OPINION
Cincinnati Insurance Company appeals from the trial court's order in a declaratory judgment action denying Cincinnati's and State Farm Fire's motions for summary judgment, and granting James and Jan Trosky's motion for summary judgment against Cincinnati and State Farm Fire, and granting Kaitlin Culpepper's eross-motion for partial summary judgment against Cincinnati. Cincinnati raises the following issue for our review: Did the trial court correctly conclude that excess underinsured motorist coverage (UIM coverage) in a personal liability umbrella policy was available where the underlying insurance policy provided UIM coverage, but no UIM benefits were paid because the total coverage limits had been exhausted instead by set-offs and liability payments?
We affirm.
In March 2004, Courtland Brown, Kyle Trosky, and Kaitlin Culpepper were returning to Indiana from a trip to Florida in a vehicle owned by Courtland Brown's parents, Pamela and Stewart Brown. Near Daytona Beach, Florida, Brown, Trosky, and Culpepper were involved in a vehicle collision with a vehicle owned by the Florida Highway Patrol (FHP) and operated by FHP Trooper Kurt Glaenzer. At the time of the accident, Culpepper was a permissive driver of the Browns' vehicle, and Brown and Trosky were passengers. As a result of the collision, Trosky was killed and Culpepper was injured.
FHP is a self-insured entity with a statutory limit of liability in the amount of $100,000 per claim, $200,000 per occurrence. Fla. Stat. Ann. § 768.28(5) (West 2006). Culpepper was insured by State Farm Mutual Automobile Insurance Company under her father's policy with liability limits of $ 100,000 per person, $300,000 per accident and UIM limits in the amount of $100,000 per person and $300,000 per accident. Trosky was insured under his policy with State Farm Auto with liability limits of $100,000 per person and $300,000 per accident, with UIM limits in the same amounts. The Browns had a policy with American Select Insurance Company (the ASIC) which had a total coverage limit of $500,000 applying to either liability or UIM coverage. Under the ASIC policy, Culpeppеr and Trosky qualified as insureds because they were occupants 'of a vehicle owned by the Browns at the time of the accident. The Troskys also had a personal liability umbrella policy (PLUP) with State Farm Fire which provided excess UIM coverage of $2,000,000. The Browns had a PLUP with Cincinnati which supplied excess UIM coverage of $2,000,000.
In January 2005, Culpepper filed her liability suit in Volusia County, Florida against the FHP alleging that FHP Trooper Glaenzer negligently operated the FHP patrol cаr. The FHP offered to pay its per person tort liability cap of $100,000 to Culpepper to settle her suit. ASIC, the Browns' insurer, advanced that amount to Culpepper in October of 2005, and the FHP reimbursed ASIC for that advance. Culpepper and the FHP executed a settlement agreement and Culpepper released the FHP for its alleged fault in the accident, excluding UM/UIM claims against ASIC and Cincinnati. State Farm Auto subsequently paid Culpepper the $100,000-per-person limit under the UIM coverage of her father's policy. Culpepper also received $35,000 under the ASIC policy's bodily injury liability coverage.
*4 In February 2005, the Troskys, individually and as personal representatives of the Estate of Kyle Trosky, filed a liability suit in Volusia County, Florida against Culpep-per and the Browns for the death of Kyle Trosky, alleging that Culpepper was negligent in the operation of the vehicle owned by the Browns, causing the accident. The Troskys later added the allegation that FHP Trоoper Glaenzer was negligent in the operation of his FHP patrol car. In October 2005, State Farm Auto paid the Troskys $100,000, the per-person limit of Culpepper's father's liability coverage under his policy, and on December 5, 2005, the Troskys released all liability claims against Culpepper, excluding UM/UIM claims. FHP paid $90,000 to the Troskys, exhausting the FHP statutory limit of liability per occurrence, 1 and the Troskys released all claims against the FHP. The Troskys received $275,000 under the Browns' liability covеrage through ASIC for the release of all claims, individually and on behalf of the estate, against Cul-pepper, the Browns, and ASIC. 2 The Tro-sky lability suit against Culpepper and the Browns was dismissed with prejudice on January 31, 2006. The Trosky liability suit against the FHP was dismissed with prejudice on January 30, 2006.
On September 21, 2005, Cincinnati filed a complaint for declaratory judgment in Hamilton County, Indiana. In March of 2006, the Troskys filed a complaint in Hamilton County, Indiana, against State Farm Auto seeking to recover under Kyle Trosky's State Fаrm Auto policy's UIM provision for his wrongful death alleging negligence on the part of the FHP. They also sought coverage under the State Farm Fire PLUP and the Cincinnati PLUP. Cineinnati was allowed to intervene in the Troskys' action against State Farm Auto. Id. at 10. State Farm Fire was allowed to intervene as a defendant in Cincinnati's declaratory judgment action. In April of 2007, the trial court granted Culpepper's motion for leave to file her counterclaim against Cincinnati and her cross-clаims against the Troskys. Culpep-per seeks to recover only under the Cincinnati PLUP.
Cincinnati moved for summary judgment against both Culpepper and Trosky as to their UIM claims and numerous motions and responses were filed by the parties. The trial court heard argument on the pending motions, issuing its order on December 11, 2008. Cincinnati now appeals.
Our supreme court has set forth the standard of review on a summary judgment ruling as follows:
On appeal, the standard of review for a summary judgment motion is the sаme as that used in the trial court: summary judgment is appropriate only where the evidence shows that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Ind. Trial Rule 56(C). All facts and reasonable inferences drawn from those facts are construed in favor of the non-moving party. Review of a summary judgment motion is limited to those materials designated to the trial court. TR. 56(H). We must carefully review a decision on a summary judg *5 ment motion to ensurе that a party was not improperly denied its day in court.
Reeder v. Harper,
The interpretation of an insurance policy is generally a question of law appropriate for summary judgment. Liberty Mut. Ins. Co. v. Michigan Mut. Ins. Co.,
First, Cincinnati argues that Culpepper is not entitled to excess UIM coverage because the underlying State Farm Auto UIM per person coverage, $100,000, was the same amount paid to her by the FHP, $100,000. Culpepper also was an insured under the Browns' ASIC policy as a permissive driver of their insured vehicle. Culpepper seeks to recover from the Cincinnati PLUP, and the ASIC policy as the proper underlying insurance for this analysis and determination. Consequently, we need not address Cincinnati's argument about Culpepper's coverage under her father's State Farm Auto policy.
Cincinnati claims that the trial court erred by concluding that excess UIM coverage in the Cincinnati PLUP was available to the Troskys and Culpepper where the Browns' ASIC policy provided for UIM coverage, but no UIM benefits were paid because the total coverage limits had been exhausted by liability payments. More specifically, Cincinnati argues that UIM coverage was "denied" by ASIC because the total coverage limits were exhausted before any UIM payments were made on the underlying policy, thus relieving Cincinnati of its obligation to provide exeess UIM coverage to the Troskys and Culpepper.
The ASIC policy provides as follows:
A. We will pay compensatory damages which an insured is legally entitled to recover from the owner or operator of an underinsured motor vehicle because of bodily injury [sustained by an insured[ ] and [cJaused by an accident.
Appellant's Appendix at 298 (emphasis in original).
The Cincinnati PLUP contains a follow form provision which reads as follows:
C. This insurance applies in excess of and only to the extent insurance is provided by the 'underlying insurancе' as scheduled in Schedule A-Schedule of Underlying Insurance and subject to all its terms, conditions and limitations other than the limit of insurance or any other provision not consistent with this policy.
Id. at 307. We believe that the trial court correctly determined that the exhaustion of the ASIC policy's total coverage limits did not relieve Cincinnati of its obligation to provide exeess UIM coverage. The ASIC policy provided for UIM coverage, but did not pay out UIM benefits because of the limit of insurance. While Cineinnati would have this court interpret the Cinein-nati PLUP language to read that its excess coverage applies only if underlying UIM coverage is paid, we decline to do so as the policy language clearly states that it *6 applies to the extent underlying insurance "is provided." Id.
A panel of this court stated as follows: [I]f the insuring clause does not extend coverage, one need look no further. If coverage exists, exclusions must then be considered. If an exclusion excludes coverage, an exception to the exclusion may re-grant coverage. However, the entire process must begin with an initial grant of coverage via the insuring clause; otherwise, no further consideration is necessary.
Amerisure, Inc. v. Wurster Constr. Co., Inc.,
Cincinnati сontends that the exclusion of "government vehicles" from the definition of "underinsured motor vehicle" in the ASIC and State Farm policies relieves Cincinnati of its obligation to provide excess UIM coverage as the FHP vehicle involved was a "government vehicle." Culpepper's State Farm Auto policy, Kyle Trosky's State Farm Auto policy, and the ASIC policy each include a "government vehicle exclusion." Appellant's Appendix at 194, 223 (State Farm Auto language: "An underinsurеd motor vehicle does not include a land motor vehicle owned by any government or any of its ... agencies"); Id. at 299 (ASIC language: "Underinsured motor vehicles does not include any vehicle or equipment [o]Jwned by any governmental unit or agency"). Cincinnati further argues that the Troskys and Culpepper are not "legally entitled to collect" any money from the FHP because the statutory limit has been satisfied, also relieving Cincinnati of its obligation to provide any excess UIM covеrage. Appellant's Brief at 26. Culpepper's and Kyle Trosky's State Farm Auto policies additionally state, "We will pay damages for bodily injury an insured is legally entitled to collect from the owner or driver of an underinsured motor vehicle." Appellant's Appendix at 198, 228.
As an initial matter, the trial court concluded, as Culpepper and the Troskys suggested, that Florida substantive law should be applied to resolve the above arguments. Cincinnati argues that the trial court should have applied Indiana substantive law. There is no choice-of-law provision in the insurance contracts.
First, a choice-oflaw analysis is necessary only when there is a conflict between the laws of the states in question. Am. Employers Ins. v. Coachmen Indus.,
When faced with a choice-of-law question, the decision is made by the courts оf the state in which the suit is pending. Schaffert by Schaffert v. Jackson Nat'l Life Ins. Co.,
(a) the needs of the interstate and international systems,
(b) the relevant policies of the forum,
(c) the relevant policies of other interested states and the relative interests of *7 those states in the determination of the particular issue,
(d) the protection of justified expectations,
(e) the basic policies underlying the particular field of law,
(f) certainty, predictability and uniformity of result, and
(g) ease in the determination and appli-eation of the law to be applied.
The Restatement is even more specific on the subject of choice-of-law questions in contract actions. Under Section 188, "The rights and duties of the parties with respect to an issue in contract are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the transaction and the parties under the principles stated in § 6." In determining the state that has the most significant relationship to the transaction and the parties under the principles stated in Section 6, the contacts to be taken into account include:
(a) the place of contracting,
(b) the place of negotiation of the contract,
(ec) the place of performance,
(d) the location of the subject matter of the contract, and
(e) the domicil, residence, nationality, place of incorporation and place of business of the parties.
Id.
The Restatement is even more specific with regard tо contracts for fire, surety, or casualty (including liability) insurance. Section 193 has been described as addressing "that special subset of contracts that involve insurance." Zurich Ins. v. Shearson Lehman Hutton,
The validity of a contract of fire, surety, or casualty insurance and the rights created thereby are determined by the local law of the state which the parties understood was to be the principal location of the insured risk during the term of the policy, unless with respect to thе particular issue, some other state has a more significant relationship under the principles state in Section 6 to the transaction and the parties, in which event the local law of the other state will be applied.
Here, the only contact with Florida was the accident itself. Although the policy territory includes the United States, the insureds reside in Indiana, the insurance policies were issued in Indiana, and the insured vehicle was garaged primarily in Indiana. Consequently, thе trial court erred to the extent it found that Florida law applied. See Pennington v. Am. Family Ins. Group,
That said, the trial court also found, in the alternative, that should Indiana law apply, the government vehicle exclusion is void as against public policy in Indiana, and that Culpepper and the Troskys were legally entitled to recover notwithstanding the statutory tort limit for liability of government entities. Ind.Code Ann. § 34-13-3-1 et seq. (Indiana's Tort Claims Act). We turn to those considerations next.
In Losiniecki v. American States Ins. Co.,
An issue very similar to the one before us was addressed by the supreme court of New Mexico in Boradiansky v. State Farm Mut. Auto. Ins. Co.,
Statutory tort claims caps serve to limit the financial exposure of a state's treasury for torts committed by state offi
*9
cials and employees. See West Am. Ins. Co. v. Popa,
Additionally, we agree with the cases from other jurisdictions holding that the sovereign immunity defense is not available to UIM carriers who argue that onee the statutory cap has been paid by the governmental unit, the insured is no longer "legally entitled to recover." Those cases adopt a broader definition of the policy language, holding that "legally entitled to recover" mеans only that the insured establish fault on the part of the uninsured or underinsured motorist, and establish the amount of his or her damages. See e.g., Karlson v. City of Oklahoma City,
Cincinnati argues that Bush v. State Farm Mutual Auto. Insurance Company,
Turning to our statutes, Indiana Code Ann. § 27-7-5-4(b) defines an "underin-sured motor vehicle" as an insured motor vehicle where the limits of coverage available for payment to the insured under all bodily injury liability pоlicies covering persons liable to the insured are less than the limits for the insured's underinsured motorist coverage at the time of the accident, but does not include an uninsured motor vehicle. We note that there is no statutory exclusion for government owned vehicles from Indiana's statutory definition of an underinsured motor vehicle.
Furthermore, "the underlying purpose of UIM coverage 'is to give the insured the recovery he or she would have received if the underinsured motorist had maintained an adequate policy of liability insurance'" Corr v. Am. Family Ins.,
The amount actually available for payment to Culpepper and the Troskys from the FHP was $200,000. Comparing that per-accident liability amount to the per-accident ASIC UIM policy limits under which both Culpepper and the Troskys made a claim, the FHP vehicle is underin-sured. The ASIC policy did not contain a per-person or per-accident limit, but in *10 stead provided total coverage of $500,000 for UIM or liability coverage.
Thus, having determined that the FHP vehicle was underinsured, we turn to the UIM coverage available. The ASIC policy provided for UIM coverage, but no payments were made as the policy limits were exhausted by liability payments. Thе Cincinnati PLUP, through its follow-form provision, made available additional UIM coverage up to $2,000,000. As a consequence, the trial court correctly determined that Culpepper was entitled to recover under the Cincinnati PLUP.
The Troskys sought benefits under Kyle's State Farm Auto policy's UIM provision for his wrongful death, and under the State Farm Fire PLUP and the Cincinnati PLUP. The trial court found that the Troskys could recover under all three policies, and that the Troskys should first recover under Kyle's State Farm Auto policy and then receive pro rata coverage between the Cincinnati PLUP and their State Farm Fire PLUP. Cincinnati argued that the two PLUPs should provide coverage on a pro rata basis until the policy limits are exhausted, and this is what the court decided. We agree with this determination.
In summary, Indiana substantive law applies here. Further, we hold that the government vehicle exclusion from the definition of underinsured motorist in insurance policies is void as against public policy in Indiana. Lastly, we hold that the exhaustion of a tortfeasor's statutory tort cap liability does not mean that an insured is not "legally entitled to recover" as that term is used in insurance policies.
Judgment affirmed.
Notes
. The FHP paid the remaining $10,000 to Patricia Samson ($7,800) and VMS Maintenance Systems, Inc. ($2,200). Appellant's Appendix at 435.
. The set-off provision of the ASIC policy reduced the $500,000 to $310,000 due to the Troskys' receipt of $100,000 from Culpepper's State Farm Auto policy, and $90,000 from the FHP. ASIC paid $275,000 to the Troskys and $35,000 to Culpepper, exhausting the total coverage limits. Id. at 300.