I recently told you about the United States Supreme Court’s recent decision in Fox. v. Vice, kin which the Court held that a defendant could recovering against frivolous claims, even when some of the plaintiff’s claims are not frivolous. It was unclear whether Indiana’s courts would apply the reasoning of Fox to Indiana cases, amd a decision issued yesterday in The Travelers Inc. Cos. v. Maplehurst Farms, Inc., ___ N.E.2d ___ (Ind. Ct. App. 2011), Cause No. 49A04-1006-PL-394, did not clarify that isssue at all.
This case involved a coverage dispute between Maplehurst and Travelers over whether Travelers would reimburse Maplehurst for the costs of an environmental cleanup effort. Travelers refused to pay for the costs incurred before it was provided notice. The trial court granted summary judgment to Maplehurst and the Court of Appeals reversed.
Even though it lost on appeal, Maplehurst argured that it was entitled to attorney’s fees for being forced to litigate “numerous utterly meritless coverage defenses” raised by Travelers. This would have been an opportunity for the Court of Appeals to apply Fox. However, it refused to take the bait.
It is impossible to tell from the opinion whether Maplehurst’s contention that some of Travelers’s defenses were frivolous is true. However, it is intersting to note that the Court of Appeals declined to address the question since it was not squarely presented. Indiana lawyers should continue to press the point made by Maplehurst however, until we have an appellate decision that explicitly states whether Indiana will apply the reasoning in Fox.
Lessons:
- An insurer is not liable for costs incurred in defense of a suit before the insurer is put on notice.
- It is unclear whether Indiana will allow attorney’s fees for frivolous claims or defenses if the case also includes non-frivolous claims or defenses.
