Beam v. Wausau Ins. Co.

• Decision Date: 27 February 2001
• Docket Number: No. 20A03-0003-CV-102.,20A03-0003-CV-102.
• Citation: 743 N.E.2d 1188
• Parties: Steven T. BEAM, Appellant-Plaintiff, v. WAUSAU INSURANCE COMPANY, Appellee-Defendant.
• Court: Indiana Appellate Court

743 N.E.2d 1188

Steven T. BEAM, Appellant-Plaintiff, v. WAUSAU INSURANCE COMPANY, Appellee-Defendant.

No. 20A03-0003-CV-102.

Court of Appeals of Indiana.

February 27, 2001.

Edmond W. Foley, South Bend, IN, Attorney for Appellant.

Edward L. Murphy, Diana C. Bauer, Fort Wayne, IN, Attorney for Appellee.

OPINION

RATLIFF, Senior Judge.

STATEMENT OF THE CASE

Plaintiff-Appellant Steven T. Beam ("Beam") appeals from the trial court's judgment reducing by the amount of set offs the jury's verdict of $701,371.00 in damages owed by Defendant-Appellee Wausau Insurance Company ("Wausau") in an action to receive underinsured motorist benefits.

We affirm.

ISSUES

I. Whether Ind.Code § 34-51-2-19, the lien reduction statute, applies to the judgment entered in Beam's favor.

II. Whether the trial court correctly reduced the judgment by setting off amounts recovered by Beam including those from the tortfeasor's insurance company and his own insurance company.

FACTS AND PROCEDURAL HISTORY

On August 20, 1993, Beam was traveling in his semi tractor within the course and scope of his employment with Fairmont Homes, Inc. ("Fairmont") on the Northwest Toll Road outside Chicago, Illinois, when he was injured in a motor vehicle accident. Beam swerved his semi tractor off the roadway in order to avoid colliding with a vehicle that was stalled in the right hand driving lane. The operator of the stalled vehicle was Amanda Vongsomchith ("Vongsomchith"). Beam incurred medical expenses in the amount of $310,206.56.¹

INSURANCE COVERAGE

Fairmont was self-insured for worker's compensation benefits for all amounts up to $350,000.00. Fairmont contracted with Wausau to provide Fairmont with worker's compensation insurance for all amounts above the $350,000.00 self-insured retention limit.

Vongsomchith maintained personal automobile liability insurance through Safeway Insurance Company ("Safeway"). The limits of that policy were $20,000.00. Beam also maintained personal automobile liability insurance, but through United Farm Bureau Insurance Company ("Farm Bureau"). Fairmont maintained automobile liability insurance at the time of the collision through Wausau with policy limits of $1,000,000.00.

Beam's personal automobile liability insurance coverage included a provision for underinsured motorist ("UIM") benefits in the amount of $100,000.00. Fairmont's automobile liability insurance policy with Wausau also provided for UIM coverage in the amount of $1,000,000.00.

PAYMENTS RECEIVED BY BEAM

Safeway paid its policy limits of $20,000.00 to Beam. Farm Bureau paid to Beam $80,000.00 under the UIM provision of its policy.

Fairmont paid for Beam's medical expenses of $310,206.56 as worker's compensation benefits. Wausau made disability payments to Beam in the amount of $86,945.14. Beam received a total of $397,151.70 in worker's compensation benefits.

Wausau refused to pay Beam UIM benefits under the policy issued to Fairmont. Beam filed suit against Wausau seeking to obtain benefits under the UIM provisions of the policy.

Wausau's policy contained the following relevant provisions:

A. COVERAGE

1. We will pay all sums the "insured" is legally entitled to recover as compensatory damages from the owner or driver of an "uninsured motor vehicle" or an "underinsured motor vehicle."...

* * *

C. EXCLUSIONS

This insurance does not apply to:

2. The direct or indirect benefit of any insurer or self-insurer under any workers compensation, disability benefits or similar law.

* * *

D. LIMIT OF INSURANCE

2. The Limit of Insurance under this coverage shall be reduced by all sums paid or payable by or for anyone who is legally responsible, including all sums paid under this Coverage Form's LIABILITY COVERAGE.

3. Any amount payable for damages under this coverage shall be reduced by all sums paid or payable under any workers' compensation, disability benefits or similar law.

* * *

(R. 24-25).

Prior to trial the parties stipulated that the jury was to determine liability and damages only, while any set offs from damages would be determined later by the trial court. On October 19, 1999, a jury found Vongsomchith to be fifty-five percent at fault, while Beam was forty-five percent at fault. The jury determined Beam's damages to be $701,371.00, which amount was reduced to judgment subject to modification by the trial court for set offs.

The trial court requested that the parties submit their arguments to the court on the issue of set offs in the form of a proposed order for the trial court's signature. On February 23, 2000, the trial court executed the proposed order submitted by Wausau and modified the judgment amount owed to Beam to $204,219.30.

This appeal ensued.

DISCUSSION AND DECISION

STANDARD OF REVIEW

The court entered special findings of fact and conclusions of law upon its own order. Ind. Trial Rule 52(A) provides in pertinent part, "[u]pon its own motion, or the written request of any party filed with the court prior to the admission of evidence, the court in all actions tried upon the facts without a jury ... shall find the facts specially and state its conclusions thereon." Because the record does not reflect that a party requested special findings and conclusions under T.R. 52(A), the court's order requiring proposed findings and conclusions by a date certain should be construed as the court's "own motion." See Coffin v. Hollar, 626 N.E.2d 586, 588 (Ind.Ct.App.1993)

. Had the court ordered proposed findings pursuant to a request by a party, entry of findings or the lack thereof would be reviewed depending upon whether the party made a written motion prior to admission of evidence. Id. Thus, special findings were entered in the present case upon the court's own motion. Id. at 589.

When such findings are entered, this court applies a two-tier standard of review. Id. The court first determines whether the evidence supports the findings and then determines whether the findings support the judgment. Id. Special findings and the judgment flowing therefrom will be set aside only if they are clearly erroneous. Id.

I. LIEN REDUCTION STATUTE

The lien reduction statute at issue provides as follows:

If a subrogation claim or other lien or claim that arose out of the payment of medical expenses or other benefits exists in respect to a claim for personal injuries or death and the claimant's recovery is diminished:

(1) by comparative fault; or

(2) by reason of the uncollectibility of the full value of the claim for personal injuries or death resulting from limited liability insurance or from any other cause;

the lien or claim shall be diminished in the same proportion as the claimant's recovery is diminished. The party holding the lien or claim shall bear a pro rata share of the claimant's attorney's fees and litigation expenses.

Ind.Code § 34-51-2-19.

As previously mentioned, Fairmont was self-insured for worker's compensation for amounts up to $350,000.00. Fairmont contracted with Wausau for worker's compensation coverage in excess of $350,000.00. Beam received a total of $397,151.70 in worker's compensation benefits from Fairmont and Wausau. The trial court set off the $397,151.70 in benefits already received by Beam from the jury's award of $701,371.00 making the final judgment amount $204,219.30.²

Beam claims that the trial court erred by allowing Wausau to set off the entire amount of worker's compensation benefits paid to Beam from the jury's award. Beam argues that the lien reduction statute should apply and that Wausau should be entitled to a credit against the judgment of only a percentage of the judgment recovered by Beam. In other words, Beam argues that Wausau's interest is a subrogation claim or a lien against the judgment and not, as Wausau argues, enforcement of a provision of the policy.

Subrogation has been defined as "the substitution of one person in the place of another with reference to a lawful claim, demand or right, so that he who is substituted succeeds to the rights of the other in relation to the debt or claim." BLACK'S LAW DICTIONARY 1279 (5th Ed.1979). See also, Home Owners' Loan Corp. v. Henson, 217 Ind. 554, 29 N.E.2d 873, 876 (1940). A lien is defined as a claim which one person holds on the property of another as a security for an indebtedness or charge. Hubble v. Berry, 180 Ind. 513, 103 N.E. 328, 330 (1913). In the present case, Wausau is not attempting to sue another person in Beam's stead. Furthermore, Wausau did not assert a lien on any of Beam's property. The posture of this case is insured, Beam, suing insurer, Wausau, for coverage under the terms of the policy issued. Since Wausau is liable to Beam for underinsured motorist coverage, Wausau is entitled to a credit against that amount for payments already made. Without the credits provided for in the policy, Beam would receive a greater compensation than that to which he was entitled.

The purpose of underinsured motorist (UIM) coverage is to provide individuals indemnification in the event negligent motorists are not adequately insured for damages that result from motor vehicle accidents. Veness v. Midland Risk Ins. Co., 732 N.E.2d 209, 212 (Ind.Ct.App.2000). Beam agrees that he is entitled to $701,371.00 in order to make him whole. Wausau contends that it should be able to set off the amounts Beam already has recovered from the underinsured liability. If Wausau were not allowed to set off those amounts Beam would receive a windfall to which he is not entitled.

The present case is very similar to the facts presented to a different panel of this court in Standard Mutual Ins. Co. v. Pleasants, 627 N.E.2d 1327 (Ind.Ct.App. 1994). Pleasants was injured in an accident and received $5,000.00 pursuant to the medical payments coverage of her automobile insurance policy with Standard Mutual. The tortfeasor had no automobile insurance coverage at the time of the accident. Standard Mutual and Pleasants disagreed regarding liability for the accident...