UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA

INDIANAPOLIS DIVISION
EMMIS COMMUNICATIONS CORP., )
Plaintiff,
vs. Cause No. 1:16-cv-89-WTL-DML
ILLINOIS NATIONAL INSURANCE CO., 5
Defendant.

ENTRY ON MOTIONS FOR SUMMARY JUDGMENT

This cause is before the Court on the Defendant’s motion for summary judgment (Dkt.
No. 53) and the Plaintiff’s motion for partial summary judgment (Dkt. No. 59). The motions are
fully briefed, and the Court, being duly advised, GRANTS IN PART AND DENIES IN PART
the Defendant’s motion and GRANTS the Plaintiff's motion for the reasons set forth below.
The Court also DENIES the Plaintiff’s motion for oral argument (Dkt. No. 63).

I. SUMMARY JODGMENT STANDARD

Federal Rule of Civil Procedure 56(a) provides that summary judgment is appropriate “if
the movant shows that there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” In ruling on a motion for summary judgment, the
admissible evidence presented by the non-moving party must be believed, and all reasonable
inferences must be drawn in the non-movant’s favor. Zerante v. DeLuca, 555 F.3d 582, 584 (7th
Cir. 2009) (“We view the record in the light most favorable to the nonmoving party and draw all
reasonable inferences in that party’s favor.”). When the Court reviews cross-motions for
summary judgment, as is the case here, “we construe all inferences in favor of the party against

whom the motion under consideration is made.” Speciale v. Blue Cross & Blue Shield Ass'n,

 

 
538 F.3d 615, 621 (7th Cir. 2008) (quotation omitted). “‘[W]e look to the burden of proof that
each party would bear on an issue of trial.”” Diaz v. Prudential Ins. Co. of Am., 499 F.3d 640,
643 (7th Cir. 2007) (quoting Santaella v. Metro. Life Ins. Co., 123 F.3d 456, 461 (7th Cir.
1997)). A party who bears the burden of proof on a particular issue may not rest on its
pleadings, but must show what evidence it has that there is a genuine issue of material fact that
requires trial. Johnson v. Cambridge Indus., Inc., 325 F.3d 892, 901 (7th Cir. 2003), Finally, the
non-moving party bears the burden of specifically identifying the relevant evidence of record,
and “the court is not required to scour the record in search of evidence to defeat a motion for
summary judgment.” Ritchie v. Glidden Co., 242 F.3d 713, 723 (7th Cir. 2001).
II. FACTS OF RECORD

This suit involves Defendant Illinois National Insurance Company’s (“INIC”) denial of
insurance coverage to Plaintiff Emmis Communications Corporation (“Emmis”) for a lawsuit
filed against Emmis in this district in 2012. See Corre Opportunities Fund, LP, et al. v. Emmis
Communications Corp., et al., 1:12-cv-491-SEB-TAB (hereinafter referred to as “the COF
Suit”). The voluminous facts set forth in the parties’ briefs are virtually undisputed; indeed, the
Plaintiff does not expressly dispute any of the facts contained in the Defendant’s Statement of
Material Facts Not in Dispute, and the Defendant disputes only one of the facts asserted in the
Plaintiff’s.! The following facts are those facts of record that the Court believes to be either

directly relevant to the Court’s decision or helpful to put those relevant facts in context.

 

'That factual dispute—whether AIG or National Union Fire Insurance Company of
Pittsburgh, Pa. was Emmis’s primary carrier during the 2010-11 policy period—is not material to
the Court’s decision.

 

 
Emmis’s Preferred Stock

In 1999, Emmis issued 2,875,000 shares of 6.25% Series A Cumulative Convertible
Preferred Stock (“Preferred Stock”) for $50 per share. Emmis’s Articles of Incorporation set
forth the rights and protections associated with the Preferred Stock, which included: (1) a right
to cumulative annual cash dividends at a rate per annum equal to 6.25% of the stock’s $50
liquidation preference; (2) a right to sell the stock back to Emmis at $50 per share, plus
outstanding dividends in certain go-private scenarios; and (3) the requirement that any issuance
of senior-ranking stock or any adverse amendment to the terms of the Preferred Stock be
approved by two-thirds of the outstanding Preferred Stock.

The 2010 Go-Private Attempt

In 2010, the market price of Emmis’s Common Stock had fallen to under three dollars per
share. Believing this to be an undervaluation, Jeff Smulyan, Emmis’s CEO and largest
shareholder, proposed a go-private transaction (the “2010 Go-Private Attempt”).’ Smulyan
formed a company called JS Acquisition, LLC (“JSA”) for the purpose of acquiring all of
Emmis’s Common Stock. JSA obtained a commitment from Alden Global Distressed
Opportunities Master Fund (“Alden”) to provide financing for the 2010 Go-Private Attempt.
Alden owned 42% of Emmis’s Preferred Stock. JSA offered to pay a premium over the market
price for the Common Stock and proposed that the Preferred Stock be converted into
subordinated debt instruments.

The Emmis Board of Directors approved the offer from JSA on the terms proposed.

When a group of Preferred Stock holders formed a lockup group that threatened to object to the

 

“In 2006, Smulyan had proposed taking Emmis private by purchasing the Company’s
Common Stock at $15.25 per share. However, the Emmis Board of Directors rejected his
proposal, and Emmis remained a public company.

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terms of the conversion of their stock into subordinated debt instruments (the “Go-Private
Lockup Group”), JSA negotiated with the Go-Private Lockup Group to provide more favorable
terms (the “Exchange Offer Modifications”), which the Go-Private Lockup Group members
accepted, thereby paving the way for the Go-Private Offer to proceed. However, after this
agreement was reached, Alden withdrew its offer of financing and notified the Securities and
Exchange Commission (“SEC”) that it was withholding its approval for the Exchange Offer
Modifications. This resulted in the failure of the 2010 Go-Private Attempt.
Litigation Stemming from the 2010 Go-Private Attempt

Between April 27 and June 18, 2010, seven lawsuits were filed on behalf of Emmis
shareholders against Emmis and its officers and directors as putative class actions in response to
the 2010 Go-Private Attempt, alleging that the offer grossly undervalued the shares of Emmis
and the approval of it constituted a breach of fiduciary duty. See, e.g., Dkt. No. 54-2 at 146 9 5
(“Under the terms of the Transaction, Emmis public shareholders will be cashed-out pursuant to
grossly unfair and inadequate terms to the benefit of Smulyan, the controlling shareholder.”).
The Shareholder Litigation further alleged that the offer was “coercive to the preferred
shareholders of Emmis” because “{i]f a preferred stock shareholder does not convert their
preferred shares . . . [the] dissenting preferred shares will be converted into Class A common
stock immediately prior to the merger and receive the same consideration as Class A common
stock shareholders —an amount less than otherwise required by the Company’s Articles of
Incorporation.” Jd. § 64. The plaintiffs alleged that Emmis’s Directors had violated their
fiduciary duties to the shareholders by approving the proposal without regard to its fairness,
without considering alternatives, and without disclosing all material information to the

shareholders and, in so doing, putting their personal interests ahead of those of the shareholders.

 

 
Emmis had previously purchased a Directors and Officers (“D&O”) and Entity Liability
policy from Chubb Insurance (“Chubb”) covering claims first made during the period from
October 1, 2009, through October 1, 2010 (the “Chubb Policy”). Each of the Shareholder Suits
was reported to Chubb, and Chubb accepted coverage of the Shareholder Suits under a
reservation of rights.

Each of the Shareholder Suits was voluntarily dismissed following the failure of the 2010
Go-Private Attempt; no class was ever certified in any of them.

Aiden’s withdrawal of financing for the 2010 Go-Private Attempt also led to litigation.
First, in September 2010, JSA filed suit against Alden for breach of its contract to finance the
2010 Go-Private transaction (the “JSA Suit”). In response, on February 16, 2011, Alden filed a
derivative action against Emmis’s Board of Directors (the ‘“‘Alden Action”) asserting claims of
breach of fiduciary duty based on Emmis’s agreement, as approved by its Board, to invest in the
JSA suit against Alden. Specifically, Alden alleged that the Board’s agreement to loan JSA up to
$200,000 to pursue its breach of contract suit against Alden in exchange for a portion of any
recovery obtained in the suit was illegal and that Smulyan, through JSA, filed the JSA Suit “as a
personal litigation vendetta” against Alden for terminating the 2010 Go-Private Attempt and
interfering with Smulyan’s effort to take Emmis private. Dkt. No. 54-2 at 200 9 4.

On February 14, 2011, Emmis, through its broker, Marsh USA, Inc. (“Marsh”), reported
the Alden Action to its D&O carriers for the policy period of October 1, 2010, to October 1,
2011, which included National Union Fire Insurance Company of Pittsburgh, Pa. (“National
Union”) and Chubb, National Union denied coverage for the Alden Action based on its policy’s
Specific Investigation/Claim/Litigation/Event or Act Exclusion. Although Chubb initially

denied coverage for the Alden Action as falling outside the policy period, Chubb later

 

 
reconsidered and accepted coverage of the Alden Action as a Related Claim to the Shareholder
Suits. Chubb determined that the Alden Action and the Shareholder Suits were Related Claims
because they both “emanate[d] from the proposed buyout by JSA”—i.e., the 2010 Go-Private
Attempt. Dkt. No. 54-2 at 240,

Emmis Gains Control of Its Preferred Stock

In June 2011, Emmis entered into an agreement to sell some of its radio stations (the
“Merlin Transaction”), which resulted in net proceeds to Emmis of $120 million. Shortly before
the closing on the Merlin Transaction, two of Emmis’s Preferred Stock shareholders approached
Emmis management about obtaining liquidity for their shares. Purchasing its Preferred Stock at
a discount would benefit Emmis, as credit ratings agencies would view it as extinguishing
existing debt, making it easier for Emmis to refinance senior debt at lower interest rates, which
would improve the overall financial health of the company. After the Merlin Transaction closed,
Emmis obtained a loan commitment to fund purchases of Preferred Stock. In September and
October 2011, Emmis approached its ten largest shareholders of Preferred Stock to determine
whether there was interest in selling, and on October 25, 2011, Emmis senior management
presented a proposal for a Preferred Stock Repurchase Plan.at a Board meeting.

One of the main goals of the Preferred Stock Repurchase Plan was for Emmis to preserve
the voting rights of any Preferred Stock it acquired through the plan. Under Indiana law, any
shares of Preferred Stock that Emmis acquired through outright purchases would have to be
retired and could not be voted. Therefore, the Preferred Stock Repurchase Plan included the use
of total return swap (“TRS”) transactions and TRS Voting Agreements, rather than ordinary
purchase agreements, as the means to preserve the voting rights of the Preferred Stock. If Emmis

could acquire two-thirds of the Preferred Stock through TRS transactions, it would have the

 

 
ability to amend the Preferred Stock terms. After deliberation, the Board, including the
Preferred Shareholders’ representative, unanimously approved implementation of the Preferred
Stock Repurchase Plan.

On November 11, 2011, Emmis publicly announced the Preferred Stock Repurchase
Plan, which was the first public notice of the plan to Preferred Stock shareholders. On
November 14, 2011, Emmis filed an 8-K with the SEC disclosing the TRS transactions with
certain holders of Preferred Stock involving approximately 23% of the Preferred Stock. On
November 22, 2011, as part of a settlement of the litigation between Alden and JSA involving
Alden’s decision not to finance the 2010 Go-Private Attempt, Alden agreed to enter into a TRS
transaction with Emmis involving over one million shares of Preferred Stock. With this
transaction completed, Emmis had now acquired voting rights of 56.8% of the Preferred Stock.

At this point Emmis’s senior management believed for the first time that the company
might be able to gain control of two-thirds of the outstanding shares of the Preferred Stock. That
same day the Board met to discuss a tender offer and the implications of gaining control of two-
thirds of the Preferred Stock. The Board approved a modified “Dutch Auction” tender offer at
that meeting by an 8-1 margin, with the Preferred Shareholders’ representative as the lone
dissenter.

On November 30, 2011, Emmis publicly announced it would conduct the modified Dutch
auction tender offer to purchase up to $6 million in Preferred Stock at a price between $12.50

and $15.56 per share. One day later, on December 1, 2011, Emmis submitted its tender offer

 

 
filing to the SEC and stated that if it succeeded in obtaining two-thirds of the Preferred Stock, it
“may elect to... amend various provisions applicable to the Preferred Shares.”

On January 5, 2012, Emmis announced that it had purchased 164,400 shares of Preferred
Stock in the modified Dutch auction tender. Because those shares were purchased outright,
rather than acquired through TRS transactions, they were retired and returned to the status of
authorized but unissued Preferred Stock. With financing for the Preferred Stock Repurchase
Plan about to expire, Emmis purchased and retired an additional 25,700 shares of Preferred Stock
at prices of up to $30 per share. On January 30, 2012, Emmis filed an 8-K stating that the total
of “authorized but unissued” Preferred Shares had reached 452,680, and that, if it reissued
390,604 of those shares to a third-party with a voting agreement allowing Emmis to direct the
vote, it would have voting control over two-thirds of the Preferred Stock. Emmis also disclosed
in this filing that if it were able to acquire voting control, it “may elect” to use that power to
amend the terms of the Preferred Stock.

In early 2012, Emmis’s senior management decided to create an employee benefit plan
trust (the “Retention Plan Trust’) to which it would issue 400,000 shares of Preferred Stock,
which could be voted as directed by the Board under Indiana law. The proposal for the
Retention Plan Trust was first presented to the Board on February 29, 2012, and approved by the
Board at a follow-up meeting on March 8, 2012, once again by an 8-1 vote. Emmis contributed

400,000 shares of Preferred Stock to the Retention Plan Trust in return for a voting agreement

 

*The Court notes that for this and many of the other facts in its brief Emmis cites to the
“Factual Background” section of the summary judgment ruling in the COF Suit, which is found
at Dkt. No. 54-2 at 246. INIC does not object to this practice, and, in fact, also cites to the
summary judgment ruling in its own statement of facts, Accordingly, the Court has accepted
these facts as properly supported.

 
allowing the company to direct the vote of those shares. At that point, Emmis had gained control
over two-thirds of the Preferred Stock.
Amendments to Articles of Incorporation Affecting Preferred Stock

At the February and March 2012 Board meetings where the Retention Plan Trust was
discussed and adopted, the Board discussed specific Amendments to the Articles of
Incorporation affecting the terms of the Preferred Stock and approved the Proposed Amendments
for consideration by the Company’s shareholders, with the Preferred Shareholders’
representative again being the lone dissenter.

On March 13, 2012, Emmis filed a preliminary proxy statement with the SEC in which it
disclosed for the first time the exact terms of seven proposed amendments to the Preferred Stock.
The amendments included the following: (1) eliminating Emmis’s obligation to pay the
Preferred Stock dividends that had accumulated since October 2008; (2) changing the Preferred
Stock from “Cumulative” to “Non-Cumulative” so dividends would not accrue unless declared
by the Board, thereby eliminating the right of Preferred Shareholders to elect directors in the
event of nonpayment of dividends; (3) eliminating the right of holders of Preferred Stock to
require Emmis to repurchase their shares upon certain going-private transactions, thereby
allowing Emmis to classify Preferred Shares as equity on its balance sheet; and (4) eliminating
the right to convert Preferred Stock to Common Stock at specified conversion prices upon a
change of control. This preliminary proxy statement also disclosed Emmis’s expectation that the
holders of two-thirds of the Preferred Stock would vote in favor of the Amendments, based on
the TRS and Retention Plan Trust voting agreements. The preliminary proxy stated that the

Board had approved the Proposed Amendments based on the belief that they would have a

 

 
positive effect on the overall capital structure of Emmis, which would in turn benefit the
Common Stock holders.

On September 4, 2012, the shareholders approved the proposed amendments to the
Preferred Stock. Those amendments took effect that same day when Emmis filed Amended
Articles containing the approved amendments with the Indiana Secretary of State.

The COF Suit

On April 16, 2012, five Preferred Shareholders filed the COF Suit against Emmis, its
officers, and directors, The COF Suit alleged, inter alia, that the acquisition of Preferred Stock
through TRS transactions and the reissuance of Preferred Stock to the Retention Plan Trust
violated various federal securities laws as well as laws governing the conduct of Indiana
corporations. The initial complaint in the COF Suit contained six counts alleging violations of
federal securities laws, two counts alleging violations of Indiana corporate laws, one count
alleging failure to follow Emmis’s articles of incorporation, and two counts alleging breaches of
fiduciary duty. Both the original complaint and the first amended complaint in the COF Suit
expressly allege acts and circumstances surrounding the 2010 Go-Private Attempt, the JSA Suit,
and the Alden Action. For example:

On May 25, 2010, Emmis announced that it had entered into a definitive merger

agreement with JS Acquisition, LLC, an entity wholly-owned by Smulyan, which

would result in Emmis being taken private. This was Smulyan's second attempt to
buy the Company after a failed takeover effort in 2006.

OR AK

Frustrated by his inability to take Emmis private in 2010, Smulyan hatched a brazen
scheme in 2011 to eliminate all the rights and privileges of the Preferred Stock,
most notable the right to accrued and future dividends and the Take Private Put
Right, by attempting to gain voting control of the Preferred Stock through sham
derivative and related party transactions and voting to eliminate the rights and
preferences contained in the Certificate. Elimination of these rights and preferences

10

 
would render the Preferred Stock essentially worthless and pave the way for Mr.
Smulyan to “take Emmis private” at the time of his choosing.

Dkt. No. 1-2 {§ 25, 27 (COF Complaint); Dkt. No. 54-2 §§ 25, 28 (COP Amended Complaint).

The Second Amended Complaint in the COF Suit, which was filed on October 18, 2012,
alleges more generally that “[t}wice in the last decade, Emmis has been subject to take-private
efforts by Mr. Smulyan, once in 2006 and again in 2010.” Dkt. No. 1-3 § 14. That complaint
contained three counts alleging violations of federal securities laws, two counts alleging
violations of Indiana corporate laws, two counts for breach of contract, and one count for breach
of fiduciary duty, It summarized the basis of plaintiffs’ claims as Emmis’s attempts to strip the
Preferred Stock shareholders of any rights through the following three procedures: “(1) the
repurchase of shares that Emmis would keep alive, artificially, solely for voting purposes; (2) the
conduct of a modified “Dutch Auction” tender offer without making necessary and proper
disclosures; and (3) the dumping of repurchased shares into a sham trust controlled by Emmis.”
Id.§ 18.

Coverage Decisions Regarding the COF Suit

Emmis purchased a D&O and Entity liability insurance policy covering claims first made
during the period from October 1, 2011, through October 1, 2012, from INIC (the “INIC
Policy”). The INIC Policy provided coverage for Loss and Defense Costs resulting from Claims
(including Securities Claims) for the time in which the COF Suit was filed.

Emmis promptly notified Marsh, the broker through which the INIC Policy was issued,
of the COF Suit. Marsh forwarded the COF Suit to INIC for coverage under the INIC Policy by
letter dated April 18, 2012. Marsh also forwarded the COF Suit to other carriers that had issued
coverage during the 2009-10 and 2010-11 policy periods, including to Chubb for the Chubb

Policy.

il

 

 
INIC denied coverage in the COF Suit in a letter to Emmis dated June 10, 2013, which
was fourteen months after it received notice of the COF Suit and eight months after the Second
Amended Complaint was filed therein. The denial was based on the “Specific Event Exclusion”
in the INIC Policy, which is set forth in detail below.

Chubb also denied coverage of the COF Suit, concluding that the COF Suit and the
Shareholder Suits were not “Related Claims” to the Shareholder Suits as that term is used in the
Chubb Policy.

In light of the coverage denials from INIC and Chubb, Emmis funded its successful
defense in the COF Suit, incurring a total of $4,104,188.14 in defense costs, or $3,104,188.14 in
excess of its $1.0 million retention. INIC has not reimbursed any of these defense costs.

Relevant Provisions of the INIC Policy

There is no dispute that the claims in the COF Suit fall under the INIC Policy’s coverage
for securities claims and that Emmis’s costs of defending the COF Suit, minus the $1 million
retention applicable to securities claims, are a covered loss under the policy unless an exclusion
applies.

The INIC Policy includes Endorsement #28, which is entitled Specific Investigation/
Claim/Litigation/Event or Act Exclusion. This exclusion provides:

[Hnsurer shall not be liable to make any payment for Loss in connection with: (i)

any of the Claim(s), notices, events, investigations or actions listed under

EVENT(S) below (hereinafter “Event(s)”; or (ii) the prosecution, adjudication,

settlement, disposition, resolution or defense of: (a) Event(s); or (b) any Claim(s)

arising from the Event(s); or Giii) any Claim alleging, arising out of, based upon,
attributable to or in any way related directly or indirectly, in part or in whole, to an

Interrelated Wrongful Act (as that term is defined below).

Dkt. No, 1-1 at 66, “Events” is defined to include the following:

12

 

 

 
1) Events contained within Note 10 of the 10-Q released on July 15,2010 titled
“All Regulatory, Legal and Other Matters” and sub-titled Shareholder
Litigation.

2) All notice of claim or circumstances as reported under policy number
8181-0668 issued to Emmis Corporation by Chubb Insurance Companies.

id. “Interrelated Wrongful Act” is defined as “(i) the same or related facts, circumstances,
situations, transactions or events alleged in any of the Event(s), and/or (ii) any Wrongful Act(s)
that are the same or that are related to those that were alleged in any of the Event(s).” Jd.
“Wrongful Act” is defined as follows:

(1) any actual or alleged breach of duty, neglect, error, misstatement, misleading

statement, omission or act or any actual or alleged Employment Practices Violation

or Third-Party EPL Violation ... or

(2) with respect to an Organization, any actual or alleged breach of duty, neglect,

error, misstatement, misleading statement, omission or act by such Organization,

but solely in regard to a Securities Claim.
Id. at 34.

I. DISCUSSION

Emmis asserts claims for breach of contract and for the tort of breach of the duty of good
faith and fair dealing. INIC moves for summary judgment on both claims; Emmis moves for
summary judgment on the breach of contract claim and argues that summary judgment is not
appropriate on the tort claim.

A. Breach of Contract

Emmis alleges that INIC breached the contract between the parties--the INIC Policy —

by denying coverage for the COF Suit. Under Indiana law, which the parties agree applies,

insurance contracts are governed by the same rules of construction as other contracts. Bradshaw

v. Chandler, 916 N.E.2d 163, 166 (Ind. 2009).

13

 

 
The construction of the terms of a written contract is a pure question of
law .... When construing the meaning of a contract, our primary task is
to determine and effectuate the intent of the parties. First, we must
determine whether the language of the contract is ambiguous. The
unambiguous language of a contract is conclusive upon the parties to the
contract and upon the courts. If the language of the instrument is
unambiguous, the parties’ intent will be determined from the four corners
of the contract. If, on the other hand, a contract is ambiguous, its meaning
must be determined by examining extrinsic evidence and its construction
is a matter for the fact finder. When interpreting a written contract, we
attempt to determine the intent of the parties at the time the contract was
made. We do this by examining the language used in the instrument to
express their rights and duties. We read the contract as a whole and will
attempt to construe the contractual language so as not to render any words,
phrases, or terms ineffective or meaningless, We must accept an
interpretation of the contract that harmonizes its provisions, rather than
one that places the provisions in conflict.

Whitaker v. Brunner, 814 N.E.2d 288, 293-94 (Ind. Ct. App. 2004), Thus, the first step in
applying a contract provision is determining whether the provision in question is ambiguous.
“A word or phrase is ambiguous if reasonable people could differ as to its meaning.” Broadbent
v. Fifth Third Bank, 59 N.E.3d 305, 311 (nd. Ct. App. 2016). A term is not ambiguous solely
because the parties disagree about its meaning. /d. Insurance policies are interpreted from the
perspective of an ordinary policyholder of average intelligence. Bradshaw, 916 N.E.2d at 166.
“We will not bend the language of a contract to create an ambiguity when none exists, but
neither will we follow a literal interpretation when [to do so] would lead to an unreasonable or
absurd result.’” In re Airadigm Comme’ns, Inc., 616 F.3d 642, 664 (7th Cir, 2010) (quoting Chi.
Bd. of Options Exch. v. Conn. Gen. Life Ins. Co., 713 F.2d 254, 258 (7th Cir. 1983)).

INIC argues that the INIC Policy did not cover the COF Suit because that suit was
excluded from coverage by each provision of the Policy’s Specific Investigation/Claim/
Litigation/Event or Act Exclusion (“the Exclusion”). “Generally, a coverage exclusion is an

affirmative defense, proof of which is the insurer’s burden.” PS/ Energy, Inc. v. Home Ins. Co.,

14

 

 
801 N.E.2d 705, 725 (Ind. Ct. App. 2004) (citations omitted). For the reasons set forth below,
the Court finds that INIC has failed to satisfy its burden with regard to each part of the Exclusion
and that Emmis is entitled to judgment as a matter of law on its breach of contract claim.

1. Section (i)

INIC argues that the COF Suit is excluded by Section (i) of the Exclusion, which states
that INIC “shall not be liable to make any payment for Loss in connection with ... any of the
Claim(s), notices, events, investigations or actions listed under EVENT(S) below.” INIC argues
that the COF Suit is included in Event #2, which is defined as “[ajll notices of claim or
circumstances as reported under [the Chubb Policy].” This language is unambiguous, INIC
argues, and as there is no dispute that Marsh reported the COF Suit to Chubb under the Chubb
Policy, the COF Suit is a “notice of claim . . . as reported under” the Chubb Policy and is
excluded from coverage.

The Court disagrees with INIC that the relevant language is unambiguous. The term “as
reported under [the Chubb Policy]” could be read to refer to any claim that is reported under the
Chubb Policy at any time, as urged by INIC, but it also reasonably could be read to refer to any
claims that had been reported under the Chubb Policy at the time the INIC Policy went into
effect, October 1, 2011, as urged by Emmis. The Court finds the latter reading to be the correct
one, for several reasons. First, the term is written in the past tense, and thus should be read as
referring to events that had already occurred at the time of drafting. While INIC argues that the
use of the word “as” somehow supports its reading, it does not articulate how that is the case.
Second, under INIC’s reading of Event #2, any report under the Chubb Policy made by anyone at
any time — presumably even a report made by mistake— would render Section (i) applicable and

exclude coverage. See Dkt. No. 62 at 2 (“Regardless of whose agent Marsh was, it is undisputed

15

 
that the COF Suit was reported under the Chubb Policy. Therefore, section (i) of the EVENT(S)
Exclusion bars coverage for the COF Suit.”). This is an unreasonable reading of the policy
language; there is simply no rational basis for interpreting an insurance policy such that the
scope of coverage potentially hinges on a report made by someone other than the insured or its
agent.

Finally, pursuant to the contra proferentem rule of contract interpretation, if an insurance
policy’s terms are ambiguous, the language is construed strictly against the insurer, Bradshaw,
916 N.E.2d at 166. “This is especially true with respect to a policy’s exclusion of coverage.” Id.
INIC argues that this rule of contract interpretation should not apply in this case because “Emmis
is a sophisticated corporate insured who was assisted by a broker in negotiating the terms of the
manuscript EVENT(S) Exclusion,” and “the equal bargaining power between Emmis and INIC,
as evidenced by Emmis’ direct input into the language of the EVENT(S) Exclusion with Illinois
National’s underwriter supports application of the EVENT(S) Exclusion that Emmis specifically
agreed to include.” Dkt. No. 54 at 18-19; see also Dkt. No. 62 at 7.4 However, the evidence
INIC cites to in support of this proposition in both its initial and reply briefs, Exhibit 1-R (Dkt.
No. 54-2 at 359-60), does not have anything to do with the manner in which the INIC Policy (or

any policy) was negotiated.” Perhaps INIC intended to refer to Exhibit 1-S, which does involve

 

4INIC also states that “Emmis made the decision to report the COF Suit to Chubb and
later negotiated the EVENT(S) Exclusion with Illinois National.” Dkt. No. 62 at 7. INIC cites
no evidence in support of this statement, which is seemingly contradicted a few sentences later in
the same brief, when INIC states: “Emmis knew of the language in the EVENT(S) Exclusion
and knew that the COF Suit related to the Shareholder Litigation and the Alden Action, which is
why it reported the COF Suit to Chubb.” /d.

SINIC also cites to WellPoint, Inc. v. National Union Fire Ins. Co., 29 N.E.3d 716, 725
(Ind, 2015), as an example of the Indiana Supreme Court “enforcing insurance policy language
in light of the very strong presumption of enforceability of contracts, and the relative equality of
sophistication and bargaining power among the parties.” The Court notes that that case did not
involve the application of the contra proferentem rule and that its holding was not based on the

16

 

 
the discussion of policy language, but that discussion involved the amendment of language in
Emmis’s policy with National Union, not INIC, and INIC itself argues that that language is
“simply irrelevant to the issues before the Court as the National Union policy has different
language than the [INIC] Policy and was issued for a different time period.” Dkt. No. 62 at i5.
Accordingly, there is no evidence in the record to support a finding that Emmis had the
sophistication and bargaining power necessary to negotiate the language used in the INIC Policy,
let alone that it exercised that power such that the policy language should not be construed
against INIC. See Phillips v. Lincoin Nat. Life Ins. Co.,978 F.2d 302, 313-14 (7th Cir. 1992)
(holding that actual evidence, not simply bald assertion, that two parties negotiated the terms of
an insurance policy was necessary to support a finding that the general rule of contra
proferentem was not applicable). Accordingly, the language defining Event #2 is subject to the
tule of contra proferentem and the Court, interpreting it against the insured, finds that it refers
only to those claims that had been reported under the Chubb Policy as of the effective date of the
INIC policy.
2. Section (ii)

INIC next argues that the COF Suit is excluded from coverage by Section (ii) of the
Exclusion, which provides that INIC “shall not be liable to make any payment for Loss in
connection with .. . the prosecution, adjudication, settlement, disposition, resolution or defense

of: (a) Event(s); or (b) any Claim(s) arising from the Event(s).” INIC argues that the COF Suit

 

fact that the insured was “a sophisticated corporate insured,” as INIC describes Emmis, but
rather on the fact that the case “involve[d] a multi-million dollar multi-tiered insurance
arrangement. The contracts at issue reinsure Anthem’s self-insured excess policies for E & O
liability. Anthem and the Excess Reinsurers are sophisticated, professional insurance
companies.” Id. at 724.

17

 

 

 
falls under subsection (a) because it falls under the definition of Event #2; that argument is
addressed above. INIC also argues the following:
The Shareholder Litigation was a result of the 2010 Go-Private Attempt. The Alden
Action was in connection with the resolution of the Shareholder Litigation. The
settlement of the Alden Action enabled Emmis to accomplish one of the key goals
of the 2010 Go-Private Attempt: control of more Preferred Stock. As the COF Suit
court stated:
as part of a broader agreement to settle all litigation elated [sic] to its
pullout from 2010 go-private transaction, Alden Capital agreed to
enter into a TRS transaction with Emmis involving over 1,000,000
shares of Preferred Stock.
The settlement of the Alden Action then became one of the subjects in the COF
Suit. As evidenced by the resolution of the Shareholder Litigation and the
settlement of the Alden Action, the COF Suit satisfies section (ii) as it is in
connection with the “prosecution, adjudication, settlement, disposition, resolution
or defense” of any Event(s).
Dkt. No. 54 at 19-20 (citing Dkt. No. 54-2 at 253 and Dkt. No. 54-4 at 6).© As Emmis correctly
points out, this argument ignores the plain language of subsection (a), which excludes coverage
for a “loss” paid “in connection with the prosecution, adjudication, settlement, disposition,
resolution or defense of” the Alden Action or the Shareholder Suits. This language
unambiguously refers to payments made by Emmis to prosecute, adjudicate, settle, dispose of,
resolve, or defend the Alden Action or the Shareholder Suits. It does not include Emmis’s
defense costs in the COF Suit.
INIC next argues that the COF Suit falls under subsection (b) of Section (ii), which
excludes coverage for any Loss in connection with “any Claim(s) arising from the Event(s).”

INIC argues that the COF Suit is a claim “‘arising under” Events #1 and #2, the Shareholder Suit

and the Aiden Action. The Court disagrees. As INIC recognizes, “[i]n Indiana, the phrase

 

SINIC cites to § 27, but the correct citation actually is § 24.
18

 
‘arising out of’ as used in insurance policies long has been construed to mean that one thing must
be the ‘efficient and predominating’ cause of something else.” Dkt. No. 54 at 20 (quoting
Indiana Lumbermens Mut. Ins. Co. v. Statesman Ins. Co.. 291 N.E.2d 897, 899 (1973)). INIC
argues that
Here, the Shareholder Litigation and/or the Alden Action caused the COF Suit
as evidenced by the express allegations in both the original complaint and the
second amended complaint in the COF Suit regarding acts and circumstances
surrounding the 2010 Go-Private Attempt and Smulyan’s alleged frustration at not
being able to amend the terms of the preferred stock to strip rights and take Emmis
private. In fact, Plaintiff even admits in its coverage complaint that “. . . the initial
complaint in the COF Suit contained allegations that the Preferred Stock
Repurchase Plan was motivated by the failure of the 2010 Go-Private Attempt and
Emmis’s desire to punish the Preferred Stock shareholders for that failure... .”
Dkt. No. 54 at 20-21. That argument is without merit. The plaintiffs in the COF Suit did not sue
Emmis because of the Shareholder Litigation or because of the Alden Action. Those previous
cases simply were not the cause of the COF Action. The fact that the complaints in the cases
included some of the same factual allegations is simply irrelevant to the inquiry of whether the
earlier cases were a cause of the COF Action.’
3. Section (iti)
The overlapping factual allegations are relevant to the potential application of Section

(iii) to the COF Suit, however. Section (iii) excludes coverage for any loss in connection with

“any Claim alleging, arising out of, based upon, attributable to or in any way related directly or

 

7INIC also argues that “[t]he alleged Wrongful Acts in the COF Suit also ‘arise from’ the
Shareholder Litigation and/or the Alden Action. For example, both the Shareholder Litigation
and the COF Suit alleged that in order to eliminate the burden of the Preferred Stock and the
rights of the preferred shareholders, Emmis and Smulyan pursued the same strategy: to obtain
the two-thirds voting control necessary to effectuate the proposed amendments by first obtaining
control of Alden’s 42%.” Dkt. No. 54 at 21, Subsection (b) of Section Gi) does not use the term
“wrongful acts,” however, so that argument is irrelevant to the application of subsection (b) to
the COF Suit.

19

 
indirectly, in part or in whole, to an Interrelated Wrongful Act (as that term is defined below).”
Dkt. No. 54-3 at 67. “Interrelated Wrongful Act” is defined as “(i) the same or related facts,
circumstances, situations, transactions or events alleged in any of the Event(s) fi.e. the
Shareholder Suits or the Alden Action], and/or (ii) any Wrongful Act(s) that are the same or that
are related to those that were alleged in any of the Event(s).” Id.

There is no question that if the plain language of Section (iii) is applied literally, the COF
Suit is excluded from coverage. Read literally, Section (iii) excludes coverage for defense costs
paid in connection with any claim that alleges “the same or related facts .. . alleged in” the
Shareholder Suits or the Alden Action. As INIC points out, the complaint in the COF Suit
contains some of the same factual allegations as the Shareholder Suits and the Alden Action, and
in some instances, the same factual allegations are contained in all three. See Dkt. No. 54 at 23
(setting out shared factual allegations).

If Section (iii} were to be applied literally, it would mean that any shared factual
allegation would be sufficient to trigger the exclusion, including the allegation that Emmis is a

eee

publicly-traded corporation, or even simply that Emmis does business in Indiana. “‘[A] contract
will not be interpreted literally if doing so would produce absurd results, in the sense of results
that the parties, presumed to be rational persons pursuing rational ends, are very unlikely to have
agreed to seek.’” Sirazi v. Gen, Mediterranean Holding , 826 F.3d 920, 925 (7th Cir, 2016)
(quoting Beanstalk Group, Inc. vy. AM General Corp., 283 F.3d 856, 859-60 (7th Cir. 2002)
(applying Indiana law)). The parties are very unlikely to have intended Section (iii) to be applied
literally, as doing so would lead to the exclusion of virtually any lawsuit filed against Emmis.

For example, the complaints in both the Alden Action and at least one of the Shareholder Suits

allege that Emmis is a publicly traded company and that it is incorporated in Indiana. See Dkt.

20

 

 
No. 54-2 at 201 § 8 (Complaint in Alden Action) (alleging that Emmis is a publicly traded
Indiana corporation with its executive offices in Indiana); see also Dkt. No. 54-2 at 148 $9 15, 16
(Complaint in one of the Shareholder Suits) (alleging that Emmis is an Indiana corporation with
its principal offices in Indiana “that stock trades on the NASDAQ”). Pursuant to Federal Rule of
Civil Procedure 8(a)(1), any suit relying on diversity jurisdiction would have to contain
allegations relating to Emmis’s citizenship —i.c., that it is an Indiana corporation with its
principal place of business in Indiana. Indeed, such allegations routinely are included in
complaints even when they are not required to show the basis for the court’s jurisdiction. See,
e.g., the complaints in 1:09-cv-525-SEB-TAB and 1:16-cv-2568-JMS-MJD (both employment
discrimination cases brought against Emmis pursuant to federal statutes in which the complaints
allege that Emmis is an Indiana corporation). It would be nonsensical to read Section (ii) in
such a way that whether Emmis had insurance coverage for a lawsuit filed against it would
depend on the whim of the plaintiff’s attorney who drafted the complaint in the lawsuit.

Rather than being read literally, the language of Section (iii) must be read to exclude only
those claims that share operative facts with the Shareholder Suits and/or the Alden Action; that
is, facts that form the basis of the causes of action asserted in the lawsuits. While complaints are
required only to set forth a short and plain statement of facts that show the plaintiff is entitled to
relief, lawyers often have strategic reasons for including far more than the necessary facts in a
complaint. For example, background facts might be included to give the reader context, or
certain facts might be included to paint the defendant in a negative light or generate sympathy for

the plaintiff.

21

 

 
INIC does not appear to urge a literal reading of Section (iii), but rather argues that the
allegations in the COF Suit are “related to” those in the Shareholder Suits and the Alden Action
and therefore the exclusion applies. As INIC correctly notes, the Seventh Circuit

has held that in interpreting a contract under Indiana law, “related” has a common
understanding and meaning and “covers a very broad range of connections, both
causal and logical.” Gregory v. Home Ins. Co., 876 F.2d 602, 606 (7th Cir.1989);
See Am. Home Assurance Co. vy. Allen, 814 N.E.2d 662, 669 (Ind. Ct. App. 2004).
In other words, it means “having relationship: connected by reason of an established
or discoverable relation.” Gregory, 876 F.2d at 606, n. 5 (quoting Webster's Third
New Int'l Dictionary (1981)). This release language which the parties freely
negotiated is broad, but its expansiveness does not create an ambiguity.

 

RLI Ins. Co. v. Conseco, Inc., 543 F.3d 384, 391 (7th Cir. 2008). INIC argues that the
allegations in the COF Suit are “logically connected” to those in the Shareholder Suits and the
Alden Action because the cases all “alleged acts and claims related to the 2010 Go-Private
Attempt and Smulyan’s and Emmis’ alieged improper attempts to strip the preferred
shareholders of their rights.” Dkt. No. 54 at 22; see also Dkt. No. 62 at 4 (noting that “the
Shareholder Litigation, the Alden Action, and the COF Suit all involve the 2010 Go-Private
Attempt and Emmis’s attempts to gain control of voting power” and “the COF Suit contained
allegations that the Preferred Stock Repurchase Plan was motivated by the failure of the 2010
Go-Private Attempt and Emmis’s desire to punish the Preferred Stock shareholders for that
failure”).

The question is whether the allegations that the COF Suit shares with the Shareholder

Suits and the Alden Action were operative facts in the COF Suit or merely window dressing

 

included in the COF Suit for some purpose other than supporting the legal claims made therein.
The Court finds that they were the latter. The Plaintiffs in the COF Suit alleged that Emmis took

various actions and failed to take certain actions in 2011 and 2012 and that those actions and

 

omissions violated various federal statutes and Indiana law. The allegations that Emmis took the

22
alleged actions in order to “punish” its Preferred Stock Shareholders or out of “frustration”
related to the 2010 Go-Private Attempt are simply irrelevant to any of the causes of action in the
COF Suit, which is demonstrated by the fact that those allegations were omitted by the Plaintiffs
in their Second Amended Complaint in the COF Suit and not mentioned by the court in granting
summary judgment in that case. Nor ts it relevant to those causes of action that Emmis’s goal in
taking those actions may have been the same as Emmis’s goal in the 2010 Go-Private Attempt.
In other words, the legal basis for the COF Suit would have remained the same if the 2010 Go-
Private Attempt never happened; the operative facts in the COF Suit were Emmis’s actions and
omission in 2011 and 2012.

INIC also argues that Section (iii) applies because “the wrongful acts alleged in both the
Shareholder Litigation and the COF Suit primarily consisted of the alleged improper attempts to
effectuate the same proposed amendments in part by controlling the voting power of Alden’s
42% of the preferred shares to strip the preferred shareholders of their rights” and “obtain the
ability to take Emmis private ‘at a time of [Smulyan’s] choosing.’” Dkt. No. 54 at 24 (citing
Exh. 5 at § 27 and Exh. 1-P at § 28). But having a goal—to gain the ability to take Emmis
private—it not a “wrongful act.” The alleged wrongful acts in the various lawsuits were the
actions and omissions of Emmis that (allegedly) were taken to effectuate that goal. A suit
alleging that Smulyan “really wants to take Emmis private” would have no legal basis, and
wholly different actions taken at different times do not share operative facts such that they are
reasonably considered “the same or related” simply because they may have been taken with the
same goal in mind,

None of the cases cited by INIC support such a broad application of the language of

Section (iii). For example, in RSUI Indem. Co. v. WorldWide Wagering, Inc.,2017 WL

23

 
3023748, at *7 (N.D. Ill. July 17, 2017), reconsideration denied sub nom. RSUI Indem. Co. v.
World Wide Wagering, Inc., 2017 WL 4512922 (N.D. Ill. Oct. 10, 2017), the court found a direct
causal connection between the two cases at issue, holding that “[if] Defendants and their entities
had not been liable for the massive judgment in the Riverboat Matter, they would not have
engaged in a scheme to fraudulently transfer their assets in breach of their fiduciary duties, The
Riverboat Matter caused Defendants to enter into the scheme alleged in the Underlying
Litigation.” As discussed above, that is simply not the case here. In Langdale Co. v. National
Union Fire Ins. Co., 110 F. Supp. 3d 1285 (N.D. Ga. 2014), aff'd on other grounds by 609 Fed.
Appx. 578 (11th Cir. 2015), the court did not, as INIC asserts, find that a similarly worded
exclusion applied “because the insurer pointed to several paragraphs in the complaint at issue
that were essentially identical or similar to those in the prior litigation, which was listed as an
“Event” in the endorsement.” Dkt. No. 54 at 22. Rather, the court found that the lawsuit at issue
“arose out of” and was related to “the same facts alleged and the wrongful acts identified in
Paragraphs 38-42 of” the prior litigation and that a “fact-intensive inquiry as to whether the
Wrongful Acts [alleged in the two lawsuits were] logically related and [arose] out of a common
nucleus of operative facts” led to the same conclusion. Langdale Co., 110 F. Supp. 3d at 1311-
12. And while the court in Continental Casualty Co. v. Wendt, 205 F.3d 1258, 1264 (11th Cir.
2000), did mention the fact that the wrongful acts alleged in two lawsuits “were tied together
because all were aimed at a single particular goal,” it found that the exclusion applied because
while the lawsuits alleged different types of acts that “resulted in a number of different harms to
different persons, who may have different types of causes of action,” they comprised a single
course of conduct designed to promote investment in K.D, Trinh.” (emphasis added). Because

“this same course of conduct... serve[d] as the basis for” lawsuits, the “conduct at issue in both

24

 

 
cases was arguably the ‘same’ and at the very least ‘related’ in any common sense understanding
of the word” and therefore the exclusion applied. Id. The other cases cited by INIC can be
similarly distinguished from this one. See Darwin Nat. Assur. Co. v. Westport Ins. Corp., 2015
WL 1475887 (E.D.N.Y. Mar. 31, 2015) (finding that the latter suit alleged a “long-standing
campaign, dating back to” the earlier suit); The One James Plaza Condo. Ass’n, Inc. v. RSUI
Grp., Inc., 2015 WL 7760179 (D.N.J, Dec. 2, 2015) (finding a “substantial overlap of factual
allegations and causes of action in the two underlying suits”).

The Shareholder Suits were filed to stop the 2010 Go-Private Attempt, which involved an
attempt by JSA to purchase all of Emmis’s Common Stock and convert its Preferred Stock into
subordinated debt instruments. The Alden Action involved the decision of Emmis to finance a
lawsuit related to the 2010 Go-Private Attempt. Section ii) excludes claims in which someone
seeks to hold the insureds liable for the actions or omissions that were at issue in the Shareholder
Suits and/or the Alden Action or any actions or omissions that are logically connected to them.
The COF Suit simply did not seek to do that. The only connection between the COF Suit and the
other suits is that the 2010 Go-Private Attempt is mentioned in the COF Suit as part of the
historical context of the relationship between Emmis and its shareholders. That is not enough to
bring the COF Suit under Section (iii) and exclude it from coverage.

4. Conclusion

There is no dispute that, in the absence of an applicable exclusion, the INIC Policy

provides coverage for the COF Suit. For the reasons set forth above, the Court determines that

there are no genuine issues of material fact with regard to the application of the Exclusion to the

25

 

 
COF Suit and, as a matter of law, the Exclusion does not apply to the COF Suit. Accordingly,
Emmis is entitled to summary judgment in its favor with regard to its breach of contract claim.’
B. Breach of the Duty of Good Faith and Fair Dealing
In its Complaint, Emmis alleges that INIC breached its duty of good faith and fair dealing
by denying coverage for the COF Suit without a legitimate basis for doing so and in so doing
ignored relevant information and placed its own monetary interests ahead of its insured’s
interests.

Indiana law has long recognized a legal duty, implied in all insurance contracts, for
the insurer to deal in good faith with its insured. Erie Ins. Co. v. Hickman, 622
N.E.2d 515, 518 (ind.1993); Vernon Fire & Cas. Ins. Co. v. Sharp, 264 Ind. 599,
349 N.E.2d 173, 181 (1976). In recognizing a cause of action in tort for a breach of
that duty, we have also noted that a cause of action will not arise every time an
insurance claim is denied. Hickman, 622 N.E.2d at 520, For example, a good faith
dispute about whether the insured has a valid claim will not supply the grounds for
recovery in tort for the breach of the obligation to exercise good faith. fd. On the
other hand, an insurer that denies liability knowing there is no rational, principled
basis for doing so has breached its duty. /d. To prove bad faith, the plaintiff must
establish, with clear and convincing evidence, that the insurer had knowledge that
there was no legitimate basis for denying liability. Ind. Ins. Co. v. Plummer Power
Mower & Tool Rental, Inc., 590 N.E.2d 1085, 1093 (Ind. Ct. App. 1992).

Freidline v. Shelby Ins, Co., 774 N.E.2d 37, 40 (ind. 2002). INIC moves for summary judgment
on this claim, arguing that Emmis does not have the requisite clear and convincing evidence of
“any conscious wrongdoing, dishonest purpose, moral obliquity, furtive design, or ill will on the
part of [INIC] in denying coverage.” Dkt. No. 54.

In response to INIC’s motion, Emmis had the burden of pointing to evidence of record
from which a reasonable juror could conclude that INIC breached its duty of good faith and fair

dealing. See Gekas v. Vasiliades, 814 F.3d 890, 896 (7th Cir. 2016) (“As we have said before,

 

"In light of this holding, the Court need not consider Emmis’s arguments with regard to
INIC’s duty to advance defense costs.

26

 

 
summary judgment is the ‘put up or shut up’ moment in a lawsuit, when a party must show what
evidence it has that would convince a trier of fact to accept its version of events.”) (citation
omitted). Emmis failed to do so. Emmis’s argument on the issue consists only of a summary of
its arguments in support of its breach of contract claim, While the Court agrees that INIC’s
position that the Exclusion applied to the COF Suit was incorrect as a matter of law, that, alone,
is not sufficient to support Emmis’s breach of the duty of good faith and fair dealing claim.
Emmis simply points to no evidence that INIC’s denial was made in bad faith.? Accordingly,
INIC is entitled to summary judgment on this claim.
IV. CONCLUSION

For the reasons set forth above, INIC’s motion for summary judgment is GRANTED
with regard to Emmis’s breach of the duty of good faith and fair dealing claim and DENIED
with regard to Emmis’s breach of contract claim. Emmis’s motion for partial summary judgment
is GRANTED. Emmis is entitled to coverage under the INIC Policy for its defense costs in the
COF Suit. As Emmis has only moved for judgment on the issue of liability on the breach of
contract claim, the parties shall confer and file a joint notice within 28 days of the date of this
Entry setting forth how they wish to proceed to resolve this case.

SO ORDERED: 3/21/18 .
LDBbunen Eager

Hon, William T, Lawrence, Judge
United States District Court
Southern District of Indiana

Copies to all counsel of record via electronic notification

 

"Emmis argues that “INIC’s summary judgment motion only seeks summary judgment
on the issue of bad faith, which is distinct from a breach of the duty of good faith and fair dealing
under Indiana law.” Dkt. No. 61 at 60. Emmis does not elaborate on this statement, and, as the
quote above indicates, the Indiana Supreme Court has spoken in terms of the plaintiff’s burden in
a breach of the duty of good faith and fair dealing claim as “proving bad faith.”

27

 

 
