Opinion
Case No. 4:03-cv-0124-DFH-WGH.
March 18, 2005
ENTRY ON MOTIONS FOR SUMMARY JUDGMENT
In Indiana, an insurance company can be found liable in tort for bad faith denial or delay of payment on an insurance claim. Erie Insurance Co. v. Hickman, 622 N.E.2d 515, 519 (Ind. 1993). This diversity case presents a dispute over delayed payment of an insurance claim for a bus damaged by a fire that the insurer believes was caused by arson. The plaintiff claiming bad faith is not the party entitled to payment under the insurance policy. The plaintiff is the lessee of the bus. It alleges that it suffered losses as a result of the insurance company's alleged bad faith delay in making payment to the lessor, the party actually entitled to payment on the policy.
Procedural Background
Plaintiff Johnny Miller Transportation and Tours, Inc. ("Johnny Miller") leased a charter bus owned by defendant General Electric Commercial Equipment Finance Corporation, which does business as "GE Capital." Plaintiff insured the bus with defendant Great American Insurance Company of New York ("Great American"). Owner-lessor GE Capital had rights as the loss-payee under the policy. When the bus was damaged by fire, plaintiff Johnny Miller made a claim under the insurance policy. After delays involving investigation into the cause of the fire and into the identity of the rightful loss-payee, Great American eventually made payment on the claim to GE Capital. Plaintiff Johnny Miller has sued Great American claiming that the delay on payment was in bad faith and caused Johnny Miller to lose money because it fell behind on lease payments to GE Capital while the bus was inoperable during the delay.
Plaintiff Johnny Miller also named GE Capital as a party to determine GE Capital's interests in the insurance proceeds. GE Capital filed a counterclaim against plaintiff and its president seeking past due lease payments on the bus, compensation for the loss value of the bus, and other compensatory damages.
The case has a rather tangled procedural history, in part a result of lengthy efforts by the court and the parties to reach a comprehensive settlement rather than spend time and money on litigation. Those efforts were only partially successful; GE Capital and Great American have resolved their issues with one another, and Johnny Miller has agreed that it is not entitled to payment as a loss-payee directly under the Great American insurance policy. The following claims remain before the court: Johnny Miller's bad faith tort claim against Great American, and GE Capital's counterclaim against Johnny Miller and its president. GE Capital has moved for summary judgment on its counterclaim based on the terms of its lease agreement with plaintiff. Great American has moved for summary judgment on plaintiff's claim of bad faith delayed payment on the insurance claim. For reasons explained below, Great American's motion is granted, and GE Capital's motion is granted as to liability but denied as to the amount owed.
Plaintiff Johnny Miller's motion for leave to file an amended response to Great American's motion for summary judgment (Docket No. 90) is hereby granted, and the court has considered the amended response tendered by plaintiff.
I. Standard for Summary Judgment
Under Rule 56(c) of the Federal Rules of Civil Procedure, the court should grant summary judgment if and only if there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. On a motion for summary judgment, the moving party must first come forward and identify those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, which the party believes demonstrate the absence of a genuine issue of material fact. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
This court's Local Rule 56.1 requires parties moving for summary judgment to include a "statement of material facts" that includes citations to the relevant record materials. Where the moving party has met the threshold burden of supporting the motion, the opposing party must "set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). Not all factual disagreements are material. Factual disagreements that are irrelevant or immaterial under the applicable substantive law do not preclude summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986).
Under Local Rule 56.1, the party opposing summary judgment must in its brief identify specific and material factual disputes in a section labeled "Statement of Material Facts in Dispute." In making this showing, the party opposing the motion may not rely merely on assertions in pleadings to establish a genuine issue, but must come forward with evidence that would be admissible at trial. Collier v. Budd Co., 66 F.3d 886, 892 n. 8 (7th Cir. 1995). Where an opposing party fails to make this showing, the court must assume that the moving party's stated facts exist without controversy if they are supported by admissible evidence. Local Rule 56.1(e).
In reviewing the parties' submissions, the court must consider the evidence in the light reasonably most favorable to the non-moving party. However, the existence of some "metaphysical doubt" does not create a genuine issue of fact. The issue is whether a rational trier of fact could reasonably find for the party opposing the motion with respect to the particular issue. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The court need not scour the record in search of a genuine issue of fact but may rely on the parties' citations to the evidence they contend supports their positions. E.g., Richards v. Combined Ins. Co. of Am., 55 F.3d 247, 251 (7th Cir. 1995). The court should neither "look the other way" to ignore genuine issues of material fact, nor "strain to find" material factual issues where there are none. Mechnig v. Sears, Roebuck Co., 864 F.2d 1359, 1363-64 (7th Cir. 1988). Summary judgment is not a substitute for a jury's determinations about credibility or about the inferences to draw from circumstantial evidence. At the same time, if there is no dispute over a material factual issue — one that could control the outcome of a trial — then summary judgment is appropriate even if there remain many other factual disputes between the parties. Summary judgment is not a disfavored shortcut, but an essential part of the Federal Rules of Civil Procedure. Summary judgment is not discretionary; when a party is entitled to judgment as a matter of law, summary judgment must be granted.
II. GE Capital's Motion for Summary Judgment
GE Capital filed its brief in support of its motion for summary judgment on its counterclaim against plaintiff on June 1, 2004. On July 9, 2004, plaintiff moved for an extension of time to respond to GE Capital's summary judgment motion, and the parties and the court agreed to further extensions. The magistrate eventually granted plaintiff until October 30, 2004, to file its response to GE Capital's motion for summary judgment. Plaintiff did not respond.
GE Capital eventually added to its counterclaim a third party claim against John R. Miller. Part II of this entry refers to the Johnny Miller company and Mr. Miller collectively as "plaintiff."
Under Rule 56(e) of the Federal Rules of Civil Procedure, "If the adverse party does not respond, summary judgment, if appropriate, shall be entered against the adverse party." GE Capital is entitled to summary judgment as to liability on its counterclaim against plaintiff. The facts contained in GE Capital's "Statement of Undisputed Facts" are supported by admissible evidence and not otherwise controverted by plaintiff or by other evidence in the record before the court. See GE Capital Br. at 2-4. Pursuant to Local Rule 56.1(e), the court treats them as undisputed. In other words, by not responding to GE Capital's motion, plaintiff has effectively admitted that no issues of material fact exist. See Manor Healthcare Corp. v. Guzzo, 894 F.2d 919, 922 (7th Cir. 1990) ("any arguments in opposition to summary judgment not properly raised in the district court are waived").
For the reasons stated in GE Capital's brief at pages 4-6, these undisputed facts entitle GE Capital to summary judgment as a matter of law as to liability for the losses GE Capital suffered. Plaintiff has waived any right to persuade this court otherwise. See Sere v. Board of Trustees of Univ. of Illinois, 852 F.2d 285, 287 (7th Cir. 1988) ("It is not the obligation of this court to research and construct the legal arguments open to parties, especially when they are represented by counsel.") (citation omitted).
However, GE Capital filed its motion for summary judgment before the full cost of the repairs to the bus was known, and before Great American reached its settlement with GE Capital. Great American has since paid the cost of the repairs to GE Capital. However, GE Capital was attempting to sell the bus in order to mitigate damages. See GE Capital Request to Rule on Motion at ¶ 4. This court has not been informed of the status of these matters or the present extent of damages attributable to plaintiff. The court grants summary judgment to GE Capital on its counterclaim only as to plaintiff's liability, not to the extent of damages, which shall be addressed promptly, as discussed below.
III. Great American's Motion for Summary Judgment
In three briefs to this court in support of its summary judgment motion, Great American provided detailed factual assertions supported by admissible evidence. Great Amer. Br. at 2-6; Great Amer. Reply Br. at 2-3; Great Amer. Supp. Reply Br. at 2-3. In the plaintiff's amended response brief, the plaintiff offered some legal conclusions and some events and circumstances not set forth in Great American's briefs. However, plaintiff chose not to controvert Great American's factual assertions or to identify specific material factual disputes. Accordingly, pursuant to Local Rule 56.1(e), the following facts are undisputed for purposes of Great American's motion for summary judgment.
The facts a court must assume for purposes of summary judgment are often incomplete and ultimately incorrect, but the court must apply the legal standard to the evidence they have submitted. Out-of-court assertions related to the fire investigation and alleged causes of the fire are admissible not for their truth but only as relevant to Great American's state of mind in delaying payment on the claim. See Fed.R.Evid. 801(c). Great American's motion does not require the court to decide the actual cause of the fire or the culpability of John R. Miller or his company.
A. Undisputed Facts
Plaintiff Johnny Miller leased a 1999 Van Hool charter bus from defendant GE Capital. Under the terms of the lease, plaintiff was required to secure insurance for the bus. Plaintiff had a commercial automobile insurance policy with Great American. On January 13, 2003, fire severely damaged the bus. Plaintiff then made a claim to Great American for payment for damage to the bus.
Great American took steps to investigate the fire and to evaluate the claim. The investigation caused Great American to believe that the fire had been set intentionally. A fire investigation expert hired by Great American ruled out accidental causes and identified evidence of a liquid accelerant consistent with arson. Great Amer. Br. at 2-3.
The investigation revealed that Steve Thompson was arrested by the Aurora, Indiana, police and gave a sworn statement that he had set the fire at the request of John R. Miller, president of plaintiff Johnny Miller. Evidence from Jeanne Heimann, an independent witness, supported the sworn statement of Steve Thompson. Great Amer. Br. at 3-5.
The investigation concluded that the Johnny Miller company had financial motive to cause the fire to be set. Great Amer. Br. at 5-6. The investigation also concluded that Mr. Miller had made material misrepresentations during the claims stage. Based on the investigation, Great American's claims examiner recommended that Johnny Miller's claim for fire damage to the bus be denied. Id. at 6.
On September 30, 2003, following the investigation, Great American denied plaintiff's claim based on the results of its investigation. Plaintiff then filed suit in this court against Great American for breach of contract and bad faith denial of an insurance claim.
Prior to the conclusion of Great American's arson investigation, however, it was determined that GE Capital might have rights as the loss-payee on the insurance policy. Great American moved to have GE Capital added as an indispensable party-plaintiff. Instead, plaintiff added GE Capital as an additional defendant.
GE Capital filed its answer on October 29, 2003, with its counterclaim against plaintiff and its president (who is technically a third party defendant) for past due lease payments on the bus and damages related to the fire, as well as a cross-claim against Great American seeking coverage as the loss-payee under the policy. This was the first time GE Capital had asserted a claim under the policy. Deutsch Aff. ¶ 4.
On December 15, 2003, GE Capital submitted a settlement demand of approximately $190,000 to Great American. As it turned out, the named loss-payee on the policy was ABC Bus Leasing, Inc. ABC Financial Services, Inc. was the named lessor. ABC Bus Leasing and ABC Financial Services (together "ABC Financial") were both subsidiaries of GE Capital.
Gary B. Deutsch was a senior claims examiner for the company that performs claims evaluation for Great American. Deutsch needed to be assured that GE Capital was ABC Financial's parent company and thus had rights as the loss-payee under the policy. He also needed assurance that GE Capital had no other insurance on the bus because Great American's coverage was excess over any other collectible insurance on the bus. Deutsch requested this information from GE Capital's counsel. Deutsch Aff. ¶¶ 1-6.
On January 6, 2004, Great American received from GE Capital the affidavit of Williams Murphy, an attorney for GE Capital, indicating that GE Capital was the parent company of ABC Financial, and that no other insurance coverage existed for the bus. Deutsch Aff. ¶ 7.
Deutsch was not satisfied that this affidavit established GE Capital as the valid loss-payee because the information did not establish that GE Capital owned 100% of ABC Financial. Deutsch requested this information. Deutsch Aff. ¶ 8.
On February 16, 2004, in response to Deutsch's request, ABC Financial provided an affidavit indicating that GE Capital owned all of ABC Financial's outstanding shares of stock. However, Deutsch then requested assurance that GE Capital owned all shares of the company's stock, not just those outstanding. Deutsch received an affidavit confirming this on or about February 26, 2004. Deutsch Aff. ¶¶ 9-10.
Satisfied with these representations, Great American entered settlement negotiations with GE Capital to settle all claims and causes of action against Great American by GE Capital in its capacity as loss-payee under the policy. On March 15, 2004, Great American and GE Capital reached a settlement agreement whereby Great American would pay for all repairs to the bus, less the $5,000 policy deductible.
Deutsch authorized the repair work to begin on the bus when GE Capital accepted the terms of the settlement. Deutsch understood the repairs would take three months. The repairs took about four months. On July 14, 2004, Great American sent a check to GE Capital in the amount of $133,796 for the repairs to the bus and in return for a release from further liability. Deutsch Aff. ¶ 12. Other relevant facts are noted below as necessary, keeping in mind the standard that applies on a motion for summary judgment.
B. The Bad Faith Claim
Indiana recognizes the tort of bad faith denial of an insurance claim. In Erie Insurance Co. v. Hickman, the Supreme Court of Indiana held that insurers owe their insureds a duty of good faith and fair dealing, which includes a duty to refrain from causing an unfounded delay in making payment. 622 N.E.2d 515, 519 (Ind. 1993). Plaintiff asserts that Great American caused an "intentional delay" in making its payment to GE Capital "during a time when lease payments continued to accrue at a rate of $3,800 per month." Pl. Amend. Resp. at 3.
In its complaint and in its original response to Great American's motion for summary judgment, the plaintiff alleged breach of contract in addition to bad faith delay. However, Great American reported in its brief that plaintiff conceded before the magistrate judge that it had no claim other than the bad faith claim. Great Amer. Br. at 10. While the court has been provided no record of the parties' meeting with the magistrate judge, the plaintiff has not contested that statement. The plaintiff also has not asserted a breach of contract claim in its amended response and has not pointed this court to any governing law that would support a breach of contract claim by a party other than the loss-payee under circumstances as exist here. The court is satisfied that plaintiff has abandoned any breach of contract claim and asserts against Great American only a claim for bad faith delay.
To prove bad faith, the plaintiff must establish with clear and convincing evidence that the insurer knew there was no legitimate basis for the delay. Freidline v. Shelby Ins. Co., 774 N.E.2d 37, 40 (Ind. 2002). Thus, "poor judgment or negligence do not amount to bad faith; the additional element of conscious wrongdoing must also be present." Woodley v. Fields, 819 N.E.2d 123, 133 (Ind.App. 2004), quoting Colley v. Indiana Farmers Mutual Ins. Group, 691 N.E.2d 1259, 1261 (Ind.App. 1998).
Plaintiff identified the period of delay as between January 13, 2003, when the bus burned, and February 26, 2004, when Deutsch received the information regarding GE Capital's ownership of ABC Finance which Deutsch claims satisfied him that GE Capital was the rightful loss-payee on the claim.
However, Great American asserted, and plaintiff did not deny, that Great American was unaware of the existence of GE Capital as the loss-payee on the policy and was unaware that plaintiff was not the loss-payee until GE Capital was brought into this litigation in June 2003. The court assumes this to be a fact without controversy. See Local Rule 56.1. Thus, the relevant period of alleged delay here is between June 2003 and February 26, 2004. It could be otherwise only if plaintiff could establish that Great American earlier knew, or intentionally delayed finding out, the identity of the loss-payee.
Plaintiff discussed vaguely Great American's arson investigation in its response brief without specifying how the arson investigation fits into its bad faith claim. This investigation began before GE Capital emerged as a possible loss-payee. If plaintiff means to imply that Great American was negligent in focusing on the arson investigation with the result of delaying the discovery of GE Capital as the loss-payee, the argument fails. See Woodley, 819 N.E.2d at 133 (negligence is not sufficient to establish bad faith, "conscious wrongdoing" is required); see also Colley, 691 N.E.2d at 1261 ("A finding of bad faith requires evidence of a state of mind reflecting dishonest purpose, moral obliquity, furtive design, or ill will.").
Moreover, the arson investigation began at a time when plaintiff was representing itself to Great American as the rightful recipient of the insurance payment, and plaintiff was demanding payment in its own right. See Pl. Resp. Br., Letter of April 29, 2003. Plaintiff is asserting bad faith for a delay it helped to cause by improperly claiming a payment to which it now concedes it was not entitled.
Plaintiff also has not come forth with argument or evidence that would allow a jury to find that the arson investigation amounted to "conscious wrongdoing." Plaintiff points to statements made by John R. Miller denying his involvement in the fire. It offers evidence and argues that the company had no financial motive to burn the bus. Such evidence would be relevant on the question whether John R. Miller or his company are in any way culpable for the burning of the bus. That question is no longer at issue in this case. Even if plaintiff had been the rightful loss-payee under the policy, as Great American apparently assumed when it started the investigation, a dispute over liability does not establish bad faith even if it turns out the insurance company was in error and the claim was valid. "That insurance companies may, in good faith, dispute claims, has long been the rule in Indiana." Hickman, 622 N.E.2d at 520. Rather, to infer bad faith from an insurer's delay in paying a claim, there must be an "absence of any reasonable ground" for the delay, and circumstantial evidence of arson can provide reasonable grounds for denying a claim. Hoosier Ins. Co. v. Mangino, 419 N.E.2d 978, 983, 986-87 (Ind.App. 1981). The undisputed facts here show that there were actually two reasonable grounds for the delay: the evidence of arson by Mr. Miller, and uncertainty as to which party would be entitled to payment for the loss.
Plaintiff has not come forward with evidence that would allow a reasonable jury to find that Great American had no reasonable grounds for its arson investigation. The undisputed facts show that Great American quickly obtained evidence that the fire had been set deliberately. Great Amer. Br. at 2-3. The undisputed facts show evidence that could support an inference that John R. Miller was involved in setting the fire. The undisputed facts show that the Aurora, Indiana, police arrested Steve Thompson for setting the fire, that Mr. Thompson implicated Mr. Miller, and that an independent witness supported Mr. Thompson's statement. Id. at 3-5.
Again, on the bad faith claim, the issue is not whether Great American had definitive proof that Mr. Miller or his company were involved in setting the fire. The issue is whether the plaintiff has evidence that would allow a reasonable jury to find that Great American's investigation was groundless and in bad faith. In light of the undisputed facts, the plaintiff does not have such evidence. Great American has come forward with evidence that would, under controlling Indiana law, reasonably permit an inference that Mr. Miller was involved in the fire. See Cincinnati Ins. Co. v. Compton, 569 N.E.2d 728, 729-30 (Ind.App. 1991) (circumstantial evidence of incendiary origin, motive, and opportunity can support arson defense); Dean v. Ins. Co. of North America, 453 N.E.2d 1187, 1194 (Ind.App. 1983) (jury may find arson based on circumstantial evidence "if the inferences are not so remote and all circumstances, including the inferences, are of sufficient force to bring minds of ordinary intelligence to a persuasion of incendiarism by a fair preponderance of the evidence").
Plaintiff cites McLaughlin v. State Farm Mutual Ins. Co., 30 F.3d 861 (7th Cir. 1994), where the Seventh Circuit upheld a denial of summary judgment to an insurer which had denied a claim based on a suspicion of arson. However, in that case the Seventh Circuit upheld the denial of summary judgment against the insurer as to only the plaintiff's breach of contract claim. The court found that there were substantial and material factual disputes as to whether the plaintiff had in fact committed arson. Those disputed facts (concerning the insured's alibi) affected whether the denial of his claim was or was not a breach of the insurance contract, but they were not material to the bad faith tort claim. The court went on to hold as a matter of law that a jury verdict for punitive damages on the bad faith claim was not supported by the evidence where substantial circumstantial evidence pointed toward arson by the plaintiff. Id. at 869-70. The district court had held that the question of bad faith was a "question of fact for the jury," and the jury ultimately awarded punitive damages. The Seventh Circuit reversed the punitive damages award as a matter of law because the existence of circumstantial evidence of arson precluded a finding of bad faith, the only basis on which punitive damages could be awarded. As with the punitive damages issue in McLaughlin, the undisputed facts here show that Great American had ample reasonable grounds to investigate the arson.
An arson investigator found that the truck fire was incendiary and started inside the locked truck. The doors of the building in which the truck was stored were locked, and there was no evidence of a break-in. The plaintiff said that he had the only keys to the truck. There was no evidence of vandalism or forced entry into the vehicle. All of the reports noted that both the radio and the battery had been removed from the truck prior to the fire. The investigation also showed that the plaintiff had serious financial difficulties, had told inconsistent stories to investigators, and had submitted two similar fire claims before. 30 F.3d at 869-70.
Because the bad faith tort has its roots in contract law, Indiana courts are still sorting out the types of available damages. The availability of punitive damages is the biggest difference between contract and tort law, and Hickman clearly opened the door to punitive damages if the insured can meet a high standard of proof. 622 N.E.2d at 520. As for compensatory damages, the Indiana Supreme Court observed in Hickman that, "in most instances, tort damages for the breach of the duty to exercise good faith will likely be coterminous with those recoverable in a breach of contract action." 622 N.E.2d at 519. Judge Lee has held that emotional damages may be available for the tort, though they would not be available on a contract claim. Patel v. United Fire Cas. Co., 80 F. Supp. 2d 948, 960 (N.D. Ind. 2000). As a corporate plaintiff, Johnny Miller has not tried to assert a claim for emotional damages. Since Johnny Miller is not the proper loss-payee under the contract, it appears that the only relief available to Johnny Miller on its bad faith claim (if it had merit) would be punitive damages.
On the bad faith claim, the issue is not whether Mr. Miller was in fact guilty of arson or conspiracy to commit arson. The relevant issue is whether circumstances in fact existed by which Great American could in good faith initiate and carry out an arson investigation of Mr. Miller. Great American has come forward with undisputed evidence showing that these circumstances existed. Plaintiff's statements that both it and John R. Miller "had nothing to do with the fire" do not amount to a material factual dispute because whether Mr. Miller or his company are in fact guilty of arson is not material to the bad faith claim.
Where the insured is a corporation, arson cases involving officers, directors, and/or shareholders can present an issue of "corporate arson": should the insured corporation's claim for loss be barred by the officer's arson? See, e.g., Thompson Hardwoods, Inc. v. Transportation Insurance Co., 2002 WL 440222, at *6-11 (S.D. Ind. 2002) (granting summary judgment for insurer on bad faith claim because Indiana law on "corporate arson" was not clearly defined and investigation produced evidence that president, director, and 23 percent shareholder was responsible for arson). In the present case, Mr. Miller owned 50 percent of the company and was the principal manager of its affairs. See Pl. Amend. Resp. at March 20, 2003, interview with John R. Miller, lines 210-15. Accordingly, Great American had ample reason to investigate the arson on suspicion of Mr. Miller before making a payment decision regarding the company. See also Hoosier Ins. Co. v. North South Trucking Supplies, Inc., 684 N.E.2d 1164, 1169 n. 2, 1171 (Ind.App. 1997) (stating that "no Indiana cases have addressed the issue," and looking to other jurisdictions to conclude that "the point on which the decision turns is the degree of control which the incendiarist exerts over the affairs of the corporation, and whether the incendiarist stands to gain from his wrongdoing").
Based on the foregoing, the only possible period of actionable delay in this case is between June 2003, when GE Capital emerged as a potential loss-payee under the policy, and February 26, 2004, when Mr. Deutsch said he was finally satisfied that GE Capital was in fact the proper loss-payee. Plaintiff offers one argument to support its burden of proof with regard to this period of time. Plaintiff states:
Great American contends that it had to check on whether there was other insurance on the bus. This could have been accomplished through a phone call on January 14, 2003 to GE Capital. It is interesting to note that of all of the people Great American hired to interview [John R. Miller], none of them asked if there was other insurance.
Pl. Amend. Resp. at 2-3.
These statements, which the court assumes to be true, do not raise an inference of "conscious wrongdoing." Woodley, 819 N.E.2d at 133. They do not evince "dishonest purpose, moral obliquity, furtive design, or ill will." Colley, 691 N.E.2d at 1261. The fact that during an active arson investigation, nobody thought to ask the chief suspect of that investigation if there was other insurance on the burned vehicle hardly carries plaintiff's burden of proof here. And the suggestion that Great American could have phoned ABC Bus Leasing or ABC Financial Services on January 14, 2003, without more permits an inference of nothing worse than negligence.
By contrast, the undisputed facts show reasonable grounds for the time it took Great American to pay GE Capital. Deutsch's affidavit describing the assurances he needed regarding the relationship between ABC Financial and GE Capital, and why he needed those assurances, are in themselves sufficient. The Deutsch affidavit as well as the evidence of the communications between GE Capital and Great American reflect reasonable requests by an insurance company, reasonable responses by a loss-payee, and while not a swift resolution of the claim, also not one unduly prolonged under the circumstances. The circumstances included several months during which the plaintiff falsely represented itself to the insurance company as the loss-payee, as well as the uncertainty regarding the precise relationships between ABC Busing, ABC Financial, and GE Capital. Under such circumstances, the insurance company was entitled to make very sure that any six-figure payment would go to the proper party.
For the foregoing reasons, the plaintiff has failed to show an "absence of any reasonable ground" for the time it took Great American to make payment to GE Capital. Mangino, 419 N.E.2d 978, 983 (Ind.App. 1981). Accordingly, Great American's motion for summary judgment is granted.
Conclusion
GE Capital's motion for summary judgment on its counterclaim against Johnny Miller and John R. Miller is granted as to liability but denied without prejudice as to the amount of damages. Great American's motion for summary judgment on Johnny Miller's bad faith claim is granted in full. The court will hold a status conference on April 12, 2005 at 4:00 p.m. Indianapolis time, to address how best to resolve the remaining issues concerning the amount to which GE Capital is entitled. Counsel may participate by telephone. The court anticipates that the issue might be resolved by stipulation or a short hearing.
So ordered.