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by: Colin E. Flora
Today, we look at an interesting decision from the Court of Appeals of Indiana that facilitates discussion of two areas of Indiana law: third-party beneficiary claims and Indiana Trial Rule 9.2.
Trial Rule 9.2
Let us first begin by looking at Trial Rule 9.2, so that we can understand how this case ended up on appeal. Enacted in 1970, the Indiana Trial Rules were almost entirely an adoption of the Federal Rules of Civil Procedure, which were established in 1938. Despite the Federal Rules providing a template, there are portions of the Indiana Trial Rules that are uniquely Hoosier. We have previously discussed one such rule: Trial Rule 13(J). This week, we look at another.
Both Federal and Indiana Trial Rule 9 apply to pleading special matters. Most often, Rule 9 is invoked in the context of pleading claims sounding in fraud, which requires heightened specificity. We have briefly discussed Federal Rule 9, before. In addition to the categories of Rule 9, Indiana adds two additional rules for pleading special matters. Rule 9.1 governs pleading the defense of contributory negligence or assumed risk, a theory of res ipsa loquitur, the defense of lack of consideration in an action on contract, and the defense of bona fide purchaser. That rule also dictates that items subject to presumptions or judicial notice need not be pleaded and sets out what is necessary to answer an action to recover the possession of property distrained while doing damage.
The portion that we focus on today is Trial Rule 9.2, which generally governs pleadings regarding written instruments. Specifically, we are looking at subdivision (A):
When instrument or copy, or an Affidavit of Debt must be filed. When any pleading allowed by these rules is founded on a written instrument, the original, or a copy thereof, must be included in or filed with the pleading. Such instrument, whether copied in the pleadings or not, shall be taken as part of the record. When any pleading allowed by these rules is founded on an account, an Affidavit of Debt, in a form substantially similar to that which is provided in Appendix A-2 to these rules, shall be attached.
Succinctly, Trial Rule 9.2(A) requires that claims for breach of written contracts or other written instruments require that the document(s) forming the instrument be attached to the complaint. That can be a very important requirement in a great many consumer transactions, especially debt collection. It can sometimes be quite difficult to know why you are being sued unless you are provided with a copy of the contract. For that reasons, a similar requirement is imposed under Indiana Small Claims Rule 2(B)(4).
Third-Party Beneficiary Claim
Turning to Tucker, the case all started when lightning struck an RV owned by the Tuckers. Their insurance company had the RV taken to a repair shop, which eventually passed the RV off to a second repair shop. When the Tuckers got it back, there were several problems. The Tuckers tried to sue for the damages caused by the additional problems, which included the battery having been hooked up backwards. The problem for the Tuckers is that they were not the ones who contracted with the repair shops, their insurance company was. Consequently, they could only bring a claim for breach of contract if they had standing as third-party beneficiaries.
As the Court of Appeals, recognized, the standard in Indiana to establish a third-party beneficiary claim has been:
To be enforceable, it must clearly appear that it was the purpose or a purpose of the contract to impose an obligation on one of the contracting parties in favor of the third party. It is not enough that performance of the contract would be of benefit to the third party. It must appear that it was the intention of one of the parties to require performance of some part of it in favor of such third party and for his benefit, and that the other party to the agreement intended to assume the obligation thus imposed. The intent of the contracting parties to bestow rights upon a third party must affirmatively appear from the language of the instrument when properly interpreted and construed.
If you have been following closely, you may now be seeing the problem. The italicized language, which is how the Court of Appeals italicized it, suggests that there must be something written—i.e. an instrument—upon which to base the claim. So, what happens if there was no written contract? The trial court thought the answer was simple: the claim required a written contract, no written contract has been attached under Rule 9.2, therefore the case should be dismissed.
The Court of Appeals thought otherwise. Somewhat surprisingly, this was an issue not previously addressed by Indiana appellate courts. As a result, the Court of Appeals looked to the Seventh Circuit for guidance. In so doing, the court found F.W. Hempel & Co., Inc. v. Metal World, Inc. Applying Illinois law, which is similar to Indiana law on third-party beneficiary claims, the Seventh Circuit considered whether the plaintiff was a third-party beneficiary despite the contract being oral. The Seventh Circuit found that plaintiff was not, but examined the oral agreement in considering whether the plaintiff was. Extrapolating from Hempel, the Court of Appeals concluded that “ third-party beneficiary status is not solely dependent upon a written contact[.]” Accordingly, the court reinstated the claims and sent the case back to the trial court.
Join us again next time for further discussion of developments in the law.
- Tucker v. Tom Raper, Inc., 81 N.E.3d 1088 (Ind. Ct. App. 2017) (Robb, J.).
- F.W. Hempel & Co., Inc. v. Metal World, Inc., 721 F.2d 610 (7th Cir. 1983) (Weigel, S.J..
- Ind. Trial Rule 9.2.
- Ind. Small Claims Rule 2(B)(4).
- Colin E. Flora, Indiana Trial Rule 13(J): Now More Cloudy Than Ever, Hoosier Litig. Blog (Sep. 4, 2015).
- Colin E. Flora, Lessons from Thomas v. UBS AG (7th Cir. 2013): Multistate Class Actions and Applicable Law in Federal Diversity, Hoosier Litig. Blog (Feb. 8, 2013).
- Colin E. Flora, Damages Pt. 5: Assessing Damages When Injured Person is Partially at Fault, Hoosier Litig. Blog (May 11, 2012).
- Colin E. Flora, Indiana: Injuries in Sports Drills Are Judged in Light of Sport as a Whole, Hoosier Litig. Blog (Feb. 17, 2017).
- Colin E. Flora, The Legal Doctrine of Res Ipsa Loquitur, Hoosier Litig. Blog (Aug. 4, 2012).
*Disclaimer: The author is licensed to practice in the state of Indiana. The information contained above is provided for informational purposes only and should not be construed as legal advice on any subject matter. Laws vary by state and region. Furthermore, the law is constantly changing. Thus, the information above may no longer be accurate at this time. No reader of this content, clients or otherwise, should act or refrain from acting on the basis of any content included herein without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue.