                                                                        FILED
                                                                    Mar 01 2019, 8:22 am

                                                                        CLERK
                                                                    Indiana Supreme Court
                                                                       Court of Appeals
                                                                         and Tax Court




ATTORNEYS FOR APPELLANT                                    ATTORNEYS FOR APPELLEES
Dale W. Eikenberry                                         Cary J. Solida
Elizabeth S. Schmitt                                       State Farm Litigation Counsel
Wooden McLaughlin LLP                                      Indianapolis, Indiana
Indianapolis, Indiana




                                            IN THE
    COURT OF APPEALS OF INDIANA

Indiana Farmers Mutual                                     March 1, 2019
Insurance Company,                                         Court of Appeals Case No.
Appellant-Plaintiff,                                       18A-CT-2043
                                                           Appeal from the Tippecanoe
        v.                                                 Superior Court
                                                           The Honorable Randy J. Williams,
John Weaver, Sunday Vanzile,                               Judge
Bryan Vanzile, and State Farm                              Trial Court Cause No.
Mutual Automobile Insurance                                79D01-1708-CT-127
Company,
Appellees-Defendants.



Bradford, Judge.




Court of Appeals of Indiana | Opinion 18A-CT-2043 | March 1, 2019                           Page 1 of 8
                                           Case Summary
[1]   In August of 2015, John Weaver was driving a vehicle which he owned and

      which was insured by Indiana Farmers Mutual Insurance Company (“Indiana

      Farmers”) when he lost control and drove it into the home of Bryan and

      Sunday Vanzile (“the Vanziles”). Indiana Farmers sought a declaratory

      judgment that it had no duty to provide coverage to Weaver, who was driving

      with a suspended driver’s license, pursuant to the terms of the insurance

      contract (“ the Policy”), specifically under the exclusions provision

      (“Entitlement Exclusion”). In 2018, State Farm Mutual Automobile Insurance

      Company (“State Farm”), joined by the Vanziles (collectively “Appellees”),

      moved for summary judgment, and Indiana Farmers moved for summary

      judgment as well. The trial court entered summary judgment in favor of the

      Appellees and denied Indiana Farmers’s motion. Indiana Farmers contends

      that the trial court erred in denying its cross-motion for summary judgment

      because the Entitlement Exclusion excluded Weaver from coverage while

      driving with a suspended driver’s license. Because we disagree, we affirm.



                             Facts and Procedural History
[2]   On August 29, 2015, Weaver lost control of his vehicle and drove into the

      residence of the Vanziles, causing bodily injury and property damage. Weaver’s

      driver’s license was suspended at the time. Weaver’s vehicle had been insured

      since March 11, 2015, by Indiana Farmers under the Policy, which provided, in

      relevant part:

      Court of Appeals of Indiana | Opinion 18A-CT-2043 | March 1, 2019           Page 2 of 8
              Part A – Liability Coverage

              Insuring Agreement
              A. We will pay damages for “bodily injury” or “property
              damage” for which any “insured” becomes legally responsible
              because of an auto accident[…]We will settle or defend, as we
              consider appropriate, any claim or suit asking for these
              damages[…]We have no duty to defend any suit or settle any
              claim for “bodily injury” or “property damage” not covered
              under this policy.
              B. “Insured” as used in this Part means:
                     1. You or any “family member” for the ownership,
                     maintenance or use of any auto or “trailer”.
                     2. Any person using “your covered auto”.

              [….]

              Exclusions
              A. We do not provide Liability Coverage for any “insured”:
                    [….]
                    8. Using a vehicle without a reasonable belief that that
                    “insured” is entitled to do so. This Exclusion […] does not
                    apply to a “family member” using “your covered auto”
                    which is owned by you.


      Appellant’s App. Vol. II p. 103–04.


[3]   On June 21, 2017, the Vanziles sued Weaver for the recovery of damages. On

      August 3, 2017, Indiana Farmers filed for declaratory judgment seeking a

      determination that the Policy did not provide Weaver with coverage on the day

      of the accident because he was excluded under the Entitlement Exclusion due

      to his suspended driver’s license. State Farm moved to intervene, a motion

      which was granted by the trial court, and both State Farm and the Vanziles filed


      Court of Appeals of Indiana | Opinion 18A-CT-2043 | March 1, 2019           Page 3 of 8
      answers denying Indiana Farmers’ allegation of no coverage. On January 22,

      2018, State Farm moved for summary judgment, a motion which was joined by

      the Vanziles. On February 20, 2018, Indiana Farmers cross-moved for

      summary judgment. The trial court held a hearing on the summary judgment

      motions and ordered summary judgment in favor of State Farm and the

      Vanziles on July 26, 2018.1



                                 Discussion and Decision

[4]   Indiana Farmers contends that the trial court erred by granting summary

      judgment in favor of the Appellees and denying its cross-motion for summary

      judgment. Specifically, Indiana Farmers contends that without a valid driver’s

      license, Weaver was using his vehicle without a reasonable belief that he was

      entitled to do so, which resulted in him being excluded from coverage pursuant

      to the Entitlement Exclusion of the Policy. We review an order granting

      summary judgment de novo, applying the same standard as the trial court. Miller

      v. Rosehill Hotels, LLC, 45 N.E.3d 15, 18 (Ind. Ct. App. 2015). Summary

      judgment is appropriate where the designated evidence demonstrates that there

      is no genuine issue of material fact and the moving party is entitled to judgment

      as a matter of law. Ind. Trial Rule 56(C). The moving party bears the initial

      burden of making a prima facie case that there is no genuine issue of material



      1
       Although Weaver did not appear or join the summary judgment motion, the trial court included Weaver in
      the order, granting summary judgment in favor of him as well.

      Court of Appeals of Indiana | Opinion 18A-CT-2043 | March 1, 2019                            Page 4 of 8
      fact and that it is entitled to judgment as a matter of law. Manley v. Sherer, 992

      N.E.2d 670, 673 (Ind. 2013) (internal quotations omitted). If the moving party

      fails to make a prima facie case, summary judgment is improper; however, if it

      succeeds, then the nonmoving party must present evidence establishing a

      genuine issue of material fact. Miller, 45 N.E.3d at 18–19. Our review is limited

      to the designated evidence that was before the trial court but is neither

      constrained by the claims and arguments made to the trial court nor the

      rationale of the trial court’s ruling. Manley, 992 N.E.2d at 673. The

      interpretation of an insurance policy presents a question of law which is

      appropriate for summary judgment. Am. Family Ins. Co. v. Globe Am. Cas. Co.,

      774 N.E.2d 932, 935 (Ind. Ct. App. 2002), trans. denied.


[5]   While there is case law that has addressed entitlement exclusions in relation to

      a driver given permissive use of a vehicle from the policy holder, we have not

      yet had the opportunity to address entitlement exclusions in relation to the

      policy holder’s own use of a vehicle. We direct our focus to the basic principles

      of contract law to address this issue.


              An insurance policy is a contract, and in reviewing the policy, we
              construe it as we would any other contract—to give effect to the
              parties’ intentions at the time the contract was made. The
              freedom to contract is a bedrock principle of Indiana law, and the
              freedom of the parties to exclude risks from an insurance contract
              is well established[.] Generally, insurers are free to limit liability
              in any manner not inconsistent with public policy, and an
              unambiguous exclusionary clause is ordinarily entitled to
              enforcement.


      Court of Appeals of Indiana | Opinion 18A-CT-2043 | March 1, 2019            Page 5 of 8
      Founders Ins. Co. v. May, 44 N.E.3d 56, 61–62 (Ind. Ct. App. 2015) (internal

      quotations and citations omitted, brackets added), trans. denied. When the

      language of an insurance policy is clear and unambiguous, we give the words

      their plain and ordinary meaning. Buckeye State Mut. Ins. Co. v. Carfield, 914

      N.E.2d 315, 318 (Ind. Ct. App. 2009), trans. denied. Where an ambiguity exists,

      however, we construe a policy provision strictly against the insurer. Bradshaw v.

      Chandler, 916 N.E.2d 163, 166 (Ind. 2009). A provision is ambiguous if it is

      susceptible to more than one interpretation and reasonable persons would differ

      as to its meaning. Buckeye State, 914 N.E.2d at 218. “Strict construction against

      the insurer derives from the disparity in bargaining power characteristics of

      parties to insurance contracts.” Bradshaw, 916 N.E.2d at 166. We interpret

      policy terms from the perspective of the ordinary policyholder of average

      intelligence. Burkett v. Am. Family Ins. Group, 737 N.E.2d 447, 452 (Ind. Ct.

      App. 2000).


[6]   Turning to the Policy, we conclude that the term “using” is ambiguous because

      its meaning is susceptible to differing interpretations by reasonable persons.

      Indiana Farmers contends that “using” should be interpreted as synonymous

      with “operating”; however, we conclude that the terms are not synonymous.

      While “operating” is one way of “using” a vehicle, it is not the only way. A

      person could use a vehicle for storage, to salvage spare parts from, or to display

      at a classic car show, none of which would require the person to operate the

      vehicle. Indiana Farmers could have drafted the Policy in a way that clearly

      defined “using” or included “operating”, just as insurance companies and the

      Court of Appeals of Indiana | Opinion 18A-CT-2043 | March 1, 2019          Page 6 of 8
      General Assembly have done. See Founders Ins. Co. v. Munoz, 930 N.E.2d 999,

      1002 (Ill. 2010) (finding that the insurance policy excluded any person

      “operating an automobile without a reasonable belief that he or she is entitled to

      do so”) (emphasis added); see also Ind. Code § 27-1-13-7(b)(3) (statutorily

      mandating that insurance companies “insur[e] the owner against liability for

      damages…resulting from negligence in the operation of the motor vehicle…by

      any person legally using or operating the motor vehicle with permission,

      expressed or implied of the owner) (emphasis added). Moreover, reasonable

      minds may differ as to whether “using” one’s own vehicle under this exclusion

      is dictated upon one’s driver’s license status. Indiana Farmers could have

      drafted a provision that specifically excluded drivers from coverage who used

      the vehicle without a valid driver’s license. See Founders Ins. Co., 44 N.E.3d at 58

      (noting that a policy provision specifically excluded a driver from coverage if he

      is “not a licensed driver, or is without a valid driver’s license, [or his] driver’s

      license is revoked or suspended”). Indiana Farmers’s failure to add further

      clarification leaves the term “using” ambiguous, and we must construe such

      ambiguities against the insurer. Therefore, Weaver had a reasonable belief that

      he was entitled to use his vehicle pursuant to the language of the Policy.


[7]   The judgment of the trial court is affirmed.


      Bailey, J., concurs.


      Brown, J., concurs with opinion.




      Court of Appeals of Indiana | Opinion 18A-CT-2043 | March 1, 2019             Page 7 of 8
      Indiana Farmers Mutual                                     Court of Appeals Case No.
      Insurance Company,                                         18A-CT-2043
      Appellant-Plaintiff,

              v.

      John Weaver, Sunday Vanzile,
      Bryan Vanzile, and State Farm
      Mutual Automobile Insurance
      Company,
      Appellees-Defendants.



      Brown, Judge, concurring.

[8]   I concur with the majority opinion that the term “using” is not synonymous

      with “operating” and would note that had Indiana Farmers wanted to dispel

      any uncertainty regarding the impact of an individual’s driver’s license status on

      coverage, it could have referred in certain provisions to “legally” using a

      vehicle; that is, Indiana Farmers could have drafted the Policy in a way that

      clearly defined and used “legally using.” Further, in light of the fact that the

      Policy leaves “entitled” undefined and uses elsewhere the phrase “legally

      entitled,” see, e.g., Appellant’s Appendix Volume II at 106 (“We will pay

      compensatory damages which an ‘insured’ is legally entitled to recover . . . .”), I

      find that reasonable persons could interpret subsection A(8) to refer to

      permission. For these reasons I concur with the majority opinion.




      Court of Appeals of Indiana | Opinion 18A-CT-2043 | March 1, 2019                      Page 8 of 8
