ILNews

Judge argues ruling puts form over substance

Back to TopE-mailPrintBookmark and Share

The chief judge of the Indiana Court of Appeals dissented from his colleagues in an insurance dispute because he believes the decision leads to "an inequitable result."

Chief Judge John Baker wrote in his dissent that Judges Melissa May and Michael Barnes elevated form over substance when concluding that American Family Insurance wasn't entitled to a setoff to reduce jury verdicts by the amounts the insurer had previously paid as medical expense coverage for injuries Tamatha and Hannah Nealy suffered in a car accident. The Nealys won a default judgment of liability against the driver and the owner of the car that hit them; neither person had insurance, so American Family provided coverage under the Nealys' uninsured motorist and medical expense coverage.

The Nealys then sued American Family for the uninsured motorist coverage. The trial court granted American Family's motion for a setoff based on the amount of medical expenses it paid before trial.

In Tamatha M. Nealy, et al. v. American Family Mutual Insurance Co., No. 49A02-0812-CV-1096, the majority reversed the grant of the motion for setoff and remanded for the entry of judgment in the amount of the verdicts the jury originally returned. Judges May and Barnes ruled the trial court erred by basing the grant of the setoff on the advance payment statute, Indiana Code Section 34-44-2-3, because the payments the insurer made couldn't be characterized as "advance payments." American Family isn't the defendant's insurance company, as required by statute, and the statute doesn't apply when there is more than one defendant, wrote Judge May. There are three defendants in this action - the driver of the car that hit the Nealys, that car's owner, and American Family.

In addition, there's no language in the Nealys' policy to include setoffs for amounts paid under medical expense coverage to reduce the amount paid under the uninsured motorist coverage. The prior payments made by American Family were made under the medical expense provisions, not the uninsured motorist coverage, which does provide for a deduction of payments from the limits of liability. The majority also ruled the original jury verdict wouldn't give the Nealys a double recovery.

Chief Judge Baker believed the advance payment statute applies to this case. He also wrote that because there were multiple defendants and American Family was the plaintiffs' insurer, this decision "elevates form over substance to a degree that leads to an inequitable result." There were multiple defendants, but only American Family played any role in the litigation whatsoever, he wrote. Although American Family was the Nealys' insurer, it was litigating against them.

"I cannot believe that the legislature intended these facts to stand in the way of the application of the advance payment statute," he wrote. "Here, American Family has already paid over $10,000 for the Nealys' medical expenses; it is inequitable and unjust - and antithetical to the purpose of the advance payment statute - to ask the insurer to pay that amount a second time."

Chief Judge Baker also wrote the majority faulted American Family because it didn't say the "magic words" of "uninsured motorist coverage" when it paid the Nealys' medical expenses.

The chief judge did concur with the majority's resolution of the Nealys' additur argument, in which the majority affirmed the denial of their motion for additur.

ADVERTISEMENT

Sponsored by

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. YES I WENT THROUGH THIS BEFORE IN A DIFFERENT SITUATION WITH MY YOUNGEST SON PEOPLE NEED TO LEAVE US ALONE WITH DCS IF WE ARE NOT HURTING OR NEGLECT OUR CHILDREN WHY ARE THEY EVEN CALLED OUT AND THE PEOPLE MAKING FALSE REPORTS NEED TO GO TO JAIL AND HAVE A CLASS D FELONY ON THERE RECORD TO SEE HOW IT FEELS. I WENT THREW ALOT WHEN HE WAS TAKEN WHAT ELSE DOES THESE SCHOOL WANT ME TO SERVE 25 YEARS TO LIFE ON LIES THERE TELLING OR EVEN LE SAME THING LIED TO THE COUNTY PROSECUTOR JUST SO I WOULD GET ARRESTED AND GET TIME HE THOUGHT AND IT TURNED OUT I DID WHAT I HAD TO DO NOT PROUD OF WHAT HAPPEN AND SHOULD KNOW ABOUT SEEKING MEDICAL ATTENTION FOR MY CHILD I AM DISABLED AND SICK OF GETTING TREATED BADLY HOW WOULD THEY LIKE IT IF I CALLED APS ON THEM FOR A CHANGE THEN THEY CAN COME AND ARREST THEM RIGHT OUT OF THE SCHOOL. NOW WE ARE HOMELESS AND THE CHILDREN ARE STAYING WITH A RELATIVE AND GUARDIAN AND THE SCHOOL WON'T LET THEM GO TO SCHOOL THERE BUT WANT THEM TO GO TO SCHOOL WHERE BULLYING IS ALLOWED REAL SMART THINKING ON A SCHOOL STAFF.

  2. Family court judges never fail to surprise me with their irrational thinking. First of all any man who abuses his wife is not fit to be a parent. A man who can't control his anger should not be allowed around his child unsupervised period. Just because he's never been convicted of abusing his child doesn't mean he won't and maybe he hasn't but a man that has such poor judgement and control is not fit to parent without oversight - only a moron would think otherwise. Secondly, why should the mother have to pay? He's the one who made the poor decisions to abuse and he should be the one to pay the price - monetarily and otherwise. Yes it's sad that the little girl may be deprived of her father, but really what kind of father is he - the one that abuses her mother the one that can't even step up and do what's necessary on his own instead the abused mother is to pay for him???? What is this Judge thinking? Another example of how this world rewards bad behavior and punishes those who do right. Way to go Judge - NOT.

  3. Right on. Legalize it. We can take billions away from the drug cartels and help reduce violence in central America and more unwanted illegal immigration all in one fell swoop. cut taxes on the savings from needless incarcerations. On and stop eroding our fourth amendment freedom or whatever's left of it.

  4. "...a switch from crop production to hog production "does not constitute a significant change."??? REALLY?!?! Any judge that cannot see a significant difference between a plant and an animal needs to find another line of work.

  5. Why do so many lawyers get away with lying in court, Jamie Yoak?

ADVERTISEMENT