140 N.E.3d 292
Ind. Ct. App.2020Background
- On Feb. 18, 2016, Gregory Smith (vehicle owner) permitted Nolan Clayton to drive his pickup; Clayton crashed into a tree and Smith was seriously injured. No other vehicles were involved.
- Progressive insured Smith; it paid vehicle damage ($10,937.71) and medical payments ($5,000). Smith sued Clayton; Allstate (Clayton’s carrier) eventually settled; a jury later entered a $21.7M judgment for Smith against Clayton in a separate tort action.
- Progressive filed a declaratory-judgment complaint seeking (1) a declaration that Smith was not entitled to UM or bodily-injury liability coverage under his policy and (2) a declaration that Progressive has no duty to defend or indemnify Clayton.
- The trial court granted summary judgment to Smith on the UM issue; Progressive appealed (First Appeal) and this Court reversed, holding Smith was not entitled to UM coverage because the policy excluded his truck.
- After the First Appeal, Smith moved to dismiss the remaining declaratory claims; the trial court granted dismissal. Progressive appealed the dismissal, arguing (among other things) it waived no issues by appealing and that it was entitled to declarations that Smith lacks bodily-injury coverage and Progressive owes no duty to defend or indemnify Clayton.
Issues
| Issue | Progressive's Argument | Smith/Clayton's Argument | Held |
|---|---|---|---|
| Whether Progressive waived unresolved declaratory issues by bringing the First Appeal as a final appeal | No waiver; the First Appeal was a mandatory appeal of a final judgment and did not forfeit other declaratory claims | Progressive’s appeal of the UM ruling waived remaining issues | Court sidestepped waiver analysis and held waiver irrelevant to outcome; Progressive entitled to relief on the merits |
| Whether Smith is entitled to bodily-injury liability coverage under his Progressive policy | Smith is not; policy language and Smith’s own choice to pursue UM (and concession he could not pursue both) preclude bodily-injury coverage | Smith previously conceded he could not pursue bodily-injury coverage while seeking UM | Smith is not entitled to bodily-injury liability coverage; judgment for Progressive |
| Whether Progressive has a duty to defend or indemnify Clayton for Smith’s claim | No duty: the policy excludes coverage for bodily injury to the named insured, so duty to defend is not triggered | Duty to defend exists despite coverage exclusion | Progressive has no duty to defend or indemnify Clayton; trial court erred in denying this declaration |
| Whether Clayton is entitled to dismissal/declaratory relief for lack of service or failure to prosecute | Progressive: service objections are meritless because Clayton knew of and participated in related litigation; no prejudice shown | Clayton: he was not properly served and seeks judgment without Progressive proving good service; also moved to dismiss for failure to prosecute | Court rejected Clayton’s service/failure-to-prosecute grounds; directed trial court to deny Clayton’s motion |
Key Cases Cited
- Progressive Se. Ins. Co. v. Smith, 113 N.E.3d 229 (Ind. Ct. App. 2018) (appellate decision reversing summary judgment that had awarded UM coverage to insured)
- Clayton v. Smith, 113 N.E.3d 693 (Ind. Ct. App. 2018) (appellate decision affirming tort judgment against driver; referenced to show related litigation)
- United Farm Bureau Mut. Ins. Co. v. Hanley, 360 N.E.2d 247 (Ind. Ct. App. 1977) (upholding enforceability of household exclusion that can bar coverage for injuries to the insured)
Outcome: Reversed the trial court’s dismissal; directed entry of final judgment declaring (1) Smith has no bodily-injury coverage under the Progressive policy, and (2) Progressive has no duty to defend or indemnify Clayton; Clayton’s motion for declaratory relief was denied.