Travelers Insurance Companies v. Maplehurst Farms, Inc.
953 N.E.2d 1153
Ind. Ct. App.2011Background
- Maplehurst owned a dairy in Indianapolis with a UST leak discovered in 2000; Dean Foods/Dean then settled remediations in 2002 for $170,000.
- Travelers and other insurers provided general liability coverage; Maplehurst discovered insurers late due to dispersed records after 1997 closure.
- Notice provisions required prompt written notice and consent for voluntary payments; Maplehurst notified insurers in 2003 after pre-notice costs were incurred.
- Maplehurst incurred pre-notice defense and indemnity costs totaling $89,984.31 before tender and $295,896.98 after tender; Dean’s settlement occurred without insurer input.
- Trial court granted summary judgment for Maplehurst on pre-notice costs; court distinguished Dreaded and held prejudice not required to recover pre-notice costs.
- On appeal, Supreme Court reversed for pre-notice costs; held Dreaded controls, pre-notice costs are not recoverable; cross-appeal denied attorney’s fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether pre-notice costs are recoverable | Maplehurst argues pre-notice costs must be reimbursed. | Travelers argues no reimbursement due under Dreaded and policy voluntary-payment terms. | Pre-notice costs not recoverable; reversed in Travelers' favor. |
| Whether voluntary payment provisions bind insurer before notice | Maplehurst asserts prejudice not required, and Dreaded allows recovery. | Travelers maintains provisions prohibit pre-notice payments without consent. | Voluntary payment rule bars pre-notice reimbursements; insurer not liable for pre-notice costs. |
| Whether prejudice is required to deny pre-notice recovery | Maplehurst cites Miller for potential prejudice, rebuttable with evidence. | Travelers argues Dreaded requires no prejudice analysis for pre-notice costs. | Dreaded controls; prejudice not necessary to deny pre-notice recovery. |
| Attorney's fees on cross-appeal | Maplehurst seeks fees for defending long list of defenses by Travelers. | Travelers contends no frivolous or groundless defense; fees inappropriate. | Attorney’s fees denied; issue moot since outcome favors Travelers on pre-notice costs. |
| Remand and summary judgment posture | Maplehurst contends trial court erred in granting partial relief for pre-notice costs. | Travelers argues judgment should be in its favor for pre-notice costs. | Remand with instructions to enter summary judgment in Travelers’ favor on pre-notice costs. |
Key Cases Cited
- Dreaded, Inc. v. St. Paul Guardian Ins. Co., 904 N.E.2d 1267 (Ind. 2009) (pre-notice defense costs not recoverable; notice triggers defense duties)
- Miller v. Dilts, 463 N.E.2d 257 (Ind. 1984) (prejudice presumed from unreasonable delay; reasonableness question of law when undisputed)
- Tri-Etch, Inc. v. Cincinnati Ins. Co., 909 N.E.2d 997 (Ind. 2009) (post-Dreaded considerations on prejudice and defenses)
- Moms v. Economy Fire & Cas. Co., 848 N.E.2d 663 (Ind. 2006) (cooperation/coverage provisions may be enforced without prejudice showing)
- Auto-Owners Ins. Co. v. Hughes, 943 N.E.2d 432 (Ind. Ct. App. 2011) (limited duty to provide policy copy; does not excuse delay in notice)