|
Homeowner |
Business
exclusion |
|
Remediation |
Pollution |
Shoney's Inc., a restaurant
tenant, brought an action against its landlord, Donald Hedrick, for damages
stemming from environmental contamination at its restaurant site. A gas station
had been located at the site in the past, and petroleum contamination was later
found to exist. Shoney's sought property damage and personal injury liability
coverage under a homeowners policy issued to Hedrick
by Mid-American Fire & Casualty Company. The policy excluded coverage for
property damage and personal injury arising from the "business
pursuits" of the insured.
The lower court granted
partial judgment in favor of Shoney's and partial judgment in favor of
Mid-American.
The Court of Appeals of
It was undisputed that
Hedrick owned the property at the time the leakage occurred and that there was
soil and groundwater contamination at the time he owned the property. Thus, his
ownership of the property served as the basis of the liability claim so long as
his ownership was not a "business pursuit." Shoney's argued that
Hedrick merely owned a piece of land, and that the property damage and personal
injury did not arise out of his business pursuit. They emphasized that Hedrick
was a college professor and that his ownership of the property did not rise to
the level of "business pursuit." However, the evidence showed that
Hedrick regularly engaged in various real estate ventures, and that he often
made more money from these investments than he did as a college professor.
According to the court, it was obvious that Hedrick earned an additional
livelihood through this commercial activity. In fact, Hedrick was also involved
with the ownership and construction of a Comfort Inn located adjacent to the
property. He had purchased the former gas station property in hopes of finding
someone to build a restaurant that would be convenient for hotel guests.
The court held that Mid-American
was not obligated to defend or indemnify in the Shoney's lawsuit because
Hedrick's ownership of the property was a "business pursuit" that was
excluded under the language of the homeowners policy.
The decision of the trial
court in favor of Shoney's was reversed and remanded for an entry in favor of
Mid-American.
Mid-American
Fire & Casualty Company vs. Shoney's Inc.-No. 49A02-0503-CV-235-Court of Appeals of Indiana-March
3, 2006-843 <I>North Eastern Reporter<I> 2d 548