United Nat. Ins. Co. v. DePrizio, 94S00-9802-CQ-113
| Decision Date | 03 February 1999 |
| Docket Number | No. 94S00-9802-CQ-113,94S00-9802-CQ-113 |
| Citation | 705 N.E.2d 455 |
| Parties | UNITED NATIONAL INSURANCE COMPANY, Appellant (Plaintiff Below), v. Adele M. DePRIZIO, Appellee (Defendant Below). |
| Court | Indiana Supreme Court |
Joseph Stalmack, Hammond, Indiana, Attorney for Appellant.
Terrance L. Smith, Highland, Indiana, Attorney for Appellee.
Terrence DePrizio was fatally injured on the job by an uninsured motorist. DePrizio collected the policy limits from his employer's auto insurance carrier and sought to collect additional damages from its umbrella insurance carrier. The umbrella carrier responded that its policy did not cover excess uninsured motorist claims. In response to a certified question, 1 we hold that Indiana's underinsured motorist statute requires an umbrella policy that covers excess third-party automobile liability claims to also cover excess uninsured motorist claims.
Track Services, Inc., is a corporation based in Griffith, Indiana. As part of its operations, Track maintained a multi-tiered program of liability insurance, consisting of several primary policies and an umbrella liability policy. At the primary level, Track maintained insurance coverage for worker's compensation and employer's liability, comprehensive general liability, and automobile liability. Track's primary automobile liability coverage consisted of a "Business Auto Policy" issued by Liberty Mutual Insurance Group ("Liberty Mutual"), covering Track's automobiles, trucks, and trailers registered and/or garaged in the State of Indiana. The policy provided personal injury protection, comprehensive and collision physical damage coverage, medical payment coverage, as well as uninsured and underinsured motorist coverage.
The United National Insurance Company issued Track an "umbrella" policy for the period of November 1, 1995 to November 1, 1996. It was designed to cover Track's ultimate net loss in excess of the applicable underlying policy limits and could, in certain situations, provide primary insurance coverage over a prescribed limit to fill gaps in the insured's primary insurance program.
Terrance DePrizio was an officer of Track. While on Track business in December, 1995, he was fatally injured in an automobile accident with a fifteen-year-old driver insured by State Farm Insurance Company. Shortly after the accident, State Farm tendered its $100,000 policy limits to the Estate of Terrence DePrizio. Because the damages resulting from Mr. DePrizio's death exceeded the limits of that policy, the Estate made a claim for underinsured motorist coverage under Track's Business Auto Policy. Liberty Mutual subsequently tendered the balance of its policy limits, reduced by the amount paid by State Farm, to the Estate. Finding that these payments were still insufficient to compensate for the loss of Mr. DePrizio, the Estate made a claim for excess coverage under Track's umbrella policy.
In a letter dated June 21, 1996, United National responded to this claim by advising the Estate that the umbrella policy did not provide uninsured, underinsured, personal injury, or any similar type coverage. Subsequently, United National filed suit in the United States District Court for the Northern District of Indiana, seeking a declaration that its policy does not provide uninsured/underinsured motorist coverage.
By order dated February 20, 1998, the U.S. District Court ruled that the umbrella policy did not provide underinsured coverage by its own terms. However, it found the issue of whether Indiana's uninsured/underinsured motorist statute applies to umbrella liability policies to be one of first impression in the State of Indiana and appropriate for certification. We agreed to accept the question by order dated March 6, 1998.
We are called upon here to determine whether a commercial umbrella liability insurance policy is an "automobile liability or a motor vehicle liability policy" which, under our underinsured motorist statute, must provide uninsured and underinsured motorist coverage. See Indiana Code § 27-7-5-2(a)(1998).
The task before us does not require an interpretation of the provisions of United National's umbrella policy. It is undisputed that the umbrella policy afforded coverage to the insured in excess of the limits of the underlying policies for liability to third persons. 2 Given that one such underlying policy was for automobile liability, this excess coverage clearly included liability arising out of the ownership, maintenance or use of a motor vehicle by or on behalf of the insured. 3 And, in earlier proceedings, the District Court interpreted the umbrella policy as one that does not expressly provide for uninsured/underinsured motorist protection. 4
Instead, the question for this Court is to interpret Indiana's uninsured/underinsured motorist statute:
The insurer shall make available, in each automobile liability or motor vehicle liability policy of insurance ... insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person and for injury to or destruction of property to others arising from the ownership, maintenance, or use of a motor vehicle, or in a supplement to such a policy, the following types of coverage:
(1) in limits for bodily injury or death and for injury to or destruction of property not less than those set forth in IC 9-25-4-5 5 under policy provisions approved by the commissioner of insurance, for the protection of persons insured under the policy who are legally entitled to recover damages from owners or operators of uninsured or underinsured motor vehicles because of bodily injury, sickness or disease, including death, and for the protection of persons insured under the policy who are legally entitled to recover from damages from owners or operators of uninsured motor vehicles for injury to or destruction of property resulting therefrom; or
(2) in limits for bodily injury or death not less than those set forth in IC 9-25-4-5 under policy provisions approved by the commissioner of insurance, for the protection of persons insured under the policy provisions who are legally entitled to recover damages from owners or operators of uninsured or underinsured vehicles because of bodily injury, sickness or disease, including death resulting therefrom.
The uninsured and underinsured motorist coverage must be provided by insurers for either a single premium or for separate premiums, in limits at least equal to the limits of liability specified in the bodily injury provisions of an insured's policy, unless such coverages have been rejected in writing by the insured.... Uninsured motorist coverage or underinsured motorist coverage may be offered by an insurer in an amount exceeding the limits of liability specified in the bodily injury and property damage liability provisions of the insured's policy.
Ind.Code § 27-7-5-2(a) (1998). Although the statute specifies that its provisions apply to "automobile liability or motor vehicle liability polic[ies] of insurance," it does not define these terms. 6 As a result, we must ascertain whether the statute contemplates the inclusion of umbrella liability policies in its purview, thereby requiring such policies that cover excess third party automobile claims also to provide uninsured and underinsured motorist coverage.
Ind.Code § 27-7-5-2(a) mandates that insurers provide uninsured/underinsured motorist coverage "in each automobile liability or motor vehicle liability policy ... insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person and for injury to or destruction of property to others arising from the ownership, maintenance, or use of a motor vehicle...." United National contends that its umbrella policy is not an "automobile liability policy" as envisioned in Ind.Code § 27-7-5-2. United National urges this court to adopt its view that "[u]mbrella coverage is only meant to protect the insured against claims from third parties from catastrophic loss and is fundamentally different from an automobile or motor vehicle liability policy." (Plaintiff's Br. at 17). United National predicates much of this distinction on the assertion that umbrella policies combine more than one type of liability insurance in a single policy, serving as comprehensive excess insurance that "insur[es] the policy holder in general rather than a particular automobile within the state." (Plaintiff's Br. at 6) Finding that the holder of such comprehensive excess insurance receives the protection of Indiana's uninsured/underinsured motorist statute, United National argues, goes beyond the intent of the legislature.
In support of these arguments, United National cites decisions from several jurisdictions interpreting the scope of their respective uninsured/underinsured motorist statutes. Among them, United National directs us to a decision of the Connecticut Supreme Court which held:
We are persuaded that excess or umbrella policies ... serve a purpose distinct from that served by policies that exclusively cover liability from damages arising out of the ownership, maintenance or operation of an automobile. While the [insured's] personal excess policy provides, among other coverages, coverage for automobile liability, this does convert it into an "automobile liability policy" within the meaning of § 38-175c. Rather, the language of the personal excess policy indicates that it was intended as "excess insurance designed solely to protect [the insured] from the infrequent occurrence of catastrophic judgements against [them]."
Mass v. U.S. Fidelity and Guaranty Co., 222 Conn. 631, 610 A.2d 1185, 1191 (Conn.1992) (citation omitted).
To accept United National's position requires this Court to look beyond the plain language of the statute, interpret its provisions, and ultimately find that the Legislature intended to exclude umbrella policies from Indiana's...
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