Court Opinion

ID: 9531921
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:15:58.885288+00
Date Added: 2024-06-11T13:28:37.135599
License: Public Domain

BAILEY, Judge,
dissenting.
I respectfully dissent. Where there is an ambiguity in an insurance contract, the policy is to be construed strictly against the insurance company. Stevenson v. Hamilton Mutual Insurance Company, 672 N.E.2d 467, 471 (Ind.Ct.App.1996), trans. denied. Strict construction against the insurer is driven by the fact that the insurer drafts the policy and foists its terms upon the customer. Id. The insurance companies write the policies; we buy them forms or we do not buy insurance. Id. An insurance contract is ambiguous when it is susceptible to more than one interpretation and reasonably intelligent persons would honestly differ as to its meaning. Id. In construing terms in an insurance policy, we apply the rule of construction which favors coverage of the insured. Allstate Insurance Company v. Neumann, 435 N.E.2d 591, 593 (Ind.Ct.App.1982).
Although it is common for a builder’s risk policy to provide coverage only for the duration of a specified project, a builder’s risk policy may be written for a fixed period of time. Hospital Service Dist. v. Delta Gas, Inc., 141 So.2d 925, 927 (La.App.1962) (policy covered perils for a term of 1 year beginning and ending on specified dates and whether hospital was complete or incomplete at time of explosion was immaterial); 9 Couch on Insurance 3d § 132:20 (1997); Annotation: Coverage Under Builder’s Risk Insurance, 97 A.L.R.3d 1270 § 2 at 1274. It is only where the builder’s risk policy insures during the ‘course of construction,’ “regardless of its date ” that it becomes effective as of the time construction or renovation begins. 7 Couch on Insurance 3d § 102:29 (1997) (emphasis supplied).
The majority’s reliance on Neuman v. National Fire Insurance Co., 152 Miss. 344, 118 So. 295, 297 (1928), is misplaced. First of all, a 1928 Mississippi case is extremely weak authority to guide Indiana jurisprudence into the twenty-first century. Moreover, the insurance policy under scrutiny in Neuman provided coverage for:
fire loss on building material on the ground—‘to be used and actually used ... on the one-story, frame building (incomplete) with composition roof while in course of construction ....’
118 So. at 297 (ellipses and emphasis original). Similarly, in Metzger v. Aetna Insurance Co., 227 N.Y. 411, 125 N.E. 814 (1920), the relevant policy language read as follows:
It is understood and agreed that this policy covers the property described herein only while the building is in process of erection and completion ...
125 N.E. at 815. Thus, the language of the policies involved in Neuman and Metzger more clearly spelled Qut the intention that coverage be provided only when the construction or renovation project was in process.
By contrast, the insurance policy in the present case defines “Covered Property” to include “[bjuildings or structures including foundations while in the course of construction, installation, reconstruction, or repair.” (§ A(l)(a)) (emphasis supplied). A strict construction of this clause against the insurance company would produce the interpreta*775tion of the phrase “while in the course of’ as modifying the word “foundations” only. Thus, “[b]uildings or structures” are covered without qualification.
Additionally, the following language supports the interpretation that coverage is provided before renovation begins:
Covered Property does not include: Property while on any premises owned, leased, or controlled by you unless the property is designated for a specific construction project we cover ....
(§ A(2)(a)) (emphasis supplied). In the present case, there can be no dispute that the property destroyed by fire had been designated for the specific construction project contemplated under the policy.
More importantly, however, the policy expressly reads as follows:
2. WHEN INSURANCE BEGINS AND ENDS
We cover from the time the Covered Property is at your risk starting on or after the date this coverage begins, but we will not insure the property after the following events....
(§ E(2)) (emphasis supplied). Clearly, a strict construction of this language against the insurer leads to the conclusion that coverage begins on the date the policy is issued and is not triggered by the occurrence of some external event.
Finally, the purchase of builder’s risk insurance itself is affirmative conduct taken in the course of constructing or reconstructing a building. In fact, the prudent builder would want insurance coverage in place before taking other affirmative action. Had Westfield intended that coverage be triggered only upon the delivery of the first board, the driving of the first nail, the obtaining of a building permit, or the occurrence of some other affirmative conduct on the part of the builder, the policy could have provided such with specificity.
When the evidence is undisputed, the appellate court may determine as a matter of law that summary judgment was entered in favor of the wrong party and reverse and remand with instructions that judgment be entered in favor of the other party. Motorists Mutual Insurance Company v. Morris, 654 N.E.2d 861, 862, 864 (Ind.Ct.App.1995). The Westfield policy under scrutiny in the present case is ambiguous because it is susceptible to more than one reasonable interpretation and reasonably intelligent persons honestly differ as to its meaning. As discussed above, the Westfield policy in question may reasonably be interpreted as providing coverage from the date it was issued. As we must strictly construe the policy against the insurance company in favor of providing indemnification, I would reverse and remand with instructions that summary judgment be entered in favor of Boseeker.