Victor Spina v. Owners Insurance Company (mem. dec.)

• Court: Indiana Court of Appeals
• Decided: March 26, 2018
• Docket: 55A05-1710-CT-2401
• Status: Published

Opinion

MEMORANDUM DECISION Pursuant to Ind. Appellate Rule 65(D), this Memorandum Decision shall not be FILED regarded as precedent or cited before any Mar 26 2018, 9:16 am court except for the purpose of establishing CLERK the defense of res judicata, collateral Indiana Supreme Court Court of Appeals estoppel, or the law of the case. and Tax Court

ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEE Paul B. Overhauser David L. Taylor April M. Jay Misti Presnell DeVore Overhauser Law Offices, LLC Taylor DeVore P.C. Greenfield, Indiana Indianapolis, Indiana

IN THE COURT OF APPEALS OF INDIANA

Victor Spina, March 26, 2018 Appellant-Plaintiff, Court of Appeals Case No. 55A05-1710-CT-2401 v. Appeal from the Morgan Circuit Court Owners Insurance Company, The Honorable Daniel F. Zielinski, Appellee-Defendant. Special Judge Trial Court Cause No. 55C01-1507-CT-1181

Bradford, Judge.

Court of Appeals of Indiana | Memorandum Decision 55A05-1710-CT-2401 | March 26, 2018 Page 1 of 6 Case Summary [1] Appellant-Plaintiff Victor Spina appeals following the trial court’s

determination that his homeowner’s insurance provider, Appellee-Defendant

Owners Insurance Company (“Owners”), did not owe a duty to defend him in

an underlying lawsuit relating to his business dealings. Spina contends that

because he requested a jury trial shortly after initiating his lawsuit against

Owners, the trial court erroneously violated his constitutional right to a jury

trial by making a judicial determination as to the question of whether Owners

owed him a duty to defend. Because applicable authority indicates that the

question of whether an insurance provider owes an insured a duty to defend is

to be determined by the court, we affirm.

Facts and Procedural History A. Facts Relating to the Underlying Lawsuit [2] On January 26, 2015, DirecTV, LLC (“DirecTV”) filed a lawsuit against Spina

and his brother, William Spina, individually and in their official capacities as

principals in a company owning Texas Corral restaurants in Martinsville and

Shelbyville, Indiana (“the DirecTV lawsuit”). The DirecTV lawsuit alleged that

Spina and his brother had violated both federal and state law by committing

acts “that constitute theft, misappropriation and/or unauthorized interception

and display of DirecTV satellite signals and programming … at Texas Corral

restaurants … operated at Martinsville and Shelbyville, Indiana for commercial

Court of Appeals of Indiana | Memorandum Decision 55A05-1710-CT-2401 | March 26, 2018 Page 2 of 6 benefit without a valid commercial account [and] without paying a commercial

rate.” Appellant’s App. Vol. II, p. 115.

B. Facts Relating to Spina’s Claims Against Owners [3] On April 1, 2015, Spina filed a claim under his homeowner’s insurance policy

relating to the DirecTV lawsuit. After Owners denied coverage under the

homeowner’s policy, Spina filed a lawsuit against Owners alleging breach of

contract, breach of fiduciary duty, and bad faith and seeking injunctive relief.

Spina also filed a request for a jury trial. Owners subsequently filed a

counterclaim in which it requested a declaratory judgment as to whether it had

a duty to defend Spina in the DirecTV lawsuit under the terms of Spina’s

homeowner’s policy.

[4] On October 13, 2016, Owners filed a motion to bifurcate the question of

whether it had a duty to defend Spina in the DirecTV lawsuit from the

remaining claims levied in Spina’s complaint. Spina subsequently filed a brief

in opposition to Owners’s motion to bifurcate.

[5] On or about November 1, 2016, the trial court issued an order granting

Owners’s motion to bifurcate trial. This order indicated that the question of

coverage would first be determined by a bench trial. The order set the bench

trial on the coverage issue for January 3, 2017. On November 14, 2016, Spina

filed a motion in which it requested that the trial court reconsider the

bifurcation order and set the entire matter for a single jury trial. The trial court

denied Spina’s motion to reconsider in an order dated December 22, 2016.

Court of Appeals of Indiana | Memorandum Decision 55A05-1710-CT-2401 | March 26, 2018 Page 3 of 6 [6] The trial court conducted a bench trial solely on the question of coverage on

June 29, 2017. At the conclusion of this trial, the trial court concluded that

Owners did “not owe a duty to defend or indemnify Spina against the claims of

DirecTV[.]” Appellant’s App. Vol. II, p. 126. This appeal follows.

Discussion and Decision [7] The parties’ numerous claims and arguments on appeal can be succinctly

restated as whether the trial court violated Spina’s constitutional right to a jury

trial by making a judicial determination as to whether Owners had a duty to

defend Spina in the DirecTV lawsuit. Generally,

[a]n insurance company’s duty to defend is broader than its duty to indemnify. Seymour Mfg. Co. v. Commercial Union Ins. Co., 665 N.E.2d 891, 892 (Ind. 1996). An insurer, after making an independent determination that it has no duty to defend, must protect its interest by filing a declaratory judgment action for a judicial determination of its obligations under the policy or defend its insured under a reservation of rights. Liberty Mut. Ins. Co. v. Metzler, 586 N.E.2d 897, 902 (Ind. Ct. App. 1992), trans. denied.

Emp’rs Ins. of Wausau v. Recticel Foam Corp., 716 N.E.2d 1015, 1025 (Ind. Ct.

App. 1999) (emphasis added).

[8] A judicial determination of whether an insurer owes the insured a duty to

defend is appropriate because in order to make such a determination, the court

must interpret the terms of the insurance policy, i.e., the contract, agreed to by

the parties. Interpretation of an insurance contract is a matter of law. Burkett v.

Court of Appeals of Indiana | Memorandum Decision 55A05-1710-CT-2401 | March 26, 2018 Page 4 of 6 Am. Family Ins. Grp., 737 N.E.2d 447, 452 (Ind. Ct. App. 2000); Westfield Cos. v.

Rovan, Inc., 722 N.E.2d 851, 855 (Ind. Ct. App. 2000). Issues of law “are not

the proper subject of jury analysis.” Winney v. Bd. of Comm’rs of Vigo Cty., 174

Ind. App. 624, 628, 369 N.E.2d 661, 663 (1977). Therefore, when a party files

a motion for declaratory relief, issues of law within the claim “will be

determined by the court, either by a separate decision or by instructions to the

jury.” Id. at 629, 369 N.E.2d at 664.

[9] By seeking a declaratory judgment as to whether it had a duty to defend Spina

and requesting the bifurcation of the issue from the other claims levied against it

by Spina, Owners sought a judicial determination as to whether it had a duty to

defend Spina before proceeding to trial on the claims asserted by Spina. The

trial court conducted a bench trial focused solely on this question. The record

reveals that had the trial court found that Owners owed Spina a duty to defend,

the matter would have proceeded to a jury trial on Spina’s claims. However,

following this bench trial, the trial court determined that Owners did not have a

duty to defend Spina. The trial court did not make any findings or conclusions

thereon relating to any other issue. Given the applicable authority indicating

that a determination as to whether an insurance company owes an insured a

duty to defend is to be made by the trial court, see Emp’rs Ins. of Wausau, 716

N.E.2d at 1025, we conclude that the trial court did not violate Spina’s

constitutional right to a jury trial by making such a determination.

[10] The judgment of the trial court is affirmed.

Court of Appeals of Indiana | Memorandum Decision 55A05-1710-CT-2401 | March 26, 2018 Page 5 of 6 Robb, J., and Crone, J., concur.

Court of Appeals of Indiana | Memorandum Decision 55A05-1710-CT-2401 | March 26, 2018 Page 6 of 6