Court: Indiana Supreme Court; February 21, 1998; Indiana; State Supreme Court
Sandy Thomas and James Lee Thomas, appellants, filed a lawsuit against Victoria Fire Casualty Insurance Company, the appellee, after their claim for uninsured motorist coverage was denied. The denial was based on a policy exclusion that precluded coverage for relatives of the named insured, Sandra Simmons, who owned the insurance policy. The Thomases alleged bad faith in the denial of coverage and benefits. Victoria Insurance countered with a motion for summary judgment, asserting that the exclusion barred the Thomases from recovery.
Key points of the case include:
- The Thomases’ appeal raises three consolidated issues:
1) Whether the exclusion of coverage for relatives violates public policy.
2) Whether the Thomases are entitled to uninsured motorist coverage.
3) Whether they can pursue a bad faith claim against Victoria Insurance.
- The undisputed facts show that Sandra Simmons was driving her car, with the pregnant Sandy Thomas as a passenger, when they were involved in a collision with uninsured driver Tracy Koontz. Both the mother and unborn child suffered severe injuries.
- The policy explicitly excluded coverage for bodily injury to the insured or any relatives, defined as individuals related by blood, marriage, or adoption, or living in the same household.
- The trial court granted Victoria Insurance's motion for summary judgment, which the Thomases appealed, with the court affirming the trial court's decision based on the established legal standards for summary judgment.
The ruling confirmed that the policy's exclusionary clause was valid and upheld the denial of the Thomases’ claims.
Summary judgment is granted when no genuine material fact exists and the moving party is entitled to judgment as a matter of law. The facts in this case are undisputed, focusing on the legal implications of those facts. The Thomases assert that a relative exclusion clause in the Victoria Insurance contract violates public policy as outlined in the Financial Responsibility Act and the Uninsured Motorist Statute, claiming the trial court erred in granting summary judgment based on this clause being void. A trial court's decision on summary judgment carries a presumption of correctness, and appellate review affirms any supported theory.
Victoria Insurance sought summary judgment for a declaratory judgment, arguing that the Thomases lacked standing regarding their bad faith claim and that their insurance contract did not provide liability or uninsured motorist coverage for the Thomases. The trial court found no material fact disputes and ruled in favor of Victoria Insurance. Regardless of whether the exclusion clause violates public policy, the appellate court will affirm if any theory supported by the insurance policy and evidence presented justifies the trial court's decision.
The Thomases claim they are insured under the uninsured motorist provision because they were occupying Simmons' car, which is defined as "insured." They argue entitlement to benefits under this provision. The facts are similar to a precedent case where a mother and daughter were involved in an accident with an uninsured motorist, highlighting differences in coverage between liability and uninsured motorist provisions. The court noted that the insured definitions under the two provisions differ, creating ambiguity about coverage.
The interpretation of the uninsured motorist statute leads to the conclusion that coverage is only available to those listed as insured under the liability section of the insurance policy. In this case, neither mother (Sandra J. Simmons) nor daughter (Sandy Thomas) were designated as insureds under the liability section, which precludes them from receiving uninsured motorist coverage. The policy defines "insured" to include the named insured, their spouse living in the household, drivers listed on the declaration page, and anyone driving the insured vehicle with permission. The uninsured motorist provision encompasses a wider class of persons than the liability section; however, eligibility for uninsured motorist coverage is contingent upon being classified as an “insured” under the liability provision.
The court also notes that the rationale for linking uninsured motorist coverage to liability coverage is to protect those who have insurance for potential injuries they might cause, affirming the principle that uninsured individuals should not benefit from public policy protections. The trial court's summary judgment in favor of Victoria Insurance was upheld, confirming that the Thomases could not claim bad faith since they were not entitled to uninsured motorist coverage. Consequently, Victoria Insurance had no obligation to provide such coverage or benefits. The judgment is affirmed, with one judge concurring and another partially dissenting.
The passenger, Thomas, is not entitled to uninsured motorist coverage against her car's driver due to an exclusion for relatives in the liability coverage provisions of the insurance policy, which was part of the contractual agreement. While the exclusion is deemed unusual, there is no public policy justification to invalidate it. However, if the other driver, Koontz, is found negligent for the accident, Thomas could recover under the uninsured motorist provision of Simmons’ policy, which includes coverage for anyone in the insured vehicle. The case of Indiana Farmers Mut. Ins. Co. v. Speer does not change this outcome, as the facts differ significantly—specifically, the policy in question did not cover the vehicle involved in the collision. The resolution of any good faith claim was prematurely decided on summary judgment, as liability hinges on comparative fault, indicating that Victoria may only be liable to the Thomases if Koontz is found liable. The relationship between Simmons and Thomas is acknowledged but deemed irrelevant to the appeal's outcome. The court recognizes that "household" exclusion clauses are not against public policy in Indiana, though the specific issue of "relative" exclusion remains unaddressed and is set aside for future consideration. The Thomases criticize the Speer decision but accept its current standing in law.
