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Underinsurance benefit payout doesn’t satisfy judgment

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The Indiana Court of Appeals held that the party at-fault in an auto accident is not entitled to benefit from the injured party’s “carefulness and assiduousness” in obtaining underinsured motorist insurance coverage.

The court reversed a ruling finding a $98,000 judgment against Alan Steady was satisfied after injured party Ronald Kern’s insurer, State Farm Mutual Automobile Insurance Co., paid out $68,000 in underinsured motorist benefits to Kern. A jury found Steady 100 percent liable for the accident and injuries Kern sustained, but Steady’s insurance policy was only for $25,000. State Farm also paid $5,000 for medical expenses.

After State Farm paid out the UIM benefits, Steady asked the trial court to deem his judgment satisfied. The trial court granted the request, leading to the appeal by State Farm.

Steady claimed State Farm couldn’t appeal because it wasn’t a party at the time judgment was entered against him, but Indiana’s Uninsured and Underinsured Motorist Coverage Act allows the company to be subrogated to the proceeds of the judgment against Steady. Therefore, State Farm has standing to appeal, the court held.

“When an insurer compensates its insured due to a third party tortfeasor being underinsured, the third party tortfeasor’s liability is not reduced. Rather, Indiana Code section 27-7-5-6(a) provides that the insurer may enforce its insured’s right of recovery against the third-party tortfeasor, either in its own name or in the name of its insured, and that the insurer shall then be subrogated to the proceeds of any settlement or judgment that results,” Chief Judge Margret Robb wrote. “To allow a judgment entered against the third-party tortfeasor to be deemed satisfied due to the insurer’s underinsured motorist payment to its insured would undermine the purpose of this statute.”

The case, State Farm Mutual Automobile Insurance Company, Alan Steady v. Richard Kern, 49A02-1201-CT-34, goes back to the trial court for further proceedings.

 

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  1. Im very happy for you, getting ready to go down that dirt road myself, and im praying for the same outcome, because it IS sometimes in the childs best interest to have visitation with grandparents. Thanks for sharing, needed to hear some positive posts for once.

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  5. For the record no one could answer the equal protection / substantive due process challenge I issued in the first post below. The lawless and accountable only to power bureaucrats never did either. All who interface with the Indiana law examiners or JLAP be warned.

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