FOR PUBLICATION
                                                      Dec 30 2014, 9:13 am




ATTORNEYS FOR APPELLANT:                     ATTORNEY FOR APPELLEES:
RICK D. MEILS                                JUSTIN STIMSON
WILLIAM M. BERISH                            Bloomington, Indiana
JOHN W. MERVILDE
Meils Thompson Dietz & Berish
Indianapolis, Indiana




                             IN THE
                   COURT OF APPEALS OF INDIANA

PEERLESS INDEMNITY INSURANCE CO.             )
                                             )
      Appellant-Plaintiff,                   )
                                             )
             vs.                             )    No. 49A02-1404-PL-244
                                             )
MOSHE & STIMSON LLP,                         )
SARAH MOSHE, and                             )
JUSTIN STIMSON,                              )
                                             )
      Appellees-Defendants.                  )


                    APPEAL FROM THE MARION SUPERIOR COURT
                         The Honorable Cynthia J. Ayers, Judge
                          Cause No. 49D04-1203-PL-010282


                                  December 30, 2014

                             OPINION – FOR PUBLICATION

VAIDIK, Chief Judge
                                      Case Summary

       Sarah Moshe, Justin Stimson’s sister and former law partner, sued her brother in

Marion Superior Court alleging, among other things, defamation. Justin made a claim

under Moshe & Stimson LLP’s insurance policy for defense and indemnification.

Peerless Indemnity Insurance Company, the firm’s insurer, filed a summary-judgment

motion arguing that it had no duty to defend and indemnify Justin due to a clause in the

policy that excluded coverage for certain employment-related practices, including

defamation. The trial court initially ruled in Peerless’s favor, but it later reversed course

and ordered Peerless to defend and indemnify Justin.

       On appeal, Peerless argues that the employment-related exclusionary clause is

unambiguous and bars coverage. We agree. Because Justin’s alleged actions toward his

sister were employment-related, the exclusionary clause applies. We reverse the trial

court and remand with instructions to enter summary judgment in Peerless’s favor on the

issue of coverage.

                              Facts and Procedural History

       Sarah and Justin are siblings and former law partners in the law firm Moshe &

Stimson LLP. In December 2011, after Sarah told Justin that she intended to leave the

firm, the siblings’ working relationship deteriorated: Justin allegedly refused to dissolve

the partnership, seized control of the firm’s assets and refused to pay Sarah her regular

income, refused to turn over client files and certain personal property belonging to Sarah,

and began making “accusations about [Sarah’s] personal integrity and her professional

competence.” Appellant’s App. p. 168. One month later, Sarah filed suit against Justin


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in Marion Superior Court alleging defamation and seeking a formal dissolution of the

partnership, an accounting, an injunction, and damages. Id. at 167-69.

          Peerless insured Moshe & Stimson LLP. After Sarah filed suit, Justin made a

claim under the firm’s policy for defense and indemnification. Peerless denied the claim

and sought a declaratory judgment that it had no responsibility to defend or indemnify

Justin.        Id. at 15.    In its motion, Peerless argued that “the allegations in [Sarah’s]

complaint constitute “employment-related practices, which are excluded from coverage

by the [policy’s] terms, conditions and exclusions . . . .” 1 Id. at 20. Peerless relied on the

following exclusionary clause:

          This insurance does not apply to:

          1.        “Bodily injury” or “personal and advertising injury” to
                a. A person arising out of any:
                   (1)    Refusal to employ that person;
                   (2)    Termination of that person’s employment; or
                   (3)    Employment-related practices, policies, acts or omissions,
                   such as coercion, demotion, evaluation, reassignment, discipline,
                   defamation, harassment, humiliation or discrimination directed at
                   that person . . . .

                                        *       *       *       *       *

          2.        This exclusion applies:
                a. Whether the insured may be liable as an employer or in any other
                   capacity; and
                b. To any obligation to share damages with or repay someone else who
                   must pay damages because of the injury.

Id. at 140 (emphasis added).




          1
              Peerless also asserted it was entitled to declaratory judgment under other theories not relevant
here.
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       In response, Justin filed a motion to dismiss for failure to state a claim, arguing

that Peerless was not entitled to declaratory judgment because he “ha[d] not yet sued

[Peerless] and I may never do so. At present no controversy exists.” Id. at 24. The trial

court denied Justin’s motion to dismiss, and the parties conducted discovery.

       A short time later, Peerless filed a summary-judgment motion, renewing its claim

that it had no responsibility to defend or indemnify Justin due to the employment-related

exclusionary clause. Justin responded and filed a cross-motion for summary judgment.

He argued that the exclusion did not apply because Sarah “had been a partner at Moshe

& Stimson LLP, not an employee. Nowhere in her complaint did [Sarah] allege that she

was ever employed by [Justin or the firm] and nowhere in her complaint did [Sarah]

suggest that the defamation she alleged was employment-related.” Id. at 197 (citation

omitted).

       Both parties elaborated at a hearing. Counsel for Peerless explained that:

       [I]t’s important . . . to note what the exclusion states, and what it does not
       because I think that’s the big issue that was raised within at least the
       response and counter motion for summary judgment by [Justin]. Nowhere
       within this exclusion does it state that [Sarah] need be an employee of
       anybody. The designation of the person seeking those damages is
       irrelevant, and not defined in this exclusion. What is relevant is whether or
       not the [alleged] acts of the person being sued, in this case brother, were
       related to the employment relationship. It’s that simple. Both have agreed
       that every allegation in this complaint was related to that employment
       relationship; every single one. There is no evidence to the contrary. We
       believe that the facts are very clear. [B]usiness owners’ policies are
       designed to protect liabilities by third – up to third parties. They’re not
       designed to deal with squabbles between two partners, brother and sister or
       otherwise . . . .

Tr. p. 7-8 (emphasis added). Justin responded by arguing that his sister, “at the time the

lawsuit was filed, was not associated with the firm either as a partner, or as an employee.

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So . . . the question really is, were my alleged defamatory comments employment-

related?” Id. at 11. He continued: “I think for Peerless to prevail, they’ve got to show

some employment, and some relationship of those comments to an employment.” Id. at

12.

       After taking the matter under advisement, the trial court granted Peerless’s

summary-judgment motion. In its order, the court framed the issue as “how the policy

applies to insurance coverage for the Moshe v. Stimson lawsuit concerning their business

relationship to one another.” Appellant’s App. p. 12. The court continued:

       In the defamation suit that precipitated this declaratory action, [Sarah]
       brought allegations against [Justin] for the following: “[Justin] refused to
       dissolve the partnership; [] seized control of partnership funds, refused to
       pay [Sarah] her regular salary/draw . . . [Justin] has possession of client
       files for the partnership, made defamatory comments about [Sarah], and
       refused to return personal property to [Sarah].” These allegations are based
       on comments that [Justin] had made in [Sarah’s] retirement letter about her
       personal integrity and professional competence.

Id. at 12-13.

       Justin filed a motion to correct errors. In his motion, he argued simply that the

exclusionary clause did not apply because the clause was “for employment-related

practices. [Sarah’s] lawsuit is not employment-related.” Id. at 216. Justin further argued

that he and Peerless disagreed “on the meaning of the phrase employment-related,” and

that “any ambiguity on this point must be resolved in [his] favor . . . .” Id. One month

later, the trial court reversed course, granting Justin’s motion and ordering Peerless to

defend and indemnify Justin in his suit against his sister. In doing so, the court reasoned:

       Since the suit between [Sarah] and [Justin] involves partners of the law
       firm, the exclusion does not apply. [Justin] argues that because [Sarah] was
       no longer a partner of the firm, she did not qualify as a partner under the

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       policy for purposes of determining coverage. He attempts to distinguish his
       relationship with [Sarah] so as not to fall within the exclusionary clause that
       relates to employer-employee conduct because one partner is not the
       employee of the other. [Justin] is correct.

Id. at 6-7.

       Peerless now appeals.

                                 Discussion and Decision

       On appeal, Peerless argues that the employment-related exclusionary clause is

unambiguous and bars coverage. In raising this issue, Peerless is appealing the trial

court’s grant of Justin’s motion to correct errors. Rulings on motions to correct error are

usually reviewable under an abuse-of-discretion standard, but our review is de novo when

the issue on appeal is purely a question of law. Eagle Aircraft, Inc. v. Trojnar, 983

N.E.2d 648, 657 (Ind. Ct. App. 2013) (citation omitted). The interpretation of a contract

is a pure question of law. Id. (citing Dunn v. Meridian Mut. Ins. Co., 836 N.E.2d 249,

251 (Ind. 2005)).

       Generally speaking, insurance policies are governed by the same rules of

construction as other contracts. Wert v. Meridian Sec. Ins. Co., 997 N.E.2d 1167, 1170

(Ind. Ct. App. 2013) (citation omitted), reh’g denied, trans. denied. Yet because of the

disparity in bargaining power between insurance companies and insureds, courts have

developed distinct rules for those contracts. Id. (citing Auto-Owners Ins. Co. v. Harvey,

842 N.E.2d 1279, 1283 (Ind. 2006)). When interpreting an insurance contract, if the

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

meaning. Id. (citation omitted). The mere fact that a controversy exists and the insured



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asserts an interpretation contrary to that asserted by the insurer is insufficient to establish

an ambiguity. Id. (citation omitted).

       This case involves a third-party liability insurance policy. The relevant portion of

the policy, the exclusionary clause, reads:

       This insurance does not apply to:

       1.      “Bodily injury” or “personal and advertising injury” to

            a. A person arising out of any:
               (1)    Refusal to employ that person;
               (2)    Termination of that person’s employment; or
               (3)    Employment-related practices, policies, acts or omissions,
               such as coercion, demotion, evaluation, reassignment, discipline,
               defamation, harassment, humiliation or discrimination directed at
               that person . . . .

                                *        *    *       *      *

       2.      This exclusion applies:

            a. Whether the insured may be liable as an employer or in any other
               capacity; and
            b. To any obligation to share damages with or repay someone else who
               must pay damages because of the injury.

Appellant’s App. p. 140 (emphasis added).

       Justin devotes much of his appellate brief to the issue of whether his sister was an

employee of Moshe & Stimson LLP as opposed to a partner in the firm. The trial court

also engaged in this analysis in granting Justin’s motion to correct errors. This is a red

herring, however, because we need not determine in what capacity Sarah was employed

by the firm. Instead, the issue is whether Justin’s alleged actions, particularly his alleged

defamation of his sister, were “employment-related,” a phrase the policy does not define.

Throughout this case, Justin has repeatedly claimed that the parties disagree on the

                                              7
meaning of this phrase and that this creates an ambiguity that must be resolved in his

favor. But the phrase “employment-related” is not ambiguous simply because a

controversy exists and Justin’s interpretation differs from Peerless’s. See Wert, 997

N.E.2d at 1170.

        Black’s Law Dictionary defines “employment” in many ways, including “the

quality, state, or condition of being employed; the condition of having a paying job.”

Black’s Law Dictionary 641 (10th ed. 2014). “Related,” in turn, means “connected in

some way; having relationship to or with something else . . . .” Id. at 1479. Applying

these plain and ordinary definitions, we conclude—as the trial court initially did—that

Sarah’s claims against her brother relate to her job: after Sarah told Justin she would be

leaving the firm, he allegedly refused to dissolve the partnership, seized control of the

firm’s assets and refused to pay Sarah her regular income, refused to turn over client files

and certain personal property belonging to Sarah, and began making “accusations about

[Sarah’s] personal integrity and her professional competence.” Appellant’s App. p. 168.

These acts are connected to Sarah’s employment at Moshe & Stimson LLP; as a result,

they are not covered under the policy by way of the exclusionary clause.2

        The policy at issue was designed to protect the siblings in suits brought by third

parties—it was not meant to protect one against the other in a suit between the two.

        2
            Justin claims that in order to be considered employment-related, defamation must:

        meet two standards . . . . First, the author of the defamation must be the plaintiff’s
        superior. Defamation by a peer does not constitute “employment-related” defamation.
        Second, the subject of the defamation must be the plaintiff’s performance during the
        employment to which it is allegedly related. A mere insult by a former supervisor does
        not constitute “employment-related” defamation.

Appellant’s Br. p. 9. Justin provides no citation or authority for these claims, and we decline to adopt his
reasoning.
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Because we conclude that the policy unambiguously excludes coverage in this case, we

reverse the trial court and remand with instructions to enter summary judgment in

Peerless’s favor on the issue of coverage.

       Reversed and remanded.

FRIEDLANDER, J., and MAY, J., concur.




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