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Justices rule on underinsured motorist coverage case

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The Indiana Supreme Court has held that a tortfeasor’s vehicle was underinsured according to state statute because the benefit amount actually paid to a woman was less than the per-person limit of liability of the underinsurance endorsement of an insurance policy that applied to all the family members involved in the accident.

In Hannah Lakes v. Grange Mutual Casualty Company, No. 89S05-1109-CT-531, the justices unanimously agreed with the result the Indiana Court of Appeals reached, but for a different reason.

The case involves a severe auto accident in 2004 where Hannah Lakes and several family members were injured. The tortfeasor, James Isaacs, had an insurance policy that limited bodily injury liability to $25,000 per person and $50,000 per accident. Lakes’ sister, Anitra, was driving and had an insurance policy with underinsured motorist coverage for $50,000 per person and per accident. Their father, Jerry Lakes, also had UIM coverage for $100,000 per person and $300,000 per accident.

After the Lakeses filed a state suit against Isaacs and Anitra Lakes’ carrier, Grange Mutual Casualty Company, Isaacs’ carrier paid its limit but Grange filed for summary judgment on the basis that the tortfeasor’s vehicle was not an underinsured vehicle as a matter of law because the per-accident limit of his policy was equal to the UIM per-accident limit of Anitra’s policy. The trial court granted Grange’s summary judgment motion, holding that Jerry Lakes’ $50,000 policy limit was equal to the UIM limit Anita Lakes had in her policy and that it didn’t matter that more than one family member was receiving benefits. The trial court also held Hannah Lakes couldn’t recover under her father’s insurance because that policy excluded coverage for property damage or bodily injury for family members inside the vehicle.

The Court of Appeals reversed, holding that the tortfeasor’s vehicle was underinsured and that Hannah was entitled to recover up to $44,900 in UIM benefits under Anitra’s policy. The justices agreed, although for a different reason. They reaffirmed the decision from a decade ago in Corr v. American Family Insurance, 767 N.E.2d 535 (Ind. 2002).

The Supreme Court agreed with Grange and the trial court that the regime established by the intermediate appellate court may encourage “collusion” among insureds to structure their relationships in order to trigger Corr. But the justices disagreed with the proposed “fix” to that issue, adopting a different standard from another line of precedent.

Justice Frank Sullivan wrote for the court that when there are multiple claimants on these types of cases, courts should examine each claim individually and compare each with the per-person limits of applicable UIM coverage. The per-accident limits have no bearing on whether a vehicle is underinsured, Sullivan wrote, and the per-accident limits come into play only to limit the insurer’s liability.

The trial court judgment is reversed and the case is remanded for further proceedings consistent with this opinion.

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  1. So that none are misinformed by my posting wihtout a non de plume here, please allow me to state that I am NOT an Indiana licensed attorney, although I am an Indiana resident approved to practice law and represent clients in Indiana's fed court of Nth Dist and before the 7th circuit. I remain licensed in KS, since 1996, no discipline. This must be clarified since the IN court records will reveal that I did sit for and pass the Indiana bar last February. Yet be not confused by the fact that I was so allowed to be tested .... I am not, to be clear in the service of my duty to be absolutely candid about this, I AM NOT a member of the Indiana bar, and might never be so licensed given my unrepented from errors of thought documented in this opinion, at fn2, which likely supports Mr Smith's initial post in this thread: http://caselaw.findlaw.com/us-7th-circuit/1592921.html

  2. When I served the State of Kansas as Deputy AG over Consumer Protection & Antitrust for four years, supervising 20 special agents and assistant attorneys general (back before the IBLE denied me the right to practice law in Indiana for not having the right stuff and pretty much crushed my legal career) we had a saying around the office: Resist the lure of the ring!!! It was a take off on Tolkiem, the idea that absolute power (I signed investigative subpoenas as a judge would in many other contexts, no need to show probable cause)could corrupt absolutely. We feared that we would overreach constitutional limits if not reminded, over and over, to be mindful to not do so. Our approach in so challenging one another was Madisonian, as the following quotes from the Father of our Constitution reveal: The essence of Government is power; and power, lodged as it must be in human hands, will ever be liable to abuse. We are right to take alarm at the first experiment upon our liberties. I believe there are more instances of the abridgement of freedom of the people by gradual and silent encroachments by those in power than by violent and sudden usurpations. Liberty may be endangered by the abuse of liberty, but also by the abuse of power. All men having power ought to be mistrusted. -- James Madison, Federalist Papers and other sources: http://www.constitution.org/jm/jm_quotes.htm RESIST THE LURE OF THE RING ALL YE WITH POLITICAL OR JUDICIAL POWER!

  3. My dear Mr Smith, I respect your opinions and much enjoy your posts here. We do differ on our view of the benefits and viability of the American Experiment in Ordered Liberty. While I do agree that it could be better, and that your points in criticism are well taken, Utopia does indeed mean nowhere. I think Madison, Jefferson, Adams and company got it about as good as it gets in a fallen post-Enlightenment social order. That said, a constitution only protects the citizens if it is followed. We currently have a bevy of public officials and judicial agents who believe that their subjectivism, their personal ideology, their elitist fears and concerns and cause celebs trump the constitutions of our forefathers. This is most troubling. More to follow in the next post on that subject.

  4. Yep I am not Bryan Brown. Bryan you appear to be a bigger believer in the Constitution than I am. Were I still a big believer then I might be using my real name like you. Personally, I am no longer a fan of secularism. I favor the confessional state. In religious mattes, it seems to me that social diversity is chaos and conflict, while uniformity is order and peace.... secularism has been imposed by America on other nations now by force and that has not exactly worked out very well.... I think the American historical experiment with disestablishmentarianism is withering on the vine before our eyes..... Since I do not know if that is OK for an officially licensed lawyer to say, I keep the nom de plume.

  5. I am compelled to announce that I am not posting under any Smith monikers here. That said, the post below does have a certain ring to it that sounds familiar to me: http://www.catholicnewworld.com/cnwonline/2014/0907/cardinal.aspx

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