Wildman v. National Fire and Marine Ins. Co.
| Decision Date | 10 December 1998 |
| Docket Number | No. 49A05-9803-CV-168,49A05-9803-CV-168 |
| Citation | 703 N.E.2d 683 |
| Parties | Terry WILDMAN, Appellant-Plaintiff, v. NATIONAL FIRE AND MARINE INSURANCE COMPANY, Appellee-Defendant. |
| Court | Indiana Appellate Court |
Terry Wildman appeals the grant of National Fire and Marine Insurance Company's (National) Motion for Judgment on the Pleadings raising the following issue for our review: Whether the trial court erred in determining that National was entitled to set-off, under its underinsured motorist policy, the entire amount of worker's compensation benefits Wildman received without deduction for the amount of benefits reimbursed to worker's compensation carrier.
We reverse and remand.
The facts are not disputed. On October 13, 1993, Wildman, while working as an employee of Police Escort Service, sustained injuries in an automobile-motorcycle collision. Wildman received $47,246.50 in worker's compensation benefits. A settlement agreement was reached between Wildman and the third party tort-feasor's insurance company for its policy limits of $100,000. From this amount, the worker's compensation carrier was paid $31,497.67 in satisfaction of its lien. 1
National provided uninsured/underinsured motorist liability coverage to Police Escort Service with policy limits of $300,000. Wildman filed an underinsured motorist claim against National asserting that his damages were greater than the $100,000 settlement he had received from the tortfeasor's insurer. An arbitrator found that Wildman had sustained damages of $205,000 and entered an award in such amount "subject to set-offs as provided for in [the policy]." Record at 11. After arbitration, Wildman filed a complaint for declaratory relief to enforce the arbitration award. National responded by filing a counterclaim, asserting that it was entitled to set-off all of the worker's compensation benefits Wildman received, $47,246.50, rather than the net amount Wildman retained after reimbursement to the worker's compensation carrier. National calculated its liability at $57,753.50 ($205,000.00 less $100,000 underlying coverage, less $47,246.50 worker's compensation benefits) and paid this amount. Wildman filed a reply, requesting that the trial court determine that National was entitled to set-off only the net amount of the worker's compensation benefits he retained after repayment to the carrier, $15,748.83, and to find that National owed him $89,251.17.
Wildman filed a motion for summary judgment arguing that the worker's compensation set-off provision in National's underinsured motorist policy was ambiguous and void as against public policy and that National was entitled to set-off only those worker's compensation benefits Wildman actually retained, not the amount of benefits he received and then repaid to the worker's compensation carrier pursuant to IC 22-3-2-13.
National filed a motion for judgment on the pleadings claiming that the set-off provision in the policy was clear and unambiguous and entitled it to set-off all amounts of worker's compensation benefits paid to Wildman ($47,246.50) instead of the amount retained after repayment to the worker's compensation carrier ($15,748.83). The trial court agreed and granted National's Motion for Judgment on the Pleadings. Wildman appeals.
Wildman argues that National should not be entitled to set-off the total amount of worker's compensation benefits he received, but only that remaining after repayment to the worker's compensation carrier, pursuant to IC 22-3-2-13. He challenges the set-off provision on multiple theories: first, the set-off provision is ambiguous; second, that it is void for being against public policy; third, the set-off provision is in derogation of a statute and, therefore, void; and last, the intent of the statute is inapplicable in situations where the amount of underinsured motorist coverage procured is larger than that statutorily prescribed.
A judgment on the pleadings pursuant to Indiana Trial Rule 12(C) is proper only when there are no genuine issues of material fact and when the facts shown by the pleadings clearly entitle the moving party to judgment. Wagle v. Henry, 679 N.E.2d 1002, 1004 (Ind.Ct.App.1997). A motion for judgment on the pleadings should be granted only when it is clear from the pleadings that the non-moving party cannot in any way succeed under the facts and allegations therein. Noblesville Redevelopment Comm'n v. Noblesville Assocs. Ltd. Partnership, 674 N.E.2d 558, 562 (Ind.1996). In reviewing the grant of a Rule 12(C) motion, we accept as true the well-pleaded material facts alleged in the pleadings, and our review is confined to information included in the pleadings. Id.
Insurance contracts are subject to the same rules of construction as are other contracts; construction of a written contract is a question of law. Terre Haute First Nat'l Bank v. Pacific Employers Ins. Co., 634 N.E.2d 1336, 1337 (Ind.Ct.App.1993). An unambiguous insurance policy must be enforced according to its terms, even those terms that limit an insurer's liability. Selleck v. Westfield Ins. Co., 617 N.E.2d 968, 970 (Ind.Ct.App.1993), trans. denied. An insurance contract will be deemed ambiguous only if reasonable people upon reading the contract would differ as to the meaning of its terms. Meridian Mut. Ins. Co. v. Cox, 541 N.E.2d 959, 961 (Ind.Ct.App.1989), trans. denied (1990). If an insurance contract is found to be ambiguous, it will be strictly construed against the insurer who drafted the contract. Id. An ambiguity is not established by the mere existence of a controversy or by the parties' differing interpretations of the contract terms. Id.
IC 22-3-2-13 sets forth the statutory subrogation rights of employers and compensation carriers. It states, in part:
"Whenever an injury ... for which compensation is payable under .... this article shall have been sustained under circumstances creating in some other person than the employer and not in the same employ a legal liability to pay damages in respect thereto, the injured employee, ... may commence legal proceedings against the other person to recover damages notwithstanding the employer's or the employer's compensation insurance carrier's payment of or liability to pay compensation.... In that case, however, if the action against the other person is brought by the injured employee ... and judgment is obtained and paid, and accepted or settlement is made with the other person, either with or without suit, then from the amount received by the employee or dependents there shall be paid to the employer or the employer's compensation insurance carrier, subject to its paying its pro-rata share of reasonable and necessary costs and expenses of asserting the third party claim, the amount of compensation paid to the employee or dependents, plus the medical, surgical, hospital and nurses' services and supplies and burial expenses paid by the employer or the employer's compensation carrier....
....
The employer or the employer's compensation insurance carrier shall pay it pro rata share of all costs and reasonably necessary expenses in connection with asserting the third party claim, action or suit, including but not limited to cost of depositions and witness fees, and to the attorney at law selected by the employee or his dependents, ... a fee of thirty-three and one-third per cent (33 1/3 %), if collected with suit, of the amount of benefits after deduction of costs and reasonably necessary expenses in connection with the third party claim action or suit."
The challenged language in National's policy is: "Any amount payable under this coverage shall be reduced by all sums paid or payable under any worker's compensation disability benefits or similar law." Record at 23, 27, 30. Although a number of Indiana cases have considered reduction language similar to that used by National, with no prevailing consensus on its clarity, 3 no authority cited to this court focuses on the policy language we find controlling here. ...
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