Pendleton v. Aguilar

• Decision Date: 19 May 2005
• Docket Number: No. 45A03-0404-CV-153.,45A03-0404-CV-153.
• Citation: 827 N.E.2d 614
• Parties: Julian PENDLETON, Appellant-Plaintiff, v. Manuel AGUILAR and National Transportation Corp., Appellees-Defendants.
• Court: Indiana Appellate Court

827 N.E.2d 614

Julian PENDLETON, Appellant-Plaintiff, v. Manuel AGUILAR and National Transportation Corp., Appellees-Defendants.

No. 45A03-0404-CV-153.

Court of Appeals of Indiana.

May 19, 2005.

Rehearing Denied July 26, 2005.

David W. Holub, Ruman, Clements & Holub, P.C., Hammond, IN, Attorney for Appellant.

Kristin A. Mulholland, Steven P. Polick, Steven P. Polick & Associates Highland, IN, Attorneys for Appellees.

OPINION

RILEY, Judge.

STATEMENT OF THE CASE

Appellant-Plaintiff, Julian Pendleton (Pendleton), appeals the trial court's Order granting Appellees'-Defendants', Manuel Aguilar and National Transportation Corporation (collectively, Aguilar), Motion for Set-off for workers' compensation benefits. On cross-appeal, Aguilar appeals the trial court's Order denying his Motion to Correct Error.

We reverse, in part, and remand, in part.

ISSUES

Pendleton raises three issues on appeal, which we consolidate and restate as the following two issues:

(1) Whether the trial court erred in entering a post-verdict set-off of collateral source reimbursement where evidence of the collateral source reimbursement was presented to a jury and the jury was instructed on non-duplication of recovery; and

(2) Whether the trial court violated the provision of the Illinois Guaranty Fund by entering a post-verdict set-off of collateral source reimbursements.

On cross-appeal, Aguilar raises three issues, which we consolidate and restate as the following two issues:

(1) Whether the trial court erred in denying Aguilar's Motion to Correct Error requesting a new trial pursuant to Indiana Trial Rule 59(J); and

(2) Whether the trial court erred in denying the introduction of the collateral source reimbursement made to Pendleton by his employer's uninsured motorist carrier.

FACTS AND PROCEDURAL HISTORY

On April 30, 1999, Pendleton, a Florida resident, was involved in a truck accident when the tractor trailer he was operating was struck from the rear on westbound I-80 near Hammond, Indiana, by Aguilar, an Illinois resident. At the time, Pendleton was employed by Timely Transport; Aguilar was working for National Transportation Corporation. As a result of this accident, Pendleton suffered a nerve-impinging disc herniation and has been unable to return to work.

On February 1, 2001, Pendleton filed a complaint for damages against Aguilar and National Transportation Corporation. During the pendency of the action, the Commonwealth Court of Pennsylvania declared National Transportation Corporation's insurance carrier, Reliance Insurance Company (Reliance), insolvent. The Pennsylvania Court ordered the appointed liquidator to make arrangements for payment of claims against the insolvent Reliance through the appropriate insurance guaranty funds.

On September 8, 2003, Aguilar filed his Motion to Enforce the Non-Duplication of Recovery Provisions of the Illinois Insurance Guaranty Act (Illinois Act), requesting the trial court to determine the amount of the set-offs which would apply pursuant to the Illinois Act as well as to rule on the admissibility of evidence of collateral source payments made to Pendleton under the Indiana Collateral Source Rule. On October 9, 2003, after receiving Pendleton's Response, the trial court held a hearing on Aguilar's motion. Thereafter, on October 29, 2003, the trial court ordered, in pertinent part,

1. This case is against a trucking company and its driver, not a guaranty fund; consequently, issues of insurance priority and set-off are not now properly before this court.

2. Until a judgment is obtained, the issue of set-off is not ripe for decision by this court.

3. Any rulings on set-off will be issued by this court after a judgment is obtained and after a hearing is held post-judgment to address the set-off issue.

4. The admissibility of collateral source payment evidence shall be decided by this court during the course of trial pursuant to the Collateral Source Rule which is codified in Indiana Code § 34-44-1-2.

(Appellant's App. p. 112).

On November 3 through November 5, 2003, a jury trial was held on the issue of damages only. During the trial, Pendleton introduced evidence of collateral source payments, i.e., his receipt of Florida worker's compensation payments in the amount of $122,877.34. In closing argument, Pendleton sought recovery for pain and suffering, future lost earnings, and all other non-reimbursed damage elements, for a total amount of $570,000. Prior to deliberation, the trial court instructed the jury that "the plaintiff may not recover more than once for any item of loss sustained." (Appellant's App. p. 111). At the close of the trial, the jury returned a damage award of $422,000 and assessed Aguilar to be 80% at fault. That same day, the trial court entered judgment against Aguilar in the amount of $337,600.

On December 5, 2003, Aguilar filed a post-trial Motion for Set-Off, asking the trial court to enter a post-judgment set-off of $122,877.34 in paid benefits. On the same date, Aguilar also filed his Motion to Correct Error, alleging an excessive verdict. After Pendleton filed a response to both motions, the trial court heard arguments on February 2, 2004. Subsequently, in its Order of March 2, 2004, the trial court denied Aguilar's Motion to Correct Error but granted his Motion for Set-off, reducing Pendleton's damage award to $164,722.66. This Order states in pertinent part that:

The court, having taken under advisement [Aguilar's] Motion to Correct Errors and Motion for Set-offs, now finds and orders as follows:

1. The jury verdict was within the scope of the evidence presented at trial and there is no basis for granting [Aguilar's] Motion to Correct Errors.

2. [Aguilar's] Motion to Correct Errors should be and is hereby DENIED.

3. [Aguilar] [was] insured by [Reliance].

4. On October 3, 2001, the Commonwealth Court of Pennsylvania entered an order declaring [Reliance] insolvent. The Pennsylvania court ordered the liquidator in that case to make arrangements for payment of claims by and through the appropriate guaranty associations.

5. Every state in the country has created an insurance guaranty fund in order to protect claimants and policyholders if insurance carriers become insolvent. The Indiana fund was created by Indiana Code § 27-6-8-1 et seq. The Illinois fund was created in the Illinois Insurance Code Article XXXIV Illinois Guaranty Fund, 215 UKCS 5. Both acts contain very similar provisions.

6. Both the Indiana and Illinois Acts state that recovery in this case should be made from the guaranty association of the place of the residence of the insured.

7. National Transportation Corporation is an Illinois corporation and is the named insured under the Reliance policy. Therefore, the [Illinois Act] applies to this case and should be used to determine whether there is a non-duplication of recovery in this case.

8. In order to make a claim against the Illinois Insurance Guaranty Fund (hereinafter "Fund"), a claimant must prove that he or she has a "covered claim" as it is defined in the state. "`Covered claim' means an unpaid claim for a loss arising out of and within the coverage of an insurance policy to which this Article applies and which is in force at the time of the occurrence giving rise to the unpaid claim, ..." 215 ILCS 5/534.3(a).

9. The Illinois Act states that the amount payable for a covered claim is limited by the "other insurance" statute section which requires that an insured or claimant be required to first exhaust all other insurance coverage available. Upon payment by any other insurer, the Fund's obligation to pay a covered claim "shall be reduced by the amount recovered or recoverable, which ever is greater, under such insurance policy. Where such other insurance policy provides uninsured or underinsured motorists coverage, the amount recoverable shall be deemed to be the full applicable limits of such coverage." 215 ILCS 5/546(s). The liability of the insured under the insolvent's insurer's policy is also reduced. "To the extent that the Fund's obligation under Section 537.2 is reduced by application of this Section, liability of the person insured by the insolvent's insurer's policy for the claim shall be reduced in the same amount." Id.

10. The Illinois Act also provides that a claimant having a worker's compensation claim which may be recovered from an Insurance Guaranty Fund must first seek recovery from the Fund of his or her residence. "Any recovery under this Article should be reduced by the amount of the recovery from any other Insurance Guaranty Fund or its equivalent." 215 ILCS 5/546(b).

11. [Pendleton] received payments totaling $122,877.34 for a worker's compensation claim from America All-Risk Loss Administrators on behalf of the Florida Workers' Compensation Insurance Guaranty Fund.

12. At the time of the accident, [Pendleton] was insured for uninsured motorist coverage under policy 1STP20000146 and/or 1STP20001454 by InterCargo Insurance Company with coverage in the amount of $40,000.00.

* * *

14. The request of [Aguilar] for set-off from the jury's verdict herein in accordance with the non-duplication of recovery provision of the Illinois Insurance Guaranty Fund Act, should be and is hereby GRANTED.

15. The court now finds that [Aguilar] is entitled to set-offs in the total amount of $172,877.34 and accordingly the jury verdict is ordered reduced by said amount.

16. The liability of [Aguilar] herein shall be limited to $164,722.66 and judgment for said amount shall be entered and any previous judgment entered is hereby vacated and set aside.

(Appellant's App. pp. 19-21).

Pendleton now appeals. Additional facts will be provided as necessary.

DISCUSSION AND DECISION

I. Pendleton's Appeal

Pendleton contends that Indiana's statutory treatment of collateral source evidence allows the trier-of-fact to determine the damage award a plaintiff is entitled to, thereby taking into account any collateral payments a...