Antonne Gose and Lisa Gose, Appellants-Plaintiffs v. Indiana Farm Bureau Insurance, Appellee-Defendant (2026)

MEMORANDUM DECISION

[1] Antonne Gose (“Antonne”) and Lisa Gose (together, “the Policyholders”) appeal the trial court's entry of summary judgment for Indiana Farm Bureau Insurance (“the Insurance Company”) on a contract claim and a tort claim, both arising from the Insurance Company's denial of coverage for a fire loss. Concluding that genuine issues of material fact preclude summary judgment on both claims, we reverse and remand.

Facts and Procedural History

[2] The Policyholders occupied a two-story barn-style structure in Richmond, Indiana, which contained a small residence and an unfinished garage and storage space. Two greenhouses stood behind it. The property was insured under two policies from the Insurance Company (together, “the Policies”): a commercial policy (“the Commercial Policy”) and a contents policy (“the Contents Policy”). The Policies excluded coverage for loss resulting from the intentional or criminal acts of an insured. See Appellants’ App. Vol. 3 pp. 92, 159. The Commercial Policy contained a “Duties In The Event Of Loss Or Damage” provision that required the Policyholders, among other things, to “permit us to inspect the property proving the loss or damage and examine your books and records,” to “[c]ooperate with us in the investigation or settlement of the claim,” and to submit to examination under oath. Id. at 142. The Contents Policy contained a “Your Duties After Loss” provision that required the Policyholders to “[p]rovide us with records and documents we request and permit us to make copies” and to submit to examination under oath. Id. at 93. Under each policy, the Policyholders could not bring suit for coverage unless they had first complied with the policy's terms. See id. at 94, 155.

[3] On November 16, 2020, the Richmond Fire Department responded to a fire at the Policyholders’ property in the early morning. The building was locked. Inside, the Richmond Fire Department found a melted red container that resembled a container for gasoline, and material recovered from the residence tested positive for gasoline. At the request of the Insurance Company's Special Investigator, Amy Delp (“Investigator Delp”), EFI Global, Inc. conducted an independent fire-scene examination on November 19, 2020, through its investigator Steve Cottingham (“Investigator Cottingham”).

[4] Investigator Cottingham reviewed surveillance footage from a neighboring residence, which captured a flash at the front entry door and a person moving toward a vehicle. In a report dated December 29, 2020 (“the Report”), he concluded that gasoline had been intentionally poured throughout the interior of the structure before the vapors were ignited by an individual “at an outside point adjacent to the front, main entry door.” Appellee's App. Vol. 2 p. 5. An investigation by the Richmond Fire Department separately determined that the fire was intentionally set. The Report did not identify who set the fire. The Policyholders denied involvement, explaining that they had been out of state, and Investigator Delp testified that they provided documents supporting their travels. She acknowledged that neither Policyholder was the person seen on the surveillance video, that the Policyholders consistently denied involvement under oath, and that the Insurance Company chose not to believe them. She also acknowledged that, because the Policyholders were out of state, the Insurance Company's belief that they were responsible for the fire required someone else to have acted for them.

[5] The Policyholders initiated claims under the Policies by filing a Sworn Statement in Proof of Loss (“the Proof of Loss”), which the Insurance Company received on December 10, 2020. Investigator Delp testified that the Proof of Loss used valuations obtained from the Insurance Company's investigation. By letter dated December 22, 2020, the Insurance Company acknowledged receipt of the Proof of Loss and declined payment pending its continuing investigation, stating that “[w]hile your Proof of Loss is acceptable as to its form, we are declining to make payment at this time.” Id. at 52.

[6] The Insurance Company's investigation yielded information that, before the fire, the Policyholders had removed property from the building. The Insurance Company examined each of the Policyholders under oath and reviewed their bank statements, which showed recurring payments to SmartStop Self-Storage. The statements also showed a checking account balance of $15.55 at the end of October 2020. See Appellants’ App. Vol. 3 p. 201. Lisa denied that the Policyholders ever had a storage unit. When confronted with the records, the Policyholders responded that the unit belonged to Antonne's father. Records the Insurance Company obtained from the facility, however, reflected that there had been two storage units rented in Antonne's name. One unit was rented on October 10, 2020, and closed on November 24, 2020, a period spanning the date of the fire. See Appellants’ App. Vol. 4 p. 197.

[7] The Insurance Company sent correspondence to the Policyholders’ counsel enclosing, for their signatures, authorizations for the release of records from SmartStop Self-Storage and NATCO Credit Union. Investigator Delp testified that the storage authorization was sought so the Insurance Company could review those records and determine when the Policyholders were last in the storage facility. Through the same correspondence, the Insurance Company also requested a credit report and phone records for November 2020. The Policyholders produced phone records beginning November 16, 2020, though not for the full period the Insurance Company requested. Counsel for the Insurance Company sent these requests in a series of letters dated April 29, June 25, August 5, and September 3, 2021. On August 24, 2021, the Policyholders’ counsel notified them that he would be withdrawing his representation due to their failure to fulfill the Insurance Company's requests during the investigation, including signing the authorization forms made available to them. After the Policyholders’ counsel withdrew, the Insurance Company's counsel wrote to the Policyholders directly on October 19, 2021, allowing thirty days to comply with the requests.

[8] The Policyholders never provided a signed authorization to obtain records from the storage facility. Investigator Delp testified at her deposition that the Policyholders attended every examination under oath, gave the Insurance Company unrestricted access to the property, and generally provided records, answered questions, and produced documents when requested, but that she was prevented from completing her investigation because they had not provided the storage-records authorization. A note in the Insurance Company's claim file from December 3, 2020, recorded a tip that a fire investigator relayed to Investigator Delp. According to the fire investigator, a woman called to report that her nephew, whom investigators suspected of setting the fire, received a phone call from Lisa before the fire. The aunt overheard him say he would “do the job tomorrow,” which he described as an “insurance job.” Id. at 202. The nephew had recently come into some money. Investigator Delp testified that a Deputy State Fire Marshal advised her that she could not disclose the identity of a person suspected of setting the fire because that information had been obtained under what she called the arson-immunity statute, and that the investigation of that person remained ongoing.

[9] In March 2021, the Deputy State Fire Marshal told Investigator Delp that investigators had “developed a suspect from the neighbor's video footage.” Id. at 197–98. As late as October 26, 2021, he told her that investigators still needed to “get [the witness's] recorded interview” and that, “every time they are supposed to meet with her, she has an excuse as to why she can't meet.” Id. at 195. The State Fire Marshal's office declined Investigator Delp's requests for the identities of the suspect and the aunt through the date of the denial, and she did not learn the suspect's name until October 2024. She had not interviewed the suspect, did not know whether anyone had, and, although she reviewed the phone records the Policyholders produced, had never connected Lisa's phone to a number associated with the suspect. She testified that the Insurance Company “considered” the tip but “didn't depend on it” in making a coverage decision, and she agreed that she had no evidence that the Policyholders directly set the fire. Id. at 163.

[10] By letter dated January 14, 2022, the Insurance Company denied both claims. As of that date, the SmartStop authorization remained unsigned. The letter set forth multiple grounds for the denial. See id. at 188. One ground was that the investigation led the Insurance Company “to believe that it is more probable than not that [the Policyholders] directly caused, arranged, participated in, or directed a loss to covered property.” Id. It also stated that the Policyholders “failed to cooperate in our investigation by providing documents and information we requested.” Id. In its list of grounds, the letter specified that the failure included not “signing authorizations to allow us to obtain information.” Id. The letter quoted provisions of the Commercial Policy requiring them to “[c]ooperate with us in the investigation or settlement of the claim” and “[a]s often as may be reasonably required, permit us to inspect the property proving the loss or damage and examine your books and records.” Id. at 187. The letter also quoted the provision in the Contents Policy requiring the Policyholders to “[p]rovide us with records and documents we request and permit us to make copies ․” Id.

[11] On November 7, 2022, the Policyholders filed a complaint against the Insurance Company and their insurance agent, Bryan K. Sparks (“Sparks”). Count I alleged that the Insurance Company was liable for breach of contract for denying coverage. See Appellants’ App. Vol. 2 p. 37. Count II alleged that the Insurance Company was liable in tort for breaching the duty of good faith and fair dealing, both in handling the Policyholders’ claims and in its ultimate coverage determinations. See id. at 37–38. Count III alleged that Sparks was liable for breach of contract for failing to procure adequate coverage. The Insurance Company and Sparks answered and asserted affirmative defenses in January 2023.

[12] In April 2025, the Insurance Company and Sparks each moved for summary judgment. The Policyholders did not oppose Sparks's motion but challenged whether the Insurance Company was entitled to summary judgment. The Insurance Company's designated evidence included the Policyholders’ examinations under oath, the claims correspondence, the Report, and affidavits of Investigator Cottingham and Investigator Delp. In response, the Policyholders’ designated evidence included Investigator Delp's testimony describing the Insurance Company's internal training on the duty of good faith and fair dealing. See Appellants’ App. Vol. 4 p. 37. It also included Investigator Delp's testimony that the Policyholders generally provided records answered questions, and produced documents when requested, and that, asked to identify anything the Policyholders “did that prevented [her] from completing [her] investigation before [she] denied the claim,” she answered, “Yes. The authorization for the storage records.” Id. at 145–46. The Policyholders also designated an April 29, 2021, email exchange between Sparks and the Insurance Company's commercial underwriter, Bev Driscoll (“Driscoll”), about reinstating the Policyholders’ policy. Driscoll wrote that she could not offer reinstatement “due to the claims,” that the Policyholders “have had 2 large fires that are suspicious,” and that the Policyholders should be told reinstatement was unavailable “due to the loss ratio.” Appellants’ App. Vol. 5 p. 152. Sparks answered that he “didn't want this reinstated” and “wanted to non-renew them after their 1st fire ․” Id. In reply, the Insurance Company argued that Sparks's views were immaterial because he took no part in the claim decision.

[13] The trial court held a summary judgment hearing on August 20, 2025. The Insurance Company contended that the dispositive question on Count I, the contract claim, was whether the Policyholders provided a specifically requested item—the signed authorization related to the storage unit. See Tr. Vol. II pp. 8–9. The Insurance Company argued that, by failing to provide a signed authorization, the Policyholders failed to comply with conditions to coverage, precluding recovery for the alleged breach of contract. See id. at 8–10. The Insurance Company acknowledged that the Policyholders “sat for exams” and “provided some documents,” but asserted that “you can cooperate and not cooperate at the same time.” Id. at 7. It asserted that the authorization would “allow [the Insurance Company] to determine when they were accessing the storage unit.” Id. The Insurance Company argued that this was a “really crucial piece of evidence” to investigate “[t]he timing of that as it relates to the fire.” Id. The Policyholders responded that “there's a question of fact of whether or not my clients compl[ied] with all of these terms [and] conditions of the policy [the Insurance Company] wrote and a jury is going to have to decide if ․ it was ever reasonable to ask for the document in the first place.” Id. at 15–16.

[14] As to Count II, the tort claim for breach of the duty of good faith and fair dealing, the Insurance Company argued that it had a good-faith basis to deny the claims based on evidence of intentional loss. The Policyholders argued that a jury could infer that the Insurance Company sought to “cook up a reason to not pay” the claims, which precluded summary judgment. Id. at 17. They pointed to an investigation lasting more than a year, the denial of coverage over a missing storage-unit document, Investigator Delp's training on the duty of good faith, and Sparks's reluctance to insure them after their earlier fire, which they contended was attributable to the Insurance Company.

[15] The trial court took the matter under advisement. On September 8, 2025, the court granted Sparks's motion for summary judgment. On September 29, 2025, the court granted the Insurance Company's motion for summary judgment. The trial court entered findings and conclusions on each count. As to Count I, the court determined that the Contents Policy required the Policyholders to provide records and documents, while noting that the Commercial Policy “d[id] not contain that same language.” Appellants’ App. Vol. 2 pp. 21, 31. The trial court determined that the failure to produce the SmartStop Self-Storage authorization form was “a breach of the insurance contract” and “the contract was first breached by the Goses,” precluding recovery. Id. at 31. As to Count II, the tort claim for breach of the duty of good faith and fair dealing, the court found that the Insurance Company “had a good-faith basis to dispute” that the Policyholders had a valid claim under Indiana law based on the Report indicating that the Policyholders intentionally caused the loss. Id. at 25. The court also found “no designated evidence” that the Insurance Company made “an unfounded refusal to pay policy proceeds, caused an unfounded delay in making payment, deceived the [Policyholders] in any way, and/or exercised any unfair advantage to pressure the [Policyholders],” and that it “did not have any ‘dishonest purpose, moral obliquity, furtive design, or ill will’ in denying the [Policyholders’] claim.” Id. at 27.

[16] The Policyholders moved to correct error on October 28, 2025, arguing that the court had considered only one of the two Policies. See id. at 159–60. The Policyholders also argued that “the frequency or timing of the document requests must be reasonable” under the Contents Policy, and that reasonableness of the requests was a question of fact for the jury to decide. Id. at 163 (emphasis removed). The motion did not address the ruling on Count II. The court denied the motion, stating that “it correctly determined that there was no coverage because the Goses failed to provide documents to [the Insurance Company] as required by both the Commercial Policy and the [Contents] Policy.” Id. at 34–35.¹ The Policyholders now appeal.

Discussion and Decision

[17] The Policyholders appeal following the denial of their motion to correct error, which challenged the entry of summary judgment for the Insurance Company. We ordinarily review a ruling on a motion to correct error for an abuse of discretion; however, our review is de novo where—as here—the motion challenged the entry of summary judgment. Poiry v. City of New Haven, 113 N.E.3d 1236, 1239 (Ind. Ct. App. 2018). We review the underlying summary judgment ruling using the same standard the trial court applied. Id. Summary judgment is proper only if the designated evidence shows no genuine issue of material fact and that the movant is entitled to judgment as a matter of law, with all reasonable inferences drawn in favor of the non-movant. Ind. Trial Rule 56(C); Hughley v. State, 15 N.E.3d 1000, 1003 (Ind. 2014). The trial court entered findings and conclusions on each count; although those findings and conclusions aid our review by supplying the reasons for the court's decision, they do not bind us. Rice v. Strunk, 670 N.E.2d 1280, 1283 (Ind. 1996). We may affirm summary judgment on any theory the designated materials support. Miller v. Danz, 36 N.E.3d 455, 456 (Ind. 2015).

[18] “Indiana consciously errs on the side of letting marginal cases proceed to trial on the merits, rather than risk short-circuiting meritorious claims.” Hughley, 15 N.E.3d at 1004. To prevail on summary judgment, the movant may not simply point to gaps in the opponent's proof; it bears “a more onerous burden: to affirmatively ‘negate an opponent's claim.’ ” Id. at 1003 (quoting Jarboe v. Landmark Cmty. Newspapers of Ind., Inc., 644 N.E.2d 118, 123 (Ind. 1994)). Once the movant negates an element of the claim, the burden shifts to the nonmovant to come forward with evidence of a genuine issue for trial. Consumer Att'y Servs., P.A. v. State, 71 N.E.3d 362, 364 (Ind. 2017). On summary judgment, “judges may not weigh the evidence or judge witness credibility,” for “[t]hat assignment is reserved for the jury.” Cave Quarries, Inc. v. Warex LLC, 240 N.E.3d 681, 685 (Ind. 2024). So long as the designated evidence allows reasonable conflicting inferences on a determinative issue, summary judgment is improper. See Hughley, 15 N.E.3d at 1003. The inferences drawn in the nonmovant's favor must, however, be reasonable; an inference resting on “speculation, guess, surmise, conjecture[,] or mere possibility” does not create a genuine issue. Speaks v. Vishnuvardhan Rao, 117 N.E.3d 661, 668 (Ind. Ct. App. 2018) (quoting Fowler v. Campbell, 612 N.E.2d 596, 602 (Ind. Ct. App. 1993)).

[19] “[I]nsurance coverage exclusions are generally considered to be affirmative defenses upon which the insurer bears the burden of proof.” Williams v. Pekin Ins., Inc., 230 N.E.3d 939, 942–43 (Ind. Ct. App. 2024) (citing PSI Energy, Inc. v. Home Ins. Co., 801 N.E.2d 705, 725 (Ind. Ct. App. 2004), trans. denied), trans. denied. The party asserting an affirmative defense bears the burden of proving each of its elements “in summary judgment proceedings, as at trial.” Abbott v. Bates, 670 N.E.2d 916, 922–23 (Ind. Ct. App. 1996).

I. Breach of Contract

[20] The Policyholders contend that genuine issues of material fact precluded summary judgment on their breach of contract claim. The trial court determined that, because the Policyholders failed to provide the SmartStop Self-Storage authorization form, they could not recover for the Insurance Company's alleged breach in failing to pay the claims. The Insurance Company maintains that the failure to produce the document breached the Policies and precluded the contract claim. See Appellee's Br. pp. 17–22.

[21] The meaning of an insurance policy is a question of law that we review de novo. Erie Indem. Co. for Subscribers at Erie Ins. Exch. v. Est. of Harris, 99 N.E.3d 625, 629–30 (Ind. 2018). Insurance policies are contracts subject to the same rules of judicial construction as other contracts, and clear and unambiguous policy language is afforded its plain, ordinary meaning. Id. at 630. A provision is ambiguous only if it is susceptible to more than one reasonable interpretation to an ordinary policyholder of average intelligence, not merely because the parties advance competing readings. Id. Where a policy is ambiguous, we construe it strictly against the insurer that drafted it and in favor of the insured. Holiday Hosp. Franchising, Inc. v. AMCO Ins. Co., 983 N.E.2d 574, 578 (Ind. 2013).

[22] The Indiana Supreme Court sorts an insured's post-loss duties into three categories according to the content of the provision: (1) a provision requiring timely notice of the claim; (2) a provision requiring the insured to cooperate in the investigation and defense of the claim; and (3) any other provision imposing a specific post-loss duty on the insured. See Miller v. Dilts, 463 N.E.2d 257, 265 (Ind. 1984); Morris v. Econ. Fire & Cas. Co., 848 N.E.2d 663, 666 (Ind. 2006). The category matters because it determines whether the insurer must show prejudice to enforce the condition. See Miller, 463 N.E.2d at 265; Morris, 848 N.E.2d at 666. For a notice provision, prejudice to the insurer is presumed from an unreasonable delay, subject to rebuttal by the insured. Miller, 463 N.E.2d at 265–66. For a cooperation clause—a policy provision requiring that the insured assist the insurer in investigating and defending a claim—the insured is obligated only to provide “reasonable assistance” to the insurer. Foster v. State Farm Fire & Cas. Co., 674 F.3d 663, 667 (7th Cir. 2012) (applying Morris). Further, the insurer must show actual prejudice from the breach. Morris, 848 N.E.2d at 666; Miller, 463 N.E.2d at 265. For a provision in the third category, “prejudice is not a necessary consideration in determining the enforceability of” the condition. Morris, 848 N.E.2d at 666. And a court will not superimpose a requirement that the insurer's requests be reasonable in the documents or information they seek. Id. at 667; see also Foster, 674 F.3d at 668.

[23] The line between the second and third categories is drawn by the provision itself, not by whether the insured's performance would, in a general sense, aid the investigation. Morris illustrates the distinction. The policy there contained two different kinds of conditions. Its liability-coverage conditions asked the insured to “help us” investigate and defend, and the Court treated those as cooperation clauses. Morris, 848 N.E.2d at 666. Its property-coverage provision, titled “Your Duties After Loss,” was different: it enumerated specific acts the insured “must” perform, including to “provide us with records and documents we request” and to submit to examination under oath. Id. The Court held that this provision was “an entirely separate condition that explicitly requires the policyholder to perform specific duties,” not a cooperation clause. Id. Thus, although producing requested documents assists an investigation, our Supreme Court placed that enumerated post-loss duty in the third category, where prejudice need not be shown and the insured's performance is measured against the terms of the condition. Id. at 666–67; Knowledge A-Z, Inc. v. Sentry Ins., 857 N.E.2d 411, 421 (Ind. Ct. App. 2006), trans. denied.

[24] We begin with the Commercial Policy, which requires the Policyholders, “[a]s often as may be reasonably required, [to] permit us to inspect the property proving the loss or damage and examine your books and records.” Appellants’ App. Vol. 3 p. 142. We need not resolve how the provision is classified—or whether enforcing it would require a showing of prejudice—because the question is answered by the scope of the provision itself. By its terms, the duty reaches only the Policyholders’ own books and records. See, e.g., New Berean Missionary Baptist Church, Inc. v. State Farm Fire & Cas. Ins. Co., No. 1:08-cv-1584, 2010 WL 2010464, at *4 n.3 (S.D. Ind. May 18, 2010) (noting that personal tax returns of the officers of the insured church “simply cannot be categorized as records of the [insured]”). An authorization for records held by SmartStop Self-Storage is therefore outside the Commercial Policy's books-and-records provision, and the Policyholders’ failure to sign it did not breach that provision.²

[25] We turn to the Contents Policy. Its “Your Duties After Loss” provision required the Policyholders to “[p]rovide us with records and documents we request and permit us to make copies”—a duty worded more broadly than the Commercial Policy's books-and-records provision and not confined to the Policyholders’ own records. Appellants’ App. Vol. 3 p. 93. Because it is not so confined, that production duty could reach an authorization for records held by a third party such as SmartStop Self-Storage. Paired with the Contents Policy's condition that “[n]o action can be brought unless the policy provisions have been complied with,” that duty is an express condition precedent of the kind our Supreme Court enforced in Morris. Id. at 94; Morris, 848 N.E.2d at 666–67. Compliance with such a condition is mandatory, and the insurer need not show prejudice. Morris, 848 N.E.2d at 667.

[26] That duty is not boundless, however. The Seventh Circuit has recognized that the duty outlined in Morris does not “license badgering and irrelevant demands for documents and information or endless EUOs.” Foster, 674 F.3d at 671. The insurer must still establish a material breach. See id. at 668. And whether an insured “substantially complied” with a document-production requirement is ordinarily a question for the trier of fact. Ind. Ins. Co. v. Plummer Power Mower & Tool Rental, Inc., 590 N.E.2d 1085, 1089 (Ind. Ct. App. 1992) (involving the production of some, but not all, of the documents the insurer requested).

[27] Applying that framework, the designated evidence precludes summary judgment on the Contents Policy. It is undisputed that the Policyholders sat for examinations under oath, submitted the Proof of Loss, and produced records—including bank statements—and that, as Investigator Delp acknowledged, they generally answered questions and produced documents when requested. It is also undisputed that the Policyholders did not produce all requested items. Investigator Delp testified that the item that prevented her from completing the investigation before the denial was the storage-records authorization. Appellants’ App. Vol. 4 p. 146. As the summary-judgment movant asserting a policy-based defense, the Insurance Company bore the burden of establishing that defense on the designated evidence, with all reasonable inferences drawn in the Policyholders’ favor. Hughley, 15 N.E.3d at 1003–04. On that standard, a jury crediting Investigator Delp's testimony could find that the Policyholders substantially complied with the Contents Policy's production duty and that the single missing authorization was not a material breach. See Plummer, 590 N.E.2d at 1089.

[28] The Insurance Company suggests that Morris insists on strict compliance rather than substantial compliance. See Appellee's Br. pp. 18, 21–22. We disagree that Morris requires a different result. There, the insureds refused to submit to an examination under oath until the insurer first met a precondition of their own devising, and the Court held they breached as a matter of law—expressly noting that the insureds “do not alternatively contend that the breach was immaterial.” Morris, 848 N.E.2d at 667. Thus, although Morris bars a court from second-guessing the reasonableness of the insurer's request, it does not hold that coverage is barred due to any shortfall on the part of the insured.

[29] Unlike the insureds in Morris, the Policyholders here imposed no precondition on their performance. Drawing all reasonable inferences in their favor, Investigator Delp's testimony that they generally provided records, answered questions, and produced documents—with only the storage-records authorization affecting her completion of the investigation—would permit a jury to find partial but substantial performance rather than the kind of outright refusal that breaches as a matter of law. See Keten v. State Farm Fire & Cas. Co., No. 2:06-cv-341, 2010 WL 1258198, at *4 (N.D. Ind. Mar. 29, 2010) (reading Morris as a refusal case rather than a substantial compliance case and identifying “an issue of fact as to whether the documentation [the insureds] provided to [the insurer] and their efforts to obtain further documentation constitute[d] substantial compliance with the insurance contract”).

[30] For the foregoing reasons, we conclude that the trial court erred in granting the Insurance Company summary judgment on Count I for breach of contract.³

II. Breach of the Duty of Good Faith and Fair Dealing

[31] We turn to Count II, the Policyholders’ claim that the Insurance Company breached the duty of good faith and fair dealing. The trial court entered summary judgment for the Insurance Company, concluding that the designated evidence established that it “had a good-faith basis to dispute” the claims. Appellants’ App. Vol. 2 p. 25.

[32] Indiana law implies in every insurance contract a duty for the insurer to deal in good faith with the insured, and it recognizes a tort for the breach of that duty. Erie Ins. Co. v. Hickman ex rel. Smith, 622 N.E.2d 515, 518–19 (Ind. 1993). The duty forbids, among other things, “making an unfounded refusal to pay policy proceeds,” “causing an unfounded delay in making payment,” “deceiving the insured,” and “exercising any unfair advantage to pressure an insured into a settlement of his claim.” Id. at 519. A claimant “must prove, first, a breach of the duty of good faith,” which exposes the insurer to compensatory damages; “[o]nly then does the claimant have the opportunity ‘to establish the right to punitive damages’ by proving the insurer acted more culpably—i.e., in bad faith.” Baldwin v. Standard Fire Ins. Co., 269 N.E.3d 1197, 1209 (Ind. 2025) (quoting Hickman, 622 N.E.2d at 520). At the second step, there must be clear and convincing evidence of conscious wrongdoing—malice, fraud, gross negligence, or oppressiveness. Hickman, 622 N.E.2d at 520 (“[P]roof that a tort was committed is not sufficient to establish the right to punitive damages.”).

[33] A good-faith dispute about the amount of a valid claim, or about whether the insured has a valid claim at all, “will not supply the grounds for a recovery in tort for the breach of the obligation to exercise good faith[,] ․ even if it is ultimately determined that the insurer breached its contract.” Id. Nor does a lack of diligent investigation, standing alone, support a tort claim. Id. Conversely, “an insurer which denies liability knowing that there is no rational, principled basis for doing so has breached its duty.” Id. And it is generally a question of fact whether, under the circumstances, the specific claims-handling process fell outside the bounds of good faith. See Earl v. State Farm Mut. Auto. Ins. Co., 91 N.E.3d 1066, 1077 (Ind. Ct. App. 2018), trans. denied. For example, this court reversed summary judgment for the insurer when a chain of claims-handling events—including the insurer's concealment of information it internally documented—“create[d] a question of material fact whether [the insurer] acted in bad faith.” Id. And our Supreme Court identified an issue for the fact-finder to resolve where there was conflicting evidence as to whether the insurer led the insured “to believe [it] would not cancel their policy and deterred them from taking action that would have kept the policy in effect.” Cosme v. Clark, 232 N.E.3d 1141, 1154 (Ind. 2024); see also Monroe Guar. Ins. Co. v. Magwerks Corp., 829 N.E.2d 968, 976–77 (Ind. 2005) (reasoning that, if the insurer effectively acknowledged before suit that the loss was covered, a jury could find its denial “an unfounded refusal to pay policy proceeds”).

[34] The Insurance Company's motion was directed to one theory of Count II—that it had a rational basis to deny the claims because the fire was intentionally set and the circumstances pointed to the Policyholders. The trial court accepted that theory, finding that the Insurance Company “had a good-faith basis to dispute” the claims and that there was “no designated evidence” of an unfounded refusal, an unfounded delay, deception, or an unfair advantage. Appellants’ App. Vol. 2 pp. 25, 27. In doing so, the court recounted the Insurance Company's circumstantial evidence, accepted it, and found that the Insurance Company “did not have any” improper state of mind, without discussing the evidence the Policyholders designated. Id. at 25–27.

[35] But Count II alleged that the Insurance Company breached the duty “both in the manner in which it handled [the Policyholders’] claims ․ and in making its ultimate coverage determinations,” and that it acted with a “furtive design” to avoid payment. Id. at 37–38. In reply, the Insurance Company argued that the Policyholders’ claims-handling evidence did not implicate any element of Hickman because the intentional origin of the fire supplied a rational basis for the denial. See id. at 130–32 (asserting that the Policyholders’ argument against summary judgment “ignores the most important fact of this case,” which was that “ample evidence suggests an intentionally set fire”). The Policyholders, for their part, argued that the investigation was aimed at denying the claims rather than evaluating them objectively. That argument is not answered by the existence of a rational basis for suspecting arson. The duty “encompasses more than a bad faith coverage claim.” Monroe, 829 N.E.2d at 976. A good-faith dispute over whether coverage exists will not, standing alone, support a tort claim, but the inquiry extends to the insurer's conduct leading up to and including the denial. Id. at 976–77. Thus, even if the Insurance Company had an objectively rational basis to deny the claims, that would not resolve whether its handling of the claims breached the duty it owed the Policyholders. The question, then, is not simply whether the Insurance Company had grounds to suspect arson, but whether the designated evidence permits a reasonable inference that those grounds were a pretext for a denial the Insurance Company had already decided to make.

[36] The designated evidence, viewed in the Policyholders’ favor, supports that inference. The Insurance Company's belief that the Policyholders were responsible for the fire rested on circumstantial evidence. Investigator Delp agreed that she had no evidence that the Policyholders directly set it, that neither Policyholder was the person seen on the surveillance video, and that, because the Policyholders were out of state, the theory required someone else to have acted for them. The Policyholders provided documents indicating that they were away when the fire started, and they consistently denied involvement under oath, which the Insurance Company chose not to credit.

[37] As to who that other person might be, a claim note from December 3, 2020, relays a fire investigator's report that the suspect's aunt heard him say, after a phone call from Lisa, that he was going to “do the job tomorrow,” and that he later called it an “insurance job.” Appellants’ App. Vol. 4 p. 202. In March 2021, the Deputy State Fire Marshal told Investigator Delp that investigators had “developed a suspect from the neighbor's video footage.” Id. at 197–98. As late as October 26, 2021, he told her that investigators still needed to “get [the witness's] recorded interview” and that “every time they are supposed to meet with her, she has an excuse as to why she can't meet.” Id. at 195. The State Fire Marshal's office declined Investigator Delp's requests for the identities of the suspect and the aunt through the date of the denial, and she did not learn the suspect's name until October 2024. Id. at 161–62. She had not interviewed the suspect, did not know whether anyone had, and, although she reviewed the phone records the Policyholders produced, never connected Lisa's phone to a number associated with him. She testified that the Insurance Company “considered” the tip but “didn't depend on it.” Id. at 163.

[38] The denial letter also asserted that the Policyholders failed to cooperate, including by not providing documents and signing authorizations. Investigator Delp testified, however, that the Policyholders attended every examination under oath, provided records when asked, gave the Insurance Company unrestricted access to the property, and completed and signed the Proof of Loss. Asked to identify anything the Policyholders did that prevented her from completing the investigation before the denial, she identified only the unsigned authorization for the storage-unit records. The Insurance Company issued the denial more than thirteen months after receiving the Proof of Loss.

[39] The Insurance Company's evidence is not insubstantial. The fire was intentionally set in a locked building. The Policyholders had almost no money in the weeks before the fire, with a checking account balance of $15.55 at the end of October 2020. Lisa initially denied that the Policyholders ever had a storage unit, and the Insurance Company later learned that a unit had been rented in Antonne's name from October 10 to November 24, 2020. The Policyholders never signed the storage authorization, and they produced phone records beginning only on November 16, 2020, though the Insurance Company had asked for records beginning November 1. A factfinder could reasonably regard those circumstances as evidence of involvement. A factfinder could also conclude, however, that those circumstances were not the Insurance Company's actual basis for denying the claims. The question on summary judgment is not which inference is stronger. As our Supreme Court has explained, “no matter how decisively the scales may seem to tip,” weighing evidence is “a matter for trial, not summary judgment.” Hughley, 15 N.E.3d at 1005–06.

[40] Moreover, as the Policyholders argued below, the Insurance Company's attitude toward them is reflected in an April 29, 2021, email exchange between Sparks and Driscoll, written more than eight months before the denial, while the claims were still under investigation. Driscoll wrote that she could not offer reinstatement of the policy “due to the claims,” observing that the Policyholders “have had 2 large fires that are suspicious.” Appellants’ App. Vol. 5 p. 152. Sparks answered, “I didn't want this reinstated, I wanted to non-renew them after their 1st fire ․” Id. The Insurance Company may be able to explain the exchange as an underwriting decision, and Driscoll also pointed to “the loss ratio” in explaining the reinstatement decision. Id. But Driscoll tied her decision to the pending claims and described the fires as “suspicious” while Investigator Delp was still investigating, and Sparks's statement permits the inference that he regarded the Policyholders as a poor risk because of an earlier fire claim. Id. A factfinder could reasonably infer from the exchange that the Insurance Company viewed the Policyholders with suspicion before its investigation was complete, and that its handling of the claims reflected that view.

[41] In briefing below, the Insurance Company argued that it did not matter whether Sparks was its employee or an independent contractor because he took no part in the claim decision. Appellants’ App. Vol. 2 pp. 132–34. At the hearing, it acknowledged that Sparks “didn't want them insured” but asserted that “Farm Bureau didn't take that position.” Tr. Vol. II p. 20. On appeal, however, the Insurance Company does not address Sparks in its appellate briefing. Driscoll, moreover, is its own employee. Whatever the extent of Sparks's and Driscoll's involvement in the claim decision, their statements are evidence of the Insurance Company's attitude toward the Policyholders that a factfinder may weigh in deciding whether the Insurance Company breached the duty.

[42] In the end, no single item decides the matter. The unsigned authorization, the uncorroborated tip, the cooperation ground that Investigator Delp's own testimony undercuts, the length of the investigation, and the April 2021 exchange can each be explained innocently. However, considered together, and with all reasonable inferences drawn in the Policyholders’ favor, the designated evidence permits a reasonable factfinder to conclude that the Insurance Company decided to deny the claims and then assembled grounds to support that decision, rather than evaluating the claims objectively. An insurer that denies liability knowing that there is no rational, principled basis for doing so has breached its duty, and whether the grounds the Insurance Company stated were its actual basis for the denial is a question for the factfinder. See Hickman, 622 N.E.2d at 520; Monroe, 829 N.E.2d at 977.

[43] The Insurance Company contends that the Policyholders ask us to reweigh the evidence the trial court considered. See Appellee's Br. pp. 24–25. But we do not engage in reweighing. That is, we do not decide whose account of the investigation is more persuasive; we ask only whether the designated evidence, viewed in the Policyholders’ favor, permits more than one reasonable inference.

[44] The Insurance Company also argues summary judgment was proper because the Policyholders “failed to designate any evidence that there is dishonest purpose, moral obliquity, furtive design, or ill will that may be attributed to [Insurance Company] in [its] adjustment of [the] claim[s].” Appellee's Br. p. 27. That showing pertains to the second step, the right to punitive damages. Hickman, 622 N.E.2d at 520. The evidence discussed above, however, also permits an inference about the Insurance Company's state of mind, and the trial court's finding that the Insurance Company “did not have any” improper state of mind resolved a question of fact against the non-movant. Appellants’ App. Vol. 2 p. 27. Whether the Policyholders can carry their burden of proof is a matter for trial.

[45] Assuming the Insurance Company's designated evidence made a prima facie showing that it had a good-faith basis to dispute the claims, the burden shifted to the Policyholders, who designated evidence from which a reasonable factfinder could infer that the stated basis was a pretext for denying coverage. Drawing every reasonable inference in the Policyholders’ favor, as we must, we conclude that the trial court erred in granting the Insurance Company summary judgment on Count II. Because the pretext theory provides a basis to reverse summary judgment, we do not reach the Policyholders’ remaining arguments for reversal of this count, including their independent contentions regarding delay, the statutory standards for claims handling, the authorship of the denial letter, and the Insurance Company's alleged refusal to disclose the suspect's identity.

Conclusion

[46] Genuine issues of material fact remain on both counts. We therefore reverse the entry of summary judgment for the Insurance Company, and we remand for further proceedings.

[47] Reversed and remanded.

FOOTNOTES

1.   Regarding the breach of contract claim, the trial court also stated, “On review, the Court can only find that it properly determined that [the Insurance Company] concluded that the Goses’ loss was intentionally caused and there was, therefore, no coverage under either of their two (2) policies.” Appellants’ App. Vol. 2 p. 34. On appeal, there is no contention that the Insurance Company established, as a matter of law, that the Goses intentionally caused the fire so as to support granting it summary judgment on the breach of contract claim.

2.   The only Commercial Policy provision broad enough to reach the Policyholders’ conduct is the separate requirement to “[c]ooperate with us in the investigation or settlement of the claim.” Appellants’ App. Vol. 3 p. 142. On appeal, the Insurance Company does not rely on this clause as a basis for summary judgment. We therefore do not address the scope or effect of the clause.

3.   Having determined that the Insurance Company was not entitled to summary judgment on the breach of contract claim, we do not reach the Policyholders’ alternative arguments for reversing the judgment.

Foley, Judge.

Tavitas, C.J., and Weissmann, J., concur.