Global Caravan Tech., Inc. v. The Cincinnati Ins. Co. 2019 WL 5288167 (Ind. Ct. App. 2019)
Hoefer started and became the owner of a company manufacturing recreational vehicles. Other investors joined the company and became officers. Hoefer was eventually removed as an owner of the company, so he sued the investors and other part owners of the company, but not the company itself.
The company notified its insurer, Cincinnati Insurance Company (“Cincinnati”), of Hoefer’s lawsuit and requested a defense for some of the investors and the company itself, even though it was not a defendant. Cincinnati offered to provide a defense to the investors, but not to the company. The company moved to intervene by arguing that some of the claims related to events that occurred as part of the company’s operations and that, as part of his lawsuit, Hoefer sought to obtain some of the company’s assets. Over Hoefer’s objection, the trial court granted the company’s request to intervene. As a result, Hoefer amended his complaint, which named the company as a defendant, but did not assert any allegations relating to the company.
Cincinnati eventually filed a declaratory judgment action, seeking a declaration that it was not required to defend or indemnify the company or the individual investors in Hoefer’s lawsuit. Cincinnati then moved for summary judgment, contending that a defense was only owed “against any ‘suit’ seeking damages” against the company, and because Hoefer’s complaint made no allegations against the company, no coverage was owed. Finding the company’s voluntary intervention in Hoefer’s lawsuit did not qualify as a “suit,” the trial court granted summary judgment to Cincinnati.
The Court of Appeals affirmed the trial court’s grant of summary judgment for Cincinnati and found that the company’s intervention was “completely voluntary” and that even after Hoefer amended his complaint, he made no claim for damages against the company. The Court of Appeals also concluded:
• The phrase “arising out of” in an employment-related practices exclusion was not ambiguous
• The term “employment-related” was not ambiguous simply because a controversy existed as to its interpretation
• The employment-related practices exclusion applied because the alleged actions of the investors occurred while they were employees of the company.
The background and facts of this case are rather complex. However, the case provides helpful guidance on what constitutes a “suit” to trigger an insurer’s duty to defend and on how to interpret the phrase “arising out of” in an exclusion.