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

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.

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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.

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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.

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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.”).

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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:

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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