                                                                          FILED
                                                                     Mar 25 2020, 10:31 am

                                                                          CLERK
                                                                      Indiana Supreme Court
                                                                         Court of Appeals
                                                                           and Tax Court




ATTORNEYS FOR APPELLANT                                   ATTORNEYS FOR APPELLEE
Michael L. Carmin                                         Lonnie D. Johnson
Daniel M. Cyr                                             Belinda R. Johnson-Hurtado
CarminParker, PC                                          Stephanie A. Halsted
Bloomington, Indiana                                      Clendening, Johnson &
                                                          Bohrer, P.C.
                                                          Bloomington, Indiana



                                            IN THE
    COURT OF APPEALS OF INDIANA

KMC, LLC,                                                 March 25, 2020
Appellant-Defendant/Third-Party                           Court of Appeals Case No.
Plaintiff,                                                19A-CC-2665
                                                          Appeal from the Greene
        v.                                                Superior Court
                                                          The Honorable Dena A. Martin,
Eastern Heights Utilities, Inc.,                          Judge
Appellee-Third-Party Defendant                            Trial Court Cause No.
                                                          28D01-1806-CC-196



Baker, Judge.




Court of Appeals of Indiana | Opinion 19A-CC-2665 | March 25, 2020                            Page 1 of 8
[1]   KMC, LLC (KMC), owns a building that was damaged by flooding after water

      pipes leading to a sprinkler system froze and then burst. KMC filed a

      negligence complaint against Eastern Heights Utilities, Inc. (Eastern Heights),

      arguing that Eastern Heights was negligent for failing to shut off the water

      supply to the building when requested by KMC. The trial court entered

      summary judgment in favor of Eastern Heights. Finding as a matter of law that

      Eastern Heights did not have a duty to shut off the water supply to the fire

      suppression system because it was prohibited by law from doing so, we affirm.


                                                      Facts
[2]   KMC is a real estate holding company that owns a building (the Building)

      located on North Main Street in Bloomfield. Eastern Heights is a private,

      nonprofit utility company providing water services to Bloomfield and the

      surrounding areas; it provides water services to the Building.


[3]   In 2006, KMC learned that it was required by statute to put a fire suppression

      sprinkler system into the Building. After the system was installed, Eastern

      Heights provided the water supply to the fire suppression system. The main

      water valve, which provides general water service to the Building, is in the

      Building’s basement. There are separate water valves, located outside the

      Building, that are connected to the fire suppression system and dedicated to that

      purpose.


[4]   In 2017, KMC decided to winterize the Building because it was vacant. Among

      other things, it decided to disconnect the Building’s heating system. Therefore,

      Court of Appeals of Indiana | Opinion 19A-CC-2665 | March 25, 2020       Page 2 of 8
      on November 2, 2017, KMC requested that Eastern Heights shut off the water

      supply to the Building to avoid frozen pipes during the winter. Eastern Heights

      visited the property the same day and turned off the main water valve in the

      basement. KMC did not specifically request that Eastern Heights disconnect

      the water supply to the fire suppression system; therefore, Eastern Heights did

      not shut off the separate valves located outside.


[5]   Subsequently, cold weather conditions caused pipes connected to the Building’s

      fire suppression systems to freeze. On January 9, 2018, upon thawing, the pipes

      burst, causing extensive flood damage. KMC hired Five Star Complete

      Restoration, Inc. (Five Star), to repair the flood damage. After completing its

      work, Five Star billed KMC over $300,000 for the extensive repairs needed.

      KMC failed to remit payment to Five Star.


[6]   On June 25, 2018, Five Star filed a lawsuit against KMC for the money it

      alleged was owed by KMC for the flood damage repairs. On September 7,

      2018, KMC filed a third-party complaint against Eastern Heights and KMC’s

      property insurer. In relevant part, the third-party complaint alleges that Eastern

      Heights was negligent for failing to turn off the fire suppression system’s water

      supply and that its negligence proximately caused the flood damage.


[7]   On March 8, 2019, KMC filed a motion for partial summary judgment against

      Eastern Heights, asking that the trial court find as a matter of law that Eastern

      Heights was negligent for failing to shut off the water supply to the Building’s

      fire suppression system. On May 6, 2019, Eastern Heights filed a cross-motion


      Court of Appeals of Indiana | Opinion 19A-CC-2665 | March 25, 2020        Page 3 of 8
      for summary judgment against KMC, asking that the trial court find as a matter

      of law that Eastern Heights was not negligent because (1) Eastern Heights had

      no duty regarding the fire suppression system; (2) Eastern Heights’s actions did

      not proximately cause the damage; and (3) Eastern Heights is entitled to

      common law governmental immunity from liability for its fire protection

      services. Following briefing and a hearing, the trial court summarily entered

      summary judgment in favor of Eastern Heights on June 28, 2019. KMC now

      appeals.


                                    Discussion and Decision
[8]   KMC argues that the trial court erred by entering summary judgment in favor

      of Eastern Heights, contending that we should enter summary judgment in its

      favor or, in the alternative, that there are issues of material fact that must be

      considered by a factfinder.


[9]   Our standard of review on summary judgment is well settled:


              The party moving for summary judgment has the burden of
              making a prima facie showing that there is no genuine issue of
              material fact and that the moving party is entitled to judgment as
              a matter of law. Reed v. Reid, 980 N.E.2d 277, 285 (Ind. 2012).
              Once these two requirements are met by the moving party, the
              burden then shifts to the non-moving party to show the existence
              of a genuine issue by setting forth specifically designated
              facts. Id. Any doubt as to any facts or inferences to be drawn
              therefrom must be resolved in favor of the non-moving
              party. Id. Summary judgment should be granted only if the
              evidence sanctioned by Indiana Trial Rule 56(C) shows there is
              no genuine issue of material fact and that the moving party

      Court of Appeals of Indiana | Opinion 19A-CC-2665 | March 25, 2020           Page 4 of 8
                deserves judgment as a matter of law. Freidline v. Shelby Ins.
                Co., 774 N.E.2d 37, 39 (Ind. 2002).


       Goodwin v. Yeakle’s Sports Bar & Grill, Inc., 62 N.E.3d 384, 386 (Ind. 2016).


[10]   To prevail on a theory of negligence, KMC must show that (1) Eastern Heights

       owed it a duty; (2) Eastern Heights breached that duty; and (3) KMC’s damages

       were proximately caused by that breach. E.g., Winchell v. Guy, 857 N.E.2d

       1024, 1026 (Ind. Ct. App. 2006). Negligence cases tend to be fact sensitive and,

       as such, summary judgment is rarely appropriate. Id. at 1026-27. Nonetheless,

       summary judgment is appropriate when the undisputed material evidence

       negates one element of a negligence claim. Id. at 1027.


[11]   We find the first element—duty—to be dispositive in this case. A duty of care

       is created in one of three ways—by statute, at common law, or by assuming the

       duty. Holtz v. J.J.B. Hillard W.L. Lyons, Inc., 185 F.3d 732, 740 (7th Cir. 1999)

       (applying Indiana law). Generally, whether a duty exists is a question of law.

       Buckingham Mgmt. LLC v. Tri-Esco, Inc., 137 N.E.3d 285, 289 (Ind. Ct. App.

       2019).


[12]   We agree with KMC that “[w]ater utilities owe a duty of care to their

       customers.” Appellant’s Br. p. 11 (citing Pa. R. Co. v. Lincoln Tr. Co., 91 Ind.

       App. 28, 167 N.E. 721, 724 (1929)). But the same case cited by KMC for that

       proposition emphasizes that the duty of the utility is to “furnish[] a supply

       adequate in quantity and wholesome in quality” to the public and that “there is

       no duty on the part of a public utility . . . to inspect the devices, apparatus, or

       Court of Appeals of Indiana | Opinion 19A-CC-2665 | March 25, 2020           Page 5 of 8
       fixtures of a responsible patron on the patron’s property, located at a point

       beyond the meter, which is the point of delivery of the utility.” Pa. R. Co., 167

       N.E. at 724. Therefore, Eastern Heights has a duty to supply enough water of

       good quality to the public. See also Terre Haute Paper Co. v. Terre Haute

       Waterworks Co., 62 Ind. App. 263, 110 N.E. 85, 88 (1915) (holding that water

       companies have a duty to furnish a water supply “equal to all emergencies,”

       including fire protection) (internal quotation marks omitted).


[13]   KMC tries to broaden Eastern Heights’s duty, arguing that it was obligated to

       shut off all water, including the water supplying the fire suppression system, to

       the Building.1 We cannot agree. Initially, we note that there is no evidence in

       the record that KMC explicitly asked that the sprinkler system water be shut off,

       nor did KMC ask the Eastern Heights employee to shut off the valves outside of

       the Building (which supply the water to the fire suppression system) as well as

       the valve in the Basement (which provides the general water supply to the

       Building). Eastern Heights is not required to read the mind of its customer.


[14]   Furthermore, we note that there are strict statutory requirements governing

       when, and under what circumstances, a fire suppression system may be shut

       off.2 Specifically, KMC is required to notify the Division of Fire and Building




       1
         While KMC insists that “Eastern Heights had a legal duty to shut off water service to the building as KMC
       requested,” appellant’s br. p. 16, it offers no legal citation to authority supporting that proposition.
       2
        These specific requirements lend extra weight to KMC’s obligation to make an explicit request of Eastern
       Heights that the water supply to the fire suppression system be shut off.

       Court of Appeals of Indiana | Opinion 19A-CC-2665 | March 25, 2020                               Page 6 of 8
       Safety, the fire department, and the alarm receiving facility “before . . . shutting

       down a system or its supply.” 675 I.A.C. 28-1-12 (adopting by reference the

       National Fire Protection Association (NFPA) Standard for the Inspection,

       Testing, and Maintenance of Water-Based Fire Protection Systems, which

       contains the quoted language). Moreover, “[n]o person shall remove or modify

       any fire protection system installed or maintained in accordance with the rules

       of the commission without notifying the servicing fire department prior to

       receiving approval from the building official” of the Indiana Fire Protection and

       Building Commission. 675 I.A.C. 13-2.6-10(a) (emphasis added).

       Additionally, the Indiana Fire Code states that it “shall be unlawful for any

       person to . . . disturb any . . . fire suppression system . . . except for the purpose

       of extinguishing fire, training purposes, or recharging or making necessary

       repairs.” 675 I.A.C. 22-2.5-10 (adopting by reference the NFPA Standard

       described above, which contains the quoted language).


[15]   In other words, Eastern Heights was prohibited from shutting off the water

       supply to the Building’s fire suppression system without authorization from the

       above listed authorities. We certainly cannot conclude that it had a duty to take

       an action that was proscribed by law.


[16]   Therefore, while Eastern Heights had a duty to supply enough water of good

       quality to the public, it did not have a duty to shut off the water supply to the

       Building’s fire suppression system without authorization from the appropriate

       authorities. It likewise did not have a duty to shut off the water supply to the

       fire suppression system when KMC did not even make that explicit request.

       Court of Appeals of Indiana | Opinion 19A-CC-2665 | March 25, 2020            Page 7 of 8
       Because we find as a matter of law that Eastern Heights did not have a duty to

       shut off the water supply to the fire suppression system, we necessarily also find

       that the trial court did not err by entering summary judgment in favor of

       Eastern Heights.


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


       Bradford, C.J., and Pyle, J., concur.




       Court of Appeals of Indiana | Opinion 19A-CC-2665 | March 25, 2020        Page 8 of 8
