TOVAR SNOW PROFESSIONALS, INC. et al

Filing 63

ORDER denying 47 Tovar's Motion for Summary Judgment and denying 53 All Seasons' Motion for Summary Judgment. Signed by Magistrate Judge Debra McVicker Lynch on 7/11/2017. (CBU)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
TOVAR SNOW PROFESSIONALS,
Plaintiff,
vs.
ALL SEASONS GENERAL
CONTRACTING, LLC,
Defendant.

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Case No. 1:15-cv-00200-DML-TWP

Order on Cross-Motions for Summary Judgment
This is a breach of contract case. Both parties have moved for summary
judgment. The dispute is about whether under the “Standard Subcontractor Service
Agreement,” All Seasons General Contracting, LLC (the subcontractor) is liable to
Tovar Snow Professionals for $159,515.26 that Tovar paid to a third party based on
a claim that snow removal and salt de-icing work performed by All Seasons at a
General Motors plant resulted in damages to car parts. Tovar also seeks to recover
attorneys’ fees, costs, and expenses. As explained below, the court finds that
genuine disputes of material fact prevent summary judgment for either party.
Summary Judgment Standard
Summary judgment is appropriate 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). Substantive law determines the facts that are material. Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 251, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A

genuine issue of material fact exists if “there is sufficient evidence favoring the
nonmoving party for a jury to return a verdict for that party.” Id., 477 U.S. at 249.
The court construes the evidence in the light most favorable to the nonmoving party
and draws all reasonable inference from the evidence in favor of the nonmoving
party. Zerante v. DeLuca, 555 F.3d 582, 584 (7th Cir. 2009). When evaluating crossmotions for summary judgment, therefore, the court construes the evidence and its
reasonable inferences in favor of the party against which the particular motion
under consideration is made. Metro Life Ins. Co. v. Johnson, 297 F.3d 558, 561-62
(7th Cir. 2002). “[I]f genuine doubts remain and a reasonable fact-finder could find
for the party opposing the motion, summary judgment is inappropriate.” Olayan v.
Holder, 2011 WL 6300615 at *5 (S.D. Ind. Dec. 15, 2011).
To evaluate the parties’ cross-motions, the court first sets forth below those
facts about which there is no genuine dispute. These undisputed facts describe the
parties’ business relationship, explain the work provided by All Seasons at the GM
plant, and describe the nature and context of the claim for which Tovar seeks
indemnification. The court will address in the Analysis section of this order
relevant disputed issues of material fact for which one side or the other is entitled to
have the evidence construed in its favor.
Undisputed Material Facts
Plaintiff Tovar Snow Professionals, Inc. (“Tovar”) provides snow and ice
removal services for commercial clients. (Affidavit of Ronald Wilson, Dkt. 49-1, ¶

2

3).1 Defendant All Seasons General Contracting, LLC (“All Seasons”) also is in the
business of providing snow and ice removal services (as well as other general
contracting services for residential and commercial buildings). (Id., ¶ 7; Rhees Dep.,
p. 12, line 8 to p. 13, line 21).2 Tovar was hired by a facilities management company
named Caravan Facilities Management, LLC to provide snow and ice removal
services at a General Motors facility in Marion, Indiana. (Wilson Aff., ¶ 6). That
facility manufactures automobile parts. Tovar subcontracted the snow and ice
removal work to All Seasons, and Tovar and All Seasons entered into an agreement
titled Standard Subcontractor Service Agreement. (Id., ¶¶ 7, 10). Tovar and All
Seasons had not previously worked together. (Rhees Dep., p. 19, lines 4-15). Under
the Service Agreement, All Seasons agreed to provide snow and ice removal services
at the Marion facility for the period November 1, 2012, through April 15, 2013.
(Wilson Aff., ¶ 11). The parties do not dispute the contents of the Service
Agreement; its relevant provisions will be addressed in the Analysis section of this
order.
After entering into the Service Agreement but before beginning any work at
the GM facility, the owner of All Seasons (Lucas Rhees) and other All Seasons crew
members met with a representative from Caravan (the facilities manager) at the

Ronald Wilson is employed by Tovar and was an account manager at the
relevant time who oversaw Tovar’s snow and ice removal work for clients in
Indiana.
1

Lucas Rhees is the owner and sole member of defendant All Seasons General
Contracting, LLC. Excerpts from his deposition are at Dkt. 49-2, Dkt. 54, pp. 27-42,
and Dkt. 56-2.
2

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GM facility. They attended a safety meeting. Mr. Rhees asked a Caravan
representative where to push snow and where to salt at the facility, but the
Caravan representative did not know the answers to the questions. (Rhees Dep., p.
21, line 16 to p. 24, line 11). Caravan had, however, given instructions to Tovar, and
Tovar passed them along to All Seasons. (Wilson Dep., p. 48, lines 9-14).3 All
Seasons was instructed by Tovar that GM had a “zero tolerance” policy regarding
the presence of snow and ice in the parking lots and drive lanes. (Wilson Dep., p.
47, lines 3-21, and p. 48, lines 15-21; Rhees Aff., ¶ 7; Plaintiff’s Dep. Exh. 3, Dkt. 492 at pp. 36-37).
All Seasons maintained a pile of salt on the premises for its work and used
bobcat equipment with attached salt spreaders to salt the outside lots, drive lanes,
and loading docks. Tovar supplied some of this equipment and All Seasons used
some of its own equipment. (Rhees Dep., p. 27, line 15 to p. 28, line 10 and p. 29,
lines 12-23).
Large “containers” or “racks” were situated in at least one outside area of the
GM facility, around which were driving lanes. The parties generally refer to these
items as “racks” and the court will do so too. All Seasons salted the driving lanes
around the racks. (Rhees Aff., ¶ 8). It had never been told not to use de-icing salts
near the racks. (Rhees Aff., ¶ 6). Each rack is approximately 9 feet wide by 9 feet

3

Excerpts from Ronald Wilson’s deposition are at Dkt. 54, pages 2-26.
4

tall and is open on the sides. (Land Dep., p. 10, lines 8-19).4 The racks were
grouped in blocks and stacked three or four high. (Land Dep., p. 9, lines 7-13).
They are used to, eventually, hold (or “contain”) car parts. A rack filled with car
parts fits inside a railroad car for transport. (Datar Dep., p. 25, lines 16-22).5
Though GM prefers to not store racks outside, there are times when it has too many
racks at the Marion facility to store all of them inside. (Davis Dep., p. 14, lines 1720; Land Dep., p. 18, lines 8-14).
When car parts are ready to be loaded onto a rack, a rack is transported
using a forklift by a GM employee from the outside lot to a loading dock area.
(Davis Dep., p. 11, lines 1-23).6 An “inside” GM forklift driver takes over from
there. If a rack is wet, GM’s general procedure required placing the rack on a ramp
once brought inside to allow any moisture to drain off and for the rack to dry before
parts are loaded onto it. (Vandermeir Dep., p. 40, line 10-13 and line 23 to p. 41,
line 4).7

Excerpts from the deposition of Anita Land, who was an engineer at the GM
Marion facility, are at Dkt. 49-3 and at Dkt. 54, pp. 63-77.
4

Excerpts from the deposition of Milind Datar, a GM employee, are at Dkt. 54,
pages 90-98.
5

Excerpts from the deposition of Terry Davis, who was the GM facility area
manager and had landlord-like responsibilities for the Marion facility, are at Dkt.
49-4 and Dkt. 54, pp. 52-62.
6

Excerpts from the deposition of George Vandermeir, who was the quality
manager at the Marion facility, are at Dkt. 49-5.
7

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In February 2013, GM’s employees loaded car parts (mostly hood panels and
some fenders) onto racks that had been brought from outside. (Davis Dep., p. 11,
lines 20-23). As a general rule, GM personnel do not formally inspect racks when
they are brought from outside and put in place for being loaded with parts at the
end of the assembly line, although GM personnel “watch” to make sure that racks
brought from outside are dry before loading them. (Vandermeir Dep., p. 12, line 24
to p. 13, line 4; lines; Land Dep., p. 19, lines 3-7). Parts, like hood panels, are
inspected when they come off the line. (Vandermeir Dep., p. 11, line 15 to p. 12, line
14). If there were rust or corrosion on a part at that time, such a problem should be
noticed. (Id.).
The now-loaded racks were placed in box rail cars—an enclosed
environment—and shipped to a GM facility in Arlington, Texas. (Land Dep., p. 34,
lines 14-19). When the parts were received in Arlington, Texas, quality control
inspectors at that facility discovered problems with the parts. About February 11,
2013, Arlington notified Marion of problems they encountered, which included salt
found on parts and racks and the presence of heavy rust on parts. (Land Dep., p. 7,
line 10 to p. 11, line 2; Land Dep. Ex. 1). The Marion facility began investigating the
problem. The investigation was led by Anita Land, the Materials Packaging
Coordinator at the Marion facility. She reviewed photographs of the parts damages
sent by Arlington. (Id. at p. 8, lines 17-21). She looked around the Marion facility,
inside and outside, and noticed what appeared to be chunks of de-icing residue of
various sizes on the outside racks. (Id., p. 8, line 22 to p. 9, line 13). She reported

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in an email dated February 14, 2013, that the day before she and another GM
employee (George Hensley) inspected racks then being stored outside and found
that “salt was indeed sprayed into [racks].” (Dkt. 49-5 at p. 13). Ms. Land began
formulating a plan to clean all racks at the Marion facility. (See Feb. 14, 2013
email).
The Arlington plant issued formal “Quality Alert” documentation in midFebruary 2013 which described and depicted (by photographs) what appeared to be
salt found on parts and racks and the presence of heavy rust on parts. The
Arlington plant had already begun “scrapping out” over 400 car hoods (Dkt. 49-5 at
p. 12). GM turned to Caravan, its facilities manager at the Marion plant, to
respond to the problem and rectify it. (See Feb. 14, 2013 email, Dkt. 49-5 at p. 12).
According to an invoice sent by Caravan to Tovar, Caravan’s employees began
cleaning racks at the GM Marion facility as early as February 14, 2013. (See Dkt.
49-5 at p. 23). That work involved bringing racks into a steam booth at the plant
that produces hot water, and cleaning the racks with soapy water. (Davis Dep., p.
43, lines 3-14).
Caravan turned to its contracting partner, Tovar, about the problem. A
meeting was held at the Marion plant on February 18, 2013. It was attended by
representatives from General Motors (including the Marion facility manager, Terry
Davis), Caravan, Tovar (Ronald Wilson and Chris Price),), and All Seasons (Lucas
Rhees). The damage to parts shipped from Marion to Arlington was discussed. The
General Motors representatives stated that GM had concluded after its

7

investigation that parts had become corroded because the racks used to transport
them were contaminated with salt from de-icing the outside lots. (Wilson Dep., p.
74, lines 2-16). The problem was described as “severe,” but the extent of damage
was not addressed and no demand for payment was made. (Wilson Dep. p. 76, lines
17-25). After the meeting, Ronald Wilson (Tovar’s representative at the meeting)
inspected racks that were being stored outside. (Wilson Dep., p. 66, lines 2-7). He
noticed salt on portions of the racks. (Id., p. 66, lines 13-17). Mr. Rhees of All
Seasons did not, at that point or any other, similarly look at the racks stored
outside.
Caravan issued an invoice to Tovar dated March 28, 2013, in the sum of
$159,515.26 for the “[c]ost of salt corrosion on panels and salty racks.” (Dkt. 49-5,
at pp. 21-33). Tovar received the invoice on or about its date. (Wilson Aff., ¶ 18).
The amount consists of $140,699.93 attributed to GM’s “cost to recover damage to
hoods” and $18,815.33 attributed to Caravan’s “labor costs associated with the
damaged hoods.” (Caravan Invoice, Dkt. 49-5 at pp. 21-22). The GM portion was
calculated by GM; about 1/3 of the costs are labeled as “est.” Neither Caravan nor
Tovar questioned GM’s calculation. (Wilson Dep., p. 78, lines 16-24 and p. 81, lines
8-15). The Caravan “labor costs” apparently are all attributed to cleaning racks at
the Marion facility. That work (722 hours at $26.06 per hour) was done, according
to the invoice, between February 14, 2017, and March 10, 2013. Tovar did not
question the amount of the Caravan invoice. (Wilson Dep., p. 81, lines 8-15). Tovar

8

paid the Caravan invoice in full. (Wilson Aff., ¶ 19). The record does not establish
when Tovar paid the invoice.
Against this factual background (and other evidence and inferences discussed
below), the court now turns to the parties’ arguments why each is entitled to
judgment as a matter of law. The court explains why neither is so entitled.
Analysis
The parties’ cross-motions for summary judgment require the court to
determine whether there is any genuine dispute of material fact about whether All
Seasons breached the Service Agreement. Tovar argues that the contract was
breached because All Seasons was, as a matter of law, required to reimburse Tovar
for paying Caravan’s invoice under the indemnity provision of the Service
Agreement. See Tovar opening brief, Dkt. 48, at p. 14 (“Tovar is Entitled to
Indemnification from All Seasons for the Damage It Caused to GM’s Property”) and
at p. 18 (“All Seasons’ refusal [to indemnify Tovar] is a breach of the
indemnification provision as a matter of law.”) All Seasons argues that, as a matter
of law, it did not breach the indemnification provision because Tovar did not provide
proper written notice of the claim as required by the contract, and All Seasons was
prejudiced by the lack of proper written notice.
I.

The Agreement, and its indemnification provision, is governed by
Illinois law.
The Service Agreement, at Section 9(C), contains a choice of law provision

directing that it must be “interpreted, enforced and governed by and under the laws
of the State of Illinois.” The parties agree that Illinois substantive law governs.
9

II.

The indemnification provision first describes “indemnity events”
and then provides a notice procedure.
The indemnification provision is lengthy, and it is worthwhile to include in

this order the entire provision. It has two sections, A and B. Section A describes
what constitutes an “Indemnity Event.” Section B describes a notice procedure in
the event of “any demand, claim or action which would be the basis of a claim by
Contractor [Tovar] under the provisions of” Section A. The indemnification
provision of the contract reads:
3.

Indemnity8

A. Subcontractor hereby agrees to defend, indemnify and hold harmless
Contractor, its affiliates, and each of their respective officers, directors,
shareholders, employees, and agents (each, an “indemnified party”) from and
against any and all liability, loss, damage, cause of action, claim, cost and
expense, including but not limited to, reasonable attorneys’ fees and
expenses, incurred as a result of or in connection with any of the following
(each, an “indemnity event”), even if the negligence, gross negligence, or other
tortuous conduct of one of the indemnified parties is a contributing, but not
the sole, cause of the indemnity event: (a) any injury or death of persons
whomsoever, including, but not limited to, officers, agents, employees or
subcontractors of Contractor or Subcontractor or their respective
subcontractors, loss or destruction of, or damage or delay to the property to
whomsoever belonging, including the conversion thereof, arising from or
relating to the performance of the Services; (b) Subcontractors’ or its
subcontractors’ or their respective employees’ or agents’ or subcontractors
negligence, willful misconduct or fraud, including but not limited to theft,
embezzlement, defalcation or issuance of false or fraudulent receipts, reports
or other documents; (c) Subcontractor’s breach of or failure to perform
Services; (d) any Hazardous Condition or other environmental contamination
caused in whole or part by the acts or omissions of Subcontractor or its
subcontractors or their respective employees or agents or sub-subcontractors;
(e) Actions of Subcontractor or its subcontractors or their respective
employees or agents or sub-contractors outside the scope of the authority
granted under the Agreement; (f) subcontractor’s or its subcontractor’s use of
The typographical and spelling errors in this provision are in the original
contract.
8

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equipment; (g) Subcontractor’s failure to maintain insurance coverage
required under this Agreement or to provide funds in satisfaction of any
insurance deductible amount; or (h) claims made by third parties for services
or labor provided or materials furnished to Subcontractor or its
subcontractors, and (i) any breach of any other provision of this Agreement.
Subcontractor shall also defend, indemnify and hold harmless the
Indemnified parties in the foregoing manner with respect to the defense of
claims and actions alleging that an Indemnified party’s negligence, gross
negligence or other tortuous conduct was or might have been the sole cause of
the subject indemnity event, but Subcontractor’s indemnification shall not
extend to any judgment, award or settlement where it has been determined
or agreed that the Indemnified party’s negligence, gross negligence or other
tortuous conduct was the sole cause of the Indemnity event or where the
Indemnified party committed an intentional tort. Subcontractor’s obligations
under this Section 3.A shall not be limited in any way by any limitations on
the amount or type of damages, compensations, or benefits payable by or for
Contractor under workers’ compensation acts, disability benefit acts, or other
employee benefit acts and all such obligations shall survive any termination
of this Agreement whether by expiration of time or otherwise.
B. Upon receipt of notice by Contractor of any demand, claim or action which
would be the basis of a claim by Contractor under the provisions of Section
3.A above (an “indemnified claim”), Contractor shall provide written notice of
such indemnified claim. So long as Subcontractor is not in default in the
performance of its obligations under this Agreement, as between Contractor
and subcontractor, Subcontractor shall retain primary responsibility for the
conducting of any legal and/or administrative action or other proceeding
regarding any such indemnified claim (and “indemnified claim proceeding”)
and the defense (and any appropriate appeal) thereof. Legal counsel retained
with respect to any indemnified claim proceeding shall be selected by
Subcontractor, but shall be subject to the reasonable prior approval of
Contractor. As between Contractor and Subcontractor, all costs incurred with
respect to any indemnified claim proceeding (including, but not limited to,
court cost and attorney’s fees) shall be borne by Subcontractor, and
Subcontractor’s indemnification obligations set forth in Section 3.A above
shall extend to all such costs. Nothing contained herein shall in anyway limit
Contractor’s right to participate and/or retain independent legal counsel, at
Contractor’s expense, with respect to any indemnified claim proceeding, but
Contractor shall cooperate with Subcontractor and coordinate Contractor’s
participation and/or use of independent counsel in a matter not consistent
with Subcontractor’s positions and interests in such indemnified claim
proceeding to the extent reasonably possible and not adverse to the interest
of Contractor. Notwithstanding the foregoing, in the event Contractor
determines, in Contractor’s opinion, that there is a conflict of interest or other
circumstance such Subcontractor’s retained legal counsel cannot adequately
11

represent Contractor’s interests in any indemnified claim proceeding,
Contractor shall have the right to retain independent legal counsel and
Subcontractor’s indemnification obligation set forth in section 3.A above shall
extend to all costs incurred with respect to such separate representation.
Subcontractor’s obligation to conduct and undertake any required
indemnified claim proceeding or the defense thereof, and to bear the costs
incurred with respect thereof, shall apply even in the event that there is an
ultimate adjudication or other determination of liability of the Indemnified
party attributable to the negligence, gross negligence or other tortuous
conduct of such Indemnified party.
Thus, Section 3(A) lists nine events (described in subparagraphs 3(A)(a)
through 3(A)(i))—each defined as an “indemnity event”—which trigger an obligation
by All Seasons to indemnify and hold harmless Tovar. The indemnification extends
to “any and all” “liability, loss, damage, cause of action, claim, cost and expense,
including but not limited to reasonable attorneys’ fees and expenses incurred as a
result of or in connection with” an indemnity event.
Tovar’s summary judgment brief (Dkt. 48 at p. 16) contends that Indemnity
Events (a), (b), (c), (f), and/or (i) were triggered:


The subparagraph (a) Indemnity Event is: “loss or destruction of, or
damage or delay to the property to whomsoever belonging . . . arising
from or relating to the performance of the Services.”



The subparagraph (b) Indemnity Event is: “negligence.”



The subparagraph (c) Indemnity Event is: “breach of or failure to
perform Services.”



The subparagraph (f) Indemnity Event is: “use of equipment.”



The subparagraph (i) Indemnity Event is: “any breach of any other
provision of this Agreement.”
12

With respect to Indemnity Event (i)—any breach of any other provision of the
Agreement—Tovar points to one “other provision” of the Agreement it claims was
breached by All Seasons. See Dkt. 48 at pp. 15-16. It is Section 1(I), which states in
full:
Subcontractor shall take all necessary safety precautions with respect
to performing services and shall comply with all safety rules and
requirements from time to time specified by Contractor or by Owner
and with all applicable laws, ordinances, rules, regulations, and orders
of any public authority. Without limiting the generality of the
previous sentence, Subcontractor shall make certain that
Subcontractor’s equipment and the operation thereof do not damage
the paving of the Snow Removal Site or any light poles or other
improvements or property thereon. In the event of any such damage,
Subcontractor shall immediately notify Contractor and, at the request
of Contractor shall promptly repair all such damage to the satisfaction
of Owner without charge or expense to Contractor, Owner. If Owner or
Contractor elects to repair such damages, Subcontractor shall pay all
costs thereof upon demand.9

Tovar’s reply brief argues that All Seasons’ alleged breach of Section 1(I) of
the Service Agreement is a claim it is pursuing independent of the indemnification
provision of the Agreement, and thus notice procedures under the indemnification
provision are irrelevant to whether it can recover against All Seasons. See Dkt. 55
at pp. 12-13. The court rejects that argument on summary judgment because it was
raised for the first time in the reply brief. Tovar’s opening brief framed its
argument solely in terms of whether All Seasons was liable under the
indemnification provision—that’s the very heading of Section C of its brief which
includes the reference to Section 1(I). Moreover, Tovar presented no analysis how it
is entitled to judgment as a matter of law under this contract provision; it did not
even cite the entire language of Section 1(I) until its reply brief. To obtain summary
judgment, some analysis was needed to address (a) how All Seasons violated a
safety rule or precaution or something akin thereto or address whether violation of
a safety rule or precaution is necessary for a breach of Section 1(I); (b) why Section
1(I) should be interpreted to apply to alleged damages to car parts that were not on
the Snow Removal Site and with which All Seasons’ work had no direct physical
contact; (c) how Section 1(I) could be applied to outside racks when there appears to
be no allegation that the racks were “damaged”; or (d) how any failure to comply
with the notice section of the provision affects its enforcement. Thus, even if Tovar
had made clear in its opening brief that it was seeking judgment for breach of
9

13

Section 3(B) of the indemnification provision contains notice requirements
from Tovar to All Seasons when Tovar receives notice of a claim in connection with
an Indemnity Event, i.e., notice “of any demand, claim or action which would be the
basis of a claim by Contractor under the provisions of” Section 3(A).
III.

Questions of fact prevent the court from deciding that All Seasons
breached the indemnification provision and from deciding that
Tovar breached that same provision, excusing All Seasons from any
liability.
The court will address later the state of the evidence about whether an

Indemnity Event described in Section 3(A) occurred. Even assuming that an
Indemnity Event occurred, the court cannot conclude as a matter of law that either
All Seasons or Tovar breached the indemnification provision in a way entitling
either to summary judgment. This breach of contract case must therefore be tried
to the jury.
A. The evidence and reasonable inferences therefrom show that
Tovar did not provide written notice of its claim before it already
paid Caravan in full for the claim.
Section 3(B) of the Service Agreement required Tovar to provide notice that
Tovar claimed entitlement to indemnity. The notice was to be in writing: “Upon
receipt of notice by Contractor of any demand, claim or action which would be the
basis of a claim by Contractor under the provisions of Section 3.A above (an

Section 1(I) independent of the indemnification provision (which it did not), Tovar
did not meet its burden to adequately inform the court of the bases for its argument.
14

“indemnified claim”), Contractor shall provide written notice of such indemnified
claim.” (emphasis added).
There is no evidence in the record that Tovar provided written notice to All
Seasons before Tovar had paid the Caravan invoice. The only written notice from
anyone associated with Tovar to anyone associated with All Seasons established by
the record is dated May 1, 2013. That date is more than a month after the date of
Caravan’s invoice. Although there is no evidence about the date Tovar (or its
insurer) paid the invoice, the reasonable inference from the evidence is that Tovar
paid it before any written notice was made to All Seasons.
Tovar’s third-party insurance claims administrator sent a letter dated May 1,
2013, to All Seasons’ insurance agency (Hobson Insurance Agency) and All Seasons’
insurance carrier (Property Owners Insurance Company) enclosing the Caravan
invoice and demanding payment. (See letter dated May 1, 2013, Dkt. 56-3 at p. 8).
The May 1, 2013 letter states that Tovar’s claims administrator had previously
“tendered” a claim to All Seasons and that All Seasons representative “indicated” he
had not reported the claim. (Id.). There is no information in the letter, or anywhere
else in the record, about when the claims administrator allegedly “tendered” the
claim to All Seasons or how the claim was “tendered”; it could have occurred orally
and, even if not, it could have occurred the very same day the May 1 letter was
written.10 Moreover, Tovar admitted in response to a request for admission that the

All Seasons contends that the statement in the letter about the tender of a
claim to All Seasons is hearsay and should be disregarded by the court. But, even if
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May 1, 2013 letter was “the first time any request was made in writing to All
Seasons regarding any alleged claim for damages regarding the General Motors
parts (hoods).” (See Answer to Request for Admission 8, Dkt. 57-1 at p. 4).
The only other evidence of any receipt by All Seasons of the Caravan invoice
is a statement by Lucas Rhees, of All Seasons, in his affidavit that “All Seasons was
not provided written notice of any ‘claim’ or lawsuit filed against Tovar . . . and
Tovar had already paid an invoice from Caravan/General Motors, before Tovar
presented All Seasons with a copy of the invoice and demanded payment.” (Dkt. 54
at p. 44, para. 12). This testimony also does not establish a date when anyone
associated with Tovar gave the Caravan invoice to All Seasons. It establishes only
that by the time All Seasons had a copy of the invoice (which could have been as
late as May 2013, when the invoice was sent to All Seasons’ insurance agent and
carrier), Tovar already had paid it. Tovar has provided no evidence about when it
gave the Caravan invoice to All Seasons (if it ever did, apart from the
communication by its claims administrator) and Ronald Wilson confirms that Tovar
had already paid the invoice by the time requests were made to All Seasons for
“reimbursement.” (See Wilson Aff., Dkt. 49-1, paras. 20-21).
B. Lack of notice does not entitle All Seasons to summary judgment.
Tovar’s failure to provide written notice of the allegedly indemnified claim
before paying the Caravan invoice does not absolve All Seasons from potential

the court does not disregard it, the statement does not prove that written notice of a
claim was made any earlier than May 1, 2013.
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liability for all or any part of the claim, at least on this record and as a matter of
law. Both parties agree that under Illinois law, as addressed by the Appellate
Court of Illinois in Williams v. BNSF Railway Co., 29 N.E.3d 1097 (Ill. App. 2015),
notice requirements in contractual indemnification provisions are analyzed under
the same principles that notice requirements in insurance policies are analyzed. Id
at 1105. Insurance policies typically contain a notice provision requiring the
insured to notify the insurer of a claim and state that proper notice is a prerequisite
to coverage. Id. (citing West American Ins. Co. v. Yorkville Nat’l Bank, 939 N.E.2d
288 (Ill. 2010)). When an insurer seeks to avoid its coverage obligation on the
ground notice was not timely or otherwise reasonably provided, Illinois courts
analyze five factors to determine whether the notice was reasonable under the
circumstances and not a ground for the avoidance of coverage. Id. In Williams, the
court ruled that these factors “are relevant in the context of reasonable notice
required in a contractual indemnification clause.” Id.
The factors—which, the Williams court holds, generally present questions of
fact, id.—are:
1. “The specific language of the policy’s notice provisions”;
2. “The degree of the insured’s sophistication in the world of commerce and
insurance”;
3. “The insured’s awareness that an occurrence as defined under the terms
of the policy has taken place”;

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4. “The insured’s diligence and reasonable care in ascertaining whether
policy coverage is available once the awareness has occurred”; and
5. “Any prejudice to the insurance company.”
Id.
Tovar, the indemnitee, is the “insured” under these factors and All Seasons,
the indemnitor, is the “insurance company.” There are genuine issues of material
fact that prevent the court from deciding as a matter of law that Tovar’s notice was
so unreasonable that All Seasons should be absolved of any liability. Further,
because All Seasons is seeking summary judgment based on an alleged lack of
reasonable notice, the court must view the evidence and reasonable inferences on
this issue in the light most favorable to Tovar. The court highlights some of the fact
issues.
First, there are issues of fact about what All Seasons knew as of February 18,
2013, when it attended the meeting with GM, Caravan, and Tovar officials
regarding the damaged car parts. It is undisputed All Seasons was told that GM
had determined by its investigation that All Seasons’ work was a root of the
problem. There are disputed facts, however, about whether All Seasons was aware
and should have been aware that a claim was being made at that meeting.
According to Ronald Wilson (of Tovar), Mr. Rhees of All Seasons apologized at the
meeting for “this occurrence and the damage it caused to GM’s racks, vehicle hoods,
and other products.” (Wilson Aff., ¶ 16). Mr. Rhees disputes that testimony, and
states that he never indicated to anyone that All Seasons was responsible for

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alleged damage to any GM parts. (Rhees Aff., ¶ 15). While any notice of a claim at
that meeting was not in writing, the Williams analysis does not begin and end with
whether there was strict compliance with the language of a notice provision. Under
Williams, the language of a notice provision is one factor in addressing whether the
notice actually given is reasonable or unreasonable under the circumstances.
Second, a reasonable inference from Tovar’s evidence (though All Seasons
contests it) is that Mr. Rhees understood at and after the meeting that GM was
holding All Seasons responsible for the damaged car parts, although the full extent
of the damage was not yet known. Mr. Rhees thus had information at that point
that might have caused a reasonable insurer (or indemnitor) to begin to investigate
the matter rather than to ignore it until a written notice was tendered.
Third, there are questions of fact related to whether and the extent to which
All Seasons was prejudiced by the making of written notice after Tovar had paid the
invoice. All Seasons asks the court to determine on summary judgment that the
prejudice to it was so great it should be relieved of any responsibility. The
prejudice, according to All Seasons, stems primarily from its inability to conduct a
thorough investigation and determine from an inspection of the car parts and the
racks that de-icing salts definitively caused the alleged damages. According to the
evidence on summary judgment, the car parts (or most of them) were scrapped at
the GM Arlington plant and Tovar had no more ability than All Seasons to inspect
those parts. Thus, timing of Tovar’s written notice may not have caused All
Seasons’ inability to personally inspect the car parts.

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There is evidence about the condition of the car parts when they arrived at
GM’s Arlington facility. GM’s personnel took pictures of the parts and documented
GM’s contemporaneous investigation. There is evidence about the condition of the
racks and eyewitness accounts (from Anita Land, Terry Davis, and Ronald Wilson)
about the presence of de-icing salts on racks that were sited outside at the Marion
facility. There is evidence about the manner (at high speed and at a relatively high
level off the ground) in which de-icing salts were dispersed by the equipment used
by All Seasons in its work,11 upon which a reasonable inference may be made that
de-icing salts likely (and perhaps very likely) regularly hit racks stored outside. All
this evidence can be weighed by a jury, along with evidence that Mr. Rhees chose to
not inspect the outside racks after the February 18 meeting (or apparently any time
thereafter), and evidence that Caravan washed all racks before All Seasons
inspected any of them and before Tovar provided written notice on May 1, 2013.
All Seasons’ protest that undue prejudice must be presumed because
without an inspection of the parts and the racks, it cannot determine with absolute
certainty that de-icing salts caused the white rust on the car parts that was
documented by GM’s photographs and investigation is an argument that must be
presented to a jury. Although All Seasons’ expert (Conrad Christensen)12 states in

E.g., Wilson Aff., ¶ 17; Rhees Dep., p. 32 at lines 2-24. Ronald Wilson
testified that he told Lucas Rhees that All Seasons was putting down too much deicing salts, was driving too fast, and salt had been hitting office windows. (Wilson
Dep., p. 44, lines 17-20 and p. 50, lines 2-24).
11

The court is satisfied that Mr. Christensen has the expertise to opine on
conditions that can cause the kind of “white rust” corrosion documented by GM
12

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his affidavit (though not in his expert report) that “[w]ithout testing of the parts at
issue, it is not possible to determine with an acceptable degree of certainty what
substance(s) caused the “white rust” corrosion,” the statement is insufficiently
precise. Certainty measured by what? Science? The law? Neither? Mr.
Christensen’s expert report states he is “critical” of the investigation conducted by
GM because parts were not saved and chemical composition tests were not
conducted of the white rust corrosion and of the salts themselves. (See Expert
Report, Dkt. 54 at p. 88, ¶ 1). Yet he also states that the GM photographs depict
“considerable white rust/corrosion damage to the galvanized steel parts” consistent
with exposure to a corrosive agent other than plain water, which “could have
occurred as a result of road deicing salt contamination to the racks.” Id.
That opinion, along with evidence advanced by Tovar (its expert’s opinions,
the findings by GM Arlington, the testimony of Anita Land, and the testimony of

Arlington. He has a Bachelor of Science degree in Materials Science and
Engineering from the University of California, Berkeley, and is a registered/licensed
professional metallurgical engineer in California and in Nevada. See Christensen
Aff., Dkt. 54, at p. 82, paras. 4-5. The court agrees with Tovar, however, that Mr.
Christensen does not have the expertise to opine about what General Motors should
or should not have done as a matter of prudent inspection or racks and parts
storage practices. His lack of expertise about automobile quality control practices
does not prevent him from opining about whether particular circumstances (such as
storage of racks outside in areas of de-icing activity and the presence of moisture on
racks) inevitably can lead to corrosion problems if salt comes into contact with
parts. For example, it is appropriate for him to give an opinion, based on his
expertise and fact assumptions supported by evidence that: “[A]ny salt
contamination on the racks is too much, and could result in corrosion problems if it
comes into contact with parts. It is impossible to salt the area around the racks and
not expect some contamination, either from initial spreading of the salt or the
subsequent splash and wind spray from vehicle/forklift traffic operating in the
vicinity of the racks.” See Christensen Expert Report, Dkt. 54, at p. 89, para. 4.
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others who had the opportunity to inspect the racks) could convince a jury it is more
likely than not that road de-icing salts combined with moisture (perhaps on racks
that were not dried completely before loaded with the car parts and shipped to
Arlington) corroded and damaged the parts. From that premise, a jury could
conclude (though the court is not suggesting here that a jury must conclude) that
All Seasons’ inability to test the parts or look at racks did not result in undue
prejudice because cause and effect fairly can be deduced by other available, and
reliable, evidence.
A jury’s assessment of prejudice may also include evaluating whether it was
unreasonable for Tovar to pay the entire invoice without first allowing All Seasons
input and investigation about the reasonableness of the charges, including
consideration whether GM itself should bear some of the cost because of its own
conduct. All Seasons asserts that GM bears some responsibility, but that too is an
issue that is not amenable to summary judgment. There is evidence that the GM
Marion facility did not previously (or subsequently) encounter corrosion issues like
that experienced when All Seasons did the snow and ice removal work. There is
evidence that All Seasons used a more high-powered de-icing salt delivery method
than was used in past seasons. There is evidence that that method of spraying salt
(at a high level off the ground and powerfully) led to an “assault” of salt crystals on
the outside racks that was not experienced before, and GM therefore had no reason
to treat its racks differently than it had in the past.

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A jury may also consider the reasonableness of the Caravan invoice itself. It
appears from the face of the invoice that some of the charges attributed to GM are
estimated, and there is no back-up documentation for GM’s charges. (See Invoice at
Dkt. 49-5, p. 22). A portion of GM’s costs appear to be for an “estimated” 636 manhours at the Marion facility to “Wash and ID Racks,” id., yet Caravan also
separately charged for 722 hours of work by laborers at the Marion facility to clean
racks (with documentation of the dates, times, and persons performing that work).
It is possible that the 636 estimated hours are subsumed within the 722 hours
reported by Caravan, and thus labor costs were double-counted.
Further, the 722 hours spent washing racks (or 636 plus 722) may not be
fairly associated with All Seasons’ work if the labor included washing every rack at
the Marion facility whether or not the rack ever was on the outside lot or, even if on
the outside lot, was situated in a position on the lot that it came into contact with
de-icing salt. According to Anita Land, who inspected the outside racks as part of
her contemporaneous investigation, she noticed de-icing salts on some racks but not
others depending on their location within the group of racks. Racks near the top
(recall that 3 or 4 racks were stacked on each other) did not come into contact with
salt; racks near the middle did not either. (Land Dep., p. 9, lines 7-13 and at p. 31,
lines 14-25).
For all the reasons addressed above, the court cannot decide as a matter of
law that Tovar’s providing of written notice on May 1, 2013, was so unreasonable as
to absolve All Seasons of any liability. Consequently, the court DENIES All

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Seasons’ motion for summary judgment. It also DENIES Tovar’s motion for
summary judgment because its motion depends on the court’s finding that the
notice Tovar gave to All Seasons was sufficiently compliant with the notice
requirement under the indemnification clause and reasonable as a matter of law.
The court will also address, below, some of the issues of fact regarding the
occurrence of an “indemnity event” under the indemnification clause.
C. There are issues of fact regarding the occurrence of one or more
of the indemnity events on which Tovar relies.
The court also cannot decide as a matter of law that one of the indemnity
events relied on by Tovar was triggered. Recall that Tovar relies on one or more of
the following events:


Subparagraph (a): “loss or destruction of, or damage or delay to the
property to whomsoever belonging . . . arising from or relating to the
performance of the Services.”



Subparagraph (b): “negligence.”



Subparagraph (c): “breach of or failure to perform Services.”



Subparagraph (f): “use of equipment.”



Subparagraph (i): “any breach of any other provision of this
Agreement.”

There are issues of fact as to each one, and the court notes some of them.
As discussed above, part of deciding the notice/prejudice issue will require the
jury to evaluate the evidence about All Seasons’ inability to physically inspect and
test the GM parts and the racks. In that context, the jury will consider whether
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there is reliable evidence that damage to the parts arose from All Seasons’ de-icing
work around the racks on the outside lot. The evidence on summary judgment is
very strong that (a) de-icing salts hit and stuck to (or landed in the crevices of) some
racks stored outside on GM’s Marion facility and that (b) de-icing salts on the racks,
combined with some level of moisture, was the cause of the rust damage to the GM
parts. The evidence is not, however, so conclusive, that the court should decide the
issue as a matter of law, particularly because the same cause/effect evidence is
relevant to the notice/prejudice issue. All Seasons is entitled to have a jury
evaluate its expert’s opinion that the failure to preserve racks (with salt) and parts
(with rust) makes the conclusion reached by GM employees and Tovar’s expert that
All Seasons’ work was the root of the problem insufficiently reliable for a conclusion
that the damage to GM’s property either arose from or was related to All Seasons’
work (Indemnity Event (a)) or All Seasons’ use of equipment (Indemnity Event (f)).
Disputed facts must be evaluated by a jury to decide whether All Seasons was
negligent (Indemnity Event (b)) or whether All Seasons had breached or failed to
perform its Services (Indemnity Event (c)). The parties dispute whether snow
removal industry standards even existed, and thus whether All Seasons failed to or
did not fail to follow industry standards. (Wilson Dep., p. 55, lines 1-9; Rhees Dep.,
p. 15, lines 21-23). All Seasons has cited evidence (generally the “zero tolerance” for
ice anywhere on the GM lot) that it faithfully followed the instructions it was given
regarding performance expectations, and thus should not be deemed negligent or as
having committed a breach in the performance of its Services.

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Finally, as to subparagraph (i)—breach of “any other provision” of the
Agreement—Tovar relied on one other provision, Section 1(I). As the court
explained in footnote 8, supra, there are issues a fact-finder must evaluate in
applying that provision to the evidence.
When the evidence and the reasonable inferences therefrom are viewed in the
light most favorable to All Seasons, the court cannot conclude as a matter of law
that an Indemnity Event occurred or that proper notice was given to All Seasons
requiring it to reimburse Tovar for the amount paid under the Caravan invoice.
Tovar’s summary judgment motion also sought judgment for attorneys’ fees.
Because the court has found that genuine issues of fact prevent summary judgment,
the court does not reach that issue. The court also notes that under Fed. R. Civ. P.
54(d)(2), a claim for attorneys’ fees is made by motion after judgment unless
substantive law requires their proof at trial as an element of damages. Whether
substantive law requires proof of fees at trial was not addressed by the parties and
is an issue that should be addressed at the final pretrial conference.
Conclusion
For all the foregoing reasons, the court (1) DENIES Tovar’s motion (Dkt. 47)
for summary judgment and (2) DENIES All Seasons’ motion (Dkt. 53) for summary
judgment.
So ORDERED.
____________________________________
Debra McVicker Lynch
United States Magistrate Judge
Southern District of Indiana

Dated: July 11, 2017

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Distribution:
All ECF-registered counsel of record by email through the court’s ECF system

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