FILED Mar 25 2020, 10:31 am
CLERK Indiana Supreme Court Court of Appeals and Tax Court
ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEE Michael L. Carmin Lonnie D. Johnson Daniel M. Cyr Belinda R. Johnson-Hurtado CarminParker, PC Stephanie A. Halsted Bloomington, Indiana Clendening, Johnson & Bohrer, P.C. Bloomington, Indiana
IN THE COURT OF APPEALS OF INDIANA
KMC, LLC, March 25, 2020 Appellant-Defendant/Third-Party Court of Appeals Case No. Plaintiff, 19A-CC-2665 Appeal from the Greene v. Superior Court The Honorable Dena A. Martin, Eastern Heights Utilities, Inc., Judge Appellee-Third-Party Defendant Trial Court Cause No. 28D01-1806-CC-196
Baker, Judge.
Court of Appeals of Indiana | Opinion 19A-CC-2665 | March 25, 2020 Page 1 of 8 [1] KMC, LLC (KMC), owns a building that was damaged by flooding after water
pipes leading to a sprinkler system froze and then burst. KMC filed a
negligence complaint against Eastern Heights Utilities, Inc. (Eastern Heights),
arguing that Eastern Heights was negligent for failing to shut off the water
supply to the building when requested by KMC. The trial court entered
summary judgment in favor of Eastern Heights. Finding as a matter of law that
Eastern Heights did not have a duty to shut off the water supply to the fire
suppression system because it was prohibited by law from doing so, we affirm.
Facts [2] KMC is a real estate holding company that owns a building (the Building)
located on North Main Street in Bloomfield. Eastern Heights is a private,
nonprofit utility company providing water services to Bloomfield and the
surrounding areas; it provides water services to the Building.
[3] In 2006, KMC learned that it was required by statute to put a fire suppression
sprinkler system into the Building. After the system was installed, Eastern
Heights provided the water supply to the fire suppression system. The main
water valve, which provides general water service to the Building, is in the
Building’s basement. There are separate water valves, located outside the
Building, that are connected to the fire suppression system and dedicated to that
purpose.
[4] In 2017, KMC decided to winterize the Building because it was vacant. Among
other things, it decided to disconnect the Building’s heating system. Therefore,
Court of Appeals of Indiana | Opinion 19A-CC-2665 | March 25, 2020 Page 2 of 8 on November 2, 2017, KMC requested that Eastern Heights shut off the water
supply to the Building to avoid frozen pipes during the winter. Eastern Heights
visited the property the same day and turned off the main water valve in the
basement. KMC did not specifically request that Eastern Heights disconnect
the water supply to the fire suppression system; therefore, Eastern Heights did
not shut off the separate valves located outside.
[5] Subsequently, cold weather conditions caused pipes connected to the Building’s
fire suppression systems to freeze. On January 9, 2018, upon thawing, the pipes
burst, causing extensive flood damage. KMC hired Five Star Complete
Restoration, Inc. (Five Star), to repair the flood damage. After completing its
work, Five Star billed KMC over $300,000 for the extensive repairs needed.
KMC failed to remit payment to Five Star.
[6] On June 25, 2018, Five Star filed a lawsuit against KMC for the money it
alleged was owed by KMC for the flood damage repairs. On September 7,
2018, KMC filed a third-party complaint against Eastern Heights and KMC’s
property insurer. In relevant part, the third-party complaint alleges that Eastern
Heights was negligent for failing to turn off the fire suppression system’s water
supply and that its negligence proximately caused the flood damage.
[7] On March 8, 2019, KMC filed a motion for partial summary judgment against
Eastern Heights, asking that the trial court find as a matter of law that Eastern
Heights was negligent for failing to shut off the water supply to the Building’s
fire suppression system. On May 6, 2019, Eastern Heights filed a cross-motion
Court of Appeals of Indiana | Opinion 19A-CC-2665 | March 25, 2020 Page 3 of 8 for summary judgment against KMC, asking that the trial court find as a matter
of law that Eastern Heights was not negligent because (1) Eastern Heights had
no duty regarding the fire suppression system; (2) Eastern Heights’s actions did
not proximately cause the damage; and (3) Eastern Heights is entitled to
common law governmental immunity from liability for its fire protection
services. Following briefing and a hearing, the trial court summarily entered
summary judgment in favor of Eastern Heights on June 28, 2019. KMC now
appeals.
Discussion and Decision [8] KMC argues that the trial court erred by entering summary judgment in favor
of Eastern Heights, contending that we should enter summary judgment in its
favor or, in the alternative, that there are issues of material fact that must be
considered by a factfinder.
[9] Our standard of review on summary judgment is well settled:
The party moving for summary judgment has the burden of making a prima facie showing that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Reed v. Reid, 980 N.E.2d 277, 285 (Ind. 2012). Once these two requirements are met by the moving party, the burden then shifts to the non-moving party to show the existence of a genuine issue by setting forth specifically designated facts. Id. Any doubt as to any facts or inferences to be drawn therefrom must be resolved in favor of the non-moving party. Id. Summary judgment should be granted only if the evidence sanctioned by Indiana Trial Rule 56(C) shows there is no genuine issue of material fact and that the moving party
Court of Appeals of Indiana | Opinion 19A-CC-2665 | March 25, 2020 Page 4 of 8 deserves judgment as a matter of law. Freidline v. Shelby Ins. Co., 774 N.E.2d 37, 39 (Ind. 2002).
Goodwin v. Yeakle’s Sports Bar & Grill, Inc., 62 N.E.3d 384, 386 (Ind. 2016).
[10] To prevail on a theory of negligence, KMC must show that (1) Eastern Heights
owed it a duty; (2) Eastern Heights breached that duty; and (3) KMC’s damages
were proximately caused by that breach. E.g., Winchell v. Guy, 857 N.E.2d
1024, 1026 (Ind. Ct. App. 2006). Negligence cases tend to be fact sensitive and,
as such, summary judgment is rarely appropriate. Id. at 1026-27. Nonetheless,
summary judgment is appropriate when the undisputed material evidence
negates one element of a negligence claim. Id. at 1027.
[11] We find the first element—duty—to be dispositive in this case. A duty of care
is created in one of three ways—by statute, at common law, or by assuming the
duty. Holtz v. J.J.B. Hillard W.L. Lyons, Inc., 185 F.3d 732, 740 (7th Cir. 1999)
(applying Indiana law). Generally, whether a duty exists is a question of law.
Buckingham Mgmt. LLC v. Tri-Esco, Inc., 137 N.E.3d 285, 289 (Ind. Ct. App.
2019).
[12] We agree with KMC that “[w]ater utilities owe a duty of care to their
customers.” Appellant’s Br. p. 11 (citing Pa. R. Co. v. Lincoln Tr. Co., 91 Ind.
App. 28, 167 N.E.
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FILED Mar 25 2020, 10:31 am
CLERK Indiana Supreme Court Court of Appeals and Tax Court
ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEE Michael L. Carmin Lonnie D. Johnson Daniel M. Cyr Belinda R. Johnson-Hurtado CarminParker, PC Stephanie A. Halsted Bloomington, Indiana Clendening, Johnson & Bohrer, P.C. Bloomington, Indiana
IN THE COURT OF APPEALS OF INDIANA
KMC, LLC, March 25, 2020 Appellant-Defendant/Third-Party Court of Appeals Case No. Plaintiff, 19A-CC-2665 Appeal from the Greene v. Superior Court The Honorable Dena A. Martin, Eastern Heights Utilities, Inc., Judge Appellee-Third-Party Defendant Trial Court Cause No. 28D01-1806-CC-196
Baker, Judge.
Court of Appeals of Indiana | Opinion 19A-CC-2665 | March 25, 2020 Page 1 of 8 [1] KMC, LLC (KMC), owns a building that was damaged by flooding after water
pipes leading to a sprinkler system froze and then burst. KMC filed a
negligence complaint against Eastern Heights Utilities, Inc. (Eastern Heights),
arguing that Eastern Heights was negligent for failing to shut off the water
supply to the building when requested by KMC. The trial court entered
summary judgment in favor of Eastern Heights. Finding as a matter of law that
Eastern Heights did not have a duty to shut off the water supply to the fire
suppression system because it was prohibited by law from doing so, we affirm.
Facts [2] KMC is a real estate holding company that owns a building (the Building)
located on North Main Street in Bloomfield. Eastern Heights is a private,
nonprofit utility company providing water services to Bloomfield and the
surrounding areas; it provides water services to the Building.
[3] In 2006, KMC learned that it was required by statute to put a fire suppression
sprinkler system into the Building. After the system was installed, Eastern
Heights provided the water supply to the fire suppression system. The main
water valve, which provides general water service to the Building, is in the
Building’s basement. There are separate water valves, located outside the
Building, that are connected to the fire suppression system and dedicated to that
purpose.
[4] In 2017, KMC decided to winterize the Building because it was vacant. Among
other things, it decided to disconnect the Building’s heating system. Therefore,
Court of Appeals of Indiana | Opinion 19A-CC-2665 | March 25, 2020 Page 2 of 8 on November 2, 2017, KMC requested that Eastern Heights shut off the water
supply to the Building to avoid frozen pipes during the winter. Eastern Heights
visited the property the same day and turned off the main water valve in the
basement. KMC did not specifically request that Eastern Heights disconnect
the water supply to the fire suppression system; therefore, Eastern Heights did
not shut off the separate valves located outside.
[5] Subsequently, cold weather conditions caused pipes connected to the Building’s
fire suppression systems to freeze. On January 9, 2018, upon thawing, the pipes
burst, causing extensive flood damage. KMC hired Five Star Complete
Restoration, Inc. (Five Star), to repair the flood damage. After completing its
work, Five Star billed KMC over $300,000 for the extensive repairs needed.
KMC failed to remit payment to Five Star.
[6] On June 25, 2018, Five Star filed a lawsuit against KMC for the money it
alleged was owed by KMC for the flood damage repairs. On September 7,
2018, KMC filed a third-party complaint against Eastern Heights and KMC’s
property insurer. In relevant part, the third-party complaint alleges that Eastern
Heights was negligent for failing to turn off the fire suppression system’s water
supply and that its negligence proximately caused the flood damage.
[7] On March 8, 2019, KMC filed a motion for partial summary judgment against
Eastern Heights, asking that the trial court find as a matter of law that Eastern
Heights was negligent for failing to shut off the water supply to the Building’s
fire suppression system. On May 6, 2019, Eastern Heights filed a cross-motion
Court of Appeals of Indiana | Opinion 19A-CC-2665 | March 25, 2020 Page 3 of 8 for summary judgment against KMC, asking that the trial court find as a matter
of law that Eastern Heights was not negligent because (1) Eastern Heights had
no duty regarding the fire suppression system; (2) Eastern Heights’s actions did
not proximately cause the damage; and (3) Eastern Heights is entitled to
common law governmental immunity from liability for its fire protection
services. Following briefing and a hearing, the trial court summarily entered
summary judgment in favor of Eastern Heights on June 28, 2019. KMC now
appeals.
Discussion and Decision [8] KMC argues that the trial court erred by entering summary judgment in favor
of Eastern Heights, contending that we should enter summary judgment in its
favor or, in the alternative, that there are issues of material fact that must be
considered by a factfinder.
[9] Our standard of review on summary judgment is well settled:
The party moving for summary judgment has the burden of making a prima facie showing that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Reed v. Reid, 980 N.E.2d 277, 285 (Ind. 2012). Once these two requirements are met by the moving party, the burden then shifts to the non-moving party to show the existence of a genuine issue by setting forth specifically designated facts. Id. Any doubt as to any facts or inferences to be drawn therefrom must be resolved in favor of the non-moving party. Id. Summary judgment should be granted only if the evidence sanctioned by Indiana Trial Rule 56(C) shows there is no genuine issue of material fact and that the moving party
Court of Appeals of Indiana | Opinion 19A-CC-2665 | March 25, 2020 Page 4 of 8 deserves judgment as a matter of law. Freidline v. Shelby Ins. Co., 774 N.E.2d 37, 39 (Ind. 2002).
Goodwin v. Yeakle’s Sports Bar & Grill, Inc., 62 N.E.3d 384, 386 (Ind. 2016).
[10] To prevail on a theory of negligence, KMC must show that (1) Eastern Heights
owed it a duty; (2) Eastern Heights breached that duty; and (3) KMC’s damages
were proximately caused by that breach. E.g., Winchell v. Guy, 857 N.E.2d
1024, 1026 (Ind. Ct. App. 2006). Negligence cases tend to be fact sensitive and,
as such, summary judgment is rarely appropriate. Id. at 1026-27. Nonetheless,
summary judgment is appropriate when the undisputed material evidence
negates one element of a negligence claim. Id. at 1027.
[11] We find the first element—duty—to be dispositive in this case. A duty of care
is created in one of three ways—by statute, at common law, or by assuming the
duty. Holtz v. J.J.B. Hillard W.L. Lyons, Inc., 185 F.3d 732, 740 (7th Cir. 1999)
(applying Indiana law). Generally, whether a duty exists is a question of law.
Buckingham Mgmt. LLC v. Tri-Esco, Inc., 137 N.E.3d 285, 289 (Ind. Ct. App.
2019).
[12] We agree with KMC that “[w]ater utilities owe a duty of care to their
customers.” Appellant’s Br. p. 11 (citing Pa. R. Co. v. Lincoln Tr. Co., 91 Ind.
App. 28, 167 N.E. 721, 724 (1929)). But the same case cited by KMC for that
proposition emphasizes that the duty of the utility is to “furnish[] a supply
adequate in quantity and wholesome in quality” to the public and that “there is
no duty on the part of a public utility . . . to inspect the devices, apparatus, or
Court of Appeals of Indiana | Opinion 19A-CC-2665 | March 25, 2020 Page 5 of 8 fixtures of a responsible patron on the patron’s property, located at a point
beyond the meter, which is the point of delivery of the utility.” Pa. R. Co., 167
N.E. at 724. Therefore, Eastern Heights has a duty to supply enough water of
good quality to the public. See also Terre Haute Paper Co. v. Terre Haute
Waterworks Co., 62 Ind. App. 263, 110 N.E. 85, 88 (1915) (holding that water
companies have a duty to furnish a water supply “equal to all emergencies,”
including fire protection) (internal quotation marks omitted).
[13] KMC tries to broaden Eastern Heights’s duty, arguing that it was obligated to
shut off all water, including the water supplying the fire suppression system, to
the Building.1 We cannot agree. Initially, we note that there is no evidence in
the record that KMC explicitly asked that the sprinkler system water be shut off,
nor did KMC ask the Eastern Heights employee to shut off the valves outside of
the Building (which supply the water to the fire suppression system) as well as
the valve in the Basement (which provides the general water supply to the
Building). Eastern Heights is not required to read the mind of its customer.
[14] Furthermore, we note that there are strict statutory requirements governing
when, and under what circumstances, a fire suppression system may be shut
off.2 Specifically, KMC is required to notify the Division of Fire and Building
1 While KMC insists that “Eastern Heights had a legal duty to shut off water service to the building as KMC requested,” appellant’s br. p. 16, it offers no legal citation to authority supporting that proposition. 2 These specific requirements lend extra weight to KMC’s obligation to make an explicit request of Eastern Heights that the water supply to the fire suppression system be shut off.
Court of Appeals of Indiana | Opinion 19A-CC-2665 | March 25, 2020 Page 6 of 8 Safety, the fire department, and the alarm receiving facility “before . . . shutting
down a system or its supply.” 675 I.A.C. 28-1-12 (adopting by reference the
National Fire Protection Association (NFPA) Standard for the Inspection,
Testing, and Maintenance of Water-Based Fire Protection Systems, which
contains the quoted language). Moreover, “[n]o person shall remove or modify
any fire protection system installed or maintained in accordance with the rules
of the commission without notifying the servicing fire department prior to
receiving approval from the building official” of the Indiana Fire Protection and
Building Commission. 675 I.A.C. 13-2.6-10(a) (emphasis added).
Additionally, the Indiana Fire Code states that it “shall be unlawful for any
person to . . . disturb any . . . fire suppression system . . . except for the purpose
of extinguishing fire, training purposes, or recharging or making necessary
repairs.” 675 I.A.C. 22-2.5-10 (adopting by reference the NFPA Standard
described above, which contains the quoted language).
[15] In other words, Eastern Heights was prohibited from shutting off the water
supply to the Building’s fire suppression system without authorization from the
above listed authorities. We certainly cannot conclude that it had a duty to take
an action that was proscribed by law.
[16] Therefore, while Eastern Heights had a duty to supply enough water of good
quality to the public, it did not have a duty to shut off the water supply to the
Building’s fire suppression system without authorization from the appropriate
authorities. It likewise did not have a duty to shut off the water supply to the
fire suppression system when KMC did not even make that explicit request.
Court of Appeals of Indiana | Opinion 19A-CC-2665 | March 25, 2020 Page 7 of 8 Because we find as a matter of law that Eastern Heights did not have a duty to
shut off the water supply to the fire suppression system, we necessarily also find
that the trial court did not err by entering summary judgment in favor of
Eastern Heights.
[17] The judgment of the trial court is affirmed.
Bradford, C.J., and Pyle, J., concur.
Court of Appeals of Indiana | Opinion 19A-CC-2665 | March 25, 2020 Page 8 of 8