Mircea Garba v. West Bend Mutual Insurance Company (mem. dec.)
75A04-1611-PL-2546
| Ind. Ct. App. | May 16, 2017Background
- On October 11, 2013 Mircea Garba's home (Coverage A limit $360,500) was fire-damaged; he submitted an insurance claim to West Bend.
- Policy contained a Loss Settlement Provision allowing payment up to 125% of Coverage A for repair/replacement, but if insured elects not to repair, settlement is actual cash value (ACV) not to exceed Coverage A; it also contained an Appraisal Provision for disputes over amount of loss.
- Parties invoked appraisal; the appraisers and umpire produced an appraisal award of $360,190.07, which West Bend paid to Garba.
- Garba elected not to repair the house and purchased a replacement home in Arizona for $420,000.
- Garba sued West Bend claiming entitlement to additional funds under the Loss Settlement Provision (seeking up to 125% of the policy limit) and bad faith; both parties moved for summary judgment.
- Trial court granted summary judgment to West Bend; the Court of Appeals affirmed, holding Garba’s election not to repair caps recovery at the policy limit/ACV.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether West Bend’s liability exceeded the policy limit because Loss Settlement allows up to 125% of Coverage A | Garba: Loss Settlement permits up to 125% replacement payment (arguing appraisal award doesn’t limit this) | West Bend: Loss Settlement limits payment when insured elects not to repair—ACV capped at Coverage A; appraisal set amount of loss | Held: Garba elected not to repair; Loss Settlement unambiguously caps settlement at Coverage A (ACV), so West Bend’s liability limited to policy limit |
Key Cases Cited
- Kroger Co. v. Plonski, 930 N.E.2d 1 (Ind. 2010) (standard of review for summary judgment)
- Gill v. Evansville Sheet Metal Works, Inc., 970 N.E.2d 633 (Ind. 2012) (movant’s burden and nonmovant response in summary judgment)
- Hardy v. Hardy, 963 N.E.2d 470 (Ind. 2012) (cross-motions for summary judgment evaluated separately)
- Reed v. Reid, 980 N.E.2d 277 (Ind. 2012) (contract interpretation as a question of law suitable for summary judgment)
- Wright v. Am. States Ins. Co., 765 N.E.2d 690 (Ind. Ct. App. 2002) (rules for construing insurance policy language)