Cincinnati Ins. Co. v. Trosky

• Decision Date: 25 November 2009
• Docket Number: No. 29A02-0902-CV-148.,29A02-0902-CV-148.
• Citation: 918 N.E.2d 1
• Parties: CINCINNATI INSURANCE COMPANY, Appellant-Plaintiff/Counterdefendant, v. James and Jan TROSKY, as personal representatives of the Estate of Kyle Trosky, and individually as parents of Kyle Trosky, Kaitlin A. Culpepper, American Select Insurance Company, State Farm Mutual Insurance Company, Pamela Brown, Stewart Brown, and State Farm Fire & Casualty Company, Appellees-Defendants/Counterplaintiffs.
• Court: Indiana Appellate Court

918 N.E.2d 1

CINCINNATI INSURANCE COMPANY, Appellant-Plaintiff/Counterdefendant, v. James and Jan TROSKY, as personal representatives of the Estate of Kyle Trosky, and individually as parents of Kyle Trosky, Kaitlin A. Culpepper, American Select Insurance Company, State Farm Mutual Insurance Company, Pamela Brown, Stewart Brown, and State Farm Fire & Casualty Company, Appellees-Defendants/Counterplaintiffs.

No. 29A02-0902-CV-148.

Court of Appeals of Indiana.

November 25, 2009.

Richard R. Skiles, Janet M. Prather, Skiles Detrude, Indianapolis, IN, Attorneys for Appellant.

John F. Townsend, III, Townsend & Townsend, Charles A. Carlock, Laura S. Reed, Riley Bennett & Egloff, LLP, Indianapolis, IN, Attorneys for Appellees.

OPINION

FRIEDLANDER, Judge.

Cincinnati Insurance Company appeals from the trial court's order in a declaratory judgment action denying Cincinnati's and State Farm Fire's motions for summary judgment, and granting James and Jan Trosky's motion for summary judgment against Cincinnati and State Farm Fire, and granting Kaitlin Culpepper's cross-motion for partial summary judgment against Cincinnati. Cincinnati raises the following issue for our review: Did the trial court correctly conclude that excess underinsured motorist coverage (UIM coverage) in a personal liability umbrella policy was available where the underlying insurance policy provided UIM coverage, but no UIM benefits were paid because the total coverage limits had been exhausted instead by set-offs and liability payments?

We affirm.

In March 2004, Courtland Brown, Kyle Trosky, and Kaitlin Culpepper were returning to Indiana from a trip to Florida in a vehicle owned by Courtland Brown's parents, Pamela and Stewart Brown. Near Daytona Beach, Florida, Brown, Trosky, and Culpepper were involved in a vehicle collision with a vehicle owned by the Florida Highway Patrol (FHP) and operated by FHP Trooper Kurt Glaenzer. At the time of the accident, Culpepper was a permissive driver of the Browns' vehicle, and Brown and Trosky were passengers. As a result of the collision, Trosky was killed and Culpepper was injured.

FHP is a self-insured entity with a statutory limit of liability in the amount of $100,000 per claim, $200,000 per occurrence. Fla. Stat. Ann. § 768.28(5) (West 2006). Culpepper was insured by State Farm Mutual Automobile Insurance Company under her father's policy with liability limits of $100,000 per person, $300,000 per accident and UIM limits in the amount of $100,000 per person and $300,000 per accident. Trosky was insured under his policy with State Farm Auto with liability limits of $100,000 per person and $300,000 per accident, with UIM limits in the same amounts. The Browns had a policy with American Select Insurance Company (the ASIC) which had a total coverage limit of $500,000 applying to either liability or UIM coverage. Under the ASIC policy, Culpepper and Trosky qualified as insureds because they were occupants of a vehicle owned by the Browns at the time of the accident. The Troskys also had a personal liability umbrella policy (PLUP) with State Farm Fire which provided excess UIM coverage of $2,000,000. The Browns had a PLUP with Cincinnati which supplied excess UIM coverage of $2,000,000.

In January 2005, Culpepper filed her liability suit in Volusia County, Florida against the FHP alleging that FHP Trooper Glaenzer negligently operated the FHP patrol car. The FHP offered to pay its per person tort liability cap of $100,000 to Culpepper to settle her suit. ASIC, the Browns' insurer, advanced that amount to Culpepper in October of 2005, and the FHP reimbursed ASIC for that advance. Culpepper and the FHP executed a settlement agreement and Culpepper released the FHP for its alleged fault in the accident, excluding UM/UIM claims against ASIC and Cincinnati. State Farm Auto subsequently paid Culpepper the $100,000-per-person limit under the UIM coverage of her father's policy. Culpepper also received $35,000 under the ASIC policy's bodily injury liability coverage.

In February 2005, the Troskys, individually and as personal representatives of the Estate of Kyle Trosky, filed a liability suit in Volusia County, Florida against Culpepper and the Browns for the death of Kyle Trosky, alleging that Culpepper was negligent in the operation of the vehicle owned by the Browns, causing the accident. The Troskys later added the allegation that FHP Trooper Glaenzer was negligent in the operation of his FHP patrol car. In October 2005, State Farm Auto paid the Troskys $100,000, the per-person limit of Culpepper's father's liability coverage under his policy, and on December 5, 2005, the Troskys released all liability claims against Culpepper, excluding UM/UIM claims. FHP paid $90,000 to the Troskys, exhausting the FHP statutory limit of liability per occurrence,¹ and the Troskys released all claims against the FHP. The Troskys received $275,000 under the Browns' liability coverage through ASIC for the release of all claims, individually and on behalf of the estate, against Culpepper, the Browns, and ASIC.² The Trosky liability suit against Culpepper and the Browns was dismissed with prejudice on January 31, 2006. The Trosky liability suit against the FHP was dismissed with prejudice on January 30, 2006.

On September 21, 2005, Cincinnati filed a complaint for declaratory judgment in Hamilton County, Indiana. In March of 2006, the Troskys filed a complaint in Hamilton County, Indiana, against State Farm Auto seeking to recover under Kyle Trosky's State Farm Auto policy's UIM provision for his wrongful death alleging negligence on the part of the FHP. They also sought coverage under the State Farm Fire PLUP and the Cincinnati PLUP. Cincinnati was allowed to intervene in the Troskys' action against State Farm Auto. Id. at 10. State Farm Fire was allowed to intervene as a defendant in Cincinnati's declaratory judgment action. In April of 2007, the trial court granted Culpepper's motion for leave to file her counterclaim against Cincinnati and her cross-claims against the Troskys. Culpepper seeks to recover only under the Cincinnati PLUP.

Cincinnati moved for summary judgment against both Culpepper and Trosky as to their UIM claims and numerous motions and responses were filed by the parties. The trial court heard argument on the pending motions, issuing its order on December 11, 2008. Cincinnati now appeals.

Our supreme court has set forth the standard of review on a summary judgment ruling as follows:

On appeal, the standard of review for a summary judgment motion is the same as that used in the trial court: summary judgment is appropriate only where the evidence shows that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Ind. Trial Rule 56(C). All facts and reasonable inferences drawn from those facts are construed in favor of the non-moving party. Review of a summary judgment motion is limited to those materials designated to the trial court. T.R. 56(H). We must carefully review a decision on a summary judgment motion to ensure that a party was not improperly denied its day in court.

Reeder v. Harper, 788 N.E.2d 1236, 1240 (Ind.2003) (some citations omitted). The party seeking summary judgment bears the burden of making a prima facie showing, by specifically designated evidence, that there are no genuine issues of material fact and that it is entitled to judgment as a matter of law. Splittorff v. Fehn, 810 N.E.2d 385 (Ind.Ct.App.2004). Finally, the party appealing from a summary judgment decision bears the burden of persuading this court that the ruling was erroneous. Id.

The interpretation of an insurance policy is generally a question of law appropriate for summary judgment. Liberty Mut. Ins. Co. v. Michigan Mut. Ins. Co., 891 N.E.2d 99 (Ind.Ct.App.2008). We review an insurance policy under the same rules of interpretation applied to other contracts. Id. If the language is clear and unambiguous we will apply the plain and ordinary meaning. Id.

First, Cincinnati argues that Culpepper is not entitled to excess UIM coverage because the underlying State Farm Auto UIM per person coverage, $100,000, was the same amount paid to her by the FHP, $100,000. Culpepper also was an insured under the Browns' ASIC policy as a permissive driver of their insured vehicle. Culpepper seeks to recover from the Cincinnati PLUP, and the ASIC policy as the proper underlying insurance for this analysis and determination. Consequently, we need not address Cincinnati's argument about Culpepper's coverage under her father's State Farm Auto policy.

Cincinnati claims that the trial court erred by concluding that excess UIM coverage in the Cincinnati PLUP was available to the Troskys and Culpepper where the Browns' ASIC policy provided for UIM coverage, but no UIM benefits were paid because the total coverage limits had been exhausted by liability payments. More specifically, Cincinnati argues that UIM coverage was "denied" by ASIC because the total coverage limits were exhausted before any UIM payments were made on the underlying policy, thus relieving Cincinnati of its obligation to provide excess UIM coverage to the Troskys and Culpepper.

The ASIC policy provides as follows:

A. We will pay compensatory damages which an insured is legally entitled to recover from the owner or operator of an underinsured motor vehicle because of bodily injury sustained by an insured and caused by an accident.

Appellant's Appendix at 298 (emphasis in original).

The Cincinnati PLUP contains a follow form provision which reads as follows:

C. This insurance applies in excess of and only to the extent insurance is provided by the `underlying insurance' as scheduled in Schedule A-Schedule of Underlying Insurance and subject to all its terms, conditions and limitations other than the limit of insurance or any other provision not consistent with this policy.

Id. at 307. We believe that the trial court...