144 N.E.3d 778
Ind. Ct. App.2020Background:
- On February 1, 2018, Timothy Smith negligently struck Christine Catanzarite; she incurred ~$269,841.32 in medical charges and Memorial Hospital timely filed a lien.
- Smith’s insurer (Hanover) offered the $100,000 policy limit; Catanzarite had $100,000 UIM coverage with Safeco.
- At the summary judgment hearing Catanzarite testified the hospital reduced its lien to about $25,000; she argued her net recovery from Hanover would be $75,000, less than her $100,000 UIM limit.
- Catanzarite sued for a declaratory judgment that she was entitled to UIM benefits from Safeco because the tortfeasor was underinsured after the hospital lien reduced her settlement proceeds.
- The trial court granted summary judgment for Safeco, ruling that payment of a hospital lien by a tortfeasor’s insurer does not reduce the tortfeasor’s policy limit for UIM-trigger purposes; Catanzarite appealed.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether payment of a hospital lien reduces the tortfeasor’s "limits available for payment" such that the tortfeasor is an underinsured motorist triggering UIM coverage | Catanzarite: hospital lien reduces her net settlement from $100,000 to ~$75,000, which is less than her $100,000 UIM limit, so UIM is triggered | Safeco: the tortfeasor’s $100,000 settlement is "available for payment"; a hospital lien does not decrease the tortfeasor’s limits for UIM comparison, so no UIM exposure | Affirmed for Safeco: payment of a hospital lien does not reduce the tortfeasor’s available limits for UIM determination; tortfeasor was not underinsured and no UIM benefits were owed |
Key Cases Cited
- Corr v. Am. Family Ins., 767 N.E.2d 535 (Ind. 2002) (construed "available for payment" to mean money present or ready for immediate use and rejected a strict limits-to-limits comparison)
- Lakes v. Grange Mut. Cas. Co., 964 N.E.2d 796 (Ind. 2012) (held underinsured determination depends on amount received from tortfeasor’s policy)
- Masten v. AMCO Ins. Co., 953 N.E.2d 566 (Ind. 2011) (UIM statute is remedial and to be liberally construed in favor of the insured)
- National Ins. Ass’n v. Parkview Mem’l Hosp., 590 N.E.2d 1141 (Ind. Ct. App. 1992) (hospital lien, if perfected, grants hospital a direct right to insurance proceeds or settlement funds)