Ashby v. Bar Plan Mutual Insurance Co.
949 N.E.2d 307
| Ind. | 2011Background
- Ashby and O'Brien retained Davidson to represent them in separate inmate-attack damages actions; Ashby's claim dates to Sept. 11, 2000 and O'Brien's to Jan. 14, 2001.
- Davidson began representing Ashby in May 2002 but did not file suit before the September 2002 statute of limitations; O'Brien's suit was filed but dismissed in August 2003 for Davidson's noncompliance.
- Davidson sought Bar Plan professional liability coverage (policy issued 3/20/2003–3/20/2004) but did not disclose potential claims; application stated no knowledge of incidents that could give rise to a claim.
- Bar Plan issued a claims-made policy with a 20-day written-notice condition (Section VII) and a retro-date exclusion prior to 3/20/2001; coverage tied to Davidson’s notice to Bar Plan.
- Davidson abandoned his practice in 2003 and was disbarred in 2004; neither Ashby nor O'Brien notified Bar Plan of malpractice claims against Davidson.
- Bar Plan intervened with a cross-claim for declaratory relief; trial court granted summary judgment for Bar Plan, which the Court of Appeals reversed; Indiana Supreme Court granted transfer and reversed in part, remanding for trial on estoppel issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the claims-made policy provide coverage if notice was not given by Davidson? | Ashby/O'Brien argue notice to Bar Plan satisfied policy requirements or estoppel applies. | Bar Plan contends no coverage absent Davidson's notice within 20 days; policy requires personal notice as a condition precedent. | No coverage absent Davidson's personal notice; issues on estoppel remain factual. |
| Whether Bar Plan should be estopped from denying coverage due to its communications | Bar Plan misled claimants into believing coverage existed. | Bar Plan acted appropriately; no reliance or detriment shown. | Genuine issues of material fact exist about detrimental reliance and estoppel; summary judgment reversed on this ground. |
| Whether the plaintiffs' notices to Bar Plan complied with policy terms | Actual notices to Bar Plan from counsel satisfied the 'claims first made and reported' requirement. | Written notice from the insured within 20 days of demand was required; notices by claimants may not suffice. | Questions of fact remain about whether notices constituted proper compliance or were influenced by Bar Plan's representations. |
| Whether Bar Plan breached the policy by not providing or disclaiming coverage in a timely manner | Bar Plan failed to clearly reserve its rights and misrepresented coverage. | No obligation to indemnify absent proper notice; actions were within policy framework. | Parties raise factual disputes; not ripe for summary judgment on breach and misrepresentation claims. |
Key Cases Cited
- Paint Shuttle, Inc. v. Cont'l Cas. Co., 733 N.E.2d 513 (Ind. Ct. App. 2000) (notice provision defines insurer's obligation; no coverage without timely notice)
- Tate v. Secura Ins., 587 N.E.2d 665 (Ind. 1992) (estoppel vs. implied waiver distinctions; often used interchangeably in insurance)
- Brown v. Branch, 758 N.E.2d 48 (Ind. 2001) (estoppel involves misleading acts leading to detrimental reliance)
- Sheehan Constr. Co. v. Cont'l Cas. Co., 938 N.E.2d 685 (Ind. 2010) (summary judgment standard and burden shifting in Indiana)
- Dreaded, Inc. v. St. Paul Guardian Ins. Co., 904 N.E.2d 1267 (Ind. 2009) (summary judgment framework for insurance disputes)
- Matter of Davidson, 814 N.E.2d 266 (Ind. 2004) (bar plan coverage implications in professional liability context)
- Ashby v. Davidson, 930 N.E.2d 53 (Ind. Ct. App. 2010) (non-final appellate ruling on notice and coverage relevance)