ILNews

Court reverses insurer's summary judgment

Jennifer Nelson
January 1, 2007
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The Indiana Court of Appeals today reversed a summary judgment award in favor of an auto insurance company, holding that an uninsured-motorist claim was not barred by state statute and language of the insurance policy.

In Mary Lou Smith, et al. v. Auto-Owners Insurance Co., No. 84A01-0611-CV-516, the appellate court had to decide whether Smith's claim for uninsured motorist coverage against her policyholder, Auto-Owners, was allowed based on her policy and Indiana Code 27-7-5-4.

Smith and several family members were involved in a car accident caused by Nellie Rogers in February 1999. The Smiths filed a personal injury action against Rogers in February 2001. Just a few days before the trial was set to start in 2004, Rogers' attorney told the Smiths' attorney that Rogers' insurance company, Highlands Insurance Co., had filed for receivership in Texas. That same day, the Smiths' attorney sent a letter to Auto-Owners to inform the company the Smiths would be making an uninsured-motorist claim. Later, the Smiths added Auto-Owners as a defendant in their personal-injury action.

Auto-Owners filed a complaint for declaratory judgment, arguing Indiana statutes and the terms of the Smiths insurance policy prevented them from making an uninsured motorist claim more than two years after an accident. The trial court granted summary judgment in favor of Auto-Owners.

At issue in this case is the interpretation and application of the insurance policy and definition of insolvency regarding uninsured-motorist claims as defined by Indiana Code, wrote Judge James Kirsch. He and Judge Margret Robb overturned the trial court grant of summary judgment.

Indiana Code 27-7-5-4 says uninsured motorist coverage under an insurer's insolvency protection applies only when the tortfeasor's insurer becomes insolvent within two years after the accident. The Smiths' insurance policy with Auto-Owners also says they must file an uninsured-motorist claim within two years from the date that the cause of action accrued. However, in the Smith's case, the cause of action for the claim is the insolvency of Rogers' insurer.

Before discovering Highland had become insolvent, the Smiths would not have been able to bring a claim for uninsured motorist with Auto-Owners, wrote Judge Kirsch. The statute of limitations for IC 27-7-5-4 runs from the date of the accident or the date of the insurer's insolvency, whichever is later. For someone to claim uninsured-motorist coverage due to insolvency of the tortfeasor's insurer, the cause of action is not complete until there is an accident, the tortfeasor's insurer becomes insolvent, and the injured party learns of the insolvency. Judge Kirsch wrote the claim does not need to be filed within two years of the accident but within two years after learning the tortfeasor's insurer became insolvent. Even though Highland was placed in receivership in November 2003, the Smiths didn't learn about until just before their trial in March 2004.

Because questions of fact exist as to when the insolvency of Highland occurred and if the Smiths then filed their claim in a timely manner, summary judgment in favor of Auto-Owners is reversed.

Judge Michael Barnes dissented from the majority because he believed the plaintiffs do not present a question of fact regarding the potential date of Highland's insolvency and the plain language of IC 27-7-5-4 bars the plaintiffs' suit. Indiana Code would require the Smiths to present evidence that as of February 2001, Highland was unable to pay its obligations or its liabilities exceeded its assets at the time. The Smiths rely on receivership documents, which did not come out until four years after the date of the accident and those documents show Highland was not experiencing financial difficulties until after the two years as is required by Indiana Statute and Auto-Owner's policy.
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  1. Indianapolis employers harassment among minorities AFRICAN Americans needs to be discussed the metro Indianapolis area is horrible when it comes to harassing African American employees especially in the local healthcare facilities. Racially profiling in the workplace is an major issue. Please make it better because I'm many civil rights leaders would come here and justify that Indiana is a state the WORKS only applies to Caucasian Americans especially in Hamilton county. Indiana targets African Americans in the workplace so when governor pence is trying to convince people to vote for him this would be awesome publicity for the Presidency Elections.

  2. Wishing Mary Willis only God's best, and superhuman strength, as she attempts to right a ship that too often strays far off course. May she never suffer this personal affect, as some do who attempt to change a broken system: https://www.youtube.com/watch?v=QojajMsd2nE

  3. Indiana's seatbelt law is not punishable as a crime. It is an infraction. Apparently some of our Circuit judges have deemed settled law inapplicable if it fails to fit their litmus test of political correctness. Extrapolating to redefine terms of behavior in a violation of immigration law to the entire body of criminal law leaves a smorgasbord of opportunity for judicial mischief.

  4. I wonder if $10 diversions for failure to wear seat belts are considered moral turpitude in federal immigration law like they are under Indiana law? Anyone know?

  5. What a fine article, thank you! I can testify firsthand and by detailed legal reports (at end of this note) as to the dire consequences of rejecting this truth from the fine article above: "The inclusion and expansion of this right [to jury] in Indiana’s Constitution is a clear reflection of our state’s intention to emphasize the importance of every Hoosier’s right to make their case in front of a jury of their peers." Over $20? Every Hoosier? Well then how about when your very vocation is on the line? How about instead of a jury of peers, one faces a bevy of political appointees, mini-czars, who care less about due process of the law than the real czars did? Instead of trial by jury, trial by ideological ordeal run by Orwellian agents? Well that is built into more than a few administrative law committees of the Ind S.Ct., and it is now being weaponized, as is revealed in articles posted at this ezine, to root out post moderns heresies like refusal to stand and pledge allegiance to all things politically correct. My career was burned at the stake for not so saluting, but I think I was just one of the early logs. Due, at least in part, to the removal of the jury from bar admission and bar discipline cases, many more fires will soon be lit. Perhaps one awaits you, dear heretic? Oh, at that Ind. article 12 plank about a remedy at law for every damage done ... ah, well, the founders evidently meant only for those damages done not by the government itself, rabid statists that they were. (Yes, that was sarcasm.) My written reports available here: Denied petition for cert (this time around): http://tinyurl.com/zdmawmw Denied petition for cert (from the 2009 denial and five year banishment): http://tinyurl.com/zcypybh Related, not written by me: Amicus brief: http://tinyurl.com/hvh7qgp

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