Indiana Farmers Mutual Insurance Company v. Amber N. Yost, Gretchen L. Poehler, Mandy Shearer, and Anne K. Nania (mem. dec.)
79A02-1606-CT-1407
| Ind. Ct. App. | Mar 14, 2017Background
- In 2005 Kay Lee, LLC leased two halves of a West Lafayette duplex; occupants included Scott and Poehler (422-1) and Yost, Shearer, and Nania (422-2). Indiana Farmers insured Kay Lee.
- A May 9, 2006 fire damaged both units and common areas; Indiana Farmers paid Kay Lee’s claim and filed a subrogation suit in 2010 against Scott and the four tenants for negligence and breach of the leases.
- Early proceedings: most defendants returned service and appeared; by 2012 the court dismissed claims against Yost on grounds the insurer lacked privity with Yost’s lease (and found the negligence claim timely); Scott was dismissed by stipulation in 2014.
- In 2015 Indiana Farmers reissued summons to Poehler (then Broman); Poehler later appeared and moved to dismiss for failure to prosecute and defective service. Shearer and Nania moved for summary judgment arguing no factual showing of lease breach.
- The trial court dismissed Poehler for failure to prosecute and granted summary judgment for Shearer and Nania. The court’s prior dismissal of claims against Yost remained in the record.
- On appeal, the court affirmed dismissal of Poehler and the summary judgment for Shearer and Nania, but reversed the dismissal of Indiana Farmers’ negligence and contract claims against Yost and remanded those claims for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether dismissal of Poehler for failure to prosecute was proper | Indiana Farmers: Rule 41(E) should not apply to a single defendant where other defendants are actively pursued; also argued it resumed prosecution when it reattempted service | Poehler: Service was deficient and plaintiff waited over five years to serve her | Court: Affirmed dismissal — five-year delay was presumptively unreasonable; Rule 41(E) dismissal appropriate where plaintiff failed to show due diligence |
| Whether dismissal of negligence claim against Yost was proper | Indiana Farmers: Complaint pleaded timely negligence claim; trial court’s stated contract-based reason didn’t defeat negligence claim | Yost: Trial court had independent bases (joined discovery/prosecution arguments) to dismiss | Court: Reversed dismissal as to negligence — trial court had already found negligence claim timely and no independent, defendant-specific grounds justified dismissal |
| Whether Indiana Farmers (as subrogee) may enforce landlord’s lease rights against Yost (privity issue) | Indiana Farmers: As Kay Lee’s subrogee it stands in landlord’s shoes and can enforce lease rights | Yost: Indiana Farmers lacks privity and cannot bring contract claim | Court: Reversed — subrogation permits insurer to assert the insured’s contract rights; lack of direct privity does not bar the subrogee’s lease claim |
| Whether summary judgment for Shearer and Nania on breach liability was proper | Indiana Farmers: Lease prohibits waste and requires return in good condition; genuine issues exist whether tenants caused negligent/excessive damage | Shearer/Nania: Indiana Farmers designated no admissible evidence showing they committed waste or caused the fire | Court: Affirmed — landlord (plaintiff) bears burden to designate evidence that tenants caused damage; mere allegations insufficient, so no genuine factual dispute shown |
Key Cases Cited
- Geiger & Peters, Inc. v. Am. Fletcher Nat. Bank & Trust Co., 428 N.E.2d 1279 (Ind. Ct. App. 1981) (discusses T.R. 41(E) dismissal for failure to prosecute and need to show due diligence)
- State v. McClaine, 300 N.E.2d 342 (Ind. 1973) (explains that a plaintiff who resumes diligent prosecution can defeat a T.R. 41(E) dismissal when the defendant had notice and moved timely)
- Erie Ins. Co. v. George, 681 N.E.2d 183 (Ind. 1997) (describes subrogation as equitable doctrine allowing payor to succeed to insured’s rights but not to acquire greater rights than subrogor)
- Bank of N.Y. v. Nally, 820 N.E.2d 644 (Ind. 2005) (explains subrogation arises from discharge of a debt and permits successor to creditor’s rights)
- Veolia Water Indpls., LLC v. Nat’l Trust Ins. Co., 3 N.E.3d 1 (Ind. 2014) (framework for de novo review of T.R. 12(B)(6) dismissal and standards for pleadings)