Northern Indiana Public Service Co. v. Bloom

• Decision Date: 27 October 2004
• Docket Number: No. 02A04-0309-CV-475.,02A04-0309-CV-475.
• Citation: 816 N.E.2d 887
• Parties: NORTHERN INDIANA PUBLIC SERVICE COMPANY, Appellant-Defendant, v. John S. BLOOM, as Personal Representative of the Estate of Fred J. Zurbrick, deceased, Appellee-Plaintiff.
• Court: Indiana Appellate Court

816 N.E.2d 887

NORTHERN INDIANA PUBLIC SERVICE COMPANY, Appellant-Defendant, v. John S. BLOOM, as Personal Representative of the Estate of Fred J. Zurbrick, deceased, Appellee-Plaintiff.

No. 02A04-0309-CV-475.

Court of Appeals of Indiana.

October 27, 2004.

Paul A. Rake, John M. McCrum, Robert J. Feldt, Eichorn & Eichorn, Hammond, IN, Attorneys for Appellant.

Dane L. Tubergen, James J. Shea, Sr., Daniel J. Palmer, Hunt, Suedhoff, Kalamaros, LLP, Fort Wayne, IN, Attorneys for Appellee.

OPINION

ROBB, Judge.

Northern Indiana Public Service Company (NIPSCO) employee Fred Zurbrick was killed in an automobile accident with Charmaine Minniefield while driving a NIPSCO vehicle home from work. Minniefield filed suit against NIPSCO and Zurbrick's estate (the "Estate") for injuries to herself and her passengers as well as property damage. NIPSCO filed dispositive motions arguing that it was not responsible for Zurbrick's actions because he was a commuter rather than an employee in the course of his employment. The trial court found that a genuine issue of material fact existed as to whether Zurbrick was a commuter at the time of the accident, but that NIPSCO was liable regardless of the outcome of that issue. The trial court found that NIPSCO was to pay for the Estate's legal defense and to act as the Estate's insurance carrier for up to one million dollars.¹ NIPSCO now appeals. We affirm in part and reverse in part.

Issues

NIPSCO raises three issues which we consolidate and restate as:

1. Whether the trial court properly found that NIPSCO was obligated to pay for the Estate's legal defense and to act as the Estate's insurance carrier; and

2. Whether the trial court properly found that NIPSCO was to indemnify the Estate for up to one million dollars.

Facts and Procedural History

Fred Zurbrick was employed at NIPSCO. On January 26, 2001, he was driving a NIPSCO-owned vehicle home from work when he was involved in an accident with Charmaine Minniefield. Zurbrick was killed in the accident and Minniefield and her passengers were injured. Minniefield, on behalf of herself and her passengers, filed her original claim against NIPSCO and NiSource, Inc.² on March 12, 2002, seeking recovery from NIPSCO as Zurbrick's employer pursuant to the theory of respondeat superior. NIPSCO responded and filed a counter-claim against Minniefield for damage to its vehicle. Minniefield amended her complaint to add the Estate as a defendant, also seeking recovery from the Estate for Zurbrick's alleged negligence. NIPSCO filed a cross-claim against the Estate on April 21, 2003, followed by a Motion for Summary Judgment regarding Minniefield's respondeat superior claim, arguing that Zurbrick was a commuter at the time of the accident and therefore, NIPSCO was not liable for his actions. The Estate then filed a cross-claim against NIPSCO. NIPSCO filed a Motion to Dismiss the Estate's cross-claim and the Estate responded by filing Motions for Summary Judgment on NIPSCO's cross-claim and the Estate's cross-claim. On August 13, 2002, the trial court held a hearing on these motions as well as NIPSCO's Motion for Summary Judgment disclaiming vicarious liability under respondeat superior.

The trial court ruled from the bench that a genuine issue of material fact existed as to whether Zurbrick was an employee acting in the course of his employment at the time of the accident. However, the trial court found that NIPSCO was liable for Zurbrick's negligence either way: if he was an employee acting in the course of his employment, NIPSCO was liable under respondeat superior and if he was a commuter, NIPSCO was liable under a permissive user theory. The trial court ordered NIPSCO to pay for the Estate's legal defense in the underlying case and to act as the Estate's insurance carrier up to one million dollars.³ This appeal ensued.

Discussion and Decision

I. Standard of Review for Motions for Summary Judgment

Summary judgment is appropriate only if 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). When determining the propriety of summary judgment, we use the same standard as the trial court. Caito Foods v. Keyes, 799 N.E.2d 1200, 1201 (Ind.Ct.App. 2003). We construe all facts and reasonable inferences to be drawn therefrom in favor of the non-movant. Id. When there is a genuine issue of material fact and the non-moving party is entitled to judgment as a matter of law, summary judgment is appropriate. Id. Where, as here, the material facts are essentially undisputed, out task is to determine whether the trial court properly applied the law to the facts. Id.

II. Defense Against Minniefield's Claims

NIPSCO first argues that the trial court erred in finding that NIPSCO was liable for the Estate's legal defense and was to act as insurance carrier for the Estate. NIPSCO argues that the Financial Responsibility Act merely requires that persons who register or operate vehicles in Indiana meet the minimum standards of financial responsibility with respect to the motor vehicle:

For the purposes of this article, financial responsibility is in effect with respect to a motor vehicle if:

(1) a motor vehicle liability insurance policy issued with respect to the vehicle;

(2) a bond executed with respect to the vehicle under section 7 of this chapter; or

(3) the status of the owner or operator of the vehicle as a self-insurer, as recognized by the bureau through the issuance of a certificate of self-insurance under section 11 of this chapter;

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 or 6 of this chapter.

Ind.Code § 9-25-4-4(a). As allowed by section 9-25-4-4(a)(3), NIPSCO elected to meet its financial responsibility obligation by qualifying as a self-insured. NIPSCO argues that the trial court erred in requiring it to defend and indemnify the Estate because, by doing so, the trial court treated NIPSCO like an insurance carrier rather than a self-insured party.

The caselaw on self-insured liability in Indiana is sparse. In City of Gary v. Allstate Insurance Company, 612 N.E.2d 115 (Ind.1993), our supreme court was presented with the question of whether a self-insured city was required to provide uninsured motorist coverage to an injured police officer. Luis Deluna, while on duty as a Gary Police Officer, was operating a city-owned police car when he was involved in an accident. Deluna sued the other driver for injuries he sustained in the accident. Upon learning that the other driver's insurance company was insolvent, Deluna amended his complaint to add his own insurance company, Allstate, as his policy included uninsured motorist coverage. In turn, Allstate filed a third party complaint against the city alleging that the city, as the self-insurer for the vehicle, was primarily liable for uninsured motorist coverage. Allstate filed a motion for summary judgment in the trial court and the trial court granted the motion. Id. at 116.

Upon appeal, our supreme court first examined the purpose of the Financial Responsibility Act:

The purpose of Indiana's financial responsibility law is to compel motorists to make provisions for the protection of other drivers on the road so that a driver may be protected from damages which might be inflicted on him by another. Although Indiana may be referred to as a compulsory financial responsibility state, a victim is not guaranteed compensation in every automobile accident. A person complies with the financial responsibility law by providing proof that the person is able to respond in damages for liability caused through the ownership of the motor vehicle in the statutory amount. The law permits proof of financial responsibility through the purchase of motor vehicle liability insurance, through bond, deposit of funds or securities, or self-insurance.

Id. at 117 (internal citations omitted). The court then examined the concept of self-insurance:

Self-insurance, however, is not insurance at all but, rather, is the "antithesis of insurance." In [American Nurses Association v. Passaic General Hospital, 192 N.J.Super. 486, 471 A.2d 66 (1984)] the court explained, "the essence of self-insurance, a term of colloquial currency rather than of precise legal meaning, is the retention of the risk of loss by the one upon whom it is directly imposed by law or contract." [Id.] at 69. As a result, the choice to self-insure does not mean that the party has "insurance," but rather that the party has chosen to retain the risk.

Id. at 118 (internal citations omitted).⁴ NIPSCO contends that this language supports their argument that the trial court improperly treated them like an insurance carrier. However, we believe that it supports the Estate's argument that, although being self-insured is not akin to being insured, it is a choice to retain the risk of liability and all that entails. To hold otherwise would be to state that a party may escape liability by self-insuring. See Barnes v. Whitt, 852 P.2d 1322, 1326 (Colo. Ct.App.1993) (holding that self-insurer must provide liability coverage to permissive users and pay a judgment obtained not just against itself because to hold otherwise "would place the self-insurer in a position superior to that of an owner who has ... purchas[ed] an insurance policy.").

Although NIPSCO argues that it should not have to defend the Estate against Minniefield's claims, we note the specific language of the Financial Responsibility Act which states that, for the requirements of financial responsibility to be met, the person or corporation must provide "the ability to respond in damages for liability arising out of the ownership, maintenance, or use of the motor vehicle...." Ind.Code § 9-25-4-4(a). The statute does not state that NIPSCO should be able to respond in damages only for its...