Jana Stacy v. ASI Select Insurance Corporation
23A-CT-02529
Ind. Ct. App.Aug 26, 2024Background
- Jana Stacy purchased a home in Indiana and experienced drainage and foundation issues following sewer line repair work by Greenwell Plumbing.
- Stacy claimed that Greenwell’s work (and possibly a backhoe incident) damaged the foundation; Greenwell denied striking the house but agreed to pay United Dynamics, Inc. (UDI) to make repairs in exchange for Stacy signing a release of claims against Greenwell.
- UDI allegedly performed faulty repairs, causing further damage. Stacy informed her insurer, ASI Select Insurance Corp. (ASI), of the damages only after UDI completed its work.
- ASI denied Stacy’s homeowner’s claim, citing exclusions for faulty workmanship and untimely notice. Stacy sued ASI for breach of contract and UDI for negligent workmanship; she dismissed her claims against Greenwell by agreement.
- The trial court granted summary judgment for ASI (untimely notice), but denied summary judgment for UDI (finding a fact issue on negligence). ASI and UDI both appealed; the appeals were consolidated.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timely Notice to Insurer | Stacy claimed she notified ASI soon after realizing UDI worsened the damage; late notice should not bar recovery. | ASI argued Stacy’s delay in notification prejudiced investigation and breached the policy. | For ASI; late notice presumed prejudicial, unrebutted by Stacy. |
| Release/ASI’s Subrogation Rights | Stacy alleged the release signed with Greenwell did not harm her claim against ASI. | ASI argued the release destroyed subrogation rights before notice, justifying denial. | Affirmed summary judgment for ASI (untimely notice disposition was dispositive). |
| Privity / Negligence Claim vs. UDI | Stacy argued UDI owed her a duty under Indiana’s Home Improvement Contract Act (HICA), despite lack of direct contract. | UDI argued lack of privity and no foreseeable risk of personal injury, thus no duty owed; HICA inapplicable. | For UDI; no privity and no foreseeable injury, so no liability in negligence. |
| Foreseeability Doctrine (Property Damage) | Stacy contended recovery for property damage permitted if personal injury is foreseeable from negligent work. | UDI argued only property risk, not personal injury, was foreseeable. | For UDI; personal injury not reasonably foreseeable, so claim barred. |
Key Cases Cited
- Miller v. Dilts, 463 N.E.2d 257 (Ind. 1984) (untimely notice to insurer may warrant presumption of prejudice and bar recovery)
- U.S. Automatic Sprinkler Corp. v. Erie Ins. Exch., 204 N.E.3d 215 (Ind. 2023) (foreseeability doctrine applies to allow third parties to recover for property damage only if personal injury foreseeably results)
- Peters v. Forster, 804 N.E.2d 736 (Ind. 2004) (foreseeability doctrine replaces acceptance rule for contractor liability to third parties)
- Citizens Gas & Coke Util., Inc. v. American Econ. Ins. Co., 486 N.E.2d 998 (Ind. 1985) (privity controls recovery for property damage when no foreseeable personal injury)