45 N.E.3d 781
Ind.2015Background
- Christopher Schmidt inherited a condemned, vacant, uninhabitable house that required extensive cleanup and renovation; animals were removed and the health department issued an Order to Abate.
- In April 2010 Schmidt contacted agent Bart Stith (C&F Insurance Group) to obtain insurance; a Dwelling Fire Application was submitted that did not disclose vacancy, condemnation, renovation, or rental status.
- Indiana Insurance Company issued a Dwelling Fire Policy; the house burned in June 2010. The insurer later rescinded the policy in February 2011 for material misrepresentations and refunded premiums.
- Schmidt sued the insurer, the brokerage (C&F), and agent Stith alleging false representations on the application, claims under the Indiana Crime Victims Relief Act, and (later in proceedings) negligent procurement of appropriate insurance.
- The trial court granted summary judgment to all defendants; the Court of Appeals affirmed summary judgment for the insurer but reversed as to the agents. The Indiana Supreme Court granted transfer.
- The Supreme Court (this opinion) affirms summary judgment for the insurer, affirms summary judgment for the agents on claims concerning inaccurate reporting for a Dwelling Fire Policy, but reverses in part and remands on Schmidt’s negligent-procurement claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether agents are liable for inaccurately reporting dwelling-fire application facts | Schmidt says agents misreported occupancy/condition, causing rescission and loss of coverage | Agents say even with truthful info no dwelling-fire policy would have been issued, so no proximate damages | Court: No genuine issue of proximate causation; summary judgment for agents on this claim |
| Whether agents negligently failed to procure appropriate insurance (different product) | Schmidt contends agents had duty to seek/advise about alternative coverages for condemned/renovating property | Agents say no special relationship/duty and no evidence other coverage was available | Court: Agents did not rule out possibility other coverage existed; summary judgment improper on negligent-procurement claim |
| Whether insurer properly rescinded policy based on application misrepresentations | Schmidt sought reinstatement and coverage | Insurer contended it relied on application representations and rescission was permitted | Court: Affirms Court of Appeals — rescission upheld; summary judgment for insurer |
| Whether plaintiff proved pecuniary loss under Crime Victims Relief Act based on agents’ conduct | Schmidt claimed statutory pecuniary loss from fraud/deception/forgery | Agents argued lack of causation and damages showing | Court: For claims tied to dwelling-fire application misstatements, damages causation negated; summary judgment for agents on those statutory claims |
Key Cases Cited
- Hughley v. State, 15 N.E.3d 1000 (Ind. 2014) (summary judgment standard and favoring trial on marginal cases)
- Williams v. Tharp, 914 N.E.2d 756 (Ind. 2009) (summary judgment standard under Trial Rule 56)
- Estate of Mintz v. Connecticut General Life Insurance Co., 905 N.E.2d 994 (Ind. 2009) (summary judgment proper when undisputed evidence negates an element of the claim)
- Rhodes v. Wright, 805 N.E.2d 382 (Ind. 2004) (same principle on negating claim elements at summary judgment)
- French v. State Farm Fire & Casualty Co., 881 N.E.2d 1031 (Ind. Ct. App. 2008) (elements of negligent procurement claim discussed)
- Ford Motor Co. v. Rushford, 868 N.E.2d 806 (Ind. 2007) (tort elements referenced for negligent procurement)
- Schmidt v. Indiana Insurance Co., 24 N.E.3d 516 (Ind. Ct. App. 2015) (prior appellate decision reversing agents' summary judgment and affirming insurer)