UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF INDIANA

SOUTH BEND DIVISION

PROPERTY-OWNERS INSURANCE )

COMPANY, )

)

Plaintiff, )

)

vs. ) Cause Number: 3:13CV399-PPS

)

JOHN PARKE, CENTRAL )

RENT-A-CRANE, INC. and D-T )

CONSTRUCTION SERVICES, INC., )

)

Defendants. )

OPINION AND ORDER

 John Parke was seriously injured when a crane from Central Rent-A-Crane

knocked over the roof trusses on which he was working. At the time of the accident, Mr.

Parke was employed by D-T Construction. This is a declaratory judgment action

wherein D-T’s insurer, Property-Owners Insurance Company, seeks a declaration that it

owes no duty to defend or provide coverage to Mr. Parke, D-T or Central Crane. D-T has

not responded to the lawsuit and Parke is only a nominal defendant at this point because

he has since settled his personal injury case in state court and thus has no real interest in

the outcome of this case. Currently pending before me are Property-Owners’ and

Central Crane’s cross-motions for summary judgment, as well as Central Crane’s motion

to strike. (DE’s 60, 62, and 66.) 

Factual Background

D-T Construction contracted with Central Crane to supply a crane and crane

operator to a construction site to assist in setting trusses in the construction of a church.
(DE 63-3 at ¶7.) The crane operator supplied by Central Crane was a man named Charles

Patterson. (Id. at ¶10.) John Parke, one of D-T’s employees, was atop one of the trusses

when it was being set by the crane. (DE 63-4 at 3.) Somehow the truss collapsed with

Mr. Parke on top of it, and he fell 20 feet to the ground as a result. (Id.) He was seriously

injured in the fall. D-T had rented the crane from Central Crane for less than two days,

and Mr. Patterson estimated he was on the job for no longer than a day and threequarters. (DE 65-6 at 7, internal p.159:17-18.) 

After the accident, Parke sued Central Crane and other parties (who are not

involved in this lawsuit) in state court in Wabash County, where the accident occurred.

D-T was not a defendant in that action likely due to the fact that Parke’s exclusive

remedy against D-T, as his employer, would have been through the worker’s

compensation system. I am told by Property-Owners that D-T was a third-party

defendant in the state court litigation having been sued by one of the defendants in that

case, Martin Drafting and Design. That third party case was settled. (DE 86 at 4). But

importantly, D-T was not sued by Central Crane in the state court litigation, or at any

other time as a far as I can tell.

As mentioned at the outset, Property-Owners insured D-T Construction. At some

point after the state case was filed, Central Crane sought insurance coverage under D-T's

policy issued by Property-Owners, requesting that Property-Owner’s defend Central

Crane in the Parke lawsuit. This request for indemnification was based upon an alleged

indemnification agreement between Central Crane and D-T which is contained in the

crane rental agreement (DE 63-6 at 2, ¶4.) Under the terms of the rental agreement,

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Central Crane leased the crane and crane operator to D-T, and D-T agreed to indemnify

Central Crane from all claims for injury to persons arising out of the operation of the

crane, but not for Central Crane’s sole negligence. (Id.)

It is clear from the record that Central Crane, through its lawyer, sought

indemnification from D-T (DE 63-8 at 2-3), and then later sought coverage from

Property-Owners. (DE 1 at ¶16). But as mentioned above, it is also clear from the record

that Central Crane never sued D-T or otherwise brought a claim against D-T. PropertyOwners tells me that “D-T informed Property-Owners of Central Crane’s claim for

defense and indemnification.” (DE 86 at 2.) But noticeably absent from this

representation in Property-Owners’ brief is a citation to any evidence supporting that

proposition. (Id.) I’m puzzled why no lawsuit or claim has ever been brought by Central

Crane against D-T. In any event, at this point, any liability of D-T to Central Crane is

speculative at best which raises the question whether there exists an actual controversy

between D-T and its insurer, Property-Owners.

In response to Central Crane’s request for coverage, Property-Owners agreed to

defend Central Crane, but did so under a reservation of rights. (DE 60-12 at 5.) For

reasons that are a little unclear, Central Crane then declined to use the attorney provided

by Property-Owners, and it ultimately settled with Parke without informing

Property-Owners. That settlement occurred in August 2015, but the terms of the

settlement are unknown to the court. (DE 57 at ¶4.) 

During the state court litigation, but prior to the settlement, Property-Owners

filed this action seeking a declaratory judgment to determine “the respective rights and

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responsibilities of the parties under the policy issued by Property-Owners to D-T

Construction.” (DE 1 at 22.) Property-Owners specifically requested in its complaint a

declaration of no duty to defend or indemnify Central Crane but curiously absent from

the complaint is any similar request relating to D-T. (Id.) Property-Owners and Central

Crane have filed cross-motions for summary judgment regarding Central Crane’s and DT’s rights (or lack thereof) under the Policy. Property-Owners requests that I find that it

owes no coverage to D-T for its potential indemnity obligations to Central Crane and

that it owes no duty to defend Central Crane, while Central Crane argues that D-T is

entitled to coverage for the losses suffered by Central Crane. 

After the motions were fully briefed, I requested additional briefing on two issues

that the parties had not addressed: (1) whether Property-Owners has standing at this

time to seek a declaration of its obligations to D-T, and (2) Central Crane’s ability to

recover directly from Property-Owners Insurance in light of precedent seemingly

forbidding that course of action. The parties have submitted that briefing and now these

motions are ready for my ruling.

Discussion

Summary judgment is proper “if the movant shows that there is no genuine

dispute as to any material fact and the movant is entitled to judgment as a matter of

law.” Fed.R.Civ.P. 56(a). A genuine dispute about a material fact exists only “if the

evidence is such that a reasonable jury could return a verdict for the non-moving party.” 

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In making this determination, I

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must construe all facts and draw all reasonable inferences from the record in the light

most favorable to the nonmoving party. Id. at 255. 

In essence, Property-Owners asks me to do two things: (1) declare that it has no

obligation to D-T to provide coverage for any obligation D-T may have to indemnify

Central Crane, and (2) declare that it has no obligation to provide coverage or defense

directly to Central Crane. I’ll address each of these in turn.

The first request is problematic because Property-Owners does not have an actual

controversy with its insured (D-T) at this time. Under the Declaratory Judgment Act,

Property-Owners may seek a declaratory judgment only where it has a “case of actual

controversy.” 28 U.S.C. § 2201. An “actual controversy” exists where the facts alleged

“show that there is a substantial controversy, between parties having adverse legal

interests, of sufficient immediacy and reality to warrant the issuance of a declaratory

judgment.” Bell v. Taylor, __ F.3d ___, 2016 WL 3568139 at *9 (7th Cir. Jul. 1, 2016), quoting

MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007). 

Here, Property-Owners has no case or actual controversy with D-T because

Central Crane has not sued D-T for indemnification or for anything else relating to the

underlying claim, and it does not appear that D-T requested any coverage or filed any

claim with Property-Owners. In fact, D-T hasn't even appeared in this case. Under these

circumstances, Property-Owner’s action isn’t ripe with respect to D-T, and I must

dismiss it. Atlanta Int'l Insurance Company v. Atchison, Topeka & Santa Fe R.R. Co., 938

F.2d 81, 84 (7th Cir. 1991) (finding declaratory judgment action by insurer not ripe under

the Declaratory Judgment Act where insured had not yet filed a claim with insurer, even

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though insured did send insurance company a notice that a judgment might be filed

against the insured and a judgment was ultimately filed against the insured). That’s

because “[t]he mere possibility that proceedings might be commenced against an

insured regarding an act of the insured’s as to which the insurer might contest coverage,

is not sufficient to create a controversy within the meaning of either the Declaratory

Judgment Act or Article III of the Constitution.” Solo Cup Co. v. Federal Ins. Co., 619 F.2d

1178, 1189 (7th Cir. 1980). 

More specifically, in the Seventh Circuit, an insurance company ordinarily cannot

obtain a declaratory judgment regarding its duty to indemnify before its insured is

found liable. Lear Corp. v. Johnson Electric Holdings, Ltd., 353 F.3d 580, 583 (7th Cir. 2003)

(“We regularly say that decisions about indemnity should be postponed until the

underlying liability has been established.”) When a party seeks a declaratory judgment

on an unripe duty-to-indemnify claim, it is proper for the Court “to dismiss that aspect

of the case[.]” Medical Assur. Co. v. Hellman, 610 F.3d 371, 375 (7th Cir. 2010); Cincinnati

Ins. Co. v. Maintenance Dynamics, Inc., 2013 WL 350080 at *4 (N.D.Ind. 2013) (citing 7th

Cir. law). In other words, in order for Property-Owners to seek a declaratory judgment

regarding its potential obligation to provide coverage to its insured (D-T), Central Crane

would first need to seek indemnification from D-T, obtain a judgment saying D-T owes a

duty to indemnify Central Crane, and then D-T would need to seek coverage from

Property-Owners. Because these things have not occurred, it does not appear that there

is an actual case or controversy between Property-Owners and D-T. At the very least, it

is Property Owners’ obligation to establish standing and they have presented nothing to

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me to suggest that there is a live controversy between it and D-T. Property-Owner’s

claims against D-T must therefore be dismissed because there is no actual controversy

between the parties. 

There is, however, an actual case between Property-Owners and Central Crane. 

And here, Property-Owners has the better argument. Property-Owners claims it owes

Central Crane no coverage under D-T’s policy, and thus no duty to defend Central

Crane, because Central Crane is not an additional insured under D-T's policy. The

policy requires that to be an additional insured as the lessor of leased equipment, the

parties must execute a written agreement naming Central Crane as an additional insured

prior to a covered loss: “ Section II - Who Is An Insured is amended to include as an

additional insured any person or organization with whom you have agreed (1) in a

written contract . . . to name as an additional insured[.]” (DE 60-5 at 129.)

 Central Crane does not dispute that it is not actually named as an additional

insured under the policy, and a review of the policy confirms this. (DE 60-5 at 128-130,

133, and 189.) Instead, Central Crane claims its crane operator, Patterson, was a “leased

worker” to D-T under the policy and therefore an employee of D-T. In other words,

Central Crane appears to be arguing that the bad acts committed by Patterson were

actually the acts of D-T itself. According to Central Crane, if Patterson is an employee of

D-T, then he’d be covered under the Property-Owners policy and Central Crane

wouldn’t be on the hook for his actions. But there are a few problems with this

argument.

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First, Central Crane is wrong about Patterson being D-T’s employee. The policy

requires that a leased employee be someone leased by a “labor leasing firm.” (DE 60-5 at

153.) Although the Policy does not define what constitutes a “labor leasing firm” — and

no Indiana state courts have interpreted the term — the Southern District of Indiana and

a few circuit courts from other jurisdictions have, and they all have come to the same

(and rather obvious) conclusion: a “labor leasing firm” is one which hires and places

individuals “with client companies for varying lengths of time” and retains “the rights

and obligations of an employer,” while leaving the client company “responsible for

training, supervision and assigning work tasks.” Telamon Corp. v. Charter Oak Fire Ins.

Co., 2015 WL 10738615 at *9 (S.D.Ind. Dec. 10, 2015), quoting Scottsdale Ins. Co. v. Torres,

561 F.3d 74, 75 (1st Cir. 2009). The company at issue in Telamon was exactly the type of

company one might think of as a labor leasing firm – it was a staffing company that

provided employees to various businesses on a temporary basis. Id. 

Central Crane, as the moniker obviously implies, is a crane company; it’s not an

employment agency or staffing firm. (DE 60-8 at 4, internal p.8:11-14.) It’s not in the

business of leasing employees out to other companies like a labor staffing firm does. But

let’s suppose Patterson was leased to D-T. At most, Patterson was a temporary

employee and therefore still not an employee under the policy. Under the policy, a

“temporary worker” is someone furnished to D-T “to meet seasonal or short-term

workload conditions” and is excluded from coverage as an employee under the policy. 

(DE 60-5 at 152, 155.) Recall that D-T rented the crane for two days and Patterson

worked on the job site for only one and three-quarters of a day. (DE 65-6 at 7, internal

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p.159:17-18.) In short, Patterson wasn’t D-T’s employee. At most, he was filling a

temporary need – a couple of days of crane work to set some trusses. 

There is yet another problem with Central Crane’s argument. Let’s suppose that

Patterson was D-T’s employee, there would still be a problem. Since Central Crane is not

an additional insured, it cannot go after Property-Owners for coverage directly because

the indemnification agreement between Central Crane and D-T creates no rights for

Central Crane under the Policy between D-T and Property-Owners. Sears, Roebuck & Co.

v. Royal Surplus Lines Ins., 61 Fed.Appx. 280, 284 (7th Cir. 2003) (relying on Alliance

Syndicate, Inc. v. Parsec, Inc., 318 Ill.App.3d 590 (1st Dist. 2000)). And as much as Central

Crane argues that D-T’s rights are the key to its claim, Central Crane can’t assert D-T’s

rights without D-T. Id. So Central Crane would still be on the hook for the money it

paid in its settlement with Parke. 

At most, the Rental Agreement which secured the lease of the crane is an “insured

contract” whereby Property-Owners has agreed to provide coverage to D-T – its insured

– for agreements it executes with other companies. (DE 60-5 at 137, 152 (stating it will

cover D-T for D-T’s “liability for damages: (1) Assumed in a contract or agreement that is

an ‘insured contract’” and defining an insured contract as a contract or agreement where

D-T “assume(s) the tort liability of another party to pay for ‘bodily injury’ or ‘property

damage’ to a third person or organization.”) But, again, to get there Central Crane

would have to bring an action or claim against D-T for indemnity under the terms of

their contract. At that point, D-T could seek coverage from Property-Owners and argue

that the indemnity agreement is an insured contract entitling it to coverage from

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Property-Owners in order to reimburse Central Crane for the money it paid to Parke. 

There are several steps missing here. Thus, Property-Owners’ motion will be granted

regarding its claims against Central Crane, and Central Crane’s motion will be denied

because it cannot obtain coverage under the Policy directly from Property-Owners. 

I will also dismiss Property-Owner’s claims against Parke. Property-Owners

stated in its complaint that “Defendants are made parties to this action to assert their

respective rights and interests, if any, as to liability coverage for Central Rent-A-Crane

under various insurance policies issued by Plaintiff to D-T Construction with regard to

liability coverage for damages alleged in a civil lawsuit filed by Defendant John Parke

against Defendants Rent-A-Crane, Builders of Wabash, Inc. and Stark Truss Company,

Inc.” (DE 1 at ¶9.) Presumably, Parke was named only because at the time, he was an

interested party and would have been interested in the outcome of the case insofar as his

state court claims had not yet been settled. But now, not only has he already settled with

and been paid by Central Crane (DE 57 at ¶4), but I have decided that Property-Owners

owes no duty to Central Crane directly. Since any right or claim in this matter Parke

could possibly have with Property-Owners would come from Central Crane’s liability,

both the settlement and my ruling have mooted out any claim Park could have had. 

Indeed, although Parke did appear and answer in this matter, he has not otherwise

participated, nor has asked that I declare that he has any rights vis-a-vis PropertyOwners. 

Finally, Central Crane’s Motion to Strike is denied as moot. Because I have

decided the case based on the issues presented in the supplemental briefing, I had no

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need to evaluate or rely on the Bolinger affidavit, and it has not factored into my

decision. 

Conclusion

Thus, for the reasons stated above, plaintiff Property-Owners Insurance

Company’s motion for summary judgment (DE 60) is DENIED IN PART and

GRANTED IN PART. Defendant Central Rent-A-Crane’s motion for summary

judgment (DE 62) is DENIED and its motion to strike (DE 66) is DENIED AS MOOT. 

Property-Owners is entitled to a DECLARATORY JUDGMENT AGAINST

DEFENDANT CENTRAL RENT-A-CRANE, INC. stating that at this time PropertyOwners owes no duty to defend or indemnify Central Rent-A-Crane, Inc. But I cannot

grant Property-Owners’ request for a declaratory judgment with respect to defendant DT Constructions Services, Inc. because Property-Owners’ claims against D-T must be

DISMISSED FOR LACK OF STANDING to sue D-T. Defendant John Parke will be

DISMISSED as a party. 

Since there are no remaining claims pending in this matter, judgment may now be

entered in accordance with this opinion and this matter will be CLOSED. 

SO ORDERED.

ENTERED: September 14, 2016

 /s/ Philip P. Simon 

PHILIP P. SIMON, CHIEF JUDGE

UNITED STATES DISTRICT COURT

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