Central Mutual Insurance Company v. Motorists Mutual Insurance Company
2014 Ind. App. LEXIS 607
Ind. Ct. App.2014Background
- On July 5, 2011, Alvin Pilotte was injured while driving a Kenworth-owned truck with permission; Kenworth was insured by Central Mutual under a Commercial Garage Policy that labeled its UM/UIM coverage as primary.
- Pilotte’s employer, Wampler’s Services, was insured by Motorists Mutual under an automobile policy that expressly provided UM/UIM coverage on an excess basis.
- Both policies contain UM/UIM limits of $1,000,000; Central’s policy is a “garage liability” policy under Indiana law (Ind. Code ch. 27-8-9).
- Pilotte sued Scotten and insurers; Motorists sought a declaratory judgment on priority; cross-motions for partial summary judgment were filed by Central and Motorists.
- Trial court denied Central’s motion and granted Motorists’ motion, holding Central’s policy provides primary coverage and Motorists’ policy is excess; Central appealed.
Issues
| Issue | Central’s Argument | Motorists’ Argument | Held |
|---|---|---|---|
| Whether Ind. Code § 27‑8‑9‑10 (Garage Liability Statute) requires Central’s garage policy to be excess to other available coverage | The statute mandates that a permittee’s coverage is primary and recovery under a garage policy is not allowed until all coverage available to the permittee is exhausted; statutory priority overrides parties’ policy language | The statute applies only as a tiebreaker between policies of the same level; here policies unambiguously establish different levels (Central = primary; Motorists = excess), so statutory displacement is inapplicable | Court held statute applies only between policies providing the same level of coverage; Central’s policy is primary and Motorists’ policy is excess, so Motorists entitled to judgment as a matter of law |
Key Cases Cited
- Mangold ex rel. Mangold v. Ind. Dep’t of Natural Res., 756 N.E.2d 970 (Ind. 2001) (summary judgment standard and construing facts in favor of nonmovant)
- Gen. Acc. Ins. Co. of Am. v. Hughes, 706 N.E.2d 208 (Ind. Ct. App. 1999) (purpose of garage statute to resolve "circular riddle" of conflicting other‑insurance clauses)
- Monroe Guaranty Ins. Co. v. Langreck, 816 N.E.2d 485 (Ind. Ct. App. 2004) (owner’s statute does not require umbrella/excess policies to pay ahead of primary policies)
- Old Republic Ins. Co. v. RLI Ins. Co., 887 N.E.2d 1003 (Ind. Ct. App. 2008) (lease statute, like owner’s statute, applies only between policies of the same level)
- USA Life One Ins. Co. of Ind. v. Nuckolls, 682 N.E.2d 534 (Ind. 1997) (insurance contracts interpreted like other contracts; clear policy language given plain meaning)