COA: School’s insurance doesn’t cover student who injured teacher

July 20, 2016

Although the Indiana Court of Appeals disagreed with parts of a trial court’s ruling in an insurance coverage dispute, the judges affirmed the ruling that the insurance policy of a school where a student injured her teacher during class is not the primary insurance in the teacher’s personal injury suit.

Paul Chandler took his car to a career center operated by Michigan City Area Schools in May 2012 for repairs. The school provides vocational training to its students. Sydney Mireles was a student in the class and received credit for the course. While driving Chandler’s car into the garage during class, she hit and injured teacher Leon Klosowski. He then sued Mireles.

At issue is whose insurance is primary and whose is excess in the personal injury suit. Chandler has a personal auto policy with Milbank Insurance Co. Mireles had insurance through Geico Indemnity Co., and the school had a commercial auto/garage keepers insurance policy from Indiana Insurance Co.

Milbank filed a complaint for declaratory judgment primarily against Indiana Insurance, claiming its policy is excess and it would only offer a defense and indemnity to Mireles after the limits of the Indiana Insurance policy were exhausted. Indiana Insurance moved to have the court declare she is not covered under its policy.

Both parties moved for summary judgment. The trial court ruled in August 2015 that Chandler’s car was covered by the school’s policy, but the policy does not provide Mireles with liability coverage for a claim from another agent of the school, such as her teacher.

Milbank filed a notice of appeal in the trial court 30 days later, but never filed with the appellate clerk’s office. Two months later, it filed a “motion to clarify,” alleging the court never ruled whether Milbank is the primary insurance. The trial court entered an order declaring it was, and then Milbank filed an appeal with the clerk’s office in November 2015.

The appellate court found that Milbank’s appeal is untimely because the August ruling was a final judgment. Thus, it had 30 days to file notice in the clerk’s office, but did not. The “motion to clarify,” which the judges treated as a motion to correct error, did not reset the clock for filing an appeal, Judge Margret Robb wrote.

But the COA still considered the parties’ arguments and upheld the trial court. The judges disagreed with the trial court that Mireles is covered under the school’s policy. Per the language of the agreement, she would have had to use a car the school owned, hired or borrowed to be covered, or she had to be a volunteer worker of the school. Since she was earning credit and required to be in the class, she is not a volunteer, the judges held.

“We agree, however, with the trial court’s result: the Milbank policy is primary,” Robb wrote in Milbank Insurance Company v. Indiana Insurance Company, et al., 46A03-1512-PL-2096.


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