Court Opinion

ID: 4551500
Source: CourtListenerOpinion
Date Created: 2020-07-28 15:04:37.442922+00
Date Added: 2024-06-11T13:01:20.862072
License: Public Domain

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be                                       FILED
regarded as precedent or cited before any                              Jul 28 2020, 10:22 am

court except for the purpose of establishing                                CLERK
the defense of res judicata, collateral                                 Indiana Supreme Court
                                                                           Court of Appeals
                                                                             and Tax Court
estoppel, or the law of the case.

ATTORNEYS FOR APPELLANT                                   ATTORNEYS FOR APPELLEE
William D. Beyers                                         Jan N. Campbell
Thomas C. Buchanan                                        John M. Mead
Buchanan & Bruggenschmidt, P.C.                           Leeuw Oberlies & Campbell, P.C.
Zionsville, Indiana                                       Indianapolis, Indiana

                                           IN THE
    COURT OF APPEALS OF INDIANA

Frankie Marcum,                                           July 28, 2020
Appellant-Plaintiff,                                      Court of Appeals Case No.
                                                          20A-PL-853
        v.                                                Appeal from the Henry Circuit
                                                          Court
United Farm Family                                        The Honorable Bob A. Witham,
Mutual Insurance Co.,                                     Judge
Appellee-Defendant                                        Trial Court Cause No.
                                                          33C01-1802-PL-7

Baker, Judge.

Court of Appeals of Indiana | Memorandum Decision 20A-PL-853 | July 28, 2020                    Page 1 of 5
[1]   Frankie Marcum appeals from the trial court’s order entering summary

      judgment in favor of United Farm Family Mutual Insurance Company (Farm

      Bureau). We affirm and remand with instructions.

[2]   On July 11, 2017, Marcum submitted an application to Farm Bureau for

      homeowner’s insurance. Part of the application asks, “[H]as anyone in the

      applicant’s household been convicted, arrested, or is waiting final disposition of

      a felony?” Appellant’s App. Vol. II p. 34. Marcum answered, “No.” Id. Farm

      Bureau issued a Homeowners Policy (the Policy) to Marcum with effective

      dates of coverage from July 2017 to July 2018.

[3]   On November 21, 2017, Marcum’s home was damaged by fire. She filed a

      claim under the Policy. As part of the claims process, Farm Bureau conducted

      a background investigation of Marcum and learned that in April 2015, Marcum

      pleaded guilty to Level 6 felony theft, meaning that she had lied on her

      application. Had Farm Bureau been aware of this information, it would not

      have issued the Policy. On December 14, 2017, Farm Bureau sent

      correspondence to Marcum advising her that it had decided to rescind the

      Policy based on her material misrepresentation and would provide no coverage

      for the fire damage. It also sent correspondence to Marcum’s mortgage

      company notifying it of the decision to rescind the Policy and refunding the

      Policy premium to the mortgage company.

[4]   On February 6, 2018, Marcum filed a complaint against Farm Bureau, alleging

      that Farm Bureau had breached the terms of the Policy. She did not attach the

      Court of Appeals of Indiana | Memorandum Decision 20A-PL-853 | July 28, 2020   Page 2 of 5
      Policy itself as an exhibit to the complaint. On September 20, 2019, Farm

      Bureau filed a motion for summary judgment, arguing that it was entitled to

      judgment as a matter of law because it rightfully rescinded the Policy. The trial

      court summarily granted summary judgment in favor of Farm Bureau on

      February 10, 2020. Marcum now appeals.

[5]   Our standard of review on summary judgment is well established:

              We review summary judgment de novo, applying the same
              standard as the trial court: “Drawing all reasonable inferences in
              favor of . . . the non-moving parties, summary judgment is
              appropriate ‘if the designated evidentiary matter shows that there
              is no genuine issue as to any material fact and that the moving
              party is entitled to judgment as a matter of law.’” Williams v.
              Tharp, 914 N.E.2d 756, 761 (Ind. 2009) (quoting T.R. 56(C)). “A
              fact is ‘material’ if its resolution would affect the outcome of the
              case, and an issue is ‘genuine’ if a trier of fact is required to
              resolve the parties’ differing accounts of the truth, or if the
              undisputed material facts support conflicting reasonable
              inferences.” Id. (internal citations omitted).

      Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014).

[6]   Our Supreme Court has held that “a material misrepresentation or omission of

      fact in an insurance application, relied on by the insurer in issuing the policy,

      renders the coverage voidable at the insurance company’s option.” Colonial

      Penn Ins. Co. v. Guzorek, 690 N.E.2d 664, 672 (Ind. 1997). “A representation is

      ‘material’ if the fact omitted or misstated, if truly stated, might reasonably have

      influenced the insurer in deciding whether to reject or accept the risk or charge

      a higher premium.” Fricke v. Gray, 705 N.E.2d 1027, 1032 (Ind. Ct. App. 1999).

      Court of Appeals of Indiana | Memorandum Decision 20A-PL-853 | July 28, 2020   Page 3 of 5
      To support rescission, the insurer must establish that the representation in the

      application was (1) false and (2) material. Id.

[7]   In this case, it is undisputed that on her coverage application, Marcum stated

      that no one in her household had been convicted or arrested for a felony. It is

      likewise undisputed that this representation was false; Marcum had been

      convicted of a felony in 2015. Finally, it is undisputed that Farm Bureau would

      not have offered coverage had Marcum answered the question honestly.

      Consequently, Farm Bureau is entitled, as a matter of law, to rescind the Policy,

      and the trial court did not err by granting summary judgment in Farm Bureau’s

      favor.

[8]   Marcum argues that Farm Bureau is not entitled to relief because it did not

      attach the Policy as an exhibit to its summary judgment motion. We note that

      had Marcum cared so much about the terms of the Policy, she would have

      complied with Indiana Trial Rule 9.2(A) by attaching it to her complaint. We

      will not hold her failure to do so against Farm Bureau. We likewise note that in

      this particular case, the terms of the Policy itself are not relevant to the

      evaluation of Farm Bureau’s claim for rescission; therefore, its absence in the

      record is of no moment.

[9]   Marcum also notes that rescission is permissible only if the insurer returns the

      premiums paid under the policy so that the parties are returned to the position

      they were in prior to the contract. Am. Standard Ins. Co. v. Durham, 403 N.E.2d
879, 881 (Ind. Ct. App. 1980). In this case, Farm Bureau returned the policy

      Court of Appeals of Indiana | Memorandum Decision 20A-PL-853 | July 28, 2020   Page 4 of 5
       premium, but it returned the premium to the mortgage company rather than to

       Marcum. Marcum argues that the premium “must be sent to the policyholder,”

       reply br. p. 5, but she is wrong—the premium must be returned to the person or

       entity who actually paid it. Here, the record does not reveal whether Marcum

       or her mortgage company paid the premium. Therefore, we remand with

       instructions to the trial court to determine who paid the premium and to whom

       it should be returned.

[10]   The judgment of the trial court is affirmed and remanded with instructions to

       conduct further proceedings to determine who is entitled to the premium

       payment refund.

       Bailey, J., and Vaidik, J., concur.

       Court of Appeals of Indiana | Memorandum Decision 20A-PL-853 | July 28, 2020   Page 5 of 5