A TTORNEY S FOR A PPELLANTS A TTORNEY FOR A PPELLEE A TTORNEYS FOR A MIC I C URIAE

Caroline B. Briggs The Bar Plan Mutual Ins. Co. Defense Trial Counsel of Indiana John K. Morris Philip E. Kalamaros Donald B. Kite, Sr. Lafayette , Indiana Hunt Suedhoff Kalamaros LLP Dean

- Webster, Wright & Kite LLP St. Joseph, Michigan Indianapolis, Indiana

James D. Johnson Rudolph Fine Porter & Johnson LLP Evansville, Indiana

Insurance Institute of Indiana Karl L. Mulvaney Barry C. Cope Bingham McHale, LLP Indianapolis, Indiana

________________________________________ ______________________________________ 

# In the 

# Indiana Supreme Court

_________________________________ No. 4 9 S0 4

- 1011

- CV

- 635

M ICHAEL A SHBY AND R ANDY O’B RIEN , Appellants ( Plaintiff s b e low),

v.

T HE B AR P LAN M UTUAL I NSURANCE C OMPANY AND C. B RUCE D AVIDSON , J R ., Appellees ( Defendant

s b e low )

.

_________________________________ Appeal from the Marion Superior Court No. 49D05

- 0504

- CT

- 014786, 49D05

- 0504

- PL

- 014864, 49D12

- 0504

- CT

- 014786, 49D12

- 0504

-

PL

- 014864, 49D13

- 0601

- CT

- 0 03817, 49D14

- 0504

- CT

- 014786

The Honorable Robyn L. Moberly, Judge

________________________________ On Transfer from the Indiana Court of Appeals, No. 49A04

- 0910

- CV

- 569

_________________________________

June 21 , 2011
Dickson, Justice.

This appeal challenges the grant of summary judgment in favor of a n insurance company seeking a declaration of no professional liability coverage for claims brought against its insured2

attorney who abandoned his law practice , was disbarred, and did not report the claims to the

company. We revers e t he summary judgment

.

Briefly summarized, t he pertinent designated mater ial s indicate the fo l lowing sequence of

events. The plaintiffs, Michael Ashby and Randy O'Brien each retained attorney C

. Bruce D avidson to represent them in damage actions arising o ut of alleged attacks upon Ashby ( on Se ptember 11, 2000) and O'Brien ( on January 14, 2001) by fellow inmates during incarceration at Indiana Department of Correction facilities

. O'Brien retained Davidson to represent him on A ugust 1, 2001 , and o n January 7, 2003, Davidson filed a complaint on behalf of O'Brien . It was dismissed , however, on August 5, 2003, due to Davidson's repeated failure to conform to court
orders. Davidson b e gan representing Ashby about May 9, 2002, but never filed any action on his behalf before the statute of limitation expired in September 2002. Davidson applied for profe ssional liability i n surance coverage from The Bar Plan Mutual Insurance Company ("Bar Plan")

on March 18, 2003, but did not disclose any potential claims from Ash by or O'Brien. Davidson's application indicated that he had no "knowledge of any incident, circumstance, act, error or omission which may give rise to a [profe s sional liability] claim." Appellant's App'x at 565. Bar
Plan issued its professional liabilit y "claims made" policy designating the policy period as "E ffective : 0 3/20/2003" and "Expiration: 03/20/2004." Id. at 568. By special "Retro

- Date Excl usion" endorsement s , the policy further declared that the policy "does not apply" to claims "ari sing out of any act, error or omission" of Davidson "occurring prior to 03/20/ 2 001." Id. at 569

– 7 0. Bar Plan explains the endorsement s as "providing coverage for claims made from March 20, 2001 to March 20, 2003. " Appellee's Br. at 4.

Beginning February 26, 20 04, in a series of attorney discipline actions, Davidson was first suspended and eventually disbarred from the practice of law due to his abandonment of law practice starting November 2003 and his accompanying failure to complete work for clients , his
fail ure to keep them informed or take reasonable steps to protect their interest s , and his theft or conversion of legal fees paid to him. Matter of Davidson , 814 N.E.2d 266 (Ind. 2004). Davi dson filed for bankruptcy on November 10, 2004. Neither Ashby nor O 'Brien ever notified D avidson of their professional malpractice claims against him , and both contend that Davidson's
whereabouts was unknown , resulting in their presenting their c laims directly to Bar Plan.3

O'Brien, with assistance of counsel, by letter t o Bar Plan dated February 10, 2004 , asserted his claim against Davidson . Bar Plan acknowledge d the letter, notifying O'Brien's attorney that "The Bar Plan is the professional liability carrier for C. Bruce Davidson," that Bar Plan would
"be investi gating this matter," requesting "detailed review of your client's claim against Mr. D avidson," and advising the "Claim No." assigned to the case. Appe l lant's App'x at 815. On March 15, 2004, Ashby wrote directly to Bar Plan and asserted his claim against Davids on, and o n March 23, 2004, Bar Plan acknowledged Ashby's claim against Davi d son, providing the "Claim No.," and requesting "information regar d ing the nature of this claim." Id. at 818.

Separate actions for damages were filed against Davidson on behalf o f Ashby and
O'Brien on April 1 9 , 2005. 1 The actions were eventually consolidated and Bar Plan intervene d
and asserted a cross

- claim seeking declaratory relief establishing that it is not obligated to i ndemnify Davidson for the claims of Ashby and O'Brien

. The grounds presented by Bar Plan in support of its subsequent motion for summary judgment
, to the extent they are also presented on appeal, include : (a) its unambiguous policy language establishes that, as a condition precedent to coverage, Davidson was required to provide written notification to Bar Plan within twenty days of any claim and that he failed to notify Bar Plan of any claims; and (b) Davidson failed to

com p ly with the insurance policy's requirement that he assist and cooperate with Bar Plan

. 2

As h by and O'Brien disputed Bar Plan's assertions and emphasized that they each had provided timely, actual , written notice of a claim against Davidson directly to Bar Plan ; that Bar Plan should be estopped from insisting upon strict, technical complianc e with the policy prov i sions;
and that Bar Plan failed to act in good faith in its interactions with the plaintiffs. After conside rable add i tional litigation, the trial court on June 7, 2009, grante d summary judgment in favor of Bar Plan against Ashby and O'Brien, with the court declaring the ruling to be "a final a nd an a ppealable order as to The Bar Plan." Id. at 17. The judgment did not include any findings of fact
or conclusions of law. T he Court of Appeals reversed , concluding that the pu rposes of the claim

1 The trial court proceedings also included a professional malpractice action brought against D avidson by Sheila (Dotson) Hurrigan, but she is not a party in this appeal.

2 Supporting its motion for summary judgment in the trial court, Bar P lan also argued that the issue of coverage is moot because O'Brien's lawsuit against Davidson lacked substantive merit and As hby's action against Davidson was barred by the two

- year statute of limitation. Because these conte n tions are not reflected in the trial court judgment nor asserted in Bar Plan's appellee's brief on appeal, we deem them abandoned as grounds for summary jud g ment.4

and notice provisions were fulfilled by the plaintiffs providing actual no tice to Bar Plan

. Ashby
v. Davidson , 930 N.E.2d 53 (Ind. Ct. App. 2010)

. We granted transfer

.

Upon appellate review of summary judgment, we use the same standard as the trial court:

" summary judgment is appropriate only where the evidence shows there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. All facts and re asonable inferences drawn from those facts are constru ed in favor of the non

- moving party. "
Sheehan Constr. Co. v. Cont'l Cas. Co. , 938 N.E.2d 685, 688 (Ind. 2010) (internal citations omi tted). Only after the moving party satisfies its burden to show the absence of any genuine i s sue of
material fact and ent itlement to judgment as a matter of law d oes the burden shift to the non

moving party to demonstrate the existence of a genuine determinative factual issue. Dreaded,
Inc. v. St. Paul Guardian Ins. Co. , 904 N.E.2d 1267, 1270 (Ind. 2009).

Challenging the summary judgment on appeal, Ashby and O'Brien primarily a s sert , as they did at trial, that the doctrines of waiver and estoppel preclude Bar Plan from asserting D avidson's failure to satisfy the Bar Plan policy requirements

.

1. Coverage

The basic premis e of Bar Plan's quest for summary judgment is that its policy provides no

co verage for the claims of Ashby and O'Brien because it received no notice in accordance with the nature and terms of its professional liability coverage po l icy protecting Davidson.

Among the Bar Plan policy contract provisions
, the following terms are central to this dispute

. The policy's basic insuring agreement , presented in Section II

- COVERAGE, pr ovides:

A. PROFESSIONAL LIABILI TY AND CLAIMS MADE A ND REPORTED CLAUSE:

T he Company will pay on behalf of an Insured all sums, subject to the Limit(s) of Liability, Exclusions and terms and conditions contained in this Policy; which an Insured shall become lega l ly obligated to pay as Damages as a result5 of CLAIMS (INCLUDING CL A IMS FOR PERSONAL INJ URY) FIRST MADE AGAINST AN INSU RED DURING THE POLIC Y PERIOD AND REPORTED TO THE COMP ANY DURING THE POLIC Y PERIOD by re ason of any act or omission by an Insured acting in a professional capacity pr oviding Legal Services. * * * Note: It i s a condition pr ecedent to coverage under this P olicy that all Claims be reported in compliance with Section VII., CLAIMS, Paragraph A.
Appellant's App'x at 550 . Section V II

- CLAIMS, delineating the reporting requirement and e mphasizing that it is a con dition precedent, states:

As a condition precedent to the coverage provided by this Policy, an Insured shall, within twenty (20) days of the date any Claim is first made against that Insured, give written notice of that Claim to the Company.

In the event suit is brought against an Insured, the Insured shall immediately fo rward to the Company every demand, notice, su mmons or other process received directly or by the Insured's representatives.

Id. at 559. Within Section I

- DEFINITIONS , the policy states that "Insured" is d e fined as,
1. Any Named Insured; * * * 4. The heirs, executors, administrators, benefici aries, assigns, appointed legal representatives, gu ardians and conservators of an I nsured who is dead , disabled or incapacitated, and the trustee or estate of an I nsured in bankruptcy, but solely with respect to such li a bility of the Insured as is other wise covered by this Policy; * * *

Id. at 548. The policy defines a "Claim" as, " Receipt by an Insured of a demand for money or services (including the service of suit or the institution of arbitration proceedings) against the I nsured from one other than that Insured. " Id

.

Davidson was not obligated by any statute or rule to purchase insurance coverage to pr otect his clients. Nor was he compelled to obtain professional liability insurance co v erage for his own protection. But he elected to purchase the Bar Plan policy to obtain coverage to protect himself in the event of any professional liability claims against him. Nothing in the policy la nguag e impose s upon Bar Plan any obligation to indemnify Davidson's clients against their losses. The policy was solely for Davidson's protection against professional liability claims, and its6

terms made it clear that cov er age could be triggered only by its in sured, Davidson, notif y ing Bar
Plan and seeking it to defend and, if necessary, indemnify Davidson from loss arising from As hby's or O'Brien's claims.

Neither Ashby nor O'Brien ever informed Davidson of any professional malpractice claim against him, and Davidson did not provide notification to Bar Plan of any such claim. D avidson purchased the policy to provide himself with protection against professional liability claims. It remained his choice as to whether to activate the available coverage protecti on. As

exp ress ed in Paint Shuttle, Inc. v. Cont' l Cas

. Co. , "[t]he notice provision of a 'claims made' pol icy is not simply the part of the insured 's duty to cooperate, it defines the limits of the insu r er's obligation. If the insured does not give notic e within the contractually required time period, there is simply no coverage under the policy." 733 N.E.2d 513, 522 ( Ind. Ct. App. 2000) ( in te rnal citations omitted ). We hold that Bar Pl an has established that there are no genuine i s sues of
fact as to Da vidson's failure to comply with t h e policy's condition precedent requiring personal
wri t ten notice of a claim, but this is not dispositive because Ashby and O'Brien oppose summary judgment on ground s of waiver and estoppel notwithstanding the potential lac k of cove r age.

2. Estoppel

Ashby and O'Brien also assert waiver and estoppel to oppose summary judgment
, clai ming that the affirmative actions of Bar Plan preclude it from denying coverage based upon Davi dson's failure to p rovide notice or to cooperate

.

When Bar Plan received letters from Ashby and O'Brien 's lawyer advising of their legal malpra c tice claims against Davidson
, Bar Plan responded in writing, acknowledging their claims, showing claim numbers had been assigned, and requesting additional in formation and do cume ntation for the claims

. Acknowledging O'Brien's claim, Bar Plan on February 12, 2004, e x pressly confirmed that it was Davidson's professional liability carrier, advised that it would be invest iga t ing
, and requested a "detailed review o f your client's claim against Mr. Davidson." Appe llant's App'x at 815. In its March 23, 2004, acknowledgment of Ashby's notification of a claim,
Bar Plan advised Ashby that it does not provide coverage for the recovery of any fees and e x-7

penses Ashby paid to Davidson, but the letter does not exclude or even suggest the possible e xclusion of coverage for other damages. In its letter of April 1, 2004, the Bar Plan represent a tive wrote to Ashby declaring
, "I am more than willing to work with either you, or y our a t torney to resolve your claim against Mr. Davidson. I understand that your claim is for the loss of your right to bring suit against the Department of C orrections." Id. at 821. Bar Plan makes no claim
to have sent Ashby, O'Brien, or their counsel a ny " reservation of rights " letter explaining that there was a coverage question and cautioning that Bar Plan's inquires and actions should not be construed as an acceptance of coverage or admission of liability. As requested, As h by and
O'Brien co n tinued t o provide information to Bar Plan in an attempt to resolve their claims. In
October 2005
, Bar Plan asserted its claim of non

- coverage with the filing of its cross

- counter claim for declaratory jud g ment

. Id

. at 129.

The terms "estoppel" and "waiver" ord inarily have distinct and separate meanings, but "estoppel" is often used synonymously with "implied waiver." Tate v. Secura Ins. , 58 7 N.E.2d 665, 671 (Ind. 1992).

Technically, there is a distinction between "waiver" and "estoppel." A waiver is an inten tional relinquishment of a known right and is a voluntary act, while the elements of estoppel are the misleading of a party entitled to rely on the acts or statements in question and a consequent change of position to his detriment. But in the law of insu rance, the distinction between "estoppel" and "implied waiver" is not easy to preserve, and
, quite commonly, in in surance cases, the courts have found it unnecessary or inadvisable to make a distinction between them and have used the terms interchangeably.

Id. ( quoting Travelers Ins. Co. v. Eviston , 110 Ind. App. 143, 154, 37 N.E.2d 310, 314 (1941) )

. In describing the doctrine of estoppel, this Court has explained, "[a]lthough variously d e fined, it is a concept by which one's own acts or conduct prevents the claiming of a right to the detriment of another party who was entitled to and did rely on the conduct." Brown v. Branch , 758 N.E.2d 48, 51

– 52 (Ind. 2001). Further, "one who by deed or conduct has induced another to act in a pa rticular manner will not be permitted to adopt an inconsistent position, attitude, or course of co nduct that causes injury to such other." Id. at 52.

In the present case, Bar Plan sent written communications to Ashby and O'Brien impl y-8

ing the existence of coverage by providing conventional treatment of their claims b y assigning a claim number, seeking further inform a tion from the claimants, and inviting further negotiations to work "to resolve your claim." Appellant's App'x at 821. Conspicuously absent was any ca ution about po ssible no n

- coverage due to the absence of written notice f rom Davidson, the i nsured. From the designated mater ial s, we find genuine issue s of fact as to whether Ashby and O'Brien, and their counsel, were misle d to b e lieve that Bar Plan provided profession al liability coverage for Davidson with respect to their claims

.

As to detrimental reliance on Bar Plan's representations of coverage, the issue is whether Ashby or O'Brien sustained a resulting change of position to their detriment. We first note a re asonable argument may be made that t he notices of claim s against Davidson sent directly to Bar
Plan from O'Brien's attorney and from Ashby operated to satisfy the policy's general r e quirement
that claims must be " first made against an insured during the pol icy period and r e ported to the company during the policy period." Policy Section II, P aragraph A, Appellant's App'x at 550. Even if we assume compliance with this policy requirement, there is the additional exp licit co ndition precedent requiring that wit hin twenty days of the insured receiving a demand against him for money or se r vices, he must give written notice to Bar Plan. Policy Section VII, Paragraph A, Appel l ant's App'x at 559. In order to entitle Ashby or O'Brien to summary judgment in their f av or on the issue of detrimental reliance, the designated materials must establish that , if Bar Plan's
initial re s ponses had disclosed their coverage defenses, Ashby and O'Brien would have been able to locate Davidson and persuade him to provide written noti fication to Bar Plan within twenty days of Davi d son's first learning of Ashby 's and O'Brien 's professional liability claims against
him. But this fact is n either conclusively established nor disproved by the designated evidence.
It remains an issue for r e s olution at trial, thus precluding summary judgment in favor of any of the parties on the issue of detrimental r e liance.

The summary judgment materials show that genuine issues of material fact remain as to
whether Bar Plan should be e stopped from asser ting lack of notice and non

- cooperation as grounds for denying coverage for the claims of Ashby and O'Brien

. As the party seeking su mmary judgment, Bar Plan has thus failed to establish the absence of factual issues so as to entitle
it t o judgment as a ma tter of law.9 Conclusion

We hold as a matter of law that the claims

- made professional liability insurance policy purchased from Bar Plan by Davidson for his protection provided no coverage without Davi dson's compliance with the policy's condition precede nt requiring a personal written notice from him to the company within twenty days of his receiving a claim . As to the issue of estoppel
, however, we hold that genuine issues of f act remain regarding whether Bar Plan's misrepresent ation of valid coverage r esulted in Ashby or O'Brien sustaining actual detriment. The trial court's grant of summary judgment to Bar Plan against Ashby and O'Brien is r e versed, and this cause is
remanded for fu r ther proceedings.

Shepard, C.J., and Sullivan, Rucker, and David, J J., concur.