Howell Tractor and Equipment, LLC v. Alliance Tank Service, LLC

Filing 81

OPINION AND ORDER: The Motion for Summary Judgment filed by Plaintiff Howell Tractor and Equipment, LLC 65 is GRANTED IN PART AND DENIED IN PART - it is GRANTED on the issue of liability but DENIED as to the damages. This Court HEREBY ORDERS that the action on the third-party counterclaim is STAYED until after trial or resolution of the underlying action and until further order of the Court. Due to the stay, the Motion for Summary Judgment filed by Great American Insurance Company of New Yor k 61 is DENIED WITHOUT PREJUDICE WITH LEAVE TO REFILE; the Motion for Summary Judgment filed by Third-Party Plaintiff, Alliance Tank Service p62] is DENIED WITHOUT PREJUDICE WITH LEAVE TO REFILE; and Great American's Motion to Strike 67 IS D ENIED WITHOUT PREJUDICE WITH LEAVE TO REFILE. Plaintiff Howell's Motion to Bar Third-Party Defendant Great American Insurance's Expert Witness 68 is GRANTED TO THE EXTENT as ou lined in the Order. Signed by Judge Rudy Lozano on 3/20/2018. (jss)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION
HOWELL TRACTOR AND EQUIPMENT, )
LLC, an Illinois Corporation, )
)
Plaintiff,
)
)
vs.
) CAUSE NO. 2:14-cv-302
)
ALLIANCE TANK SERVICE, LLC,
)
an Oklahoma Corporation,
)
)
Defendant.
)
______________________________)
)
ALLIANCE TANK SERVICE, LLC,
)
)
Third-Party Plaintiff,
)
)
vs.
)
)
GREAT AMERICAN INSURANCE
)
COMPANY OF NEW YORK,
)
)
Third-Party Defendant.
)
OPINION AND ORDER
This matter is before the Court on the: (1)Great American
Insurance Company of New York’s Motion for Summary Judgment, filed
by Third-Party Defendant, Great American Insurance Company of New
York, on August 14, 2017 (DE #61); (2) Motion for Summary Judgment,
filed by Third-Party Plaintiff, Alliance Tank Service, LLC, on
August

14,

2017

(DE

#62);

(3)

Plaintiff

Howell

Tractor

and

Equipment, LLC’s Motion for Summary Judgment, filed by Plaintiff,

Howell Tractor and Equipment, LLC, on August 14, 2017 (DE #65); (4)
Great American Insurance Company of New York’s Motion to Strike or
Exclude Certain Opinions of Dr. William Warfel, filed by ThirdParty Defendant, Great American Insurance Company of New York, on
August 14, 2017 (DE #67); and (5) Plaintiff Howell Tractor and
Equipment,

LLC’s

Motion

to

Bar

Third-Party

Defendant,

Great

American Insurance Company of New York’s Expert Witnesses Anthony
Bond, Michael Smith, Frank Dues, Ben Glaser, Edward Kozlove, Tommie
Beattie, Dave Wood, and Ron Williams, filed by Plaintiff, Howell
Tractor and Equipment, LLC, on August 14, 2017 (DE #68).
For the reasons set forth below, the Motion for Summary
Judgment filed by Plaintiff, Howell Tractor and Equipment, LLC (DE
#65) is GRANTED IN PART AND DENIED IN PART - it is GRANTED on the
issue of liability but DENIED as to damages because there are
disputed questions of material fact for the fact finder with
respect to whether damages for lost profits are recoverable (and if
they are recoverable, what amount is appropriate) and whether
Howell is entitled to attorneys’ fees and costs.
This Court HEREBY ORDERS that the action on the third-party
counterclaim is STAYED until after trial or resolution of the
underlying action between Plaintiff Howell and Defendant Alliance,
and until further order of the Court.
Due to the stay in the third-party action, the Motion for
Summary Judgment filed by Third-Party Defendant Great American
2

Insurance Company of New York (DE #61) is DENIED WITHOUT PREJUDICE
WITH LEAVE TO REFILE; the Motion for Summary Judgment filed by
Third-Party Plaintiff, Alliance Tank Service, LLC (DE #62) is
DENIED WITHOUT PREJUDICE WITH LEAVE TO REFILE; and Third-Party
Defendant Great American Insurance’s Motion to Strike or Exclude
Certain Opinions of Dr. William Warfel (DE #67) is DENIED WITHOUT
PREJUDICE WITH LEAVE TO REFILE.
Finally,

Plaintiff

Howell’s

Motion

to

Bar

Third-Party

Defendant Great American Insurance’s Expert Witnesses (DE #68) is
GRANTED TO THE EXTENT that Great American’s experts will be barred
from giving testimony in the underlying case between Plaintiff
Howell and Defendant Alliance; however, this does not effect Great
American Insurance’s possible use of its own experts in the thirdparty action, when the third-party action is no longer stayed.
BACKGROUND
All of the controversy involved in this case began with a
crane that got stuck in the mud.
Agreement,

Plaintiff,

Howell

Under a Rental Equipment

Tractor

and

Equipment,

LLC

(hereinafter “Howell”), leased a crane to Defendant, Alliance Tank
Service, LLC (hereinafter “Alliance”).

The crane got stuck in the

mud and while attempting to pull it out, Alliance concedes that it
bent the boom of the crane.
Alliance returned the crane to Howell.

After conferring with

the crane’s manufacturer, Tadano Mantis Corporation (“Mantis”),
3

Howell demanded in writing that the boom sections be replaced.
Meanwhile, Alliance reported the claim to its insurer, third-party
defendant Great American Insurance Company of New York (hereinafter
“Great

American”).

Great

American

investigated

the

claims,

consulted with several heavy equipment experts and repair shops,
and concluded that the crane’s boom sections could be repaired
(instead of replaced).
Great American tendered payment for only the repair costs
($48,298.78), Alliance tendered payment of its deductible ($5,000),
and Howell accepted the payment without waiving its rights to seek
recovery from Alliance for the difference between the repair cost
and replacement cost of the crane’s boom.

Howell had the boom

sections of the crane replaced.
Howell

then

initiated

this

lawsuit

against

Alliance.

Plaintiff’s Complaint (DE #1) states a claim against Alliance for
negligence for damaging the crane (Count I) and breach of contract
(Count

II)

for

failure

to

pay

the

full

replacement

damages

($142,645.55) and the monthly rent lost while the crane was being
repaired ($105,000).
Alliance then filed a third-party complaint against Great
American, which it amended several times.

In the second amended

third-party compliant (DE #45), Alliance states a claim against
third-party defendant Great American for breach of contract (Count
I) and bad faith (Count II).
4

Three motions for summary judgment have been filed.

Third-

Party Defendant Great American filed a motion for summary judgment,
arguing that Alliance’s claims against it are premature and unripe,
the bad faith claim fails, and it does not owe anything for the
lost rents.

(DE ##61, 69.)

In response, Howell argues that the

breach of contract claim against Great American is ripe for
adjudication, there is a genuine issue of material fact regarding
whether Great American acted in bad faith, and damages for lost
rent are recoverable under Alliance’s bad-faith claim.

(DE #75.)

Third-Party Plaintiff, Alliance, filed a cross-motion for summary
judgment against Great American, arguing that applicable OSHA
regulations precluded repair of the boom.

(DE #62.)

In response,

Great American contended it did not breach its contract and that
the OSHA regulations cited by Alliance do not prohibit repair of
the boom sections.

(DE #76.)

Additionally, Howell filed a motion

for summary judgment, arguing Alliance breached the Equipment
Rental Agreement when it failed to pay for the replacement of the
boom sections, Great American’s expert witnesses are irrelevant to
the contractual cause of action between Howell and Alliance, and
that it is also entitled to lost rental fees and attorneys’ fees
and costs.

(DE #65, 66.)

Alliance responds in opposition that

there are genuine disputes as to whether Howell is entitled to lost
rental income, the amount of lost rental income and other damages,
whether eight to ten months of lost rental income was foreseeable,
5

and whether Howell failed to mitigate its damages. (DE #74.)
In addition to the three motions for summary judgment, there
are two motions to bar expert witnesses.
motion

to

bar

Third-Party

Defendant

Plaintiff Howell filed a
Great

American’s

expert

witnesses Anthony Bond, Michael Smith, Frank Dues, Ben Glaser,
Edward Kozlove, Tommie Beattie, Dave Wood, and Ron Williams,
arguing these expert opinions are irrelevant to the cause of action
between Howell and Alliance. (DE #68.) In response, Great American
argues that Howell does not have any standing to bar expert
testimony in an action between Alliance and Great American.
#70.)

(DE

Finally, Great American moves to strike the opinions of

Alliance’s

expert,

Dr.

William

Warfel,

arguing

Warfel

offers

improper legal conclusions and that his expert opinions were not
timely disclosed. (DE #67.) In opposition, Alliance contends that
Dr. Warfel is qualified, his opinions will assist the trier of
fact, and the opinions expressed during his deposition were timely.
(DE #71.)
All five motions are fully briefed and ready for adjudication.
DISCUSSION
Summary judgment must be granted when “there is no genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law.”

Fed. R. Civ. P. 56(a).

A genuine

dispute of material fact exists when “the evidence is such that a
reasonable jury could return a verdict for the nonmoving party.”
6

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct.
2505, 91 L. Ed. 2d 202 (1986).

Not every dispute between the

parties makes summary judgment inappropriate; “[o]nly disputes over
facts that might affect the outcome of the suit under the governing
law will properly preclude the entry of summary judgment.”

Id. To

determine whether a genuine dispute of material fact exists, the
Court must construe all facts in the light most favorable to the
non-moving party and draw all reasonable inferences in that party’s
favor.

See Ogden v. Atterholt, 606 F.3d 355, 358 (7th Cir. 2010).

However, “a court may not make credibility determinations, weigh
the evidence, or decide which inferences to draw from the facts;
these are jobs for a factfinder.”

Payne v. Pauley, 337 F.3d 767,

770 (7th Cir. 2003) (citations omitted).
A party opposing a properly supported summary judgment motion
may not rely on allegations in his own pleading but rather must
“marshal and present the court with the evidence [he] contends will
prove [his] case.”
651,

654

(7th

Goodman v. Nat'l Sec. Agency, Inc., 621 F.3d

Cir.

2010).

“[I]nferences

relying

on

mere

speculation or conjecture will not suffice.” Stephens v. Erickson,
569 F.3d 779, 786 (7th Cir. 2009) (citation omitted).

If the non-

moving party fails to establish the existence of an essential
element on which he bears the burden of proof at trial, summary
judgment is proper.

See Massey v. Johnson, 457 F.3d 711, 716 (7th

Cir. 2006).
7

Where the parties file cross-motions for summary judgment,
like Third-Party Plaintiff Alliance and Third-Party Defendant Great
American, the Court must consider each motion and, even if the
parties agree that no genuine issue of material fact exists, the
Court can deny all motions if the parties do not establish their
rights to judgment as a matter of law.
Supp. 2d 746, 747 (N.D. Ind. 2002).

Grabach v. Evans, 196 F.

As the Seventh Circuit has

stated:
It is true that cross-motions for summary judgment
do not waive the right to a trial, but this rule
does not alter the respective burdens on crossmotions for summary judgment - more particularly
here, the responsive burden of a plaintiff who
moves for summary judgment and is confronted with a
cross-motion for summary judgment. The motions are
treated separately.
McKinney v. Cadleway Props., Inc., 548 F.3d 496, 504 n.4(7th Cir.
2008) (abrogated on different grounds).
I.

Howell’s Motion for Summary Judgment
This Court finds it appropriate to start first with the Motion

for Summary Judgment filed by Plaintiff, Howell, as it deals with
the underlying rental agreement between Howell and Alliance.

The

parties agree that the Equipment Rental Agreement is controlling.
A.

Undisputed Facts

Howell

and

Alliance

entered

into

the

Equipment

Rental

Agreement on October 16, 2013. Under that agreement, Howell leased
to Alliance a 2008 Mantis 6010LP crane. The Agreement provides, in
pertinent part, that the Renter “makes no alterations, additions,
8

modifications or improvements of or to Equipment without the prior
written consent of Howell.” (DE #77-1, Equipment Rental Agreement,
¶7(b)(6).)

Additionally, it provides that the “RENTER SHALL BE

RESPONSIBLE FOR FULL COST OF ALL REPAIRS AND MAINTENANCE OF OR WITH
RESPECT TO THE EQUIPMENT, WHETHER ON ACCOUNT OF DAMAGE TO THE
EQUIPMENT OR OTHERWISE.”

(DE #77-1, Equipment Rental Agreement,

¶7(b)(7) (emphasis in original).)
Alliance was using the crane in Michigan when it became stuck
in the mud at the project site on November 27, 2013.

Alliance

attempted to free the crane by pulling it out of the mud using a
chain, and bent the boom in the process.
crane to Howell in December 2013.

Alliance returned the

(DE #74-3, Balitewicz Dep. at

19.)
Howell then performed measurements on the boom and found that
the bottom had 9/16-inch deflection in the bottom of the boom, the
left side had 1/4-inch deflection, the tip section had a bottom
3/8-inch deflection and left side had 3/16-inch deflection.
##66-5, 66-7.)

(DE

On February 12, 2014, James Lamb (a representative

from Mantis) sent an e-mail to Gary Hammond at Howell stating the
defects exceeded Mantis’ published criteria, Mantis believed the
tubes should be replaced, but:
[i]t is of course the prerogative of the crane
owner to pursue other independent courses of action
but they should obtain written assurances from
those attempting to straighten or otherwise
‘repair’ these components regarding liability for
such repairs and subsequent long term boom
9

performance.
(DE #64-14; 2/12/2014 e-mail from Mantis to Howell.)

A few days

later, on February 17, 2014, James Lamb from Mantis sent a letter
to Gary Hammond and Tom Ellis of Howell informing Howell that the:
deformations exceed the limits of acceptance
criteria published by [Mantis], and as the
Manufacturer we recommend the boom should be
replaced.
Under
no
circumstances
should
repair/straightening of the damaged boom tube
sections be attempted and if attempted [Mantis]
will accept no responsibility for the continued
operation
of
structural
competence
of
this
equipment.
(DE #73-13, 2/17/14 letter from Mantis to Howell.)
Meanwhile, Alliance’s insurer, Great American, hired Haag
Engineering to also measure the boom sections.

Although Haag

Engineering also recorded measurements that were outside of the
scope of repair per Mantis’ standards (DE #66-11 at 99-106, DE #6610), Haag Engineering believed that the boom of the crane could be
repaired.

(DE #66-11 at 102-03.)

Howell demanded, in writing, that the boom sections of the
crane be replaced, not repaired.
repairing

the

crane

without

(DE #66-13.)

replacing

the

The estimate for

boom

sections

was

$53,298.78. (DE #66-16.) Howell repaired other parts of the crane
sections and replaced the boom sections, at a cost of $142,645.55.
(DE #66-14 at 97-98; DE #66-17.)

Howell ordered replacements for

the crane’s three boom sections from the manufacturer, Mantis, on
April 22, 2014.

(DE #75-2 at 38-39; Ex. 32 to Hammond Dep. (DE
10

#75-4).)
On April 11, 2014, Great American tendered $48,298.78 to
Howell. Howell accepted the payment, but indicated that it was not
accepting this as a final payment for damages suffered.
18; DE #66-19 at 26.)

(DE #66-

On June 5, 2014, Alliance tendered $5,000 to

Howell, which represented Alliance’s deductible from its insurance
policy with Great American. (DE #66-20; DE #66-2 at 65-66; DE #6611 at 87.)
Howell received the replacement parts on June 24, 2014.
#75-4 at 97.)

(DE

Afer receiving the parts, it took Howell a few

months to repair the crane, and it was ready to be rented again on
August 23, 2014.
B.

(Id. at 91-93; Ex. 12 to Hammond Dep; DE #77-16.)

Relevance of Third-Party Expert Witnesses

First, Howell argues that the expert witnesses designated by
Third-Party Defendant, Great American, and expert rebuttal reports,
are irrelevant to this contractual cause of action between Howell
and Alliance.

(DE #66 at 6-9.)

Alliance does not address this

argument, and Alliance does not rely upon Great American’s experts
in its response in opposition to the motion for summary judgment.
Therefore, Alliance has essentially conceded Howell’s argument, as
typically “[f]ailure to respond to an argument . . . results in
waiver.”

Bonte v. U.S. Bank N.A., 624 F.3d 461, 466 (7th Cir.

2010).
This Court agrees that, when dealing with this section of the
11

case, the action between Howell and Alliance, the expert witnesses
designated

by

Third-Party

Defendant

Great

American,

are

not

relevant to this contract at issue in this portion of the case.1
Under Daubert, the Supreme Court fashioned a two-prong test of
admissibility for evidence based on scientific knowledge.

Daubert

v. Merrell Dow Pharm., Inc., 509 U.S. 579, 592 (1993).

To be

admissible, evidence must be both relevant and reliable.

Id. at

589; see also Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 152
(1999) (noting the objective of court’s gatekeeping requirement is
to ensure reliability and relevancy of expert testimony).
Even if an expert’s testimony is deemed reliable, under the
relevance prong, the testimony must also assist the trier of fact
to understand the evidence in the sense that it is relevant to or

1

There is a separate motion filed by Howell seeking to bar
Great American’s experts (DE #68), in which Howell also argues
that the experts should be barred because they are immaterial and
irrelevant to the issues involved in Howell’s contract action
against Alliance. In response, Great American contends this case
also includes a third-party action between Alliance and Great
American (based upon a different contract, the insurance policy
issued by Great American to Alliance), and that Howell has no
standing to bar expert testimony in an action between two other
parties in the case. (DE #70.) Because this Court has found
that Great American’s experts are not relevant to the contractual
case between Howell and Alliance, Alliance does not rely upon
them in opposition or argue that this expert testimony is
relevant to this portion of the case, and this Order stays the
proceeding between third-party plaintiff and third-party
defendant, this motion (DE #68) is GRANTED to the extent that
Great American’s experts shall be barred from giving testimony in
the underlying case between Howell and Alliance. This ruling
does not effect Great American Insurance’s possible use of its
own experts when the third-party action is no longer stayed.
12

“fits” the facts of the case.

Daubert, 509 U.S. at 591; Smith v.

Ford Motor Co., 215 F.3d 713, 718 (7th Cir. 2000).

In other words,

the testimony must be such that the jury can apply it in a
meaningful

way

essentially

to

the

facts

represents

an

at

hand.

inquiry

This
similar

“fit”
to

analysis
if

not

indistinguishable from the basic evidentiary inquiries into whether
evidence is relevant and, if so, whether its probative value is
nonetheless substantially outweighed by, among others, the danger
of unfair prejudice and jury confusion.

See Daubert, 509 U.S. at

595; Ayers v. Robinson, 887 F. Supp. 1049, 1058-59 (N.D. Ill.
1995).

Testimony that is not relevant should be stricken.

Kumho

Tire Co., 526 U.S. at 149.
In this underlying case, Great American experts are not needed
and are irrelevant to the evaluation of the issues between Howell
and Alliance (revolving around the breach of contract issue arising
from a separate contract, the Equipment Rental Agreement).

As

such, those experts will be excluded from consideration in this
underlying matter.
C.

OSHA Regulations

Howell next argues that it would have violated OSHA equipment
modification regulations had it agreed to repair the crane’s boom.
(DE #66 at 15-16.)

While Alliance does not respond to the OSHA

argument (and has therefore waived argument on this issue), the
Court is reluctant to address and rule on this issue without
13

argument from both sides and the Court acknowledges that this issue
is contested in the third-party litigation.
DE #76 at 9-16.)

(See DE #75 at 12-15;

Because a ruling on this issue is not necessary

for this motion, and because it is not fully briefed by Howell and
Alliance in this underlying action, the Court will defer from
ruling on it at this point in the litigation.
D.

Damages

The Agreement provides, in pertinent part, that the Renter
“makes no alterations, additions, modifications or improvements of
or to Equipment without the prior written consent of Howell.”
#77-1, Equipment Rental Agreement, ¶7(b)(6).)

(DE

Additionally, it

provides that the “RENTER SHALL BE RESPONSIBLE FOR FULL COST OF ALL
REPAIRS AND MAINTENANCE OF OR WITH RESPECT TO THE EQUIPMENT,
WHETHER ON ACCOUNT OF DAMAGE TO THE EQUIPMENT OR OTHERWISE.”
#77-1,

Equipment

Rental

Agreement,

¶7(b)(7)

(emphasis

(DE
in

original).)
Howell sets forth in its motion for summary judgment that it
is undisputed that Howell and Alliance entered into a valid
Equipment Rental Agreement; Alliance then damaged the boom of the
crane; the Equipment Rental Agreement provided that Howell must
give written consent to Alliance for any modifications; Howell did
not give written consent to Alliance to repair the boom sections;
Mantis recommended that the boom sections be replaced due to the
deformities exceeding their standards, and Howell demanded in
14

writing that the damaged boom sections be replaced.

(DE #66 at

14.) Alliance does not dispute any of these facts in its response.
Rather, Alliance argues that there are genuine disputes as to:
(1) whether Howell is entitled to lost rental income under the
terms of the Equipment Rental Agreement; (2) the amount of lost
rental income and other damages to which Howell is entitled; (3)
whether 8-10 months of lost income was foreseeable; and (4) whether
Howell failed to mitigate its damages.

(DE #74 at 4.)

The Equipment Rental Agreement established a monthly rental
amount of $10,500 for the crane.

Howell argues that Alliance is

liable for $105,000 in lost rents to Howell for 10 months of lost
profit because the crane did not become operational until August
23, 2014, after Howell had completed replacing the damaged boom
sections.

(DE #77 at 10.)

With regard to the claim for lost profits, the Equipment
Rental Agreement provides in pertinent part as follows: “RENTER
SHALL BE RESPONSIBLE FOR FULL COST OF ALL REPAIRS AND MAINTENANCE
OF OR WITH RESPECT TO THE EQUIPMENT OR OTHERWISE (which if done or
performed by Howell, shall be done at the cost and expense of
Renter).”

(DE #77-1 at ¶ 7(b)(6) (emphasis in original).) The

Agreement additionally provides that “[r]ent shall not abate during
the term hereof because renter’s right to possession of Equipment
has terminated or because Equipment has been repossessed, or
because the Equipment has been lost, damaged or destroyed, or is
15

otherwise unusable by Renter, or for any other reason.”

(DE #77-1

at 6, ¶4.)
Yet,

the

contract

also

provides

that

“THE

RENTAL

TERM

HEREUNDER SHALL COMMENCE ON THE DAY ON WHICH THE EQUIPMENT LEAVES
HOWELL’S YARD FOR DELIVERY TO RENTER AND SHALL TERMINATE ON THE DAY
ON WHICH THE EQUIPMENT IS RETURNED TO HOWELL’S YARD.”

(Id. at ¶2

(emphasis in original.) Thus, it seems that by the language of the
Agreement, the rental term arguably ended when Alliance returned
the crane to Howell’s yard in early December, 2013.
claims

“Alliance

does

not

assert

that

the

While Howell

Rental

Equipment

Agreement is ambiguous” (DE #77 at 10), Alliance does argue that
according to the Agreement, the rental term terminated in early
December, relieving Alliance from any further rent obligations.
It is well settled that under Indiana law, the goal of
contract interpretation is to ascertain the intent of the parties.
MPACT Constr. Group, LLC v. Superior Concrete Constructors, Inc.,
802 N.E.2d 901, 906 (Ind. 2004).

In the case of a written

contract, the parties’ intent is determined by looking first to the
plain and ordinary meaning of the contract language.

USA Life One

Ins. Co. v. Nuckolls, 682 N.E.2d 534, 538 (Ind. 1997).
contract

language

is

clear

and

unambiguous,

the

If the

court

must

interpret the contract without considering extrinsic evidence.
Automation by Design, Inc. v. Raybestos Prods. Co., 463 F.3d 749,
753-54 (7th Cir. 2006) (applying Indiana law).
16

However, if the

contract is ambiguous, the court may look to relevant extrinsic
evidence in order to ascertain the intent of the parties.

Id. at

753-54.
The two types of contract ambiguity are patent or latent.
Patent ambiguity is apparent on the face of the instrument and
arises from inherently contradictory or nonsensical language that
either conveys no definite meaning or a confused meaning. Bradley
v. W. & S. Fin. Group, No. 2:05-cv-39, 2005 WL 2709282, at *6-7
(N.D. Ind. Oct. 20, 2005). A latent ambiguity “arises not upon the
face of the instrument by virtue of the words used, but emerges in
attempting to apply those words in the manner directed in the
instrument.”

Hauck v. Second Nat’l Bank of Richmond, 286 N.E.2d

852, 862 (Ind. Ct. App. 1972). Extrinsic evidence is admissible to
explain the meaning of a latent ambiguity, but not to explain
patent ambiguity.
Ct. App. 1994).

Eckart v. Davis, 631 N.E.2d 494, 497-98 (Ind.

Patent ambiguity presents a pure question of law,

while the jury must resolve latent ambiguity as a question of fact.
Felker v. Sw. Emergency Med. Serv., Inc., 521 F.Supp.2d 857, 867
(S.D. Ind. 2007).

In other words, if a contract is latently

ambiguous:
and uncertain in its terms, we believe that the
meaning of the contract
may well need to be
determined by extrinsic evidence.
As such, its
construction is a matter for the fact-finder.
Rules of contract construction and extrinsic
evidence need to be employed to determine and give
effect to the parties’ reasonable expectations.
Under such circumstances, resolution of this issue
17

is inappropriate for summary judgment.
Fresh Cut, Inc. v. Fazli, 650 N.E.2d 1126, 1133 (Ind. 1995)
(citations omitted).
In this case, the Court believes there is a latent ambiguity
in the Agreement. It is only when trying to determine whether lost
profits are allowable under the contract, and for what duration,
that the issue arises with the provision “rent shall not abate
during the term hereof” and the provision which states that the
rental term terminates on the date the equipment is returned to
Howell’s yard.

Extrinsic evidence will be needed to determine the

parties’ intent, and give effect to their reasonable expectations
about whether Alliance and Howell agreed to lost profits in the
event of damaging the crane, and for how long they expected and
intended to pay the lost profits. This cannot be determined by the
Court on summary judgment, but rather is delegated to the factfinder.
If the fact finder determines that Howell is entitled to lost
rental income for the damaged crane, it will also need to determine
the amount of lost rents to which it is entitled.

Alliance

contends that Howell has not provided any documentation that the
crane would have been rented in the nine months after it was
damaged, that eight-ten months of lost rent was not foreseeable,
and that Howell failed to mitigate its damages by delaying ordering
the parts and not being diligent in the repair of the crane.
18

These

are all questions that the fact finder will need to determine in
this case.
Howell has also requested attorneys’ fees and costs.

In its

memorandum in support of the motion for summary judgment, Howell
requests “$257,684.86 plus additional attorneys’ fees and costs
incurred after June 30, 2017.”

(DE #66 at 16.)

Howell does not

articulate the source of its claim for attorneys fees (whether it
be statutory or contractual), or give the Court any law whatsoever
to support its claim that attorneys fees and costs are recoverable
in this case.

While the complaint requests reasonable attorneys’

fees and costs, it also does not give a basis for entitlement.
#1 at 5.)

(DE

In response, Alliance does not contest that Howell is

entitled to recover attorneys fees and costs, but it does argue
that Howell “provided no accounting for the attorney fees it seeks
to recover” and attorney fees are required to be reasonable.
#74 at 7.)

(DE

In its reply, Howell sets forth that it is entitled to

$89,976.34 in attorneys’ fees and $13,051.84 in costs, and attaches
an affidavit of Donald Timothy McVey, setting forth the hourly
charges for the work performed and number of hours each individual
worked.

(DE #77-13.)

But again, in the reply, Howell cites no

authority whatsoever, and gives no statutory or contractual basis
for recovery of attorneys fees and costs in this breach of contract
and negligence action. This Court will not do the parties research
for them.

Vaughn v. King, 167 F.3d 347, 354 (7th Cir. 1999)("It is
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not the responsibility of this court to make arguments for the
parties.").
The

American

ordinarily

rule

presumes

recoverable

to

a

that

attorney

prevailing

fees

are

not

as

costs

or

litigant

damages, unless specifically allowed by statute, agreement between
the parties, or narrow common law exception. Travelers Cas. & Sur.
Of Am. v. Pac. Gas & Elec. Co., 549 U.S. 443, 448 (2007); see also
Courter v. Fugitt, 714 N.E.2d 1129, 1132 (Ind. Ct. App. 1999).
Moreover, this “presumption that parties bear their own costs of
litigation
construed.”

demands

that

fee

shifting

agreements

be

narrowly

BKCAP, LLC v. Captec Franchise Trust 2000-1, 701

F.Supp.2d 1030, 1039 (N.D. Ind. 2010).

Because Howell has not

pointed this Court to any contractual language or otherwise proved
to the Court that attorneys’ fees and costs are recoverable in this
action, summary judgment on this issue is denied.
In sum, Howell’s motion for summary judgment is granted on the
issue of liability as Alliance does not contest that it entered
into a valid Equipment Rental Agreement with Howell, Alliance
thereafter damaged the boom of the crane, the Agreement provided
that

Howell

must

given

written

consent

to

Alliance

for

any

modifications, and Howell demanded in writing that the damaged boom
sections be replaced.

However, there are disputed questions of

material fact for the jury with respect to whether damages for lost
profits are recoverable, and if they are recoverable by Howell,

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what amount is appropriate.

Finally, because Howell did not prove

it was entitled to attorneys’ fees and costs, this issue also
remains for the fact finder.
II.

Third-Parties Alliance and Great American’s Cross Motions for
Summary Judgment
Third-Party Plaintiff, Alliance, and Third-Party Defendant,

Great American, have also filed cross motions for summary judgment.
Great American argues in part that Alliance’s breach of contract
claims against it are premature and not ripe for adjudication, and
should be dismissed. The second amended complaint alleges that “in
the event that the Court or the trier of fact determines that
Howell Tractor is entitled to the cost of replacing the crane’s
boom as damages, GAICNY will have breached its contract with
Alliance Tank by refusing to pay the amounts owed under the Policy
to indemnify Alliance Tank against Howell Tractor’s claim.”
#45 at 5, ¶18.)

(DE

The third-parties additionally dispute whether

Great American has a duty to reimburse the lost rental damages (if
lost rental damages are recoverable) and they dispute whether
attorneys’ fees and costs are recoverable under Alliance’s bad
faith claim against Great American.
While this Court has certainly seen declaratory judgment
indemnification actions dismissed as premature until an underlying
case is decided, this case is a little different as it involves a
separate breach of contract claim and bad faith claim that Alliance
has against Great American. As such, dismissal does not seem to be
21

the appropriate route, especially since with this opinion and
order, the Court has determined that in the underlying suit,
Alliance breached its Agreement with Howell. Moreover, Federal Rule
of Civil Procedure Rule 14 provides in pertinent part that “[a]
defending party may, as third-party plaintiff, serve a summons and
complaint on a nonparty who is or may be liable to it for all or
part of the claim against it.”

Fed. R. Civ. P. 14(a)(1) (emphasis

added).
Yet, there are several things the fact finder must determine
first in the case between Howell and Alliance before the action
between Alliance and Great American can be entertained, including
whether lost rental damages are recoverable (if yes, in what
amount), and whether attorneys’ fees and costs are recoverable (if
yes, in what amount).

Therefore, the third-party claims are not

ripe until the underlying action is resolved.
The Court has the inherent power to stay proceedings before
it.

Landis v. North American Co., 299 U.S. 248, 254-55 (1936).

This Court believes the best way to handle this case is to stay the
counterclaim proceedings.

See, e.g., United States v. City of

Evansville, No. 3:09-cv-128-WTL-WGH, 2011 WL 52467, at *2 (S.D.
Ind.

Jan.

6,

2011)

(staying

third-party

resolution of the underlying action).

complaint

pending

Whether Great American is

liable to Alliance (and for what amount) will depend on: (1) how
much Howell recovers from Alliance; and (2) whether Alliance is
22

entitled to indemnification under the insurance contract for those
categories of damages and those amounts.
It is therefore ordered that the action on the third-party
counterclaim is stayed until after the trial or resolution of the
other issues in this action and until further order of the Court.
Because the third-party action has been stayed, this Court
will deny without prejudice, with leave to refile at a later time:
Third-Party Defendant Great American’s Motion to Strike or Exclude
Certain Opinions of Dr. William Warfel (DE #67); Third-Party
Plaintiff Alliance’s Motion for Summary Judgment (DE #62); and the
Motion for Summary Judgment filed by Third-Party Defendant Great
American Insurance (DE #61).
CONCLUSION
For the reasons set forth above, the Motion for Summary
Judgment filed by Plaintiff, Howell Tractor and Equipment, LLC (DE
#65) is GRANTED IN PART AND DENIED IN PART - it is GRANTED on the
issue of liability but DENIED as to damages because there are
disputed questions of material fact for the fact finder with
respect to whether damages for lost profits are recoverable (and if
they are recoverable, what amount is appropriate) and whether
Howell is entitled to attorneys’ fees and costs.
This Court HEREBY ORDERS that the action on the third-party
counterclaim is STAYED until after trial or resolution of the
underlying action between Plaintiff Howell and Defendant Alliance,
23

and until further order of the Court.
Due to the stay in the third-party action, the Motion for
Summary Judgment filed by Great American Insurance Company of New
York (DE #61) is DENIED WITHOUT PREJUDICE WITH LEAVE TO REFILE; the
Motion

for

Summary

Judgment

filed

by

Third-Party

Plaintiff,

Alliance Tank Service, LLC (DE #62) is DENIED WITHOUT PREJUDICE
WITH LEAVE TO REFILE; and Great American’s Motion to Strike or
Exclude Certain Opinions of Dr. William Warfel (DE #67) is DENIED
WITHOUT PREJUDICE WITH LEAVE TO REFILE.
Finally,

Plaintiff

Howell’s

Motion

to

Bar

Third-Party

Defendant Great American Insurance’s Expert Witnesses (DE #68) is
GRANTED TO THE EXTENT that Great American’s experts will be barred
from giving testimony in the underlying case between Plaintiff
Howell and Defendant Alliance; however, this does not effect Great
American Insurance’s possible use of its own experts in the thirdparty action, when the third-party action is no longer stayed.

DATED: March 20, 2018

/s/ RUDY LOZANO, Judge
United States District Court

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