WILLIAM LOOMIS v. ACE AMERICAN INSURANCE COMPANY
Case 6:19-cv-01131-BKS-ATB
UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK
March 24, 2022
Hon. Brenda K. Sannes, United States District Judge
Appearances:
Martha L. Berry
Michael J. Longstreet
Longstreet & Berry, LLP
P.O. Box 249
Fayetteville, NY 13066
For Defendant:
Kacey Houston Walker
Kurt M. Mullen
Nixon Peabody LLP
Exchange Place
53 State Street
Boston, MA 02109
MEMORANDUM-DECISION AND ORDER
I. INTRODUCTION
In this action, Plaintiff William Loomis challenges Defendant ACE American Insurance Company‘s rejection of his claim for underinsured motorists benefits in connection with an accident that occurred while Plaintiff was driving a vehicle Defendant insured. (Dkt. No. 2). Following the parties’ cross-motions for summary judgment (Dkt. Nos. 20, 23), the Court concluded, as a matter of law, that Defendant‘s failure to obtain explicit written rejection of uninsured and underinsured motorist coverage (“UM” and “UIM“) before excluding it from the $7 million policy it issued to the vehicle owner—Plaintiff‘s employer, XPO Logistics—violated Indiana‘s Uninsured Motorist Coverage and Underinsured Motorist Statute, (“UM/UIM Statute“),
II. FACTS2
A. Factual Background
Plaintiff, a New York resident, was injured in a motor vehicle accident while driving a truck owned by his employer, XPO Logistics (“XPO“) in New York. (Dkt. No. 20-23, ¶¶ 1-2, 6; Dkt. No. 23-7, ¶¶ 1-2, 6; Dkt. No. 20-19, ¶¶ 2-3). The accident occurred when another vehicle crossed over the center lane and crashed into Plaintiff‘s truck head-on: both vehicles were traveling at approximately 50 miles per hour. (Dkt. No. 20-23, ¶ 2; Dkt. No. 23-7, ¶ 2; Dkt. No. 20-19, ¶ 4). Plaintiff suffered multiple injuries; the driver of the
The other vehicle involved in Plaintiff‘s accident was insured by State Farm Mutual Automobile Insurance Company (“State Farm“). (Dkt. No. 20-23, ¶ 4; Dkt. No. 23-7, ¶ 4). Plaintiff made a claim against the other driver‘s estate for the injuries he suffered as a result of the accident. (Dkt. No. 20-23, ¶ 7; Dkt. No. 23-7, ¶ 7). Plaintiff‘s claim was settled for $50,000—the full amount of the State Farm policy limit—and State Farm paid that amount to Plaintiff. (Dkt. No. 20-23, ¶ 8; Dkt. No. 23-7, ¶ 8; Dkt. No. 20-7; Dkt. No. 20-8). There is no dispute that Plaintiff‘s damages exceed $50,000. Plaintiff notified Defendant, the insurer of the XPO-owned vehicle he was driving, of his intent to pursue a claim for supplemental underinsured motorist coverage; Defendant denied coverage on the grounds that “there is no Uninsured/Underinsured Motorist Coverage in New York State”3 under the relevant policies. (Dkt. No. 20-23, ¶ 19; Dkt. No. 23-7, ¶ 19; Dkt. No. 20-4; Dkt. No. 20-6).
B. The XSA Policy
At the time of the accident, the vehicle Plaintiff was driving was insured by a policy Defendant issued to XPO, with the policy number XSA H25097257 (the “XSA Policy“). (Dkt. No. 20-23, ¶¶ 10-11; Dkt. No. 23-7, ¶¶ 10-11; Dkt. No. 20-15).4 The Declarations page of the XSA Policy states that it provides liability coverage for “covered autos,” and that the “Limit,” that is, “[t]he most [it] will pay for any one Accident or Loss,” is $7 million and that the “Retained Limit,” that is, “the amount [XPO] must pay before the Limits of Insurance become applicable,” “for any one ‘accident’ or ‘loss‘” is $3 million. (Dkt. No. 20-15, at 29, 51).
The section of the XSA Policy titled “Liability Coverage” provides that Defendant “will pay the ‘insured’ for the ‘ultimate net loss’ in excess of the ‘retained limit’ because of ‘bodily injury’ or ‘property damage’ to which [the XSA Policy] applies, caused by an ‘accident’ and resulting from the ownership, maintenance or use of a covered ‘auto.‘” (Id. at 39). The XSA Policy defines “ultimate net loss” as “the total amount the ‘insured’ is legally obligated to pay as damages for a covered claim or ‘suit’ either by adjudication or a settlement to which we agree in writing, and includes deductions for recoveries and salvages which have or will be paid.” (Id. at 51). “Retained limit” is defined as:
[T]he limit shown in the Declarations and is the amount you must pay before the Limits of Insurance become applicable. In the event there is other insurance, whether or not applicable to an “accident“, claim or “suit” within the “retained limit,” you will continue to be responsible for the full amount of the “retained limit” before the Limits of Insurance under this policy apply. In no case will we be required to pay the “retained limit” or any portion thereof.
(Id. at 51).
The XSA Policy‘s “Limit of Insurance” provision states:
Regardless of the number of covered “autos“, “insureds“, premiums paid, claims made or vehicles involved in the “accident“, the most we will pay for “ultimate net loss” in excess of the “retained limit” for damages ... resulting from any one “accident” is the Limit of Insurance for Liability Coverage shown in the Declarations. . . . .
You agree to assume payment of the “retained limit” before the Limits of Insurance become applicable.5
(Id. at 44).
III. STANDARD OF REVIEW
Under
If the moving party meets this burden, the nonmoving party must “set out specific facts showing a genuine issue for trial.” Anderson, 477 U.S. at 248, 250; see also Celotex, 477 U.S. at 323-24; Wright v. Goord, 554 F.3d 255, 266 (2d Cir. 2009). “When ruling on a summary judgment motion, the district court must construe the facts in the light most favorable to the non-moving party and must resolve all ambiguities and draw all reasonable inferences against the movant.” Dallas Aerospace, Inc. v. CIS Air Corp., 352 F.3d 775, 780 (2d Cir. 2003). Still, the nonmoving party “must do more than simply show that there is some metaphysical doubt as to the material facts,” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986), and cannot rely on “mere speculation or conjecture as to the true nature of the facts to overcome a motion for summary judgment,” Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 12 (2d Cir. 1986) (quoting Quarles v. Gen. Motors Corp., 758 F.2d 839, 840 (2d Cir. 1985)). Furthermore, “[m]ere conclusory allegations or denials . . . cannot by themselves create a genuine issue of material fact where none would otherwise exist.” Hicks v. Baines, 593 F.3d 159, 166 (2d Cir. 2010)
IV. DISCUSSION
For purposes of the supplemental summary judgment motion, the parties do not dispute that the XSA Policy covered the vehicle Plaintiff was driving at the time of his accident; that Plaintiff was using XPO‘s covered “auto” with XPO‘s permission at the time of the accident, and therefore also qualifies as an “insured” under the XSA Policy; and that Plaintiff satisfied all the necessary prerequisites to bringing suit against Defendant for UM/UIM coverage. (Dkt. No. 20-23, ¶ 18; Dkt. No. 23-7, ¶ 18; Dkt. No. 23-1, at 8). The parties’ core dispute is whether, under Indiana law, when UIM coverage is read into the XSA Policy, the $3 million Retained Limit must be paid before the $7 million Limits of Insurance become available to Plaintiff. (Dkt. Nos. 32, 33, 35, 36). Having determined that UM and UIM coverage must be read into the XSA Policy under Indiana law, and there being no argument that New York law applies to the present inquiry, the Court considers the parties’ arguments solely under Indiana law.
As the parties acknowledge, the Supreme Court of Indiana has not addressed whether the UM/UIM Statute allows the enforcement of a retained limit in a UM/UIM policy. “[I]n the absence of authoritative law from the state‘s highest court,” the Court “must either (1) predict how the [Indiana Supreme Court] would resolve the state law question, or, if state law is so uncertain that” the Court cannot make a “reasonable prediction, (2) certify the question to the [Indiana Supreme Court] for a definitive resolution.” DiBella v. Hopkins, 403 F.3d 102, 111 (2d Cir. 2005); see also
A. Indiana‘s UM/UIM Statute
Plaintiff primarily relies on
Sec. 2. (a) Except as provided in subsections (d), (f), and (h), the insurer shall make available, in each automobile liability or motor vehicle liability policy of insurance which is delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state, insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person and for injury to or destruction of property to others arising from the ownership, maintenance, or use of a motor vehicle, or in a supplement to such a policy, the following types of coverage:
(1) ... for the protection of persons insured under the policy who are legally entitled to recover damages from owners or operators of uninsured or underinsured motor vehicles because of bodily injury . . .[or] injury to or destruction of property . . . ; or (2) ... for the protection of persons insured under the policy provisions who are legally entitled to recover damages from owners or operators of uninsured or underinsured motor vehicles because of bodily injury . . . .
. . . .
The uninsured and underinsured motorist coverage must be provided by insurers for either a single premium or for separate premiums, in limits at least equal to the limits of liability specified in the bodily injury liability provisions of an insured‘s policy, unless such coverages have been rejected in writing by the insured.
Plaintiff also cites to a “Limitation on coverages” provision,
B. Reading the UM/UIM Statute into the XSA Policy
The Court begins by incorporating the coverage mandated by the UM/UIM Statute into the terms of the XSA Policy. Thus, the Court reads the XSA Policy to provide UM and UIM “coverage ... in limits at least equal to the limits of liability specified in the bodily injury liability provisions of [the] policy.”
coverage of up to $1,000,000 under the Policy,” explaining that “[t]he Policy has a liability limit of $1,000,000, and the
C. Analysis
Plaintiff argues that because the UM/UIM Statute does “not provide for an offset for a deductible or self insured retention for bodily injury claims,” (Dkt. No. 32, at 2), the retained limit in the XSA Policy is an impermissible “coverage limitation,” that “does not limit Defendant‘s obligation to pay,” and “[b]y operation of law, $7 million is the ‘limit of liability,‘” (Dkt. No. 35, at 1, 5-6).8 Plaintiff further argues that because his employer has no obligation to pay the retained limit, coverage under the XSA Policy is illusory because it can never be triggered. (Id. at 4). Defendant argues that it has “no obligation to pay Plaintiff for ultimate net loss within the $3 million Retained Limit” because the XSA Policy unambiguously states that the insured must pay the $3 million retained limit “before the Limits of Insurance become applicable.” (Dkt. No. 33, at 1). In other words, Defendant argues, it is not required to “provide[] first dollar coverage.” (Id.).
1. Operation of Retained Limit
There is no real dispute that the plain language of the XSA Policy requires payment of the $3 million retained limit before the $7 million “Limits of Insurance become applicable” or that payment for “ultimate net loss” is “in excess of the ‘retained limit.‘” (Dkt. No. 20-15, at 44). See Citimortgage, Inc. v. Barabas, 975 N.E.2d 805, 813 (Ind. 2012) (instructing that courts must “begin with the plain language of the contract, reading it in context and, whenever possible, construing it so as to render each word, phrase, and term meaningful, unambiguous, and harmonious with the whole“); see also Catanzarite v. Safeco Ins. Co. of Indiana, 144 N.E.3d 778, 783 (Ind. Ct. App. 2020)
(“Insurance contract provisions are subject to the same rules of construction as other contracts.“). Plaintiff‘s argument instead focuses on whether the retained-limit provision violates the UM/UIM Statute.
Before considering whether the retained limit violates the UM/UIM statute, it is helpful to review the operation of retained limits or self-insured retentions (“SIR“) within insurance policies, which is well settled under Indiana law. The Indiana Supreme Court has recognized that only after the retained limit or SIR is exhausted or satisfied are the insurer‘s policy obligations triggered. Cinergy Corp. v. Associated Elec. & Gas Ins. Servs., Ltd., 865 N.E.2d 571, 576-77 (Ind. 2007); Walsh Constr. Co., v. Zurich Am. Ins. Co., 72 N.E.3d 957, 963 (Ind. Ct. App. 2017) (“Both the Indiana Supreme Court and this court have repeatedly recognized that, as between an insurer and a single insured, the insurer‘s responsibilities arise only ‘[a]fter the self-insured retention amounts specified in the policies are satisfied.‘” (quoting Cinergy, 865 N.E.2d at 576-77)); Thomson Inc. v. Ins. Co. of N. Am., 11 N.E.3d 982, 1011 (Ind. Ct. App. 2014) (“Thomson must prove that the $250,000 SIR for each ‘occurrence’ has been satisfied under the [policies] before any obligations under those Policies commence.“); Allianz Ins. Co. v. Guidant Corp., 884 N.E.2d 405, 420 (Ind. Ct. App. 2008) (explaining that “it is only after the SIR is exhausted that an insurer‘s duty to defend, among other things, is triggered” (citing Cinergy, 865 N.E.2d at 576-77)) (emphasis in original).
Moreover, Indiana law expressly distinguishes a retained limit or SIR from a deductible and holds that a retained limit
2. Enforceability of Retained Limit Under UM/UIM Statute
a. IC 27-7-5-2
The UM/UIM Statute requires Defendant to provide UM/UIM coverage in limits “at least equal to the limits of liability specified in the bodily injury liability provisions of an insured‘s policy.”
distinction between the concepts of “coverage” and “limits of liability,” and argues that the UM/UIM Statute explicitly makes UM/UIM coverage mandatory with no exceptions or offsets for plans that include retained limits. (Id.). Given that ambiguity, Plaintiff argues that it is reasonable to read the UM/UIM Statute as making UM/UIM coverage mandatory from the first dollar (absent an applicable exemption or written rejection), with the aforementioned language simply setting the minimum amount at which that coverage must be provided. (Id. at 4-5).
“Indiana courts employ the basic tools of statutory interpretation: Statutes are read as a whole, and words are given their plain and ordinary meaning.” Frye v. Auto-Owners Ins. Co., 845 F.3d 782, 786 (7th Cir. 2017) (citations omitted). “If a statute is unambiguous, that is, susceptible to but one meaning, [the Court] must give the statute its clear and plain meaning.” Bolin v. Wingert, 764 N.E.2d 201, 204 (Ind. 2002) (citations omitted). “If a statute is susceptible to multiple interpretations, however, [the Court] must try to ascertain the legislature‘s intent and interpret the statute so as to effectuate that intent.” Id. The Court “presume[s]
The UM/UIM Statute is clear and unambiguous in its directive that insurers must provide UM/UIM “coverage . . . in limits at least equal to the limits of liability specified in the bodily injury liability provisions of an insured‘s policy.”
Plaintiff is correct that that the UM/UIM Statute does not expressly refer to policies with retained limits, but even viewing the UM/UIM Statute as a whole, the Court finds nothing that suggests the retained limit does not comport with the statute. Plaintiff argues that the retained limit is unenforceable and “does not limit Defendant‘s obligation to pay” because none of the few exemptions to the UM/UIM Statute allow a “‘carve out’ for self insured retentions.” (Dkt. No. 35, at 5). Indeed, the Indiana Supreme Court has stated in no uncertain terms that “[a]bsent an express directive from our legislature,” courts must not “carve out an exemption for particular policies.” DePrizio, 705 N.E.2d at 457-63 (emphasis added); see also Frye, 845 F.3d at 787 (“[T]he Indiana Supreme Court made clear that if the state legislature wished to exclude any specific types of insurance contracts from the UIM-coverage mandate, only an explicit statutory carve-out would suffice.” (citing DePrizio, 705 N.E.2d at 463-64)). Here, the Court has found the XSA Policy is not exempt from providing UM/UIM coverage and that in the absence of a rejection of UM/UIM coverage in writing, the XSA Policy must be read to provide UM/UIM coverage. Loomis, 517 F. Supp. 3d at 114. Thus, it appears that what Plaintiff in fact opposes is the policy language, which specifies that the retained limit is a condition that must be satisfied before Defendant‘s obligations under the XSA Policy are triggered.
The Indiana Supreme Court has explained that “[s]o long as the policy language comports with our state statutes, it will control,” but if it is inconsistent with those statutes, it is unenforceable. Just. v. Am. Fam. Mut. Ins. Co., 4 N.E.3d 1171, 1177 (Ind. 2014) (internal citation omitted) (first quoting Medley v. Am. Econ. Ins. Co., 654 N.E.2d 313, 315 (Ind. Ct. App. 1995); and then citing Bush v. State Farm Mut. Auto. Ins. Co., 905 N.E.2d 1003, 1005 (Ind. 2009)). In addition, Indiana courts uniformly hold that “[a]ttempts to limit or diminish the uninsured motorists protection required by statute [are] against . . . public policy” of this state. Smith v. Allstate Ins. Co., 681 N.E.2d 220, 222 (Ind. Ct. App. 1997) (citing American States Ins. Co. v. Braden, 625 N.E.2d 1252, 1257 (Ind. Ct. App.1993)). Here, once the UM/UIM Statute is read into the XSA Policy, the XSA Policy provides coverage in the amount of $7 million, which is equal to the limit of liability specified in the bodily injury liability provisions of the policy, and
In addition, even in the context of the UM/UIM Statute, “[i]t is well established that an insurer is free to limit its liability in a manner not inconsistent with public policy.” Jones v. State Farm Mut. Auto. Ins. Co., 635 N.E.2d 200, 203 (Ind. Ct. App. 1994) (citing Allstate Ins. Co. v. Boles, 481 N.E.2d 1096, 1098 (Ind. 1985); see also id. (finding that the limitation on underinsured motorist coverage, which contained a household exclusion was “neither illusory
nor contrary to public policy“). “[P]ublic policy is not violated unless ‘the policy specifically limits uninsured motorist coverage as to persons who would otherwise qualify as insureds for liability purposes.‘” Smith v. Allstate Ins. Co., 681 N.E.2d 220, 222 (Ind. Ct. App. 1997) (quoting Whitledge, 586 N.E.2d at 887). “Restated, if a person qualifies as an insured under the liability section of the policy, he must also qualify under the uninsured motorists section or the insurance contract violates public policy.” Id. (citing Connell v. American Underwriters, Inc., 453 N.E.2d 1028, 1031 (Ind. Ct. App. 1983)). Here, it is undisputed that Plaintiff qualifies as an insured under the UIM provision read into the XSA Policy. Thus, the Court finds no public policy violation.
Courts have also allowed conditions precedent to the attachment of coverage in the UM/UIM context. See Adkins v. Vigilant Ins. Co., 927 N.E.2d 385, 392-93 (Ind. Ct. App. 2010) (finding that “the conditions necessary to attach” the plaintiff‘s “excess liability coverage” had not been met, explaining that “[t]he Excess Umbrella Policy clearly states that it merely provided Sutphin with excess liability coverage for damages for which Sutphin was legally responsible and that coverage would only be initiated after the maximum limits of Sutphin‘s underlying liability insurance policies had been exhausted” and that the plaintiff had not “proven that Sutphin was legally responsible for any of the alleged damages, and it is undisputed that neither of Sutphin‘s underlying insurance policies covered any of the alleged damages” (citing Cincinnati Ins. Co. v. Amerisure Ins. Co., 644 N.E.2d 136, 140 (Ind. Ct. App. 1994))). The Court therefore finds that the retained limit appears to be a permissible
b. IC 27-7-5-5
Plaintiff relies on
The Supreme Court of Indiana has explained that “anti-stacking clauses ‘limit coverage when coverage under another policy is currently available so as to preclude stacking or double recovery of uninsured motorist coverages.‘” Id. (quoting Progressive Ins. Co., Inc. v. Bullock, 841 N.E.2d 238, 240 (Ind. Ct. App. 2006)). This provision establishes “the maximum and minimum parameters for the amount of recovery a plaintiff is entitled to as a result of a UM or UIM claim.” Kinslow v. GEICO Ins. Co., 858 N.E.2d 109, 114 (Ind. Ct. App. 2006) (citing Gardner v. State Farm Mut. Ins. Co., 589 N.E.2d 278, 281 (Ind. Ct. App. 1992)). In general, a “setoff” is an amount paid by a tortfeasor or other insurer in connection with a claim that may be “setoff” or reduced from the amount an insured is entitled to recover under a later-applied policy. See, e.g., Kinslow, 858 N.E.2d at 111 (noting that “[s]etoff provisions in UM[/UIM] motorist policies have generated frequent litigation, often focusing on whether payment to an insured from a third party should be deducted from the total amount of damages sustained by the insured or from the limits of liability of the UM/UIM coverage“). Moreover, courts have recognized that “[t]he language of Indiana Code Section 27-7-5-5(c) does not provide a set formula for calculating setoffs in all cases,” Kinslow, 858 N.E.2d at 114 (citing Gardner, 589 N.E.2d at 281); see Gardner, 589 N.E.2d at 281 (“This language is indicative not of the legislature‘s intent to
provide a set formula, but to provide maximum and minimum parameters for the amount of damages a plaintiff is entitled to as a result of an uninsured motorist claim.“), and that it must be read in conjunction with the UM/UIM policy‘s language, Gardner, 589 N.E.2d at 281 (explaining that so long as the policy‘s language and relevant provisions provide coverage “within these statutory parameters, the policy does not violate” the UM/UIM Statute). Plaintiff does not identify any language in this provision that would allow a conclusion that retained limits are impermissible in the context of calculating payment under the XSA Policy. Indeed, without evidence of “the amount paid in damages” to Plaintiff or “the total amount of damages” he incurred,
3. Illusory Coverage
Plaintiff argues that because “[t]here is no statutory authority or contractual basis to impose underinsured motorist coverage obligations” on his employer,12 (Dkt. No.
Nevertheless, even if the Court were to find, as Plaintiff argues, that UM/UIM coverage in the XSA Policy is essentially illusory because his employer is a self-insurer13 and has no
obligation to pay the $3 million retained limit necessary to trigger that coverage, the remedy would not provide Plaintiff the relief he seeks—an order requiring Defendant to pay damages within the retained limit. The Indiana Supreme Court “has defined illusory coverage as that for which the insured paid a premium but from which he would not be paid benefits under any reasonably expected circumstances.” Jones v. State Farm Mut. Auto. Ins. Co., 635 N.E.2d 200, 202 (Ind. Ct. App. 1994) (citing Meridian Mutual Insurance Co. v. Richie, 540 N.E.2d 27, 30 (Ind. 1989). “Provisions in an insurance policy . . . [that] in effect, provide only illusory coverage, should be enforced to satisfy the reasonable expectations of the insured.” Davidson v. Cincinnati Ins. Co., 572 N.E.2d 502, 508 (Ind. Ct. App. 1991). “[T]he ‘expectations’ of which the Indiana court speaks are the objectively reasonable expectations of an insured,” that is “expectations that an insured ‘could’ have had, not of the expectations it had in fact.” Eli Lilly & Co. v. Home Ins. Co., 794 F.2d 710, 715 (D.C. Cir. 1986) (citing Eli Lilly & Co. v. Home Ins. Co., 482 N.E.2d 467, 470 (Ind. 1985)). If the trigger for UM/UIM coverage—or the UM/UIM coverage itself—were illusory, Plaintiff could reasonably expect Defendant to comply with its obligations under the XSA Policy and to pay Plaintiff for UIM damages “in excess” of the $3 million retained limit, up to the amount of its $7 million limit of liability, (Dkt. No. 20-15, at 44 (“[T]he most we will pay for ‘ultimate net loss’ in excess of the ‘retained limit’ for damages . . . resulting from any one ‘accident’ is the Limit of Insurance for Liability Coverage shown in the Declarations.“)), even if the retained limit had not been paid.
By the same token, nothing in the XSA Policy or the UM/UIM Statute would allow a reasonable expectation that Defendant was obligated to pay UIM damages falling within the amount of the $3 million retained limit,” (see id. at 51 (“In no case will we be required to pay the ‘retained limit’ or any portion thereof.“)). See, e.g., In re Fed. Press Co., Inc., 104 B.R. 56, 60-61 (Bankr. N.D. Ind. 1989) (applying Indiana law and concluding that “[t]he policies place no obligation upon Columbia to pay damages falling within the amounts of the retained limit which Federal Press has the duty to pay. Moreover, such a result cannot be inferred as a matter of law. The provisions regarding the insured‘s retained limit do not purport to excuse Columbia from its obligations in the event Federal Press fails to pay the retained limit of $300,000.” (citing Ryder Truck Lines, Inc. v. Carolina Cas. Ins. Co., 385 N.E.2d 449, 452 (Ind. 1979)); see also Ryder Truck Lines, 385 N.E.2d at 452 (“In the present case, since Carolina‘s excess coverage began only if the loss was over $100,000 for personal injury liability, then the excess liability focused on the upper limits of the other insurance policy. As stated by the Court of Appeals, the excess insurance clause should not be extended to cover an amount for which the insured, here Ryder, has bargained to become a self-insurer.“) (emphasis added). Thus, even if the UM/UIM coverage in the XSA Policy were illusory, Plaintiff has identified no legal basis for concluding that the remedy under those circumstances would obligate Defendant to pay UM/UIM damages within the $3 million retained limit; the XSA Policy obligates Defendant to pay UM/UIM damages “in excess of” the $3 million retained limit. (Dkt. No. 20-15, at 39). As noted, there is no evidence that Plaintiff‘s damages exceed the retained limit.
Finally, Plaintiff argues that because his employer “would never make payment of the retained limit” as required by the XSA Policy, a finding that allows Defendant “to water down the UM/UIM mandate with a self insured retention,” “would be inconsistent with the remedial purpose of UM/UIM coverage in Indiana policies.” (Dkt. No. 35, at 5-6). To the extent there is a $3 million gap in coverage because plaintiff‘s employer is, as Plaintiff asserts, self-insured, and not legally obligated to provide UM/UIM coverage, the unavailability of coverage at that level would not be unknown to the Indiana legislature:
Although we recognize the remedial purpose of the uninsured motorist coverage statute and we may even agree that public policy favors a requirement that self-insurers under the financial responsibility law should be required to provide some sort of uninsured motorist protection for those who drive their automobiles, it is not our role to sit as a judicial legislator and write such a requirement into the act. Rather, this type of mandate must come from the legislature.
City of Gary, 612 N.E.2d at 119. Accordingly, the Court concludes that the retained limit in the XSA Policy is not prohibited by or incompatible with the Indiana UM/UIM Statute.
V. CONCLUSION
For these reasons, it is hereby
ORDERED that Defendant‘s supplemental motion for summary (Dkt. No. 33) is GRANTED; and it is further
ORDERED that the parties are to file a joint status report by April 7, 2022 indicating how they seek to proceed.
IT IS SO ORDERED.
Dated: March 24, 2022
Syracuse, New York
Brenda K. Sannes
U.S. District Judge
Notes
(c) The maximum amount payable for bodily injury under uninsured or underinsured motorist coverage is the lesser of:
- the difference between:
- the amount paid in damages to the insured by or for any person or organization who may be liable for the insured‘s bodily injury; and
- the per person limit of uninsured or underinsured motorist coverage provided in the insured‘s policy; or
- the difference between:
- the total amount of damages incurred by the insured; and
- the amount paid by or for any person or organization liable for the insured‘s bodily injury.