Court Opinion

ID: 9712685
Source: CourtListenerOpinion
Date Created: 2023-08-26 04:58:27.470774+00
Date Added: 2024-06-11T18:23:13.752298
License: Public Domain

HOFFMAN, Presiding Judge,
dissenting.
While I concur in the majority's analysis of issue one in the case at bar, I must strongly dissent from the position they take in addressing issue two. The decision of the majority would effectively nullify an operative provision of the insurance contract agreed to and signed by both parties.
Initially, it should be noted that the majority's statement of facts is misleading. In stating that the insurer continued to represent the insured until June 8, 1981, they leave the reader with the impression that the insurer knew of the accident and the lawsuit at the time the suit was filed. This is not the case. The insurer knew nothing of the accident central to this controversy until it was notified of the lawsuit on October 9, 1980, ten days after the suit was filed and almost seven months after the accident occurred. This hardly constitutes timely notice.
Further, the majority carefully words their statement of issues and then refers to the provisions in the policy in a manner which answers the question before it is addressed. The majority refers to the provisions of the policy at issue as a cooperation *1238clause. This ignores the realities of the situation and the precise language of the contract.
The policy provisions at issue fall under the heading of Conditions Precedent to recovery upon the insurance policy. The provision is further delineated as Duties of the insured when an accident or loss occurs. This provision is then divided into two specific categories of conduct. The first subdivision refers to timely notice of accident or loss. The second subdivision outlines the insured's duty of cooperation. In referring to both of these provisions as the cooperation clause of the policy, the majority merges two wholly separate and distinct contractual provisions rendering the notice provision meaningless.
The insurer contends that Williams breached both provisions pertaining to duties of the insured. According to appellant no factual issue exists regarding Williams' breach of these provisions; thus summary judgment was properly granted. The majority correctly recites the law applicable to the second subdivision of the insured's duties upon an accident. Prejudice will not be presumed from an insured's non-compliance with the cooperation clause of an insurance policy. Motorists Mut. Ins. Co. v. Johnson, Admrx. (1966), 139 Ind.App. 622, 218 N.E.2d 712. However, in incorrectly treating the notice provision as merely another factor considered under the cooperation clause, the majority obfuscates the issue and renders the notice clause of the insurance contract meaningless.
In Motorists the Court was concerned that insurers might rely on a "technical and inconsequential lack of cooperation" as a ground for avoiding their obligations under the insurance contract. There is less chance of this type of abuse when considering the notice clause of an insurance contract. The notice requirement is much less susceptible to subjective interpretation than the concept of cooperation since it is comprised of primarily one physical act rather than ongoing conduct.
Further, contrary to the position taken by the majority, notice is not equivalent to cooperation and does not serve the same objectives. Notice is a threshold requirement which must be met before an insurer is even aware that a controversy or matter exists which requires the cooperation of the insured. The notice requirement of an insurance policy "is material, and of the essence of the contract." London, etc., Accident Co. v. Siwy (1903), 35 Ind. App. 340, at 345, 66 N.E. 481, at 482. Once an insured fails to give the insurer timely notice of an accident or loss, the entire set of cireum-stances surrounding the matter change, placing the insurer in a disadvantageous position. The scene of the accident may change with the passage of time, witnesses may have died or moved away, or at best their memories may have been dimmed by the passage of time. All of these circumstances combine to place the insurer in a difficult position that could have been avoided by timely notice, and the most cooperative insured cannot erase this prejudice suffered by the insurer.
As stated earlier the majority's position would render the language of the notice clause of the insurance policy meaningless. This construction violates a guiding principle of law: that this Court will not construe terms or phrases of a contract in a manner that renders them superfluous or meaningless. - Evansville-Vanderburgh Sch. Corp. v. Moll et al. (1976), 264 Ind. 356, 344 N.E.2d 831; Walb Construction Co. v. Chipman (1931), 202 Ind. 434, 175 N.E. 132.
As support for their position the majority reaches into that black hole of legal reasoning referred to as public policy. "In addition, public policy dictates that we should treat noncompliance with notice provisions the same as we treat noncompliance with cooperation clause provisions. We must liberally construe the insurance policy in favor of Williams and Hart." At 1236. I know of no public policy which dictates that wholly separate and distinct contractual provisions drafted to reach similar but separate objectives should be treated identically. Further, in analyzing the contract terms in this manner the majority completely ignores the generally accepted rules of con*1239struction applied by this Court when construing contractual language.
Terms of an insurance policy should be construed liberally, in favor of the insured, only where there is an ambiguity in the language of the policy. Cincinnati Ins. Co. v. Mallon (1980), Ind.App., 409 N.E.2d 1100; Utica Mut. Ins. Co. v. Ueding et al. (1977), 175 Ind. App. 60, 370 N.E.2d 373. Where no ambiguity exists the language used in an insurance contract should be given its plain and ordinary meaning. Amer. States Ins. Co. et al. v. Aetna Life & Cas. Co. (1978), 177 Ind.App. 299, 379 N.E.2d 510; Vernon Fire & Cas. Ins. Co. v. Amer. Under., Inc. (1976), 171 Ind.App. 309, 356 N.E.2d 693. The court may not rewrite the insurance policy for the parties and may in no way construe the contract so as to extend its coverage. Home Ins. Co. v. Neilsen et al. (1975), 165 Ind.App. 445, 382 N.E.2d 240; State Farm Fire & Cas. Co. v. Ackerman (1972), 151 Ind.App. 464, 280 N.E.2d 332.
A thorough search of the majority opinion uncovers no mention of any ambiguous language contained in the insurance contract. The simple explanation for this is that the contractual language at issue is clear and unambiguous. Since there is no ambiguity the majority has violated the most basic tenet of contract interpretation in order to reach their result.
The majority points to the lack of Indiana case law on the precise issue involved in the case at bar. While the precise issue has not been discussed by the courts of Indiana, the federal courts have decided the issue, forwarding very persuasive and logical reasoning. Ohio Cas. Ins. Co. v. Rynearson (7th Cir.1974) 507 F.2d 573; Hartford Acc. & Indem. Co. v. Lochmandy Buick Sales (7th Cir.1962) 302 F.2d 565; Johnson v. Universal Underwriters, Inc. (7th Cir.1960) 283 F.2d 316, Muncie Banking Co. v. American Surety Co. (7th Cir.1952) 200 F.2d 115; Allstate Ins. Co. v. Kelley (S.D.Ind.1964) 233 F.Supp. 779. Further, the reasoning forwarded by this dissent has been followed by Indiana courts when rendering decisions on notice requirements within other types of insurance Baker et al. v. The German Fire Insurance Company (1890), 124 Ind. 490, 24 N.E. 1041 (fire insurance); Shedd v. American Credit, etc., Co. (1911), 48 Ind.App. 23, 95 N.E. 316 (credit insurance); London, etc., Accident Co. v. Siwy, supra, 35 Ind.App. 340, 66 N.E. 481 (employer's accident indemnity insurance);
In conclusion the majority has ignored the realities of the situation in deciding to treat notice provisions as if they were cooperation clauses. The majority then misapplies a basic rule of contract construction to support their argument. - The result reached by the majority rewrites the parties' contract and renders one of its operative provisions meaningless and redundant. For these reasons I would reverse the trial court's grant of the motion to correct errors and order that its grant of summary judgment for the insurance company be reinstated.