Reversal: Insurance company has no duty to indemnify homeowner after child’s accident

An insurance company will not have to defend a man being sued for negligence after a toddler was injured on his property because the toddler was exempt from coverage under the man’s insurance policy, the Indiana Court of Appeals has ruled.

In April 2014, while Brena Berardicelli and her two sons were living with him, Travis Shroyer backed a skid loader out of his barn and accidentally backed over J.B., Berardicelli’s 3-year-old son. J.B. survived, but he suffered serious injuries.

Shroyer submitted a claim to Auto-Owners Insurance Company for the accident, but the company denied coverage because J.B. was an “insured” subject to certain policy exclusions. Under Shroyer’s policy, an insured was “any other person under the age of 21 residing with [the named insured] who is in [the named insured’s] care …” and was exempt from personal liability coverage for bodily or personal injury.

Meanwhile, Berardicelli filed a negligence lawsuit against Shroyer on J.B.’s behalf. Shroyer then filed a complaint requesting declaratory judgment that Auto-Owners must defend and indemnify him in the lawsuit, and the insurance company moved for summary judgment on the grounds that J.B was an insured.

The Henry Circuit Court denied the summary judgment motion, but the Indiana Court of Appeals reversed that ruling on Tuesday.

Judge Rudolph Pyle III, writing for the unanimous appellate panel, first noted Berardicelli did not work while living with Shroyer, who took care of all of the expenses, including buying her vehicle and providing diapers and other necessities for her children. Thus, J.B. was under Shroyer’s “care” for purposes of the insurance policy, Pyle said.

“Shroyer’s argument that Berardicelli possessed the ‘sole responsibility’ concerning the watching, guarding or overseeing of J.B. is unconvincing,” Pyle wrote. “The concept of ‘care’ is not a mutually exclusive concept. … Although J.B. was in the care of his mother Berardicelli, he was still, as a matter of law, in Shroyer’s care.”

The case of Auto-Owners Insurance Company v. Travis Shroyer, 18A-CT-1330, was, thus, remanded for the trial court to enter judgment in Auto-Owners’ favor.