Court Opinion

ID: 9706452
Source: CourtListenerOpinion
Date Created: 2023-08-26 01:43:57.967877+00
Date Added: 2024-06-11T18:22:22.865805
License: Public Domain

HOFFMAN, Senior Judge,
dissenting with separate opinion.
I respectfully dissent to the majority's rewrite of the contract between Allgood and Meridian.
As the majority has already stated, and I restate for emphasis, we may not rewrite an insurance contract if the language of the contract is unambiguous. Estate of Eberhard v. Illinois Founders Insurance Co., 742 N.E.2d 1, 2 (Ind.Ct.App.2000). In interpreting the contract, we must attribute the plain meaning to the contract's language. Id.
The contract between Allgood and Meridian requires Allgood to pay her premiums and Meridian to pay for "loss." The contract limits Meridian's lability for loss to the lesser of (1) actual cash value of the stolen or damaged vehicle, or (2) the amount necessary to repair or replace the property with other property of like kind and quality. The operative term at issue is "repair," which is not an esoteric or technical term. It is instead, a common word with a plain meaning. In the last two years, at least nine courts have held that an insurer is not contractually obligated to pay for the diminution in value under contracts with substantially similar language to the language at issue here. These courts have premised their decisions on the fact that the term "repair" is unambiguous. A number of courts have relied on the definition of "repair" from BLACK'S L&W DICTIONARY 1298 (6th ed.1990), which states that the term means "to mend, remedy, restore, renovate. To restore to a sound or good state after decay, injury, dilapidation, or partial destruction." See eg., Pritchett v. State Farm Mutual Automobile Insurance Co., 834 So.2d 785 (Ala.Civ.App.2002), cert. denied; Lupo v. Shelter Mutual Insurance Co., 70 S.W.3d 16 (Mo.Ct.App.2002), trans. denied; Schulmeyer v. State Farm Fire & Casualty Co., 358 S.C. 491, 579 S.E.2d 1832 (2008). These same courts, as well as several others, have also relied on the definition of "repair" as articulated in Carton v. Trinity Universal Insurance *139Co., 32 S.W.8d 454, 464 (Tex.Ct.App.2000), defining "repair" as "bring{ing] back to good or useable condition." See eg., American Manufacturers Mutual Insurance Co. v. Schaefer, 124 SW.3d 154, 159 (Tex.2003) (citing cases relying on Cari-ton's definition of "repair"). Finally, courts have consulted popular dictionaries with similar definitions. See e.g., Pritchett, 834 So.2d at 791 (quoting MERRIAM-WEBSTER'S COLLEGIATE DICTIONARY (10th ed.1999) for the definition that "repair" means "to restore by replacing a part or putting together what is torn or broken: Fix"); Hall v. Acadia Insurance Co., 801 A2d 9983, 995 (Me.2002) (quoting WEBSTER'S II: NEW RIVERSIDE UNIVERSITY DICTIONARY 996 (Soukhanoy et al. eds., 1984) for the definition that "repair" means "to restore to sound condition after damage or injury"); Given v. Commerce Insurance Co., 440 Mass. 207, 796 N.E.2d 1275 (2003) (quoting WEBSTER'S THIRD NEW INTERNATIONAL DICTIONARY 1923 (1993) for the definition that "repair" means "to restore by replacing a part or putting together what is torn or broken").
Stated simply, a reasonable insured would understand that an insurer was required by contract to "repair" his or her vehicle by paying someone in the car repair business to fix the tangible, physical damage to the vehicle. A reasonable insured would not understand "repair" to include "fixing" the intangible value caused by the market for "wrecked but repaired" vehicles. As the Maine Supreme Court stated in Hall, "[the necessary cost of a repair is fairly understood to mean the amount that will be required to fix the car, not, in addition, the difference between the amounts a hypothetical willing and able buyer might pay to purchase the vehicle in its pre-accident condition versus its post-repair condition." 801 A.2d at 995.
Furthermore, the majority changes the plain meaning of "repair" by making the "of like kind and quality" language refer to the act of repairing. In doing so, the majority ignores the language stating that the repair or placement will occur by provision of "other property" of the like kind or quality. It is clear that the "other property" referred to consists of either repair parts or a replacement vehicle of the like kind and quality, not to the provision of money to cover losses in market value.
Additionally, the majority's construction violates the basic tenet requiring a court to construe contract language in a way that does not render any words, phrases, or terms ineffective or meaningless." See Farmers Insurance Exchange v. Smith, 757 NE.2d 145, 149 (Ind.Ct.App.2001), trans. denied. The "Limits of Liability" section of the contract between Allgood and Meridian provides that Meridian's liability is limited to the "lesser of" the "actual cash value" or the "amount necessary to repair or replace" the stolen or damaged property. The majority's construction, despite its unsupported assertion otherwise, excises the "lesser of" language from the contract. As the Texas Supreme Court opined in its evaluation of the same construction, "[tlhe insurer's obligation to compensate the loss would be cumulative-repair or replace and pay diminished value-in effect insuring the vehicle's 'actual cash value' in every instance and undermining the insurer's right under the policy to choose a course of action." 124 S.W.3d at 159 (emphasis in original).
Finally, I disagree with the majority's conclusion that "[nlo reasonable insured would read a policy containing a limit of liability provision like that in Hyden or herein and assume that, if he were involved in a collision and turned to his insurer to cover his loss, he might be left *140with only one-third of what he had before the collision." While it may be true that most, if not all, insureds would misread the contract's clear language in the vain "hope" that such a loss might be covered, a "reasonable insured" under contract law, unburdened by self-interest, would recognize the import of the contract's unambiguous language.
I would affirm the trial court's grant of Meridian's motion to dismiss and its denial of Allgood's motion for partial summary judgment.