Arthur Barnard III v. Menard, Inc. Menard, Inc., and Blue Line LP, Inc. v. Capitol Specialty Insurance Corp.
25 N.E.3d 750
Ind. Ct. App.2015Background
- Plaintiff Arthur Barnard alleged a Blue Line loss-prevention officer physically assaulted him in a Menard parking lot and detained him in the store, causing injury and slander, after a suspected $1.99 theft.
- Blue Line was contracted by Menard as an independent contractor to provide loss-prevention/security services; the contract disclaimed an employer-employee relationship and required Blue Line to indemnify Menard.
- Blue Line was insured by Capitol Specialty Insurance Corp.; Menard was listed as an additional insured under the policy, which covered bodily injury and “personal and advertising injury” (including false arrest and slander) but contained an assault-and-battery exclusion (including “physical altercation”).
- Barnard sued Menard and Blue Line for negligence, battery, false imprisonment, and slander. Menard moved for summary judgment; the trial court granted it, finding Blue Line an independent contractor and Menard owed no duty for Blue Line’s unforeseeable actions.
- Menard and Blue Line sued their insurer Capitol for a defense/indemnity; the trial court granted summary judgment to Capitol based on the assault-and-battery exclusion. The Court of Appeals affirmed Menard’s summary judgment on Barnard’s claim but reversed as to Capitol’s duty to defend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Menard owed Barnard a duty of care as a business invitee for harm caused by Blue Line | Barnard: Menard owed usual invitee duty to protect from third-party misconduct | Menard: Duty extends only to reasonably foreseeable third-party harm; Blue Line officer’s violent act was not foreseeable | Held: No — Menard’s duty did not extend to this unforeseeable, violent act by an independent contractor |
| Whether Blue Line was Menard’s employee (respondeat superior) | Barnard: Blue Line employees were effectively Menard employees; Menard liable vicariously | Menard: Contract and facts show independent-contractor relationship | Held: Blue Line is an independent contractor as a matter of law (control and contract factors reviewed) |
| Whether Menard can be liable for an independent contractor’s negligence under exceptions (e.g., probability of harm) | Barnard: Exception applies (act likely to cause injury; duty to protect) | Menard: No exception applies; no probability of such harm was foreseeable at contracting | Held: No exception applies — no evidence showing a probability of harm such that Menard should have anticipated assault |
| Whether insurer Capitol owes duty to defend Menard/Blue Line despite assault-and-battery exclusion | Menard/Blue Line: Complaint includes non-excluded claims (false imprisonment, slander) triggering duty to defend | Capitol: Entire incident arises from assault/battery or use of force to protect property — exclusion bars defense | Held: Reversed — insurer must defend claims not clearly excluded (false imprisonment/slander); assault/battery allegations excluded, but other allegations triggered duty to defend |
Key Cases Cited
- Alldredge v. Good Samaritan Home, Inc., 9 N.E.3d 1257 (Ind. 2014) (standard of review for summary judgment)
- Paragon Family Restaurant v. Bartolini, 799 N.E.2d 1048 (Ind. 2003) (proprietor’s duty to invitees extends to reasonably foreseeable third-party misconduct)
- Moberly v. Day, 757 N.E.2d 1007 (Ind. 2001) (ten-factor test for employee vs. independent contractor)
- Bagley v. Insight Commc’ns Co., 658 N.E.2d 584 (Ind. 1995) (exceptions making principal liable for independent contractor’s negligence)
- Liberty Mut. Ins. Co. v. OSI Indus., Inc., 831 N.E.2d 192 (Ind. Ct. App. 2005) (insurer’s duty to defend broader than duty to indemnify)
- Transamerica Ins. Servs. v. Kopko, 570 N.E.2d 1283 (Ind. 1991) (if policy otherwise applies insurer must defend even if not liable for all damages)
- Meridian Mut. Ins. Co. v. Richie, 544 N.E.2d 488 (Ind. 1989) (illusory insurance coverage against public policy)
- Everhart v. Founders Ins. Co., 993 N.E.2d 1170 (Ind. Ct. App. 2013) (definition of battery as intentional offensive touching)