THE CINCINNATI INSURANCE COMPANY v. GLOBAL CARAVAN TECHNOLOGIES, INC. et al

Filing 108

ENTRY ON CROSS MOTIONS FOR SUMMARY JUDGMENT - For the reasons stated above, the Court concludes that the applicable insurance policy does not require a defense by Cincinnati. Accordingly, the Court GRANTS Cincinnati's motion for partial summa ry judgment, (Filing No. 81), and DENIES the Defendants' motion for partial summary judgment, (Filing No. 74). It appears that the only remaining claim in this case is the Defendant's counterclaim for breach of contract, a claim that ap pears factually related to the issues addressed in this Entry. (See Filing No. 50 at 28.) The parties shall confer and file a status report within ten (10) days of this order, explaining what claims and issues, if any, remain for trial. **SEE ORDER** Signed by Judge Tanya Walton Pratt on 8/8/2016. (JLS)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
THE CINCINNATI INSURANCE COMPANY,
Plaintiff,
v.
GLOBAL CARAVAN TECHNOLOGIES, INC.,
C.H. DOUGLAS & GRAY, LLC,
RED WING CAPITAL, LLC,
CHRISTOPHER DOUGLAS, HUSHENG DING,
CHRIS TZENG, KYLE FANG, THOMAS
GRAY, DORIS ROBERTS, and CHARLES
HOEFER, JR,
Defendants.

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Case No. 1:14-cv-01643-TWP-DML

ENTRY ON CROSS MOTIONS FOR SUMMARY JUDGMENT
Before the Court are the parties’ cross partial motions for summary judgment. On January
1, 2015, Plaintiff, the Cincinnati Insurance Company (“Cincinnati”), filed an Amended Complaint
for Declaratory Judgment. (Filing No. 48.) On February 13, 2015, the Defendants filed an Answer
and Counterclaim. (Filing No. 52.)
Cincinnati seeks a declaration of its rights and legal obligations arising from a contract of
insurance entered into between it and Defendant Global Caravan Technologies, Inc., (“GCT”), and
a determination of whether an insurance policy issued by Cincinnati to GCT requires Cincinnati
to defend and indemnify the Defendants in a pending state court action.
On September 17, 2015, the Defendants filed a Motion for Partial Summary Judgment.
(Filing No. 74.) Cincinnati filed an Amended Response (Filing No. 80) and a Cross Motion for
Partial Summary Judgment (Filing No. 81) on October 22, 2015.

For the reasons stated below, the Court concludes that the policy does not require defense.
Accordingly, the Court GRANTS Cincinnati’s Motion for Partial Summary Judgment and
DENIES the Defendants’ Motion for Partial Summary Judgment.
I. BACKGROUND
In large part, the facts are not disputed by the parties. Where there is a dispute, however,
the Court has indicated as such in the following recitation.
A.

State Court Lawsuit
Underlying this declaratory action is a state court lawsuit arising out of a failed business

relationship. In 2012, Charles Hoefer (“Hoefer”) and several of the individual Defendants engaged
in discussions to create GCT, a business that was intended to create and implement new
technologies for the manufacturing of recreational vehicles. (Filing No. 76 at 6-7.) On January
17, 2013, GCT was formed. Id.
Defendants Husheng Ding (“Ding”) and Christopher Douglas (“Douglas”) are investors in
GCT. Id. In addition, Ding and Douglas are also officers and directors of GCT, serving as
President and Interim Chief Executive Officer, respectively. Id. Ding and Douglas are also
principals in Defendant Red Wing Capital, which is a shareholder of GCT. Id. Defendant Kyle
Fang (“Fang”) is also an investor and director of GCT. Id. Before the business relationship soured,
Hoefer served as Chairman and CEO of GCT. Id.
Hoefer alleges that, shortly after GCT was formed, Ding began seeking investment deals
in China, making it difficult to meet deadlines for new products and straining the relationships
within the company. (Filing No. 48-2 at 13-15; Filing No. 48-3 at 7, 20-24, 28.) As a result,
Hoefer alleges that Defendants Ding, Douglas, and Fang began conspiring to remove Hoefer from
GCT. (Filing No. 48-2 at 15-16; Filing No. 48-3 at 27, 29.)

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In March 2014, GCT launched a new product, the CR-1 Carbon prototype. (Filing No. 482 at 13, 19; Filing No. 48-3 at 7, 33; Filing No. 76 at 6-7.) Leading up to the launch date, Hoefer
alleges that Ding deliberately thwarted his efforts to keep production running smoothly, in order
to make Fang believe that Hoefer was “underperforming”. (Filing No. 48-2 at 20-21; Filing No.
48-3 at.)
After the launch date, which Hoefer contends was a resounding success, Hoefer alleges
that Ding, Douglas, and Fang indicated their intentions to shift their investments away from GCT
and the production of RVs and instead focus on more lucrative deals in China. (Filing No. 48-2 at
22-24; Filing No. 48-3 at 32-36, 41.) In addition, though the details are not entirely clear from
either the Complaint or the Amended Complaint, Hoefer alleges that Ding, Douglas, and Fang had
an illicit purpose of securing land in China through GCT. Id.
Thereafter, the relationship between Hoefer and his business partners continued to sour.
Ultimately, on April 21, 2014, Hoefer alleges that Defendants Ding, Douglas, and Fang held a
special board meeting, wherein the Defendants passed “frivolous and unconventional [b]ylaws”
and voted to remove Hoefer from GCT. (Filing No. 48-2 at 32; Filing No. 48-3 at 24, 40-41.) As
a result, on May 1, 2014, Hoefer filed a lawsuit against his former business partners in the Marion
Superior Court. (Filing No. 48-2.)
On May 14, 2014, the Defendants named in Hoefer’s Complaint, and GCT, requested that
Cincinnati provide defense and indemnification under GCT’s commercial general liability plan.
(Filing No. 76 at 93.) On July 7, 2014, GCT moved to intervene in the state court action. (Filing
No. 80 at 5.) On September 26, 2014, Cincinnati offered to provide a defense with a full
reservation of rights, noting that GCT had not been named as a Defendant. (Filing No. 76 at 15051.) Sometime later, the state court granted GCT’s motion to intervene. (Filing No. 80 at 5.)

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On September 30, 2014, Hoefer filed an Amended Complaint in the Marion Superior
Court. (Filing No. 48-3). Therein, Hoefer summarized the Defendants’ actions as follows:
The Complaint brought before this Court involves a sophisticated and organized
fraud scheme perpetrated against the Plaintiff by the Defendants, in which the
Defendants represented themselves as securities experts and financial
representatives and acted as the Plaintiff’s advisors and persons in a position of
confidence and trust, but were conspiring to defraud the Plaintiff of his economic
rights and steal his technology and intellectual property for their own selfish
purposes in a scheme of personal enrichment for China riches.
Id. at 2.
In the Amended Complaint, Hoefer alleges, among other things, that Ding, Douglas and
Fang publically defamed his personal and business reputation. (Filing No. 48-3 at 50-51.) For
instance, Hoefer alleges the following:
[T]he Defendants’ efforts to oust the Plaintiff from GCT included disparagements
and character assassinations directed to GCT’s employees, attorneys, investors,
partners, and other individuals. These defamations were professionally brutal,
falsely alleging that the Plaintiff had stolen intellectual property, and that the
Plaintiff was a liar. Evidence that these defamations took place while the Plaintiff
was CEO of GCT come from Purdue University’s Director of Motorsports Danny
White, who left the Plaintiff a voicemail after talking with Ding in mid-April 2014,
calling him a con-man. . . . GCT’s intellectual property attorney also told the
Plaintiff that Douglas and Ding had fully informed him of the Plaintiff’s ‘theft’
through the month of April 2014.
Id. at 40. Further, Hoefer also alleges:
[T]he Defendants publically humiliated the Plaintiff by issuing through GCT a
public and severely defamatory statement against the Plaintiff after kicking him to
the curb, calling the Plaintiff “dangerous” and “irrational” in major RV industry
media such as RV Business, RV-Pro, and RV Daily Report, and also in the
Indianapolis Business Journal.
Id. at 41. In particular, Hoefer notes Ding’s published response to his state court lawsuit, in which
Ding remarked, “[Hoefer’s] lawsuit, which reads as sensationalistic, defamatory, and error-ridden,
demonstrates the same emotional, irrational and dangerous behavior that led to his necessary
separation from the company.” (Filing No. 80-1 at 309.)
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On October 8, 2014, Cincinnati filed this declaratory judgment action. (Filing No. 1.)
Thereafter, on October 29, 2014, Cincinnati again offered to provide a defense with conditions to
the named state court Defendants; but the named state court Defendants again rejected this second
offer. (Filing No. 82 at 10.) On January 16, 2015, Cincinnati filed an Amended Complaint for
Declaratory Judgment, addressing both Hoefer’s Amended Complaint and GCT’s voluntary
intervention. (Filing No. 48.)
As of May 31, 2015, the named Defendants had incurred $40,728.46 in fees and expenses
to Delk McNally, LLP and an additional $89,378.01 in fees and expenses to Ice Miller, LLP.
(Filing No. 75 at 12.)
B.

Applicable Contract Provisions
The parties agree on the relevant coverage and exclusion provisions but differ on their

interpretation and application in this case.
1.

“Personal and Advertising Injury” Coverage

The policy defines the scope of coverage, as follows,
SECTION I – COVERAGES
...
COVERAGE B. PERSONAL AND ADVERTISING INJURY LIABILITY
1. Insuring Agreement
a. We will pay those sums that the insured becomes legally obligated to pay as
damages because of “personal and advertising injury” to which this insurance
applies. We will have the right and duty to defend the insured against any “suit”
seeking those damages. However, we will have no duty to defend the insured
against any “suit” seeking damages for “personal and advertising injury” to which
this insurance does not apply.
...
b. This insurance applies to “personal and advertising injury” only if:
(1) The “personal and advertising injury” is caused by an offense arising out of
your business; . . .
(Filing No. 1-2 at 22.)
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The policy defines the following persons as “insureds” under the plan as follows,
SECTION II - WHO IS AN INSURED
1. If you are designated in the Declarations as:
...
d. An organization other than a partnership, joint venture or limited liability
company, you are an insured. Your “executive officers” and directors are insureds,
but only with respect to their duties as your officers or directors. Your stockholders
are also insureds, but only with respect to their liability as stockholders.
...
2. Each of the following is also an insured:
a. Your “volunteer workers” only while performing duties related to the conduct
of your business, or your “employees”, other than either your “executive officers”
(if you are an organization other than a partnership, joint venture or limited liability
company) or your managers (if you are a limited liability company), but only for
acts within the scope of their employment by you or while performing duties related
to the conduct of your business. . . .
(Filing No. 1-2 at 26-27.)
Further, the policy offers the following relevant definitions.
SECTION V - DEFINITIONS
...
8. “Employee” includes a “leased worker”. “Employee” does not include a
“temporary worker”.
9. “Executive officer” means a person holding any of the officer positions created
by your charter, constitution, by-laws or any other similar governing document.
...
17. “Personal and advertising injury” means injury, including consequential
“bodily injury”, arising out of one or more of the following offenses:
...
d. Oral or written publication, in any manner, of material that slanders or libels a
person or organization or disparages a person’s or organization’s goods, products
or services; . . .
(Filing No. 1-2 at 31-32, 34.)
2. “Employment Related Practices” Exclusion
Finally, the policy includes the following relevant exclusion.

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SECTION I – COVERAGES
...
COVERAGE B. PERSONAL AND ADVERTISING INJURY LIABILITY
...
3. Exclusions
This insurance does not apply to:
...
m. Employment Related Practices
“Personal and advertising injury” to:
(1) A person arising out of any:
...
(b) Termination of that person’s employment; or
(c) Other employment-related practices, policies, acts or omissions including but
not limited to coercion, criticism, demotion, evaluation, failure to promote,
reassignment, discipline, defamation, harassment, humiliation or discrimination
directed at that person . . .
(Filing No. 1-2 at 22-24.)
II. LEGAL STANDARD
Summary judgment is only appropriate by the terms of Federal Rule of Civil Procedure 56
where there exists “no genuine issue as to any material facts and . . . the moving party is entitled
to judgment as a matter of law.” Fed. R. Civ. P. 56. This notion applies equally where, as here,
opposing parties each move for summary judgment in their favor pursuant to Rule 56. I.A.E., Inc.
v. Shaver, 74 F.3d 768, 774 (7th Cir. 1996). Indeed, the existence of cross-motions for summary
judgment does not necessarily mean that there are no genuine issues of material fact. R.J. Corman
Derailment Serv., Inc. v. Int’l Union of Operating Eng’rs, 335 F.3d 643, 647 (7th Cir. 2003).
Rather, the process of taking the facts in the light most favorable to the non-movant, first for one
side and then for the other, may reveal that neither side has enough to prevail without a trial. Id.
at 648. “With cross-motions, [the court’s] review of the record requires that [the court] construe
all inferences in favor of the party against whom the motion under consideration is made.”
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O’Regan v. Arbitration Forums, Ins., 246 F.3d 975, 983 (7th Cir. 2001) (quoting HendricksRobinson v. Excel Corp., 154 F.3d 685, 692 (7th Cir. 1998)).
A court is not permitted to conduct a paper trial on the merits of a claim and may not use
summary judgment as a vehicle for resolving factual disputes. Ritchie v. Glidden Co., ICI Paints
World-Grp., 242 F.3d 713, 723 (7th Cir. 2001); Waldridge v. Am. Hoechst Corp., 24 F.3d 918,
920 (7th Cir. 1994). Indeed, a court may not make credibility determinations, weigh the evidence,
or decide which inferences to draw from the facts. Payne v. Pauley, 337 F.3d 767, 770 (7th Cir.
2003) (“these are jobs for a factfinder”); Hemsworth v. Quotesmith.Com, Inc., 476 F.3d 487, 490
(7th Cir. 2007). Instead, when ruling on a summary judgment motion, a court’s responsibility is
to decide, based on the evidence of record, whether there is any material dispute of fact that
requires a trial. Id.
III. DISCUSSION
As an initial matter, the Court notes that the issue of indemnification was previously
stayed. (See Filing No. 39.) Accordingly, the Court does not make any conclusions regarding
that issue in this Entry.
A.

Applicable Law
Both sides agree that Indiana contract principles apply to this contract interpretation

dispute. Under Indiana law, the interpretation of an insurance policy presents a question of law to
be decided by the court. Cincinnati Ins. Co. v. Flanders Elec. Motor Serv., Inc., 40 F.3d 146, 151
(7th Cir. 1994) (citing Tate v. Secura Ins., 587 N.E.2d 665, 668 (Ind. 1992)); Jim Barna Log Sys.
Midwest, Inc. v. Gen. Cas. Ins. Co. (“Jim Barna”), 791 N.E.2d 816, 823 (Ind. Ct. App. 2003) (“The
construction of an insurance contract is a question of law for which summary judgment is
particularly appropriate”). The insured bears the initial burden of showing that its claim is covered

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by the policy. Allstate Ins. Co. v. Neumann, 435 N.E.2d 591, 594 (Ind. Ct. App. 1982). Thereafter,
the burden shifts to the insurer to prove that an exclusion applies. Mut. Hosp. Ins., Inc. v. Hagner,
475 N.E.2d 32, 34 (Ind. Ct. App.1984).
“Clear and unambiguous policy language is given its ordinary meaning in order to
accomplish the primary goal of contract interpretation of determining the intent of the parties at
the time the contract was made as disclosed by the language used to express their rights and duties.”
Selective Ins. Co. of S. Carolina v. Erie Ins. Exch., 14 N.E.3d 105, 111 (Ind. Ct. App. 2014).
However, where there is ambiguity, insurance policies are to be construed strictly against the
insurer. Jim Barna, 791 N.E.2d at 823.
Nevertheless, “[a] policy term is not ambiguous simply because a controversy exists, and
one party asserts an interpretation contrary to that asserted by the opposing part”. Short v. N.
Pointe Ins. Co., No. 1:11-cv-00545-SEB-MJD, 2013 WL 1828024, *7 (S.D. Ind. Apr. 29, 2013)
(citing Bedwell v. Sagamore Ins. Co., 753 N.E.2d 775, 779 (Ind. Ct. App. 2001)). Instead, a
contract is only ambiguous “when it is susceptible to more than one interpretation and reasonable
persons would honestly differ as to its meaning.” Id.
Finally, under Indiana law:
An insurer’s duty to defend its insured is broader than its duty to indemnify. We
determine the insurer’s duty to defend from the allegations contained within the
complaint and from those facts known or ascertainable by the insurer after
reasonable investigation. If it is revealed that a claim is clearly excluded under the
policy, then no defense is required.
Knight v. Ind. Ins. Co., 871 N.E.2d 357, 362 (Ind. Ct. App. 2007) (internal citations omitted).
B.

“Personal and Advertising Injury” Coverage
Both parties agree that the defamatory conduct identified in Hoefer’s Amended Complaint

constitutes a “personal and advertising injury”. (See, e.g., Filing No. 80 at 19) (“[t]here is no

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dispute that, if proven, Hoefer’s defamation claims potentially involve ‘personal and advertising
injury’ caused by one of the enumerated offenses, here defamation, . . . under Coverage B of the
[insurance contract]”).
However, Cincinnati argues that the factual allegations in Hoefer’s Amended Complaint
did not “arise out of GCT’s business”. In so arguing, Cincinnati attempts to deny coverage under
the insurance policy under Section I.B.1.b. (See Filing No. 1-2 at 22) (“[t]his insurance applies to
‘personal and advertising injury’ only if: [t]he ‘personal and advertising injury’ is caused by an
offense arising out of your business”) (internal numbering omitted.) In support of this argument,
Cincinnati notes that Hoefer’s Amended Complaint discusses the conduct of the named state court
Defendants as “conspirators” rather than as “executive officers”, “shareholders”, or “employees”.
In addition, Cincinnati notes that Hoefer did not name GCT as a defendant in either of his
Complaints.
Somewhat puzzling, however, when discussing the “Employment Related Practices”
exclusion at other points in its briefing, Cincinnati repeatedly argues that the alleged defamation
does “arise out of the employment” relationship. (See, e.g., Filing No. 80 at 25 (“the defamation
at issue arises out of the employment”); Id. at 26 (“[t]he May 9, 2014, RV D@ily Report clearly
shows that Ding’s allegedly defamatory statement relates to and arises out of Hoefer’s GCT
employment and termination”); Filing No. 82 at 33 (“the injury to Hoefer’s professional reputation
(‘personal and advertising injury’) also arose out of his termination of employment with GCT
because the alleged defamatory public statement provided the reason for his termination”).)
Cincinnati cannot have it both ways, and this Court agrees with Cincinnati’s latter
conclusion rather than its former one. As Cincinnati concedes, Hoefer’s defamation allegations
fit squarely within the policy’s definition of “personal and advertising injury”. (See Filing No. 1-

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2 at 31-32, 34) (“‘[p]ersonal and advertising injury’ means injury, including consequential ‘bodily
injury’, arising out of one or more of the following offenses: [o]ral or written publication, in any
manner, of material that slanders or libels a person or organization or disparages a person’s or
organization’s goods, products or services”) (internal numbering omitted.)
Further, Hoefer’s defamation allegations would not have occurred but for his employment
relationship with GCT. For instance, Hoefer alleges the following:
[T]he Defendants’ efforts to oust the Plaintiff from GCT included disparagements
and character assassinations directed to GCT’s employees, attorneys, investors,
partners, and other individuals. These defamations were professionally brutal,
falsely alleging that the Plaintiff had stolen intellectual property, and that the
Plaintiff was a liar. Evidence that these defamations took place while the Plaintiff
was CEO of GCT come from Purdue University’s Director of Motorsports Danny
White, who left the Plaintiff a voicemail after talking with Ding in mid-April 2014,
calling him a con-man. . . . GCT’s intellectual property attorney also told the
Plaintiff that Douglas and Ding had fully informed him of the Plaintiff’s ‘theft’
through the month of April 2014.
(Id. at 40) (emphasis added). In addition, Hoefer notes Ding’s published response to his state court
lawsuit, in which Ding remarked, “[Hoefer’s] lawsuit, which reads as sensationalistic, defamatory,
and error-ridden, demonstrates the same emotional, irrational and dangerous behavior that led to
his necessary separation from the company.” (Filing No. 80-1 at 309) (emphasis added.)
Further, the Court is not persuaded by Cincinnati’s argument that these alleged actions did
not arise out of the employment relationship because Hoefer did not specifically allege that the
named state court Defendants acted pursuant to an official business capacity. As pled, there can
be no other interpretation of the alleged defamation other than pursuant to the business
relationship. Compare Peerless Indem. Ins. Co. v. Moshe & Stimson LLP (“Peerless”), 22 N.E.3d
882, 886 (Ind. Ct. App. 2014). Further, Cincinnati has provided no cases to support it pleadingbased argument, which seems to be grounded upon inapplicable government immunity pleading
standards rather than on fact-based contractual ones.
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Accordingly, the Court concludes that the unambiguous “Personal and Advertising Injury”
provision is triggered to provide coverage for Hoefer’s defamation allegations in his Amended
Complaint. See Selective Ins. Co. of S. Carolina., 14 N.E.3d at 111 (“[c]lear and unambiguous
policy language is given its ordinary meaning”).
C.

“Employment Related Practices” Exclusion
Nevertheless, although the Court concludes that the Coverage provision is applicable, the

Court agrees with Cincinnati that the “Employment Related Practices” exclusion is also applicable,
thereby negating Cincinnati’s duty to defend or indemnify the named state court Defendants.
In this regard, the Defendants unpersuasively argue that the “Employment Related
Practices” exclusion is ambiguous. The challenged “Employment Related Practices” exclusion
provision states, in relevant part, as follows:
2. Exclusions
This insurance does not apply to:
...
m. Employment Related Practices
“Personal and advertising injury” to:
(1) A person arising out of any:
...
(b) Termination of that person’s employment; or
(c) Other employment-related practices, policies, acts or omissions including but
not limited to coercion, criticism, demotion, evaluation, failure to promote,
reassignment, discipline, defamation, harassment, humiliation or discrimination
directed at that person . . .
(Filing No. 1-2 at 22-24) (emphasis added).
As Cincinnati correctly notes, Peerless Indem. Ins. Co. v. Moshe & Stimson LLP
(“Peerless”), provides clear direction on this issue. 22 N.E.3d 882 (Ind. Ct. App. 2014). In
Peerless, a conflict arose between two siblings who were jointly running a private law firm, when
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one of the siblings, Sarah Moshe, decided to leave the law firm. Id. at 883. Upon announcement
of Sarah’s intentions, Sarah’s brother, Justin Stimson, refused to dissolve the partnership; seized
the firm’s assets, including the client files; and refused to pay Sarah her salary. Id. In addition,
according to allegations made in a subsequent defamation complaint, Justin began “making
accusations about Sarah’s personal integrity and her professional competence”. Id. (internal
punctuation omitted). Id. The insurance company, which provided a policy for the siblings’ law
firm, filed a declaratory action, asserting that an “employment-related practices” exclusion negated
the insurance company’s responsibility to defend or indemnify the firm or Justin in the dispute.
Id.
The Indiana Court of Appeals concluded that the exclusion did, indeed, apply, noting that
the exclusion was “not ambiguous simply because a controversy exists and Justin’s interpretation
differs from [the insurance company’s]”. Id. at 886. In so concluding, the court unequivocally
opined that the Sarah’s allegations against her brother were “connected to Sarah’s employment”.
Id. In addition, the court noted that “[t]he policy at issue was designed to protect the siblings in
suits brought by third parties-it was not meant to protect one against the other in a suit between the
two”. Id.
The factual allegations in Hoefer’s Amended Complaint are nearly identical to those in
Peerless, thereby, requiring a similar conclusion regarding the applicable “Employment Related
Practices” exclusion. In particular, the Court has already concluded that Hoefer’s allegations
clearly arise out of the employment relationship and would not have occurred but for the
relationship. In addition, the Court agrees with the Peerless reasoning that the policy at issue was
designed to protect GCT in suits brought by third parties and not suits arising out of internal,
business-related disagreements. See 22 N.E.3d at 886.

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Further, the Court notes that the cases cited by Defendants either do not apply business
related exclusions or do not apply binding Indiana contract law. See, e.g., Khatib v. Old Dominion
Ins. Co., 153 So.3d 943 (Fla. Dist. Ct. App. 2014) (applying Florida contract law); Acuity v. N.
Cent. Video, LLLP, No. 1.05-cv-010, 2007 WL 1356919 (D. N.D. May. 7, 2007) (applying North
Dakota contract law); Peterborough Oil Co. v. Great Am. Ins. Co., 397 F. Supp. 2d 230 (D. Mass.
2005) (applying Massachusetts contract law); Grinnell Mut. Reinsurance Co. v. Ault, 918 N.E.2d
619 (Ind. Ct. App. 2009) (applying a “bodily injury” exclusion); Barga v. Ind. Farmers Mut. Ins.
Grp., Inc., 687 N.E.2d 57, (Ind. Ct. App. 1997) (applying a “bodily injury” exclusion).
Accordingly, the unambiguous “Employment Related Practice” exclusion is also triggered
by Hoefer’s defamation allegations in his Amended Complaint. See Short, 2013 WL 1828024 at
*7 (“[a] policy term is not ambiguous simply because a controversy exists, and one party asserts
an interpretation contrary to that asserted by the opposing part”). Therefore, Cincinnati has no
duty to defend or indemnify the named state court Defendants in their suit against Hoefer. Knight
v. Ind. Ins. Co., 871 N.E.2d 357, 362 (Ind. Ct. App. 2007) (“[i]f it is revealed that a claim is clearly
excluded under the policy, then no defense is required”).
IV. CONCLUSION
For the reasons stated above, the Court concludes that the applicable insurance policy does
not require a defense by Cincinnati. Accordingly, the Court GRANTS Cincinnati’s motion for
partial summary judgment, (Filing No. 81), and DENIES the Defendants’ motion for partial
summary judgment, (Filing No. 74).
Additionally, although the indemnity issue is currently stayed, the issue of indemnity may
no longer be viable given this Court’s decision on the issue to defend. Because the duty to defend
is broader than the duty to indemnity, if there is no duty to defend, there can be no duty to

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indemnify. See, e.g., Jim Barna, 791 N.E.2d at 823; Pekin Ins. Co. v. Barber, No. 1:09-cv-0521TAB-TWP, 2011 WL 1258063, *3 (S.D. Ind. Mar. 31, 2011).
It appears that the only remaining claim in this case is the Defendant’s counterclaim for
breach of contract, a claim that appears factually related to the issues addressed in this Entry. (See
Filing No. 50 at 28.) The parties shall confer and file a status report within ten (10) days of this
order, explaining what claims and issues, if any, remain for trial.
SO ORDERED.

Date: 8/8/2016

DISTRIBUTION:
George M. Plews
PLEWS SHADLEY RACHER & BRAUN
[e-mail]

Douglas H. Fisher
CINCINNATI INSURANCE COMPANY
(LAW OFFICES)
[e-mail]

Jonathan P. Emenhiser
PLEWS SHADLEY RACHER & BRAUN
[e-mail]

James J. Hutton
CINCINNATI INSURANCE COMPANY
(LAW OFFICES)
[e-mail]

Shelley M. Jackson
PLEWS SHADLEY RACHER & BRAUN
[e-mail]

S. Andrew Burns
COX SARGEANT & BURNS PC
[e-mail]

April C. Tarvin
STAFF COUNSEL OF THE CINCINNATI
INSURANCE COMPANY
[e-mail]

Charles Russell Cox
COX, SARGEANT & BURNS, P.C.
[e-mail]

David S. Wirth
THE CINCINNATI INSURANCE
COMPANIES
[e-mail]

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