Case Notes: Recent Court Decisions

Chad J. Melchi - 6/29/2008

1. Homeowner's Insurance Coverage -Intentional Acts.  A homeowner's policy's "intentional acts" exclusion barred coverage for intentional tort action arising from "fisticuffs."  Economy Premier Assur. Co. v. Wernke, 521 F.Supp.2d 852 (S.D. Ind. 2007)
2. Probate - Surviving Shareholder Action.  After shareholder's Will was admitted to probate, corporation and surviving shareholder brought action for declaratory judgment to enforce Buy-Sell Agreement.  The trial court denied the personal representative's motion for judgment on the pleadings and entered summary judgment in favor of the plaintiffs.  The personal representative appealed.
   
   The appellate court reversed and remanded, holding that the plaintiffs were barred from pursuing claim against the estate and were required to pursue the claim against beneficiaries of the Will.  Bettenhausen v. Godby, 878 N.E.2d 1277 (Ind. Ct. App. 2008).
3. Commercial Services - Collection of Debt.  After a collection agency's Complaint against debtor was dismissed for failure to prosecute, the collection agency filed motion to reinstate complaint.  The trial court granted the motion and the debtor appealed.  The Court of Appeals reversed.  The debtor then filed a motion to tax costs and to recover his appellate attorney fees.
   
   The appellate court granted the debtor's motion to tax costs and remanded with instructions, holding that the debtor was entitled to an award of appellate attorney fees incurred in appealing an erroneous order reinstating the Complaint.  Natare Corp. v. Cardinal Accounts, Inc., 878 N.E.2d 1290 (Ind. Ct. App. 2008).
4. Employment Law - Employee Benefit Plan.   School system employee brought an action against the school system and its Employee Benefit Plan alleging breach of contract and bad faith in regard to the Plan's decision to deny coverage for Intravenous Immunoglobulin Replacement Therapy (IVIG).  The trial court granted defendant's motion for summary judgment and the employee appealed.
   
   The appellate court affirmed, holding that the Plan did not breach its contract with the employee by denying coverage for IVIG treatment.  Ogle v. East Allen County Schools, 879 N.E.2d 614 (Ind. Ct. App. 2008).
5. Construction Law - Arbitration. Following arbitration in which arbitrator awarded builder $45,804.01, the builder's former clients filed a Complaint for interpleader against the builder, materials suppliers, and subcontractors, seeking to deposit arbitration award with the court clerk and to prevent multiple liability.  The trial court ordered all subcontractors to seek compensation from the builder and not from the clients and that the award should be divided pursuant to agreed stipulation.  The builder appealed.
   
   On rehearing, the appellate court affirmed as clarified, holding that: (1) the trial court's order did not impermissibly modify the arbitration order, and (2) the arbitration and award were not affirmative defenses to clients' interpleader.  Delta Building Group, Inc. v. Laurenzano, 879 N.E.2d 592 (Ind. Ct. App. 2008).
6. Corporate Litigation.  A subsidiary corporation, that had loaned money to a former Director of the parent corporation, brought a breach of contract action against the Director seeking payment on the Note that was issued as part of a ‘corporate loan program' that allowed Directors to borrow money to purchase stock in the parent corporation.  The trial court granted the subsidiary corporation's motion for summary judgment and the Director appealed.
   
   The appellate court affirmed, holding that: (1) the subsidiary corporation that loaned money to Directors of the parent corporation was not an alter ego of the parent corporation; (2) the Director failed to state a claim for breach of fiduciary duty against the subsidiary corporation; (3) the Director did not reasonably rely on any representations by the subsidiary corporation regarding the finances of the parent corporation; (4) the Director was not entitled to assert Regulation U violations as an affirmative defense to a breach of contract action; and (5) any superior interests the parent corporation had to repayment of the money that Director had borrowed to purchase stock were relinquished.  Massey v. Conseco Services, LLC, 879 N.E.2d 605 (Ind. Ct. App. 2008).
7. Real Estate - Property Line Fencing.  The landowners' neighbors filed a Complaint against the landowners, alleging that landowners' eight-foot fence running parallel to the property line violated the ‘spite fence' statute.  The trial court entered judgment in favor of the neighbors and the landowners appealed.
   
   The appellate court affirmed, holding that: (1) a local permit granting landowners permission to build wooden fences parallel to the property line did not trump the ‘spite fence' statute, and (2) the landowner's erection of an eight-foot high fence parallel to the property line was a "nuisance," within the meaning of the ‘spite fence' statute.  Gertz v. Estes, 879 N.E.2d 617 (Ind. Ct. App. 2008).