Court Opinion

ID: 2724847
Source: CourtListenerOpinion
Date Created: 2014-09-08 20:42:06.981328+00
Date Added: 2024-06-11T09:16:08.234830
License: Public Domain

Pursuant to Ind. Appellate Rule 65(D), this
Memorandum Decision shall not be
regarded as precedent or cited before any            Jun 17 2014, 6:26 am
court except for the purpose of establishing
the defense of res judicata, collateral
estoppel, or the law of the case.

ATTORNEYS FOR APPELLANTS:                        ATTORNEY FOR APPELLEE:

GEORGE M. PLEWS                                  DONNA H. FISHER
COLIN E. CONNOR                                  Smith Fisher Maas & Howard, P.C.
Plews Shadley Racher & Braun LLP                 Indianapolis, Indiana
Indianapolis, Indiana

                              IN THE
                    COURT OF APPEALS OF INDIANA

VALLE VISTA LIMITED, LLC,                        )
                                                 )
       Appellant/Plaintiff,                      )
                                                 )
              vs.                                )       No. 41A05-1309-PL-481
                                                 )
SELECTIVE INSURANCE COMPANY                      )
OF SOUTH CAROLINA,                               )
                                                 )
       Appellee/Defendant.                       )

                    APPEAL FROM THE JOHNSON SUPERIOR COURT
                         The Honorable Kevin M. Barton, Judge
                             Cause No. 41D01-1011-PL-84

                                       June 17, 2014

               MEMORANDUM DECISION - NOT FOR PUBLICATION

BRADFORD, Judge
                                   CASE SUMMARY

       Appellant/Plaintiff Valle Vista Limited, LLC, operates a country club in

Greenwood and was insured by Appellee/Defendant Selective Insurance Company of

South Carolina when the club’s roof and rooftop HVAC units were damaged in a hail

storm in April of 2006. Valle Vista and Selective could not agree on the amount of the

damage and so submitted the claim to appraisal. After this appraisal, Valle Vista filed

suit, seeking to set aside the appraiser’s award. In August of 2011, the parties reached a

negotiated settlement of the lawsuit (“the Agreement”), which provided for a second

appraisal by an umpire of the damage to Valle Vista’s tile roof. The agreement provided,

inter alia, that the umpire’s award “shall be final and binding” and that Selective “shall

pay no more than Five Hundred Thousand Dollars[.]”

       Following a hearing, the umpire awarded Valle Vista $444,455.48 as

compensation for its roof damage plus $172,132.31 in prejudgment interest. Selective

made a payment to Valle Vista which, along with a previous payment for roof damage,

came to $500,000.00. Valle Vista failed to dismiss the lawsuit as provided for in the

Agreement and objected to Selective’s payment. In December of 2012, Selective filed a

motion to compel dismissal of the lawsuit, a motion that was ultimately granted. Valle

Vista contends that the trial court erred in allegedly overturning the umpire’s award and

in concluding that Selective complied with the terms of the Agreement. Concluding that

the trial court committed no error, we affirm.

                                             2
                       FACTS AND PROCEDURAL HISTORY

       On or about April 16, 2006, Valle Vista suffered extensive hail damage to its

property, damages covered under its insurance policy (“the Policy”) with Selective. At

some point in 2008, the parties submitted the claim to an appraisal process, as provided

for in the Policy. On July 9, 2009, the umpire issued its award finding, in part, that

Selective owed Valle Vista $80,132.00 for roof repair. Also on July 9, 2009, Valle Vista

sued Selective, alleging that Selective had not honored the terms of the Policy and had

failed to negotiate a settlement in good faith and that the umpire had ordered payment for

actual cash value and not replacement cost, as provided for in the Policy.

       On August 19, 2011, Valle Vista and Selective entered into the Agreement, which,

inter alia, contained a new appraisal procedure for Valle Vista’s roof damage:

       3.      Appraisal Procedure. Valle Vista and Selective agree to conduct a
               second appraisal to determine any amount due and owing Valle
               Vista under Selective’s Policy for the damaged roof in the Lawsuit.
               The appraisal procedure shall be conducted according to the
               following provisions:
            a.     Each party may submit two (2) names of prospective umpires to
                   William Baten of Van Winkle Baten Dispute Resolution in
                   Indianapolis, Indiana. Mr. Baten will select a single umpire
                   either from the parties’ suggestions or of his own choosing. The
                   umpire’s award will be binding. The umpire’s costs will be split
                   evenly by the parties. All other costs during the appraisal
                   process will be paid by the respective parties.
            b.     The umpire will address two issues:
                       1.     The nature and extent of the damage to Valle Vista’s
                              tile roof caused by the storm.
                       2.     The amount which must be paid by Selective for such
                              damage under the terms and conditions of the Policy.
            c.     The only issues before the umpire will be the above issues and
                   not bad faith or the replacement cost of Valle Vista’s HVAC
                   units. The Policy is stipulated into evidence.
       ….

                                             3
           i.    The parties agree that the appraisal procedure shall be subject to
                 a high-low agreement under which, regardless of the umpire’s
                 award, Valle Vista shall receive no less than One Hundred
                 Twenty-five Thousand Dollars ($125,000.00) (which amount
                 shall include any amount previously paid Valle Vista by
                 Selective for roof damage) and Selective shall pay no more than
                 Five Hundred Thousand Dollars ($500,000.00) (which amount
                 shall include any amount previously paid to Valle Vista by
                 Selective for roof damage).
           j.    Payment of any amount due under this Agreement shall be made
                 within fifteen (15) days of the umpire’s award.
           k.    The amount of the umpire’s award shall be final and binding.
      ….
      4.      Withdrawal and Release. In exchange for the consideration
              provided in paragraph 1 of this Agreement entitled “Up-Front
              Payment to Valle Vista” and for any payment for the roof’s damage
              pursuant to the appraisal procedure provided in paragraph 3 of this
              Agreement entitled “Appraisal Procedure”:
           a.    Valle Vista agrees that it will dismiss the Lawsuit with prejudice
                 within three (3) business days of receiving payments under
                 paragraphs 1 and 3 above.

Appellant’s App. pp. 786-88.

      On November 20, 2012, the umpire issued the following:

                                          AWARD
              The undersigned umpire does hereby render the following full and
      final award:
              … I find that Valle Vista is entitled to replacement cost for its roof,
      and it is entitled to the following relief:
              1.      Payment of the full replacement cost of its roof in the amount
                      of $444,445.48.
              2.      Prejudgment interest at the rate of 8% per anum, from
                      December 18, 2007, in the amount of $172,132.31.

Appellant’s App. p. 918. The umpire’s total award was therefore $616,587.79. On

December 3, 2012, Selective paid Valle Vista $500,000.00 (minus the $80,132.00 it had

already paid). Valle Vista did not dismiss the lawsuit but, instead, wrote Selective’s

counsel requesting the balance of the umpire’s award.

                                            4
       On December 21, 2012, Selective filed a motion to compel dismissal of the

lawsuit pursuant to the Agreement, which motion was granted on April 2, 2013.

Meanwhile, on January 3, 2013, Valle Vista petitioned the umpire to declare that

prejudgment interest was not subject to the $500,000.00 limit in the Agreement. On

April 30, 2013, the umpire issued a new ruling finding that prejudgment interest was not

subject to the $500.000.00 limit because it was a “collateral litigation expense” and that

Selective was therefore obligated to pay the entire amount of the umpire’s award.

Appellant’s App. p. 190. On May 2, 2013, Valle Vista filed a motion to correct error,

which the trial court denied.

                            DISCUSSION AND DECISION

                      Whether the Trial Court Erred in Granting
                       Selective’s Motion to Compel Dismissal

       Selective contends that it complied with the Agreement and that Valle Vista was

therefore obligated to dismiss its lawsuit with prejudice within three business days of

receiving payment, as provided for in the Agreement. It is well-settled that in the

absence of fraud or mistake a settlement is as binding and conclusive of the parties’ rights

and obligations as a judgment on the merits. Burke v. Middlesworth, 92 Ind. App. 394,

399, 174 N.E. 432, 433 (1930). If a party agrees to settle a pending action, but then

refuses to consummate his settlement agreement, the opposing party may obtain a

judgment enforcing the agreement from the court before which the action is pending.”

Brant Const. Co. v. Lumen Const. Co., 515 N.E.2d 868, 876 (Ind. Ct. App. 1988), trans.

denied. Although the parties differ on the proper standard of review, all seem to agree

                                             5
that resolution of this appeal boils down to applying the terms of the Agreement to facts

that are not in dispute, which means that this court is required to interpret the Agreement

as a matter of law.

       “Construction of settlement agreements is governed by contract law.” Ind. State

Highway Comm’n v. Curtis, 704 N.E.2d 1015, 1018 (Ind. 1998). “The first rule in the

interpretation of contracts is to give meaning and effect to the intention of the parties as

expressed in the language of the contract.” Stech v. Panel Mart, Inc., 434 N.E.2d 97, 100

(Ind. Ct. App. 1982). “In ascertaining the intention of the parties, a court must construe

the instrument as a whole, giving effect to every portion, if possible.”           Id.   “In

interpreting an unambiguous contract, a court gives effect to the parties’ intentions as

expressed in the four corners of the instrument, and clear, plain, and unambiguous terms

are conclusive of that intent.” Oxford Fin. Group, Ltd. v. Evans, 795 N.E.2d 1135, 1142

(citing Hyperbaric Oxygen Therapy Sys., Inc. v. St. Joseph Med. Ctr. of Ft. Wayne, Inc.,

683 N.E.2d 243, 247 (Ind. Ct. App. 1997)).          “Courts may not construe clear and

unambiguous provisions, nor may it add provisions not agreed upon by the parties.” Id.

(Ind. Ct. App. 2003) (citing Hyperbaric Oxygen Therapy Sys., 683 N.E.2d at 247-48).

However, it is well-settled that “[i]f the terms of a written contract are ambiguous, it is

the responsibility of the trier-of-fact to ascertain the facts necessary to construe the

contract.” Newnam Mfg., Inc. v. Transcon. Ins. Co., 871 N.E.2d 396, 401 (Ind. Ct. App.

2007). “A contract is ambiguous only if reasonable persons would differ as to the

meaning of its terms.” Oxford Fin. Group, 795 N.E.2d at 1142 (citing Beam v. Wausau

Ins. Co., 765 N.E.2d 524, 528 (Ind. 2002)).

                                              6
       As previously mentioned, the Agreement provided, in relevant part, as follows:

“The parties agree that the appraisal procedure shall be subject to a high-low agreement

under which, regardless of the umpire’s award, … Selective shall pay no more than Five

Hundred Thousand Dollars ($500,000.00) (which amount shall include any amount

previously paid to Valle Vista by Selective for roof damage).” Appellant’s App. p. 787

(emphases added). There is nothing ambiguous about this passage: The Agreement

clearly indicates that Selective shall pay Valle Vista no more than $500,000.00, with no

exceptions for prejudgment interest or anything else. Whether designated a “collateral

litigation expense” or part of the award proper, prejudgment interest must still be paid,

and the Agreement strictly limits the amount that Selective must pay. Because Selective

lived up to its end of the bargain, Valle Vista breached the Agreement by failing to

dismiss its lawsuit within three business days. The trial court did not err in entering

judgment enforcing the terms of the Agreement and dismissing Valle Vista’s lawsuit

against Selective.

       We affirm the judgment of the trial court.

RILEY, J., and ROBB, J., concur.

                                            7