Troy Lee v. Liberty Mutual Fire Insurance Company
121 N.E.3d 639
Ind. Ct. App.2019Background
- On June 22, 2016 Troy Lee was injured in a collision with Jazmine Rice; Rice’s insurer paid its $225,000 policy limits. Lee’s employer’s primary auto policy (covering Lee) had $2,000,000 bodily-injury liability limits and $60,000 underinsured motorist (UIM) limits.
- The employer signed an election form selecting $60,000 UIM (stating UM/UIM would not be provided higher than the policy liability limit).
- Lee sued Rice for negligence and Liberty Mutual (his employer’s insurer) for UIM benefits, alleging Rice’s vehicle was underinsured because her $225,000 liability limit was less than Lee’s $2,000,000 liability limit.
- Liberty Mutual moved for summary judgment, arguing Rice’s $225,000 limit exceeded the $60,000 UIM limit purchased by Lee’s employer, so Rice was not an underinsured motorist under the policy.
- The trial court granted summary judgment for Liberty Mutual; the Court of Appeals affirmed, holding an insured may reject UIM limits equal to liability limits and accept lower UIM limits (subject to statutory minimums).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether insurer may offer UIM limits lower than the policy's bodily-injury liability limits | Lee: Statute requires insurers to provide UIM limits at least equal to liability limits unless rejected; partial selection of a lower UIM limit is not a valid written rejection | Liberty Mutual: Insurer may offer equal limits and, if the insured in writing rejects that offer, insurer may provide a UIM plan with lower limits (so long as statutory minimums are met) | Court: Insured may reject UIM equal-to-liability limits in writing and accept lower UIM limits; Liberty Mutual entitled to summary judgment because $225,000 > $60,000 and UIM purchased was valid (above $50,000 statutory minimum) |
Key Cases Cited
- United Nat. Ins. Co. v. DePrizio, 705 N.E.2d 455 (Ind. 1999) (describing UM/UIM statutory purpose and remedial construction)
- Marshall v. Universal Underwriters Ins. Co., 673 N.E.2d 513 (Ind. Ct. App. 1996) (insurer may offer equal limits and insured may validly select lower UM/UIM limits after proper offer)
- Asklar v. Gilb, 9 N.E.3d 165 (Ind. 2014) (remanding to resolve factual issues over validity/format of an election to select reduced UIM limits)
- Frye v. Auto-Owners Ins. Co., 845 F.3d 782 (7th Cir. 2017) (interpreting subsection differences in the statute for umbrella policies; held coverage in a commercial umbrella, if provided, may have to match the policy’s general liability limits)
- Ind. Ins. Co. v. Noble, 265 N.E.2d 419 (Ind. 1970) (statutory UM/UIM provisions are considered part of every automobile liability policy)