Steven Glover, as Personal Representative of the Estate of Shelina M. Glover v. Allstate Property and Casualty Insurance Company ( 2019 )

FILED
Sep 16 2019, 6:28 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEE
Nicholas C. Deets Christopher D. Cody
Tyler Zipes Georgianna Q. Tutwiler
Hovde Dassow + Deets, LLC Hume Smith Geddes Green &
Indianapolis, Indiana Simmons, LLP
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Steven Glover, as Personal September 16, 2019
Representative of the Estate of Court of Appeals Case No.
Shelina M. Glover, 19A-CT-403
Appellant-Plaintiff, Appeal from the Marion Superior
Court
v. The Honorable James B. Osborn,
Judge
Allstate Property and Casualty Trial Court Cause No.
Insurance Company, 49D14-1711-CT-41566
Appellee-Defendant.
Brown, Judge.
Court of Appeals of Indiana | Opinion 19A-CT-403| September 16, 2019 Page 1 of 19
[1] Steven Glover, as Personal Representative of the Estate of Shelina M. Glover
(the “Estate”), appeals the trial court’s grant of the motion for summary
judgment filed by Allstate Property and Casualty Insurance Company
(“Allstate”) and the denial of its motion to correct error. He raises one issue
which we revise and restate as whether the trial court erred in granting
summary judgment in favor of Allstate . We affirm. 1
Facts and Procedural History
[2] This case involves an attempted recovery under an automobile insurance
policy’s underinsured motorist (“UIM”) provisions for a July 22, 2016 roadside
collision involving three vehicles driven by Kenneth Bogue, Matthew Hahn,
and Terry Robinson, which resulted in the death of Shelina M. Glover
Robinson, 2 who was a passenger in Terry’s vehicle.
[3] At the time of Shelina’s death, she had an auto insurance policy through
GEICO insurance (“GEICO”). Her parents, Phillip and Dovie Glover (the
“Glovers”), were insured under Allstate Policy # 922 379 189 (the “Policy”),
which provided on the Policy Declarations page for “Uninsured Motorists
Insurance” coverage limits in the amount of “$100,000 each person” for the
1
On cross-appeal, Allstate asserts that the trial court erred in failing to grant its motion for summary
judgment on the basis it was not properly notified of Shelina’s status as a “resident relative” in the household
of her parents and that, therefore, she did not qualify as an insured under her parents’ policy with Allstate.
The Court need not reach this issue because we conclude that the court properly granted summary judgment
based on Part 3 of the Policy.
2
The parties refer to Shelina differently, but do not dispute that she is the decedent.
Court of Appeals of Indiana | Opinion 19A-CT-403| September 16, 2019 Page 2 of 19
Glovers’ 2014 Ford Truck Edge and 2006 Ford Truck F150. Appellant’s
Appendix Volume II at 68-69. It defined “Resident” for use throughout the
policy as a “person who physically resides in your household with the intention
to continue residence there.” 3 Id. at 72. It defined “Bodily Injury” for use
throughout the policy in part as “physical harm to the body, sickness, disease,
or death.” Id.
[4] Part 3 of the Policy, titled “Uninsured Motorists Insurance Coverage,” began
with a general statement of coverage that provided, “we will pay damages
which an insured person is legally entitled to recover from the owner or
operator of an uninsured auto because of . . . bodily injury sustained by an
insured person.” Id. at 80. It defined in part “Insured Person(s)” as “you and
any resident relative” and an “uninsured auto” as:
an underinsured motor vehicle which has bodily injury liability
protection in effect and applicable at the time of the accident in
an amount equal to or greater than the amounts specified for
bodily injury liability by the financial responsibility laws of
Indiana, but:
a. in an amount less than the applicable limit of liability for this
coverage shown on the Policy Declarations; or
3
Nontitular words or phrases appearing in bold letters in this decision appear as such in the Policy and
appear to indicate expressly defined terms.
Court of Appeals of Indiana | Opinion 19A-CT-403| September 16, 2019 Page 3 of 19
b. available limits have been reduced to less than the applicable
limit of liability for this coverage as shown on the Policy
Declarations.
Id. at 80-81. It provided further in Part 3:
Limits of Liability
The coverage limit shown on the Policy Declarations for:
1. “each person” is the maximum that we will pay for damages
arising out of bodily injury to one person in any one motor
vehicle accident, including damages sustained by anyone else
as a result of that bodily injury.
2. “each accident” is the maximum we will pay for damages
arising out of all bodily injury in any one motor vehicle
accident. This limit is subject to the limit for “each person.”
*****
The liability limits shown on the Policy Declarations for
Uninsured Motorists Insurance may not be added to the limits
for similar coverage applying to other motor vehicles to
determine the limit of insurance coverage available. This applies
regardless of the number of:
1. policies involved;
2. vehicles involved;
3. persons covered;
4. claims made;
5. vehicles or premiums shown on the Policy Declarations; or
6. premiums paid.
THIS MEANS THAT NO STACKING OR AGGREGATION
OF UNINSURED MOTORISTS INSURANCE
WHATSOEVER WILL BE ALLOWED BY THIS POLICY.
Court of Appeals of Indiana | Opinion 19A-CT-403| September 16, 2019 Page 4 of 19
If none of the autos shown on the Policy Declarations is involved
in the accident, the highest limits of liability shown on the Policy
Declarations for any one auto will apply.
The limits of this Uninsured Motorists Insurance shall be reduced
by:
1. all amounts paid or payable by or on behalf of any person or
organization that may be legally responsible for the bodily
injury for which the payment is made, including, but not
limited to, any amounts paid under the bodily injury liability
coverage of this or any other insurance policy;
2. all amounts paid or payable under any workers’ compensation
law; and
3. all amounts paid or payable under any disability benefits law.
The maximum amount payable for bodily injury under
uninsured coverage is the lesser of:
(1) the difference between:
(a) the amount paid in damages to the insured by or for
any person or organization who may be liable for the
insured person’s bodily injury; and
(b) the “each person” limit of uninsured motorists
coverage provided in the insured person’s policy; or
(2) the difference between:
(a) the total amount of damages incurred by the insured
person; and
(b) the amount paid by or for any person or organization
liable for the insured person’s bodily injury.
We are not obligated to make any payment for bodily injury
under this coverage which arises out of the use of an
Court of Appeals of Indiana | Opinion 19A-CT-403| September 16, 2019 Page 5 of 19
underinsured motor vehicle until after the limits of liability for
all liability protection in effect and applicable at the time of the
accident have been exhausted by payment of judgments or
settlements.
Non-Duplication of Benefits
No injured person will recover duplicate benefits for the same
elements of loss under this or any other uninsured motorists’
insurance, including approved plans of self-insurance.
If There Is Other Insurance
If the insured person was in, on, getting into or out of, or on or
off of a vehicle you do not own which is insured for uninsured
motorists, underinsured motorists, or similar type coverage under
another policy, coverage under Uninsured Motorists Insurance,
Part 3, of this policy will be excess. This means that when the
insured person is legally entitled to recover damages in excess of
the other policy limits, we will pay up to your policy limit, but
only after the other insurance has been exhausted. No insured
person may recover duplicate benefits for the same element of
loss under Uninsured Motorists Insurance, Part 3, of this policy
and the other insurance.
If more than one policy applies to the accident on a primary
basis, the total benefits payable to any one person will not exceed
the maximum benefits payable by the policy with the highest
limit of uninsured motorists’ coverage.
We will bear our proportionate share with other uninsured
motorists insurance benefits. Our share is determined by adding
the limits of liability of this insurance to the limits of all other
insurance that apply on the same basis and finding the percentage
of the total that our limits represent. This applies no matter how
many automobiles or automobile policies may be involved
whether written by Allstate or another company.
Court of Appeals of Indiana | Opinion 19A-CT-403| September 16, 2019 Page 6 of 19
Id. at 82-83.
[5] On November 6, 2017, the Estate filed a complaint against Allstate. As
amended, the complaint alleged: on July 22, 2016, Shelina resided with her
parents, the Glovers, and “was a ‘Resident Relative’” under the Policy; the
Policy provided UIM coverage of $100,000 per person; the Policy provided
UIM coverage for her wrongful death that was excess to Terry’s American
Family Insurance Company (“American Family”) policy which insured him on
July 22, 2016; and that the Estate was “contractually entitled to payment under
the underinsured motorist coverage of [the Policy] that is excess to the
underinsured motorist coverage” provided by the American Family policy. Id.
at 12. It further alleged that, on or before August 23, 2016, Allstate entered into
a resolution determining that Bogue was fifty-two percent at fault and Hahn
was forty-eight percent at fault for the July 22, 2016 collision and that Bogue’s
Omni policy and Hahn’s Allstate policy were insufficient to cover the injuries
and damages resulting from Shelina’s death.
[6] Bogue’s insurer, Omni Insurance Company (“Omni”), filed an interpleader
action, and a mediation agreement dated January 15, 2018, under cause
number 16C01-1610-CT-476 settled claims of several injured parties, was signed
by numerous parties including the Estate, and indicated Bogue’s Omni policy
would pay $25,000 to the Estate and Hahn’s Allstate policy would pay $50,000
to the Estate.
Court of Appeals of Indiana | Opinion 19A-CT-403| September 16, 2019 Page 7 of 19
[7] On October 22, 2018, Allstate filed for summary judgment and argued: 1) that
the Policy’s requirement, that Allstate “be notified of a driver becoming a
member of a household for purposes of making a claim as a resident relative
under the policy,” was not met, and 2) that the Estate had received an amount
equal to or greater than the policy limits of the Policy from others, i.e. “full
payment” available under the Policy, because it contained “a right of set off for
payments made by all others as well as an anti-stacking clause.” Id. at 21. In
the “Statement of Undisputed Facts” section in its memorandum in support of
summary judgment, Allstate indicated that the mediation in the Omni
interpleader action resulted in payment to the Estate in the amount of $75,000.
Id. at 21. It further stated that Shelina’s GEICO auto insurance policy
contained UIM coverage with limits of $25,000 per person and that “[b]oth [the
Policy] and [Terry’s] American Family policy contain language that places the
UIM coverage that listed the vehicle involved in the accident as primary
coverage.” 4 Id. at 27.
[8] Allstate designated excerpts of Dovie Glover’s deposition, the Estate’s August
20, 2018 response to its request for admissions, and copies of the Policy and the
mediation agreement. In the response to Allstate’s request for admissions, the
Estate admitted that it had received settlements from various parties and
insurance companies from the accident that led to Shelina’s death in amounts
4
Prior to this statement, Allstate indicated that the “policy of underinsured motorist coverage issued to Terry
Robinson and listing the 2005 Toyota contains the following terms” and quoted without citation what it
asserted to be an excerpt of Terry’s American Family policy. Appellant’s Appendix Volume II at 26.
Court of Appeals of Indiana | Opinion 19A-CT-403| September 16, 2019 Page 8 of 19
totaling $100,000 or more. On December 21, 2018, the Estate filed a response
and cross-motion for summary judgment, in which it indicated that American
Family and GEICO both paid it $25,000 in UIM benefits, making its UIM
recovery a total of $50,000, and that it “then brought th[e] claim against Allstate
for additional UIM benefits” – i.e., it was seeking the “remaining $25,000 in
UIM coverage” under the Policy. Id. at 166, 179. It designated an affidavit of
Dovie Glover and a copy of Bogue’s Omni auto policy.
[9] On January 24, 2019, the court granted summary judgment for Allstate “based
solely on [Allstate’s] position regarding offsets,” and denied it with regard to the
“question of notification.” Id. at 201.
Discussion
[10] The issue is whether the trial court erred in granting summary judgment in
favor of Allstate. Summary judgment is appropriate only where there is no
genuine issue of material fact and the moving party is entitled to judgment as a
matter of law. Ind. Trial Rule 56(C); Mangold ex rel. Mangold v. Ind. Dep’t of
Natural Res., 756 N.E.2d 970, 973 (Ind. 2001). All facts and reasonable
inferences drawn from those facts are construed in favor of the nonmovant.
Mangold, 756 N.E.2d at 973. Our review of a summary judgment motion is
limited to those materials designated to the trial court. Id. Under Trial Rule
56(C), the moving party bears the burden of making a prima facie showing that
there are no genuine issues of material fact and that it is entitled to judgment as
a matter of law. Klinker v. First Merchs. Bank, N.A., 964 N.E.2d 190, 193 (Ind.
2012). If it is successful, the burden shifts to the nonmoving party to designate
Court of Appeals of Indiana | Opinion 19A-CT-403| September 16, 2019 Page 9 of 19
evidence establishing the existence of a genuine issue of material fact. Id. In
reviewing a trial court’s ruling on a motion for summary judgment, we may
affirm on any grounds supported by the Indiana Trial Rule 56 materials. Catt v.
Bd. of Comm’rs of Knox Cnty., 779 N.E.2d 1, 3 (Ind. 2002).
[11] The Estate argues that it “may seek up to $100,000 in underinsured motorist
benefits” and that the “additional $25,000 in underinsured motorist benefits
sought under [the Policy] will only bring the total underinsured motorist
recovery to $75,000.” Appellant’s Brief at 19. It asserts it made UIM claims
first under Terry’s American Family policy and Shelina’s GEICO policy and,
then, it made a claim for additional, excess underinsured benefits under the
Policy. It claims that, “even where policies contain valid reduction and anti-
stacking clauses,” a plaintiff is “entitled to make multiple underinsured motorist
recoveries, i.e. he may ‘stack’ UIM recoveries or payments – so long as the
aggregate underinsured motorist recovery does not exceed the highest
applicable limits.” Id. at 17.
[12] Allstate maintains that the Policy “mirrors . . . Ind. Code § 27-7-5-5,” “is
identical to the provisions contained in Ind. Code § 27-7-5-5(c),” 5 and contains
5
Ind. Code § 27-7-5-5, which deals with “Limitations on Coverage” for uninsured and underinsured
motorist coverage, provides:
(a) The policy or endorsement affording coverage specified in this chapter may provide that the total
limit of all insurers’ liability arising out of any one (1) accident shall not exceed the highest limits
under any one (1) policy applicable to the loss, but in no event may coverage be less than the
minimum set forth in IC 9-25-4-5.
Court of Appeals of Indiana | Opinion 19A-CT-403| September 16, 2019 Page 10 of 19
an anti-stacking provision which limits the total recovery an injured party can
recover to no more than the highest applicable UIM limit. Appellee’s Brief at
13. It contends that the Estate recovered all payments available to it because
both American Family and GEICO paid an additional $25,000 under the UIM
provisions of their respective policies and that, “[t]herefore, because the highest
policy limit available to the Estate in this case is $100,000, and the Estate has
received $125,000 in overall payments, the Estate has received an amount equal
to or greater than what it was owed under the limits of the various policies.” Id.
at 8.
[13] In its reply brief, the Estate argues that Allstate is entitled to use its offset
provision in the Policy to reduce its $100,000 underinsured motorist limits by
$75,000, or the amount the Estate received in liability recoveries, “but not by
the $50,000 the Estate received” in UIM recoveries, leaving “$25,000 in
underinsured motorist benefits available under the Policy.” Appellant’s Reply
*****
(c) The maximum amount payable for bodily injury under uninsured or underinsured motorist
coverage is the lesser of:
(1) the difference between:
(A) the amount paid in damages to the insured by or for any person or
organization who may be liable for the insured’s bodily injury; and
(B) the per person limit of uninsured or underinsured motorist coverage provided
in the insured’s policy; or
(2) the difference between:
(A) the total amount of damages incurred by the insured; and
(B) the amount paid by or for any person or organization liable for the insured’s
bodily injury.
Court of Appeals of Indiana | Opinion 19A-CT-403| September 16, 2019 Page 11 of 19
Brief at 9. It also contends that the anti-stacking provision “does not bring the
liability recoveries into play whatsoever” and that the application of “an
independent offset provision followed by an anti-stacking provision” is such
that “after the offsets [a]re applied, the antistacking provision applie[s] to prevent
the insureds from obtaining a total underinsured motorist recovery of more than
the underinsured motorist policy limits.” Id. at 10-11 (citing American Economy
Ins. Co. v. Motorists Mut. Ins. Co., 605 N.E.2d 162, 164-165 (Ind. 1992)).
[14] “Insurers are free to limit the coverage of their policies, but such limitations
must be clearly expressed to be enforceable.” State Farm Mut. Auto. Ins. Co. v.
Jakubowicz, 56 N.E.3d 617, 619 (Ind. 2016). This Court has explained:
Insurance contracts “are governed by the same rules of
construction as other contracts.” Colonial Penn Ins. Co. v. Guzorek,
690 N.E.2d 664, 667 (Ind. 1997). The interpretation of an
insurance contract is a question of law, and we address it de novo.
Dunn v. Meridian Mut. Ins. Co., 836 N.E.2d 249, 251 (Ind. 2005).
Clear and unambiguous policy language is given its ordinary
meaning in order to accomplish the primary goal of contract
interpretation of determining the intent of the parties at the time
the contract was made as disclosed by the language used to
express their rights and duties. Holiday Hospitality Franchising, Inc.
v. AMCO Ins. Co., 983 N.E.2d 574, 577-578 (Ind. 2013). Where
contractual language is ambiguous, we generally resolve those
ambiguities in favor of the insured, but will not do so if such an
interpretation fails to harmonize the provisions of the contract as
a whole. Id. at 578. The failure to define a contractual term does
not necessarily make that term ambiguous, nor does a simple
disagreement about the term’s meaning. Id. Rather, an
ambiguity exists where the provision is susceptible to more than
one reasonable interpretation. Id.
Court of Appeals of Indiana | Opinion 19A-CT-403| September 16, 2019 Page 12 of 19
Anderson v. Ind. Ins. Co., 8 N.E.3d 258, 262 (Ind. Ct. App. 2014).
[15] As stated above, Part 3 of the Policy states that the liability limits shown on the
Policy’s Declarations page may not be added to the limits for similar coverage
applying to other motor vehicles to determine the limit of insurance coverage
available, “regardless of the number of . . . policies involved[,] vehicles
involved[,] persons covered[, or] claims made.” Appellant’s Appendix Volume
II at 82. The Policy then indicates this is to mean no stacking or aggregation of
uninsured motorists insurance policies is allowed. Thus, the Policy’s UIM
coverage limit in the amount of “$100,000 each person” is not to be increased,
or stacked, regardless of the number of policies, vehicles, persons, or claims
involved. 6
[16] The Policy states on the same page that the “limits of this Uninsured Motorists
Insurance shall be reduced by [] all amounts paid or payable by or on behalf of
any person or organization that may be legally responsible for the bodily injury
for which the payment is made, including, but not limited to, any amounts paid
under the bodily injury liability coverage of this or any other insurance policy.”
Id. In Kinslow v. GEICO Ins. Co., 858 N.E.2d 109 (Ind. Ct. App. 2006), this
Court interpreted similar setoff provisions and stated:
6
To the extent that the Estate cites Progressive Ins. Co., Inc. v. Bullock, we note that the policy in that case
lacked an anti-stacking provision. See 841 N.E.2d 238, 241 (Ind. Ct. App. 2006) (“In absence of an anti-
stacking clause in its contract with [the deceased plaintiff], Progressive’s claim against stacking [the plantiffs’]
recovery fails.”).
Court of Appeals of Indiana | Opinion 19A-CT-403| September 16, 2019 Page 13 of 19
The language of Indiana Code Section 27-7-5-5(c) does not
provide a set formula for calculating setoffs in all cases, but it
does establish maximum and minimum parameters for the
amount of recovery a plaintiff is entitled to as a result of a UM or
UIM claim. Gardner v. State Farm Mut. Ins. Co., 589 N.E.2d 278,
281 (Ind. Ct. App. 1992), trans. denied. We also conclude that the
language of the statute is clear and unambiguous and is not open
to interpretation. It says that the maximum UM or UIM bodily
injury benefits to which an insured is entitled as the result of an
accident is the lesser of the difference between the amount already
recovered by the insured less the per person limit of UM/UIM
coverage in the insured’s policy, or the difference between the
total amount of damages incurred by the insured and the amount
already recovered by the insured.
Id. at 114. Here, the Policy provides that the “limits . . . shall be reduced by []
all amounts paid . . . .” Appellant’s Appendix Volume II at 82 (emphasis added).
The Estate has received amounts paid from other insurance policies which in
sum totaled more than $100,000; namely, $25,000 from Bogue’s Omni policy,
$50,000 from Hahn’s Allstate policy, $25,000 from Shelina’s GEICO policy,
and $25,000 from Terry’s American Family policy. Accordingly, the Policy’s
UIM limit was reduced to zero. The Estate is not entitled to further recovery
under the Policy.
[17] To the extent that the Estate draws upon Am. Econ. Ins. Co. v. Motorists Mut. Ins.
Co., 605 N.E.2d 162 (Ind. 1992), to argue that the Policy’s “legally responsible”
language “only creates an offset for liability settlements,” Appellant’s Brief at
10, and that anti-stacking provisions apply after offset provisions “to prevent the
insureds from obtaining a total underinsured motorist recovery of more than the
Court of Appeals of Indiana | Opinion 19A-CT-403| September 16, 2019 Page 14 of 19
underinsured motorist policy limits,” we do not agree. In Am. Econ. Ins. Co.,
the Indiana Supreme Court examined only the policies’ express limitation of
liability, clarified that the policies’ “more clearly delineated provisions”
expressed “amounts payable” as “a sum limited to uninsured motorists
coverage limits,” and summarily affirmed “that portion of [this Court’s]
opinion analyzing the anti-stacking provisions that found they were clear and
unambiguous.” 7 605 N.E.2d at 164-165. In a footnote, the Indiana Supreme
Court stated:
In discussing the potential recovery available under the excess
coverage provided by Motorists, we note the policy provision
that amounts payable under its underinsured motorists coverage
are to be reduced by sums paid “because of the bodily injury or
property damage sustained by or on behalf of persons or
organizations who may be legally responsible.” It may seem
unclear whether this would require a reduction to be made for
payments from American’s underinsured motorists coverage.
The policy provision is analogous to Ind. Code § 27-7-5-
5(c)(1)(A) which permits a reduction for “the amount paid in
damages to the insured by or for any person or organization who
may be liable for the insured’s bodily injury” (emphasis added).
This reduction would not include underinsured motorists
coverage payments made by American. We view the policy
limitation to be no more restrictive upon the insured than the
7
In Am. Econ. Ins. Co. v. Motorists Mut. Ins. Co., 593 N.E.2d 1242 (Ind. Ct. App. 1992), aff’d in part and vacated
in part by 605 N.E.2d 162, this Court found that the policies contained clauses which precluded the stacking
of underinsured motorist coverages; i.e., the American Economy Insurance Company policy contained a
clause providing that the “maximum limit of liability under all the policies shall be the highest applicable
limit of liability under any one policy” and the Motorists Mutual Insurance Company policy contained a
clause providing that “[a]ny recovery for damages for bodily injury or property damage sustained by an
insured may equal but not exceed the higher of the applicable limit for any one vehicle under this insurance
or any other insurance.” 593 N.E.2d at 1244 (emphases omitted).
Court of Appeals of Indiana | Opinion 19A-CT-403| September 16, 2019 Page 15 of 19
statutory language. We therefore construe the Motorists’s policy
phrase to refer only to sums from those directly liable for causing
the injuries, and to not permit reduction from amounts payable
for sums from American’s underinsured motorists coverage. As
a matter of public policy, however, in no event will Motorists be
required to pay an amount which would result in compensation
to the insured for more than the total actual damages sustained.
Id. at 165 n.5. We find that the limitations expressed in the Part 3 of the Policy
are sufficiently different from those in the policy in Am. Econ. Ins. Co., and thus
we do not construe the Policy to refer “only to sums from those directly liable
for causing the injuries.” Id.
[18] We further do not find availing the Estate’s reliance on Wagner v. Yates, 912
N.E.2d 805 (Ind. 2009). In that case, the plaintiff received injuries in an
automobile collision while driving a vehicle owned by her employer, and the
Indiana Supreme Court addressed a clause in her own automobile insurance
policy which provided: “The limits of liability of this coverage will be reduced
by: 1. A payment made or amount payable by or on behalf of any person or
organization which may be legally liable, or under any collectible auto liability
insurance, for loss caused by an underinsured motor vehicle.” 912 N.E.2d at
808. The plaintiff recovered $50,000 from the purported tortfeasor “who ‘may
be legally liable’ for ‘loss caused by an underinsured motor vehicle,” and the
Court found that the defendant insurer’s liability was reduced by the amount
that the insurer of the purported tortfeasor paid to the plaintiff. Id. at 809. The
Court then addressed the question of whether any sums “that may be payable to
[the plaintiff] by [her employer’s insurer] are similarly treated” and stated:
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American Family argues that a UIM provider “effectively
stand[s] in the shoes of a tortfeasor during evaluation of
coverage.” But the Court of Appeals rejected a similar argument
in Progressive Ins. Co., Inc. v. Bullock, 841 N.E.2d 238 (Ind. Ct.
App. 2006), trans. denied. The summarized facts in Progressive are
these. Misty Bullock and her children were passengers in a car
driven by Teresa Jones. They were injured when struck by a car
that Rosie Kemp was driving. The following insurance was in
play: Kemp was insured by Indiana Insurance Company in the
amount of $25,000 per person and $50,000 per accident; Jones
had UIM coverage with Farm Bureau Insurance Company in the
amount of $50,000 per person and $100,000 per accident; and
Bullock had UIM coverage with Progressive Insurance Company
in the amount of $50,000 per person and $50,000 per accident.
Under terms of an agreement with Kemp, Indiana Insurance,
Jones, and Farm Bureau, Bullock released the children’s claims
against those parties in exchange for $24,500 from Indiana
Insurance and $80,500 from Farm Bureau. This left only the
issue of Progressive’s liability to Bullock. Progressive argued that
after set-offs of payments made by Farm Bureau and Indiana
Insurance Progressive owed no obligation under its policy. In
relevant part the policy declared:
The Limits of Liability under [the UIM provision] shall be
reduced by all sums . . . paid because of bodily injury or
property damage by or on behalf of any person or
organizations who may be legally responsible . . . .
Id. at 241 (emphasis and alterations in original). The Court of
Appeals agreed that Progressive was entitled to a set-off for the
$[2]4,500 paid by Indiana Insurance. However, the court
rejected Progressive’s argument that “Farm Bureau effectively
stands in the shoes of the tortfeasor” and thus Progressive was
entitled to set off the payment made by Farm Bureau. Id. at 242.
The court elaborated:
Court of Appeals of Indiana | Opinion 19A-CT-403| September 16, 2019 Page 17 of 19
To the extent . . . Progressive is arguing that Farm Bureau
is legally responsible for Kemp’s negligence simply
because Farm Bureau provided UIM coverage to Jones,
this argument . . . fails. The underlying purpose of UIM
coverage is to give the insured the recovery he or she
would have received if the underinsured motorist had
maintained an adequate policy. Progressive provides us
with no authority that UIM coverage is intended to make
a UIM insurance provider directly liable for the negligent
acts of the tortfeasor.
Id. (internal citations and quotations omitted). We agree with the
Court of Appeals’ assessment. And as applied in this case we
construe the phrase in American Family’s policy, “payment
made or amount payable by or on behalf of any person or
organization which may be legally liable” as referring to
payments by or on behalf of those directly liable for causing the
injuries. This phrase does not require reduction from amounts
payable for sums from State Farm’s UIM coverage. Accord Am.
Econ. Ins. Co. v. Motorists Mut. Ins. Co., 605 N.E.2d 162, 165 n.5
(Ind. 1992) (construing similar provision and declaring the
“reduction would not include underinsured motorists coverage
payments made by [a third party’s insurance carrier]”).
Id. at 809-810 (some internal citation omitted).
[19] Here, consistent with Wagner, GEICO and American Family were not directly
liable for the negligent acts of then-potential tortfeasors Bogue and Hahn by
virtue of providing Shelina with UIM coverage under their policies. However,
even though the UIM providers are not directly liable, we cannot say they are
not legally responsible under the Policy.
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[20] For the foregoing reasons, we affirm the trial court’s entry of summary
judgment.
[21] Affirmed.
Altice, J., and Tavitas, J., concur.
Court of Appeals of Indiana | Opinion 19A-CT-403| September 16, 2019 Page 19 of 19