Julie Greenbank v. Great American Assurance Comp

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 21-2622
JULIE GREENBANK,
Plaintiff-Appellant,
v.
GREAT AMERICAN ASSURANCE COMPANY,
Defendant-Appellee.
____________________
Appeal from the United States District Court for the
Southern District of Indiana, Evansville Division.
No. 3:18-cv-00239 — Sarah Evans Barker, Judge.
____________________
ARGUED MARCH 29, 2022 — DECIDED AUGUST 30, 2022
____________________
Before FLAUM, ST. EVE, and JACKSON-AKIWUMI, Circuit
Judges.
JACKSON-AKIWUMI, Circuit Judge. This case concerns an in-
surance dispute over a champion show horse named Thomas.
Thomas is alive and well, but Thomas’s owner, Julie Green-
bank, sued her insurance carrier, Great American Assurance
Company, for failing to provide mortality coverage for
Thomas. Greenbank alleges that Great American breached the
insurance policy and acted in bad faith by unreasonably
2 No. 21-2622
withholding consent for Thomas’s authorized humane de-
struction, opting instead to perform a tenotomy that de-
stroyed Thomas’s use as an athletic show horse. She also al-
leges that Great American’s continued care and control over
Thomas, long after the policy terminated, constitutes conver-
sion and theft. The district court dismissed her claims at sum-
mary judgment, and Greenbank appeals. We conclude that
the district court did not err in granting summary judgment
in Great American’s favor and affirm.
I
A. The Insurance Policy
In September 2017, Greenbank purchased an American
Saddlebred gelding horse named Awesome at This (barn
name “Thomas”) for $500,000. Greenbank intended to use
Thomas as an athletic show horse for competitive purposes.
Shortly after this purchase, Greenbank obtained a mortal-
ity insurance policy with Great American for Thomas’s full
purchase price. The policy, effective September 28, 2017,
through September 28, 2018, provided coverage in the event
of Thomas’s “death” or “authorized humane destruction.”
The policy defines “[a]uthorized humane destruction” as the
intentional destruction of a “horse” under the following cir-
cumstances:
(1) Where we [Great American], without any
condition, qualification, or reservation, have
expressly agreed to the destruction of the
“horse”; or
(2) Where a “horse” sustains an injury and a
“qualified veterinarian” appointed by
[Greenbank] certifies to [Great American]
No. 21-2622 3
that the suffering of the “horse” is incurable
and so excessive that immediate destruction
is imperative for humane reasons; or
(3) Where a “horse” sustains an injury or is af-
flicted with an excessively painful illness or
disease and a “qualified veterinarian” ap-
pointed by [Great American] certifies to
[Great American] that the suffering of the
“horse” is incurable and so excessive that
immediate destruction is imperative for hu-
mane reasons.
Under the policy, a horse’s death or authorized humane
destruction must result, in part, from an illness, injury, or spe-
cific surgery.
To obtain coverage in the event of Thomas’s death or au-
thorized humane destruction, the policy requires Greenbank
to meet certain conditions precedent. One condition prece-
dent requires Greenbank to immediately notify Great Ameri-
can if Thomas becomes ill. The policy notes that failure to pro-
vide immediate notice of Thomas’s illness “will invalidate
any claim under the policy.” If Thomas becomes ill, the policy
allows Great American to, with Greenbank’s permission, as-
sume control over Thomas’s treatment. But, in the event of a
covered cause of loss, the policy requires Greenbank to assist
and cooperate in Great American’s investigation, including
by submitting to an examination under oath.
In addition to mortality coverage, the policy also includes
a “Major Medical Endorsement” (MME) and a “Guaranteed
Renewal Endorsement” (GRE). These provisions also require
Greenbank to meet conditions precedent. Under the MME,
4 No. 21-2622
Greenbank may request $10,000 for “reasonable and custom-
ary veterinary fees” for Thomas’s medical treatment. And un-
der the GRE, Greenbank may renew the policy on a yearly
basis.
B. Thomas’s Health
In December 2017, Greenbank boarded Thomas at Cedar-
wood Farms in Evansville, Indiana, to begin training with
Chuck Herbert. In February 2018, however, Thomas became
sick with colic and pneumonia. Thus began Thomas’s multi-
ple visits to the veterinarian, starting first with Dr. R.H. Stone.
Over the next few months, Thomas lost 50 pounds, and de-
veloped cellulitis in all four legs and uveitis in his eye. Based
on this, Dr. Stone determined that Thomas was “very sick.”
On top of this, Thomas later pulled his right stifle, rendering
him lame in his right hind; Thomas’s ability to get up and
down was compromised.
On April 26, 2018, Greenbank reported Thomas’s pneu-
monia to Great American. Great American assigned Senior
Claims Adjuster Charlotte Bloxsom to investigate. In June
2018, Dr. Stone informed Bloxsom that Thomas’s condition
had deteriorated, and that Thomas “probably” needed to be
euthanized. After hearing this, Great American, pursuant to
the policy, retained its own veterinarians to provide treatment
for Thomas. Eventually, Thomas was transported to Hagyard
Equine Medical Institute, a facility in Lexington, Kentucky,
where Dr. Kathy MacGillivray became Thomas’s primary vet-
erinarian.
Dr. MacGillivray evaluated Thomas and determined that
Thomas suffered from a deep lung abscess and severe lamini-
tis. Severe laminitis is a life-threatening condition that occurs
No. 21-2622 5
when the coffin bone separates from the hoof capsule imped-
ing blood flow to the tissues in a horse’s foot. Dr. MacGilli-
vray advised that based on Thomas’s declining health, it
would not be unreasonable to make a euthanasia recommen-
dation. But because Thomas did not previously receive treat-
ment for these issues, she wanted to try treatment first, before
recommending euthanasia.
Thomas received treatment for his deep lung abscess first,
followed by his severe laminitis. For the latter condition, vet-
erinary podiatry specialist Dr. Brian Fraley recommended
that Thomas undergo a tenotomy, which involves a one-inch
incision and cutting the deep flexor tendon to restore blood
flow and relieve pressure on the coffin bone. Greenbank ob-
jected to Thomas’s tenotomy on the basis that it would de-
stroy Thomas’s future athleticism as a show horse; she re-
quested more conservative treatments. But Dr. Fraley advised
that the tenotomy was Thomas’s only chance of regaining any
athletic ability, because, after a tenotomy, the tendon would
eventually heal and become functional. Dr. Fraley performed
Thomas’s tenotomy, and as he would later testify, Thomas’s
tenotomy went well and Thomas had a “remarkable” recov-
ery.
Within a year after his surgery, Thomas gained back his
weight and returned to trotting, bucking, running, and gal-
loping around the Pine Ridge Farm, where he now resides. At
oral argument, Great American shared that Thomas is still
alive and doing well.
C. Great American’s Policy Actions
Per the MME, Greenbank submitted the medical bills for
Dr. Stone’s treatment of Thomas’s pneumonia. Great
6 No. 21-2622
American, however, determined that certain medications,
particularly the $80 for Equipoise and $982 for Marquis, were
not related to Thomas’s pneumonia condition and denied
coverage for these treatments.
Greenbank’s policy expired on September 28, 2018. To re-
new the policy under the GRE, she submitted a payment of
$14,725.000. Great American however, denied the policy re-
newal based on Greenbank’s failure to meet several condi-
tions precedent, including providing Great American with
immediate notice of Thomas’s illness in February 2018. Under
Indiana law, Great American was required to provide Green-
bank with a 45-day notice of the policy’s non-renewal. Be-
cause it did not do that, it renewed Greenbank’s policy for 60-
days. For the 60-day renewal, Great American deducted
$2,418.00 from Greenbank’s payment and refunded
$12,307.00 to her.
Though the policy has terminated, Great American contin-
ues to care for and maintain control of Thomas.
D. Greenbank’s Lawsuit Dismissed at Summary Judgment
In November 2018, Greenbank sued Great American in In-
diana state court for unreasonably refusing to euthanize
Thomas and unlawfully maintaining control over Thomas.
The case was removed to federal district court, and Green-
bank filed an amended complaint alleging breach of contract,
bad faith, theft, statutory conversion, criminal mischief, fraud
(common law and constructive), common law conversion,
and negligence. Both parties filed motions for summary judg-
ment, and the district court granted summary judgment in fa-
vor of Great American.
No. 21-2622 7
The district court determined that Great American did not
breach the policy because there was no covered cause of
loss—Thomas did not die by natural causes or authorized hu-
mane destruction. Because there was no breach of contract,
the district court concluded that Great American could not
have acted in bad faith. The district court also concluded that
Great American did not breach the policy or act in bad faith
when it refused to renew Greenbank’s policy under the GRE
and denied coverage under the MME. As for Greenbank’s
theft, statutory conversion, and common law conversion
claims, the district court found that Greenbank never de-
manded control over Thomas, and there was no evidence that
such a demand would have been futile. Accordingly, the dis-
trict court concluded, those three claims failed. Finally, the
district court held that Greenbank failed to show criminal
mischief and her negligence claims were foreclosed. This ap-
peal followed.
II
We review a district court’s decision on a motion for sum-
mary judgment de novo, examining the factual record in a
light most favorable to the non-moving party. Martinsville
Corral, Inc. v. Soc'y Ins., 910 F.3d 996, 998 (7th Cir. 2018). Sum-
mary judgment is appropriate if there is no genuine dispute
of material fact, and the movant is entitled to judgment as a
matter of law. FED. R. CIV. P. 56(C). Greenbank raises several
arguments on appeal, which we now consider.
A. Breach of Contract
Greenbank argues that Great American breached the in-
surance policy in two ways: (1) by failing to provide mortality
coverage, and (2) by denying medical coverage for two
8 No. 21-2622
treatments Thomas received while under Dr. Stone’s care. To
prevail on a breach of insurance contract claim in Indiana,
Greenbank must show the existence of a valid contract,
breach of that contract, and damages. Roche Diagnostics Oper-
ations, Inc. v. Marsh Supermarkets, LLC, 987 N.E.2d 72, 85 (Ind.
Ct. App. 2013). Here, Greenbank fails to show that Great
American breached the insurance policy in either of the two
ways she posits.
1. Mortality Coverage
The mortality insurance policy at issue provides coverage
in the event of Thomas’s “death” or “authorized humane de-
struction.” The policy defines “authorized humane destruc-
tion” as “the intentional destruction of a ‘horse’” where Great
American provides consent, or a “qualified veterinarian” cer-
tifies that immediate destruction is “imperative for humane
reasons.”
Here, there is no dispute that Thomas did not die naturally
or by authorized humane destruction. That alone should end
the inquiry into whether Great American breached a mortal-
ity insurance contract. But Greenbank contends that Great
American breached the contract in another way—by “unrea-
sonably” withholding Thomas’s authorized humane destruc-
tion. As she sees it, instead of approving the authorized hu-
mane destruction of Thomas, Great American, over her objec-
tion, performed a tenotomy on Thomas, which destroyed
Thomas’s future athleticism. We see no support for this con-
tention.
To begin, in making this argument, Greenbank appears to
invoke the section of the policy that allows for Thomas’s au-
thorized humane destruction in three circumstances, two of
No. 21-2622 9
which require a qualified veterinarian, appointed by either
Greenbank or Great American, to certify that Thomas had an
incurable condition that required immediate destruction. The
other allows Thomas’s authorized humane destruction if
Great American expressly consents. There are two problems
for Greenbank, however: there is no evidence in the record
that Thomas needed to be euthanized, and there is no evi-
dence that Great American was required to authorize
Thomas’s authorized humane destruction.
As for the first problem, Thomas saw three veterinarians
over a period of five months, and during that time, no veteri-
narian suggested that Thomas needed to be euthanized, let
alone certified that fact to Great American. To be sure, Dr.
Stone noted that Thomas “probably” needed euthanasia, and
Dr. MacGillivray acknowledged that euthanasia was a possi-
bility. But the possibility of euthanasia is neither certification
“nor a determination that immediate euthanasia was impera-
tive for humane reasons.” Even Dr. MacGillivray’s notes clar-
ify that she wanted to try other treatments before making a
recommendation for euthanasia. Those treatments worked, so
Dr. MacGillivray never needed to make that recommenda-
tion.
As for the second problem, there is similarly no evidence
that Great American expressly agreed to euthanize Thomas
and nothing in the policy required it to. Specifically, nothing
in the policy indicates that the mere possibility of euthanasia
is enough to trigger Great American’s express consent. The
policy does not even describe under what circumstances
Great American should provide express consent.
Greenbank appears to take the position that because
Thomas lost his use as a show horse, Great American should
10 No. 21-2622
have provided authorization for Thomas’s humane destruc-
tion. But we reject that proposition because nothing in the
contract says that Great American was expected to protect
Thomas’s use as a show horse. We are thus unconvinced that
Great American unreasonably withheld its express consent in
the absence of a veterinarian’s authorization. To protect
against Thomas’s use as a show horse, Greenbank could have
sought a loss of use policy. She cannot now attempt to turn a
mortality insurance policy into a loss of use policy by claim-
ing that Great American unreasonably withheld authorized
humane destruction. In the absence of a qualified veterinar-
ian’s certification, or any other evidence suggesting that Great
American unreasonably withheld the authorized humane de-
struction of Thomas, Greenbank has failed to state a breach of
contract claim as it relates to the denial of mortality coverage.
2. MME Claims
Greenbank’s breach of contract claim as it relates to Great
American’s denial of some of Thomas’s treatments under the
MME fares no better. Under the MME, Great American
agreed to pay for “reasonable and customary veterinary fees”
incurred for Thomas’s medical or surgical treatment, assum-
ing Greenbank has met all conditions precedent. The policy
defines “[r]easonable and customary veterinary fees” as “rea-
sonable fees for a necessary veterinary service or product.”
Greenbank takes issue with Great American’s denial of cov-
erage for two medications prescribed by Dr. Stone: $80 for Eq-
uipoise and $982 for Marquis. As she sees it, Great American
denied these two treatments without a rational basis. But
Great American denied these medications as unnecessary for
Thomas’s pneumonia. Greenbank has not put forth any evi-
dence showing that these medications were necessary or that
No. 21-2622 11
she was entitled to coverage under the MME. In the absence
of such evidence, Greenbank has failed to show a breach of
contract with respect to this policy provision.
B. Bad Faith
In addition to her breach of contract claims, Greenbank ar-
gues that Great American acted in bad faith based on several
policy actions relating to (1) the mortality coverage and (2) the
GRE.
In Indiana, an insurer has a duty of good faith and fair
dealing with an insured. Allstate Ins. Co. v. Fields, 885 N.E.2d
728, 732 (Ind. Ct. App. 2008). This includes an insurer’s agree-
ment to refrain from: “(1) making an unfounded refusal to
pay policy proceeds; (2) causing an unfounded delay in mak-
ing payment; (3) deceiving the insured; and (4) exercising any
unfair advantage to pressure an insured into a settlement of
his claim.” Erie Ins. Co. v. Hickman by Smith, 622 N.E.2d 515,
519 (Ind. 1993). An insurer breaches the covenant of good
faith and fair dealing, or acts in bad faith, when an insurer
denies liability knowing that there is no rational, principled
basis for doing so. Freidline v. Shelby Ins. Co., 774 N.E.2d 37, 40
(Ind. 2002). But this claim does not necessarily arise every
time an insurance claim is denied or not resolved in the in-
sured’s favor, even if the denial is erroneous. Erie Ins. Co., 622
N.E.2d at 520. A finding of bad faith “requires evidence of a
state of mind reflecting dishonest purpose, moral obliquity,
furtive design, or ill will.” Kartman v. State Farm Mut. Auto.
Ins. Co., 634 F.3d 883, 890 (7th Cir. 2011) (quoting Mahan v.
Am. Standard Ins. Co., 862 N.E.2d 669, 677 (Ind. Ct. App.
2007)). To determine whether the insurer breached the cove-
nant of good faith and fair dealing, the factfinder must be able
to decide that the insurer wrongly denied coverage.
12 No. 21-2622
HemoCleanse, Inc. v. Phil. Indem. Ins. Co., 831 N.E.2d 259, 264
(Ind. Ct. App. 2005).
1. Mortality Coverage
As we previously concluded, Great American did not
wrongly deny mortality coverage, therefore, Greenbank is
unable to show bad faith as to this claim. See HemoCleanse, 831
N.E.2d at 264. But we pause to consider Greenbank’s other
contention, which we did not address above: that Great
American’s refusal to consider Thomas’s athletic ability or
Greenbank’s interests are indicative of bad faith. Greenbank
neither explains why Great American was required to con-
sider Thomas’s athletic ability or her interests, nor does she
point to a policy provision that mandates this. We are there-
fore hard pressed to understand how Great American acted
in bad faith. Greenbank made it clear that she never approved
of Thomas’s tenotomy. But just because Great American did
not choose the medical route Greenbank desired, or otherwise
resolve the claim to her liking, does not mean Great American
acted in bad faith. See Erie Ins. Co., 622 N.E.2d at 520. In short,
we find no evidence that Great American acted in bad faith
when it decided to perform the tenotomy of Thomas, or oth-
erwise failed to consider Thomas’s use as a show horse, or
Greenbank’s interests.
2. GRE Renewal
Greenbank also failed to show bad faith as it relates to
Great American’s denial of her policy renewal request. Under
the GRE, Great American guarantees that, at the end of the
policy period, it will renew the mortality coverage if certain
conditions precedent are met. One condition precedent is that
Greenbank immediately notify Great American of Thomas’s
No. 21-2622 13
illness or disease throughout the policy period. The policy
notes that failure to provide immediate notice of Thomas’s ill-
ness “will invalidate any claim under the policy.”
The mortality coverage terminated on September 28, 2018.
Greenbank sent Great American $14,725.00 to automatically
renew the policy for a year. But Great American denied
Greenbank’s request for policy renewal because Greenbank
failed to meet several conditions precedent, including provid-
ing Great American with immediate notification of Thomas’s
health in February, rather than in April. Denying renewal
based on a failure to meet preconditions cannot be said to be
irrational. See Erie Ins. Co., 622 N.E.2d at 519 (bad faith occurs
when insurer acts in an “unfounded” manner).
Greenbank disagrees. In her view, it was unreasonable
and an act of bad faith for Great American to use the failure
to provide immediate notice as a reason to deny her renewal
under the GRE, especially when Great American overlooked
this error when providing coverage under the MME. Green-
bank also notes that this was the first time in fourteen years
that Great American ever denied GRE renewal based on lack
of immediate notice. But these observations alone are insuffi-
cient to establish a claim of bad faith. Allstate Ins. Co., 885
N.E.2d at 732 (even if an insurer has poor judgment or denies
a claim in error, this will not provide recovery under a bad
faith claim).
Further, we note that the district court concluded that
Greenbank failed to prove a breach of contract claim as to
GRE renewal because Greenbank failed to show damages.
Greenbank does not appeal the district court’s ruling on this
issue. Because Greenbank failed to show that Great American
14 No. 21-2622
breached the contract under the GRE, her bad faith claim fails
for this reason as well. See HemoCleanse, 831 N.E.2d at 264.
C. Conversion and Theft
We turn to Greenbank’s claim that Great American’s con-
tinued care of Thomas is unlawful. Specifically, Greenbank
argues that Great American’s refusal to return Thomas to her
after the policy terminated constitutes theft, common law and
statutory conversion.
1. Common law conversion
Tortious conversion, or common law conversion, is either
“the appropriation of the personal property of another to the
party’s own use and benefit, or [] its destruction, or [] exercis-
ing dominion over it, in exclusion and defiance of the rights
of the owner or lawful possessor, or [] withholding it from his
possession, under a claim and title inconsistent with the
owner’s.” Schrenker v. State, 919 N.E.2d 1188, 1194 (Ind. Ct.
App. 2010). A plaintiff claiming tortious conversion must es-
tablish that he or she owned the property, and that the de-
fendant’s possession was unauthorized or without consent.
See id.Where the defendant’s initial possession of plaintiff’s
property is lawful, conversion occurs only after an unquali-
fied demand for return, unless such demand would be futile.
See Coffel v. Perry, 452 N.E.2d 1066, 1069 (Ind. Ct. App. 1983).
An unqualified demand would have been futile when the
property had been disposed of or destroyed, or where the
tortfeasor assumes a position establishing that any demand
would be futile. See, e.g., Merchants Nat. Bank & Trust Co. v.
H.L.C. Enters., Inc., 441 N.E.2d 509, 514 (Ind. Ct. App. 1982).
Because tortious conversion requires ownership, there is no
No. 21-2622 15
liability for conversion where property has been abandoned.
See Right Reason Publ’n v. Silva, 691 N.E.2d 1347, 1351 (Ind. Ct.
App. 1998).
There is no dispute that Great American’s initial posses-
sion and control of Thomas was lawful based on the policy.
Greenbank also does not dispute that she did not make an un-
qualified demand for Thomas’s return. The dispute then is
whether any demand would have been futile. Greenbank says
yes, and points to Great American’s motion to preserve dur-
ing the pendency of the litigation. In that motion, Great Amer-
ican argued that Thomas should not be returned to Green-
bank because she did not have his best interest in mind. The
district court denied the motion.
It strikes us as unusual that Great American maintained
control of Thomas long after the policy terminated. Green-
bank, however, has failed to demonstrate that Great Ameri-
can’s control of Thomas falls within the bounds of common
law conversion, because of a very important fact—she never
demanded Thomas, and she has failed to show that any de-
mand for Thomas would have been futile. Though Greenbank
points to the motion to preserve as support that the demand
would have been futile, she failed to raise this argument be-
fore the district court, and therefore waived the argument.
Outside of this, Greenbank is left without any showing that
any demand in this case would have been futile. Greenbank
has therefore failed to show that Great American’s continued
control over Thomas constitutes tortious conversion.
2. Statutory Conversion and Theft
Unlike tortious conversion, statutory conversion does not
require a plaintiff to demand a return. Smeigh v. Johns
16 No. 21-2622
Manville, Inc., 643 F.3d 554, 564 (7th Cir. 2011); IND. CODE § 34-
24-3-1. Although a demand for return is not required, a plain-
tiff must present evidence to raise a reasonable inference that
the defendant was aware that their possession was unauthor-
ized. Smeigh, 643 F.3d at 564. This requires a showing that the
unauthorized control was either knowing or intentional.
Schrenker, 919 N.E.2d at 1194 (noting the differences between
statutory and tortious conversion).
Similarly, theft imposes liability on individuals who
knowingly or intentionally exert unauthorized control over
another’s property with the intent to deprive the other person
of any part of its value or use. IND. CODE § 35-43-4-2. Like stat-
utory conversion, it also requires a showing that the unau-
thorized control was either knowing or intentional.
Here, no evidence exists for a jury to determine that Great
American knowingly or intentionally exercised unauthorized
control over Thomas. As discussed above, Greenbank never
requested control of Thomas, and although she is not required
to show a request or demand for Thomas to establish statu-
tory conversion or theft, the absence of such a request under-
mines any inference that Great American was aware that its
control of Thomas was unauthorized. This is especially true
when Greenbank’s counsel specifically stated during a tele-
phonic court conference that Great American could keep
Thomas: When the magistrate judge asked, “Do you want the
horse or not?,” Greenbank’s counsel replied, “No, as far as we
are concerned, they can keep it.” R. 95-2.
With no evidence that Great American knew that their
continued control of Thomas was purportedly unauthorized,
Greenbank’s statutory conversion and theft claims fail.
No. 21-2622 17
D. Other Claims (Criminal Mischief, Fraud, and Negli-
gence)
Finally, Greenbank argues that she is generally entitled to
summary judgment as to all of her claims, but she does not
make specific arguments on appeal about her claims for crim-
inal mischief, fraud, and negligence. We have made clear that
perfunctory and underdeveloped arguments, and arguments
that are unsupported by pertinent authority are waived. See
Gross v. Town of Cicero, Ill., 619 F.3d 697, 705 (7th Cir. 2010). A
party asking us to reverse a district court’s judgment has an
obligation to argue why we should reverse that judgment,
and to cite appropriate authority to support that argument.
See id. “Where, as here, a party fails to develop the factual ba-
sis of a claim on appeal and, instead, merely draws and relies
upon bare conclusions, the argument is deemed waived.”
Spath v. Hayes Wheels Int’l-Ind., Inc., 211 F.3d 392, 397 (7th Cir.
2000). Because we are not responsible for constructing the
parties’ arguments, Greenbank’s arguments as to these claims
are waived and we do not consider them. See United States v.
Lanzotti, 205 F.3d 957 (7th Cir. 2000).
III
Accordingly, we AFFIRM the district court’s judgment.