Court Opinion

ID: 9720998
Source: CourtListenerOpinion
Date Created: 2023-08-26 08:46:13.960601+00
Date Added: 2024-06-11T18:24:22.738638
License: Public Domain

ON PETITION FOR REHEARING
United Mechanical Contractors [UMC] has filed its petition for rehearing in St. Paul Fire & Marine Ins. Co. v. Pearson Construction Co. (1989), Ind.App., 547 N.E.2d 853.
*860In St. Paul Fire we held that St. Paul Fire and Marine Insurance Co. and Reliance Insurance Co. as subrogees of J.C. Sipe were third party beneficiaries of a contract between Pearson Construction Co. (general contractor) and UMC (subcontractor). UMC claims our decision contravenes ruling precedent found in Reynolds v. Louisville, New Albany and Chicago Railway Co. (1895), 143 Ind. 579, 40 N.E. 410, which held that in order to be considered a third party beneficiary, a party must be expressly declared to be such a beneficiary in the contract. We grant rehearing in order to clarify this issue.
In reaching our decision we relied on two appellate decisions — Mogensen v. Martz (1982), Ind.App., 441 N.E.2d 34, and Jackman Cigar Mfg. Co. v. John Berger & Son Co. (1944), 114 Ind.App. 437, 52 N.E.2d 363. Both of these cases applied an “intent to benefit” test to determine third party beneficiary status, rather than the apparently stricter, express declaration test applied in Reynolds, supra. However, Mogensen, supra cited Freigy v. Gargaro Co. (1945), 223 Ind. 342, 60 N.E.2d 288, in which our supreme court applied the “intent to benefit” test. In addition, in Nash Engineering Co. v. Marcy Realty Corp. (1944), 222 Ind. 396, 54 N.E.2d 263 (cited in Freigy, supra) our supreme court explained the following language in Irwin’s Bank v. Fletcher (1925), 195 Ind. 669, 672, 145 N.E. 869: “[the contract] must clearly evidence a distinct intention to benefit such third person,” (language similar to that used in Reynolds, supra, which UMC claims applied a stricter test). Our supreme court stated: “We do not understand that the intention of the parties as to third party beneficiaries is to be treated by any stricter or different rule than their intention as to other terms of the contract.” Nash Engineering Co., supra, at 416-17, 54 N.E.2d at 271. Therefore, Reynolds, supra has been explained and modified by implication. As we stated in our decision, the proper test is the “intent to benefit” test.
CONOVER, J., and GARRARD, J., concurring.
1. Pretrial Procedure <§=>33
Party seeking to avoid discovery has burden of establishing essential elements of privilege being invoked.