FOR PUBLICATION


ATTORNEYS FOR APPELLANT:                           ATTORNEYS FOR APPELLEE
                                                   ESTATE OF THOMAS LYNN MORRIS:
DANNY L. WORKER
SIOBHÁN M. MURPHY                                  J. KEVIN KING
Lewis Brisbois Bisgaard & Smith LLP                PETER CAMPBELL KING
Chicago, Illinois                                  Cline, King & King, P.C.
                                                   Columbus, Indiana
JAN N. CAMPBELL
JOHN M. MEAD                                       ATTORNEYS FOR APPELLEE
Leeuw Oberlies & Campbell, P.C.                    DAEMEN SAMPSON:
Indianapolis, Indiana
                                                   PAUL M. BLANTON
                                                   Blanton & Branstetter, LLC
                                                   Paoli, Indiana
                                                                                FILED
                                                                            Apr 04 2012, 9:25 am
                              IN THE
                    COURT OF APPEALS OF INDIANA                                     CLERK
                                                                                  of the supreme court,
                                                                                  court of appeals and
                                                                                         tax court




MID-CENTURY INSURANCE COMPANY,                     )
                                                   )
       Appellant,                                  )
                                                   )
              vs.                                  )     No. 07A01-1106-PL-313
                                                   )
ESTATE OF THOMAS LYNN MORRIS,                      )
by and through his personal representative,        )
TOMMY LYNN MORRIS, DAEMEN                          )
SAMPSON, and DORA ROBINSON,                        )
                                                   )
       Appellees.                                  )


                      APPEAL FROM THE BROWN CIRCUIT COURT
                          The Honorable Judith A. Stewart, Judge
                             Cause No. 07C01-1007-PL-430


                                         April 4, 2012

                              OPINION - FOR PUBLICATION

BROWN, Judge
            Mid-Century Insurance Company (“Mid-Century”) appeals the trial court‟s grant

of the Estate of Thomas Lynn Morris‟s (“the Estate”) motion to dismiss Mid-Century‟s

complaint for declaratory judgment. Mid-Century raises one issue which we revise and

restate as whether the trial court abused its discretion in granting the Estate‟s motion to

dismiss. We affirm.

            The relevant facts as stated in Mid-Century‟s first amended complaint follow.1

Mid-Century, a reciprocal insurance exchange operating under California law with its

principal headquarters in California, issued an automobile liability policy to Dora

Robinson which listed Daemen Sampson as a named insured. The policy provided bodily

injury limits of $50,000 per person and $100,000 per occurrence. On December 2, 2004,

Sampson was operating a vehicle, and Michael Ogle and Thomas Lynn Morris were

passengers in the vehicle when the vehicle was involved in a collision with a vehicle

driven by Marcia Flaherty.2

            Prior to the Estate filing suit, Mid-Century believed that the total $100,000 per

occurrence liability limits may be exhausted by the three injured party claimants who

sustained injuries as a result of the accident. In December 2004, a representative of Mid-

Century wrote to the Estate advising of its involvement in handling this claim. On

December 10, 2004, J. Kevin King of Cline, King & King, P.C. (the “King Firm”),


            1
          Mid-Century did not request a transcript in its notice of appeal. The Estate cites to a transcript
of a February 8, 2011 hearing in its brief, but the record does not contain the transcript.
            2
                Mid-Century‟s first amended complaint does not specify who was injured or the extent of the
injuries.


                                                        2
advised Mid-Century of its representation of the Estate. That same day, Mid-Century

responded to the King Firm by advising it of the limited liability limits available and the

other potential claimants.

       King demanded payment of the $50,000 limit on behalf of the Estate. Mid-

Century‟s representative explained to King that Mid-Century wanted to attempt to

resolve all claims within the insured‟s policy limits. King “became upset” and indicated

that he would send a policy limit demand. Appellant‟s Appendix at 168. On January 10,

2005, King faxed a time limit policy demand giving Mid-Century seven days to pay its

limit to the Estate. Mid-Century advised King that it would consider the demand upon

receipt of all supporting documentation, including information concerning the two other

claimants. On January 13, 2005, King sent another letter to Mid-Century indicating that

all information requested by Mid-Century had been provided and reiterated the demand,

the time limit to expire on January 17, 2005, and the Estate‟s intention to seek an excess

judgment in the event that sum of the proceeds was not forthcoming.

       On January 18, 2005, the Estate filed suit against Sampson in the Bartholomew

Superior Court. Mid-Century retained representation for Sampson. On February 3, 2005,

Mid-Century filed a petition to intervene indicating its desire to resolve the multiple

claims against Sampson and to pay the policy‟s proceeds upon the claimant‟s release of

Sampson. On May 12, 2005, the court granted Mid-Century‟s petition to intervene and

instructed Mid-Century to file a complaint for interpleader, which Mid-Century filed on

May 24, 2005.



                                            3
       On January 13, 2006, Mid-Century “unconditionally tendered the $50,000 Policy

to the ESTATE based upon the facts that Flaherty was to receive underinsured motorist

proceeds from her carrier and exhaustion of the limits for the ESTATE would not

jeopardize SAMPSON‟S rights with regard to the other two potential claimants.” Id. at

169. In response to Mid-Century‟s unconditional tender, the Estate “rejected Policy

limits as „untimely‟ without further explanation.” Id.

       Sampson‟s refusal to participate in discovery resulted in a court order of default on

liability issues in the case. Mid-Century “continued to provide a defense and tender of its

limits to the ESTATE at all times prior to the entry of the judgment,” but “agreed to do so

through SAMPSON‟S personal attorney . . . as independent defense counsel to handle

any issue with regard to the motion to enforce the consent judgment or entry of the

same.” Id. at 170.

       On April 13, 2010, King proposed a consent judgment in the amount of $850,000,

and Mid-Century rejected the proposal on May 20, 2010. The action proceeded to trial

and the Bartholomew Superior Court entered a Judgment on Jury Verdict for the Estate in

the amount of $1,195,024.00. The Policy‟s proceeds had been deposited with the Court

by Mid-Century per its interpleader action.

       On July 23, 2010, Sampson entered into an “Assignment of All Claims and

Covenant Not to Execute” in which he assigned “all claims, including breach of contract,

negligence, statutory violations, insurance bad faith, that he may have against „Farmers

Insurance Group of Companies/The Mid-Century Insurance Company of Los Angeles,

California or any related entity of the Farmers Insurance Group of Companies/The Mid-
                                              4
Century Insurance Company of Los Angeles, California,” to the Estate. Id. at 171.

Sampson “never requested MID-CENTURY‟s consent to enter into the settlement by

way of the Assignment or for dismissal of the appeal, and did not have MID-

CENTURY‟s consent.” Id.

       On July 28, 2010, Mid-Century filed a complaint for declaratory relief against the

Estate in the Brown Circuit Court. Mid-Century requested the court to declare: (1) Mid-

Century‟s “failure to tender its limits within seven (7) days was made in good faith in an

attempt to protect its insured from multiple claimants arising from a single occurrence

where the liability limits were insufficient to provide the insured with protection of all

claims, without sufficient time to investigate all claims;” (2) the Estate‟s “time limit

demand of seven (7) days was unreasonable;” (3) the Estate “had no reasonable basis in

which to deny [Mid-Century‟s] tender of policy limits after all potential claimants were

involved in the litigation and had agreed to mediate the apportionment of limits;” (4)

Mid-Century “breached no duty of good faith and fair dealing owed to its insured;” (5)

the “insured‟s conduct in entering into first a later non-enforced settlement and then

Assignment without [Mid-Century‟s] consent was a violation of the Conditions section of

the policy;” (6) the “insured breached the contract by entering [into] first a later non-

enforced settlement and Assignment agreement leaving [sic] [Mid-Century] from any

obligation on the policy;” and (7) Mid-Century “is not obligated to pay any portion of the

judgment in excess of its Policy‟s limits.” Id. at 34-35.




                                             5
          On October 4, 2010, the Estate filed a motion to dismiss pursuant to Ind. Trial

Rule 12(B)(6).3 The Estate argued that Mid-Century‟s declaratory action should be

dismissed because its grounds for relief are defenses to a bad faith action in tort and are

not proper subjects for declaratory judgment, no issues of contractual interpretation

remain to be litigated, and granting Mid-Century‟s complaint would deprive the Estate of

its right to determine whether, when, and where it will file a bad faith action. On

December 28, 2010, the Estate filed a motion to strike Exhibits A to N of Mid-Century‟s

complaint for declaratory relief, which included the policy, correspondence, the

assignment, and pleadings, and a letter from the King Firm regarding an attempt to

resolve the litigation attached as Exhibit A of Mid-Century‟s response to the Estate‟s

motion to dismiss. At some point, the Estate filed a complaint against Mid-Century in

California and alleged bad faith. Mid-Century argued that the forum was inconvenient.

The case was ultimately dismissed without prejudice.

          On February 17, 2011, the court granted the Estate‟s motion to dismiss. The court

stated:

                 Having reviewed the authorities submitted by the parties, the Court
          finds that the [Estate‟s] motion to dismiss should be, and hereby is granted.
          Mid-Century Insurance Company (Mid-Century) brought its complaint
          pursuant to the Indiana Declaratory Judgment Act, I.C. 34-14-1-1 et seq.
          The underlying facts giving rise to this action involve an auto accident that
          occurred in December 2004 in which Thomas Lynn Morris was killed. Mr.
          Morris was a passenger in a vehicle driven by Defendant Sampson and
          insured by Mid-Century. Another vehicle, driven by Marcia Flaherty, also
          was involved in the accident. The Estate filed suit against Sampson in
          January 2005 in the Bartholomew Superior Court 2. Mid-Century defended


         The court granted the Estate‟s motion for extension of time to respond to Mid-Century‟s
          3

complaint and ordered the Estate to respond by October 4, 2010.
                                               6
Sampson and also paid for private counsel for Mr. Sampson. Trial was
held in May of 2010 and a jury verdict was rendered in favor of the Estate
in the amount of $1,195,024.00. Mid-Century‟s insurance policy provided
bodily injury limits of $50,000.00 per person and $100,000.00 per
occurrence.

        In this declaratory judgment action, Mid-Century seeks a declaration
from the court on eight issues. These issues include a declaration that
certain actions taken by Mid-Century during settlement negotiations in the
Bartholomew County lawsuit were made in good faith; that certain actions
of the Estate in those negotiations were unreasonable; that the Estate had no
reasonable basis to deny Mid-Century‟s tender of policy limits during
negotiations; that Mid-Century breached no duty of good faith and fair
dealing owed to its insured; that Mr. Sampson‟s entry into a proposed
settlement and later assignment to the Estate of any action Sampson might
have against Mid-Century for bad faith violated the conditions of the
policy; that Mr. Sampson breached the contract of insurance by entering
into the purported settlement and assignment agreement; and that Mid-
Century is not obligated to pay any portion of the judgment in excess of its
policy limits. The majority of these requests are, in essence, a request for
this Court to determine that Mid-Century acted in good faith in dealing with
its insured, Mr. Sampson. At the time the declaratory judgment action was
filed by Mid-Century, Mr. Sampson had assigned to the Estate any right
Mr. Sampson had to a cause of action against Mid-Century for bad faith,
but no such bad faith action had been filed against Mid-Century. On
February 1, 2011, approximately a week prior to the hearing, the Estate did
file an action against Mid-Century in California for, inter alia, bad faith
refusal to settle in the Bartholomew County case.

        Indiana‟s Declaratory Judgment Act provides courts with the “power
to declare rights, status and other legal relations whether or not further
relief is or could be claimed.” I.C. 34-14-1-1. The act applies to “[a]ny
person interested under a deed, will, written contract, or other writings
constituting a contract or whose rights, status, or other legal relations are
affected by a statute, municipal ordinance, contract, or franchise,” and
allows the person to “have determined any question of construction or
validity arising under the instrument, statute, ordinance, contract, or
franchise and obtain a declaration of rights, status, or other legal relations
thereof.” I.C. 34-14-1-2. Pursuant to I.C. 34-14-1-12, the act is to be
remedial. “The purpose of the chapter is to settle and to afford relief from
uncertainty and insecurity with respect to rights, status and other legal
relations; and is to be liberally construed and administered.” As noted by
the Court in Thompson v. Medical Licensing Bd., 180 Ind. App. 333, 343
                                      7
      [389 N.E.2d 43, 50] (Ind. Ct. App. 1979), [reh‟g denied, cert. denied,]
      “[h]owever, liberal construction does not mean „carte blanche‟. A
      declaratory judgment is said to be proper if another legal remedy exists,
      only „where it is appropriate,‟” (citing, Ind. Rules Procedure, TR 57). In
      this action, Mid-Century does not ask this Court to “settle and afford relief
      from uncertainty and insecurity” with respect to the parties‟ rights, status
      and other legal relations arising from the insurance contract and settlement
      negotiations in the Bartholomew County case. Rather, Mid-Century asks
      this court to determine, by way of declaratory judgment, whether Mr.
      Sampson breached the contract of insurance and whether Mid-Century‟s
      actions in the Bartholomew County case constituted good faith dealing with
      their insured. In essence, Mid-Century asks this Court to declare whether
      possible defenses to a prospective, now actual, bad faith claim are valid.
      These are not appropriate decisions for this Court to make under Indiana‟s
      Declaratory Judgment Act, and are more appropriately resolved through
      other legal remedies. See, [Cunningham] Brothers, Inc. v. Bail, et al., 407
      F.2d 1165 (7th Cir. 1969)[, cert. denied, 395 U.S. 959 (1969)]. For this
      reason, the motion to dismiss Mid-Century‟s complaint filed by the Estate
      and joined in by Mr. Sampson is granted. Pursuant to Trial Rule 12(B),
      [Mid-Century] shall have 10 days after service of this order to amend its
      pleading pursuant to Rule 15(A). The cause shall be dismissed 10 days
      from today‟s date absent such amendment.

Id. at 22-24. The court denied the Estate‟s motion to strike with respect to Exhibit A

which contained the policy and was attached to Mid-Century‟s complaint and granted the

Estate‟s motion with respect to Exhibits B through N.

      On February 28, 2011, Mid-Century filed its First Amended Complaint which

listed two counts: Count I, “Breach of Contract;” and “Count II, “Declaration of Rights.”

Id. at 172, 174. Under Count I, Mid-Century requested the court to make the following

declarations: (1) Sampson was in breach of his obligation to cooperate in his defense

under the insurance contract prior to the settlement and assignment to the Estate; (2)

Sampson breached the contract by repeatedly entering into a settlement and Assignment

agreement; (3) the Estate can have no greater rights than Sampson would have under the


                                           8
policy; (4) Mid-Century is relieved from any obligation on the policy as a result of the

breaches discussed above; and (5) Mid-Century is not obligated to pay any portion of the

judgment in excess of its policy‟s limits. Under Count II, Mid-Century requested the

court to make the same declarations as it requested in its July 28, 2010 complaint. On

March 10, 2011, the Estate filed a motion to dismiss Mid-Century‟s First Amended

Complaint. On May 17, 2011, the trial court in California dismissed the complaint

without prejudice, and Mid-Century filed a Notice to the Court Regarding Dismissal of

California Case in the Brown Circuit Court on May 20, 2011.

       On May 27, 2011, the court granted the Estate‟s motion to dismiss. The court‟s

order stated:

       Although Mid-Century has now clearly denominated two counts, one
       captioned breach of contract and one captioned declaration of rights, both
       counts refer to and seek relief under Indiana‟s Declaratory Judgment Act.
       The Act allows the Court to “determine[] any question of construction or
       validity arising under the instrument, statute, ordinance, contract, or
       franchise and obtain a declaration of rights, status, or other legal relations
       thereof.” I.C. 34-14-1-2. Counts I and II of the First Amendment [sic]
       Complaint, seeking a declaration of breach of contract and a declaration of
       rights, respectively, do not seek a determination of the construction or
       validity of the insurance policy. Nor does the complaint seek a
       determination of the rights of the parties that could provide relief from
       uncertainty before the parties continue in a course of conduct or change
       positions in reliance on an inaccurate appraisal of their rights. The issues
       raised in the complaint are not appropriate for determination under the
       Declaratory Judgment Act. The apparent dismissal of the related California
       action does not change this ruling. Accordingly, the motion to dismiss
       Mid-Century‟s First Amended Complaint is granted.

Id. at 20-21. On August 1, 2011, the Estate filed a complaint against Mid-Century in

Ohio and alleged breach of contract and breach of good faith and fair dealing in settling

and defending claims against the insured.
                                             9
       The issue is whether the court abused its discretion in granting the Estate‟s motion

to dismiss under Ind. Trial Rule 12(B)(6). A trial court‟s decision on a “defendant‟s

motion to dismiss a declaratory judgment action, to the extent the defendant challenges

the appropriateness of declaratory relief, is reviewed for an abuse of discretion.” Quiring

v. GEICO Gen. Ins. Co., 953 N.E.2d 119, 125 (Ind. Ct. App. 2011) (citing KLLM, Inc. v.

Legg, 826 N.E.2d 136, 144-145 (Ind. Ct. App. 2005), trans. denied). The standard of

review as stated in KLLM, Inc. v. Legg follows:

               The use of a declaratory judgment is discretionary with the court;
       therefore, a trial court‟s decision to allow a declaratory judgment to proceed
       is reviewed for an abuse of discretion. See Community Hosps. of Indiana,
       Inc. v. Estate of North, 661 N.E.2d 1235, 1241 (Ind. Ct. App. 1996), trans.
       denied. When reviewing a Trial Rule 12(B)(6) motion to dismiss in a
       declaratory judgment action, the facts as alleged in the complaint must be
       taken as true. Volkswagenwerk, A.G. v. Watson, 181 Ind. App. 155, 390
       N.E.2d 1082, 1084 (1979).

826 N.E.2d 136, 144 (Ind. Ct. App. 2005), trans. denied.

       Indiana‟s declaratory judgment statute provides that trial courts, within their

respective jurisdictions, “have the power to declare rights, status, and other legal relations

whether or not further relief is or could be claimed.” Ind. Code § 34-14-1-1. “Any

person interested under a . . . written contract, or other writings constituting a contract . . .

may have determined any question of construction or validity arising under the . . .

contract . . . . and obtain a declaration of rights, status, or other legal relations

thereunder.” Ind. Code § 34-14-1-2. The declaratory judgment statute‟s stated purpose is

“to settle and to afford relief from uncertainty and insecurity with respect to rights, status

and other legal relations,” and it “is to be liberally construed and administered.” Ind.


                                               10
Code § 34-14-1-12. In applying the statute, a trial court “may refuse to render or enter a

declaratory judgment or decree where the judgment or decree, if rendered or entered,

would not terminate the uncertainty or controversy giving rise to the proceeding.” Ind.

Code § 34-14-1-6.

       When considering a motion for declaratory judgment, the test to be applied is

whether the issuance of a declaratory judgment will effectively solve the problem,

whether it will serve a useful purpose, and whether or not another remedy is more

effective or efficient. Dible v. City of Lafayette, 713 N.E.2d 269, 272 (Ind. 1999) (citing

Volkswagenwerk, A.G., 181 Ind. App. 155, 390 N.E.2d at 1085). The determinative

factor is whether the declaratory action will result in a just and more expeditious and

economical determination of the entire controversy. Dible, 713 N.E.2d at 272. The use

of a declaratory judgment is discretionary with the court and is usually unnecessary

where a full and adequate remedy is already provided by another form of action. Id.

However, according to Ind. Trial Rule 57, “[t]he existence of another adequate remedy

does not preclude a judgment for declaratory relief in cases where it is appropriate.” Id.

“Although an action for declaratory judgment in Indiana may be appropriate to construe a

contract, it is an inappropriate vehicle if its use would result in „piecemeal‟ litigation.”

U.S. Fidelity and Guar. Ins. Co. v. Hartson-Kennedy Cabinet Top Co. Inc., 857 N.E.2d

1033, 1039 (Ind. Ct. App. 2006) (citations omitted).

       Generally, an insurance company is entitled to maintain a declaratory judgment

action to determine the coverage of its policies. Ind. Lumbermens Mut. Ins. Co. v. Am.

Log Homes, Inc., 774 N.E.2d 603, 606 (Ind. Ct. App. 2002). “The primary purpose of
                                            11
declaratory relief is to permit a plaintiff to obtain a declaration of its rights and liabilities

before proceeding with a course of conduct for which it might be held liable, not to

declare nonliability for past conduct.” 22A AM. JUR. 2D Declaratory Judgments § 129

(2012). “A declaratory judgment is not available where the judgment cannot guide and

protect the petitioner with regard to some future acts, such as where the insurance

company has already denied the claim.” Id.

       Mid-Century alleges that it sought “a finding that Sampson, the insured, breached

the policy of insurance and that Mid-Century did not breach any obligations it had to its

insured that arose from the contract of insurance.” Appellant‟s Brief at 7. Mid-Century

argues that “[a] grant or denial of the relief requested . . . will effectively solve the

problem, serve a useful purpose, and is the effective and efficient method to resolve the

dispute.”   Id.   Mid-Century contends that “[e]ven if the bad faith component were

premature, the court is still empowered to determine whether Sampson breached his

insurance contract by entering into the assignment,” and that “[i]f the court determined

that Sampson breached the insurance contract, the breach would relieve Mid-Century

from any further obligation under the contract.” Id. at 10. Mid-Century also argues that

“if the court were to find Mid-Century did not breach its obligations under the insurance

contract the declaration would fully resolve the issues to be addressed.” Id.

       The Estate argues that “Mid-Century is not requesting construction of their

insurance policy,” but is “seeking declarations of their „good faith‟ in handling the

Estate‟s claim which is at issue and their insured‟s alleged failure to cooperate with Mid-

Century‟s defense of that claim.” Appellee‟s Brief at 11. The Estate also argues that
                                               12
“Mid-Century‟s requests for declarations would necessarily require preemptive litigation

of disputed facts about the behavior of the parties to the insurance policy in question,”

and that “Mid-Century‟s request for declaratory relief went beyond merely construing the

contract language and on that basis alone the Circuit Court was not obliged to grant the

declaratory judgment Mid-Century requested.” Id. at 17.

         In its reply brief, Mid-Century argues that “[t]here can be no question that by its

action, Mid-Century was seeking a determination of its rights and obligations stemming

from the contract of insurance given its insured‟s breach of the cooperation clause and

Mid-Century‟s extension of a defense under the policy even after this breach.”

Appellant‟s Reply Brief at 9.         Mid-Century maintains that it “does not seek a

determination of liability but a construction of a contract after it was breached to

determine the insured‟s breach of the policy and coverage obligations thereunder.” Id. at

10.

         The record reveals that Mid-Century sought a declaratory judgment relating to

whether its past conduct was performed in good faith. In other words, Mid-Century

essentially attempts to preemptively defend against a claim of breach of duty of good

faith.   Under the circumstances and given the claims involved, we cannot say that

declaratory relief is appropriate or that the trial court abused its discretion in granting the

Estate‟s motion to dismiss. See Volkswagenwerk, A.G., 181 Ind. App. at 162, 390

N.E.2d at 1086 (holding that the movant for a declaratory judgment was improperly

attempting to try issues or determine the validity of defenses in pending cases); Morgan

v. Guar. Nat‟l Cos., 268 Ga. 343, 345, 489 S.E.2d 803, 806 (1997) (“Because [the
                                              13
insurer] has not demonstrated a need for a legal judgment that would control its future

action, in that its defenses to any claim under the policy can be presented when suit is

entered by [the insured], a declaratory judgment action was inappropriate.”); cf. Chicago

& E. Ill. R.R. Co. v. Reserve Ins. Co., 99 Ill. App. 3d 433, 437-438, 425 N.E.2d 429, 433

(1981) (holding that the rationale for concluding that it is generally an abuse of discretion

to grant declaratory relief relating to nonliability for past conduct is that such proceedings

deprive an aggrieved party of the right to decide if, when, and where to file an action to

redress the wrong which it allegedly suffered and holding that it was an abuse of

discretion to grant declaratory relief on the issue of whether the insured breached the

provisions of its insurance policies), reh‟g denied.

       For the foregoing reasons, we affirm the trial court‟s grant of the Estate‟s motion

to dismiss Mid-Century‟s complaint for declaratory judgment.

       Affirmed.

MAY, J., and CRONE, J., concur.




                                             14
