Schrink Insurance, Inc., Appellant v. LLC (2025)

MEMORANDUM DECISION

Case Summary

[1] In September of 2022, Rusty Sheley (“Sheley”) was involved in an automobile accident (“the Accident”) with an individual insured by Western Reserve Mutual Casualty Company (“Western Reserve”). On August 9, 2024, Western Reserve filed a lawsuit against Sheley and Sheley Concrete, LLC (“Sheley Concrete”) (collectively, “the Sheley Parties”), alleging that its insured had been injured as a result of Sheley's negligence. The Sheley Parties filed a third-party complaint against Progressive Southeastern Insurance Company (“Progressive”) and Schrink Insurance, Inc. (“Schrink”). The Sheley Parties alleged that Progressive had wrongfully refused to defend them in relation to the Accident, arguing that they had had a valid insurance policy in effect with Progressive at the time of the Accident. Alternatively, the Sheley Parties alleged that they had reasonably and detrimentally relied on assurances from Schrink, their insurance agent, that they had maintained a valid and active insurance policy with Progressive and, if they had not maintained said policy, Schrink should be held liable to them for the amount of the judgment. The trial court granted summary judgment to Progressive and denied Schrink's motion for summary judgment after determining that the designated evidence demonstrated that the Sheley Parties had not been covered by a valid Progressive policy on the date of the loss. Schrink appeals. We affirm.

Facts and Procedural History

[2] On April 6, 2022, Progressive issued a commercial auto insurance policy (“the Policy”) to Sheley Concrete. “The premium for the Policy was to be paid by means of electronic transfer from the account of Sheley Concrete.” Appellant's App. Vol. II p. 170. “However, the electronic transfer request was not authorized by Sheley Concrete's financial institution.” Appellant's App. Vol. II p. 170. “Accordingly, the first installment for the premium of the Policy was not paid to Progressive.” Appellant's App. Vol. II p. 170. “On April 26, 2022, Progressive issued its Final Bill to Sheley Concrete indicating that Sheley Concrete no longer had insurance with Progressive.” Appellant's App. Vol. II p. 170. “On April 27, 2022, Progressive issued its Recission Notice to Sheley Concrete indicating that the Policy was rescinded as a result of the failure of the bank or financial institution to honor the initial payment.” Appellant's App. Vol. II p. 170.

[3] On September 12, 2022, the vehicle being driven by Sheley collided with a vehicle being driven by Charles Crawford in Seymour. On August 9, 2024, Crawford's insurance provider, Western Reserve, initiated a lawsuit against the Sheley Parties. Western Reserve alleged that at the time of the collision, Sheley had been “acting in the capacity of an agent or employee of [Sheley Concrete] or was the permissive user of the vehicle owned by [Sheley Concrete].” Appellant's App. Vol. II p. 10. Western Reserve alleged that Crawford had suffered personal injuries as well as $42,321.94 in medical bills and property damages as a result of Sheley's negligent actions.

[4] The Sheley Parties filed a third-party complaint against Progressive and Schrink. With regard to Progressive, the Sheley Parties alleged that they had had a valid insurance policy in effect with Progressive at the time of the Accident and, consequently, Progressive owed a duty to defend them. The Sheley Parties further argued that Progressive had “wrongfully denied” them insurance coverage “in relation to the” Accident. Appellant's App. Vol. II p. 85. Alternatively, the Sheley Parties alleged that Schrink, acting as their insurance agent, had assured them that they had maintained a valid and active Progressive insurance policy and, if they had not done so, Schrink should be held liable to them for the amount of the judgment because they had reasonably and detrimentally relied on Schrink's assurances.

[5] Schrink moved for summary judgment on December 18, 2024, in which it claimed that Progressive should be found liable for the amount of any damages assessed against the Sheley Parties. Progressive moved for summary judgment on January 10, 2025, in which it claimed that the Sheley Parties had not been covered by a valid Progressive insurance policy on the date of the Accident. The trial court conducted a hearing on the competing summary-judgment motions on February 10, 2025. On February 24, 2025, the trial court granted summary judgment in favor of Progressive and denied Schrink's motion for summary judgment.

Discussion and Decision

[6] Schrink contends that the trial court erred in granting Progressive's motion for summary judgment.

We review a trial court's summary judgment decision de novo, using the same standard as the trial court. 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 a judgment as a matter of law.

The moving party bears the burden of making a prima facie showing that there are no genuine issues of material fact and that the movant is entitled to judgment as a matter of law[.] If the movant satisfies that burden, the burden then shifts to the non-moving party to designate and produce evidence of facts showing the existence of a genuine issue of material fact. 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[.] We must construe all factual inferences in favor of the non-moving party, and all doubts as to the existence of a material issue must be resolved against the moving party.

Force v. New China Hy Buffet LLC, 217 N.E.3d 1275, 1277–78 (Ind. Ct. App. 2023) (internal citations and quotations omitted, brackets added, and quotation marks amended).

[7] Indiana Code section 27-1-31-2.5 provides that

An insurer may cancel a policy of insurance that the insurer has written that has been in effect ninety (90) days or less by mailing a written notice of cancellation to a person insured under the policy at least:

(1) ten (10) days before cancelling if an insured has failed to pay a premium;

(2) twenty (20) days before cancelling if the insured has perpetrated a fraud or material misrepresentation upon the insurer; or

(3) thirty (30) days before cancelling for any other reason.

In challenging the trial court's award if summary judgment to Progressive, Schrink argues that Indiana Code section 27-1-31-2.5 requires strict compliance.² Schrink also asserts that Progressive's notices of the cancellation of the Policy did not strictly comply with Indiana Code section 27-1-31-2.5 because they indicated that the cancellation was effective immediately, not ten days after the notices were sent to Sheley Construction.

[8] Despite Schrink's argument that Indiana Code section 27-1-31-2.5 requires strict compliance, we have previously concluded that statutes outlining the notice required for cancellation of an insurance policy do not require strict compliance so long as the notice provided “was sufficient to apprise” the insured of the insurer's intention to cancel the policy so to provide the insured with the opportunity to obtain other insurance. Moore v. Vernon Fire & Cas. Ins. Co., 142 Ind. App. 334, 337–38, 234 N.E.2d 661, 663 (1968). Specifically, in Moore, we stated the following:

It is the opinion of this court that to follow the rule of strict construction would be to fail to observe the rationale behind the notice provision, which is to enable the insured to obtain insurance with some other company prior to the time when he is exposed to further risks without insurance protection.

In the case at bar, more than ten days had elapsed between the date the Notice of Cancellation was sent to Pryor and the date of the accident. The evidence will show that Pryor had approximately six days in which he could acquire other insurance protection, yet he chose not to avail himself of other insurance protection, thus placing the risks of liability upon him alone.

It is the opinion of this court that the Notice of Cancellation, while not strictly conforming to the dictates of the policy, was sufficient to apprise Pryor of the appellee's intentions to cancel the policy and provided him with more than the required time as stipulated in the policy, in which to obtain other insurance.

Id. at 337–38, 234 N.E.2d at 663. Schrink's attempts to differentiate Moore from the instant matter are unpersuasive and unavailing. We find the rationale set forth in Moore to be as persuasive today as it was on the date Moore was issued.

[9] The designated evidence demonstrates that Progressive unequivocally canceled the Policy several months before the Accident. The “Final Bill” sent by Progressive to Sheley Concrete on April 26, 2022, clearly stated that the Policy “was canceled.” Appellant's App. Vol. II p. 200. Likewise, the “Rescission Notice” sent to Sheley Concrete by Progressive on April 27, 2022, clearly informed Sheley Concrete that it was no longer covered by Progressive. Appellant's App. Vol. II p. 202. Thus, as Progressive argues, “even if Progressive had stated in its Recission Notice that the Policy was going to be cancelled ten days subsequent to the issuance of the notice, there still would have been no coverage for Sheley Concrete at the time of the” Accident.³ Appellee's Br. p. 19. Based on our decision in Moore coupled with the designated evidence before us, we cannot say that the trial court erred in granting Progressive's motion for summary judgment.

[10] The judgment of the trial court is affirmed.

FOOTNOTES

2.   In support of its argument, Schrink points to caselaw from other jurisdictions. It does not cite to any relevant Indiana authority supporting its position.

3.   To the extent that Schrink suggests that Sheley Concrete had not received the notices sent by Progressive, the designated evidence demonstrates that the notices were sent to Sheley Concrete at the address provided by Sheley Concrete on its insurance application and that Sheley Concrete had not notified Progressive of any change of address.

Bradford, Judge.

Judges May and Mathias concur. May, J., and Mathias, J., concur