Court of Appeals of Indiana | Opinion 23A-PL-995 | March 4, 2024 Page 1 of 8

I N T H E

Court of Appeals of Indiana

Doug Williams and W.W. Contracting, Inc.,

Appellants-Petitioners

v.

Pekin Insurance, Inc.,

Appellee-Respondent

March 4, 2024

Court of Appeals Case No.

23A-PL-995

Appeal from the Tippecanoe Superior Court

The Honorable Steven P. Meyer, Judge

Trial Court Cause No.

79D02-2107-PL-77

Opinion by Judge Weissmann

Chief Judge Altice and Judge Kenworthy concur.
Court of Appeals of Indiana | Opinion 23A-PL-995 | March 4, 2024 Page 2 of 8

Weissmann, Judge.

[1] W.W. Contracting, Inc. and its owner, Doug Williams (collectively, W.W.), 

entrusted tools to a W.W. employee but demanded their return at the end of his 

employment. When the now-former employee allegedly failed to return all the 

tools, W.W. reported them as stolen and sought insurance coverage for the 

alleged theft. W.W.’s insurance company denied the claim primarily because 

W.W.’s insurance policy excluded coverage for property loss “caused by or 

resulting from dishonest acts by anyone entrusted with the property.” 

[2] W.W. sued its insurance company for breach of contract, but the trial court 

granted summary judgment in the insurer’s favor. On appeal, W.W. claims 

there remains a genuine issue of material fact as to whether a dishonest act 

occurred because the insurer was unable to determine if W.W.’s former 

employee actually stole its tools. Assuming a dishonest act occurred, W.W. also 

claims its former employee was no longer a person entrusted with the tools after 

W.W. demanded their return. We resolve these issues as follows:

1. The insurance company was not required to prove the occurrence of a 

dishonest act when moving for summary judgment based on the subject 

exclusion because W.W. alleged a dishonest act as its basis for coverage.

2. The exclusion requires only a causal connection between the act of 

entrustment and the resulting loss; thus W.W.’s demand that its former 

employee return its tools did not render the exclusion inapplicable.

Affirmed.
Court of Appeals of Indiana | Opinion 23A-PL-995 | March 4, 2024 Page 3 of 8

Facts

[3] W.W. employed Dante Wells from December 2017 to January 2019. During 

this time, Wells allowed W.W. to store its company tools on a piece of real 

estate Wells owned in Tippecanoe County. In exchange, W.W. allowed Wells 

to use the tools for “side work” in his own name. App. Vol. II, p. 88. 

[4] In March 2019, after Wells stopped working for W.W., the company demanded 

that Wells return the tools stored on his property. When Wells refused, W.W. 

reported the tools as “stolen” to the Tippecanoe County Sheriff’s Department 

and sued Wells for replevin. Id. at 120. Wells eventually returned what he 

claimed were all of W.W.’s tools. But upon inventorying the returned items, 

W.W. determined that “a lot of tools” were missing. Id. at 92. W.W. therefore 

submitted an insurance claim to its insurance company, alleging Wells stole the 

missing tools.

[5] At all relevant times, W.W. Contracting, Inc. was the named insured on a 

commercial general liability insurance policy (the Policy) issued by Pekin 

Insurance (the Insurer). Among other things, the Policy provided coverage for 

“accidental loss” to W.W.’s tools. Id. at 236. The Policy, however, also 

contained the following exclusions:

Dishonest Act/Entrusted Person

“We will not pay for a ‘loss’ caused by or resulting from

dishonest acts by anyone entrusted with the property.”
Court of Appeals of Indiana | Opinion 23A-PL-995 | March 4, 2024 Page 4 of 8

Unexplained Disappearance

“We will not pay for a ‘loss’ caused by or resulting from

unexplained disappearance.”

Id. at 235 (cleaned up).

[6] The Insurer investigated W.W.’s insurance claim, in part, by interviewing

Williams and Wells about the loss. Wells denied having W.W.’s missing tools, 

but Williams insisted that Wells never returned them. Williams therefore 

assumed the tools were still in Wells’s possession, but he did not “know that for 

a fact.” App. Vol. III, p. 233. If Wells no longer had the tools, Williams had 

“no idea what happened to them.” Id.

[7] Through its investigation, the Insurer was not able to determine if Wells 

actually stole W.W.’s tools. But either way, the Insurer concluded W.W.’s loss 

was excluded from the Policy’s insurance coverage: either the dishonest 

act/entrusted person exclusion applied or the unexplained disappearance 

exclusion applied. The Insurer therefore denied W.W.’s insurance claim on 

these two alternative bases.

[8] After receiving the denial, W.W. sued the Insurer for breach of contract 

claiming Wells’s alleged theft of the tools was an accidental loss for which the 

Policy provided coverage. The Insurer moved for summary judgment on 

W.W.’s claim based on the Policy’s dishonest act/entrusted person exclusion 
Court of Appeals of Indiana | Opinion 23A-PL-995 | March 4, 2024 Page 5 of 8

and, alternatively, the unexplained disappearance exclusion. The trial court 

granted the Insurer’s motion, and W.W. appeals.1

Discussion and Decision

[9] “When reviewing a summary judgment ruling, we use the same standard as the 

trial court.” State Auto. Mut. Ins. Co. v. Flexdar, Inc., 964 N.E.2d 845, 848 (Ind. 

2012). “The court must accept as true those facts alleged by the nonmoving 

party and resolve all doubts against the moving party.” Auto-Owners Ins. Co. v. 

Harvey, 842 N.E.2d 1279, 1289 (Ind. 2006) (internal quotation omitted). 

Summary judgment is appropriate only if “the designated evidentiary matter 

shows that there is no genuine issue as to any material fact and that the moving 

party is entitled to a judgment as a matter of law.” Ind. Trial Rule 56(C).

[10] W.W. argues that summary judgment based on the dishonest act/entrusted 

person exclusion was inappropriate because there is a genuine issue of material 

fact as to whether a dishonest act occurred. Alternatively, W.W. contends the 

dishonest act was not committed by an entrusted person as a matter of law. We 

conclude W.W.’s allegation that Wells stole its tools established the occurrence 

of a dishonest act for purposes of the Insurer’s motion for summary judgment. 

We also conclude that Wells was a person entrusted with W.W.’s tools as 

matter of law. Because the record reveals no genuine issue of material fact and 

1 W.W.’s complaint asserted two claims: breach of contract and tortious bad faith. The Insurer moved for 

summary judgment on both, and the trial court’s order granting the Insurer’s motion specifically entered 

judgment in the Insurer’s favor on “all claims.” App. II, Vol. p. 14. On appeal, W.W. indicates that its 

tortious bad faith claim remains pending in the trial court. The record, however, shows otherwise. 
Court of Appeals of Indiana | Opinion 23A-PL-995 | March 4, 2024 Page 6 of 8

that the Insurer was entitled to judgment as a matter of law, summary judgment 

was appropriate.2

I. W.W.’s Theft Allegation Established the Dishonest Act

[11] As W.W. correctly points out, insurance coverage exclusions are generally 

considered to be affirmative defenses upon which the insurer bears the burden 

of proof. PSI Energy, Inc. v. Home Ins. Co., 801 N.E.2d 705, 725 (Ind. Ct. App. 

2004). The insured, however, retains the burden of establishing that their loss 

falls within the policy’s coverage. Scottsdale Ins. Co. v. Harsco Corp., 199 N.E.3d 

1210, 1219 (Ind. Ct. App. 2022). In this regard, a coverage exclusion effectively 

admits the insured’s coverage allegations but asserts some additional matter 

barring relief. See Willis v. Westerfield, 839 N.E.2d 1179, 1185 (Ind. 2006). 

[12] Here, W.W. claimed its loss was covered by the Policy because it was caused 

by Wells’s alleged theft. See Appellants’ Reply Br., p. 5 (emphasizing that W.W. 

“never wavered” from its position that Wells stole its tools). The Insurer, in 

turn, claimed the Policy’s dishonest act/entrusted person exclusion barred 

coverage for W.W.’s loss. In raising this affirmative defense, the Insurer 

essentially accepted as true W.W.’s allegation of Wells’s undisputedly dishonest 

act. Thus, to prove the dishonest act/entrusted person exclusion barred 

2 W.W. also argues that summary judgment based on the unexplained disappearance exclusion was 

inappropriate because there is a genuine issue of material fact as to whether the tools’ disappearance was 

unexplained. As we find the trial court appropriately entered summary judgment based on the dishonest 

act/entrusted person exclusion, we need not consider this alternative argument.
Court of Appeals of Indiana | Opinion 23A-PL-995 | March 4, 2024 Page 7 of 8

coverage of W.W.’s loss, the Insurer was only required to establish that Wells 

was a person entrusted with W.W.’s tools.3

II. Wells Was a Person Entrusted with W.W.’s Tools

[13] To “entrust” means “to commit to another with confidence.” Entrust, MerriamWebster Online Dictionary, https://www.merriam-webster.com/dictionary/

entrustment (last visited Feb. 20, 2024). W.W. does not dispute that it entrusted 

Wells with its tools by storing them on Wells’s property during his employment 

with the company. Instead, W.W. argues that its entrustment ended when 

W.W. demanded Wells return the tools after his employment with the 

company ended. Thus, W.W. seems to argue that the dishonest act/entrusted 

person exclusion applies only if the dishonest act occurs while the insured still 

has confidence in the entrusted person.

[14] We reject such a narrow construction. In the absence of any ambiguity, the 

language of the Policy’s dishonest act/entrusted person exclusion “must be 

given its ordinary meaning.” Colonial Penn Ins. Co. v. Guzorek, 690 N.E.2d 664, 

667 (Ind. 1997). Nothing in the language of the exclusion requires that the 

dishonest act be contemporaneous with the insured’s confidence in the 

entrusted person. The exclusion applies broadly to loss “caused by or resulting 

from” an entrusted person’s dishonest act. App. Vol. II, p. 235. As other 

3 This case presents the seemingly unique circumstance in which the insured’s cause of action and the 

insurer’s affirmative defense effectively have an element in common. Had W.W. claimed its loss was caused 

by something other than a dishonest act, the Insurer would have had the burden of proving both the 

dishonest act and entrusted person elements of its affirmative defense.
Court of Appeals of Indiana | Opinion 23A-PL-995 | March 4, 2024 Page 8 of 8

jurisdictions have done, we construe this language to require nothing more than 

a “causal connection” between the act of entrustment and the resulting loss.

2900 Rock Quarry, LLC v. Westfield Ins. Co., No. 5:16-CV-100-BO, 2017 WL

2616961, at *6 (E.D.N.C. June 15, 2017) (collecting cases).

[15] The intent of the dishonest act/entrusted person exclusion is to bar coverage for 

the insured’s “misplaced confidence” in another. Van Sumner, Inc. v. Penn. Nat.

Mut. Cas. Ins. Co., 329 S.E.2d 701, 704 (N.C. Ct. App. 1985). By entrusting its 

tools to Wells, W.W. placed its confidence in Wells not to steal the tools. This 

misplaced confidence resulted in W.W.’s loss. The fact that W.W. no longer 

had confidence in Wells at the time of his alleged theft is irrelevant under the 

terms of the Policy.

[16] We affirm the trial court’s entry of summary judgment in favor of the Insurer 

on W.W.’s breach of contract claim.

Altice, C.J., and Kenworthy, J., concur.

ATTORNEY FOR APPELLANT

Steven Kyle Dietrich

Reiling Teder & Schrier, LLC

Lafayette, Indiana

ATTORNEY FOR APPELLEE

Scott S. Mandarich

McClure McClure & Davis

Indianapolis, Indiana