Kathy Inman v. State Farm Mutual Automobile Insurance Company
2012 Ind. LEXIS 976
| Ind. | 2012Background
- Inman sued after a rear-end collision by Shinnamon in 2006; settled with Shinnamon's insurer for $50,000 (policy limit).
- Inman sought an additional $50,000 under her $100,000 State Farm UIM policy.
- State Farm answered, denying fault and that damages exceeded $50,000.
- Jury later awarded Inman $50,000; trial court denied prejudgment interest under TPIS without explanation.
- Indiana Supreme Court granted transfer to resolve whether TPIS applies to UIM actions and whether prejudgment interest can exceed policy limits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether TPIS applies to UIM actions | Inman: TPIS covers civil actions arising from tortious conduct, thus includes UIM disputes. | State Farm: TPIS applies only to tort actions, not contract actions like UIM. | TPIS applies to UIM actions arising from tortious conduct. |
| Whether prejudgment interest may exceed UIM policy limits | Inman: TPIS collateral; not restricted by policy limits. | State Farm: must stay within policy limits. | Prejudgment interest can exceed the insured’s policy limit. |
| Standard of review for TPIS awards | Ask for de novo review of TPIS award. | TPIS awards reviewed for abuse of discretion. | TPIS awards reviewed for abuse of discretion. |
| Role of qualifying settlement offers under TPIS | TPIS preconditions met if offers were properly made/failed. | The presence or absence of qualifying offers governs applicability; trial court discretion remains. | Discretion to award remains with trial court after TPIS prerequisites are met. |
| Effect of the trial court’s denial of prejudgment interest | denial was error given TPIS prerequisites. | Court may deny interest in its discretion. | No abuse of discretion; trial court’s denial affirmed. |
Key Cases Cited
- Cahoon v. Cummings, 734 N.E.2d 535 (Ind. 2000) (Pendency of TPIS with MMA collateral rules; interest not limited by liability caps)
- Emergency Physicians of Indianapolis v. Pettit, 718 N.E.2d 753 (Ind. 1999) (Collateral expenses outside MMA limits; prejudgment interest treated as such)
- Poehlman v. Feferman, 717 N.E.2d 578 (Ind. 1999) (Collateral nature of interest and costs; MMA limits do not apply to TPIS)
- Erie Ins. Co. v. Hickman, 622 N.E.2d 515 (Ind. 1993) (Bad faith duty; context for insurer's obligations and litigation costs)