Northern Indiana Public Service Co. v. ACE American Insurance Co.

• Court: Indiana Court of Appeals
• Decided: September 12, 2025
• Docket: 24A-PL-00512
• Status: Published

Opinion

FILED Sep 12 2025, 8:40 am

CLERK Indiana Supreme Court Court of Appeals and Tax Court

IN THE

Court of Appeals of Indiana Northern Indiana Public Service Company, LLC, Appellant/Cross-Appellee-Plaintiff

v.

ACE American Insurance Company, Safway Services, LLC, and Headwaters Resources, Inc., Appellees/Cross-Appellants-Defendants

September 12, 2025 Court of Appeals Case No. 24A-PL-512 Appeal from the Marion Superior Court The Honorable Heather A. Welch, Judge Trial Court Cause No. 49D01-1607-PL-24617

Opinion by Judge Kenworthy

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 1 of 56 Judges Mathias and Brown concur.

Kenworthy, Judge.

Case Summary [1] Northern Indiana Public Service Company, LLC (“NIPSCO”) sued for

declaratory relief and breach of contract after Safway Services, LLC (“Safway”)

and its insurer, ACE American Insurance Company (“ACE”), ceased

defending and denied indemnification of NIPSCO in a now-settled workplace

injury lawsuit. 1 NIPSCO moved for partial summary judgment on the issues of

whether Safway breached its contractual duties to ensure a safe workplace and

whether Safway and ACE breached their duties to defend and indemnify

NIPSCO. In turn, Safway and ACE sought summary judgment on all issues.

[2] The trial court entered partial summary judgment for NIPSCO, finding Safway

breached its contractual duty to defend NIPSCO. NIPSCO then moved for

three categories of damages arising from Safway’s breach: (1) the defense costs

NIPSCO incurred in the underlying lawsuit after Safway stopped paying for

1 NIPSCO also asserted claims against Headwaters Resources, Inc. (“Headwaters”). Since 2001, NIPSCO had a marketing contract with Headwaters for coal combustion productions (fly ash). Headwaters is unrelated to Safway, but coincidentally, was also insured by ACE at the relevant times. During the pendency of this appeal, NIPSCO, Headwaters, and ACE settled the Headwaters-related claims, and on February 3, 2025, we granted the parties’ motion to dismiss: (1) NIPSCO’s appeal against Headwaters, (2) Headwaters’ cross-appeal against NIPSCO, (3) NIPSCO’s appeal against ACE for issues relating to ACE’s obligations under the ACE-Headwaters insurance policy, and (4) ACE’s cross-appeal against NIPSCO for issues relating to obligations under the ACE-Headwaters policy. We discuss the facts pertaining to Headwaters only when they give context to the remaining claims on appeal.

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 2 of 56 NIPSCO’s defense, (2) the nearly $3 million NIPSCO paid to settle the

underlying lawsuit, and (3) the attorney fees NIPSCO incurred in bringing this

action to enforce Safway’s contractual obligations. The trial court denied

NIPSCO recovery of the settlement but awarded NIPSCO its defense costs and

attorney fees in both actions, plus prejudgment interest on each, and held

Safway and Headwaters jointly and severally liable for the damages. As to

ACE, the trial court determined the insurer was liable under its policy for

damages assessed against Safway.

[3] In this consolidated appeal, the parties present the following restated and

reordered issues:

1. Did the trial court err in granting NIPSCO summary judgment on its claim Safway owed and breached its duty to defend NIPSCO in the underlying lawsuit?

2. Was NIPSCO entitled to recover the settlement payment under the theory of collateral estoppel or as a consequential damage for Safway’s breach?

3. Did the trial court clearly err in holding Safway liable for all defense costs incurred in the underlying lawsuit, rather than apportioning them between potential indemnitors?

4. Did the trial court clearly err in awarding NIPSCO the attorney fees it incurred in this action, either as a defense cost or under a contractual fee-shifting provision?

5. Did the trial court clearly err in holding ACE liable for the awarded damages under its insurance policy with Safway?

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 3 of 56 [4] We affirm in part, reverse in part, and remand.

Facts and Procedural History A. Safway Agreement

[5] At all relevant times, NIPSCO owned and operated Bailly Generating Station,

a power plant in Chesterton, Indiana. In 2006, NIPSCO and Safway entered

into a General Services Agreement for Construction, Maintenance, Services,

and Materials (the “Safway Agreement”). As to defense and indemnification,

the contract provides:

(a) To the fullest extent permitted by law, [Safway] waives any right of contribution and agrees to indemnify, defend and hold harmless [NIPSCO] from and against all claims, damages, losses, fines, penalties and expenses, including attorneys’ fees, related in any way to (i) any breach of this Agreement by [Safway]; or (ii) [Safway’s] or its Subcontractors’ or agents’ performance of the Work[ 2] (collectively, “Claims”), provided that any such Claims in subsection (a)(ii) above are caused in whole or in part by any negligent act or omission of [Safway], any Subcontractor or any of its respective direct or indirect employees or agents for whose acts any of them may be liable. Such obligation shall not negate, abridge, or otherwise reduce any other right or obligation of indemnity or contribution in favor of [NIPSCO]. Such obligation to indemnify, defend and hold harmless shall not be limited in any way by any limitation on the amount or

2 The contract defines “Work” as “the goods, maintenance, construction, or services described in Contract Documents for specific Projects and includes all supervision, labor, material, tools, equipment and shipping necessary to complete the Project.” Appellant’s App. Vol. 2 at 205. “Project” means “the Work as described in separate Purchase Orders, Project Authorizations, Service Authorizations, Work Authorizations, or as otherwise described in an exhibit[.]” Id. at 202. Interpretation of these definitions is not at issue.

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 4 of 56 type of damages, compensation, benefits or insurance proceeds payable by, for or to [Safway] or anyone directly or indirectly employed by [Safway]. The obligations of [Safway] under this Agreement shall not extend to the liability of [NIPSCO] arising out of [NIPSCO’s] negligence. [Safway] shall impose identical indemnification, defense and hold harmless obligations upon all Subcontractors.

Appellant’s App. Vol. 2 at 208. 3 As to its safety obligations, Safway agreed to “be

in control of and responsible for all construction means, methods, procedures,

sequences, and job site safety[.]” Id. at 210. By the Safway Agreement,

NIPSCO also delegated to Safway responsibility for “the prevention of

accidents and for conducting site inspections and enforcing compliance with all

safety and health programs[.]” Id. at 214.

[6] The Safway Agreement also required Safway to obtain commercial general

liability insurance with $2 million bodily injury and property damage combined

single limit per occurrence and to name NIPSCO as an additional insured

under the policy. Safway obtained a policy with ACE for the period of October

1, 2007, to October 1, 2008 (the “ACE-Safway Policy”). The policy provided

ACE would “pay those sums that the insured becomes legally obligated to pay

as damages because of ‘bodily injury’ . . . to which this insurance applies.”

Appellant’s App. Vol. 3 at 11. The policy had a $5 million each occurrence limit

and $5 million general aggregate limit. “In consideration of a reduced or

3 This entire paragraph appears in the Safway Agreement in bold typeface, which we have removed for readability.

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 5 of 56 adjusted premium,” Safway agreed to a $2 million deductible per occurrence.

Id. at 41. Under the high-deductible endorsement, Safway’s claim service

organization would provide the defense of all claims or suits arising under the

policy, ACE “shall not have any duty to defend any such ‘suit,’” and ACE

would have no duty to pay any defense cost within the deductible amount. Id.

Two endorsements provided NIPSCO coverage as an additional insured.

B. Underlying Lawsuit

[7] In 2008, NIPSCO hired Safway to build scaffolding at the Bailly plant to

facilitate routine maintenance. Adam Nagel (“Nagel”) was an employee of

Safway working on a five-person scaffolding build crew. Nagel’s job was to

retrieve scaffolding parts from a rack, climb a stairway or ladder to a catwalk,

and deliver the parts to the crew members building the scaffolding. The parts

rack was placed in Safway’s work area on the ground near a roadway

frequently used by tractor-trailers to haul fly ash out of the plant. On the

afternoon of April 8, 2008, Nagel descended from the catwalk to retrieve a part

but never returned. His coworkers soon found him lying on the ground,

unconscious, with severe injuries to his head and chest. There were no

witnesses. Nagel was in a coma for several weeks and sustained permanent

injuries. An Indiana Occupational Safety and Health Administration

investigation closed because of lack of evidence or witnesses as to how Nagel

had been injured.

[8] Nagel and his then-wife, Emily Nagel, sued NIPSCO in late 2009 for Nagel’s

injuries and Emily’s loss of consortium (the “underlying lawsuit”), alleging Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 6 of 56 Nagel was injured by “a vehicle, a piece of equipment, and/or other

instrumentality while working at the Bailly Plant” which were “allowed to be

used or employed at or very near the scaffold being erected by Safway[.]”

Appellant’s App. Vol. 5 at 36. Worker’s compensation was Nagel’s sole remedy

against Safway, and the Nagels did not name Safway as a defendant. See Ind.

Code art. 22-3 (Worker’s Compensation System). The Nagels’ complaint

against NIPSCO was based on negligence, alleging NIPSCO breached its duties

to maintain the safety of its workplace, protect the safety of the workers and

contractors at the Bailly Plant, and ensure the safe and proper movement of all

vehicles, equipment, or other instrumentalities at the facility, which

proximately caused the Nagels’ injuries. In response, NIPSCO raised the

affirmative defense of contributory fault and asserted any damages were caused

by Nagel, Safway, or unknown nonparties.

[9] NIPSCO tendered its defense and indemnity to Safway and ACE. ACE agreed

NIPSCO may qualify as an additional insured under the ACE-Safway Policy,

based on “the allegations made to date . . . that Safway employee, Adam Nagel,

fell from scaffolding, resulting in injury.” Appellant’s App. Vol. 5 at 126. But

ACE reserved its right to later deny NIPSCO indemnity coverage. ACE also

informed NIPSCO the ACE-Safway Policy contained no duty for ACE to

defend NIPSCO, instead allocating the defense to Safway’s claim service

organization. Safway agreed to defend NIPSCO in the underlying lawsuit, and

for the next seven years or so of litigation, Safway paid for NIPSCO’s defense.

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 7 of 56 [10] In 2010, Nagel responded to interrogatories stating he had “islands of memory”

and recalled being “struck by a truck” when working on and around the

scaffolding and adjacent worksite. Appellants App. Vol. 8 at 196–97. In a 2011

deposition, Nagel described bending over the rack to retrieve a part and

catching a glimpse of a truck tire passing behind him before feeling what he

thought was a trailer deck strike him. Through discovery, the parties

determined the only truck that may have been in the vicinity at the time was

owned by Whitcomb Trucking, Inc. (“Whitcomb”) and carrying a load of fly

ash on behalf of MCS Trucking, Inc. (“MCS”), a subcontractor of Headwaters.

But by that time, the statute of limitations barred the Nagels from adding claims

against Whitcomb, MCS, or Headwaters so the case proceeded with NIPSCO

as the only defendant.

[11] NIPSCO eventually moved for summary judgment on the issue of liability,

arguing there was no theory under which NIPSCO owed Nagel a duty of care.

The trial court granted NIPSCO’s motion; effectively, NIPSCO won the case.

C. Appeal and Remand

[12] The Nagels appealed, and in a published opinion, this Court reversed in part

the trial court’s grant of summary judgment. Nagel v. N. Ind. Pub. Serv. Co., 26

N.E.3d 30 (Ind. Ct. App. 2015), trans. denied (“the Nagel opinion”). In doing so,

the Court made three holdings concerning the duty NIPSCO owed Nagel.

First, the Court determined the Nagels’ complaint stated no claim that NIPSCO

was vicariously liable for the negligence of an independent contractor, such as

Safway. Id. at 43. Next, based on prior case law, the Court held NIPSCO as a Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 8 of 56 matter of law did not assume a duty of care to Nagel through the Safway

Agreement and other safety-related documents. Id. (citing Marks v. N. Ind. Pub.

Serv. Co., 954 N.E.2d 948 (Ind. Ct. App. 2011)). Last, the Court determined the

complaint alleged Nagel’s injuries were at least partially related to the condition

of the land owned by NIPSCO, thereby raising an issue of premises liability.

Id. After reviewing the designated evidence, the Court determined “whether

Safway or NIPSCO was in control of the premises when and where [Nagel]

was injured is unclear and must be resolved by a jury.” Id. at 46. The Court

also held there was a question of fact as to the obviousness of the danger of

having the parts rack so close to the road. Id. And because there were genuine

issues of material fact, the Court held the trial court improvidently granted

NIPSCO summary judgment on the basis it did not owe Nagel a duty of care.

Id.

[13] On remand, the case proceeded toward trial on the narrowed claims, with a

court-ordered mediation scheduled for Monday, March 21, 2016. At that point,

the Nagels were seeking damages of approximately $13 million. On Friday,

March 18, ACE sent NIPSCO a letter “tender[ing] this claim back to

[NIPSCO] for defense and indemnity,” triggering Safway to terminate its

defense of NIPSCO. Appellant’s App. Vol. 5 at 132. ACE gave two reasons for

the reversal: Nagel’s 2011 deposition testimony that he was injured when hit by

a truck and the Nagel opinion issued fourteen months prior. ACE reasoned the

Nagel opinion “alter[ed] the factual and liability issues presented in this matter”

by holding “the only remaining liability issues in the case were NIPSCO’s

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 9 of 56 premises liability.” Id. And because “there are no claims of negligence against

Safway or any claims of negligence arising out of Safway’s activities,” ACE

maintained Safway was not required to indemnify NIPSCO under the Safway

Agreement. Id. Accordingly, ACE concluded “NIPSCO neither qualifies as an

additional [insured] under the policy nor are the allegations made against

NIPSCO covered by the . . . policy.” Id.

[14] With trial approaching, NIPSCO began paying for its own defense. NIPSCO

also reasserted its defense and indemnification requests to Safway and ACE,

but neither party paid any further defense costs or agreed to indemnify

NIPSCO. Neither Safway nor ACE sought declaratory relief as to their

contractual obligations.

[15] In late November 2016, NIPSCO settled with the Nagels for $3.5 million. In so

doing, NIPSCO denied any liability. Before settling, NIPSCO sought Safway

and ACE’s consent but received no response. ACE later contributed $500,000

to the settlement under its insurance policy with Headwaters, subject to a

reservation of rights to pursue recovery of that amount, and NIPSCO reserved

its rights to pursue additional amounts from ACE.

D. Instant Action

[16] In July 2016—a few months after Safway withdrew from defending NIPSCO

but before NIPSCO settled with the Nagels—NIPSCO filed this declaratory

judgment and breach of contract action against Safway and ACE, among

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 10 of 56 others. 4 In its amended complaint, NIPSCO sought declaratory relief as to the

parties’ rights and obligations under the Safway Agreement and ACE-Safway

Policy. NIPSCO alleged Safway and ACE breached their contracts with

NIPSCO and requested damages including reimbursement of NIPSCO’s

defense and indemnity costs related to the underlying lawsuit. NIPSCO also

alleged ACE breached its duties of good faith and fair dealing. ACE

counterclaimed against NIPSCO for declaratory relief and raised various claims

related to recouping its $500,000 contribution to the underlying lawsuit

settlement.

[17] On May 1, 2018, NIPSCO moved for partial summary judgment on (1)

Safway’s alleged breach of its duties to maintain a safe workplace and defend

and indemnify NIPSCO, and (2) ACE’s duty to indemnify NIPSCO as an

additional insured under the ACE-Safway Policy. 5 Safway and ACE each filed

briefs in opposition to NIPSCO’s partial summary judgment motion and cross-

moved for summary judgment on all of NIPSCO’s claims, with each defendant

joining the other’s motion.

[18] On August 23, 2021, the trial court entered partial summary judgment for

NIPSCO, finding Safway had a duty to defend NIPSCO in the underlying suit

4 The other parties were Headwaters, Indemnity Insurance Company of North America, Whitcomb Trucking, Inc., and ACUITY, A Mutual Insurance Company. ACE in turn filed a third-party complaint against MCS. Although not at issue in this appeal, ACE’s claims against MCS are still pending in the trial court. 5 NIPSCO also moved for summary judgment as to Headwaters, which is no longer at issue here. It did not move for summary judgment on its claims against ACE for breach of its duties of good faith and fair dealing.

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 11 of 56 after the Nagel opinion and breached that duty. 6 The trial court denied

summary judgment on all other claims. As to NIPSCO’s claim that Safway

breached its contractual duty to maintain a safe worksite, the trial court found

“there remains a genuine issue of material fact as to whether NIPSCO or

Safway are responsible for the conditions that led to Nagel’s injuries” and “the

same issues which prompted the Court of Appeals to overturn summary

judgment in the Underlying Suit persist.” Appellant’s App. Vol. 2 at 91. For the

same reason, the trial court denied summary judgment on NIPSCO’s indemnity

claims against Safway and ACE, observing “whether Safway . . . owes any

indemnity obligations under [its agreement] with NIPSCO depends on whether

NIPSCO can show that . . . Safway . . . breached [its] safety obligations to

NIPSCO that resulted in the damages NIPSCO incurred in settling the

Underlying Suit” and “ACE’s obligation to indemnify NIPSCO depends on

whether NIPSCO can establish [a breach of contract] as well.” Id. at 100. The

trial court denied ACE and Safway’s cross-motions for summary judgment and

urged the parties to try to resolve the issue of damages for Safway’s breach of its

defense duty. On the parties’ requests, it certified the order for interlocutory

appeal, but this Court declined jurisdiction.

[19] After the parties were unable to come to a resolution on damages, in October

2022, NIPSCO moved for an award of damages for the breach of the duty to

6 The trial court also found Headwaters breached its contractual duty to defend NIPSCO under the NIPSCO- Headwaters agreement.

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 12 of 56 defend. NIPSCO asked for three categories of damages, plus prejudgment

interest on each: (1) NIPSCO’s attorney fees and defense costs in the underlying

lawsuit after Safway stopped paying for NIPSCO’s defense; (2) the underlying

lawsuit settlement payment; and (3) NIPSCO’s attorney fees incurred in

bringing this action to enforce the Safway Agreement. In sum, NIPSCO

requested about $7 million (including around $2.5 million in prejudgment

interest).

[20] After an evidentiary hearing in November 2023, the trial court declined to

award NIPSCO the settlement payment but awarded NIPSCO its attorney fees

in the underlying lawsuit and this action plus prejudgment interest on each, for

a total award upwards of $2.25 million. 7 The trial court also found Safway and

Headwaters were jointly and severally liable for the damages. As for ACE, the

trial court determined ACE was obligated to pay the damages on behalf of its

policyholders. On NIPSCO’s motion, the trial court entered final judgment on

the damages award under Trial Rule 54(B).

[21] All parties individually appealed, and on their joint motion, this Court

consolidated the appeals and designated NIPSCO the Appellant/Cross-

Appellee.

7 The exact amount of the damages awarded is unclear from the trial court’s order. The defense costs and interest calculations that appear in the factual findings differ from the sums in the trial court’s “order” section by about $285,000. Compare Appellant’s App. Vol. 2 at 112–15 with id. at 136–37.

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 13 of 56 1. Safway owed NIPSCO a duty to defend until the resolution of the underlying claim. [22] The trial court found Safway had a contractual duty to defend NIPSCO in the

underlying lawsuit, and Safway breached its duty when it terminated its defense

of NIPSCO after the Nagel opinion and just before mediation in 2016. In its

cross-appeal, Safway contends the trial court erred in granting NIPSCO

summary judgment on this issue because Safway had no duty to indemnify

NIPSCO for its own negligence under the Safway Agreement, and in the

absence of a duty to indemnify, Safway had no duty to defend NIPSCO. 8

A. Standards of Review

[23] We review a trial court’s summary judgment decision de novo, applying the

same standard as the trial court. U.S. Automatic Sprinkler Corp. v. Erie Ins. Exch.,

204 N.E.3d 215, 220 (Ind. 2023). In doing so, we consider only the evidence

designated to the trial court and draw all reasonable inferences in the non-

movant’s favor. Ebert v. Ill. Cas. Co., 188 N.E.3d 858, 863 (Ind. 2022). A party

seeking summary judgment must establish that “the designated evidentiary

matter shows . . . there is no genuine issue as to any material fact and . . . the

moving party is entitled to a judgment as a matter of law.” Ind. Trial Rule

56(C). “A fact is ‘material’ if its resolution would affect the outcome of the

8 The trial court did not find ACE breached a duty to defend NIPSCO. Still, ACE raises several arguments about Safway’s duty to defend in its cross-appeal and is generally aligned with Safway on this issue, because “ACE, in turn, was held liable to pay [NIPSCO’s attorney fees] as Safway’s insurer.” Appellee Safway’s Br. at 7. We generally refer to the arguments in this section as Safway’s, although ACE may raise similar arguments.

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 14 of 56 case, and an issue is ‘genuine’ if a trier of fact is required to resolve the parties’

differing accounts of the truth, or if the undisputed material facts support

conflicting reasonable inferences.” Hughley v. State, 15 N.E.3d 1000, 1003 (Ind.

2014) (quoting Williams v. Tharp, 914 N.E.2d 756, 761 (Ind. 2009)).

[24] The non-moving party, however, cannot “rest upon the mere allegations or

denials of his pleading.” T.R. 56(E). Likewise, “speculation is not enough to

overcome summary judgment.” Cosme v. Clark, 232 N.E.3d 1141, 1150 (Ind.

2024) (quoting Griffin v. Menard, Inc., 175 N.E.3d 811, 814 (Ind. 2021)).

Instead, the party opposing summary judgment must, by affidavit or other

evidence, “set forth specific facts showing that there is a genuine issue for trial.”

T.R. 56(E). “And ‘[a]lthough the non-moving party has the burden on appeal

of persuading us that the grant of summary judgment was erroneous, we

carefully assess the trial court’s decision to ensure that he was not improperly

denied his day in court.’” Hughley, 15 N.E.3d at 1003 (quoting McSwane v.

Bloomington Hosp. & Healthcare Sys., 916 N.E.2d 906, 909–10 (Ind. 2009)).

[25] The trial court entered findings and conclusions to support its summary

judgment order, but they are not binding on this Court. See Glob. Caravan

Techs., Inc. v. Cincinnati Ins. Co., 135 N.E.3d 584, 588 (Ind. Ct. App. 2019), trans.

denied. Rather, “we may affirm a grant of summary judgment upon any theory

supported by the evidence.” Miller v. Danz, 36 N.E.3d 455, 456 (Ind. 2015).

[26] Safway’s duty to defend arises in the indemnity provision of the Safway

Agreement. “Indemnity agreements are contracts subject to the rules and

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 15 of 56 principles of contract construction.” Henthorne v. Legacy Healthcare, Inc., 764

N.E.2d 751, 756 (Ind. Ct. App. 2002). Indiana recognizes parties’ freedom to

enter contracts, and when construing a contract, courts presume the terms

represent the parties’ freely bargained agreement. Hartman v. BigInch Fabricators

& Constr. Holding Co., Inc., 161 N.E.3d 1218, 1221 (Ind. 2021). In interpreting a

contract, the goal is to determine and give effect to the parties’ intent. Decker v.

Star Fin. Grp., Inc., 204 N.E.3d 918, 920 (Ind. 2023). To do that, we start with

the contract language. Wohlt v. Wohlt, 245 N.E.3d 611, 616 (Ind. 2024). We

review the document as a whole and make every attempt to construe the

contract language to avoid rendering any words, phrases, or terms ineffective or

meaningless. Thomas v. Valpo Motors, Inc., 258 N.E.3d 236, 241 (Ind. 2025).

We will accept an interpretation of a contract that harmonizes all its provisions.

Ryan v. TCI Architects/Eng’rs/Contractors, Inc., 72 N.E.3d 908, 914 (Ind. 2017).

“If the contract’s terms are unambiguous, then they are conclusive of the

parties’ intent, and courts give the contract its plain meaning.” Wohlt, 245

N.E.3d at 616. A contract is not ambiguous simply because the parties disagree

about the proper interpretation of its terms; for an ambiguity to exist, the

agreement must be subject to more than one reasonable interpretation. Id.

[27] The interpretation of a contract is a question of law which we review de novo.

Id. “Summary judgment is ‘especially appropriate’ in cases of contract

interpretation ‘because the construction of a written contract is a question of

law.’” Thomas, 258 N.E.3d at 240 (quoting N.H. Ins. Co. v. Ind. Auto Ins. Plan,

176 N.E.3d 514, 521 (Ind. Ct. App. 2021), trans. denied).

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 16 of 56 B. Contractual Indemnity and Defense

[28] Before turning to the merits of this case, we summarize the procedural posture

and what the trial court has—and has not—decided to date. In the underlying

lawsuit, the Nagels alleged NIPSCO’s negligence caused their injuries, and

NIPSCO, by its defense, pointed to Safway as a contributing negligent actor.

After Safway ceased defending NIPSCO in that lawsuit, NIPSCO filed this

action seeking clarity on the parties’ contract rights and obligations and alleging

the defendants breached their contracts with NIPSCO and therefore owed

NIPSCO defense and indemnification. Meanwhile, the underlying lawsuit

ended in a settlement agreement with no determination of causation,

negligence, or liability for the Nagels’ injuries. Instead, the parties continued to

vigorously litigate the indemnity claim—and the underlying issues of causation,

negligence, and breach of contract related to the safety provisions—in this

action. On summary judgment, the trial court determined Safway breached its

duty to defend NIPSCO in the underlying suit, but stopped short of finding

Safway was obligated to indemnify NIPSCO for its damages, losses, or

liabilities incurred in the underlying suit because genuine issues of material fact

remained regarding causation, negligence, and breach of contract. This case

therefore calls on us to decide whether the trial court properly granted NIPSCO

summary judgment on the issue of Safway’s duty to defend when NIPSCO’s

indemnity claim is unresolved.

[29] The cases the parties have presented to us as persuasive authority have decided

issues of contractual defense and indemnity with divergent results. For

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 17 of 56 example, in Exide Corp. v. Millwright Riggers, Inc., this Court held a contractor

had no contractual duty to indemnify a factory owner for the factory owner’s

own negligence and therefore owed the factory owner no defense costs in a

negligence claim brought by the contractor’s employee against the factory

owner. 727 N.E.2d 473, 481 (Ind. Ct. App. 2000), trans. denied. In Ozinga

Transportation Systems, Inc. v. Michigan Ash Sales, Inc., this Court held a utility

company’s subcontractor had control and possession over the area where the

subcontractor’s employee was injured, and therefore the subcontractor owed

the company indemnification and defense costs in a negligence suit the plaintiff

brought against the company but not the subcontractor. 676 N.E.2d 379, 386–

88 (Ind. Ct. App. 1997), trans. denied. In Henthorne v. Legacy Healthcare, Inc., this

Court held a contractor had a duty to indemnify and defend a nursing home for

liability incurred in a personal injury lawsuit to the extent the contractor’s own

negligence caused the injuries, but the damages for breach of the duty to defend

could not be determined until fault had been apportioned. 764 N.E.2d at 760.

Each of these cases turned on the specific contract language applied to the facts

alleged in the complaint or developed in the underlying suit or indemnity

action.

[30] Therefore, to determine whether a party has a contractual duty to defend in any

given case, we first look to the contract language to ascertain the scope of the

defense duty. See Henthorne, 764 N.E.2d at 759 (examining contract language

to determine obligation to defend). We then examine the allegations in the

complaint and determine whether they come within the scope of the defense

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 18 of 56 obligation. See Davey Tree Expert Co. v. City of Indianapolis, 147 N.E.3d 354, 356–

57 (Ind. Ct. App. 2020) (applying undisputed contract language interpretation

to the allegations in the complaint to determine whether the allegations fell

within the indemnity and defense provision). We also may consider the factual

underpinnings of the claims to determine whether the underlying complaint

triggered an indemnitor’s obligation to defend. See Ozinga, 676 N.E.2d at 388

(holding a utility company’s subcontractor, Ozinga, had a contractual duty to

defend and indemnify the company in a workplace injury suit alleging the

company’s negligence where the underlying facts showed the plaintiff’s injury

arose due to Ozinga’s negligence, even though Ozinga was not named in the

complaint).

C. Contract Language

[31] The Safway Agreement indemnity and defense provision provides, in pertinent

part:

(a) To the fullest extent permitted by law, [Safway] . . . agrees to indemnify, defend and hold harmless [NIPSCO] from and against all claims, damages, losses, fines, penalties and expenses, including attorneys’ fees, related in any way to (i) any breach of this Agreement by [Safway]; or (ii) [Safway’s] or its Subcontractors’ or agents’ performance of the Work (collectively, “Claims”), provided that any such Claims in subsection (a)(ii) above are caused in whole or in part by any negligent act or omission of [Safway], any Subcontractor or any of its respective direct or indirect employees or agents for whose acts any of them may be liable. . . . The obligations of [Safway] under this Agreement shall not extend to the liability of [NIPSCO] arising out of [NIPSCO’s] negligence.

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 19 of 56 Appellant’s App. Vol. 2 at 208.

[32] The contract language is not ambiguous. Safway promised to defend and

indemnify NIPSCO—to the fullest extent permitted by law—against two types

of claims: (1) claims “related in any way to” Safway’s breach of the agreement,

and (2) claims “related in any way to” Safway’s work performance, if Safway’s

negligence caused in whole or in part the claims.

[33] The language “related to” is “quite broad.” Storch v. Provision Living, LLC, 47

N.E.3d 1270, 1275 (Ind. Ct. App. 2015) (interpreting the phrase “arising out of

or relating to” in a contract provision for attorney fees); see also PSI Energy, Inc.

v. AMAX, Inc., 644 N.E.2d 96, 100 (Ind. 1994) (describing the phrase “arising

out of or relating to” in an arbitration contract as “all-encompassing”). Under

the plain meaning of the word “relate,” two things relate to one another “if they

simply ‘have relationship or connection.’” Storch, 47 N.E.3d at 1275 (quoting

Merriam-Webster Online Dictionary). Black’s Law Dictionary also defines

“relate” as to “have reference to” or to “have some connection to[.]” Relate,

Black’s Law Dictionary (12th ed. 2024). In short, Safway broadly agreed to

defend and indemnify NIPSCO against claims with some connection to Safway’s

breach of contract or Safway’s work, if Safway’s negligence caused the claim.

[34] We pause here to address one of Safway’s arguments implicating the scope of

its duty to defend NIPSCO. As a matter of contract interpretation, Safway

contends Safway’s defense obligations are limited to cases in which it would

have to indemnify NIPSCO. In other words, unless Safway is required to

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 20 of 56 indemnify NIPSCO for certain damages and losses, its duty to defend is not

triggered. Safway points to its promise to “indemnify, defend and hold

harmless” NIPSCO against “all claims, damages, losses, fines, penalties and

expenses, including attorneys’ fees.” Appellant’s App. Vol. 2 at 208 (emphasis

added). Safway argues that “without a valid claim for indemnity, NIPSCO is

not entitled to any relief related to its attorneys’ fees” because the fee provision

is tied to the indemnity claim. Appellee Safway’s Br. at 27–28. And here, the

trial court denied NIPSCO summary judgment on its indemnity claim because

there were unresolved questions of material fact concerning whether Safway

breached its safety obligations or negligently performed its work, thereby

leading to NIPSCO’s damages and losses in the underlying suit.

[35] “In general, an indemnity agreement involves a promise by one party

(indemnitor) to reimburse another party (the indemnitee) for the indemnitee’s

loss, damage, or liability.” Henthorne, 764 N.E.2d at 756. Put differently,

“indemnity is an obligation by one party to make another whole for a loss that

the other party has incurred.” 41 Am. Jur. 2d Indemnity § 1 (2025). The

purpose of an indemnity provision “is to shift the financial responsibility to pay

damages from the indemnitee to the indemnitor.” Ozinga, 676 N.E.2d at 386.

Indemnification obligations “generally accrue only on an event fixing liability

rather than on preliminary events that eventually may lead to liability but have

not yet occurred.” 41 Am. Jur. 2d Indemnity § 23 (2025); see also Henthorne, 764

N.E.2d at 757 (observing “the duty to indemnify does not arise until the party

seeking indemnity suffers loss or damages”) (internal quotation omitted).

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 21 of 56 [36] But as this Court has held, the “duty to defend is a duty independent of the duty

to indemnify against loss or liability.” Id. at 756–57 (analyzing the contractual

duty to defend separately from the duty to indemnify). Here, Safway agreed to

defend NIPSCO against certain claims. “Defend” in the legal context generally

means “to represent (someone) as an attorney” and “to act as legal counsel for

someone who has been sued or prosecuted.” Defend, Black’s Law Dictionary

(12th ed. 2024). As to an indemnity agreement, “defend” may also mean to

“supply a legal defense for.” Id. A “claim” is a “demand for money, property,

or a legal remedy to which one asserts a right; [especially], the part of a

complaint in a civil action specifying what relief the plaintiff asks for.” Claim,

Black’s Law Dictionary (12th ed. 2024). A claim is a “statement that

something yet to be proved is true.” Id. Therefore, the Safway Agreement’s

plain language implies a proactive responsibility to defend against claims when

they are made. And this contractual duty is broader than Safway’s duty to

indemnify, which does not attach until NIPSCO realizes damages or losses

from Safway’s breach of contract or Safway’s negligence.

[37] The indemnity provision also contains an exception: “The obligations of

[Safway] under this Agreement shall not extend to the liability of [NIPSCO]

arising out of [NIPSCO’s] negligence.” Appellant’s App. Vol. 2 at 208. The

exception speaks in terms of liability: the “quality, state, or condition of being

legally obligated or accountable” or “legal responsibility to another or to

society, enforceable by civil remedy or criminal punishment[.]” Liability,

Black’s Law Dictionary (12th ed. 2024). The plain language here creates a

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 22 of 56 narrow exception, relieving Safway of its indemnity obligation only if liability—

that is, legal responsibility—arising out of NIPSCO’s negligence attaches.

D. Underlying Lawsuit Claims

[38] We turn now to the allegations the Nagels brought against NIPSCO in the

underlying lawsuit to determine whether they come within the contractual

defense provision. The Nagels’ claims plainly “related in any way to” Safway’s

contract obligations and performance of the work NIPSCO hired it to do.

Nagel was a Safway employee and sought damages for injuries he sustained

while constructing scaffolding NIPSCO hired Safway to build and retrieving

parts from a rack within Safway’s worksite. The Nagels’ negligence claims

repeatedly refer to Safway. 9 The complaint and the underlying factual scenario

9 Specifically, the Nagels alleged NIPSCO was negligent in one or more of the following ways: (a) Created an unreasonably dangerous condition with respect to the vehicles, equipment, or other instrumentalities that were allowed to be used or employed at or very near the scaffold being erected by Safway; (b) Created an unreasonably dangerous condition when it knew or should have known that the use of vehicles, equipment or other instrumentalities at or near the scaffold being erected by Safway, created an unreasonable risk of harm to [Nagel] and others similarly situated; (c) Failed to prevent vehicles, equipment or other instrumentalities from being used or employed at or near the scaffold being erected by Safway; (d) Failed to properly warn [Nagel] and others similarly situated regarding the dangers and hazards posed by vehicles, equipment or other instrumentalities being used or employed at or near the scaffold being erected by Safway; (e) Failed to properly warn [Nagel] and others similarly situated that vehicles, equipment or other instrumentalities would be used or employed at or near the scaffold being erected by Safway; (f) Failed to establish a system for warning workers when vehicles, equipment or other instrumentalities would be used or employed in the areas in which they worked; (g) Failed to adequately protect [Nagel] and others similarly situated from jobsite hazards, including but not limited to vehicles, equipment or other instrumentalities used or employed at or near the scaffold being erected by Safway;

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 23 of 56 of this case therefore triggered Safway’s defense obligation under the plain

language of the broad defense provision. And although Safway’s assumption of

NIPSCO’s defense for seven years has no bearing on our interpretation of

unambiguous contract language, it certainly speaks to the implications of the

underlying suit. Safway’s assumption of NIPSCO’s defense in the underlying

lawsuit effectively amounts to an admission Safway’s contractual defense

obligations covered the matter. See Scottsdale Ins. Co. v. Harsco Corp., 199 N.E.3d

1210, 1219 (Ind. Ct. App. 2022) (observing an insurance company’s assumption

of a defense was “effectively an admission by [insurer] that it was obligated to

defend [the insured] after that point”), trans. denied. If Safway had any doubt

about its obligation to defend NIPSCO, it could have sought a declaratory

judgment of its contractual rights and responsibilities in relation to the

underlying suit. See, e.g., Davey Tree, 147 N.E.3d at 356 (seeking declaratory

judgment on whether one defendant had a contractual duty to defend co-

defendant against complaint).

[39] Safway nevertheless argues it had no obligation to defend NIPSCO because

NIPSCO faced claims only for its own negligence. Safway observes NIPSCO

was the only defendant in the underlying lawsuit, and thus any damages or

(h) Failed to do what a reasonably prudent company would do under the same or similar circumstances; and/or (i) Did what a reasonably prudent company would not do under the same or similar circumstances. Appellant’s App. Vol. 5 at 36–37. The complaint also asserted NIPSCO was liable to the Nagels because of res ipsa loquitur, although that is no longer an issue.

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 24 of 56 losses assessed against NIPSCO would necessarily arise from NIPSCO’s

negligence. Because Safway did not agree to indemnify NIPSCO for its own

negligence, Safway argues the exception relieved it of any obligation to

indemnify and defend NIPSCO in the underlying suit.

[40] Safway likens this case to Exide. There, the contractor Brehob agreed to

indemnify and defend factory owner Exide from “any and all liability, claims,

actions, suits, losses, costs and expenses (including without limitation attorneys’

fees), fines or penalties which may arise in any way, directly or indirectly, from

Contractor, its employees, subcontractors, and their employees[.]” 727 N.E.2d

at 479. Brehob’s employee was injured in a fall while working in the factory

and sued Exide for negligence. Exide in turn filed a third-party complaint

against Brehob, claiming “Brehob was contractually obligated to indemnify

Exide, pay its attorneys’ fees, and provide Exide with insurance.” Id. at 477.

[41] In interpreting the indemnity provision, the Exide Court held the contract did

not explicitly put the contractor on notice that the contractor agreed to

indemnify Exide for its own negligence. Id. at 481. And because Exide was

“seeking indemnification from Brehob . . . for [Exide’s] own negligence,” the

Court held Exide had no right to indemnification. Id. The Court then rejected

Exide’s argument Brehob was still contractually obligated to pay Exide’s

attorney fees incurred defending itself in the suit. The Court reasoned that

because the contract’s only provision for attorney fees appeared in the

unenforceable indemnification clause, Exide had no contractual right to

attorney fees.

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 25 of 56 [42] We agree with Safway that, like the contractor in Exide, it did not clearly or

unequivocally promise to indemnify NIPSCO for NIPSCO’s own negligence.

In fact, it explicitly agreed to the opposite. But unlike Exide, NIPSCO does not

seek to be indemnified for its own negligence. See Appellant’s Reply Br. at 27

(“NIPSCO is not asking Safway to indemnify it for NIPSCO’s negligence.”).

NIPSCO is seeking to be defended (and perhaps eventually indemnified) for

claims related in some way to Safway’s breach of contract or Safway’s negligent

performance, which the underlying lawsuit implicated. See Ozinga, 676 N.E.2d

at 388 (observing indemnitee “does not seek to exculpate itself for its own

negligence; rather, it seeks that [indemnitor] indemnify it for [indemnitor’s]

negligence”).

[43] On that note, Safway complains that a “defendant sued for its own negligence

cannot use its denials and defenses to change the plaintiff’s claim and obtain

indemnity from a third party that has no duty to indemnify the defendant from

its own negligence.” Appellee Safway’s Br. at 25 (citing Elcona Homes Corp. v.

McMillan Bloedell, LTD, 475 N.E.2d 713 (Ind. Ct. App. 1985), trans. denied). In

Elcona Homes, the issue was whether Elcona was legally entitled to maintain a

third-party action for indemnity in the absence of an express indemnity

contract, which is not the case here.

[44] Where an express indemnity provision exists, this Court has looked beyond the

parties named in the underlying complaint and considered the factual

underpinnings and the allegations of a third-party complaint when determining

whether the underlying complaint triggered an indemnitor’s obligation to

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 26 of 56 defend. See, e.g., Walsh Constr. Co. v. Zurick Amer. Ins. Co., 72 N.E.3d 957, 962

n.3 (Ind. Ct. App. 2017) (in plaintiff’s negligence suit against contractor,

observing contractor’s third-party complaint seeking to “transfer any liability

under [plaintiff’s] original claim of negligence from [contractor] to

[subcontractor]” by claiming subcontractor was negligent was sufficient to

invoke subcontractor’s duty to defend and indemnify contractor in the

underlying suit); Ozinga, 676 N.E.2d at 388.

[45] Contrary to Safway’s argument, these cases show NIPSCO was entitled to

examine the underlying facts and point to Safway as a negligent actor when

invoking the defense and indemnification clause. The present case perhaps

does not follow the typical timeline of a third-party indemnity claim, as

NIPSCO did not file a third-party complaint against Safway around the time

the Nagels brought the underlying lawsuit (presumably because Safway had

assumed NIPSCO’s defense without reservation of rights). NIPSCO did,

however, raise the affirmative defense of contributory fault and asserted

damages were caused by Nagel, Safway, or unknown nonparties. See

Appellant’s App. Vol. 5 at 79 (“The damages claimed by the plaintiff were caused

in full or in part by a nonparty to this action as set forth in Ind. Code 34-51-2, et.

seq. [Comparative Fault Act] . . ., whose name and identity is [Safway].”). And

once Safway terminated its defense in 2016, and ACE and Safway rejected

NIPSCO’s re-tender of its request for indemnity and defense, NIPSCO

promptly filed this suit seeking declaratory judgment of its rights under the

Safway Agreement. In sum, the fact Safway was not named as a defendant in

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 27 of 56 the underlying lawsuit is not dispositive of whether the Nagels’ claims triggered

Safway’s contractual duty to defend NIPSCO.

[46] Finally, Safway argues it had no obligation to defend NIPSCO after the Nagel

opinion because NIPSCO was no longer facing claims even implicating Safway’s

negligence. According to ACE, Safway initially defended NIPSCO in the

underlying lawsuit because the Nagels’ complaint “arguably could be

interpreted as alleging NIPSCO was vicariously liable for Safway’s conduct.”

Appellee ACE’s Br. at 31. Whatever Safway’s original position might have been,

Safway’s view is that after the Nagel opinion, “things became dramatically

different” because the only remaining issue on remand was NIPSCO’s own

negligence. Id. at 32. Safway especially points to the Court’s holding that the

Nagels’ complaint “states no claim that NIPSCO is vicariously liable for the

negligence of an independent contractor or any other third party, such as

Safway” and “the complaint focuses solely upon NIPSCO’s own alleged

negligence in connection with the Bailly Generating Station worksite.” Nagel,

26 N.E.3d at 43. Safway contends the Nagel opinion established Safway did not

owe NIPSCO indemnification for the underlying lawsuit allegations as a matter

of law, and if there is no duty to indemnify, there can be no duty to defend. See

Appellee Safway’s Br. at 27.

[47] Safway reads Nagel too broadly. The opinion addressed, in pertinent part, only

the narrow issue of whether NIPSCO owed Nagel a duty of care as a matter of

law. Before the Nagel opinion, the trial court granted NIPSCO summary

judgment in the underlying lawsuit on the grounds NIPSCO did not owe Nagel

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 28 of 56 a duty of care, effectively ending the suit. The Nagel Court, however, held the

underlying complaint encompassed a claim for premises liability. Under that

theory, NIPSCO owed a common law duty to keep its property in a reasonably

safe condition, which extended to employees of independent contractors. “To

recover under a theory of premises liability sounding in negligence, the plaintiff

must prove three elements: (1) a duty owed to the plaintiff, (2) a breach of that

duty by the defendant, and (3) the breach proximately caused the plaintiff’s

damages.” Isgrig v. Trustees of Ind. Univ., 256 N.E.3d 1238, 1244 (Ind. 2025)

(citation omitted). Whether a duty is owed in a premises liability case depends

primarily on whether the defendant was in control of the premises when the

accident occurred. Id. And that, the Nagel Court noted, may depend on

resolution of the underlying facts by the trier of fact. Nagel, 26 N.E.3d at 44

(citing McCraney v. Gibson, 952 N.E.2d 284, 288 (Ind. Ct. App. 2011), trans.

denied). In partially reviving the Nagels’ claims and remanding the case, the

Nagel Court held there was a genuine issue of material fact as to “whether

Safway or NIPSCO was in control of the premises when and where [Nagel] was

injured [which] must be resolved by a jury[.]” Id. at 46 (emphasis added). And

in observing “Safway may have made the initial decision as to where [to] place

the parts rack,” the Court held there was an unresolved factual question about

the obviousness of the danger of its placement. Id. at 45.

[48] Although Safway was not named as a defendant, the Nagel opinion establishes

NIPSCO still faced a common law premises liability claim “related in any way

to” Safway’s work. The Court’s summary of the Nagels’ theory of the case is

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 29 of 56 replete with references to Safway. The opinion did not determine Safway’s

breach of contract or negligent performance was not a cause of the Nagels’

injuries and claims against NIPSCO. The Nagel opinion did not relieve Safway

of its duty to defend NIPSCO from the remanded claim under the plain

language of the contract.

[49] NIPSCO’s right to a defense was triggered, and Safway had a duty to defend

NIPSCO through the resolution of the underlying claim. When Safway

terminated its defense after the Nagel opinion, it breached its duty. The trial

court did not err in granting NIPSCO summary judgment on this issue.

2. NIPSCO was not entitled to recover the settlement payment for Safway’s breach of its duty to defend. [50] After the trial court granted partial summary judgment for NIPSCO on

Safway’s breach of duty to defend, it held an evidentiary hearing on damages.

It then ordered Safway to pay NIPSCO’s defense costs incurred in the

underlying lawsuit after Safway stopped paying for NIPSCO’s defense, and

NIPSCO’s attorney fees in this action brought to enforce the Safway

Agreement. It denied NIPSCO’s request for the settlement payment.

[51] Where, as here, the trial court issues special findings of fact and conclusions

thereon under Indiana Trial Rule 52, we apply a two-tiered standard of review.

Town of Linden v. Birge, 204 N.E.3d 229, 233 (Ind. 2023). We first determine

whether the evidence supports the findings and, if so, whether the findings

support the judgment. Id. We do not reweigh the evidence or reassess witness

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 30 of 56 credibility, and we will not set aside the findings or judgment unless they are

clearly erroneous. Id. at 234. “Findings are clearly erroneous only when the

record contains no facts to support them either directly or by inference.” Berkel

& Co. Contractors, Inc. v. Palm & Assocs., Inc., 814 N.E.2d 649, 658 (Ind. Ct. App.

2004). “A judgment is clearly erroneous if it applies the wrong legal standard to

properly found facts.” Id. As always, we review conclusions of law de novo.

Town of Linden, 204 N.E.3d at 234.

[52] We first address the damages NIPSCO sought but the trial court did not award:

the settlement payment NIPSCO made to the Nagels. NIPSCO contends two

theories permit it to recover the settlement payment from Safway: (1) Safway

should be collaterally estopped from denying liability for the underlying lawsuit

settlement, and (2) NIPSCO is entitled to the settlement payment as a

consequential damage for Safway breaching the duty to defend.

A. Collateral Estoppel

[53] Collateral estoppel, also called issue preclusion, relieves parties of the cost and

vexation of multiple lawsuits, conserves judicial resources, and encourages

reliance on adjudication by preventing inconsistent decisions. Miller v. Patel,

212 N.E.3d 639, 646 (Ind. 2023). Collateral estoppel “forecloses any

‘subsequent re-litigation of the same fact or issue where that fact or issue was

necessarily adjudicated in a former suit and the same fact or issue is presented

in the subsequent lawsuit.’” Id. (quoting Tofany v. NBS Imaging Sys., Inc., 616

N.E.2d 1034, 1037 (Ind. 1993)) (emphasis omitted); see also Liberty Mut. Ins. Co.

v. Metzler, 586 N.E.2d 897, 900 (Ind. Ct. App. 1992) (observing collateral Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 31 of 56 estoppel “involves a prior adjudication of a particular issue which is binding on

the parties and their privies in a later lawsuit”), trans. denied. 10

[54] On the other hand, where a prior adjudication does not determine an issue, the

outcome will not collaterally estop subsequent litigation of that issue. See

Frankenmuth Mut. Ins. Co. v. Williams, 645 N.E.2d 605, 608 (Ind. 1995) (holding

an insurer that has notice and opportunity to control a lawsuit brought against

its insured is “bound at least to the matters necessarily determined in the lawsuit”)

(emphasis added); Kelly v. Hamilton, 816 N.E.2d 1188, 1193 (Ind. Ct. App.

2004) (where insurance coverage was not at issue in the complaint nor decided

by the entry of judgment in the underlying lawsuit, the insurer was not

collaterally estopped from first raising the issue of coverage in proceedings

supplemental); Metzler, 586 N.E.2d at 902 (holding an insurer was not estopped

from defending against coverage on the grounds its insured was not a “named

insured” because the prior litigation did not address the policy language, even

though the insurer was estopped from litigating whether the insured acted

negligently or intentionally because negligence had been adjudicated in the prior

suit); State Farm Mut. Auto. Ins. Co. v. Glasgow, 478 N.E.2d 918, 925 (Ind. Ct.

10 In the insurance context, an insurer is typically bound by the result of litigation to which its insured is a party, as long as the insurer had notice and the opportunity to control the proceedings. Id. If an insurer makes an independent determination it has no duty to defend, it must protect its interest by either filing a declaratory judgment action for a judicial determination of its obligations under the policy or defend its insured under a reservation of rights. Id. at 902. Otherwise, it may be collaterally estopped from challenging facts or issues decided in the underlying litigation against its insured. Id. In Metzler, this Court held an insurer was collaterally estopped from litigating whether its insured’s conduct was negligent or intentional because the trial court determined in a prior lawsuit that the insured acted negligently. Id.

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 32 of 56 App. 1985) (trial court’s judgment in prior action which did not include an

explicit finding that the insured was negligent did not collaterally estop an

insurer from litigating in a subsequent action whether the insured acted

negligently or intentionally).

[55] NIPSCO’s estoppel claim primarily relies on this Court’s opinion in Roadsafe

Holdings, Inc. v. Walsh Construction Co., a factually similar case. 164 N.E.3d 726

(Ind. Ct. App. 2021). There, a subcontractor, Roadsafe, had a contractual duty

to indemnify a prime contractor, Walsh, “against all claims, damages, losses, or

injuries arising out of [Roadsafe’s] negligent acts or omissions and shall save

[Walsh] harmless from any and all liability which might be asserted against

[Walsh] in connection therewith.” Id. at 731. In a negligence suit brought

against Walsh and implicating Roadsafe’s work, Walsh settled for $60,000

without a liability determination. When Walsh pursued Roadsafe for the

settlement payment and its attorney fees and costs, Roadsafe argued it had no

contractual duty to indemnify Walsh without an adjudication that Roadsafe

was negligent in causing the driver’s injuries. On appeal, this Court held

Roadsafe was collaterally estopped from asserting it had no duty to indemnify

Walsh for the settlement payment, even though there was no prior judicial

determination Roadsafe was negligent. See id. at 732 n.3 (noting “it is

undisputed that the settlement agreement did not identify a negligent party”).

[56] At first blush, Roadsafe appears to support NIPSCO’s argument that Safway,

having breached its duty to defend, should be collaterally estopped from

asserting it has no obligation to indemnify NIPSCO for the settlement payment.

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 33 of 56 The Court seemingly treated Roadsafe’s concession that it breached its duty to

defend Walsh as conclusive of Roadsafe’s indemnity obligations. Yet it also

appears from the opinion Roadsafe failed to carry its burden to set forth specific

facts to show there was a genuine issue for trial on Walsh’s negligence or

persuade this Court on appeal that the trial court improvidently granted

summary judgment. See id. at 732 (“Roadsafe then suggests, without citing any

designated evidence, that Walsh was negligent and that Roadsafe has no duty to

indemnify Walsh for its own negligence.”) (emphasis added). In other words,

while Roadsafe conceded it breached its duty to defend, there also was no

genuine dispute about whether Walsh’s damages and losses arose out of

Roadsafe’s negligence.

[57] We cannot say the same here. Whether NIPSCO was negligent remained

undecided in the underlying suit, as the case never went to trial and NIPSCO

denied any liability when executing the settlement with the Nagels. See

Appellant’s App. Vol. 10 at 70 (settlement agreement stating “the payment made

hereunder is made as a compromise of disputed claims and shall not be taken as

an admission of liability on the part of [NIPSCO], by whom liability is

expressly denied”). Moreover, the issue of negligence and Safway’s indemnity

obligations have been vigorously contested in this case, which was filed before

the NIPSCO-Nagel settlement. And here, the parties designated evidence

showing there were genuine issues of material fact precluding the trial court

from granting NIPSCO summary judgment on its claims for indemnity and

breach of the safety-related contract provisions. Because the issue of negligence

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 34 of 56 was not conclusively decided in the underlying suit, NIPSCO cannot recover

the settlement payment under a collateral estoppel theory, which precludes

litigation only of facts or issues necessarily adjudicated in a former suit. See

Miller, 212 N.E.3d at 646.

[58] NIPSCO also relies on Tom Raper Inc. v. Safari Motor Coaches, Inc., 2001 WL

13299 (S.D. Ind. Jan. 4, 2001), amended by 2001 WL 826857 (S.D. Ind. July 23,

2001). There, in litigation concerning the sale of a recreational vehicle,

indemnitor Safari ceased defending indemnitee Raper after two years. But

unlike here, Safari agreed to defend and indemnify Raper for Raper’s own

negligence in an oral indemnity and defense contract made after the underlying

lawsuit was filed. So when Safari abandoned the defense and Raper incurred

attorney fees defending the action and suffered an adverse judgment, there was

no question Safari breached the contract, and the damages fell within the scope

of the indemnity agreement.

[59] As an alternate basis of recovery, the Raper Court discussed the doctrine of

equitable insurer estoppel. 11 Although Safari was not Raper’s insurer, the

11 Generally, the doctrine of equitable estoppel cannot be used to create or extend the scope of coverage under an insurance contract. Emps. Ins. of Wausau v. Recticel Foam Corp., 716 N.E.2d 1015, 1028 (Ind. Ct. App. 1999), trans. denied. But under one of two recognized exceptions, “an insurer may be estopped from raising the defense of noncoverage when it assumes the defense of an action on behalf of its insured without a reservation of rights but with knowledge of facts which would have permitted it to deny coverage.” Id. The exception “is predicated upon the insurer’s conflict of interest, that is, at the same time the insurer defends the insured, it may also be formulating policy defenses to deny coverage.” Id. “It is also justified by the fact that the insured is deprived of his right to control his defense.” Id. In Raper, Safari’s control of the defense was critical to the district court’s decision because it demonstrated Raper suffered prejudice as a matter of law. Here, although it is clear from the record Safway footed the bill for the NIPSCO defense until just

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 35 of 56 district court applied insurer estoppel on the grounds “the positioning of the

parties here is substantially similar to such a case: Safari contracted to provide

Raper the defense of and [to] indemnify for the claims in the [underlying]

litigation, thus insuring Raper against any loss stemming from that litigation.”

Id. at *7 n.9. But Safway is not NIPSCO’s insurer and did not agree after the

fact to indemnify NIPSCO for any loss stemming from the Nagel lawsuit.

Safway has no contractual obligation to indemnify NIPSCO for NIPSCO’s own

negligence. Because the Safway Agreement differs substantially from the

contract in Raper regarding indemnity, we decline to extend the doctrine of

equitable insurer estoppel to this case.

[60] The trial court did not err in denying NIPSCO the settlement payment under an

estoppel theory.

B. Consequential Damages

[61] NIPSCO next argues it is entitled to the settlement payment as a consequential

damage flowing from Safway’s breach of its duty to defend. A party injured by

a breach of contract may recover the benefit of its bargain. Berkel & Co., 814

N.E.2d at 658. “Consequential damages may be awarded on a breach of

before the 2016 mediation, there is some conflicting argument in the appellate briefs about which party controlled the litigation strategy. Compare Appellee ACE’s Br. at 32 (“NIPSCO conducted its own defense at all times – that defense was not managed by anyone other than NIPSCO – Safway was just a payor.”) with Appellant’s Br. at 33 (claiming NIPSCO suffered prejudice because Safway “withdrew its defense one business day before mediation, just months before trial” so that NIPSCO “suddenly faced a badly injured plaintiff, unpredictable jury, and potentially large judgment, with no cooperating indemnitor”). Even if Safway were NIPSCO’s insurer, we would not apply insurer estoppel on this record.

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 36 of 56 contract claim when the non-breaching party’s loss flows naturally and

probably from the breach and was contemplated by the parties when the

contract was made.” Johnson v. Scandia Assocs., Inc., 717 N.E.2d 24, 31 (Ind.

1999). This rule generally limits consequential damages to reasonably

foreseeable economic losses. Id. The test for measuring damages is objective:

we measure based on foreseeability at the time the parties entered the contract,

not the facts existing and known to the parties at the time of the breach. Berkel,

814 N.E.2d at 658–59.

[62] The question, then, is whether at the time NIPSCO and Safway entered the

Safway Agreement, a settlement payment made by NIPSCO in a negligence

case was a reasonably foreseeable economic loss if Safway breached its duty to

defend but had not yet been found to have an obligation to indemnify NIPSCO.

[63] In support of its position that the settlement was foreseeable, NIPSCO relies on

McGrath v. Everest Nat. Ins. Co., 668 F.Supp.2d 1085 (N.D. Ind. 2009), a federal

district court case applying Indiana law. There, in a state court personal injury

case brought against the insured, the insurer retained counsel who failed to file

an answer. This led to a state court default judgment on liability in the injured

plaintiff’s favor and subsequent damages settlement. That settlement was

entered as the final judgment of the state trial court. The plaintiff then pursued

recovery of the settlement from the insurer in a federal lawsuit. The plaintiff

alleged the insurer breached its contractual duty to defend the insured and was

thus bound by the state court judgment. The district court agreed. As to

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 37 of 56 damages for the breach, the McGrath Court relied on well-settled insurance law

principles:

The foreseeability for the insurer in a case such as this is straightforward and uniformly supported by courts nationwide: “if an insurer, either through inaction or affirmative representations, leads an insured to believe that it will provide a defense, but fails to do so, the insurer may be liable for any default judgment that is entered against the insured, even if it is in excess of the policy limits.”

Id. at 1107 (quoting Windt, 1 Insurance Claims and Disputes 4th § 4:36).

Therefore, the “consequential damages for the breach of contract claim, which

the insureds mitigated [by entering into the settlement] equal the final judgment

entered in the state court claim.” Id. at 1109.

[64] In McGrath, the default judgment functioned as a judgment on the merits of

liability, and having breached its duty to defend, the insurer was bound by the

results of the underlying litigation. See id. at 1115, 1119. But here, there has

been no judgment in the underlying lawsuit conclusive as to liability for the

Nagels’ negligence claims against NIPSCO. NIPSCO’s decision to settle, while

perhaps prudent, did not resolve the Nagels’ claims in such a way to determine

Safway’s indemnity obligations under the Safway Agreement. Here, NIPSCO

seeks indemnity for a loss by categorizing it as consequential damages. But to

award NIPSCO the settlement payment under these circumstances would be an

end-run around the trial court’s summary judgment ruling that there are

genuine issues of material fact on the issue of indemnity.

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 38 of 56 [65] Still, NIPSCO argues Safway’s “safety breaches are beyond doubt,” and thus it

was always foreseeable that Safway would have some financial responsibility in

this case. Appellant’s Br. at 45. NIPSCO argues “regardless of how Mr. Nagel

was injured, any damages NIPSCO would have to pay in a judgment would be

because of Safway’s conduct and failure to honor its contractual promises to

keep its worksite and workers safe.” Id. at 43. But again, the trial court found

genuine issues of material fact precluded the entry of summary judgment on the

issue of safety breaches. This issue is neither resolved nor before us at this time.

[66] We are not persuaded the settlement payment was a natural, foreseeable, and

consequential damage for the breach of the duty to defend when NIPSCO and

Safway entered this contract. At this stage of the litigation, the trial court did

not err in denying NIPSCO’s request to recover the settlement payment.

3. The trial court did not clearly err in holding Safway responsible for the underlying lawsuit defense costs, subject to an offset for Headwaters’ contribution. [67] We turn now to the damages the trial court awarded NIPSCO. 12 After

concluding Safway breached its duty to defend NIPSCO as a matter of law, the

trial court awarded NIPSCO the defense costs it incurred in the underlying

12 As to the underlying lawsuit defense costs, in the “Order” section of the damages order, the trial court calculated those costs as $1,348,097.75, consisting of $913,594.26 in legal fees and $434,503.49 in prejudgment interest through October 31, 2023. Appellant’s App. Vol. 2 at 136. But in the factual findings of the damages order, the prejudgment interest is listed as $513,798.47, leading to a total of $1,427,392.73. Id. at 113. We remand this case for clarification on the damages calculation.

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 39 of 56 lawsuit after Safway terminated its defense and until NIPSCO settled with the

Nagels. The trial court found NIPSCO’s defense costs “are presumed

reasonable” and were “readily ascertainable” and awarded NIPSCO

prejudgment interest on those costs. Appellant’s App. Vol. 2 at 95.

[68] “Generally, the computation of damages is a matter within the sound discretion

of the trial court.” Berkel, 814 N.E.2d at 658. The damages for the breach of

the duty to defend are the reasonable and necessary expenses incurred

defending against the action. See Recticel Foam, 716 N.E.2d at 1027 (“Because

Wausau has a duty to defend Recticel, Wausau is liable for the reasonable and

necessary expenses incurred by Recticel in defending the actions.”); see also

Zebrowski & Assocs., Inc. v. City of Indianapolis, 457 N.E.2d 259, 264 (Ind. Ct.

App. 1983) (“An indemnitee, who incurs legal expenses through defending an

action against him for which he is entitled to indemnification, is entitled to

recover the expense of creating his defense, including reasonable attorney

fees.”).

[69] Safway does not contest the trial court’s award of NIPSCO’s defense costs

incurred directly in defending the Nagels’ claims, the reasonableness of those

costs, or the award of prejudgment interest. But Safway does contest the

apportionment of those costs between Safway and Headwaters.

[70] In the damages order, the trial court found Safway and Headwaters jointly and

severally liable for the cost of NIPSCO’s defense in the underlying lawsuit

because Safway and Headwaters each breached their contractual duties to

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 40 of 56 defend NIPSCO. Safway contends the plain language of the Safway

Agreement provides that any indemnification and defense should be shared pro

rata—that is, proportionally—between Safway and Headwaters. Safway points

to the indemnification provision language that Safway only agreed to indemnify

and defend NIPSCO for Safway’s own contract breach or negligent

performance (not others’) and that “[s]uch obligation shall not negate, abridge,

or otherwise reduce any other right or obligation of indemnity or contribution

in favor of [NIPSCO].” Appellant’s App. Vol. 2 at 208. Safway contends this

language demonstrates “precise and clear terms indicating Safway’s and

NIPSCO’s intent that any indemnification and defense be shared pro rata,” and

is akin to insurance policy language requiring pro rata allocation among

insurers. Appellee Safway’s Br. at 55. Safway asks this Court to remand the case

for pro rata allocation.

[71] Insurance contracts at times contain “other insurance” provisions addressing

how a policy should be applied when more than one policy covers an insured.

See United Farm Bureau Ins. Co. v. Nationwide Mut. Fire Ins. Co., 678 N.E.2d 1165,

1167 (Ind. Ct. App. 1997), trans. denied. A pro rata clause is a type of “other

insurance” provision that “apportions liability among concurrent insurers.”

Cincinnati Ins. Co. v. Amer. Alt. Ins. Corp., 866 N.E.2d 326, 329 (Ind. Ct. App.

2007), trans. denied. In this context, “before pro rata contribution may be

required between insurers providing concurrent coverage, the policies must

cover (1) the same parties, (2) in the same interest, (3) in the same property, (4)

against the same casualty.” Ind. Ins. Co. v. Sentry Ins. Co., 437 N.E.2d 1381,

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 41 of 56 1388 (Ind. Ct. App. 1982) (holding two insurers whose policies both included

pro rata clauses and insured a home seller against loss of the house to fire were

entitled to pro rata contribution when fire destroyed the house).

[72] In reviewing the Safway Agreement, we see no language conveying an intent to

apportion liability or defense costs for concurrent breach among contractual

indemnitors. Rather, the indemnity provision indicates Safway’s obligation to

defend and indemnify NIPSCO is unaffected by “any other right or obligation

of indemnity or contribution in favor of” NIPSCO. Appellant’s App. Vol. 2 at

208. As we see it, Safway agreed to defend and indemnify NIPSCO against

certain claims related to Safway’s conduct. In a suit implicating that conduct,

Safway breached its defense duty, which caused NIPSCO to incur defense costs

it would not otherwise have incurred. That said, NIPSCO concedes it “cannot

obtain a double recovery” and Safway is entitled to an offset for any costs it

recovers (or has now recovered) from Headwaters as part of the settlement

reached during the pendency of this appeal. Appellant’s Reply Br. at 50. We

agree and accordingly find no clear error in the trial court’s order. 13

13 NIPSCO contends Thomson Inc. v. Insurance Company of North America holds that damages for breach of the duty to defend are joint and several as a matter of law. 11 N.E.3d 982 (Ind. Ct. App. 2014), trans. denied. An insurance coverage case, Thomson arose out of an underlying class action toxic tort lawsuit that triggered multiple insurance policies issued by different insurers. As to the duty to defend, the trial court ordered the three primary insurers to defend the insured in the class action. Id. at 1023. At some stage of the litigation, the trial court “rejected [insurer] XL’s claim that it is entitled to a pro rata allocation on the duty to defend.” Id. at 1017. As to indemnity, the trial court similarly rejected XL’s request for a proportional allocation method, which was based on the same policy language as the defense duty. Id. On appeal, however, the Thomson Court concluded pro rata apportionment on liability was appropriate based on policy language limiting coverage to “those sums” the insured becomes legally obligated to pay for bodily injury that occurred

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 42 of 56 4. NIPSCO’s attorney fees in this action are not defense costs but the trial court did not clearly err in awarding them under the fee-shifting provision of the Safway Agreement. [73] Safway next appeals the trial court’s order awarding NIPSCO attorney fees

incurred in bringing this action. 14 The trial court awarded the fees under two

theories: “as costs associated with prosecuting its claim for defense damages

under Indiana case law,” that is, defense costs, and under the fee-shifting

provision of the Safway Agreement. Appellant’s App. Vol. 2 at 130–31.

A. Indemnification Action Attorney Fees as Defense Costs

[74] Generally, Indiana follows the American Rule, which requires each party to a

lawsuit to pay its own attorney fees. Stewart v. TT Com. One, LLC, 911 N.E.2d

51, 58 (Ind. Ct. App. 2009), trans. denied. But the trial court here determined

NIPSCO’s attorney fees in this action were recoverable as defense costs

resulting from Safway’s breach of its duty to defend NIPSCO in the underlying

suit. See Appellant’s App. Vol. 2 at 130 (agreeing with NIPSCO that because

“during the policy period.” Id. at 1019, 1021. By the time of the appeal, two of the three primary insurers had settled regarding the duty to defend, leaving only XL on the hook for certain defense costs. This Court affirmed the reasonableness and necessity of defense costs as to XL, but without discussion of pro rata apportionment or joint and several liability for defense costs. We are not convinced Thomson holds that defense costs are, as a matter of law, shared jointly and severally between two parties who have separate contractual duties to defend the same indemnitee. But we need not decide that issue here, where Headwaters has since settled with NIPSCO and NIPSCO concedes Safway is entitled to an offset for Headwaters’ contribution. 14 The trial court’s order also contains discrepancies in the amount of this award. For the costs of this action, the trial court ordered Safway to pay legal fees of $739,728.93, and prejudgment interest through October 31, 2023, of $175,138.06, for a total of $914,866.99. Appellant’s App. Vol. 2 at 136–37. But in the findings of fact, the trial court listed $847,021.31 in legal fees, plus prejudgment interest through October 31, 2023, of $246,132.14, for a total award of $1,120,153.45. Id. at 114. We remand for clarification.

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 43 of 56 Safway breached its duty to defend NIPSCO in the underlying suit, “NIPSCO

was forced to sue [Safway] to avoid or limit its liability”).

[75] The trial court found NIPSCO’s attorney fees were recoverable based on the

following statement in Bethlehem Steel Corp. v. Sercon Corp.: “An indemnitee is

entitled to recover attorney’s fees expended defending the underlying claim and

prosecuting the claim for indemnification.” 654 N.E.2d 1163, 1168 (Ind. Ct. App.

1995) (emphasis added), trans. denied. The Bethlehem Steel Court cited Zebrowski,

457 N.E.2d at 264, for that statement of law, which in turn relied on the federal

district court case of Price v. Amoco Oil Co., 524 F.Supp. 364 (S.D. Ind. 1981). In

neither Bethlehem Steel nor Zebrowski did the trial court order—or the appellate

court affirm—an award of attorney fees for prosecuting an indemnification

claim as a defense cost. 15 And in Price, the indemnity clause of the contract

stated the indemnitee could recover “reasonable expenses and attorneys’ fees

incurred by [indemnitee], in the event that [indemnitor] shall default under the

provisions of this paragraph.” 524 F.Supp. at 372. The contract in Price

therefore explicitly provided for attorney fee shifting; it did not allow the

indemnitee to recover attorney fees for prosecuting the indemnity agreement as

15 In Bethlehem Steel, the trial court denied the indemnitee the opportunity to present evidence of attorney fees, and this Court remanded for a hearing on the issue. 654 N.E.2d at 1168, 1170. Whether the attorney fees sought were for the underlying suit or the indemnification action is unclear from the opinion. In Zebrowski, “only recovery of [attorney] fees concerning the original suit was requested” and awarded. 457 N.E.2d at 264.

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 44 of 56 a defense cost. These authorities do not support NIPSCO’s claim for attorney

fees in this case.

[76] Safway points our attention to Dale Bland Trucking, Inc. v. Kiger, 598 N.E.2d

1103 (Ind. Ct. App. 1992), trans. denied. There, this Court declined to apply the

dicta in Zebrowski to an indemnitee’s request for attorney fees incurred in

prosecuting a declaratory indemnification action. Id. at 1105. The Court

expressly rejected the indemnitee’s characterization of the attorney fees as

consequential damages, because “Indiana precedent following the American

Rule for attorney’s fees precluded the award.” Id.; see also BioConvergence, LLC

v. Menefee, 103 N.E.3d 1141, 1170–71 (Ind. Ct. App. 2018) (also declining to

adopt Zebrowski’s reasoning and instead relying on Dale Bland Trucking in

declining to award attorney fees to indemnitee seeking to enforce an

indemnification provision that did not explicitly provide for attorney fees),

trans. denied. We believe this is an accurate application of Indiana law, which

adheres to the American Rule barring attorney fee-shifting unless a statute,

contract, or equitable exception permits it. Loparex, LLC v. MPI Release Techs.,

LLC, 964 N.E.2d 806, 816 (Ind. 2012) (“Thus, in the absence of statutory

authority or an agreement between the parties to the contrary—or an equitable

exception—a prevailing party has no right to recover attorney fees from the

opposition.”) (footnote on equitable exceptions omitted).

[77] Still, NIPSCO urges us to adopt the reasoning in Thomson, Inc. v. Insurance

Company of North America, that all means of limiting liability, including actions

for contribution and indemnification, are compensable defense costs. 11 Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 45 of 56 N.E.3d at 1026 n.26. Again, we must look beyond the language in Thomson’s

footnote, which relied on an Illinois federal district court case, Great West

Casualty Co. v. Marathon Oil Co., 315 F.Supp.2d 879, 882 (N.D. Ill. 2003), which

in turn relied on a New York Supreme Court case Perchinsky v. State, 660

N.Y.S.2d 177 (N.Y. App. Div. 1997). When we trace the origin, we see the

New York court allowed an indemnitee to recover “‘defensive’ third-party

claims against parties other than the contractual indemnitor.” Id. at 181. The parties

and the court in that case explicitly agreed the indemnitee “could not recover for

the expense of pursuing its cross claim against [the indemnitor] to enforce its

contractual right of indemnification.” Id. (emphasis added). We do not read

the footnote in Thomson as authorizing the recovery of NIPSCO’s attorney fees

in this action as defense costs, and we decline NIPSCO’s invitation to expand

the law to permit recovery of attorney fees absent a statute, contract, or

equitable exception providing otherwise.

B. Fee-Shifting Provision

[78] That said, the Safway Agreement contains a fee-shifting provision. As an

exception to the American Rule, parties may shift the obligation to pay attorney

fees through contract, and courts will enforce the agreements so long as they are

not contrary to law or public policy. Stewart, 911 N.E.2d at 58. The purpose of

a fee-shifting provision is to make the prevailing party to a contract whole if

litigation is necessary to vindicate the party’s rights. Walton v. Claybridge

Homeowners Ass’n, Inc., 825 N.E.2d 818, 825 (Ind. Ct. App. 2005). Generally,

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 46 of 56 “fee-shifting provisions will be upheld if enforcement does not contravene this

policy.” Id.

[79] The Safway Agreement fee-shifting clause states:

If [Safway] breaches any term of this Agreement . . . [Safway] shall be in default of this Agreement. Upon [Safway’s] default, [NIPSCO], without limiting or waiving any other rights which [NIPSCO] may have at law or equity, may immediately do any or all of the following: . . . (c) seek from [Safway] monetary damages in excess of any unpaid Contract Sum for the Work performed to compensate [NIPSCO] for damages it sustained from [Safway’s] default, including, without limitation, compensation for . . . attorneys’ fees[.] [NIPSCO] shall be entitled to collect its reasonable attorneys’ fees and costs, including expert and consulting fees, incurred in enforcing any term of this Agreement, including, without limitation, participation in any settlement discussions, alternative dispute resolution processes, or litigation.

Appellant’s App. Vol. 2 at 212.

[80] After Safway ceased defending NIPSCO, NIPSCO brought this action to

enforce Safway’s contractual duty to defend and recover damages attributable

to Safway’s breach. Under a straightforward application of the contract

language, NIPSCO was entitled to collect from Safway the “reasonable

attorneys’ fees and costs” incurred in litigating this suit to enforce the terms of

the Safway Agreement. Id.

[81] Safway does not dispute the meaning of the fee-shifting contract provision;

rather, Safway argues recovery of costs in this case would be “premature.”

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 47 of 56 Appellee Safway’s Br. at 49. Safway contends the fee-shifting provision only

allows NIPSCO to recover its attorney fees and costs incurred in enforcing the

Safway Agreement against Safway and notes NIPSCO was simultaneously

litigating claims here against Headwaters, Whitcomb, ACE, and Acuity, which

remained unresolved at the time of the damages hearing. Id. Safway also

argues NIPSCO should only be permitted to recover those attorney fees

attributable to NIPSCO’s duty to defend argument, rather than the alternate

theories of recovery NIPSCO pursued in the instant litigation. Safway

essentially argues the attorney fees and costs the trial court awarded are

unreasonable because they should be parsed and awarded after all indemnity

claims against all parties are resolved.

[82] At the damages hearing, NIPSCO presented documentary evidence supporting

the hours worked and the rates claimed for this action. NIPSCO’s expert

witness, attorney Thomas O’Gara, testified to the reasonableness of the fees

charged based on the time, labor, novelty, difficulty, and skill required for the

instant litigation. In O’Gara’s opinion, “all of the fees that NIPSCO has

incurred in the instant action related to the breach of the duty to defend.” Tr.

Vol. 2 at 128–29. O’Gara stated he would not further break down the fees based

on issue and party because there was “tremendous overlap . . . in the litigation”

and it is “very difficult when there are interrelated issues to parse the dollars

spent on a . . . motion for summary judgment” in multi-party litigation,

particularly where, as here, the parties join each other’s motions and are aligned

on certain issues. Id. at 141–42.

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 48 of 56 [83] On this evidence, the trial court found the “vast majority” of NIPSCO’s

attorney fees and costs in this action were related to pursuing damages

stemming from Safway’s decision to cease defending NIPSCO in the

underlying suit. Appellant’s App. Vol. 2 at 129. Further, “[i]t was Safway’s

decision not to defend that caused NIPSCO to incur these costs.” Id. The trial

court also found NIPSCO’s duty to defend argument and alternative arguments

for recovery “were almost always argued together in this action.” Id. The trial

court found O’Gara’s testimony “persuasive” that “it was appropriate for

NIPSCO to package its costs expended in pursuit of this litigation without

separately assigning costs to specific defendants or claims given the amount of

overlap between them in the motions practice in this case.” Id. at 132. The trial

court observed “Safway and Headwaters did not present comparably persuasive

evidence that NIPSCO’s billing practices led to an unreasonable attorney’s fees

calculation.” Id. at 133. For this reason, the trial court declined to award

NIPSCO only a portion of its fees because “that would not be reasonable given

the circumstances of this case.” Id. at 129.

[84] The evidence supports the trial court’s finding that the attorney fees NIPSCO

requested were incurred to enforce Safway’s duty to defend NIPSCO in the

underlying lawsuit. The evidence also supports the trial court’s finding that it

would be unreasonable to parse these attorney fees and costs because of the

significant overlap in issues and parties. As a result, the findings support the

trial court’s judgment awarding NIPSCO its requested attorney fees and costs

under the fee-shifting provision, which allows recovery of reasonable attorney

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 49 of 56 fees and costs incurred to enforce the Safway Agreement terms. The trial court

did not clearly err.

5. The ACE-Safway Policy does not cover NIPSCO’s attorney fees in this action. [85] Finally, we turn to the discrete issue raised by ACE: whether the damages the

trial court ordered Safway to pay are covered under the ACE-Safway Policy. 16

To answer this question, we interpret the ACE-Safway Policy.

The usual principles of policy construction apply here. Contracts for insurance are subject to the same rules of interpretation as are other contracts. Policy terms are interpreted from the perspective of an ordinary policyholder of average intelligence, and if reasonably intelligent persons may honestly differ as to the meaning of the policy language, the policy is ambiguous. Ambiguities are construed strictly against the insurer to further the general purpose of the insurance contract to provide coverage. Interpretation of the contract should harmonize its provisions, rather than place the provisions in conflict. Terms are to be given their ordinary and generally accepted meaning.

Allgood v. Meridian Sec. Ins. Co., 836 N.E.2d 243, 246–47 (Ind. 2005) (internal

citations and quotation marks omitted).

16 The trial court denied summary judgment on all claims between all parties, except NIPSCO’s allegation that Safway and Headwaters breached their contractual duties to defend. We agree with NIPSCO that the issues of whether ACE breached any duty owed directly to NIPSCO or covered NIPSCO’s damages or losses as an additional insured under the ACE-Safway Policy is not before this Court. The only question is whether Safway’s liability for breaching its duty to defend NIPSCO is covered under the ACE-Safway Policy.

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 50 of 56 [86] The ACE-Safway Policy provided ACE would “pay those sums that the insured

becomes legally obligated to pay as damages because of ‘bodily injury’ . . . to

which this insurance applies.” Appellant’s App. Vol. 3 at 11. Based on this

language, the trial court reasoned the underlying lawsuit defense costs and

attorney fees in this action “ultimately arise from claims for bodily damage

brought by Nagel.” Appellant’s App. Vol. 2 at 136. After calculating the

damages, the trial court summarily ordered: “ACE is liable to pay these sums

under its policies, subject to any applicable deductibles and self-insured

retentions.” Id. at 137. We examine each type of damages in turn.

A. Underlying Lawsuit Defense Costs

[87] In response to NIPSCO’s motion for damages in the trial court, ACE raised no

policy defenses concerning the defense costs in the Nagel action. ACE argued

only that “any obligations of ACE to pay defense fees for which its insureds are

held liable to pay should . . . be deferred until liability for the harms suffered by

Nagel is established.” Appellant’s App. Vol. 14 at 66. In the damages order, the

trial court found there “does not appear to be any disagreement among the

parties that NIPSCO’s Underlying Lawsuit defense costs are covered by the

policies.” Appellant’s App. Vol. 2 at 135. On appeal, ACE joins Safway’s

argument that Safway had no duty to defend NIPSCO after the Nagel opinion.

Assuming we hold otherwise, as we have, ACE makes no argument on appeal

that the ACE-Safway Policy does not cover its insured’s costs to defend a bodily

injury suit implicating the insured’s conduct, subject to the applicable

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 51 of 56 deductible. 17 We agree, then, with the trial court’s assessment that there

appears to be no controversy on this point, and that ACE is liable to pay these

costs under the policy.

B. Instant Action Attorney Fees

[88] But as to NIPSCO’s attorney fees in this case, ACE disclaimed any coverage

under the ACE-Safway Policy for costs Safway agreed to pay under the fee-

shifting provision of the Safway Agreement if NIPSCO sued Safway to enforce

their contract. On appeal, ACE renews this argument and contends the trial

court created “a fee-shifting framework out of whole cloth, which has no basis

under the text of the policies or existing Indiana law.” Appellee ACE’s Br. at 41.

[89] The ACE-Safway Policy broadly covers damages “because of ‘bodily injury’.”

Appellant’s App. Vol. 3 at 11. The policy also provides coverage for damages

because of “bodily injury” under an “insured contract,” which means, in

relevant part:

17 As explained above, under a high-deductible endorsement, Safway agreed Safway’s claim service organization would provide for the defense of all claims or suits arising under the policy, ACE “shall not have any duty to defend any such ‘suit,’” and ACE would have no duty to pay any defense cost (or “allocated cost adjustment expenses”) within the deductible amount. Appellant’s App. Vol. 3 at 41. For the first time on appeal, ACE raises new arguments about the additional insured endorsements in the ACE- Safway Policy and the relationship between the policy’s coverage limits and the amount of commercial general liability coverage NIPSCO contractually required Safway to procure. These issues were not briefed to the trial court as part of NIPSCO’s motion for damages and are irrelevant to the discrete issue of whether the damages assessed against Safway are generally covered by the ACE-Safway Policy, particularly since the trial court noted the damages award was “subject to any applicable deductibles and self-insured retentions.” Appellant’s App. Vol. 2 at 137. To the extent ACE and NIPSCO seek to litigate the applicable deductible amounts, whether those have been reached, excess insurance coverage, and NIPSCO’s coverage as an additional insured, those arguments are better made first to the trial court to allow development of the record.

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 52 of 56 That part of any other contract or agreement pertaining to [Safway’s] business (including an indemnification of a municipality in connection with work performed for a municipality) under which [Safway] assume[s] the tort liability of another party to pay for “bodily injury” or “property damage” to a third person or organization. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement.

Id. at 22. In this context, “damages because of ‘bodily injury’” include attorney

fees and litigation expenses:

Solely for the purposes of liability assumed in an “insured contract,” reasonable attorney fees and necessary litigation expenses incurred by or for a party other than an insured are deemed to be damages because of “bodily injury” or “property damage”, provided:

(a) Liability to such party for, or for the cost of, that party’s defense has also been assumed in the same “insured contract”; and

(b) Such attorney fees and litigation expenses are for defense of that party against a civil or alternative dispute resolution proceeding in which damages to which this insurance applies are alleged.

Id. at 12.

[90] NIPSCO’s chief argument on appeal is that “damages because of ‘bodily

injury’” in an insured contract includes its attorney fees in this case, not just the

underlying tort action. NIPSCO contends the phrase “because of” “connotes a

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 53 of 56 non-exacting causation requirement whereby any award of damages that flows

from covered damage is covered, unless otherwise excluded.” Appellant’s Reply

Br. at 55. 18 NIPSCO again essentially argues its attorney fees in this case are

damages “because of” the underlying tort action.

[91] We disagree for the same reasons we reject NIPSCO’s argument the attorney

fees in this case are “defense costs” related to the underlying lawsuit. See

Section 4.A. supra. The “insured contract” provisions in the ACE-Safway

Policy concern coverage for attorney fees and litigation expenses incurred for

the defense of a party in a suit for tort liability, not to vindicate a party’s

contractual rights. As explained above, the attorney fees NIPSCO has incurred

in bringing this indemnification action are not defense costs “because of” the

underlying lawsuit. NIPSCO can recover from Safway its attorney fees in this

case only because the Safway Agreement explicitly permits attorney fee shifting

to enforce the agreement against a breaching party. NIPSCO points us to no

other policy provision that would support ACE’s coverage of Safway’s

agreement to pay NIPSCO’s attorney fees if Safway breached the Safway

Agreement. Accordingly, we reverse the trial court’s order with respect to

ACE’s coverage for the attorney fees NIPSCO incurred in this suit.

18 NIPSCO and the trial court attribute this language to Thomson, 11 N.E.3d at 1025, but we do not find it in that opinion. The phrase appears in Association of Apartment Owners of Moorings, Inc. v. Dongbu Insurance Company, Ltd., 731 F.App’x 713, 714 (9th Cir. 2018) (mem.), which NIPSCO cited in its reply in support of its motion for damages. See Appellant’s App. Vol. 14 at 124.

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 54 of 56 Conclusion [92] Safway breached its duty to defend NIPSCO in the underlying lawsuit. As

damages for the breach, the trial court did not err in ordering Safway to pay the

defense costs NIPSCO incurred in the underlying lawsuit after Safway ceased

defending NIPSCO. We affirm the trial court’s judgment these are covered

under the ACE-Safway Policy, subject to the applicable deductible. NIPSCO’s

attorney fees and costs incurred in bringing this action are not defense costs, but

the trial court did not err in ordering Safway to pay them under the fee-shifting

provision of the Safway Agreement. But we reverse the trial court’s finding that

ACE provided insurance coverage for the attorney fees in this action. Finally,

we remand for clarification on the sum of damages awarded and for further

proceedings consistent with this opinion.

[93] Affirmed in part, reversed in part, and remanded.

Brown, J., and Mathias, J., concur.

ATTORNEYS FOR APPELLANT/CROSS-APPELLEE George M. Plews Jeffrey D. Featherstun Andrea K. Townsend Joanne R. Sommers Plews Shadley Racher & Braun LLP Indianapolis, Indiana

ATTORNEYS FOR APPELLEE/CROSS-APPELLANT ACE AMERICAN INSURANCE COMPANY

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 55 of 56 Crystal G. Rowe Kightlinger & Gray, LLP New Albany, Indiana Matthew S. Ponzi John Eggum Foran Glennon Palandech Ponzi & Rudloff PC Chicago, Illinois

ATTORNEYS FOR APPELLEE/CROSS-APPELLANT SAFWAY SERVICES, LLC Lucy R. Dollens Elizabeth A. Trachtman Quarles & Brady LLP Indianapolis, Indiana

Anthony P. Steinike Quarles & Brady LLP Chicago, Illinois

Lora L. LoCoco Quarles & Brady LLP Milwaukee, Wisconsin ATTORNEYS FOR APPELLEE/CROSS-APPELLANT HEADWATERS RESOURCES, INC. Robert Foos Jr. Michael R. Giordano Lewis Wagner, LLP Indianapolis, Indiana

Court of Appeals of Indiana | Opinion 24A-PL-512 | September 12, 2025 Page 56 of 56