Evanston Insurance Company and Markel Corporation v. Samantha Meeks Family Practice, Inc., Samantha Meeks, and George Edwin Grant

• Court: Indiana Court of Appeals
• Decided: August 27, 2014
• Docket: 33A01-1401-PL-32
• Status: Unpublished

Opinion

Pursuant to Ind. Appellate Rule 65(D), this Memorandum Decision shall not be regarded as precedent or cited before any court except for the purpose of establishing the defense of res judicata, collateral estoppel, or the law of the case.

ATTORNEYS FOR APPELLANTS: ATTORNEY FOR APPELLEES SAMANTHA MEEKS FAMILY J. RICHARD MOORE PRACTICE, INC., and SAMANTHA MEEKS: CAROL A. DILLON Bleeke Dillon Crandall, P.C. JENNIFER L. BLACKWELL Indianapolis, Indiana Goodin Orzeske & Blackwell, P.C. Indianapolis, Indiana

Aug 27 2014, 9:20 am

IN THE COURT OF APPEALS OF INDIANA

EVANSTON INSURANCE COMPANY and ) MARKEL CORPORATION, ) ) Appellants-Plaintiffs/ ) Counterclaim Defendants, ) ) vs. ) No. 33A01-1401-PL-32 ) SAMANTHA MEEKS FAMILY PRACTICE, ) INC., SAMANTHA MEEKS, ) ) Appellees-Defendants/Counterclaimants, ) ) and ) ) GEORGE EDWIN GRANT, Individually and as ) Personal Representative of the ESTATE OF ) ANGELA DIANE GRANT, ) ) Appellee-Defendant. )

APPEAL FROM THE HENRY CIRCUIT COURT The Honorable Kit C. Dean Crane, Judge Cause No. 33C02-1206-PL-34 August 27, 2014

MEMORANDUM DECISION - NOT FOR PUBLICATION

CRONE, Judge

Case Summary

Nurse practitioner Samantha Meeks obtained a series of three professional liability

insurance policies for her family practice from Evanston Insurance Company (“Evanston”)

that provided coverage for claims made during the policy period. Meeks financed the

premium for the third policy through First Insurance Funding Corp. (“First”). Meeks signed

a financing agreement, which incorrectly listed her address and provided that First could

cancel the policy under a power of attorney if she failed to make a payment. Meeks made

only two of the ten required monthly payments to First. Two months after the second

payment, an insurance wholesaler forwarded to Evanston a notice of cancellation of

insurance coverage from First on Meeks’s behalf. The notice listed Meeks’s prior policy

number and incorrect address but listed the correct effective date of the policy. Pursuant to

the notice, Evanston cancelled Meeks’s current policy. First sent Meeks a notice of

cancellation, but it was mailed to the incorrect address listed on the finance agreement, and

Meeks never received it.

More than ten months after the policy period ended, a proposed professional

negligence complaint against Meeks was filed with the Indiana Department of Insurance.

Meeks sought a legal defense and indemnity from Evanston. Evanston denied coverage and

filed a declaratory judgment action seeking a determination of no coverage. Meeks and her

2 practice filed a counterclaim against Evanston and Markel Corporation (“Markel”),

Evanston’s corporate parent, seeking a determination that Evanston owed a duty to defend

and indemnify them against the negligence claim. The parties filed cross-motions for

summary judgment, and the trial court ruled against Evanston and Markel and in favor of

Meeks and her practice, finding that the policy was in effect when the claim was made.

On appeal, Evanston and Markel (“Appellants”) contend that the trial court erred in

denying their summary judgment motion, asserting that Meeks and her practice (“Appellees”)

are not entitled to coverage because the claim was filed after the policy period ended.

Appellees argue that they are entitled to summary judgment for three reasons: (1) because

the policy was not properly cancelled; (2) because Appellants did not give Meeks a notice of

renewal; and (3) because Appellants improperly refused to offer Meeks extended coverage.

We conclude that Appellees are not entitled to summary judgment because: (1) Evanston

was not a party to the finance agreement, and therefore any dispute regarding the propriety of

the policy cancellation is between Meeks and First; (2) Appellants were not required to give

Meeks a notice of renewal; and (3) Appellants did not refuse to offer Meeks extended

coverage. Because it is undisputed that the claim was filed after the policy period ended, we

conclude that Appellants are entitled to summary judgment. Therefore, we reverse and

remand with instructions to deny Appellees’ summary judgment motion and grant

Appellants’ summary judgment motion.

3 Facts and Procedural History

The relevant facts are undisputed. Meeks is a nurse practitioner who owns and

operates Samantha Meeks Family Practice, Inc. (“SMFP”), located at 3221 S. Memorial

Drive in New Castle. Meeks obtained professional liability coverage through Diederich

Insurance Agency (“Diederich”). Beginning in November 2007, SMFP and Meeks were

insured under a series of three policies issued by Evanston. All three policies were “claims

made” policies.1

The policy period of the third policy (“the Policy”), which is the subject of this

dispute, was from November 26, 2009, to November 26, 2010. The Policy number was SM-

869402, and coverage was retroactive to November 28, 2007. The Policy listed SMFP as the

named insured, correctly showed SMFP’s address as 3221 S. Memorial Drive, and read in

pertinent part as follows:

Claims Made Coverage: The coverage afforded by this policy is limited to liability for only those Claims that are first made against the Insured during the Policy Period or the Extended Reporting Period, if exercised, and reported in writing to the Company pursuant to the terms herein.

….

EXTENDED REPORTING PERIOD

A. If the Named Insured nonrenews this policy or cancels this policy … or if the Company nonrenews this policy or cancels this policy … for reasons other than nonpayment of premium or Deductible or non-

1 As we explained in Paint Shuttle, Inc. v. Continental Casualty Co., “[a] ‘claims made’ policy links coverage to the claim and notice rather than the injury. Thus, a ‘claims made’ policy protects the holder only against claims made during the life of the policy.” 733 N.E.2d 513, 522 (Ind. Ct. App. 2000) (citation omitted), trans. denied (2001). By contrast, “occurrence” policies “link coverage to the date of the tort rather than of the suit. Thus, ‘occurrence’ policies protect the policyholder from liability for any act done while the policy is in effect.” Id. (citation omitted).

4 compliance with the terms and conditions of this policy, then the Named Insured shall have the right upon payment of an additional premium … to extend the coverage granted under this policy ….

B. As a condition precedent to the right to purchase the Extended Reporting Period, the Named Insured must have paid: (1) all Deductibles when due; (2) all premiums due for the Policy Period; and (3) all premium [sic] due on any other policy(ies) issued by the Company or any of its affiliated companies in an uninterrupted series of policies of which this policy is a renewal or replacement must have been paid.

The right to purchase the Extended Reporting Period shall terminate unless a written notice … is received by the Company within thirty (30) days after the effective date of cancellation or nonrenewal together with payment of the additional deposit premium for the Extended Reporting Period. If such written notice of election and payment of additional premium are not so received by the Company, there shall be no right to purchase the Extended Reporting Period at a later date.

OTHER CONDITIONS

A. Cancellation: This policy may be cancelled by the Named Insured on behalf of all insureds by mailing to the Company written notice as stated in Item 13. of the Declarations[2] stating when thereafter such cancellation shall be effective. If cancelled by the Named Insured, the earned premium shall be computed at the customary short rate. Payment or tender of unearned premium shall not be a condition precedent to the effectiveness of cancellation, but such payment shall be made as soon as practicable.

This policy may be cancelled by the Company or by its underwriting manager, on behalf of the Company, by mailing to the Named Insured, at the address stated in Item 2. of the Declarations, written notice stating when, not less than thirty (30) days thereafter, such cancellation shall be effective. However, if the policy is cancelled because the Named Insured has failed to pay a premium or Deductible when due,

2 Item 13 provided that nonclaim notices “shall be addressed to” Markel Midwest at Ten Parkway North in Deerfield, Illinois. Appellants’ App. at 25. No email address was given.

5 including premium due on any other policy(ies) issued by the Company or any of its affiliated companies in an uninterrupted series of policies of which this policy is a renewal or replacement, this policy may be cancelled by the Company or by its underwriting manager, on behalf of the Company, by mailing a written notice of cancellation to the Named Insured stating when, not less than ten (10) days thereafter, such cancellation shall be effective.

Appellants’ App. at 24, 37-38.

Meeks financed the Policy’s premium through First. In December 2009, Meeks and

Diederich’s president/CEO signed a finance agreement, which incorrectly listed SMFP’s

address as 3222 S. Memorial Drive. The agreement recorded a cash down payment and an

unpaid premium balance, which was to be paid in ten monthly installments of $515.29. The

agreement stated in pertinent part,

RIGHT TO CANCEL. If insured does not make a payment when it is due, or if insured is otherwise in default under this agreement, [First] may cancel the policies and act in insured’s place with regard to the policies, including endorsing any check or draft issued in the insured’s name for funds assigned to [First] as security herein. This right given by insured to [First] constitutes a “Power of Attorney”. Before [First] cancels the policies, [First] will provide notice to the insured, as required by law. Insured agrees that this right to cancel which insured has granted to [First] cannot be revoked, and that [First’s] right to cancel will terminate only after all of insured’s indebtedness under this agreement is paid in full.

Id. at 45.

First’s payment records indicate that Meeks made payments of $541.05 in January and

February of 2010 but no payments thereafter. Id. at 63. The record reflects that the payments

included Meeks’s monthly obligation of $515.29 plus a late charge of $25.76. Id. at 63. The

$541.05 figure corresponds with past-due amounts printed on three “notice of intent to

cancel” forms from First addressed to Meeks at 3222 S. Memorial Drive, id. at 71-73, which

6 indicates that Meeks either received those forms in the mail despite the incorrect address or

was otherwise informed about the proper payment amount. Meeks’s February check is in the

record before us and bears SMFP’s correct address, i.e., 3221 S. Memorial Drive. Id. at 55.

On April 8, 2010, insurance wholesaler AVRECO forwarded to Evanston via email a

notice of cancellation of insurance coverage from First on Meeks’s behalf. The notice states

that the cancellation was effective March 22, 2010, as to policy number SM-862088 with an

effective date of November 26, 2009. Id. at 75. (SM-862088 was the number of Meeks’s

prior policy with Evanston, effective November 26, 2008, to November 26, 2009.) The

notice also bears Evanston’s name and address,3 Diederich’s name and address, and Meeks’s

name and incorrect address, i.e., 3222 S. Memorial Drive. The notice further states,

To the Insurance Company:

The insurance policy identified in this notice … is hereby cancelled in accordance with … the insured’s premium finance agreement (the “Agreement”.) The Agreement, which was signed by or on behalf of the insured, granted to [First] a power of attorney to issue this notice and assigned to [First] the gross unearned premium on the Policy.

Id. Pursuant to the notice, Evanston considered the Policy cancelled effective March 22,

2010, and issued an unearned premium refund, presumably to First. First mailed a

cancellation notice to Meeks at 3222 S. Memorial Drive, and she never received it.

On October 6, 2011, George Edwin Grant, individually and as the personal

representative of the estate of Angela Diane Grant, filed a proposed complaint with the

Indiana Department of Insurance alleging professional negligence associated with Meeks’s

3 Evanston’s address is listed as Ten Parkway North in Deerfield, Illinois.

7 treatment of Angela. Appellees sought a legal defense and indemnity against George’s claim

under the Policy. Evanston denied coverage and filed a complaint for declaratory judgment

against Appellees and George, seeking a determination of no coverage. Appellees filed a

counterclaim against Evanston and Markel, Evanston’s corporate parent, seeking a

determination that Evanston owed a duty to defend and indemnify them against the claim.

Appellants and Appellees filed cross-motions for summary judgment. The trial court issued

an order denying Appellants’ summary judgment motion, and they filed a motion for

clarification. After a hearing, the trial court issued an order denying Appellants’ summary

judgment motion and granting Appellees’ summary judgment motion, summarily finding that

the Policy “was in full force and effect” when George filed his claim. Id. at 8. This appeal

ensued.

Discussion and Decision

Appellants contend that the trial court erred in denying their summary judgment

motion and granting Appellees’ summary judgment motion. “The purpose of summary

judgment is to end litigation about which there can be no factual dispute and which may be

determined as a matter of law.” Adkins v. Vigilant Ins. Co., 927 N.E.2d 385, 388 (Ind. Ct.

App. 2010), trans. denied. “Summary judgment is appropriate only where the designated

evidence shows there is no genuine issue of material fact and the moving party is entitled to

judgment as a matter of law.” Town of Newburgh v. Town of Chandler, 999 N.E.2d 1015,

1017 (Ind. Ct. App. 2013), trans. denied (2014).

All designated evidence must be construed liberally and any doubt resolved in favor of the non-moving party. Summary judgment is inappropriate where

8 material facts conflict or undisputed facts lead to conflicting material inferences.…

On appeal, we review a summary judgment order de novo and must determine whether the designated evidence before the trial court presents a genuine issue of material fact and whether the moving party is entitled to judgment as a matter of law. Although the nonmoving party has the burden of demonstrating that the grant of summary judgment was erroneous, we carefully assess the trial court’s decision to ensure that the nonmovant was not improperly denied its day in court. We may not reverse the entry of summary judgment on the ground that a genuine issue of material fact exists unless the material fact and the evidence relevant thereto were designated specifically to the trial court. Furthermore, we will sustain the trial court’s decision to grant a motion for summary judgment if it is sustainable by any theory or basis found in the record.

Adkins, 927 N.E.2d at 388-89 (citations omitted). “The fact that the parties have filed cross-

motions for summary judgment does not alter our standard for review, as we consider each

motion separately to determine whether the moving party is entitled to judgment as a matter

of law.” Reed v. Reid, 980 N.E.2d 277, 285 (Ind. 2012).

Appellants contend that Appellees are not entitled to coverage under the Policy

because George’s claim was made over ten months after the policy period ended. They

further contend that,

[w]hile there may be issues of fact surrounding whether Ms. Meeks received inadequate notice of cancellation of the Policy by [First] on March 22, 2010, those issues are not material to the question of law at issue in this case. There is no dispute that the Grant claim was made well after the policy period ended.

Appellants’ Br. at 9-10.

Appellees assert that the issue “is not as simple a matter” as Appellants suggest, for

three reasons: (1) because the Policy “was not properly cancelled”; (2) because Appellants

“denied Meeks a notice of renewal”; and (3) because Appellants “improperly refused to offer

9 tail [i.e., extended] coverage.” Appellees’ Br. at 5, 8, 9. As for reason (1), First cancelled

the Policy on Meeks’s behalf as her attorney-in-fact pursuant to their finance agreement after

she failed to make payments. Appellants point out that Evanston was not a party to the

finance agreement, and we agree with their contention that any dispute regarding the

propriety of the cancellation is between Meeks and First. Cf. Holland v. Sterling Cas. Ins.

Co., 30 Cal. Rptr. 2d 809, 811-12 (Cal. Ct. App. 1994) (“The pre-cancellation notices [from

the premium financing lender] to insurer and insured serve different functions. Notice to the

insurer is for the benefit of the insurer so that the insurer does not pay out on a post-

cancellation loss. Obviously, notice to the insured is for the insured’s benefit, so that it can

cure its defaults. If the lender does not send the pre-cancellation notice to the insured, it must

be the lender who is responsible to the insured, not the insurer.”) (citations omitted).

Appellees’ numerous grounds for asserting that Evanston is legally responsible for the

Policy not being “properly cancelled” are unpersuasive and unsupported by the record or any

citation to legal authority. For example, Appellees state, “The cancellation notice

purportedly mailed by First to Meeks contains the wrong address.” Appellees’ Br. at 5. This

was not Evanston’s fault. Appellees further state that the cancellation notice “purports to

cancel Policy No. SM-862088; the policy is number SM-869402.” Id. Notwithstanding this

error, which also was not Evanston’s fault, Evanston cancelled the policy that was the subject

of Meeks’s finance agreement with First. Appellees also claim that “the condition precedent

to cancellation is the insured failing to make a payment when it was due. First was not

properly billing Meeks for these payments. Since she was not billed, no amount was due.”

10 Id. at 6. Appellees cite no authority for this statement, and any improper billing by First was

not Evanston’s fault. Meeks made two consecutive monthly payments (including late

charges) to First, which indicates her awareness of her obligations under the finance

agreement despite any billing errors. Likewise, Appellees cite no authority for their assertion

that Appellants had a duty to notify Meeks about First’s cancellation notice because it

“contained the incorrect address for Meeks and the incorrect policy number.” Id. Finally,

Appellees contend that the Policy required Evanston to mail a written notice of cancellation

to Meeks. Appellants point out that such notice was required only if Evanston initiated the

Policy cancellation, which did not happen here. Instead, First initiated the cancellation. To

the extent that First may not have strictly complied with the cancellation provisions of the

Policy, we note that Meeks cites no authority for the proposition that she has standing to

challenge Evanston’s acceptance of First’s cancellation.

As for reasons (2) and (3), Evanston had no duty to send Meeks a notice of renewal,

and Evanston did not refuse to offer Meeks extended coverage. Appellees’ argument that

Meeks would have renewed the Policy or purchased extended coverage is based on the faulty

premise that Evanston was required to notify her that the Policy was cancelled, as well as on

portions of Meeks’s deposition that were not designated to the trial court. As indicated by

11 the Policy language excerpted above, Evanston was required to notify Meeks only if it

initiated the cancellation; here, First initiated the cancellation on Meeks’s behalf.4

In sum, we conclude that the issue is indeed as simple as Appellants suggest; because

George’s claim was made after the policy period ended, Appellees are not entitled to

coverage under the Policy. Therefore, we reverse and remand with instructions to deny

Appellees’ summary judgment motion and grant Appellants’ summary judgment motion.

Reversed and remanded.

BAKER, J., and BARNES, J., concur.

4 Appellees make a passing reference to Indiana Code Section 34-18-13-4(2) in the summary of argument section of their brief but do not mention it in the argument section. As such, any argument as to its applicability is waived. See Martin v. State, 636 N.E.2d 1268, 1270 n.2 (Ind. Ct. App. 1994) (finding issue waived where appellant raised it in summary of argument section of brief but did not address it in argument section).