Axis Insurance Company v. American Specialty Insurance & Risk Services

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 23-1698
AXIS I NSURANCE C OMPANY ,
Plaintiff-Appellant,
v.
A MERICAN S PECIALTY I NSURANCE & R ISK S ERVICES ,
Defendant-Appellee.
____________________
Appeal from the United States District Court for the
Northern District of Indiana, Fort Wayne Division.
No. 1:19-cv-00165-DRL — Damon R. Leichty, Judge.
____________________
A RGUED J ANUARY 9, 2024 — DECIDED A UGUST 6, 2024
____________________
Before R OVNER , HAMILTON , and J ACKSON -A KIWUMI , Circuit
Judges.
HAMILTON , Circuit Judge. Pursuant to an indemnification
clause in a contract, plaintiff-appellant AXIS Insurance Com-
pany sought indemnification from defendant-appellee Amer-
ican Specialty Insurance & Risk Services for claims that AXIS
settled. The parties’ contract did not require AXIS to give
American Specialty the opportunity to choose between ap-
proving the settlement payment and assuming the defense

-- 1 of 18 --

2 No. 23-1698
itself. But American Specialty argues that AXIS was obliged to
do so under Indiana law. The district court agreed with Amer-
ican Specialty and granted summary judgment for it.
We reverse. Insurance companies like AXIS and American
Specialty bargain for the rights and obligations they hold in a
contractual relationship like this one, including the specifics
of a promise of indemnification. The contract in this case did
not obligate AXIS to tender the defense to American Specialty
before settling claims against AXIS. To the contrary, the con-
tract required AXIS to provide notice of claims to American
Specialty, but AXIS otherwise retained nearly complete con-
trol over settlement decisions.
Additionally, Indiana case law does not hold that the ten-
der of defense is an implied condition in an indemnification
agreement. Indiana law respects the freedom to contract in in-
surance agreements. We see no reason to think the Indiana
Supreme Court would depart from that respect for contrac-
tual freedom and impose an implied requirement like the one
advocated by American Specialty.
I. Factual and Procedural Background
AXIS is an insurance company that specializes in insur-
ance policies for professional sports teams and other organi-
zations in entertainment industries. In 2008, AXIS signed a
contract with American Specialty that allowed American Spe-
cialty to “accept proposals for insurance, negotiate, under-
write and accept insurance coverages on [AXIS’s] behalf….”
The parties’ contract stipulated that if American Specialty
acted negligently in these tasks, it would indemnify AXIS for
any resulting losses. That indemnification provision lies at the
core of this case.

-- 2 of 18 --

No. 23-1698 3
A. Insurance for the Buccaneers
In May 2013, an agent for the professional football team
Tampa Bay Buccaneers reached out to American Specialty
asking for an insurance quote. The Buccaneers wanted to ob-
tain a variety of insurance coverages, including employer’s li-
ability coverage. American Specialty sent back an insurance
proposal and binder on behalf of AXIS. These documents
mentioned employer’s liability coverage, but everyone in-
volved in this litigation—AXIS, American Specialty, and the
Buccaneers—has interpreted the language differently. When
a Buccaneers’ player later asserted a substantial personal in-
jury claim against the team, the parties to the insurance pur-
chase disagreed about whether the Buccaneers’ policy in-
cluded employer’s liability coverage. The Buccaneers be-
lieved that the policy included it because that was what the
team had requested. Alternatively, the Buccaneers demanded
that AXIS and American Specialty cover any gap in coverage
due to employer’s liability being left off the policy. AXIS in-
sisted that the policy did not include employer’s liability cov-
erage because, regardless of what the binder and proposal
said, the policy that was actually issued to the Buccaneers did
not include it. American Specialty was caught in the middle.
It agreed with AXIS that the actual policy did not include em-
ployer’s liability coverage, but it concluded that a mistake had
been made in issuing the policy. American Specialty urged
AXIS to reform the policy to include employer’s liability cov-
erage.
American Specialty and AXIS worked together for several
years, but effective February 2014, they agreed to terminate
their contract. The parties’ contract was in effect when the in-
surance policy was issued to the Buccaneers, but the two

-- 3 of 18 --

4 No. 23-1698
companies were no longer working together when the dis-
puted claim arose.
B. The Tynes Infection and Claim
Nobody recognized the absence of employer’s liability
coverage until it became the center of debate during the re-
view of a claim. In March 2015, lawyers for Buccaneers kicker
Lawrence Tynes sent a demand letter and a draft complaint
to the Buccaneers alleging that he had suffered a career-end-
ing injury after contracting a Methicillin-resistant Staphylo-
coccus Aureus (often known as “MRSA”) infection at the
team’s facility. Tynes alleged that he contracted the infection
while rehabilitating from a medical procedure that was per-
formed on his kicking foot. The draft complaint sought over
$15 million in compensatory damages for the career-ending
injury. Tynes had won two Super Bowls and had kicked
game-winning field goals in overtime in two separate confer-
ence championship games. See Rich Cimini, Tynes Lives Dream
Yet Again, ESPN (Jan. 23, 2012, 2:34 AM),
https://perma.cc/PX9J-BD8B.
The draft complaint named the Tampa Bay Buccaneers
and the Tampa Bay Mall Limited Partnership (the owner and
operator of the Buccaneers’ practice facility) as defendants.
American Specialty quickly notified AXIS of the imminent
claim. After reviewing the claim, AXIS denied coverage to the
Buccaneers and refused to indemnify the team for Tynes’
claims.
The employer’s liability issue became apparent immedi-
ately. AXIS had denied coverage to the Buccaneers on Tynes’
claims because it believed that employer’s liability insurance
was not part of the insurance policy it had actually issued.

-- 4 of 18 --

No. 23-1698 5
American Specialty, however, told AXIS that the policy
should be reformed to include employer’s liability coverage—
American Specialty said that a “mistake” had been made that
left employer’s liability coverage off the Buccaneers’ policy
even though the team had requested it. AXIS and American
Specialty exchanged emails about their conflicting views. In
those emails, American Specialty said twice that the Bucca-
neers’ insurance policy should have included employer’s lia-
bility coverage. AXIS stressed that the policy did not include
the coverage and that it would seek indemnification from
American Specialty for any losses resulting from American
Specialty’s negligence in preparing the policy.
AXIS and American Specialty had ended their cooperative
business relationship the year before. When the dispute arose
about coverage of the Tynes claim, AXIS told American Spe-
cialty that AXIS itself would handle the Tynes claim due to
the potential exposure it presented. On April 8, 2015, AXIS in-
structed American Specialty to “keep an administrative file,
pay bills and chronicle the claim with file note entries as nor-
mal.” AXIS reiterated this message a few weeks later, saying
that “American Specialty has no authority in this matter and
should not be involved in the claims handling in any way.”
On May 4, 2015, outside counsel for AXIS echoed the same
message in another email:
Please also be advised that American Specialty
has no authority with respect to handling this
claim, and that all claim management activity,
including determinations and evaluations of
coverage issues, are solely within AXIS’s pur-
view. American Specialty is not to have any role
in the directing or managing of the defense of

-- 5 of 18 --

6 No. 23-1698
this claim. American Specialty’s primary obliga-
tion is to maintain an administrative file, pro-
cess expenses, chronicle the file with claim note
entries, report as requested, review the report-
ing completed by defense counsel, and report to
AXIS accordingly.
C. The Tynes Litigation and Settlement
Tynes and the Buccaneers did not reach a quick settle-
ment, so Tynes filed suit. The parties in the lawsuit agreed to
attempt mediation. In an email sent on October 5, 2016, the
Buccaneers’ attorney informed AXIS and American Specialty
of the planned mediation and said that the Buccaneers ex-
pected both companies to attend. AXIS emailed American
Specialty separately to explain that it was confident in its legal
position about the lack of employer liability coverage but was
interested in a “market solution” to the matter (presumably a
negotiated settlement, especially keeping in mind that litiga-
tion of the coverage issue would require disclosure of Ameri-
can Specialty’s emails siding with the Buccaneers and urging
AXIS to reform the policy in the team’s favor). American Spe-
cialty did not respond to this email. Though American Spe-
cialty sent a few more emails before mediation, it did not say
anything to AXIS about settling the claims.
In December 2016, AXIS attended a mediation session
along with Tynes and the Buccaneers. American Specialty did
not attend. The parties who attended the mediation session
reached a confidential settlement, ending the Tynes suit.
D. This Lawsuit for Indemnification
AXIS’s contribution to the Tynes settlement set the stage
for this lawsuit. In April 2017, AXIS demanded that American

-- 6 of 18 --

No. 23-1698 7
Specialty indemnify it for the settlement payment that AXIS
had made. American Specialty refused. After a failed attempt
at arbitration, AXIS filed this suit against American Specialty
seeking indemnification for its contribution to the Tynes set-
tlement, as well as attorney fees and costs.
The parties filed cross-motions for summary judgment,
though AXIS moved for only partial summary judgment.
AXIS sought to reduce the number of issues that would be
decided at trial by negating several of American Specialty’s
affirmative defenses. American Specialty, on the other hand,
argued that it should win outright because AXIS made its set-
tlement payment without giving American Specialty the op-
portunity to approve the settlement or assume the defense.
Without this offer, American Specialty argued, AXIS’s settle-
ment payment was voluntary because AXIS could not show it
was actually liable on the underlying claim.
The district court agreed with American Specialty and
granted it summary judgment. AXIS Ins. Co. v. American Spe-
cialty Ins. & Risk Servs., Inc., 662 F. Supp. 3d 950, 960 (N.D. Ind.
2023). Starting with Indiana case law, the court noted that in-
demnitors do not need to reimburse “voluntary” settlement
payments by indemnitees. Id. at 955. But whether a payment
is “voluntary” can be hard to say; Indiana law does not draw
a sharp boundary. So the court looked to other sources—cases
from other jurisdictions and a treatise—and concluded that a
settlement payment is not voluntary in two circumstances:
first, if an indemnitee gives notice and an opportunity to de-
fend to its indemnitor, id. at 955–57, and second, if the indem-
nitee shows that it was “actually liable” on the underlying
claim, id. at 956, 959. In the first circumstance, the court rea-
soned that giving indemnitors a choice ensured that

-- 7 of 18 --

8 No. 23-1698
indemnitees would not abuse indemnification agreements to
shift liability onto indemnitors improperly. Id. at 956. Regard-
ing the second circumstance, no payment could be deemed
voluntary if an indemnitee is actually liable to the claimant.
The district court found that, although AXIS had invited
American Specialty to the Tynes mediation, it never offered
American Specialty the opportunity to choose between ap-
proving the settlement and assuming the defense of a poten-
tial coverage claim by the Buccaneers. Id. at 957–58. Rather,
the court found that AXIS prevented American Specialty from
defending the claim for months and never clearly reversed its
position. Id. at 958. Because AXIS did not tender the defense
to American Specialty, the court concluded that AXIS had to
show actual liability on the potential claim by the Buccaneers.
The court found that AXIS could not make that showing and
granted summary judgment to American Specialty, finding
no duty to indemnify AXIS for its payment toward the Tynes
settlement with the Buccaneers. Id. at 959.
II. Analysis
The issue on appeal is whether the indemnification agree-
ment required AXIS to give American Specialty the oppor-
tunity to choose between approving the settlement agreement
and assuming the defense. The parties agree that Indiana law
governs their contract, so our role is to apply Indiana law as
we predict the Indiana Supreme Court would today. Circle
Block Partners, LLC v. Fireman’s Fund Ins. Co., 44 F.4th 1014,
1018 (7th 2022).
Indemnity agreements like the one in this case are gov-
erned by contract law. Bethlehem Steel Corp. v. Sercon Corp., 654
N.E.2d 1163, 1167 (Ind. App. 1995). Parties can “define their

-- 8 of 18 --

No. 23-1698 9
mutual rights and obligations” through contract and decide
for themselves what sorts of preconditions an indemnitee
must satisfy before being entitled to indemnification. Id. at
1168. As explained below, the parties’ contract does not say
that AXIS was obliged to tender the defense to American Spe-
cialty. So there is no textual basis for concluding that the par-
ties intended to require AXIS, if it wanted indemnification, to
give American Specialty the opportunity to assume the de-
fense. To the contrary, the fact that other preconditions to set-
tlement were included but tender of defense was not signals
that the parties did not intend for tender of defense to be a
precondition to settlement.
American Specialty resists this conclusion. Echoing the
district court’s reasoning, American Specialty argues that, as
a matter of common law, its promise to indemnify AXIS was
subject to an implied condition precedent: that AXIS had a
duty to tender the defense to American Specialty (absent
proof of AXIS’s actual liability to the Buccaneers). No appel-
late precedent in Indiana holds that such a duty exists, and
we do not predict that the Indiana Supreme Court would do
so now. Sophisticated insurance companies like American
Specialty know that indemnification agreements are gov-
erned by principles of contract law. See Bethlehem Steel, 654
N.E.2d at 1167–68. If an indemnitor wants the right to choose
between approving a settlement or assuming the defense, it
can bargain for that right. But if it does not, an indemnitor
cannot cry foul when it knows its indemnitee is facing pres-
sure to settle, especially when the indemnitor refuses even to
respond to the indemnitee’s communications.

-- 9 of 18 --

10 No. 23-1698
A. Indemnification Under the Parties’ Contract
The agreement between AXIS and American Specialty
consisted of three documents: the Program Manager Agree-
ment, the Underwriting Guidelines Addendum, and the
Claims Service and Management Agreement. Together, these
documents spelled out the rights and obligations that AXIS
and American Specialty owed each other. The parties identify
three provisions as relevant to whether AXIS needed to give
American Specialty the opportunity to approve the Tynes set-
tlement or to assume the defense.
First is the indemnification provision itself. In Section 27.4
of the Program Manager Agreement, American Specialty
agreed “to defend, indemnify, and hold AXIS harmless from
and against all claims … which result from any negligent or
wilful acts” by American Specialty. Section 27.4 did not say
anything about giving American Specialty a right to defend
claims against AXIS that are subject to the duty to defend and
indemnify.
American Specialty argues, however, that this provision
linked American Specialty’s obligation to “defend” and “in-
demnify” AXIS, such that AXIS could not seek indemnifica-
tion unless it also gave American Specialty the opportunity to
defend. This conclusion does not follow from the text. Section
27.4 was a one-way street—it listed only obligations that
American Specialty owed to AXIS. It did not specify obliga-
tions that AXIS owed American Specialty, such as a duty to
tender the defense. Holding AXIS’s contractual rights against
it would rewrite the plain terms of the contract, and Indiana
courts teach us not to pick up the pen ourselves when parties
have stated their intentions clearly. Bethlehem Steel, 654 N.E.2d
at 1168.

-- 10 of 18 --

No. 23-1698 11
A related contract provision, Section 27.6 of the Program
Manager Agreement, listed procedures that AXIS had to fol-
low to secure indemnification from American Specialty. Sec-
tion 27.6 stated: “Upon the assertion … of any claim that may
give rise to liability …, the party seeking indemnifications
shall promptly notify the other party, in writing, of the exist-
ence of such claim and the indemnity claimed.” Such notice
requirements are routine under indemnification agreements
and familiar to any driver or homeowner who has needed to
notify a home- or auto-insurance carrier of an accident. But
that requirement of written notice was the only condition the
contract imposed on AXIS for seeking indemnification. Ab-
sent from Section 27.6 is any requirement that AXIS tender the
defense to American Specialty.1
Finally, Section 4.2 of the Claims Service and Management
Agreement reserved authority for claims settlement to AXIS.
That provision said:
AXIS shall retain ultimate settlement authority
for all claims serviced hereunder, and reserves
1 American Specialty argues that AXIS forfeited arguments based on
Section 27.6 by failing to refer to this provision in its summary judgment
briefing. We reject the forfeiture argument. To preserve an argument for
appeal, a party must have raised the “substantive argument” in the district
court but need not have presented all aspects of the argument in the dis-
trict court. E.g., Dr. Robert L. Meinders, D.C., Ltd. v. United Healthcare Servs.,
Inc., 7 F.4th 555, 561 (7th Cir. 2021). As we said in Meinders, a party on
appeal can refer to provisions of an underlying contract in addition to
those referenced in the trial court, so long as the party makes the same
substantive arguments in both places. Id. Also, the Northern District of
Indiana requires summary judgment briefs to be substantially shorter
than the appellate page limit, and we ordinarily expect appeals to present
fewer issues than were addressed in the district court.

-- 11 of 18 --

12 No. 23-1698
the right, upon notice to [American Specialty],
to override [American Specialty] in the adjust-
ment and settlement or rejection of any claim,
and shall have the option to assume or direct the
handling and settlement of any individual
claim.
Like the provisions in the Program Manager Agreement, Sec-
tion 4.2 did not impose any conditions on AXIS for settling a
claim. Instead, it reserved to AXIS nearly complete control in
settling claims within the scope of the indemnification agree-
ment. The only obligation imposed upon AXIS in this provi-
sion was the duty to provide notice if AXIS sought to override
American Specialty’s decision in a settlement proceeding. Ob-
viously, that obligation was not triggered in this case because
American Specialty stayed silent and did not participate in the
mediation or settlement negotiations.
Nowhere in the parties’ contract was there a requirement
that AXIS give American Specialty an opportunity to approve
the settlement or to assume the defense in order to secure in-
demnification. The parties could have contracted for such a
requirement. As Section 27.6 of the Program Manager Agree-
ment shows, the parties agreed that AXIS had to provide writ-
ten notice of claims to receive indemnification. But they did
not agree to the additional terms argued by American Spe-
cialty.
B. Indemnification Under Indiana Law
We stress again that indemnification disputes are gener-
ally governed by the terms of a contract. Bethlehem Steel, 654
N.E.2d at 1167–68. But American Specialty argues, and the
district court found, that AXIS had a duty under the common

-- 12 of 18 --

No. 23-1698 13
law of Indiana to tender the defense to American Specialty, at
least if AXIS wanted indemnification for potential liability to
the Buccaneers. We disagree with that proposition. No tender-
of-defense requirement was an implied term of the contract.
No Indiana precedent holds that indemnification agree-
ments include an implied contractual term requiring indem-
nitees to tender the defense before settling a claim. In three
cases, the Indiana Court of Appeals and a federal district court
found that a settlement payment was not voluntary where, as
a matter of fact, the indemnitee notified the indemnitor of the
proposed settlement and gave it an opportunity to approve
the settlement or to assume the defense. Sequa Coatings Corp.
v. Northern Indiana Commuter Transp. Dist., 796 N.E.2d 1216,
1230 (Ind. App. 2003) (indemnitor ignored “repeated requests
for indemnification and assistance in defending against the
litigation”); Sink & Edwards, Inc. v. Huber, Hunt, & Nichols, Inc.,
458 N.E.2d 291, 293 (Ind. App. 1984) (indemnitor received no-
tice of “intention to settle and [was] given the opportunity to
take over the defense of the action”); Price v. Amoco Oil Co.,
524 F. Supp. 364, 367 (S.D. Ind. 1981) (settlement effectuated
after notice “and an opportunity to assume the defense of the
action”). But the fact that the indemnitees in those cases ten-
dered the defenses does not mean that the tenders were es-
sential to the courts’ findings that those payments were not
voluntary. None of the opinions indicated whether the con-
tracts required the tender of defense, none found the tender
of defense to be an implied contractual requirement, and none
found that the tender of defense was an essential prerequisite
to settling claims.2
2 The court granted rehearing in Sequa Coatings to clarify its holding
on a different issue in that case. Sequa Coatings Corp. v. Northern Indiana

-- 13 of 18 --

14 No. 23-1698
As the district court recognized, some courts in other ju-
risdictions have developed a framework for assessing the vol-
untariness of settlement payments for which indemnification
is sought. In these jurisdictions, if an indemnitee gives its in-
demnitor notice and an opportunity to defend, then the in-
demnitee must show only potential liability for its payment
to be deemed non-voluntary. If the indemnitee does not sat-
isfy these conditions, though, it must show actual liability.
See, e.g., Chevron Oronite Co. v. Jacobs Field Servs. N.A., Inc., 951
F.3d 219, 226 (5th Cir. 2020) (applying Louisiana law and also
considering case law from Fifth Circuit); Genger v. Genger, 76
F. Supp. 3d 488, 501 (S.D.N.Y. 2015) (applying New York law).
But other courts—including the other two states in this cir-
cuit—have reached the opposite conclusion and held that, in
the absence of an express term in a contract, indemnitees do
not need to tender the defense so long as the indemnitor has
notice of the claims. See Cincinnati Cos. v. West American Ins.
Co., 183 Ill. 2d 317, 323–26, 701 N.E.2d 499, 502–04 (1998) (con-
cluding that duty to defend was triggered where insurer is
put on notice of claims against insured; an explicit offer to as-
sume the defense was not required); Towne Realty, Inc. v. Zur-
ich Ins. Co., 201 Wis. 2d 260, 267–69, 548 N.W.2d 64, 66–67
(1996) (same).
The Supreme Judicial Court of Massachusetts addressed
this issue in Psychemedics Corp. v. City of Boston, 486 Mass. 724,
161 N.E.3d 399 (2021). The city of Boston relied on a private
company, Psychemedics Corporation, to conduct hair follicle
testing of police officers to detect illegal drug use. Officers
Commuter Transp. Dist., 800 N.E.2d 926 (Ind. App. 2003). The rehearing did
not alter the court’s reasoning relevant here.

-- 14 of 18 --

No. 23-1698 15
sued the city alleging that the follicle testing was unreliable
and had a disparate impact on people of color. The city sought
indemnification from Psychemedics based on a contract pro-
vision stipulating that Psychemedics would “assume the de-
fense of” the city and “hold [it] harmless” from all suits and
claims arising from “wrongful or negligent” acts by Psyche-
medics. Id. at 725, 728. Psychemedics sought a declaratory
judgment that it was not required to indemnify the city be-
cause the city had not allowed it to assume the defense of the
cases brought by the police officers. So the issue decided by
the Massachusetts court matches the issue we confront today:
if no contractual provisions resolve the issue, does an indem-
nitee need to explicitly tender the defense to secure indemni-
fication? Id. at 731.
The Massachusetts court reversed a grant of summary
judgment to Psychemedics, holding that material facts
needed to be resolved as to whether Psychemedics had an op-
portunity to assume the defense. Id. at 743–44. Critical to the
court’s holding was its conclusion that, between contracting
parties, the obligation to indemnify is triggered after an in-
demnitee “alert[s] the indemnitor to the existence of the
claim.” Id. at 736. No explicit tender of defense was required.
Id. at 735–40.
Indiana law tracks the reasoning in Psychemedics. As Indi-
ana courts have emphasized, contract law governs indemnity
disputes, and courts may not rewrite a contract that defines
parties’ mutual rights and obligations. Bethlehem Steel, 654
N.E.2d at 1167–68. That idea has led at least one Indiana court
to reject the doctrine of implied contractual indemnity be-
cause “sophisticated commercial entities” were “free to in-
clude an indemnity provision” in their contract but “failed to

-- 15 of 18 --

16 No. 23-1698
do so.” Indianapolis-Marion County Public Library v. Charlier
Clark & Linard, PC, 929 N.E.2d 838, 852 (Ind. App. 2010). Sim-
ilarly, here, we decline to add new rights and obligations to a
contract between two sophisticated insurance companies.
Even if we thought Indiana courts might be inclined to
add new ink to the parties’ contract under other circum-
stances, this case is not a promising candidate for predicting
adoption of an implied requirement for an explicit tender-of-
defense requirement. The undisputed facts show that AXIS
notified American Specialty that it was considering settling a
claim within the scope of the indemnification clause. Ameri-
can Specialty did not respond with an argument against set-
tlement. That would have been difficult, given American Spe-
cialty’s earlier correspondence urging AXIS to cave by re-
forming the policy to provide employer’s liability coverage.
American Specialty instead responded with … silence. At the
very least, an indemnitor who disagrees with the choice to set-
tle should be proactive and communicate its concerns rather
than remain silent and hope that a court will bail it out later.
C. Application to this Case
The most extraordinary feature of this case is American
Specialty’s silence in response to AXIS’s communications, in-
cluding the invitation to plan for and participate in the medi-
ation of the Tynes claim against the Buccaneers. Recall that for
over a year and a half, AXIS and American Specialty were
aware that Tynes was asserting claims against the Buccaneers
and disputed whether AXIS was obliged to cover the Bucca-
neers. As part of the back-and-forth emails, AXIS told Ameri-
can Specialty that it expected American Specialty to indem-
nify any losses resulting from the mistake concerning em-
ployer’s liability coverage.

-- 16 of 18 --

No. 23-1698 17
As the district court found, the Tynes claims were within
the scope of the parties’ indemnification agreement. AXIS In-
surance, 662 F. Supp. 3d at 955 n.1. AXIS managed the defense
of the claims until the Buccaneers informed both insurance
companies that the parties were going to attempt mediation.
AXIS agreed to attend mediation and urged American Spe-
cialty to attend as well. But American Specialty did not re-
spond and did not go to the mediation.
The only issue on appeal is whether, as the district court
found, AXIS was required to provide American Specialty an
explicit tender of defense. Because this requirement was not
included in the parties’ contract and it does not arise under
Indiana common law, we conclude that AXIS was not re-
quired to tender the defense as a condition precedent to in-
demnification for settlements of potential liability.
American Specialty resists our conclusion that AXIS was
not required to choose between tendering the defense of the
Buccaneers claim against AXIS or giving up indemnification
unless AXIS could show actual liability to the Buccaneers.
American Specialty argues that for months AXIS had denied
American Specialty the opportunity to engage in the defense
at all, so without an opportunity to control defense of the Buc-
caneers’ claim, American Specialty was essentially forced to
indemnify a voluntary settlement payment.
AXIS’s insistence on its contractual right to control the de-
fense and settlement of indemnified claims did not mean it
gave up its right to indemnification. American Specialty can-
not be as ignorant of insurance disputes as this argument por-
trays it to be. As a sophisticated insurance company, Ameri-
can Specialty should have known to communicate any con-
cerns it had about settling when the Buccaneers and AXIS

-- 17 of 18 --

18 No. 23-1698
invited American Specialty to mediate the Tynes claims. In-
stead of engaging with AXIS in good faith, American Spe-
cialty stayed silent. Indiana courts are loath to reward such
refusals to communicate. See Sequa Coatings Corp., 796 N.E.2d
at 1230 (finding that indemnitor “was estopped from assert-
ing that it was not given the opportunity to determine
whether the settlement agreement was reasonable because it
never responded to [indemnitee’s] letters informing it of [in-
demnitee’s] intent to enforce the indemnity clause”); see gen-
erally Monroe Guar. Ins. Co. v. Magwerks Corp., 829 N.E.2d 968,
975–76 (Ind. 2005) (recognizing that “insurers have a duty to
deal in good faith with their insureds” under Indiana law).
Finally, Indiana courts treat whether a settlement payment
was “fair and reasonable” as a question separate from
whether procedural requirements for indemnification were
followed. E.g., Sink, 458 N.E.2d at 297; see also Price, 524 F.
Supp. at 367–68 (considering separately whether a settlement
was fair and reasonable). The parties did not raise this issue
in their motions for summary judgment, so we express no
opinion on this second question as it relates to AXIS’s settle-
ment payment.
The judgment of the district court is REVERSED and this
case is REMANDED for further proceedings consistent with
this opinion.

-- 18 of 18 --