Indiana Court of Appeals Affirms Trial Court Judgment Concerning Available Underinsured Motorist Coverage in Indiana Truck Accident Case

The Indiana Court of Appeals recently decided a dispute over the amount of underinsured motorist coverage available to two individuals injured in a truck crash with an at-fault, underinsured motorist. In Cline v. Everest Nat’l Ins. Co., Michael Cline and Jacob Sofronko (“Plaintiffs”), co-workers riding in a company-owned dump truck driven by Sofronko, were severely injured when a commercial cargo van failed to stop at a stop sign and crashed into their truck. The at-fault driver’s insurance company paid the at-fault driver’s bodily injury liability coverage limit of $300,000. The Plaintiffs each received $150,000, which was insufficient to cover their damages. 

At the time of the crash, the Plaintiffs were covered under their employer’s commercial automobile insurance policy with Everest National Insurance Company (“Everest”), which provided underinsured motorist (UIM) coverage of $1,000,000 per accident, with no separate per person limit. Under Indiana law, UIM coverage serves to give insureds the recovery they would have received had the underinsured motorist maintained an adequate policy of liability insurance. The UIM statute, principally codified at Indiana Code section 27-7-5-2 and supplemented by sections 27-7-5-4 and 27-7-5-5, is a mandatory, full-recovery, remedial statute. 

Here, the UIM endorsement in the Everest policy provided, “The Limit of Insurance under this coverage shall be reduced by all sums paid or payable by or for anyone who is legally responsible.” After the Plaintiffs filed a lawsuit against Everest, Everest agreed to pay the Plaintiffs $700,000, which was the $1,000,000 per accident limit of its UIM coverage less the $300,000 paid by the at-fault driver’s insurance company. The Plaintiffs, however, contended that they were entitled to $1,000,000 in UIM coverage, not $700,000, with the UIM coverage available to them to be calculated on an individual claimant basis under prior Indiana precedent. Under the Plaintiffs’ argument, each Plaintiff was entitled to $850,000 of UIM coverage (the $1,000,000 per accident UIM limit less the $150,000 each Plaintiff received), for a combined total of $1,700,000 in UIM coverage, reduced to $1,000,000 because of the $1,000,000 UIM per accident limit. Ultimately, the trial court agreed with, and entered summary judgment for, Everest, finding $700,000 was the maximum amount Everest owed in UIM coverage to the Plaintiffs. Cline appealed the trial court’s decision.

On appeal, the Indiana Court of Appeals reviewed the undisputed facts, the UIM policy language, prior legal precedent, and Cline’s arguments. The Court distinguished the Indiana Supreme Court’s decision in Lakes v. Grange Mutual Casualty Company, 964 N.E.2d 796 (Ind. 2012), as the primary question in that case was whether the at-fault driver’s vehicle was “underinsured,” which Cline and Everest did not dispute here. As to Cline’s argument that Lakes and the UIM statute provide a formula for calculating UIM coverage Everest must provide, the Court disagreed, finding the UIM statute only provides a minimum floor and maximum cap for UIM claims. In the Court’s view, the UIM statute “does not prescribe how a UIM insurer must calculate its aggregate available coverage,” and insurers can limit their liability to insureds through policy language. Since the $700,000 was more than the statutory UIM minimum of $50,000 and within the statutory maximum on individual recovery, the Everest UIM policy language controlled. Lastly, the Court rejected Cline’s argument that the Everest UIM policy language rendered its UIM coverage illusory, as there was $700,000 in UIM coverage available to the Plaintiffs under the policy.

The Court found that “the plain and ordinary language of the unambiguous UIM endorsement” provided Everest with a $300,000 setoff from the $1,000,000 UIM coverage limit and “the maximum UIM coverage benefit available to Plaintiffs” was $700,000. Therefore, the Court affirmed the trial court’s judgment in favor of Everest.

You can read the full opinion here. 

Navigating available UIM coverage in multi-claimant cases in Indiana can be challenging. The Indiana injury lawyers at Barsumian Armiger Injury Lawyers have decades of experience handling complex personal injury matters involving uninsured and underinsured claims.