White v. Allstate Ins. Co.

• Decision Date: 11 May 1992
• Docket Number: No. 43A03-9111-CV-357,43A03-9111-CV-357
• Citation: 591 N.E.2d 586
• Parties: Harvey WHITE and Carolyn White, Appellants-Plaintiffs, v. ALLSTATE INSURANCE COMPANY, Appellee-Defendant.
• Court: Indiana Appellate Court

Page 586

591 N.E.2d 586

Harvey WHITE and Carolyn White, Appellants-Plaintiffs, v. ALLSTATE INSURANCE COMPANY, Appellee-Defendant.

No. 43A03-9111-CV-357.

Court of Appeals of Indiana,

Third District.

May 11, 1992.

Robert W. Miller, Miller & Miller, Elkhart, for appellants-plaintiffs.

Robert J. Konopa, Robert G. Devetski, Butler, Simeri, Konopa, & Laderer, South Bend, for appellee-defendant.

HOFFMAN, Judge.

Appellants-plaintiffs Harvey and Carolyn White appeal the trial court's grant of summary judgment to Allstate Insurance Company, appellee-defendant.

The facts relevant to this appeal disclose that on December 4, 1988, the appellant, Harvey White (White), was involved in an automobile accident from which he suffered personal injuries. At the time of the accident, White was driving an automobile owned by his employer, who had automobile insurance coverage through Cigna Property and Casualty Companies (Cigna). At the same time, White had personal automobile insurance with the appellee, Allstate Insurance Company (Allstate).

White claimed that a hit-and-run driver had collided with the vehicle he was driving. Each automobile insurance policy, Cigna's and Allstate's, provided uninsured coverage for hit-and-run accidents. Under each policy, the uninsured (hit-and-run) coverage required actual physical contact between the hit-and-run vehicle and the insured vehicle:

Cigna's Policy:

"A. COVERAGE

1. We will pay all sums the 'insured' is legally entitled to recover as damages from the owner or driver of an 'uninsured motor vehicle.'

* * * * * *

F. ADDITIONAL DEFINITIONS

* * * * * *

4. 'Uninsured motor vehicle' means a land motor vehicle or trailer: ...

d. Which is a hit-and-run vehicle and neither the driver nor owner can be identified. A hit-and-run vehicle is one that causes 'bodily injury' to an 'insured' by hitting the 'insured,' a covered 'auto' or a vehicle an 'insured' is 'occupying.' " (Emphasis added.)

Allstate's Policy:

"We will pay damages for bodily injury or property damage which an insured person is legally entitled to recover from the owner or operator of an uninsured auto.

* * * * * *

An uninsured auto is:

* * * * * *

4. a hit-and-run motor vehicle which causes bodily injury to an insured person by physical contact with the insured person or with a vehicle occupied by that person." (Emphasis added.)

Allstate's coverage was secondary to Cigna's coverage.

On May 11, 1990, White and his wife filed a complaint against Cigna in state court. Based on diversity of citizenship and the amount in controversy exceeding $50,000.00, Cigna requested that the matter be transferred to the United States District Court, Northern District of Indiana (District Court). The petition was granted.

Allstate was notified by the Whites on May 23, 1990, that their damages exceeded Cigna's $60,000.00 coverage maximum. Therefore, they advised that they were making a claim under Allstate's uninsurance coverage for an additional $40,000.00. In a subsequent letter to Allstate, the Whites advised that they would be pursuing Allstate's full uninsured coverage amount of $100,000.00 due to the fact that White's injuries "are far in excess of $160,000.00." However, the Whites could only recover a total amount not exceeding $100,000.00.

The Whites did not add Allstate to the suit against Cigna. A separate suit was filed against Allstate in state court on September 12, 1990.

Following a bench trial of the Whites' lawsuit against Cigna, the District Court rendered a judgment in March 1991, in favor of Cigna finding that "there was no hit and run driver." The Court's order contained findings of fact and conclusions of law and thoroughly discussed all evidence presented to the Court by both parties.

In July 1991, Allstate moved for summary judgment. Allstate contended that the Whites were prohibited from relitigating the issue of whether a hit-and-run driver had actually hit White's car. The trial court granted summary judgment to Allstate.

One issue is dispositive of this appeal: whether the Whites are barred by the doctrine of issue preclusion from relitigating the issue of whether a hit-and-run driver collided with the vehicle White was driving.

Allstate argues that a trial has already been had on whether White was hit by a hit-and-run driver; the trial court determined there was no hit-and-run driver; Allstate's policy contains the same prerequisite of actual physical contact with the hit-and-run driver before recovering under the uninsurance clause; and, therefore, the Whites should be precluded from relitigating the liability issue since it was decided adversely to them in District Court. The Whites, on the other hand, claim that Allstate has not met the requirements for asserting issue preclusion, namely, there is neither identity of parties nor mutuality of estoppel.

Issue preclusion is a branch of res judicata that is also referred to as collateral estoppel or estoppel by verdict or finding. Town of Flora v. Indiana Service Corp. (1944), 222 Ind. 253, 257, 53 N.E.2d 161, 163. In Town of Flora, the Court explained when the doctrine applies:

"where the causes of action are not the same, but where some fact or question has been determined and adjudicated in the former suit, and the same fact or question is again put in issue in a subsequent suit between the same parties. In such cases the former adjudication of the fact or question, if properly presented and relied on, will be held conclusive on the parties in the latter suit, regardless of the identity of the causes of action, or the lack of it, in the two suits. When the second action between the same parties is on a different cause of action, claim, or demand, it is well settled that the judgment in the first suit operates as an estoppel only as to the point or question actually litigated and determined, and not as to other matters which might have been litigated and determined. In such cases the inquiry must always be as to the point or question actually litigated and determined in the original action."

Id.

One requirement for issue preclusion in Indiana has been that the parties to the subsequent suit must be identical to the parties in the first suit. Privies of parties, Town of Flora, Id. at 256, 53 N.E.2d 161, and real parties in interest, In re Estate of Nye v. First Natl. Bank et al. (1973), 157 Ind.App. 236, 299 N.E.2d 854, have also been accepted as qualifying under this requirement.

The second requirement is mutuality of estoppel. "Estoppel is mutual if the one taking advantage of the earlier adjudication would have been bound by it had it gone against him." Tobin v. McClellan (1947), 225 Ind. 335, 345, 73 N.E.2d 679, 683;

State v. Speidel (1979), 181 Ind.App. 448, 453, 392 N.E.2d 1172, 1175.

Indiana has expanded the requirements of mutuality and privity when issue preclusion is applied defensively. This exception provides "namely, that they are not necessary where the liability of the defendant ... is dependent on or derived from the liability of one who was exonerated in an earlier suit by the same plaintiff on the same facts."

Mayhew, Huston v. Deister et al. (1969), 144 Ind.App. 111, 122, 244 N.E.2d 448, 454;

Sullivan v. American Cas. Co. of Reading, Pa. (1991), Ind.App., 582 N.E.2d 890, 897.

This derivative relationship is typically found between master and servant, principal and agent, and indemnitor and indemnitee. Thus, the exception applies to defendants sharing some sort of mutually dependent relationship. Hockett v. Breunig (1988), Ind.App., 526 N.E.2d 995, 1001.

These requirements of privity and mutuality have been abolished in federal courts, as well as in most state courts. 1B Moore's Federal Practice Sec. 0.441. The California Supreme Court repudiated the mutuality requirement in Bernhard v. Bank of America (1942) 19 Cal.2d 807, 122 P.2d 892, finding no compelling reason for the party asserting the plea of res judicata to have been a party, or in privity with a party, to the earlier litigation. The beneficiaries in Bernhard had sued the executor of Clara Sather's estate, Charles Cook, for taking money from the estate and depositing it in his personal account. The court found that Clara Sather had authorized the transfer of her money as a gift to Charles Cook during her lifetime. Thereafter, the beneficiaries sued the successor bank, Bank of America, which had transferred the money out of Clara Sather's account to Charles Cook. In finding that the Bank could assert issue preclusion, the court noted that other jurisdictions had abandoned the requirement of mutuality of estoppel and had confined the requirement of privity to the party against whom the plea of res judicata is asserted. Three reasons for the court's decision were discussed: the two actions contained identical issues, the earlier action had resulted in a final judgment on the merits, and the party against whom the plea was asserted was a party, or the privy of a party, in the prior action.

These latter criteria were utilized in B.R. DeWitt, Inc. v. Hall (1967) 19 N.Y.2d 141, 278 N.Y.S.2d 596, 225 N.E.2d 195, in allowing the offensive use of collateral estoppel. Hall, the defendant, had collided with a cement mix truck operated by Farnum and owned by plaintiff, B.R. DeWitt. Farnum sued Hall and was awarded a judgment of $5,000.00. Subsequently, plaintiff sued Hall requesting compensation for the property damage to the truck. Plaintiff asserted res judicata on the issue of Hall's liability and the court agreed. The court, in following Bernhard, adopted the reasoning in an earlier case that "[w]here a full opportunity has been afforded to a party to the prior action and he has failed to prove his freedom from liability or to establish liability or culpability on the part of another, there is no reason for permitting him to retry these issues." Id. at 146, 278 N.Y.S.2d at 600, 225 N.E.2d at 197. Numerous other state and federal cases were cited in support of its...