Milbank Insurance Company v. Indiana Insurance Company , 2016 Ind. App. LEXIS 240 ( 2016 )

FILED
Jul 20 2016, 8:28 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEES
Paul O. Watkiss John W. Mervilde
State Auto House Counsel Rick D. Meils
Naperville, Illinois William M. Berish
Meils Thompson Dietz & Berish
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Milbank Insurance Company, July 20, 2016
Appellant-Petitioner, Court of Appeals Case No.
46A03-1512-PL-2096
v. Appeal from the LaPorte Superior
Court
Indiana Insurance Company, et The Honorable Richard R.
al., Stalbrink, Jr., Judge
Appellees-Respondents. Trial Court Cause No.
46D02-1305-PL-844
Robb, Judge.
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Case Summary and Issue
[1] Milbank Insurance Company filed a declaratory judgment action seeking to
determine, as between its personal auto policy and Indiana Insurance
Company’s business auto policy, which policy was primary and which insurer
owed a duty to defend and indemnify Sydney Mireles in an underlying personal
injury action against her. On summary judgment, the trial court determined the
Milbank policy was primary. Milbank now appeals, raising several issues
which we consolidate and restate as whether the trial court erred in determining
the Milbank policy was primary. Concluding Milbank’s appeal is untimely, but
that regardless, the trial court did not err, we affirm.
Facts and Procedural History
[2] At all relevant times, Milbank insured a vehicle owned by Paul Chandler. On
May 15, 2012, Chandler took his car to a career center operated by Michigan
City Area Schools (“School”) to provide vocational training to its students.
Vehicles are repaired at the center for only the cost of parts. Mireles was a
student at the School and participated in the auto repair class for which she
received course credit. The School had a Commercial Auto/Garage Keepers
insurance policy issued by Indiana Insurance. Mireles had automobile
insurance with Geico Indemnity Company. When Mireles drove Chandler’s
car into the garage area during class, she hit and injured Leon Klosowski, a
teacher at the center. Klosowski filed a personal injury action against Mireles
in July 2012.
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[3] On May 20, 2013, Milbank filed a complaint for declaratory judgment
primarily against Indiana Insurance. The complaint also named Mireles,
Klosowski, Chandler, the School, and Geico as “nominal but necessary” parties
but made no claim for insurance coverage with respect to these nominal parties.
Appellant’s Appendix at 47-48. The complaint sought a judgment declaring
first, that the Indiana Insurance policy is primary and Indiana Insurance would
owe a defense and indemnity to Mireles in the underlying personal injury
lawsuit and second, that the Milbank policy is excess and Milbank would only
owe a defense and indemnity to Mireles after the limits of the Indiana
Insurance policy were exhausted. Indiana Insurance filed a counter- and cross-
claim for declaratory judgment seeking a judgment declaring that Mireles is not
covered under the Indiana Insurance policy at all and therefore the
primary/excess distinction is irrelevant.1
[4] Both Milbank and Indiana Insurance filed motions for summary judgment.2
The parties stipulated to the following facts: Mireles was an insured under both
the Milbank and Geico policies; Geico is providing a defense to Mireles in the
personal injury action; Mireles is not an employee of the School; Mireles
participated in the vocational class for which she received credit, educational
1
Geico also filed a counter- and cross-claim for declaratory judgment, seeking a determination it was excess
to both Milbank’s and Indiana Insurance’s policies. Geico’s policy did not seem to be at issue at the trial
court, see Transcript of Summary Judgment Hearing at 5 (Milbank’s counsel stating, “So you’ve basically got
two competing policies. It’s either going to be the Milbank policy that’s primary or the Indiana Insurance
Company policy that’s primary.”), and is not at issue on appeal.
2
Geico joined in Milbank’s motion for summary judgment.
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instruction, and training; once Mireles signed up for the class, her participation
was mandatory; and Mireles’s operation of Chandler’s car was within the scope
of the permission he gave when he left the car with the School for repairs. See
id. at 323-24. Following a hearing, the trial court entered the following order on
August 28, 2015:
15. Milbank and Geico seek declaratory judgment that Mireles
qualifies as an insured under the School’s Indiana [Insurance]
Policy; that the Indiana [Insurance] Policy is primary; and that
the Milbank Policy is excess, only kicking in after the liability
limits of the Indiana [Insurance] Policy are met.
15. Indiana [Insurance], on the other hand, seeks declaratory
judgment that Mireles does not qualify as an insured under the
Indiana [Insurance] Policy and therefore, making a
primary/excess distinction between the Indiana [Insurance]
Policy and the Milbank Policy is irrelevant.
***
27. [Klosowski] cannot sue the School for his injuries because
that claim is covered by his workers compensation. It seems
illogical then, for [Klosowski] to be able to collect from the
School’s insurance by bringing the claim against his student. The
School’s Indiana [Insurance] Policy was purchased to provide
coverage if someone not involved in the School’s business or
vocational class, in a manner of speaking an “outsider,” were to
bring a claim. The policy was not intended to allow a teacher
and employee to, in effect, sue the School through a fellow agent
of the [S]chool, in this case a student in a vocational class.
28. The Court finds that [Chandler’s] car was covered by the
School’s Indiana [Insurance] Policy and that Mireles was acting
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as an agent of the School’s auto repair “business” and vocational
class, however the School’s Indiana [Insurance] Policy does not
provide Mireles with liability coverage for a claim from another
agent of the School, such as Mireles’s teacher [Klosowski].
Therefore, it is ordered, adjudged and decreed that Indiana
Insurance’s Motion for Summary Judgment is hereby, granted,
and Milbank Insurance’s Motion for Summary Judgment, in
which Geico Insurance joined, is hereby, denied.
App. at 14-18. On September 28, 2015, Milbank filed in the trial court a
purported Notice of Appeal, stating it was appealing from the August 28, 2015
final judgment of the trial court granting summary judgment in favor of Indiana
Insurance and denying Milbank’s cross-motion for summary judgment. No
Notice of Appeal was filed with the Clerk of the Indiana Supreme Court, Court
of Appeals, and Tax Court, no filing fee was tendered, and nothing further
happened with respect to this “appeal.”
[5] Thereafter, on November 17, 2015, Milbank filed in the trial court a “Motion to
Clarify” alleging,
1. That Milbank filed this declaratory judgment action seeking a
declaration that the policy issued by Indiana [Insurance] was
primary and the policy issued by Milbank was excess.
2. That both Milbank and Indiana [Insurance] brought cross-
motions for summary judgment.
3. That Milbank’s motion for summary judgment sought a
declaration that the Indiana [Insurance] policy was primary and
that the Milbank policy was excess.
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4. That Indiana [Insurance]’s motion for summary judgment
sought a declaration that its policy did not cover the defendant
being sued and therefore made the primary/excess distinction
between the two policies irrelevant.
5. That while the court ultimately granted Indiana [Insurance]’s
motion for summary judgment, the ruling is unclear as to the
status of Milbank and whether it would therefore be primary.
Since there was no declaration that Milbank’s policy was primary
it is unclear as to whether a final order was entered as this issue
remains undecided.
Wherefore, [Milbank] moves this court for entry of an order
clarifying that the order of August 28, 2015 granting summary
judgment for [Indiana Insurance] and denying summary
judgment for [Milbank] is a final order and that Milbank’s policy
is primary.
Id. at 403-04. The trial court entered an order on November 23, 2015, granting
Milbank’s motion to clarify declaring that “the policy issued by [Milbank] is
primary, and that no other issues remain to be decided.” Id. at 11. Milbank
then filed a Notice of Appeal with the Clerk of the Supreme Court, Court of
Appeals, and Tax Court purporting to appeal from the November 23, 2015
order granting its motion to clarify.
[6] Indiana Insurance filed a motion to dismiss Milbank’s appeal, asserting the trial
court’s order of August 28, 2015, resolved all issues as to all parties, was
therefore a final appealable order, and because Milbank did not perfect an
appeal within thirty days of that order, its attempt to restart the clock with a
motion to clarify and subsequent notice of appeal was untimely. The motion to
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dismiss was denied by the motions panel of this court and the parties proceeded
to fully brief the case.
Discussion and Decision
I. Timeliness
[7] We first address Indiana Insurance’s request that we reconsider the ruling of the
motions panel and dismiss this appeal as untimely. Although reluctant to do
so, the writing panel has the inherent authority to reconsider any decision of the
motions panel while an appeal remains pending. D.C., Jr. v. C.A., 5 N.E.3d 473,
475 (Ind. Ct. App. 2014). We may do so where a more complete record reveals
clear authority establishing that the motions panel ruling was in error. Haggerty
v. Anonymous Party 1, 998 N.E.2d 286, 293 (Ind. Ct. App. 2013).
[8] Indiana Appellate Rule 9 provides that a party initiates an appeal from a final
judgment by filing a Notice of Appeal with the Clerk of the Indiana Supreme
Court, Court of Appeals, and Tax Court within thirty days after the entry of the
final judgment is noted in the Chronological Case Summary (“CCS”). Ind.
Appellate Rule 9(A). A “final judgment” is defined, in part, as a judgment that
disposes of all claims as to all parties. App. R. 2(H)(1). “Unless the Notice of
Appeal is timely filed, the right to appeal shall be forfeited . . . .” App. R.
9(A)(5).
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[9] Here, Milbank’s complaint for declaratory judgment, which named Indiana
Insurance as the primary defendant and Geico, among others, as a “nominal
but necessary party,” asked the trial court to
enter judgment finding and declaring the rights of the parties as
follows:
A. That the [Indiana Insurance policy] is primary and would
owe a defense and indemnity to Mireles in the underlying
personal injury action . . . ;
B. That the [Milbank policy] is excess and would only owe a
defense and indemnity to Mireles in the underlying personal
injury action . . . on an excess basis only after the liability limits
in the [Indiana Insurance policy] have been exhausted . . . .
App. at 47-48, 53. Milbank, joined by Geico, and Indiana Insurance each
sought summary judgment in its favor. Milbank’s motion for summary
judgment requested the trial court enter judgment exactly as requested by the
prayer for relief in its complaint; namely, a declaration that Indiana Insurance is
primary and Milbank is excess. Indiana Insurance’s motion for summary
judgment requested the trial court enter summary judgment “in its favor, as
against [Milbank’s] Complaint . . . .” Id. at 311-12. The trial court entered an
order on those motions on August 28, 2015, which was noted in the CCS on
September 3, 2015. See id. at 9. That order granted Indiana Insurance’s motion
for summary judgment and denied Milbank’s motion. The question presented
in the declaratory judgment action and by the motions for summary judgment
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was whether the Indiana Insurance or Milbank policy was primary.3 When the
trial court denied Milbank’s motion for summary judgment and granted
Indiana Insurance’s, it in essence declared, contrary to Milbank’s prayer for
relief, that Milbank was primary, and the sole question raised by the declaratory
judgment action was answered. No claims remained as to any party thereafter.
And indeed, Milbank tried to initiate an appeal of the trial court’s judgment by
filing a Notice of Appeal, in which it stated it was appealing from a final
judgment. Unfortunately, Milbank filed its notice of appeal with the trial court
only. Although that used to be the procedure for initiating an appeal, see App.
R. 9(A)(1) (2011), such has not been the case since January 1, 2012.4 The trial
court’s August 28, 2015, order was a final judgment and Milbank did not file an
effective Notice of Appeal within thirty days, and, thus the case was concluded
at that point.
[10] Then, seventy-five days after the trial court’s summary judgment order was
entered on the CCS and approximately fifty days after filing an ineffective
notice of appeal, Milbank filed a “motion to clarify” alleging the trial court’s
order, while ultimately granting Indiana Insurance’s motion for summary
judgment, did not specifically declare that Milbank’s policy was primary and
was therefore “unclear as to whether a final order was entered as this issue
3
Although Geico was nominally involved in the declaratory judgment action, no party suggested Geico was
primary.
4
There was a grace period from January 1, 2012, until January 1, 2014, during which a notice of appeal filed
with the trial court clerk would be deemed timely filed. App. R. 9(A)(5) (2012).
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remains undecided.” App. at 404. Indiana does not recognize a “motion to
clarify.” Hedrick v. Gilbert, 17 N.E.3d 321, 326 (Ind. Ct. App. 2014). In Hedrick,
we treated a self-styled “motion to clarify” as a motion to correct error for
purposes of determining the timeliness of an appeal. Id. (stating, “[i]f we were
to treat [the motion to clarify] as something other than a motion to correct error
or a motion to reconsider, practitioners would have no guidance on what such a
motion should be, its timelines, or its possible end results”). A motion to
correct error must be filed within thirty days of a final judgment, however, and
Milbank’s motion was not. We could also possibly consider the “motion to
clarify” a motion for relief from judgment, which does not carry the same strict
timelines as a motion to correct error. See Ind. Trial Rule 60(B) (stating a
motion for relief from judgment must be filed not more than one year after the
judgment was entered for certain enumerated reasons, and within a reasonable
time for others). However, Milbank’s motion to clarify does not contain any
allegations that would arguably fit within the enumerated provisions of Trial
Rule 60(B).
[11] The fact that the trial court purported to rule on the motion to clarify is
immaterial. A trial court has inherent power to reconsider, vacate, or modify
any previous order until the case proceeds to final judgment. See T.R. 54(B)
(stating that non-final judgments are “subject to revision at any time before the
entry of judgment adjudicating all the claims and the rights and liabilities of all
the parties”). After a final judgment is rendered in a particular case, however,
the trial court retains only “such continuing jurisdiction as is permitted by the
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judgment itself, or as is given the court by statute or rule.” Waas v. Ill. Farmers
Ins. Co., 722 N.E.2d 861, 862 (Ind. Ct. App. 2000) (quotation omitted). Since
Milbank did not file a timely motion to correct error following the entry of final
judgment on August 28, 2015, and did not allege any grounds for relief from
judgment, the trial court had no continuing jurisdiction over this case and its
order on the motion to clarify had no effect, including restarting the clock for
filing an appeal.
[12] Milbank’s failure to timely file a notice of appeal from the trial court’s final
judgment forfeited its right to appeal absent “extraordinarily compelling
reasons.” In re Adoption of O.R., 16 N.E.3d 965, 971 (Ind. 2014). We do not
find any extraordinarily compelling reasons to consider this untimely appeal and
Milbank does not offer any.5 However, given our long-standing preference for
deciding cases on the merits, Teaching Our Posterity Success, Inc. v. Ind. Dep’t of
Educ., 20 N.E.3d 149, 154 (Ind. 2014), and given that the motions panel denied
the motion to dismiss and the parties thereafter fully briefed this case, we will
proceed to consider the merits of the parties’ arguments.
5
Milbank continues to assert that the August 28, 2015 order did not dispose of all claims as to all parties and
falls back on the issue of timeliness already being decided by the motions panel. See Appellant’s Amended
Reply Brief at 8. Milbank has failed to identify why the order, in granting summary judgment to Indiana
Insurance and deciding Indiana Insurance was not primary, did not also effectively decide that Milbank’s
policy was primary.
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II. Summary Judgment
A. Standard of Review
[13] We review the grant of summary judgment de novo. Lyons v. Richmond Cmty.
Sch. Corp., 19 N.E.3d 254, 259 (Ind. 2014). Our review is limited to those facts
designated to the trial court, T.R. 56(H), and we construe all facts and
reasonable inferences drawn from those facts in favor of the non-moving party,
Meredith v. Pence, 984 N.E.2d 1213, 1218 (Ind. 2013). We will affirm a grant of
summary judgment only if the designated evidence shows there is no genuine
issue of material fact and the moving party is entitled to judgment as a matter of
law. T.R. 56(C). On appeal, the non-moving party carries the burden of
persuading us the grant of summary judgment was erroneous. Hughley v. State,
15 N.E.3d 1000, 1003 (Ind. 2014).
B. Primary Insurance
[14] Milbank concedes Mireles was covered under its policy as a permissive user.
See App. at 323 (stipulation of facts stating “[t]hat Mireles qualifies as an
insured under the Geico Policy and Milbank Policy”); see also id. at 84 (Part A
of the Milbank policy stating it “will pay damages for bodily injury . . . for
which any insured becomes legally responsible because of an auto accident”
and defining “insured” to include “[a]ny person using your covered auto”)
(internal quotation marks omitted). But Milbank contends its “Other
Insurance” provision makes it the excess insurer in this case. The “Other
Insurance” provision states:
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Any insurance we provide for a vehicle you own shall be excess
to that of a person engaged in the business of: 1. Storing; 2.
Parking; 3. Servicing; or 4. Repairing; motor vehicles if the
accident occurs while the vehicle is under that person’s control or
the control of that person’s employee or agent.
Id. at 73 (internal quotation marks omitted). Milbank contends Indiana
Insurance admitted in a Right of Reservation letter that Mireles was an insured
under its policy, and that irrespective of the letter, Mireles meets the definition
of an insured under the Indiana Insurance policy.6 Therefore, Milbank asserts
the trial court erred in denying its motion for summary judgment and granting
Indiana Insurance’s motion.
[15] With respect to the alleged admission, Milbank attached as an exhibit to its
complaint a January 3, 2013, letter from Indiana Insurance notifying Geico of
its reservation of rights. After citing several provisions of the Indiana Insurance
policy, the letter stated,
[Mireles] is potentially considered a “volunteer worker.” We
believe she is an insured, but only on an excess basis over any
other collectible insurance . . . .
6
Milbank also asserts the trial court erred in using tort law principles of liability when the issue is contract
interpretation. The trial court’s summary judgment order included findings and analysis supporting its
conclusion. Although such findings are helpful to our review by giving insight into the trial court’s rationale
for its decision, they are neither required nor binding and they do not change our standard of review. Kesling
v. Hubler Nissan, Inc., 997 N.E.2d 327, 331-32 (Ind. 2013). Our review is de novo, and if the trial court’s
judgment can be sustained on any basis supported by the evidence, we will affirm. Hicks v. Thatcher, 44
N.E.3d 1258, 1261 (Ind. Ct. App. 2015). Therefore, we focus not on the reasoning by which the trial court
reached its result, but on the result itself.
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By raising issues and referring to policy language in this letter we
do not intend to waive the right to raise or rely on other defenses
or policy language. We specifically reserve the right to amend
our coverage position and any accompanying letter.
App. at 226. Milbank asserts the statement “[w]e believe she is an insured” is
an admission by party opponent under Evidence Rule 801(d) and that when
Indiana Insurance subsequently denied that Mireles was an insured under its
policy in the summary judgment proceedings, it acted deceptively and in bad
faith. See Appellant’s Brief at 9, 15. Milbank willfully ignores the entirety of
Indiana Insurance’s letter, which is equivocal as to Mireles’s status as an
insured, see app. at 223 (letter stating Mireles “may be an insured,”), id. at 226
(“[w]e believe she is an insured, but only on an excess basis,” and “Mireles
potentially has excess coverage available”), and specifically reserves the right to
amend its position. To the extent Indiana Insurance’s letter is relevant to the
coverage question, it is merely evidence to be considered in light of the actual
language of the policies at issue. And Indiana Insurance certainly did not act in
bad faith in tentatively positing early in the proceedings there may be coverage
and then determining as the proceedings progressed that there was not.7
[16] We turn then to the language of the Indiana Insurance policy. We interpret an
insurance contract under the same rules of construction as any other contract.
7
Moreover, Milbank cites Erie Ins. Co. v. Hickman, 622 N.E.2d 515 (Ind. 1993), in support of its assertion that
Indiana Insurance acted in bad faith. Erie Ins. Co. recognized a cause of action for “tortious breach of an
insurer’s duty to deal with its insured in good faith.” Id. at 519 (emphasis added). This is wholly inapplicable
to this situation.
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WellPoint, Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA, 29 N.E.3d 716, 721
(Ind. 2015). We construe the policy as a whole rather than considering
individual words, phrases, and paragraphs, and we give clear and unambiguous
policy language its plain and ordinary meaning. See Dunn v. Meridian Mut. Ins.
Co., 836 N.E.2d 249, 251-52 (Ind. 2005). If there is an ambiguity, we construe
the policy strictly against the insurer. Bradshaw v. Chandler, 916 N.E.2d 163,
166 (Ind. 2009). An insurance policy is ambiguous only if a provision is
susceptible to more than one reasonable interpretation. FLM, LLC v. Cincinnati
Ins. Co., 24 N.E.3d 444, 454 (Ind. Ct. App. 2014), trans. denied. “[T]he power to
interpret contracts does not extend to changing their terms and we will not give
insurance policies an unreasonable construction to provide additional
coverage.” Thomson Inc. v. Ins. Co. of N. Am., 11 N.E.3d 982, 994 (Ind. Ct. App.
2014) (alteration in original) (quotation omitted), trans. denied.
[17] The named insured on the Indiana Insurance policy is “Michigan City Area
Schools.” App. at 108. Thus any reference in the policy to “you” means the
School. The policy states it will “pay all sums an ‘insured’ legally must pay as
damages because of ‘bodily injury’ or ‘property damage’ to which this insurance
applies, caused by an ‘accident’ and resulting from the ownership, maintenance
or use of a covered ‘auto.’” Id. at 113. A “covered auto,” for purposes of this
liability coverage, is defined as “any ‘auto.’” Id. at 112. And finally, the policy
provides:
1. Who Is An Insured
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The following are “insureds”:
a. You for any covered “auto.”
b. Anyone else while using with your permission a covered
“auto” you own, hire or borrow except:
***
(3) Someone using a covered “auto” while he or she is
working in a business of selling, servicing, repairing,
parking or storing “autos” unless that business is yours.
Id. at 113 (emphasis added).
[18] Milbank asserts that because Mireles was using Chandler’s covered car with the
School’s permission while working in the School’s own business of servicing or
repairing the car, Mireles is an insured under subparagraph 3 of the Indiana
Insurance policy. In order to be an insured under this provision of the policy,
however, Mireles must also have been using a covered auto that was owned,
hired or borrowed by the School.8 There is no dispute that Chandler owned the
car, not the School. Further, there is no evidence or even suggestion that the
8
Milbank asserts in its reply brief that it is unnecessary to determine whether the School owned, hired, or
borrowed Chandler’s car because the exception set forth in subparagraph 3 of the definition of insured
“stands alone and is a separate definition of who is insured” under the Indiana Insurance policy. Appellant’s
Am. Reply Br. at 6. This assertion ignores the plain language and organizational structure of the policy.
Subparagraph 3 describes an exception to the general definition of an insured as anyone besides the School
while using with the School’s permission a vehicle the School owns, hires, or borrows. Therefore, we look
first to the language of paragraph b to determine if Mireles is an insured under that definition, and if it applies,
then we look to the exceptions in the following subparagraphs.
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School hired the car. That means Mireles could only potentially be an insured
if the School borrowed Chandler’s car.
[19] In Protective Ins. Co. v. Coca-Cola Bottling Co., 423 N.E.2d 656 (Ind. Ct. App.
1981), this court considered a “Truckmen’s Endorsement” providing coverage
to the named insured and any other person while using the insured vehicle with
the permission of the named insured. However, the policy further provided if
bodily injury or property damage arises out of the loading or unloading of the
vehicle, coverage is only provided if the other person is a lessee or borrower of
the automobile. Such a clause, excluding from coverage persons who are users
but not borrowers or lessees of the vehicle “limits the insurer’s liability for
injuries resulting from acts of nonemployees of the named insured.” Id. at 660.
With respect to who is a “borrower,” the court explained:
A person can be using the vehicle without being a borrower of
the vehicle. The term “borrower” has been defined as someone
who has, with the permission of the owner, temporary possession
and use of the property for his own purposes. To be a borrower,
a person must have possession of the vehicle, possession
connoting the right to exercise dominion and control over the
vehicle. General supervision or even the actual performance of
loading or unloading operations will not make one a borrower of
the vehicle involved; there must be evidence of possession.
Id. (citations and footnote omitted). In contrast, “[a] bailment is an agreement,
either express or implied, that one person will entrust personal property to
another for a specific purpose and that when the purpose is accomplished the
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bailee will return the property to the bailor.” Pitman v. Pitman, 717 N.E.2d 627,
631 (Ind. Ct. App. 1999).
[20] Chandler left his car with the School for the specific purpose of having repair
work done. He did not lend his car to the School to use for its own purposes.
In this regard, the relationship between Chandler and the School was not that
of lender-borrower; it was bailor-bailee. As in Protective Insurance Company, even
the actual performance of repairing of the vehicle did not make the School a
“borrower” of the car because that was the purpose for which Chandler left his
car with the School. Accordingly, Mireles is not an insured under definition (b)
of the Indiana Insurance policy because she was not using a car the School
owned, hired, or borrowed.
[21] Mireles could also be an insured under the Indiana Insurance policy if she was
a volunteer worker of the School. The School Business Auto Extension
Endorsement to the Indiana Insurance policy amends the basic policy definition
of “insured” to add:
g. A “volunteer worker” of yours while using a covered “auto”
you do not own, hire or borrow in your business or your personal
affairs or while performing duties related to the conduct of your
business. Insurance provided by this endorsement is excess over
any other collectible insurance available to any “volunteer
worker.”
For the purpose of this endorsement provision, Section V –
Definitions is amended by adding the following:
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“Volunteer worker” means a person who donates their services to
you with your knowledge and consent and who is not paid a fee,
salary or other remuneration.
App. at 126-27.9 This provision does not require that the auto be owned, hired
or borrowed by the School. However, it does require Mireles to have given her
services to the School without any remuneration.
A donation is defined . . . to be the act by which the owner of a
thing voluntarily transfers the title and possession of the same
from himself to another person, without any consideration [or]
that which is given or bestowed; that which is transferred to
another gratuitously, or without a valuable consideration; a gift;
a grant.
Ind. N. & S. Ry. Co. v. City of Attica, 56 Ind. 476, 486-87 (1877) (internal
quotation marks omitted). The parties stipulated that Mireles was required to
attend class and she received class credit, education, and training for her
participation; therefore, she neither donated her services nor forewent
remuneration. Therefore, she does not satisfy the definition of a “volunteer
worker” so as to be an insured under the Indiana Insurance policy.
[22] In addition, as the trial court pointed out, if Mireles were a volunteer worker or
other agent of the School, Klosowski’s exclusive remedy would be through
worker’s compensation and not through the School’s private insurance. See
9
The endorsement also adds “any ‘employee’ of yours while using a covered ‘auto’ you do not own, hire or
borrow” to the definition of insured. App. at 126. The parties stipulated Mireles was not an employee of the
School. Id. at 324.
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Ind. Code § 22-3-2-6 (stating the “rights and remedies granted to an employee
subject to IC 22-3-2 through IC 22-3-6 on account of personal injury . . . shall
exclude all other rights and remedies of such employee”); see also Sims v. U.S.
Fid. & Guar. Co., 782 N.E.2d 345, 349-50 (Ind. 2003) (noting the worker’s
compensation exclusivity provision bars a court from hearing a common law
action brought by an employee for injuries arising out of and in the course of
employment, but does permit “an action against third party tortfeasors, so long
as the third party is neither the plaintiff’s employer nor his fellow employee”) (emphasis
added).
[23] We disagree somewhat with the trial court’s reasoning, inasmuch as the trial
court found Mireles was an insured under the Indiana Insurance policy but
Klosowski’s remedy lies elsewhere and we hold she was not an insured under
the policy. We agree, however, with the trial court’s result: the Milbank policy
is primary.
Conclusion
[24] The trial court’s grant of summary judgment to Indiana Insurance and denial of
summary judgment to Milbank, resulting in a declaration that the Milbank
policy is primary, is affirmed.
[25] Affirmed.
Najam, J., and Crone, J., concur.
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