MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be                                  FILED
regarded as precedent or cited before any                         Jun 13 2017, 6:40 am
court except for the purpose of establishing
                                                                       CLERK
the defense of res judicata, collateral                            Indiana Supreme Court
                                                                      Court of Appeals
estoppel, or the law of the case.                                       and Tax Court




ATTORNEY FOR APPELLANT                                   ATTORNEYS FOR APPELLEE
James R. Fisher                                          Danford R. Due
Miller & Fisher, LLC                                     Charles J. Maiers
Indianapolis, Indiana                                    Due Doyle Fanning & Alderfer,
                                                         LLP
                                                         Indianapolis, Indiana



                                           IN THE
    COURT OF APPEALS OF INDIANA

Karen Bedwell, as Personal                               June 13, 2017
Representative of the Estate of                          Court of Appeals Case No.
Jeffrey Bedwell, Deceased,                               77A01-1612-CT-2899
Appellant-Defendant,                                     Appeal from the Sullivan Superior
                                                         Court
        v.                                               The Honorable Hugh R. Hunt,
                                                         Judge
Auto-Owners Insurance                                    Trial Court Cause No.
Company,                                                 77D01-1603-CT-154
Appellee-Plaintiff




Crone, Judge.




Court of Appeals of Indiana | Memorandum Decision 77A01-1612-CT-2899 | June 13, 2017       Page 1 of 13
                                             Case Summary
[1]   About a half hour after he left The Uptown Tavern, Inc., an extremely

      inebriated patron, Jeffrey Bedwell, sat on a nearby railroad track and was killed

      by a train. Karen Bedwell, as personal representative of Bedwell’s estate (“the

      Estate”), filed a wrongful death action against Uptown and its shift

      manager/bartender, Leslie D. Chapman. Uptown’s general liability insurer,

      Auto-Owners Insurance Company, filed an action for declaratory judgment,

      asserting that the Estate’s claims in its underlying wrongful death action were

      excluded under the alcohol exclusion in Uptown’s general liability insurance

      policy. Auto-Owners filed a motion for summary judgment, contending that all

      four of the Estate’s claims were excluded from coverage as a matter of law, and

      the trial court granted Auto-Owners’ motion.


[2]   The Estate now appeals, maintaining that Auto-Owners waived and/or was

      estopped from asserting a coverage defense concerning the Estate’s claim

      against Uptown for failure to aid an imperiled person and that the trial court

      erred in granting summary judgment. Finding that Auto-Owners was not

      precluded by waiver or estoppel from asserting its coverage defense and that the

      trial court did not err in granting Auto-Owners’ motion for summary judgment,

      we affirm.


                                 Facts and Procedural History
[3]   On August 5, 2012, Bedwell arrived at Uptown between 12:30 and 1:00 a.m.

      While there, he drank several beers and shots of alcohol, some of which were


      Court of Appeals of Indiana | Memorandum Decision 77A01-1612-CT-2899 | June 13, 2017   Page 2 of 13
      provided courtesy of other Uptown patrons. Bedwell stayed for about two and

      a half hours. His former girlfriend, Chapman, was tending bar that night.

      Around 3:00 a.m., Chapman went out the back exit to empty some trash in a

      dumpster, and Bedwell followed her, grabbed her arm, and held her against the

      building. He attempted to persuade her to rekindle their romantic relationship,

      and she told him that she was not interested and was married to someone else.

      Shortly thereafter, an off-duty employee, Kentz Ward, approached and began

      to interact with Bedwell, at which point Chapman pulled her arm away from

      Bedwell, and Bedwell either sat down or fell onto the two stairs outside the

      back door. Chapman ran inside the building and continued to tend bar.

      Bedwell reentered the building with Ward, stayed for a few minutes, and left

      again through the back door. At 3:30 a.m., Uptown closed. Chapman went

      outside to empty the trash and heard someone urinating behind the dumpster.

      She could not see who it was, but Bedwell indicated that he was the one

      urinating and urged her to leave with him. Chapman said no, told him to go

      home, and reentered the building. She did not see him again.


[4]   Just before 4:00 a.m., Bedwell sat down on a railroad track adjacent to

      Uptown’s property. A train approached, and the conductor noticed that

      Bedwell appeared to be sitting up but was unconscious and unresponsive to the

      impending danger. He repeatedly blew the train’s whistle and applied the

      brakes but was unable to stop. The train struck and killed Bedwell. An autopsy

      revealed that Bedwell’s blood alcohol concentration was .239 percent at the

      time of his death.


      Court of Appeals of Indiana | Memorandum Decision 77A01-1612-CT-2899 | June 13, 2017   Page 3 of 13
[5]   In November 2013, the Estate filed a wrongful death action against Uptown

      and Chapman, raising three claims under the Dram Shop Act1 and one tort

      claim under the Restatement (Second) of Torts § 314A (1965) (“Section 314A”)

      for allegedly breaching a “duty not to abandon Mr. Bedwell, as an invitee of the

      tavern, in a helpless, perilous state, to which [Uptown and Chapman]

      contributed.” Appellee’s App. Vol. 2 at 8. The Estate filed a claim with

      Uptown’s liquor liability insurance carrier, United States Liability Insurance

      Group (“USLIG”). USLIG paid its policy limits to the Estate and provided

      legal representation for the wrongful death action. The Estate also filed a claim

      with Auto-Owners, as Uptown’s general liability insurer. In February 2015,

      Auto-Owners sent Uptown a coverage position letter in which it expressly

      found the Estate’s alcohol-related claims to be excluded under the policy and

      stated that it would provide defense and indemnification for any nonalcohol-

      related claims “to the extent otherwise covered under this policy.” Appellant’s

      App. Vol. 2 at 112. The letter expressly stated that Auto-Owners “completely

      reserved” all rights, terms, conditions, and exclusions under the policy. Id.


[6]   In March 2016, Auto-Owners filed an action against the Estate for declaratory

      judgment that it had no duty to pay any judgment awarded to the Estate in its

      wrongful death action against Uptown and Chapman. Several months later,

      Auto-Owners filed a motion for summary judgment, asserting that all four of



      1
        The Dram Shop Act allegations include breach of duty (1) not to serve Bedwell while he was intoxicated;
      (2) not to serve Bedwell after last call at 3:00 a.m.; and (3) to remove all alcohol from Bedwell at 3:30 a.m.
      Appellee’s App. Vol. 2 at 8.

      Court of Appeals of Indiana | Memorandum Decision 77A01-1612-CT-2899 | June 13, 2017               Page 4 of 13
      the Estate’s underlying claims in its wrongful death action were excluded from

      coverage as a matter of law under the alcohol provision in Uptown’s policy.

      The trial court granted Auto-Owners’ motion, and the Estate filed a motion to

      correct error, which the trial court denied.


[7]   The Estate now appeals, challenging the trial court’s grant of summary

      judgment. Additional facts will be provided as necessary.


                                     Discussion and Decision

          Section 1 – Auto-Owners was not precluded by waiver or
                estoppel from asserting its coverage defenses.
[8]   The Estate contends that alleged assurances made in Auto-Owners’ coverage

      position letter precluded it, by waiver or estoppel, from asserting its coverage

      defenses a year later in its action for declaratory judgment. Where an insurer

      assumes the defense of an action on behalf of an insured without a reservation

      of rights and with knowledge of facts that would have permitted it to deny

      coverage, it may be estopped from raising a defense of noncoverage. Transcon.

      Ins. Co. v. J.L. Manta, Inc., 714 N.E.2d 1277, 1281 (Ind. Ct. App. 1999). In

      other words,


              an insured suffers prejudice as a matter of law where an insurer,
              without reserving its rights and giving the insured the opportunity to
              determine whether to accept the tender of defense, assumes a
              complete defense of the underlying suit against the insured and
              controls the litigation for an extended period of time after becoming
              aware of a coverage defense.



      Court of Appeals of Indiana | Memorandum Decision 77A01-1612-CT-2899 | June 13, 2017   Page 5 of 13
      Id. at 1282 (emphases added).


[9]   The Estate cites Auto-Owners’ coverage position letter as evidence that it

      agreed to cover Uptown on the Estate’s Section 314A claim for failure to aid.

      In contrast, Auto-Owners asserts that it expressly reserved its rights concerning

      coverage, that its provision of defense did not amount to an admission of a duty

      to indemnify, and that the determination of whether the Section 314A claim

      was alcohol-related (and thus excluded) could not be made without conducting

      discovery. The coverage position letter reads in pertinent part as follows:


              This policy does not provide any coverage for liquor liability. As
              such, [Auto-Owners] will not provide coverage for defense or
              indemnification in connection with claims or damages arising out
              of the allegations for liquor liability in the Wrongful Death
              Complaint for Jeffrey Bedwell.

              We will provide coverage for defense and indemnification in
              connection the [sic] bodily injury and wrongful death allegations
              not arising out of liquor liability, to the extent otherwise covered
              under this policy.

              ….

              All rights, terms, conditions, and exclusions in your policy are in full
              force and effect and are completely reserved. No action by any employee,
              agent, attorney or other person on behalf of [Auto-Owners]; or hired by
              [Auto-Owners] on your behalf; shall waive or be construed as having
              waived any right, term, condition, exclusion or any other provision of the
              policy.


      Appellant’s App. Vol. 2 at 111-12 (italics in original, underlining omitted).



      Court of Appeals of Indiana | Memorandum Decision 77A01-1612-CT-2899 | June 13, 2017   Page 6 of 13
[10]   As the italicized language indicates, Auto-Owners completely reserved its rights

       under the policy. Even the statement that it would defend and indemnify for

       nonalcohol-related allegations specified a limitation of “to the extent otherwise

       covered under this policy.” Id. The question of whether the Estate’s Section

       314A claim was subject to the alcohol exclusion simply could not be answered

       without more information, to be collected during discovery. See Ind. Farmers

       Mut. Ins. Co. v. N. Vernon Drop Forge, 917 N.E.2d 1258, 1276 (Ind. Ct. App.

       2009) (where insurer defended its insured in underlying lawsuit but its duty to

       indemnify could not be assessed until much later, when litigation concluded),

       trans. denied (2010). Thus, as of the date of its coverage position letter, Auto-

       Owners did not have knowledge of facts that would have permitted it to deny or

       admit coverage at that time. Moreover, we note that a significant portion of the

       Estate’s wrongful death action was not in the “control” of Auto-Owners for an

       extended period but was also being managed by Uptown’s liquor liability

       insurance carrier, USLIG. Finally and importantly, Manta applied estoppel

       where the insurer’s conduct resulted in prejudice to its insured, which was

       Uptown and not the Estate. As such, Manta does not apply. Consequently,

       Auto-Owners was not precluded by waiver or estoppel from asserting its

       coverage defenses.


          Section 2 – The trial court did not err in granting summary
                      judgment in favor of Auto-Owners.
[11]   The Estate also maintains that the trial court erred in granting summary

       judgment in favor of Auto-Owners. We review a summary judgment de novo,

       Court of Appeals of Indiana | Memorandum Decision 77A01-1612-CT-2899 | June 13, 2017   Page 7 of 13
       applying the same standard as the trial court and drawing all reasonable

       inferences in favor of the nonmoving party. Hughley v. State, 15 N.E.3d 1000,

       1003 (Ind. 2014). In conducting our review, we consider only those matters

       that were designated at the summary judgment stage. Haegert v. McMullan, 953

       N.E.2d 1223, 1229 (Ind. Ct. App. 2011). Summary judgment is appropriate if

       the designated evidence shows that there is no genuine issue as to any material

       fact and that the moving party is entitled to judgment as a matter of law.

       Hughley, 15 N.E.3d at 1003; Ind. Trial Rule 56(C).


[12]   The moving party bears the initial burden of demonstrating the “absence of any

       genuine issue of fact as to a determinative issue.” Williams v. Tharp, 914 N.E.2d

       756, 761 (Ind. 2009). Then the burden shifts to the nonmoving party to “come

       forward with contrary evidence” showing a genuine issue for the trier of fact.

       Id. at 762. The nonmoving party cannot rest upon the allegations or denials in

       the pleadings. Syfu v. Quinn, 826 N.E.2d 699, 703 (Ind. Ct. App. 2005). In

       Hughley, our supreme court emphasized that the moving party bears an onerous

       burden of affirmatively negating the opponent’s claim. 15 N.E.3d at 1003. This

       approach is based on the policy of preserving a party’s day in court, thus erring

       on the side of allowing marginal cases to proceed to trial on the merits rather

       than risking the short-circuiting of meritorious claims. Id. at 1003-04.


[13]   In determining whether issues of material fact exist, we neither reweigh

       evidence nor judge witness credibility. Peterson v. Ponda, 893 N.E.2d 1100, 1104

       (Ind. Ct. App. 2008), trans. denied (2009). Rather, we must accept as true those

       facts established by the designated evidence favoring the nonmoving party. Brill

       Court of Appeals of Indiana | Memorandum Decision 77A01-1612-CT-2899 | June 13, 2017   Page 8 of 13
       v. Regent Commc’ns, Inc., 12 N.E.3d 299, 309 (Ind. Ct. App. 2014), trans. denied.

       A trial court’s grant of summary judgment arrives on appeal clothed with a

       presumption of validity. Williams, 914 N.E.2d at 762. We may affirm a grant

       of summary judgment on any legal basis supported by the designated evidence.

       Harness v. Schmitt, 924 N.E.2d 162, 165 (Ind. Ct. App. 2010).


[14]   “The construction of an insurance policy is a question of law for which

       summary judgment is particularly appropriate.” Property-Owners Ins. Co. v. Ted’s

       Tavern, Inc., 853 N.E.2d 973, 977 (Ind. Ct. App. 2006). “[I]f an insurance

       contract is clear and unambiguous, the language therein must be given its plain

       and ordinary meaning.” Id. at 978 (quoting Beam v. Wausau Ins. Co., 765

       N.E.2d 524, 527 (Ind. 2002)). This includes unambiguous terms that limit the

       insurer’s liability. Id. “[I]nsurers have the right to limit their coverage of risks

       and, therefore, their liability by imposing exceptions, conditions, and

       exclusions. However, to be enforced, these limitations must be clearly

       expressed and … consistent with public policy.” Id. (citation omitted). An

       insurance contract is not deemed ambiguous merely because the parties have

       asserted contrary interpretations of its language or a controversy exists. Id.

       Rather, it “will be deemed ambiguous only if reasonable people would honestly

       differ as to the meaning of its terms.” Id. (citation omitted).


[15]   Our function in this appeal is not to resolve the ultimate question of whether

       Uptown is liable to the Estate under Section 314A but rather to determine

       whether this claim was properly excluded from coverage as a matter of law

       under Uptown’s general liability policy with Auto-Owners. The trial court

       Court of Appeals of Indiana | Memorandum Decision 77A01-1612-CT-2899 | June 13, 2017   Page 9 of 13
       granted summary judgment for Auto-Owners (not Uptown) in its action for

       declaratory judgment concerning coverage under the policy for any of the

       Estate’s claims against Uptown. The only claim relevant to this appeal is the

       Estate’s Section 314A claim for failure to aid. That said, we discuss Section

       314A only as it relates to the issue of Auto-Owners’ obligations under the

       general liability policy.


[16]   The alcohol exclusion in Uptown’s general liability policy with Auto-Owners

       reads, in pertinent part,

               2. Exclusions

               This insurance does not apply to:

               c. Liquor Liability

               “Bodily injury” or “Property damage” for which any insured
               may be held liable by reason of:

               (1) Causing or contributing to the intoxication of any person.

               (2) The furnishing of alcoholic beverages to a person under the
               legal drinking age or under the influence of alcohol; or

               (3) Any statute, ordinance or regulation relating to the sale, gift,
               distribution or use of alcoholic beverages.

               This exclusion applies only if you are in the business of
               manufacturing, distributing, selling, serving or furnishing
               alcoholic beverages.


       Appellee’s App. Vol. 2 at 4.

       Court of Appeals of Indiana | Memorandum Decision 77A01-1612-CT-2899 | June 13, 2017   Page 10 of 13
[17]   In its wrongful death complaint against Uptown and Chapman, the Estate

       raised its failure to aid allegation as follows: “The Defendants breached the

       duty not to abandon Mr. Bedwell, as an invitee of the tavern, in a helpless,

       perilous state, to which the Defendants contributed.” Appellee’s App. Vol. 2 at

       8. The trial court determined as a matter of law that Bedwell’s perilous state

       was related to his intoxication, and therefore his claim was subject to the

       alcohol exclusion.


[18]   A landowner owes to its invitee “a duty to exercise reasonable care for his

       protection while he is on the landowner’s premises.” Pfenning v. Lineman, 947

       N.E.2d 392, 406 (Ind. 2011) (quoting Burrell v. Meads, 569 N.E.2d 637, 639

       (Ind. 1991)). Section 314A reads, in pertinent part,

               (1) A common carrier is under a duty to its passengers to take
               reasonable action


               (a) to protect them against unreasonable risk of physical harm,
               and


               (b) to give them first aid after it knows or has reason to know that
               they are ill or injured, and to care for them until they can be
               cared for by others.


               ….


               (3) A possessor of land who holds it open to the public is under a
               similar duty to members of the public who enter in response to
               his invitation.



       Court of Appeals of Indiana | Memorandum Decision 77A01-1612-CT-2899 | June 13, 2017   Page 11 of 13
[19]   The Estate argues that its Section 314A claim is not subject to the alcohol

       exclusion because alcohol consumption is not an element of the tort. However,

       protection from peril/unreasonable risk is an element of the tort, and that peril

       may stem from any number of acts or omissions by the landowner, including,

       but certainly not limited to, furnishing alcoholic beverages to the invitee while

       he is on the premises. Auto-Owners asserts that Bedwell’s intoxication (three

       times the legal limit) was inextricably related to his (in)ability to evaluate the

       risk of his being struck by a train and that, as such, the alcohol exclusion

       precludes coverage under the general liability policy. In contrast, the Estate

       submits that Bedwell’s peril was independent of his alcohol consumption,

       particularly, that (1) Chapman saw him sitting on the railroad track and should

       have acted to protect him from danger; and (2) he was placed in peril due to an

       alleged altercation with Chapman on the steps outside Uptown’s back door.

       The designated materials are devoid of any evidence to support these assertions.

       First, Chapman testified in her deposition that she never saw Bedwell sitting on

       the railroad tracks; instead, the only place/time that she saw him sitting or

       standing outside was on the two steps by the back door the first time that she

       went out to empty the trash. Appellee’s App. Vol. 2 at 19. After she heard him

       urinating and told him to go home, she never saw him again. Id.


[20]   As for any alleged altercation, the undisputed evidence shows that the first time

       Chapman went outside, Bedwell held on to her arm and begged her to leave

       with him. When Ward approached them on the back steps, Bedwell turned to

       greet him and Chapman pulled her arm away, after which Bedwell either sat


       Court of Appeals of Indiana | Memorandum Decision 77A01-1612-CT-2899 | June 13, 2017   Page 12 of 13
       down or fell onto the stair. Id. at 19-20. Bedwell was clearly able to get up,

       reenter the tavern, and visit awhile before leaving again. To say that this

       incident amounted to such peril as to require Uptown to protect Bedwell from a

       train that would come one hour later simply defies reason. See Section 314A

       cmt. f (defendant “is not required to take any action beyond that which is

       reasonable under the circumstances”).


[21]   Because the source of Bedwell’s peril was his extreme intoxication, the Estate’s

       claim for failure to aid an imperiled person was subject to the alcohol exclusion

       in Upland’s general liability policy with Auto-Owners. As such, the trial court

       did not err in granting Auto-Owners’ motion for summary judgment.

       Accordingly, we affirm.


[22]   Affirmed.


       Baker, J., and Barnes, J., concur.




       Court of Appeals of Indiana | Memorandum Decision 77A01-1612-CT-2899 | June 13, 2017   Page 13 of 13
