Northern Indiana Public Serv. Co. v. Bloom, 02S04-0505-CV-204.
| Decision Date | 18 May 2006 |
| Docket Number | No. 02S04-0505-CV-204.,02S04-0505-CV-204. |
| Citation | 847 N.E.2d 175 |
| Parties | NORTHERN INDIANA PUBLIC SERVICE COMPANY, Appellant (Defendant below), v. John S. BLOOM, as Personal Representative of the Estate of Fred J. Zurbrick, Deceased, Charmaine R. Minniefield, Individually and as Mother and Next Friend for Rayven Minniefield-Bryant and Dienna Minniefield, Minors, and Deniece Woodson, Appellees (Plaintiffs below). |
| Court | Indiana Supreme Court |
Paul A. Rake, John M. McCrum, Robert J. Feldt, Hammond, for Appellant.
Dane L. Tubergen, James J. Shea, Sr., Daniel J. Palmer, Sherrill Wm. Colvin, George Sistevaris, Fort Wayne, for Appellees.
We hold that self-insurers are statutorily liable to pay damages caused by the negligence of permissive users of their vehicles up to the minimum amounts required by the Financial Responsibility Act. We further hold that a self-insured employer who furnishes its vehicle for use by an employee has a duty to inform its employee of the limits of the employer's statutory obligation to third parties and the employee's potential exposure for negligent operation of the vehicle. We conclude that failure to perform this duty imposes an obligation to indemnify and defend the employee against liability arising out of the employee's permissive use of the employer's vehicle, and precludes the employer from asserting indemnity or subrogation rights against the employee.
Northern Indiana Public Service Company ("NIPSCO") employed Fred Zurbrick and allowed him to drive a NIPSCO owned truck to and from work. Under Indiana's Financial Responsibility Act, Indiana Code sections 9-25-1-1 through 9-25-9-7, NIPSCO self-insured the truck. The Bureau of Motor Vehicles' regulations provide that a self-insurer must deposit $40,000 for the first self-insured vehicle, and $20,000 for each additional vehicle up to a maximum deposit of one million dollars. NIPSCO apparently had at least 49 self-insured vehicles because it had deposited one million dollars with the Bureau. NIPSCO also had an excess policy covering its liability in excess of one million dollars per occurrence.
While driving NIPSCO's truck, Zurbrick was killed in an accident involving a vehicle driven by Charmaine Minniefield. On behalf of herself and her injured passengers, Minniefield sued NIPSCO and Zurbrick's Estate, claiming negligence as to Zurbrick and respondeat superior as to NIPSCO.
NIPSCO counterclaimed against Minniefield for damage to its truck and cross claimed against the Estate for indemnification against any liability NIPSCO incurred as a result of Minniefield's claims. The Estate cross claimed against NIPSCO, seeking an order that NIPSCO defend and indemnify it against any liability to Minniefield.
In response to a flurry of summary judgment motions, the trial court (1) denied NIPSCO's motion for summary judgment on Minniefield's respondeat superior claim, concluding that there were genuine issues of material fact as to whether Zurbrick was acting within the scope of his employment at the time of the accident, (2) granted summary judgment to the Estate on its request for defense and indemnity from NIPSCO, and (3) denied NIPSCO's motion for summary judgment as to the Estate's liability to NIPSCO. The trial court ordered NIPSCO to pay for the Estate's legal defense and to pay any judgment that might be entered against the Estate up to the amount of NIPSCO's deposit with the Bureau of Motor Vehicles. The trial court concluded that the Estate would be covered by NIPSCO's excess liability insurance policy for judgments in excess of NIPSCO's deposit.
NIPSCO appealed the trial court's order requiring NIPSCO to defend and indemnify the Estate and denying NIPSCO's right to seek indemnification from the Estate. NIPSCO did not appeal the trial court's denial of its motion for summary judgment on the question of whether Zurbrick was acting within the scope of his employment at the time of the accident. The Court of Appeals upheld the trial court's order requiring NIPSCO to defend and indemnify the Estate, but reversed the part of the trial court's order capping NIPSCO's liability at one million dollars. N. Ind. Pub. Serv. Co. v. Bloom, 816 N.E.2d 887, 893 (Ind.Ct.App.2004). We granted transfer. Bloom, 831 N.E.2d 746 (Ind.2005).
NIPSCO appealed the trial court's interlocutory order under two distinct provisions of Indiana Appellate Rule 14. NIPSCO argued that an "[o]rder to pay for a defense and insurance coverage" was appealable as of right as an order "[f]or the payment of money" under Rule 14(A)(1). Additionally, pursuant to Rule 14(B), the trial court certified for appellate review both its order directing NIPSCO to defend and indemnify the Estate and its order denying NIPSCO's right to indemnification from the Estate. The Court of Appeals did not indicate the jurisdictional ground on which it heard NIPSCO's appeal, and the Estate has not challenged the appealability of the trial court's order. We do not agree that an order to indemnify is an order "for the payment of money" for purposes of Appellate Rule 14(A)(1) because it is not specific as to the amount and simply describes a legal relationship that may have financial consequences. We do accept the Court of Appeals' opinion on the merits as an implicit acceptance of discretionary interlocutory appeal under Rule 14(B).
When reviewing a grant or denial of summary judgment the standard of review is the same as the standard governing summary judgment in the trial court: whether there is a genuine issue of material fact, and whether the moving party is entitled to judgment as a matter of law. Ind. Univ. Med. Ctr., Riley Hosp. for Children v. Logan, 728 N.E.2d 855, 858 (Ind. 2000). Summary judgment should be granted only if the evidence designated pursuant to Indiana Trial Rule 56(C) shows that there is no genuine issue of material fact and the moving party deserves judgment as a matter of law. Gunkel v. Renovations, Inc., 822 N.E.2d 150, 152 (Ind.2005). All evidence must be construed in favor of the opposing party, and all doubts as to the existence of a material issue must be resolved against the moving party. Tibbs v. Huber, Hunt & Nichols, Inc., 668 N.E.2d 248, 249 (Ind. 1996).
The trial court concluded that under the Financial Responsibility Act self-insured entities are liable for damages arising from the negligent operation of a self-insured vehicle by a permissive user. NIPSCO and the Estate agree that Zurbrick was a permissive user of NIPSCO's vehicle at the time of the accident. Accordingly, the trial court further concluded that if Zurbrick was negligent, NIPSCO is statutorily liable to Minniefield for that negligence even if Zurbrick's actions were outside the scope of employment.
NIPSCO concedes that, as a self-insured entity, it is statutorily liable to Minniefield for damages caused by the negligence of a permissive user of NIPSCO's vehicle. NIPSCO further concedes that under the doctrine of respondeat superior it may have unlimited liability for the negligence of its employee in the scope of employment but argues that its liability for the negligence of a permissive user under the Act is limited to the statutory minimum amounts required by section 9-25-4-5 of the Financial Responsibility Act. Specifically, NIPSCO claims that on the facts of this case its liability to Minniefield is limited to $60,000.
Section 9-25-4-4(a) of the Act provides in relevant part that financial responsibility is in effect on a vehicle when (1) a "motor vehicle liability insurance policy," (2) self-insurance, or (3) a bond "provides the ability to respond in damages for liability arising out of the ownership, maintenance, or use of the motor vehicle in amounts at least equal to those set forth in section 5 ...." Section 5 provides in relevant part:
The minimum amounts of financial responsibility are as follows:
(1) Subject to the limit set forth in subdivision (2), twenty-five thousand dollars ($25,000) for bodily injury to or the death of one (1) individual.
(2) Fifty thousand dollars ($50,000) for bodily injury to or the death of two (2) or more individuals in any one (1) accident.
(3) Ten thousand dollars ($10,000) for damage to or the destruction of property in one (1) accident.
Ind.Code § 9-25-4-5. NIPSCO argues that its potential liability to Minniefield as a self-insurer is limited to $60,000, the sum of the amounts in subsections (2) and (3) of section 5 for an accident involving injury to more than one person and damage to a vehicle.
The Court of Appeals has consistently held that contractual insurance need not provide coverage for more than the section 5 amounts. See Fed. Kemper Ins. Co. v. Brown, 674 N.E.2d 1030, 1036 (Ind.Ct. App.1997), trans. denied; Safeco Ins. Co. v. State Farm Mut. Auto. Ins. Co., 555 N.E.2d 523, 524-25 (Ind.Ct.App.1990), trans. denied ( the statutory predecessor to the present section 5). Whether a self-insurer's obligation is limited by section 5 is a question of first impression in Indiana. However, NIPSCO's contention finds support in authority from other jurisdictions. Several courts have held that self-insurers subject to mandatory uninsured and underinsured motorist statutes are obligated to provide uninsured and underinsured motorist coverage only in the statutorily mandated minimum amounts.1 Similarly, in disputes between a self-insurer and a permissive user's insurance carrier, courts which have concluded that self-insurance is "other insurance" within the meaning of the carrier's policy have concluded that the coverage provided by the self-insurer as an "other insurer" is limited to minimum statutory amounts in state financial responsibility laws.2 There is also at least one case that has held that a self-insurer's liability to...
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