Court of Appeals of Indiana | Opinion 49A02-1410-PL-763 | April 8, 2015 Page 1 of 15

ATTORNEYS FOR APPELLANT

George M. Plews

Colin E. Conner

Plews Shadley Racher & Braun, LLP

Indianapolis, Indiana

ATTORNEY FOR APPELLEE

Ginny L. Peterson

Kightlinger & Gray, LLP

Indianapolis, Indiana

I N T H E

COURT OF APPEALS OF INDIANA

5200 Keystone Limited Realty, 

LLC,

Appellant-Plaintiff,

v.

Netherlands Insurance Comp.,

Consolidated Insurance Comp.,

and Indiana Insurance Comp.,

Appellees-Defendants.

April 8, 2015

Court of Appeals Cause No.

49A02-1410-PL-763

Appeal from the Marion Superior 

Court

Cause No. 49D03-1309-PL-34315

The Honorable Patrick L. McCarty, 

Judge

Barnes, Judge.

Case Summary

[1] 5200 Keystone Limited Realty, LLC (“KLR”) appeals the trial court’s grant of 

summary judgment in favor of Netherlands Insurance Company
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(“Netherlands”), Consolidated Insurance Company (“Consolidated”), and 

Indiana Insurance Company (“Indiana”) (collectively “the Insurers”). We 

affirm.

Issue

[2] KLR raises several issues on appeal. We need only address one issue: whether 

the common law “known loss” doctrine precludes KLR’s action against the 

Insurers to compel them to provide a defense for KLR in an action brought by 

the Indiana Department of Environmental Management (“IDEM”) to remove 

pollution from land owned by KLR.

Facts

[3] This suit concerns property located on Keystone Avenue in Indianapolis. In 

2002, Apex Mortgage Company (“Apex”) acquired the property for $240,000 in 

a foreclosure action against the last property owner, Eric Spicklemire. 

Spicklemire and his father had operated a film development business at the site, 

Filmcraft Laboratories, Inc. (“Filmcraft”), from 1974 to 2001. From 1956 to 

1973, a former property owner had operated a dry cleaning facility at the site.

[4] After the foreclosure, Apex hired a company, KERAMIDA Environmental 

(“KERAMIDA”), to evaluate the property for environmental contamination. 

In 2003, KERAMIDA prepared a report finding extensive soil and water 

contamination by a variety of chemicals, including chlorinated solvents and 

petroleum hydrocarbons. The report concluded:
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Based upon the results of the investigation, the site soils were found to 

be contaminated in several areas. Shallow soils were found to be 

contaminated in several areas. Shallow soils were found to be 

contaminated above regulatory action levels. . . .

Groundwater samples confirmed contamination above the IDEM 

action levels from previous historical operations in a shallow perched 

zone. . . .

. . . . Corrective Action on the Site is necessary due to the exceedances 

of contaminant concentrations being observed above the IDEM 

regulatory action levels. KERAMIDA recommends additional site 

investigation in order to determine the extent and to begin the 

development of a remediation work plan for the site.

App. p. 675.

[5] On October 9, 2003, Apex filed suit against Filmcraft to recover costs 

associated with environmental cleanup under Indiana’s Environmental Legal 

Action (“ELA”) statute, Indiana Code Section 13-30-9-2, and Indiana’s illegal 

dumping statute, Indiana Code Section 13-30-3-13(d). The complaint alleged 

that Filmcraft was responsible for the environmental contamination on the site. 

It further stated,

Apex incurred costs for testing and will incur significant costs for 

future testing to fully delineate the extent of the impact to the soil and 

groundwater at the Site, for subsequent remediation of the soil and 

groundwater at the Site, and to remove the discarded solid waste from 

the Site.

Id. at 1314-15. Apex sought a judgment requiring Filmcraft to reimburse Apex 

for all sums Apex incurred in remediating the site. Apex later amended its 

complaint to add as defendants a number of other prior owners of the property, 

including Spicklemire personally, and businesses who had used the property.
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[6] In December 2004, Demetrios Emmanoelides founded KLR and, acting on its 

behalf, signed an agreement to purchase the land from Apex for $20,000. The 

purchase agreement contained a number of provisions related to the 

environmental contamination at the site. The agreement stated in part:

Seller has provided to Buyer, and Buyer acknowledges the receipt, 

review and understanding of, the following documents:

A. a Phase II Environmental Site Investigation for the Real Estate, 

prepared by Keramida Environmental, Inc., and dated January 31, 

2003;

B. a Chemical Decommissioning report, prepared by Patriot 

Engineering and Environmental, Inc., dated July 23, 2004;

C. a Complaint between Apex Mortgage Corporation, plaintiff, and 

Filmcraft Laboratories, Inc., defendant, involving the Real Estate, filed 

on October 9, 2003 (the “Lawsuit”) . . . .

Id. at 650. The agreement further provided that KLR as buyer agreed to 

indemnify and defend Apex as seller “from and against any and all liability or 

claim arising from or related to the Real Estate, including without limitation 

any and all facts or conditions or concerns described in or arising from the 

foregoing documents or arising under or relating to any environmental law.” 

Id. at 651. The agreement also assigned to KLR as buyer all of Apex’s “right, 

title and interest in and to any claims or causes of action Seller has against third 

parties with respect to all such matters, including without limitation the 

Lawsuit referenced above.” Id.

[7] Simultaneously with purchase of the land, KLR obtained a commercial general 

liability policy through Netherlands. This policy was in effect from 2004 

through 2005. Thereafter, KLR obtained coverage through Consolidated from 
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the end of 2005 through 2008. KLR then obtained coverage through Indiana 

from the end of 2008 through June 2010.

[8] KLR has continued to prosecute the lawsuit against Filmcraft and others that it 

acquired from Apex, and it is still not final. On June 18, 2012, this court 

handed down an opinion in Filmcraft Laboratories, Inc. v. 5200 Keystone Limited 

Realty, LLC, No. 49A02-1107-CT-676 (Ind. Ct. App. June 18, 2012). In that

opinion, we addressed whether Filmcraft had guaranteed Apex (now KLR) 

payment of environmental and property tax liabilities incurred by Spicklemire 

personally. We held that Filmcraft had guaranteed payment of tax liabilities 

but not environmental liabilities.1

[9] Following handdown of this opinion, an IDEM employee read about the case 

on a blog. Previously, no one from Apex or KLR had ever notified IDEM 

about contamination on the site. On June 21, 2012, the IDEM employee wrote 

an email to counsel for KLR asking if the site was being addressed through any 

IDEM remediation program because she could find no record of it in IDEM’s 

database. 

[10] On August 28, 2012, counsel for KLR responded by informing IDEM of the 

KERAMIDA study and the Filmcraft lawsuit. On that same date, counsel for 

 

1

Subsequently, KLR continued prosecution of the lawsuit with respect to environmental claims. Eventually, 

KLR either obtained default judgments against or settled with all defendants, except for Spicklemire 

personally. After a trial on KLR’s ELA claims against Spicklemire, judgment was entered in Spicklemire’s 

favor. That judgment currently is on appeal before this court. 
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KLR sent a “Notice of Claim” to the Insurers. The notice stated that IDEM 

“has recently become aware” of contamination at the site and might require 

remediation in the future, and it requested that the Insurers “provide full 

indemnification and defense for this claim in accordance with the policy terms 

and Indiana law.” Id. at 459. The Insurers did not respond to this notice, nor 

to one sent on November 5, 2012.

[11] On June 19, 2013, IDEM wrote a letter to KLR, Apex, Filmcraft, Spicklemire, 

and others, identifying KLR and the others as potentially responsible persons 

for remediation of the site. The letter required KLR and the others to take 

various steps to remediate the site unless it was later determined it was not a 

responsible person. After receipt of this letter, KLR filed a third “Notice of 

Claim” with the Insurers, informing them that IDEM was requiring KLR “to 

further investigate and remediate the contamination or face civil penalties.” Id.

at 471. The notice again sought “full defense and indemnification for this claim 

. . . .” Id.

[12] On July 31, 2013, the Insurers responded to this third notice with a letter 

declining either to defend KLR or indemnify it in relation to IDEM’s 

remediation action. The Insurers gave a number of reasons why they believed 

they owed no obligations to KLR under their policies. Most prominently, the 

Insurers contended there was no coverage because KLR “was aware of the 

contamination at the Site prior to its purchase of the property, which was prior 

to the inception of the . . . policies.” Id. at 314. 
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[13] On September 10, 2013, KLR filed a complaint against the Insurers, seeking to 

compel them to provide a defense in the IDEM action and to indemnify KLR 

for any costs it incurred in cleaning up the property in response to IDEM’s 

action. KLR subsequently filed a motion for partial summary judgment against 

the Insurers with respect to their duty to defend KLR. The Insurers responded 

with a cross-motion for summary judgment in its entirety. In support of its

summary judgment motion, KLR filed an affidavit from Emmanoelides stating 

in part, “KLR did not believe—and had no reason to believe—that it might ever 

be held responsible for contamination caused by former owners/operators.” Id.

at 545. The trial court granted the Insurers’ motion for summary judgment. 

KLR now appeals.

Analysis

[14] We review a granting of summary judgment de novo, reviewing the matter in 

the same way as the trial court. Hughley v. State, 15 N.E.3d 1000, 1003 (Ind.

2014). We will affirm only if, after drawing all reasonable inferences in favor of 

the non-moving party, the designated evidence shows that there is no genuine 

issue as to any material fact and the moving party is entitled to judgment as a 

matter of law. Id. A material fact is one the resolution of which would affect 

the outcome of a case, while an issue is “genuine” if a trier of fact must resolve 

the parties’ differing accounts of the truth, or if the undisputed material facts 

support conflicting inferences. Id.
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[15] A summary judgment movant bears the initial burden of demonstrating the 

absence of a genuine issue of fact on a determinative issue. Id. If the movant 

does so, the non-movant then bears the burden of coming forward with 

contrary evidence showing an issue for the trier of fact. Id. We must carefully 

review a grant of summary judgment to ensure that a party was not improperly 

denied its day in court. Id.

[16] The trial court here entered a detailed written order explaining its decision. It is 

well-settled that special findings are not required in summary judgment 

proceedings and, even if they are entered, they are not binding on this court on 

appeal. New Albany Historic Preserv. Comm’n v. Bradford Realty, Inc., 965 N.E.2d 

79, 84 (Ind. Ct. App. 2012). We will affirm a grant of summary judgment upon 

any theory supported by the designated evidence, regardless of a trial court’s 

stated theory. Henderson v. Reid Hosp. & Healthcare Servs., 17 N.E.3d 311, 315 

(Ind. Ct. App. 2014).

[17] On appeal, KLR focuses primarily upon an insurance company’s duty to 

defend its insured, noting that the duty to defend is broader than the duty to 

indemnify. See Liberty Mut. Ins. Co. v. OSI Indus., Inc., 831 N.E.2d 192, 200 (Ind. 

Ct. App. 2005), trans. denied. An insurer’s duty to defend is examined based 

upon the allegations contained within the complaint against the insured, as well 

as upon those facts known or ascertainable by the insurer after reasonable 

investigation. Newnam Mfg., Inc. v. Transcon. Ins. Co., 871 N.E.2d 396, 401 (Ind. 

Ct. App. 2007), trans. denied. “If the pleadings reveal that a claim is clearly 

excluded under the policy, then no defense is required.” Id. 
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[18] Additionally, an insurer may go beyond the face of the complaint and refuse to 

defend based upon the factual underpinnings of the claims contained within the 

complaint. Jim Barna Log Sys. Midwest, Inc. v. Gen. Cas. Ins. Co. of Wisconsin, 791 

N.E.2d 816, 823 (Ind. Ct. App. 2003), trans. denied. If an insurer is aware of 

facts outside the pleadings that clearly disclose an absence of coverage, it can 

refuse to defend.2 Id. It is the nature of the claim, not its merits, that 

determines an insurer’s duty to defend. Id. 

[19] Indiana has adopted the common law “known loss” doctrine as applicable to all 

third-party liability insurance policies. See General Housewares Corp. v. National 

Sur. Corp., 741 N.E.2d 408, 413 (Ind. Ct. App. 2000). This doctrine, which is 

not dependent upon particular policy language, derives “from the fundamental 

concept in insurance law that the loss be fortuitous.” Id. at 413, 415. “Simply 

put, the known loss doctrine states that one may not obtain insurance for a loss 

that has already taken place.” Id. at 413. A loss that exists at the time 

insurance is purchased, or one which is “‘probable or imminent,’” is not a 

proper subject of insurance. Id. (quoting 7 Couch on Insurance, § 102:8 at 20 

(3d. ed. 1997)). We further explained in General Housewares:

 

2 Ordinarily, if an insurer has made an independent determination that it has no duty to defend, it must 

protect its interest by either filing a declaratory judgment action for a judicial determination of its obligations 

or hiring independent counsel to defend its insured under a reservation of rights. Freidline v. Shelby Ins. Co., 

774 N.E.2d 37, 42 n.6 (Ind. 2002). Here, KLR’s complaint obviated the need for the Insurers to file their 

own declaratory judgment action.
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The term “probability” indicates the presence of contingency and 

fortuity, the lack of which is the very essence of the known loss 

doctrine. Even if there is a probability of loss, there is some insurable 

risk, and the known loss doctrine should not apply. “Certainty,” on 

the other hand, refers not to the likelihood of an occurrence, but rather 

to the inevitability of an occurrence. Therefore, a “substantially 

certain” loss is one that is not only likely to occur, but is virtually 

inevitable. The inquiry should be more of temporality than 

probability-when an event will occur, not whether an event will occur. 

We also note that, because the effect of the known loss doctrine is to 

avoid coverage, the burden of proving that the loss was known is on 

the party seeking to avoid coverage. Therefore, we hold that if an 

insured has actual knowledge that a loss has occurred, is occurring, or 

is substantially certain to occur on or before the effective date of the 

policy, the known loss doctrine will bar coverage. This is not to say, 

however, that parties may not explicitly agree to cover existing losses. 

Indeed, the known loss doctrine is inapplicable “if the insurer also 

knew of the circumstances on which it bases the defense.” 

Id. at 414 (citations and footnotes omitted).

[20] In Crawfordsville Square, LLC v. Monroe Guar. Ins. Co., 906 N.E.2d 934 (Ind. Ct. 

App. 2009), trans. denied, we applied the known loss doctrine in a scenario very 

similar to the present one. In that case, after executing a purchase agreement

but before closing, the property buyer had the land tested and it revealed 

extensive environmental contamination. The buyer then wrote a letter to an 

agent of the seller that stated in part, “Clean up [sic] of both petroleum and 

cleaning agent contamination must happen. The law requires it. . . . After two 

successive quarters of below action level reports, the Indiana Department of 

Environmental Management will issue ‘no further action’ letter is received from 

the state. [sic]” Crawfordsville Square, 906 N.E.2d at 936. Because of the 

environmental contamination, the buyer asked the seller to deposit money in an 
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escrow account to be used for remediation, and the seller agreed to do so. 

Before closing, the buyer obtained insurance without informing the insurer of 

the contamination. Over six years after closing, IDEM learned of the 

contamination and demanded action by the buyer to remediate the property. 

The buyer sought to require the insurer to provide a defense to IDEM’s action, 

and it refused to do so. The insurer then initiated a declaratory judgment action 

to establish its lack of duty to defend, and the trial court granted the insurer’s 

motion for summary judgment, despite submission of an affidavit from the 

buyer suggesting he only knew of potential contamination on the land, not that 

it definitely existed.

[21] On appeal, we affirmed summary judgment for the insurer on the basis of the 

known loss doctrine. We noted that the letter the buyer sent to the seller 

demonstrated clear knowledge of contamination at the site “and, by its 

references to legally-mandated clean-up and IDEM requirements for successful 

compliance with applicable regulations, that the contamination was at 

actionable levels.” Id. at 938. We went on to hold:

Moreover, we conclude the lack of evidence in the record of a formal 

IDEM action pending at the time of the sale does not help [the buyer]

here. A reasonable inference to be drawn from references in the letter 

to the requirements of the law and to IDEM regulations establishes 

that, at the very least, [the buyer] was aware that the Parcel’s 

contamination was at actionable levels and would require remediation, 

even if IDEM had not yet told [the buyer] that it was required to do so.

Under such circumstances, the lack of formal action (even assuming 

such a lack existed) was essentially irrelevant in this case.

Id. at 939. 
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[22] Despite KLR’s claim to the contrary, we find Crawfordsville Square to be virtually 

indistinguishable from this case in all pertinent respects. Before KLR purchased 

the property, KERAMIDA’s report revealed the existence of soil contamination 

“above regulatory action levels” and groundwater contamination “above the 

IDEM action levels . . . .” App. p. 675. The report also stated, “Corrective 

Action on the Site is necessary due to the exceedances of contaminant 

concentrations being observed above the IDEM regulatory action levels.” Id. 

Additionally, as a result of these revelations, Apex had filed suit against 

Filmcraft to recover costs for further testing and remediation; Apex further 

alleged that it had “incurred” and “will incur significant costs” as a result of the 

contamination. Id. at 1314-15. Upon purchasing the property, KLR was 

provided the KERAMIDA report and was substituted as plaintiff in Apex’s 

lawsuit against Filmcraft. There is no evidence any of the Insurers ever were 

aware of any environmental contamination on the property when they agreed 

to issue policies to KLR.3 

[23] Thus, just as in Crawfordsville Square, KLR as a purchaser of environmentally 

contaminated property was made aware of the existence of the contamination 

at levels above IDEM regulatory levels and that remediation definitely would 

 

3

In the original insurance application, KLR was asked, “Do/have past, present or discontinued operations 

involve(d) storing, treating, discharging, applying, disposing, or transporting of hazardous material? (e.g. 

landfills, wastes, fuel tanks, etc.).” App. p. 637. KLR responded no. In their summary judgment motion, 

the Insurers argued in part that this answer constituted a material misrepresentation in the insurance 

application that voided coverage. The trial court did not address this argument, and the Insurers have not 

raised it on appeal.
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be required. KLR, through adoption of Apex’s lawsuit, had taken steps to 

protect its financially against the costs of testing and remediation, just as the 

buyer in Crawfordsville Square had done by demanding an escrow payment by 

the seller to cover such costs. And, as we held in Crawfordsville Square, the lack 

of an existing IDEM enforcement action at the time KLR bought the property 

and obtained insurance is “essentially irrelevant . . . .” Crawfordsville Square, 906 

N.E.2d at 939. This evidence conclusively demonstrates as a matter of law the 

existence of a known loss by KLR prior to the time it obtained insurance from 

the Insurers. 

[24] As mentioned by KLR, it designated an affidavit from Emmanoelides stating in 

part, “KLR did not believe—and had no reason to believe—that it might ever 

be held responsible for contamination caused by former owners/operators.” Id.

at 545. This is an entirely self-serving affidavit; if accepted at face value, it 

would tend to negate application of the known loss doctrine. We recognize 

that, in Hughley, our supreme court recently addressed the use of self-serving 

affidavits in response to a summary judgment motion. In that case, the State 

sought civil forfeiture of the defendant’s money and vehicle after he was 

convicted of dealing in cocaine. In response, the defendant filed a perfunctory 

and self-serving affidavit stating that the money seized by police during his 

arrest was not related to any criminal activities, nor was his car used in any 

criminal activities. Although our supreme court found this uncorroborated 

affidavit “thin” and the defendant’s credibility likely to be dubious, it held the 
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affidavit was sufficient to defeat the State’s summary judgment motion. 

Hughley, 15 N.E.3d at 1005. 

[25] We observe that Hughley did not purport to overrule a line of cases beginning 

with Gaboury v. Ireland Rd. Grace Brethren, Inc., 446 N.E.2d 1310 (Ind. 1983). In 

Gaboury, a plaintiff submitted an affidavit in response to the defendant’s 

summary judgment motion that directly contradicted statements the plaintiff 

had made in a previous deposition. Our supreme court held that the affidavit 

did not create a genuine issue of material fact and concluded that a party cannot 

create such an issue simply by submitting an affidavit contradicting his or her 

own prior testimony. Gaboury, 446 N.E.2d at 1314. This proposition has since 

been cited in at least forty-four Indiana cases. See, e.g., Brown v. Buchmeier, 994 

N.E.2d 291, 296 (Ind. Ct. App. 2013). 

[26] In fact, in Crawfordsville Square we applied Gaboury outside the context of a 

conflict between and affidavit and a prior deposition. We held that the property 

buyer could not create a material issue of fact by designating an affidavit 

disclaiming definite knowledge of environmental contamination on the land 

that conflicted with the earlier letter he had written informing the seller of the 

contamination and the need for remediation. Crawfordsville Square, 906 N.E.2d 

at 939. Here, there is even more reason to disregard Emmanoelides’s affidavit 

claiming that KLR lacked knowledge that it could be responsible for 

remediation of the property. Not only did KLR have conclusive proof via the 

KERAMIDA report that the land was contaminated above IDEM regulatory 

levels, it accepted assignment of Apex’s lawsuit against Filmcraft asserting that 
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Apex—and then KLR—had incurred and would continue to incur “significant 

costs” related to the contamination. App. at pp. 1314-15. KLR has actively 

prosecuted that lawsuit for over a decade and continues to do so. It would be 

illogical to allow KLR to be substituted as plaintiff in such a lawsuit and to 

continue to pursue it, seeking recovery from third parties of past and future 

costs related to the environmental contamination, while simultaneously 

pronouncing that it had no idea it could be responsible for such costs. KLR 

cannot have it both ways. Emmanoelides’s affidavit is insufficient to create a 

genuine issue of material fact regarding application of the known loss doctrine. 

As such, there is no genuine issue of material fact regarding the doctrine, and 

the Insurers owe no coverage to KLR.4 

Conclusion

[27] Any claim by KLR against the Insurers related to the IDEM remediation action 

is conclusively barred by the known loss doctrine. The trial court properly 

granted summary judgment in favor of the Insurers, and they are not required 

either to defend or indemnify KLR. We affirm.

[28] Affirmed.

May, J., and Pyle, J., concur.

 

4 Given our resolution of this issue, we need not address alternative arguments regarding whether summary 

judgment should have been granted. Also, our affirmance of the grant of summary judgment negates KLR’s 

claim that it is entitled to attorney fees for having to bring suit against the Insurers in response to their denial 

of coverage.