986 N.E.2d 841
Ind. Ct. App.2013Background
- Palmor designed and manufactured the Trac-Vac; CBD and Northhampton distributed or sold lawn and garden equipment with no written contracts among them.
- Gary Hammerstone purchased a Palmor Trac-Vac in 2004 and was injured using it in 2009 while attempting to clear a clog.
- Hammerstone filed suit in Pennsylvania in 2009 against Palmor and Northhampton, later joining CBD; allegations included negligent design, manufacturing, warnings, and instruction, plus punitive damages and strict liability claims.
- Consolidated Insurance issued Palmor a general liability policy; Indiana Insurance issued an umbrella policy CU8131861; Northhampton and CBD were not named as insureds on the umbrella.
- The umbrella policy language includes a covered damage/defense framework, a products-completed operations hazard definition, and a separate endorsement titled Products-Completed Operations Exclusion that excludes injuries within that hazard.
- Declarations page listed $2,000,000 aggregate limits for products-completed operations and general aggregate, and identified the exclusion endorsement; trial court granted summary judgment for Indiana Insurance and denied cross-motions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the umbrella policy ambiguous about coverage for products-completed operations? | Hammerstone argues declarations show coverage for products-completed operations, while the endorsement excludes it, creating ambiguity. | Indiana asserts the declarations page clearly excludes products-completed operations, so no ambiguity exists. | Ambiguity found; construed against insurer, creating coverage for Palmor. |
| Should the case be remanded to resolve indemnitee/assignee status under the umbrella policy? | Remaining issues include whether Northhampton and CBD are Palmor indemnitees and whether Hammerstones have assignee rights. | Not explicitly disputing remand, but argues coverage is upheld for the insurer based on lack of ambiguity. | Remand instructed to determine indemnitee/assignee qualifications and related matters. |
Key Cases Cited
- Lake States Ins. Co. v. Tech Tools, Inc., 748 N.E.2d 314 (Ind. Ct. App. 2001) (ambiguous terms under insurance contracts construed against insurer)
- Allstate Ins. Co. v. Bradtmueller, 715 N.E.2d 993 (Ind. Ct. App. 1999) (ambiguity requires strict construction against insurer)
- Mahan v. Am. Standard Ins. Co., 862 N.E.2d 669 (Ind. Ct. App. 2007) (ambiguity standard; terms given plain meaning when unambiguous)
- Farmers Ins. Exch. v. Smith, 757 N.E.2d 145 (Ind. Ct. App. 2001) (interpretation of insurance contracts; avoid rendering words meaningless)
- Wilcox Mfg. Grp., Inc. v. Mktg. Servs. of Ind., Inc., 832 N.E.2d 559 (Ind. Ct. App. 2005) (standard for reviewing summary judgment; de novo on appeal)