91 F.4th 565
2d Cir.2024Background
- William Loomis, a truck driver, was injured in a New York accident while driving for XPO Logistics.
- Loomis received $50,000 from the at-fault driver’s insurer and sought additional underinsured motorist (UIM) coverage from ACE, XPO’s insurance provider.
- The ACE policy had a $7 million coverage limit with a $3 million retained limit, but expressly excluded UIM coverage in the relevant states.
- Loomis sued ACE in New York, asserting entitlement to UIM benefits under both New York and Indiana law.
- The district court granted summary judgment for ACE on New York law and for Loomis on Indiana law (with caveats discussed below).
- On further motion, the district court held for ACE, ruling that the policy’s $3 million retained limit was a valid condition precedent to any UIM coverage, and certified unresolved Indiana law questions to the Indiana Supreme Court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is ACE liable to provide underinsured coverage under NY law where it failed to offer optional SUM coverage? | Failure to offer SUM coverage means policy should be reformed to include it. | SUM coverage is optional; failure to offer does not require reformation. | ACE not liable under NY law; no remedy to reform policy for SUM. |
| Must mandatory Indiana UIM coverage be read into an ACE "excess" policy with a $3M retained limit? | Policy is not a true excess/umbrella; thus statutory UIM mandate applies. | Policy is a commercial excess liability policy exempt from UIM requirement. | Issue is ambiguous under Indiana law; certified to IN Supreme Court. |
| May ACE enforce the $3M retained limit as a barrier to UIM benefits under Indiana law? | Statute does not allow use of retained limit as condition for UIM; frustrates UIM protection. | Retained limit is enforceable as condition precedent to all coverage. | Ambiguous under Indiana law; certified to IN Supreme Court. |
Key Cases Cited
- AMEX Assurance Co. v. Caripides, 316 F.3d 154 (2d Cir. 2003) (New York law: reformation of insurance policy requires fraud or mutual mistake)
- Monroe Guaranty Insurance Co. v. Langreck, 816 N.E.2d 485 (Ind. Ct. App. 2004) (excess and umbrella policy distinctions for insurance priority)
- City of Gary v. Allstate Insurance Co., 612 N.E.2d 115 (Ind. 1993) (Indiana UM statute does not apply to self-insurers)
- United National Insurance Co. v. DePrizio, 705 N.E.2d 455 (Ind. 1999) (Indiana's UIM statute applies to umbrella policies absent clear exemption)