MOTORIST COMMERCIAL MUTUAL INSURANCE COMPANY v. ELLISON DISTRIBUTING INC. et al

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
MOTORIST COMMERCIAL MUTUAL
INSURANCE COMPANY,
)
)
)
Plaintiff, 	)
)
v. 	) 	Case No. 1:23-cv-00980-TWP-CSW
)
ELLISON DISTRIBUTING INC., 	)
DAILY FEED & GRAIN INC., 	)
)
Defendants. 	)
ORDER DENYING DEFENDANT'S MOTION
TO AMEND OR ALTER JUDGMENT
This matter is before the Court on a Motion to Amend or Alter Judgment (Filing No. 92)
filed by Defendant Daily Feed & Grain Inc. ("DFG"). Plaintiff Motorist Commercial Mutual
Insurance Company ("Motorist") initiated this declaratory judgment action seeking an order that
it did not have a duty to defend or indemnify Defendant Ellison Distributing Inc. ("Ellison") in an
underlying lawsuit filed by DFG (Filing No. 1). The undersigned issued an Order Granting in Part
and Denying in Part Motorist's summary judgment motion (the "Order"), and concluded that
Motorist had no duty to defend Ellison for the repair and replacement of Ellison's allegedly faulty
work (Filing No. 76). DFG asks the Court to reconsider its Order solely on this issue contending
that the Order conflicts with Indiana law (Filing No. 93 at 1). For the reasons discussed below, the
motion to reconsider is denied.
I. 	BACKGROUND
This background section is not meant to be a complete recitation of all material facts of the
case as that can be found in the Order (Filing No. 76). Rather, the Court merely recites those facts
pertinent to the instant motion.
Case 1:23-cv-00980-TWP-CSW Document 103 Filed 12/03/25 Page 1 of 11 PageID #:
<pageID>

2
On July 29, 2015, DFG and Ellison entered into a contract to construct and set up a non-
GMO grain storage facility (the "Non-GMO Project") (Filing No. 1-1 at 1). Under the contract,
Ellison was to construct the Non-GMO Project to store, improve, dry, clean, and process grain so
that DFG could then sell the grain as a non-GMO food grade product (Filing No. 62-1 at 12:8–16).
After Ellison constructed grain bins for storage of DFG's grain as part of the Non-GMO
Project, DFG began using the bins in late fall of 2015. Id. at 43:1–2. However, mold occurred in
the grain causing DFG to salvage what grain of the harvest it could and dispose of the rest. Id. at
50:4–8, 19–20. Ellison then resumed work on the Non-GMO Project in the spring of 2016 in an
attempt to rectify the issues but was removed from the Non-GMO Project by September 2016
(Filing No. 62-2 at 28:25, 70:10–12). DFG found that its 2016 harvest was also damaged and
subsequently had the grain bins torn down and rebuilt (Filing No. 62-1 at 139:21–140:6).
Motorist issued a commercial business insurance policy (the "Primary Policy") to Ellison
(Filing No. 1-5 at 7). The Primary Policy was effective during all relevant times. The Primary
Policy contains, in relevant part, the following agreement:
1. Insuring Agreement
a. We will pay those sums that the insured becomes legally obligated to pay as
damages because of "bodily injury" or "property damage" to which this
insurance applies. We will have the right and duty to defend the insured
against any "suit" seeking those damages. However, we will have no duty
to defend the insured against any "suit" seeking damages for "bodily injury"
or "property damage" to which this insurance does not apply. . . .
b. This insurance applies to "bodily injury" or "property damage" only if:
(1) The "bodily injury" or "property damage" is caused by an "occurrence"
that takes place in the "coverage territory”;
Id. at 45. The Primary Policy defines an "occurrence" as "an accident, including continuous or
repeated exposure to substantially the same general harmful conditions," and defines "property
Case 1:23-cv-00980-TWP-CSW Document 103 Filed 12/03/25 Page 2 of 11 PageID #:
<pageID>

3
damage" as "[p]hysical injury to tangible property, including all resulting loss of use of that
property," or "[l]oss of use of tangible property that is not physically injured." Id. at 58–59. The
Primary Policy also contains, in relevant part, the following exclusions:
j. Damage To Property
"Property Damage" to: . . . .
(6) That particular part of any property that must be restored, repaired or
replaced because "your work" was incorrectly performed on it. . . .
Paragraph (6) of this exclusion does not apply to "property damage"
included in the "products-completed operations hazard." . . . .
m. Damage To Impaired Property Or Property Not Physically Injured
"Property damage" to "impaired property" or property that has not been
physically injured, arising out of:
(1) A defect, deficiency, inadequacy or dangerous condition in "your product"
or "your work"; or
(2) A delay or failure by you or anyone acting on your behalf to perform a
contract or agreement in accordance with its terms.
This exclusion does not apply to the loss of use of other property arising out
of sudden and accidental physical injury to "your product" or "your work"
after it has been put to its intended use.
Id. at 48–49. The Primary Policy further contains the following definitions:
8. "Impaired Property" means tangible property, other than "your product" or "your
work", that cannot be used or is less useful because:
a. it incorporates "your product" or "your work" that is known or thought to be
defective, deficient, inadequate or dangerous; or
b. You have failed to fulfill the terms of a contract or agreement;
if such property can be restored to use by the repair, replacement, adjustment or
removal of "your product" or "your work" or your fulfilling the terms of the
contract or agreement. . . .
16. "Products-completed operations hazard":
Case 1:23-cv-00980-TWP-CSW Document 103 Filed 12/03/25 Page 3 of 11 PageID #:
<pageID>

4
a. Includes all "bodily injury" and "property damage" occurring away from the
premises you own or rent and arising out of "your product" or "your work"
except:
(1) Products that are still in your physical possession; or
(2) Work that has not yet been completed or abandoned. However, "your
work" will be deemed completed at the earliest of the following times:
(a) When all of the work called for in your contract has been completed.
(b) When all of the work to be done at the job site has been completed
if your contract calls for work at more than one job site.
(c) When that part of the work done at the job site has been put to its
intended use by any person or organization other than another
contractor or subcontractor working on the same project.
Work 	that 	may 	need 	service, 	maintenance, 	correction, 	repair 	or
replacement, but which is otherwise complete, will be treated as
completed. . . .
21. "Your product":
a. Means:
(1) Any goods or products, other than real property, manufactured, sold,
handled, distributed or disposed of by:
(a) You;
(b) Others trading under your name; or
(c) A person or organization whose business or assets you have acquired;
and
(3) Containers (other than vehicles), materials, parts or equipment furnished in
connection with such goods or products. . . .
22. "Your work":
a. Means:
(1) Work or operations performed by you or on your behalf; and
Case 1:23-cv-00980-TWP-CSW Document 103 Filed 12/03/25 Page 4 of 11 PageID #:
<pageID>

5
(2) Materials, parts or equipment furnished in connection with such work or
operations.
Id. at 57–60.
On August 24, 2017, DFG filed a state court action (the "Underlying Lawsuit") against
Ellison and Motorist as his insurer alleging various theories of liability against Ellison for the
construction of the Non-GMO Project (Filing No. 1 at 3–4). Ellison tendered the Underlying
Lawsuit to Motorist who advised that it would defend Ellison subject to a reservation of rights. Id.
DFG is seeking damages in the Underlying Lawsuit in the forms of (A) economic losses and lost
profits, (B) amounts paid to Ellison to construct the Non-GMO Project, and (c) amounts paid to
complete or replace Ellison's work (Filing No. 1-3).
Motorist initiated this action on June 6, 2023, seeking a declaratory judgment that it has no
duty to defend Ellison in the Underlying Lawsuit (Filing No. 1 at 10–11). On September 23, 2024,
Motorist moved for summary judgment seeking a declaration that there is no coverage for any of
the damages DFG seeks or, in the alternative, an entry of summary judgment declaring which
categories of damages were covered by the Primary Policy and which were not (Filing No. 70).
On February 27, 2025, the Court issued an Order Granting in Part and Denying in Part the
summary judgment motion, finding that the Primary Policy did not provide coverage for the cost
of repair and replacement due to the allegedly faulty workmanship Ellison performed. (Filing No.
76 at 15–16). DFG now asks the Court to reconsider only that determination of its Order.
II. 	LEGAL STANDARD
Though DFG titles its Motion as a Motion to Amend or Alter Judgment, the Motion is filed
pursuant to Federal Rule of Civil Procedure 54(b). Accordingly, the Court considers the Motion as
a Motion to Reconsider under Rule 54(b).
Case 1:23-cv-00980-TWP-CSW Document 103 Filed 12/03/25 Page 5 of 11 PageID #:
<pageID>

6
Motions to reconsider "serve a limited function: to correct manifest errors of law or fact or
to present newly discovered evidence." State Farm Fire & Cas. Co. v. Nokes, 263 F.R.D. 518, 526
(N.D. Ind. 2009). The motion is to be used "where the Court has patently misunderstood a party,
or has made a decision outside the adversarial issues presented to the Court by the parties, or has
made an error not of reasoning but of apprehension." Bank of Waunakee v. Rochester Cheese Sales,
Inc., 906 F.2d 1185, 1191 (7th Cir. 1990) (citation omitted). A motion to reconsider under Rule
54(b) may also be appropriate where there has been "a controlling or significant change in the law
or facts since the submission of the issue to the Court." Id. (citation omitted).
The purpose of a motion for reconsideration is to ask the Court to reconsider matters
"properly encompassed in a decision on the merits." Osterneck v. Ernst & Whinney, 489 U.S. 169,
174 (1989). The motion "will be successful only where the movant clearly establishes: (1) that the
court committed a manifest error of law or fact, or (2) that newly discovered evidence precluded
entry of judgment." Cincinnati Life Ins. Co. v. Beyrer, 722 F.3d 939, 954 (7th Cir. 2013) (citation
and quotation marks omitted). Furthermore,
Motion practice is not an exercise in trial and error or maybe-maybe not where a
party can reserve arguments to present later if earlier ones fail. The Court is entitled
to assume that, if [a party] had viable arguments to support its claim, it would have
presented them. The Court will not conduct [a party's] research and build [the
party's] analysis in order to find facts and law to support [the party's] own claims.
Brownstone Publ'g, LLC v. AT&T, Inc., No. 07-cv-1630, 2009 U.S. Dist. LEXIS 25485, at *2 (S.D.
Ind. Mar. 24, 2009). A motion to reconsider "is not an opportunity to relitigate motions or present
arguments, issues, or facts that could and should have been presented earlier." Id.
III. 	DISCUSSION
DFG requests that the Court reconsider the portion of the Order where the Court found that
Motorist's policies do not provide coverage for the repair or replacement of the allegedly defective
Case 1:23-cv-00980-TWP-CSW Document 103 Filed 12/03/25 Page 6 of 11 PageID #:
<pageID>

7
work Ellison performed on the Non-GMO Project (Filing No. 93 at 1). Specifically, DFG argues
that the Court committed a manifest error of law because the Order conflicts with the Indiana
Supreme Court's decision in Sheehan Constr. Co. v. Cont'l Cas. Co., 935 N.E.2d 160 (Ind. 2010)
(Filing No. 93 at 3). DFG contends that the Indiana Supreme Court in Sheehan held that
unintentional defective work constitutes an accident or "occurrence" under a Commercial General
Liability ("CGL") policy such as the Primary Policy.
DFG also argues that the Court's reliance on Indiana Insurance Co. v. DeZutti, 408 N.E.2d
1275 (Ind. 1980) is misguided because the Indiana Supreme Court in Sheehan clarified that its
holding in DeZutti was not based on the insuring provision or the definition of "property damage"
or "occurrence," but rather because faulty workmanship was specifically excluded based on the
business risk exclusionary clauses in the contract (Filing No. 93 at 5 (citing Sheehan, 935 N.E.2d
at 166)). DFG asserts that the business risk rule is therefore not an initial bar to coverage as the
Court found in its Order.
First, the Court previously considered Sheehan in its Order evidenced by the Court quoting
the same portion of the opinion DFG now urges the Court to reconsider (see Filing No. 76 at 10
(quoting Sheehan, 935 N.E.2d at 169) ("faulty workmanship does constitute an ['occurrence'] so
long as the resulting damage is an event that occurs without expectation or foresight.")). Indeed,
the Court specifically attributed this holding in Sheehan when the Court found that an
"occurrence," as defined by the Primary Policy, was present in this case. Id. Accordingly, DFG
fails to present any new arguments not considered by the Court in the Order.
Second, DFG misunderstands the Court's decision. After finding that an occurrence existed,
the Court then explained that the decision of whether certain damages were covered by the Primary
Policy turned on whether such damages constituted "property damage" within the meaning of the
Case 1:23-cv-00980-TWP-CSW Document 103 Filed 12/03/25 Page 7 of 11 PageID #:
<pageID>

8
Primary Policy and whether any exclusions applied. Id. While DFG is correct that the Court cited
DeZutti for the proposition that the business risk of faulty workmanship is generally not covered
under a standard CGL policy, the Court did not premise its holding on whether an "occurrence"
existed—the Court found that it did. Rather, the Court stated, "[i]n the case before the Court, DFG
and Ellison contracted for Ellison to construct the Non-GMO Project. When DFG became
unsatisfied with Ellison's work, DFG had Ellison's work replaced. This is a contractual issue
between DFG and Ellison and not one that gives rise to liability under Motorist's policies." (Filing
No. 76 at 16).
Accordingly, the holding in Sheehan does not change the Court's decision because the
Court already found that an occurrence existed pursuant to Sheehan. Instead, as the Indiana
Supreme Court did in Dezutti, the Court found that the CGL policy in this case did not give rise to
liability for the repair of Ellison's allegedly faulty work under Motorist's policies despite the
existence of an "occurrence." While not specifically enumerated in the section discussing the repair
and replacement of the grain bins, this conclusion was reached in part based on the determination
that there was no "property damage" to the grain bins—a requirement for coverage discussed
previously in the Order. The Court's determination was also based on the various exclusions
discussed at length in the Order.
While the Court agrees with DFG that faulty workmanship constitutes an "occurrence" in
this case, the CGL policy provides coverage for the resulting "property damage" such as the ruined
grain, not the repair of the grain bins themselves. This is in line with the Court's determination in
its Order that the Primary Policy provides coverage for some of the damaged grain. However, the
Primary Policy does not provide coverage for repairs allegedly necessary to prevent property
damage. See Cont'l Cas. Co. v. Sycamore Springs Homeowners Ass'n, 2010 U.S. Dist. LEXIS
Case 1:23-cv-00980-TWP-CSW Document 103 Filed 12/03/25 Page 8 of 11 PageID #:
<pageID>

9
90378, at *17 (S.D. Ind. 2010) ("The plain language of the policy provides coverage of damages
for the happening of an accident or occurrence, not damages that are necessary to prevent an
occurrence"), aff'd by Cont'l Cas. Co. v. Sycamore Springs Homeowners Ass'n, 652 F.3d 804 (7th
Cir. 2011).
The Court's determination is further bolstered by the example used in Sheehan. The Indiana
Supreme Court in Sheehan used the following example to illustrate its point:
[I]f a contractor improperly installs a shingle that later falls and hits a passerby, this
event is unforeseeable and is an "occurrence" or "accident." . . . A shingle falling
and injuring a person is a natural consequence of an improperly installed shingle
just as water damage is a natural consequence of an improperly installed window.
If we assume that either the shingle or the window installation will be completed
negligently, it is foreseeable that damages will result. If, however, we assume that
the installation of both the shingle and the window will be completed properly, then
neither the falling shingle nor the water penetration is foreseeable and both events
are "accidents."
935 N.E.2d at 170 (quoting Travelers Indem. Co. of Am. v. Moore & Assocs., 216 S.W.3d 302, 309
(Tenn. 2007) (alteration in original)). This example discusses only damages resulting from faulty
workmanship rather than the repair or replacement to prevent damages due to the faulty
workmanship. Applying the example to the case before it, the Indiana Supreme Court stated, "if
the faulty workmanship was the product of unintentional conduct then we start with the assumption
. . . that the work . . . would be completed properly. The resulting damage would therefore be
unforeseeable and constitute an 'accident' and therefore an 'occurrence' within the meaning of the
Insurers CGL policies." Id. Applying that reasoning to the case before the Court, the Court properly
concluded that any damage to the grain constituted an "occurrence." (Filing No. 76 at the court
10). The same reasoning does not, however, require a finding of coverage for the repair or
prevention of an occurrence due to allegedly faulty work.
Further, DFG overextends the holding in Sheehan. DFG argues that by overturning the trial
court's determination that there was no occurrence or property damage, the Indiana Supreme Court
Case 1:23-cv-00980-TWP-CSW Document 103 Filed 12/03/25 Page 9 of 11 PageID #:
<pageID>

10
held that faulty workmanship is itself "property damage." (Filing No. 97 at 3). That is not what
Sheehan states. In Sheehan, the trial court held that there was no damage to property other than
the structural components of houses built by Sheehan and thus, there was no "occurrence" or
"property damage." The Indiana Supreme Court stated that the trial court was in error because "[a]s
we have explained faulty workmanship may constitute an accident and thus an occurrence
depending on the facts." Sheehan, 935 N.E.2d at 171–172. The trial court's decision was then
reversed and remanded for further proceedings to determine whether the faulty workmanship was
the product of intentional versus unintentional conduct. Id. at 172. However, Sheehan did not hold
that faulty workmanship itself is automatically "property damage" as DFG contends. Indeed, the
main thrust of the opinion focused on the term "occurrence" rather than any in depth discussion
about what specifically constitutes "property damage." See id.
The Court finds further support that faulty workmanship is not automatically "property
damage" in the Seventh Circuit's opinion in Cont'l Cas. Co., 652 F.3d 804. In Cont'l Cas. Co., the
Seventh Circuit stated,
No insurer would write such a policy; the moral hazard would be overpowering.
Protected by a policy covering the costs of improvements, a builder would produce
a substandard project and demand that the insurer finish the job; builder and buyers
could split the savings. Insurers, recognizing this incentive, would raise the price
of their policies so high that no builder planning to do the job right would find the
offer attractive. The result would be the collapse of the insurance market. No one
would gain, and honest builders would lose because insurance would no longer be
available. That's why [plaintiff's] policy does not cover the expense of improving
the subdivision's flood defenses.
Id. at 805. Applying the Seventh Circuit's reasoning to the case before the Court, the Court once
again concludes that the Primary Policy did not undertake to insure the cost of repairing Ellison's
allegedly faulty work. Accordingly, DFG has failed to establish that the court committed a manifest
Case 1:23-cv-00980-TWP-CSW Document 103 Filed 12/03/25 Page 10 of 11 PageID
#: <pageID>

11
error of law or fact, or that newly discovered evidence precluded entry of judgment. Accordingly,
DFG's Motion is denied. Beyrer, 722 F.3d at 954.
IV. 	CONCLUSION
For the reasons discussed above, DFG's Motion to Amend or Alter Judgment pursuant to
Federal Rule of Civil Procedure 54(b), (Filing No. 92) is DENIED.
SO ORDERED.
Date: 	12/3/2025
Distribution:
Edmund Leonard Abel
LEWIS WAGNER, LLP
eabel@lewiswagner.com
Tyler Lewis Jones
Drewry Simmons Vornehm, LLP
tjones@dsvlaw.com
Kyle Andrew Lansberry
LEWIS WAGNER, LLP
klansberry@lewiswagner.com
James P. Strenski
Drewry Simmons Vornehm, LLP
jstrenski@dsvlaw.com
John A. Stroh
SHARPNACK BIGLEY STROH & WASHBURN LLP
sbsw@sbswlaw.com
Case 1:23-cv-00980-TWP-CSW Document 103 Filed 12/03/25 Page 11 of 11 PageID
#: <pageID>