a declaratory-judgment action and moved for summary judgment seeking a ruling that DLC Landscape was not an insured under DLC Services’ policy (and that policy notice/cooperation conditions were unmet).
- The trial court denied summary judgment; the Court of Appeals reversed, holding Argonaut was entitled to summary judgment because of unreasonable delay in notice and presumed prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness of notice to insurer | Argonaut: notice was unreasonably delayed (nearly 2 years after occurrence; 6 months after suit) and thus precludes coverage | Gateway/Emmes/DLC: other insurers and defendants investigated; evidence preserved; Argonaut suffered no prejudice | Held: Delay (to Feb. 1, 2016) was unreasonable as a matter of law and triggered a presumption of prejudice against Argonaut |
| Prejudice from delay | Argonaut: presumption of prejudice arises from unreasonable delay; defendants must rebut | Defendants: investigation by others protected Argonaut’s interests; no actual prejudice | Held: Defendants failed to produce evidence rebutting the presumption; prejudice presumed; summary judgment for Argonaut appropriate |
| Compliance with policy cooperation provisions | Argonaut: DLC Services failed to comply with notice/cooperation conditions precedent to coverage | Defendants: argued cooperation occurred via other insurers/defendants and evidence preserved | Held: Because notice was untimely and prejudice presumed, failure to satisfy conditions precedent defeated coverage; no need to decide further cooperation issues |
| Whether Gateway/Emmes/DLC Landscape were insureds under the policy | Argonaut: they are not insureds under DLC Services’ policy | Defendants: argued coverage or at least disputed factual issues | Held: Court resolved coverage question in favor of Argonaut on notice/prejudice ground; did not reach other coverage theories |
Key Cases Cited
- Miller v. Dilts, 463 N.E.2d 257 (Ind. 1984) (unreasonable delay in notice permits presumption of prejudice to insurer)
- Askren Hub States Pest Control Servs., Inc. v. Zurich Ins. Co., 721 N.E.2d 270 (Ind. Ct. App. 1999) (six-month delay can be unreasonable; notice requirement is material)
- Ind. Farmers Mut. Ins. Co. v. N. Vernon Drop Forge, Inc., 917 N.E.2d 1258 (Ind. Ct. App. 2009) (burden-shifting: insured must rebut presumption of prejudice; insurer then must prove actual prejudice)
- Erie Ins. Exch. v. Stephenson, 674 N.E.2d 607 (Ind. Ct. App. 1996) (insured must present some evidence to rebut presumed prejudice from delayed notice)
- Shelter Mut. Ins. Co. v. Barron, 615 N.E.2d 503 (Ind. Ct. App. 1993) (duty to notify insurer is a condition precedent to insurer’s liability)