Opinion ID: 2085643
Heading Depth: 2
Heading Rank: 2

Heading: Business Activity Exclusion

Text: It is axiomatic that Jena may recover from Frankenmuth only to the extent that Frankenmuth had a contractual duty to indemnify White. Because the consent judgment in no way addressed the issue of Frankenmuth's contractual obligations under the homeowner's policy, Frankenmuth is obviously not estopped from raising the business activity defense in this collection action. Cf. Frankenmuth, 645 N.E.2d at 608 (holding Frankenmuth bound to the matters necessarily determined in the lawsuit). Under that theory, Frankenmuth contends that White's babysitting amounted to a business activity, which was excluded from coverage under the homeowner's insurance policy. Under White's homeowner's policy, Frankenmuth agreed to indemnify White for injuries occurring in her home unless the injuries result[ed] from activities in connection with an insured's business.  (R. at 68.) Even in those situations, however, Frankenmuth would cover some injuries under its Incidental Liability and Medical Payments Coverages. (R. at 66.) This coverage applied to injuries resulting from incidental activities normally performed by minors. (R. at 67.) White argues that her babysitting services are included within this category of incidental business activities. According to White's deposition testimony, her babysitting activities were informal but fairly extensive. In the beginning, White was just taking care of children belonging to some of her friends. Then, a neighbor began periodically leaving her children with White. White explained that the babysitting wasn't an everyday type thing, that she would take care of children for other women [j]ust whenever they needed or when the women wanted to go out somewhere and they needed a babysitter. (R. at 97.) Ultimately, however, the babysitting became at times a daily activity for White. She would even keep children overnight and on the weekends. In fact, Stevens, who had learned about White's services by word-of-mouth, had left Jena with White overnight when White's husband molested Jena on a Sunday morning. White stated that on any given day, she might keep as many as four or five children. The parents would pay her [w]hatever they could afford, (R. at 98), which sometimes was nothing. Even if a parent could not afford to pay her, however, White did not have the heart to turn away the parent's children. (R. at 99.) White admitted that Stevens had, in fact, paid White for keeping Jena. There is no real factual dispute as to the substance of White's babysitting activities. The dispute centers on the interpretation of the homeowner's policy. The question is whether White's activities constitute an excluded business enterprise. Although the trial court opined that White was operating a babysitting business for which no coverage under the policy was provided, (R. at 321), we believe the question is a close one. In American Family Mut. Ins. Co. v. Bentley, 170 Ind.App. 321, 352 N.E.2d 860 (1976), the court held that an insured is engaged in a business pursuit only when he pursues a continued or regular activity for the purpose of earning a livelihood. Id. at 865. A federal court in northern Indiana assumed without deciding that babysitting was a business activity under an insurance exclusion clause. Gulf Ins. Co. v. Tilley, 280 F.Supp. 60, 65 (N.D.Ind.1967). In that case the babysitter had provided services infrequently and not on a regular or large-scale basis, and then only with one or two children at a time at most. Id. at 62. On the one hand, White's activities in the present case were far more extensive and business-like than those of the babysitter in Gulf Ins. Co. On the other hand, it is not at all clear that White relied on the babysitting services as a means of earning a livelihood. Indeed, she stated in her deposition that the amount of money she earned was so insignificant that she did not report it on her federal income tax return (though wrongly so). Frankenmuth has introduced no evidence to contradict White's own statements as to the extent of her babysitting activities. We conclude that summary judgment for Jena is unsustainable as respects the business activity exclusion. While many of the facts are largely undisputed, others are in conflict or at least susceptible to different inferences. The standard for summary judgment requires that all inferences be drawn in favor of the non-moving party, namely Frankenmuth. Accordingly, we reverse the trial court's grant of summary judgment for Jena as to the business activity exclusion. The trial court should take evidence on this question and rule on the merits.