Judge argues ruling puts form over substance

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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.


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  1. I have an open CHINS case I failed a urine screen I have since got clean completed IOP classes now in after care passed home inspection my x sister in law has my children I still don't even have unsupervised when I have been clean for over 4 months my x sister wants to keep the lids for good n has my case working with her I just discovered n have proof that at one of my hearing dcs case worker stated in court to the judge that a screen was dirty which caused me not to have unsupervised this was at the beginning two weeks after my initial screen I thought the weed could have still been in my system was upset because they were suppose to check levels n see if it was going down since this was only a few weeks after initial instead they said dirty I recently requested all of my screens from redwood because I take prescriptions that will show up n I was having my doctor look at levels to verify that matched what I was prescripted because dcs case worker accused me of abuseing when I got my screens I found out that screen I took that dcs case worker stated in court to judge that caused me to not get granted unsupervised was actually negative what can I do about this this is a serious issue saying a parent failed a screen in court to judge when they didn't please advise

  2. I have a degree at law, recent MS in regulatory studies. Licensed in KS, admitted b4 S& 7th circuit, but not to Indiana bar due to political correctness. Blacklisted, nearly unemployable due to hostile state action. Big Idea: Headwinds can overcome, esp for those not within the contours of the bell curve, the Lego Movie happiness set forth above. That said, even without the blacklisting for holding ideas unacceptable to the Glorious State, I think the idea presented above that a law degree open many vistas other than being a galley slave to elitist lawyers is pretty much laughable. (Did the law professors of Indiana pay for this to be published?)

  3. Paul Hartman of Burbank, Oh who is helping Sister Fuller with this Con Artist Kevin Bart McCarthy scares Sister Joseph Therese, Patricia Ann Fuller very much that McCarthy will try and hurt Patricia Ann Fuller and Paul Hartman of Burbank, Oh or any member of his family. Sister is very, very scared, (YES, I AM) This McCarthy guy is a real, real CON MAN and crook. I try to totall flatter Kevin Bart McCARTHY to keep him from hurting my best friends in this world which are Carolyn Rose and Paul Hartman. I Live in total fear of this man Kevin Bart McCarthy and try to praise him as a good man to keep us ALL from his bad deeds. This man could easy have some one cause us a very bad disability. You have to PRAISAE in order TO PROTECT yourself. He lies and makes up stories about people and then tries to steal if THEY OWN THRU THE COURTS A SPECIAL DEVOTION TO PROTECT, EX> Our Lady of America DEVOTION. EVERYONE who reads this, PLEASE BE CAREFUL of Kevin Bart McCarthy of Indianapolis, IN My Phone No. IS 419-435-3838.

  4. Joe, you might want to do some reading on the fate of Hoosier whistleblowers before you get your expectations raised up.

  5. I had a hospital and dcs caseworker falsify reports that my child was born with drugs in her system. I filed a complaint with the Indiana department of health....and they found that the hospital falsified drug screens in their investigation. Then I filed a complaint with human health services in Washington DC...dcs drug Testing is unregulated and is indicating false positives...they are currently being investigated by human health services. Then I located an attorney and signed contracts one month ago to sue dcs and Anderson community hospital. Once the suit is filed I am taking out a loan against the suit and paying a law firm to file a writ of mandamus challenging the courts jurisdiction to invoke chins case against me. I also forwarded evidence to a u.s. senator who contacted hhs to push an investigation faster. Once the lawsuit is filed local news stations will be running coverage on the situation. Easy day....people will be losing their jobs soon...and judge pancol...who has attempted to cover up what has happened will also be in trouble. The drug testing is a kids for cash and federal funding situation.