41 N.E.3d 297
Ind. Ct. App.2015Background
- Fire damages Misslers’ Carmel home and personal property; State Farm insured under a Homeowner’s Policy with specified coverage limits.
- IRCS, a contractor, was brought to scene by a State Farm agent; Misslers were urged to sign IRCS contract immediately to prevent mold/voiding policy.
- Misslers learned IRCS was a PSP member for dwelling repairs; dispute arises over personal property restoration not covered by PSP.
- Misslers signed multiple IRCS contracts, including consent to joint payee and assignment of insurance proceeds to IRCS; terms included potential conversion claims if funds not directed to IRCS.
- IRCS performed cleaning/restoration; State Farm paid substantial claim sums, with joint payments to Misslers and IRCS; Misslers later contested cleaning quality and contract terms.
- Misslers filed suit alleging breach of contract, breach of good faith and fair dealing against State Farm, and unjust enrichment and unconscionable contract against IRCS; trial court granted summary judgment for both.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether State Farm breached duty of good faith and fair dealing | Misslers contend State Farm steered them to IRCS and endorsed PSP terms as unfair. | State Farm did not sign IRCS contracts and acted within policy terms; no unfair advantage. | No genuine issue; summary judgment for State Farm affirmed. |
| Whether the IRCS contract was unconscionable | Contract was procedurally and substantively unconscionable due to coercive scene presence and one-sided terms. | Contract terms were standard and not evidence of oppression; performance and standards were industry-based. | Issue remanded; trial court erred in granting summary judgment for IRCS. |
Key Cases Cited
- Missig v. State Farm Fire & Cas. Co., 998 N.E.2d 216 (Ind. Ct. App. 2013) (bad faith element requires clear and convincing showing of total lack of basis)
- Freidline v. Shelby Ins. Co., 774 N.E.2d 37 (Ind. 2002) (duty to deal in good faith and fair dealing)
- Erie Ins. Co. v. Hickman, 622 N.E.2d 515 (Ind. 1993) (unfair advantage and pressure to settle claims)
- Mahan v. Am. Standard Ins. Co., 862 N.E.2d 669 (Ind. Ct. App. 2007) (need for conscious wrongdoing for bad faith)
- Brumley v. Commonwealth Bus. Coll. Educ. Corp., 945 N.E.2d 770 (Ind. Ct. App. 2011) (two-branch unconscionability: substantive and procedural)