Preview:

FILED
Sep 03 2009, 11:45 am
of the supreme court, court of appeals and tax court

CLERK

ATTORNEYS FOR APPELLANTS
Stephen T. Naville Gregory M. Reger Lorch & Naville, LLC New Albany, Indiana

ATTORNEYS FOR APPELLEE
Sandra L. Heeke George A. Budd, V Waters, Tyler, Scott, Hoffman & Doane, LLC New Albany, Indiana

______________________________________________________________________________

Indiana Supreme Court
_________________________________ No. 22S01-0808-CV-475 BRENDA S. WAGNER AND DARREN M. WAGNER, Appellants (Plaintiffs below), v. BOBBI J. YATES, ET AL., Appellee (Defendant below). _________________________________ Appeal from the Floyd Superior Court, No. 22D01-0512-CT-525 The Honorable Susan L. Orth, Judge _________________________________ On Petition To Transfer from the Indiana Court of Appeals, No. 22A01-0710-CV-474 _________________________________

In the

September 3, 2009

Rucker, Justice.

Interpreting an insurance policy as including set-off and anti-stacking provisions, the trial court granted summary judgment in favor of Insurer. Concluding both provisions are

ambiguous, we strictly construe the policy against the Insurer and reverse the judgment of the trial court.

Facts and Procedural History

This is an appeal from the grant of summary judgment. The following facts are not in dispute. Brenda Wagner sued Bobbi Yates for injuries she received in an automobile collision while driving a vehicle owned by her employer. Wagners husband joined the action on a loss of consortium claim. At the time of the collision Wagner maintained an auto insurance policy with American Family Insurance; Yates maintained an auto liability policy with Allstate Insurance Company; and the company car Wagner drove was insured by her employer through a policy with State Farm.

Wagner initially sued only Yates.

However, seeking underinsured motorist (UIM)

coverage Wagner later amended her complaint to include American Family and State Farm. Both the American Family policy and the State Farm policy provided $100,000 per person in UIM coverage.

Allstate settled with Wagner for policy limits in the amount of $50,000. And Yates was dismissed from this action. The parties agree that under the terms of Allstates liability policy Allstate was responsible for the first $50,000. The parties also agree that if applicable State Farm will be liable for the next $50,000. American Family is of the view that because of antistacking and set-off provisions in the Wagner insurance policy, it has no liability. In essence American Family contends that Wagner is entitled to a total recovery of $100,000. And because (i) Allstate has already settled for $50,000, and (ii) State Farm would be responsible for the next $50,000, if any, American Familys exposure is zero. On this basis American Family moved for summary judgment.

2

Wagner contested this claim and filed a cross-motion for summary judgment. The trial court agreed with American Family and granted summary judgment in its favor. On appeal Wagner conceded that an insurer may limit its exposure by including an "anti-stacking" provision in its insurance policy; but Wagner argued that a plain reading of American Familys policy shows that no such provision is included. Wagner also contended that based on the language of the policy, American Family was not entitled to set off any amounts that may be paid by State Farm. Concluding that American Family may set off payments made by State Farm, the Court of Appeals affirmed the judgment of the trial court. It did not address the antistacking claim. Wagner v. Yates, 884 N.E.2d 331 (Ind. Ct. App. 2008). Having previously granted transfer we now reverse the trial courts judgment.

Standard of Review

When reviewing the grant of a summary judgment motion, we apply the same standard applicable to the trial court. Summary judgment is proper only when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Ind. Trial Rule 56(C). We do not weigh the evidence, but will consider the facts in the light most favorable to the non-moving party. Freidline v. Shelby Ins. Co., 774 N.E.2d 37, 39 (Ind. 2002). We must reverse the grant of a summary judgment motion if the record discloses an incorrect application of the law to those facts. Ayres v. Indian Heights Volunteer Fire Dept, Inc., 493 N.E.2d 1229, 1234 (Ind. 1986). The interpretation of an insurance policy is primarily a question of law for the court, and it is therefore a question which is particularly suited for summary judgment. Morris v. Econ. Fire & Cas. Co., 848 N.E.2d 663, 665-66 (Ind. 2006).

Discussion I.

In the case before us no dispute of material facts exists. Rather, this matter involves the question of whether American Family is entitled to summary judgment as a matter of law based upon a clause in its insurance policy which, according to American Family, allows it to set off payments made by State Farm. The clause at issue provides:

3

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. American Family cites authority for the general proposition that

Appellants App. at 65.

"language requiring setoffs has been and should be enforced." Appellees Br. at 10. See, e.g., Hardiman v. Governmental Interinsurance Exch., 588 N.E.2d 1331, 1334 (Ind. Ct. App. 1992) (enforcing a set-off provision in an action against automobile insurer to recover underinsured motorist benefits despite receipt of workers compensation where relevant provision of insurance policy declared, "Any amount payable under this policy shall be reduced by: (a) All sums payable under any workers compensation, disability, or similar law . . . ."); Castillo v. Prudential Prop. & Cas. Ins. Co., 834 N.E.2d 204, 207 (Ind. Ct. App. 2005) (enforcing a set-off clause against an insured who received a settlement amount from the tortfeasors liability insurer, which provided that "[p]ayments will be reduced by any amount payable by persons responsible for the accident . . . [and] will also be reduced by any amount payable under this policy or by other sources"). We have no quarrel with this general proposition. The problem in this case however is whether the language of the policy accomplishes the desired result.

There is no dispute here that the amounts Allstate paid to Wagner were on behalf of a person

Download Brenda S. Wagner and Darren M. Wagner v. Bobbi J. Yates, et al.pdf

Indiana Law