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

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.
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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
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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.
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[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.
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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.
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Robb, J., and Crone, J., concur.
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