                                                                              FILED
                                                                          Jun 10 2020, 8:52 am

                                                                              CLERK
                                                                          Indiana Supreme Court
                                                                             Court of Appeals
                                                                               and Tax Court




ATTORNEYS FOR APPELLANT                                   ATTORNEYS FOR APPELLEE
Ann Marie Waldron                                         J. Blake Hike
Waldron Law                                               Larry L. Barnard
Indianapolis, Indiana                                     Carson LLP
                                                          Fort Wayne, Indiana
Michael E. Simmons
Hume Smith Geddes Green &
Simmons, LLP
Indianapolis, Indiana
Robert P. Thomas
Thomas Law Office
Indianapolis, Indiana



                                           IN THE
    COURT OF APPEALS OF INDIANA

Gregory Smith, As Assignee of                             June 10, 2020
Nolan Clayton,                                            Court of Appeals Case No.
Appellant-Plaintiff,                                      19A-PL-1959
                                                          Appeal from the Marion Superior
        v.                                                Court
                                                          The Honorable James A. Joven,
Progressive Southeastern                                  Judge
Insurance Company,                                        Trial Court Cause No.
Appellee-Defendant,                                       49D13-1809-PL-35757




Robb, Judge.




Court of Appeals of Indiana | Opinion 19A-PL-1959 | June 10, 2020                            Page 1 of 24
                                Case Summary and Issues
[1]   This action arises from a single-vehicle accident involving Gregory Smith and

      Nolan Clayton, who was driving Smith’s vehicle. Smith sued Clayton to

      recover for his personal injuries and property damage and Smith’s insurer,

      Progressive Southeastern Insurance Company (“Progressive”), arranged for

      legal counsel to defend Clayton pursuant to a reservation of rights. After a

      verdict was entered against Clayton for $21 million, Clayton irrevocably

      assigned to Smith any legal rights, claims, and causes of actions that Clayton

      may have against Progressive and the attorneys who represented him, Metzger

      Rosta, LLC (“Metzger”). Subsequently, Smith sued Progressive for bad faith.

      This case is before us because the trial court dismissed Smith’s second amended

      complaint (“Second Complaint”) against Progressive and denied his motion for

      joinder of parties or consolidation of actions. Smith now appeals, raising several

      issues for our review which we consolidate and restate as: 1) whether the trial

      court erred in dismissing Smith’s Second Complaint and 2) whether the trial

      court erred in denying Smith’s motion for joinder of parties or consolidation of

      actions. Concluding the trial court did not err in either respect, we affirm.



                            Facts and Procedural History
[2]   Smith and Clayton were co-workers at the Stacked Pickle and eventually

      became friends. On February 17, 2016, Smith drove his truck, with Clayton as a

      passenger, to a company event at the Stacked Pickle. The two spent several

      hours drinking. In the early morning hours on February 18, Smith gave Clayton

      Court of Appeals of Indiana | Opinion 19A-PL-1959 | June 10, 2020         Page 2 of 24
      permission to drive Smith’s truck. Clayton lost control of the truck and ran into

      a tree. Smith was ejected from the truck, suffered a broken neck, and was

      rendered a quadriplegic. As discussed below, multiple lawsuits have resulted

      from the accident.


                                                      Tort Action

[3]   On June 15, 2016, Smith filed a complaint against Clayton to recover for

      personal injury and property damage. Progressive intervened to provide legal

      representation to Clayton pursuant to a reservation of rights1 and arranged for

      Metzger to provide a defense for Clayton. Progressive also filed a Declaratory

      Judgment Action regarding coverage questions (discussed below) and moved to

      stay the Tort Action pending the resolution of the Declaratory Judgment

      Action. The trial court denied the motion to stay and the Tort Action

      proceeded. On December 11, 2017, a jury found in favor of Smith in the

      amount of $35 million, found Clayton sixty percent at fault, and therefore

      awarded Smith a judgment of $21 million against Clayton. The trial court also

      granted Smith a portion of prejudgment interest that he requested and added it

      to the judgment against Clayton.2




      1
        The reservation of rights letter is not in the record. But it appears to be undisputed that Progressive did
      reserve its rights when it assumed Clayton’s defense in the Tort Action.
      2
       Clayton appealed the judgment but was unsuccessful. Clayton v. Smith, 113 N.E.3d 693 (Ind. Ct. App.
      2018), trans. denied.

      Court of Appeals of Indiana | Opinion 19A-PL-1959 | June 10, 2020                                     Page 3 of 24
[4]   On July 31, 2018, Clayton executed an Assignment of Legal Rights and Causes

      of Action (“the Assignment”), pursuant to which Clayton irrevocably assigned

      to Smith any legal rights, claims, causes of action and legal theories and

      recoveries against Progressive and Metzger to the extent that the rights and

      claims were assignable. See Appellant’s Appendix, Volume 2 at 185. Clayton

      executed the Assignment so he could satisfy part of the judgment that he owed

      Smith. In exchange for the Assignment, Smith agreed not to pursue recovery

      from any of Clayton’s personal assets.


                                      Declaratory Judgment Action

[5]   At the time of the accident, Progressive insured Smith under a policy which

      provided coverage for liability, medical payments, underinsured motorists,

      damage to the covered vehicle, and roadside-assistance. “Insured person” under

      the policy included anyone who had permission to use the covered vehicle. Id.,

      Vol. 4 at 140. A provision of the policy also stated that Progressive did not have

      a duty to defend an insured person for bodily injury to Smith. In January 2017,

      while the Tort Action was pending, Progressive filed a Complaint for

      Declaratory Judgment against Smith and Clayton requesting a determination

      that, according to the terms of the policy, Smith was not entitled to coverage

      under the policy’s underinsured motorist or bodily injury provisions for injuries

      sustained in the accident and that Progressive was not obligated to defend or

      indemnify Clayton as a permissive driver of Smith’s truck because Smith could

      not recover under the policy for Clayton’s negligence. See id., Vol. 3 at 21.



      Court of Appeals of Indiana | Opinion 19A-PL-1959 | June 10, 2020         Page 4 of 24
[6]   Ultimately, the case came before this court on Progressive’s appeal arguing that

      Smith was not entitled to bodily injury liability coverage and that it had no duty

      to defend or indemnify Clayton. The Duty to Defend Declaration in the policy

      stated, “Coverage under this Part I, including our duty to defend, will not apply to

      any insured person for . . . bodily injury to [Smith] or a relative[.]” Id., Vol. 4 at

      141 (emphasis added). We concluded that Smith was not entitled to bodily

      injury coverage and that Progressive did not have (and has never had) a duty to

      defend Clayton. Progressive Se. Ins. Co. v. Smith, 140 N.E.3d 292, 298 (Ind. Ct.

      App. 2020).


                                             Malpractice Action

[7]   In October 2018, after Clayton executed the Assignment, he filed a Malpractice

      Action against Progressive and Metzger. See Appellant’s App., Vol. 7 at 87. In

      July 2019, the trial court granted Progressive’s motion to dismiss Clayton’s

      complaint against it, finding that “[a]n insurer such as Progressive cannot

      practice law or be liable for legal malpractice by attorneys” and “Progressive

      cannot be liable for a claim of improper legal services, whether to Clayton or

      Smith.” Id. at 93. At Clayton’s request, the trial court certified its order of

      dismissal, but we denied Clayton’s motion for leave to bring a permissive

      interlocutory appeal. At all times relevant to this litigation, the Malpractice

      Action has remained pending as to Metzger.




      Court of Appeals of Indiana | Opinion 19A-PL-1959 | June 10, 2020             Page 5 of 24
                                         The Current Bad Faith Action3

[8]   In September 2018, pursuant to the Assignment, Smith filed a complaint

      against Progressive. Smith also filed a motion for joinder of parties or, in the

      alternative, consolidation of actions. Smith sought to join Clayton as a plaintiff

      and Metzger as a defendant in his action against Progressive. In the alternative,

      Smith requested to consolidate Clayton’s Malpractice Action with his own

      against Progressive because the two cases represent the two halves of the

      Assignment: “To the extent the claims are assignable, they are contained in

      [Smith’s] Complaint. To the extent they are not assignable, they are included in

      the [Malpractice Action].” Id., Vol. 4 at 17.4 Progressive filed a motion to

      dismiss Smith’s complaint, alleging that it failed to state a claim upon which

      relief could be granted, and also opposed Smith’s request for joinder of parties

      or consolidation. The trial court granted Progressive’s motion, dismissed

      Smith’s complaint, and denied Smith’s motion for joinder of parties or

      consolidation.5


[9]   Smith then filed the Second Complaint on January 21, 2019, which alleged, in

      relevant part:




      3
       In naming these various actions, we have used the designations first used in Progressive Se. Ins. Co., 140
      N.E.3d at 295-96.
      4
        Contemporaneously with Smith’s motion, Clayton filed a motion to intervene in the Bad Faith Action and
      to consolidate his Malpractice Action with the Bad Faith Action. At the time the motions were filed in
      November 2018, Progressive was still a party to the Malpractice Action.
      5
          Clayton’s motion to intervene was also denied.


      Court of Appeals of Indiana | Opinion 19A-PL-1959 | June 10, 2020                                   Page 6 of 24
        49. Progressive is liable for the actions and inactions of the
        attorneys hired by it because it directed those actions by and
        through its oversight of the case and the Policy Manual.


        50. Progressive is liable for the actions and inactions of the
        attorneys hired by it because it admitted it had a duty to defend
        Clayton and such duty is a non-delegable, contractual duty
        making it liable for the actions of any independent contractors.


        51. The acts, omissions, conduct and activities of Progressive,
        directly and/or by and through its agents, servants and/or
        selected independent contractors in conjunction with and under
        the control and direction of Progressive, in handling, processing
        and conducting the contractual and non-delegable and/or
        voluntarily assumed duties and responsibilities of Progressive
        related to the claims of [Smith] against Clayton and/or as
        assignee of Clayton were negligent, grossly negligent, oppressive,
        willful and wanton, performed in bad faith, conducted for
        improper reasons and purposes and for the benefit of Progressive
        at the expense of Clayton, and for purposes of obstruction, delay
        and concealment from [Smith] as Clayton’s assignee, and
        constitute a contractual breach of the duty of good faith and fair
        dealing, a tortious breach of the duty of good faith and fair
        dealing, negligent claim file handling, negligent hiring and
        retention, and bad faith.


        52. The acts, omissions, conduct and activities of Progressive in
        handling, processing and conducting the contractual and non-
        delegable and/or voluntarily assumed duties and responsibilities
        of Progressive related to the claims of [Smith] against Clayton
        and/or as assignee of Clayton were performed and occurred, in
        part, upon advice of counsel.


        53. As a direct and proximate result of the aforementioned
        actions, omissions, activities and conduct on the part of

Court of Appeals of Indiana | Opinion 19A-PL-1959 | June 10, 2020           Page 7 of 24
        Progressive, its agents, servants and/or selected independent
        contractors, a judgment was rendered against Clayton in the
        [Tort Action] in the amount of Twenty-One Million Dollars
        ($21,000,000.00), together with pre-judgment interest in the
        amount of $714,574.35, all of which continues to accrue post-
        judgment interest at the rate of 8% per annum as Progressive, by
        and through its agents, servants and/or selected independent
        contractors continue to wrongfully obstruct and impede
        Clayton’s rights and/or the rights of [Smith] as assignee of
        Clayton to pursue available remedies against Progressive and/or
        its agents, servants and/or independent contractors under the
        control and direction of Progressive.


        54. Progressive, in addition to its own direct liability, is also
        vicariously liable for the acts, omissions, conduct and activities of
        its agents, servants and/or selected independent contractors
        including . . . Metzger Rosta . . . which resulted in the [Tort
        Action] Judgment, pre-judgment interest thereon, post-judgment
        interest thereon, post-judgment obstruction actions and delays,
        and all other damages which have been incurred by Clayton
        and/or [Smith] as the assignee of Clayton.


Id. at 126-27.6 Again, Progressive filed a motion to dismiss, arguing that Smith’s

Second Complaint raised no new issues or causes of action, and essentially

sought to re-litigate the same issues as the dismissed complaint. See id., Vol. 5 at

39-40. The trial court held a hearing on the motion to dismiss after which it




6
 Smith’s Second Complaint raised allegations similar to those in his first amended complaint but included
additional factual allegations and legal theories such as voluntary assumption of a duty to defend
competently and in good faith. See Appellant’s Brief at 11; see also Appellant’s App., Vol. 2 at 131-41.

Court of Appeals of Indiana | Opinion 19A-PL-1959 | June 10, 2020                               Page 8 of 24
granted Progressive’s motion and dismissed the Second Complaint. The trial

court found, in relevant part:


        Paragraphs 49 through 54 of Smith’s [Second Complaint] set
        forth why Smith believes Progressive is liable to Smith. The
        Court restates and reformulates the contentions of those
        paragraphs in this manner: Progressive is (allegedly) liable to
        Smith for the negligent and improper acts and omissions of the
        attorneys Progressive provided to Clayton for his defense in [the
        Tort Action] against Clayton. . . . Smith seeks recovery of
        damages from Progressive due to the representation Clayton’s
        attorneys provided in defense of Smith’s lawsuit against Clayton.


        Under the assignment of rights from Clayton to Smith, Smith
        might have been able to recover against Progressive for Smith’s
        personal injuries sustained in the truck crash. But, because the
        insurance policy . . . Progressive issued to Smith contained
        specific terms that excluded Smith from coverage for his own
        bodily injuries under that policy, Smith could not. That policy
        exclusion was partly the reason why the Court dismissed Smith’s
        First Amended Complaint. With his [Second] Complaint, Smith
        attempts recovery from Progressive by asserting what amounts to
        a claim of improper legal services provided to Clayton.


        But Smith cannot assert such a claim. Under Indiana law,
        negligence claims involving legal malpractice are not assignable.
        Moreover, because legal malpractice claims are not assignable,
        Indiana’s courts have found that a non-client may not sue an
        insurer for vicarious liability for the conduct of lawyers hired to
        defend an insured, even when the non-client has obtained an
        assignment. See Querrey & Harrow, Ltd. v. Transcontinental Ins. Co.,




Court of Appeals of Indiana | Opinion 19A-PL-1959 | June 10, 2020          Page 9 of 24
                  885 N.E.2d 1235[, 1236] (Ind. 2008).[7] Smith does not have any
                  direct claim for negligence against Progressive or the lawyers that
                  Progressive hired to defend Clayton. He cannot bring such an
                  action, as he does with his [Second] Complaint, because Clayton
                  could not assign his rights to bring such claims to Smith.
                  Furthermore, Smith had already [made] the same or similar
                  claims in paragraphs 42 through 45 of his First Amended
                  Complaint, a complaint that this Court has already considered
                  and dismissed.


       Appealed Order at 5-7 (some citations omitted).8 Smith now appeals.



                                      Discussion and Decision
                                                    I. Dismissal
                                           A. Standard of Review
[10]   The trial court granted Progressive’s motion to dismiss Smith’s Second

       Complaint for failure to state a claim upon which relief could be granted. See

       Ind. Trial Rule 12(B)(6). A motion to dismiss under Trial Rule 12(B)(6) tests the

       legal sufficiency of the plaintiff’s claim, not the facts supporting it. Hoosier Ins.

       Co. v. Riggs, 92 N.E.3d 685, 687 (Ind. Ct. App. 2018). Therefore, a Rule

       12(B)(6) motion presents a legal question that we review de novo. Ward v.

       Carter, 90 N.E.3d 660, 662 (Ind. 2018), cert. denied, 139 S.Ct. 240 (2018). When




       7
        The parties disagree about the import of this case, but because we review motions to dismiss de novo, we
       need not specifically address arguments about its applicability.
       8
           Our citation to the Appealed Order is based on the .pdf pagination.


       Court of Appeals of Indiana | Opinion 19A-PL-1959 | June 10, 2020                             Page 10 of 24
       ruling on a motion to dismiss, we will view the pleadings in the light most

       favorable to the nonmoving party, with every reasonable inference construed in

       the non-movant’s favor. Thornton v. State, 43 N.E.3d 585, 587 (Ind. 2015). We

       may affirm a dismissal under Rule 12(B)(6) if it is sustainable on any basis in

       the record. Freels v. Koches, 94 N.E.3d 339, 342 (Ind. Ct. App. 2018). That is, if

       the complaint states a set of facts that, even if true, would not support the

       requested relief, we will affirm the dismissal. Id.


                                           B. Second Complaint
[11]   Smith argues that the trial court erroneously dismissed his Second Complaint.

       Specifically, he contends that the trial court mischaracterized the nature of his

       claims against Progressive as attorney malpractice, rather than claims for

       vicarious liability, breach of duty to defend, and bad faith.9 We will discuss each

       in turn.


                                               1. Vicarious Liability

[12]   Smith first contends that the trial court incorrectly dismissed his Second

       Complaint because the complaint alleged sufficient facts to show that




       9
        Smith also briefly mentions that the trial court overlooked his claims for negligent claims handling and
       negligent selection and retention of attorneys. See Appellant’s Br. at 30; see also Appellant’s App., Vol. 4 at
       126-27. However, Smith fails to develop a cogent argument that the trial court erred in dismissing his Second
       Complaint by overlooking these claims. See Ind. Appellate Rule 46(A)(8)(a) (“The argument must contain the
       contentions of the appellant on the issues presented, supported by cogent reasoning.”). Therefore, this issue is
       waived. Burnell v. State, 110 N.E.3d 1167, 1171 (Ind. Ct. App. 2018).

       Court of Appeals of Indiana | Opinion 19A-PL-1959 | June 10, 2020                                 Page 11 of 24
       Progressive is vicariously liable for Metzger’s actions or inactions that

       contributed to a personal injury judgment against Clayton.


[13]   Generally, a plaintiff claiming negligence must show a duty owed to the

       plaintiff by the defendant, a breach of that duty, and a compensable injury

       proximately caused by the breach. Smith v. Walsh Constr. Co. II, LLC, 95 N.E.3d

       78, 84 (Ind. Ct. App. 2018), trans. denied. Vicarious liability creates an “indirect

       legal responsibility” whereby “a court can hold a party legally responsible for

       the negligence of another, not because the party did anything wrong but rather

       because of the party’s relationship to the wrongdoer.” Sword v. NKC Hosps., Inc.,

       714 N.E.2d 142, 147 (Ind. 1999) (citation omitted). Indiana courts employ

       various legal doctrines to hold people vicariously liable, including the non-

       delegable duty doctrine and the doctrine of respondeat superior. Id.


[14]   Smith’s vicarious liability claim in his Second Complaint against Progressive

       contends that but for Metzger’s actions or inactions, Clayton would not have

       incurred a substantial personal injury judgment. However, Smith did not plead

       specific facts to support his assertion and show how a smaller judgment would

       have resulted if Metzger had represented Clayton differently. Smith’s

       contention, without more, is not sufficient at the pleading stage to state a claim

       for any relief. See Hoosier Ins. Co., 92 N.E.3d at 687. Regardless, the nature of

       Smith’s complaint against Progressive for vicarious liability is nothing more

       than a negligence claim that involves alleged legal malpractice by Metzger – a

       claim that is not assignable under Indiana law. See Rosby Corp. v. Townsend,

       Yosha, Cline & Price, 800 N.E.2d 661, 665 (Ind. Ct. App. 2003) (discussing the

       Court of Appeals of Indiana | Opinion 19A-PL-1959 | June 10, 2020           Page 12 of 24
       bright-line rule drawn by our supreme court holding that “legal malpractice

       claims are not assignable”) (quoting Picadilly, Inc. v. Raikos, 582 N.E.2d 338, 339

       (Ind. 1991)), trans. denied.


[15]   In Picadilly, a bar owed a judgment to Charles Colvin, who was injured by

       another patron of the bar. The bar filed a claim against its attorneys, Raikos and

       Thomas, alleging that the attorneys’ negligence resulted in the judgment against

       them. Raikos and Thomas moved for, and were granted, summary judgment.

       The bar thereafter assigned to Colvin its legal malpractice claim against Raikos

       and Thomas. Colvin immediately filed a motion to correct error with the trial

       court, challenging the grant of summary judgment to Raikos and Thomas.

       Raikos and Thomas opposed the motion on the grounds that the assignment of

       the legal malpractice claim was invalid. The trial court denied the motion to

       correct error and, on appeal, we affirmed the trial court’s grant of summary

       judgment. Picadilly, Inc. v. Raikos, 555 N.E.2d 167, 170 (Ind. Ct. App. 1990). On

       transfer, our supreme court also affirmed the trial court, concluding that legal

       malpractice claims are not assignable. Picadilly, 582 N.E.2d at 339. In

       addressing this new question of law, our supreme court agreed with a California

       Court of Appeal decision describing the public policy issues involved:


               The assignment of such claims could relegate the legal
               malpractice action to the market place and convert it to a
               commodity to be exploited and transferred to economic bidders
               who have never had a professional relationship with the attorney
               and to whom the attorney has never owed a legal duty, and who
               have never had any prior connection with the assignor or his
               rights. . . . The almost certain end result of merchandizing such

       Court of Appeals of Indiana | Opinion 19A-PL-1959 | June 10, 2020         Page 13 of 24
               causes of action is the lucrative business of factoring malpractice
               claims which would encourage unjustified lawsuits against
               members of the legal profession, generate an increase in legal
               malpractice litigation, promote champerty and force attorneys to
               defend themselves against strangers. The endless complications
               and litigious intricacies arising out of such commercial activities
               would place an undue burden on not only the legal profession but
               the already overburdened judicial system, restrict the availability
               of competent legal services, embarrass the attorney-client
               relationship and imperil the sanctity of the highly confidential
               and fiduciary relationship existing between attorney and client.


       Id. at 342 (quoting Goodley v. Wank & Wank, Inc., 62 Cal.App.3d 389, 397, 133

       Cal.Rptr. 83, 87 (1976)).


[16]   Although the Picadilly court discussed the assignment of a legal malpractice

       claim directly against attorneys and not against an insurer that hired the

       attorneys, the principle is the same. The court was mainly concerned with the

       impact of assigning any legal malpractice claims – “the need to preserve the

       sanctity of the client-lawyer relationship, and the disreputable public role

       reversal that would result during the trial of assigned malpractice claims” – not

       how legal malpractice claims were assigned or who would be subject to litigation

       from the assignment. Picadilly, 582 N.E.2d at 342. Applying the above principle

       to the facts here, we see no reason for a different result. The nature of the

       vicarious liability claim in Smith’s Second Complaint still served as a legal

       malpractice claim against Metzger; that is, it alleged that Progressive is liable

       for Metzger’s actions or inactions in litigating the Tort Action, contributing to a

       substantial judgment against Clayton. Indiana law might support a respondeat


       Court of Appeals of Indiana | Opinion 19A-PL-1959 | June 10, 2020         Page 14 of 24
       superior claim by the insured – in this case, Clayton – against the insurer in this

       context, but it does not support such a claim being assigned to and litigated by

       Smith. Because Smith’s vicarious liability claim against Progressive stemmed

       from Metzger’s alleged legal malpractice, the trial court did not err in

       dismissing his Second Complaint on this issue.


                                        2. Breach of Duty to Defend

[17]   Smith next contends that the trial court erroneously dismissed his Second

       Complaint because he made multiple allegations that Progressive breached its

       contractual duty to defend Clayton. In Indiana, the duty to defend is broader

       than coverage liability. Trisler v. Indiana Ins. Co., 575 N.E.2d 1021, 1023 (Ind.

       Ct. App. 1991). Consequently, if it is determined that an insurer has a

       contractual duty to defend, the insurer will not be relieved of that obligation,

       regardless of the claim. Id. After an insurer has made an independent

       determination that it has no duty to defend, it must either clarify its obligation

       to defend the insured through a declaratory judgment action 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.


[18]   When determining whether a duty to defend exists, the insurer must look to the

       allegations in the complaint coupled with the facts known to the insurer after

       reasonable investigation. American States Ins. Co. v. Aetna Life & Cas. Co., 177 Ind.

       App. 299, 311, 379 N.E.2d 510, 518 (1978). Accordingly, we may consider the

       evidentiary materials offered by the parties to show coverage or exclusion.

       Trisler, 575 N.E.2d at 1023. No defense is required if the pleadings or
       Court of Appeals of Indiana | Opinion 19A-PL-1959 | June 10, 2020          Page 15 of 24
       investigation indicate that a claim is outside coverage limits or excluded under

       the policy. Id. Although ambiguities are construed in favor of the insured, clear

       and unambiguous policy terms will be given their ordinary meaning. Id.


[19]   The issue of Progressive’s duty to defend has already been resolved in the

       Declaratory Judgment Action. Progressive Se. Ins. Co., 140 N.E.3d at 298. A

       provision of Smith’s policy stated, “Coverage under this Part I, including our

       duty to defend, will not apply to any insured person for . . . bodily injury to

       [Smith] or a relative.” Appellant’s App., Vol. 4 at 141 (emphasis added).

       Progressive’s Declaratory Judgment Action sought a declaration that, based on

       this provision, it was not obligated to defend or indemnify Clayton, a

       permissive driver of Smith’s truck. Despite the above-quoted policy provision,

       the trial court granted summary judgment in favor of Smith. On appeal, we

       concluded that Progressive did not have (and has never had) a contractual duty

       to defend Clayton. Progressive Se. Ins. Co., 140 N.E.3d at 298. We noted that “it

       is eminently reasonable to conclude that if Smith is not entitled to coverage for

       his bodily injuries, Progressive is not required to defend Clayton from tort

       claims related to those bodily injuries.” Id. Because the policy clearly and

       unambiguously excluded coverage for bodily injury suffered by Smith,

       Progressive did not have a contractual duty to defend Clayton.


[20]   Smith argues that even if Progressive did not have a duty to defend, it chose to

       hire attorneys to defend Clayton and therefore, it was required to proceed in

       good faith by providing competent defense counsel for Clayton. However, our

       supreme court has noted, “To judicially impose liability under a theory of

       Court of Appeals of Indiana | Opinion 19A-PL-1959 | June 10, 2020            Page 16 of 24
       gratuitously assumed duty is unwise policy and should be cautiously invoked

       only in extreme circumstances involving a negligently performed assumed

       undertaking[.]” Yost v. Wasbash College, 3 N.E.3d 509, 518 (Ind. 2014). Smith

       has not shown in his Second Complaint how Clayton’s defense attorneys were

       incompetent or negligent in conducting Clayton’s defense. And we will not

       speculate as to the quality of Metzger’s representation of Clayton in the absence

       of specific allegations. Because Progressive did not have a contractual duty to

       defend Clayton, the trial court did not err in dismissing Smith Second

       Complaint on this issue.


                                                  3. Bad Faith

[21]   Next, Smith argues that the trial court erred in dismissing his Second

       Complaint because he made numerous allegations that Progressive acted in bad

       faith beyond issues of coverage. Specifically, Smith alleges that Progressive

       “directed the actions of the attorneys, failed to cooperate in the production of

       documents to Clayton, acted in its own best interests at the expense of Clayton,

       and acted with improper purposes.” Appellant’s Br. at 30. Progressive contends,

       and we agree, that Smith did not plead any facts that would support his claim

       that Progressive acted in bad faith. Indiana has long recognized that there is a

       legal duty implied in all insurance contracts that the insurer deal in good faith

       with its insured. Erie Ins. Co. v. Hickman by Smith, 622 N.E.2d 515, 518 (Ind.

       1993).


                The obligation of good faith and fair dealing with respect to the
                discharge of the insurer’s contractual obligation includes the

       Court of Appeals of Indiana | Opinion 19A-PL-1959 | June 10, 2020            Page 17 of 24
               obligation to refrain from (1) making an unfounded refusal to pay
               policy proceeds; (2) causing an unfounded delay in making
               payment; (3) deceiving the insured; and (4) exercising any unfair
               advantage to pressure an insured into a settlement of his claim.


       Id. at 519. Proving bad faith amounts to showing more than bad judgment or

       negligence: “it implies the conscious doing of a wrong because of dishonest

       purpose or moral obliquity. . . . [I]t contemplates a state of mind affirmatively

       operating with furtive design or ill will.” Oxendine v. Pub. Serv. Co. of Ind., Inc.,

       423 N.E.2d 612, 620 (Ind. Ct. App. 1980).


[22]   Smith’s Second Complaint does not present any facts that would indicate that

       Progressive failed to meet the obligation of good faith and fair dealing in any of

       the four ways described in Erie. Nor does it designate any evidence that would

       suggest that Progressive acted with a dishonest purpose, ill will, or engaged in

       any conscious wrongdoing. Therefore, Smith’s allegations in his Second

       Complaint, without more, cannot serve as the basis for a bad faith claim. Thus,

       the trial court did not err in dismissing Smith’s Second Complaint on this issue.


              II. Joinder of Parties or Consolidation of Actions
                                                  A. Joinder
[23]   Smith argues that the trial court erred when it denied his motion for joinder of

       parties. The determination of whether parties should be joined rests within the

       trial court’s discretion, and we will reverse a trial court’s decision only for an

       abuse of that discretion. McCoy v. Like, 511 N.E.2d 501, 504 (Ind. Ct. App.

       1987), trans. denied. An abuse of discretion occurs when the trial court’s decision

       Court of Appeals of Indiana | Opinion 19A-PL-1959 | June 10, 2020            Page 18 of 24
       is clearly against the logic and effect of the facts and circumstances before it.

       Brademas v. S. Bend Cmty. Sch. Corp., 783 N.E.2d 745, 750 (Ind. Ct. App. 2003),

       trans. denied.


[24]   Indiana Trial Rules 19 and 20 govern the joinder of parties. Trial Rule 19

       provides the requirements for mandatory joinder:


               A person who is subject to service of process shall be joined as a
               party in the action if:


               (1) in his absence complete relief cannot be accorded among
                   those already parties; or


               (2) he claims an interest relating to the subject of the action and is
                   so situated that the disposition of the action in his absence
                   may:


                   (a) as a practical matter impair or impede his ability to protect
                       that interest, or


                   (b) leave any of the persons already parties subject to a
                       substantial risk of incurring double, multiple, or otherwise
                       inconsistent obligations by reason of his claimed interest.


       Ind. Trial Rule 19(A) (emphasis added). Smith sought to join Clayton as a

       mandatory party-plaintiff in the Bad Faith Action pursuant to Trial Rule 19.

       However, Clayton irrevocably assigned to Smith all claims, legal rights, or causes

       of action that he may have had against Progressive and Metzger to the extent

       that they were assignable in return for Smith not recovering a portion of the $21

       million judgment from his personal assets. Thus, Clayton had relinquished any
       Court of Appeals of Indiana | Opinion 19A-PL-1959 | June 10, 2020            Page 19 of 24
       and all claims against Progressive and there was no reason that, in Clayton’s

       absence, Smith could not be afforded complete relief, that is, a judgment against

       Progressive. T.R. 19(A)(1). Nor did Clayton claim any interest whatsoever in

       Smith’s complaint against Progressive due to the Assignment. T.R. 19(A)(2); see

       also Indianapolis-Marion Cty. Pub. Library v. Charlier Clark & Linard, PC, 929

       N.E.2d 838, 848 (Ind. Ct. App. 2010) (“As a general rule, a valid and

       unqualified assignment operates to transfer to the assignee all the right, title, or

       interest of the assignor in or to the property or property rights that are

       comprehended within the terms of the assignment.”) (quotation omitted), trans.

       denied. Accordingly, the trial court did not abuse its discretion in denying

       Smith’s motion to join Clayton as a necessary party under Trial Rule 19.


[25]   Smith also sought to join Clayton as a permissive party-plaintiff and Metzger as

       permissive party-defendants to the Bad Faith Action pursuant to Trial Rule

       20(A). Trial Rule 20 governs the permissive joinder of parties and provides in

       pertinent part:


               (1) All persons may join in one [1] action as plaintiffs if they
                   assert any right to relief jointly, severally, or in the alternative
                   in respect of or arising out of the same transaction,
                   occurrence, or series of transactions or occurrences and if any
                   question of law or fact common to all these persons will arise
                   in the action.


               (2) All persons may be joined in one [1] action as defendants if there is
                   asserted against them jointly, severally, or in the alternative, any right
                   to relief in respect of, or arising out of, the same transaction,
                   occurrence, or series of transactions or occurrences and if any

       Court of Appeals of Indiana | Opinion 19A-PL-1959 | June 10, 2020             Page 20 of 24
                   question of law or fact common to all defendants will arise in the
                   action.

       Ind. Trial Rule 20(A)(1) & (2). The purpose of Trial Rule 20(A) is to promote

       trial convenience, expedite claims, and avoid multiple lawsuits. United of Omaha

       v. Hieber, 653 N.E.2d 83, 87 (Ind. Ct. App. 1995), trans. denied.


[26]   It was not error for the trial court to deny joinder of either party under Trial

       Rule 20. First, with respect to subsection (1), Smith and Clayton did not, jointly

       or severally, “assert any right to relief” against Progressive because Clayton

       assigned any rights he would have had against Progressive to Smith. Second,

       with respect to subsection (2), no “right to relief” has been “asserted” against

       Metzger because Smith had no such “right to relief.” T. R. 20(A)(2). The legal

       malpractice claim was not assignable pursuant to Picadilly and was only

       available to Clayton personally. Thus, Smith has failed to establish that

       Metzger should be joined as a party under Trial Rule 20(A)(2). See McCoy, 511

       N.E.2d at 504 (stating the right of relief must be asserted against the defendants

       jointly, severally, or in the alternative). Because neither Clayton nor Metzger

       could properly be joined as parties under Trial Rule 20, the trial court did not

       abuse its discretion when it denied Smith’s motion for joinder of parties.


                                            B. Consolidation
[27]   Smith next argues that the trial court erred by denying his request for

       consolidation of his Bad Faith Action and Clayton’s Malpractice Action.

       Indiana Trial Rule 42(A) provides that a trial court may order actions to be

       consolidated when the actions involve common questions of law or fact. The

       Court of Appeals of Indiana | Opinion 19A-PL-1959 | June 10, 2020         Page 21 of 24
       decision to consolidate actions is purely discretionary and will be overturned

       only when an abuse of discretion is established. Bodem v. Bancroft, 825 N.E.2d

       380, 382 (Ind. Ct. App. 2005). “A party must show resultant prejudice as a

       prerequisite to establishing that a trial court erred in denying a motion under

       Trial Rule 42.” In re Paternity of Tompkins, 518 N.E.2d 500, 507 (Ind. Ct. App.

       1988).


[28]   Smith requested the trial court consolidate the Bad Faith Action and the

       Malpractice Action against Progressive and Metzger because the cases involved

       common questions of law and fact. But whether or not common questions of

       law or fact exist, Smith failed to demonstrate that he suffered prejudice as a

       result of the trial court’s denial of his motion. Smith now argues that he was

       prejudiced because Progressive took contradictory positions that resulted in the

       dismissal of Smith’s claim against Progressive in this action and Clayton’s

       claim against Progressive in the Malpractice Action; namely, asserting in this

       action that Clayton’s claims were not assignable and asserting in the

       Malpractice Action that Clayton assigned his claims to Smith. However,

       Progressive’s assertions were not contradictory, but consistent. First, in the Bad

       Faith Action, Progressive correctly stated that Smith’s negligence claims based

       on legal malpractice were not assignable. See Appellant’s App., Vol. 5 at 40

       (Progressive noting in its motion to dismiss that “Indiana law does not

       recognize claims brought by third parties for vicarious liability for the conduct

       of counsel hired to defend the insured. Because negligence claims against

       attorneys are not assignable, and because [Smith] does not have privity with the


       Court of Appeals of Indiana | Opinion 19A-PL-1959 | June 10, 2020        Page 22 of 24
       lawyers that Progressive paid to defend . . . Clayton, [Smith] cannot sue

       Progressive for the conduct of those lawyers”); see also Picadilly, Inc., 582 N.E.2d

       at 339. Progressive never argued that Smith’s claims of bad faith and breach of

       duty to defend were not assignable. Instead, it argued that it had not acted in

       bad faith and could not be liable for the breach of a duty to defend which it did

       not owe. See Appellant’s App., Vol. 5 at 40. The trial court dismissed only

       Smith’s legal malpractice claims because those claims were not assignable.

       Second, in the Malpractice Action, Progressive argued that Clayton irrevocably

       assigned to Smith any claims for bad faith and breach of duty to defend and

       therefore, Clayton could not bring claims against it. We see no contradiction in

       Progressive’s assertions as Smith contends and thus, Smith has failed to show

       any “resultant prejudice” from the trial court’s denial of Smith’s motion to

       consolidate. In re Paternity of Tompkins, 518 N.E.2d at 507. Therefore, the trial

       court did not abuse its discretion in denying Smith’s motion to consolidate

       actions.



                                                Conclusion
[29]   Smith’s Second Complaint on its face does not support the relief he seeks and

       therefore, the trial court did not err in dismissing Smith’s Second Complaint.

       We also conclude that the trial court did not err when it denied Smith’s motion

       for joinder of parties or consolidation of actions. Accordingly, the decision of

       the trial court is affirmed.


[30]   Affirmed.

       Court of Appeals of Indiana | Opinion 19A-PL-1959 | June 10, 2020        Page 23 of 24
Bradford, C.J., and Altice, J., concur.




Court of Appeals of Indiana | Opinion 19A-PL-1959 | June 10, 2020   Page 24 of 24
