Founders Ins. Co. v. May

44 N.E.3d 56

FOUNDERS INSURANCE COMPANY, Appellant–Plaintiff

v.Mark MAY, Pamela Coomer, and Roger W. Hoke as the Personal Representative of the Estate of Brian Hoke, deceased, Appellees–Defendants.

No. 49A02–1501–PL–8.

Court of Appeals of Indiana.

Sept. 18, 2015.

Ryan Duffin, Lori A. Coates, Duffin & Hash LLP, Indianapolis, IN, Attorneys for Appellant.

R.T. Green, Blackburn & Green, Indianapolis, IN, Attorney for Appellee Roger W. Hoke, Personal Representative of the Estate of Brian Hoke, Deceased.

ROBB, Judge.

Case Summary and Issue

[1] Pamela Coomer, driving a vehicle owned by Mark May and insured by Founders Insurance Company (“Founders”), was involved in an accident that ultimately resulted in the death of Brian Hoke. Coomer did not have a valid driver's license nor May's permission to drive the vehicle. Founders filed a complaint seeking a declaratory judgment that it had no duty to defend or provide coverage for the accident pursuant to the terms of the insurance contract and sought summary judgment. The trial court granted summary judgment to Founders as to May and Coomer, but denied summary judgment as to Roger Hoke as the Personal Representative of the Estate of Brian Hoke, Deceased (“Hoke's Estate”). Founders now appeals, raising the sole issue of whether the trial court erred in denying summary judgment as to Hoke's Estate. We conclude the exclusions in the insurance contract relevant to this situation are clear and unambiguous and do not violate public policy; therefore, the exclusions are enforceable. Founders is entitled to summary judgment as to all parties, and the trial court's order denying summary judgment as to Hoke's Estate is reversed.

Facts and Procedural History

[2] In 2012, May and Coomer were involved in “a serious relationship.” Appendix of Appellee at 1. May owned a pickup truck which Coomer would drive “[m]aybe once a month[,]” id. at 5, although her driver's license was suspended, id. at 6–7. May knew that Coomer sometimes drove the truck because usually when she did so, she was acting as a designated driver for him. In general, however, May “doesn't really like anybody to drive his truck.” Id. at 7.

[3] On November 10, 2012, Coomer took May's truck to visit her children. May was not with her, and she did not have his permission to drive the truck that day. When returning home, she struck Hoke, who was riding a bicycle. Hoke did not have an automobile and did not have automobile insurance. He died on November 27, 2012, from injuries he sustained in the collision. May's truck was insured on November 10, 2012, by Founders under a policy that provided, in relevant part:

Part A—Liability Coverage

Insuring Agreement

A. We will pay damages for “bodily injury” or “property damage” for which any “insured” becomes legally responsible because of an auto accident.... We will settle or defend, as we consider appropriate, any claim or suit asking for these damages.... We have no duty to defend any suit or settle any claim for “bodily injury” or “property damage” not covered under this policy.

B. “Insured” as used in this Part means:

...

2. Any person using “your covered auto”.

* * *

Exclusions

A. We do not provide Liability Coverage for any “insured”:

...

8. Using a vehicle without a reasonable belief that that “insured” is entitled to do so.

Appellant's Appendix at 12–13. In addition, an Amendatory Endorsement modifying Part F—General Provisions of the policy provided:

No coverage is afforded under any Part of this policy if, at the time of the accident, “your covered auto” ... is being operated by a person who is not a licensed driver, or is without a valid driver's license, whose driver's license is revoked or suspended, or whose driver's license has been expired for more than 30 days, or is not legally entitled to drive under Indiana law.

Id. at 27.

[4] Hoke's Estate filed a wrongful death suit against May and Coomer in July 2013. Founders filed a complaint for declaratory judgment against May, Coomer, and Hoke's Estate, seeking a declaration that it had no obligation to provide coverage benefits under the policy because Coomer did not have a valid driver's license at the time of the accident nor did she have a reasonable belief that she was entitled to use the truck on that date. In May 2014, Founders filed a motion for summary judgment “as the evidence in this matter establishes that Founders owes no duty to provide a defense or indemnification” to May or Coomer. Id. at 32. It does not appear that May or Coomer answered the complaint or filed a response to the motion for summary judgment. Hoke's Estate, however, filed a response in opposition to summary judgment, asserting that Founders should not be permitted to deny insurance coverage as to Hoke's Estate, “an innocent, injured party” who “will be without any source of compensation for losses suffered in the November 10, 2012 incident....” Id. at 104.

[5] On November 3, 2014, the trial court entered a summary ruling on Founders' motion for summary judgment as to May and Coomer, finding that there is no genuine issue of fact and Founders is entitled to summary judgment against May and Coomer. However, the trial court's order also stated that “all issues remain or survive as to the remaining Defendant, [Hoke's Estate].” Id. at 107. Founders then sought and was granted permission to pursue this interlocutory appeal of the trial court's order with regard to the ruling as to Hoke's Estate.

Discussion and Decision

I. Standard of Review

[6] When we review a trial court's ruling on summary judgment, we apply the same standard as the trial court. Manley v. Sherer, 992 N.E.2d 670, 673 (Ind.2013). Summary judgment is appropriate where 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). The appellant has the burden of persuading us that the summary judgment ruling was erroneous. Amaya v. Brater, 981 N.E.2d 1235, 1239 (Ind.Ct.App.2013), trans. denied. Where the facts material to the proceedings are not in dispute, this court determines whether the trial court correctly applied the law to the facts. Johnson v. Hoosier Enters. III, Inc., 815 N.E.2d 542, 548 (Ind.Ct.App.2004), trans. denied. A case such as this one, involving the interpretation of an insurance contract, is particularly appropriate for summary judgment because the interpretation of a contract is a question of law. Burkett v. Am. Family Ins. Grp., 737 N.E.2d 447, 452 (Ind.Ct.App.2000).

II. Denial of Summary Judgment as to Hoke's Estate

[7] The particular facts of this case present an issue of first impression in Indiana: Does an insurer which has no duty to provide coverage benefits to its insured pursuant to the plain terms of the insurance contract nonetheless have to pay damages to an injured third party who has no independent source of insurance? Founders contends that it does not have to pay those damages because it reasonably limited its liability by the terms of its insurance contract to exclude coverage in these circumstances. Hoke's Estate argues that permitting Founders to deny coverage in this instance would contravene the public policy underlying Indiana's Financial Responsibility Act to provide “persons who suffer loss due to the tragedy of automobile accidents ... a source and means of recovery.” Brief of Appellee at 3. Hoke's Estate contends that the result it seeks is “consistent with the result reached by appellate courts in other compulsory insurance law jurisdictions,” id. at 6, and is supported by the reasoning of Indiana decisions on similar issues.

A. Overview of Statutes and Caselaw

[8] Historically, Indiana required proof of financial responsibility for automobile owners only after the occurrence of an accident. Although the primary purpose of the then–Safety–Responsibility and Driver Improvement Act was “to facilitate loss recovery by auto accident victims,” the statute was not a compulsory insurance statute because means of proving financial responsibility other than insurance were allowed. See Allstate Ins. Co. v. Boles, 481 N.E.2d 1096, 1101 (Ind.1985). When the statute was amended in 1983 to require proof of financial responsibility when registering a car, Ind.Code § 9–18–2–11, the law still permitted proof of responsibility through bond, deposit of funds or securities, and self-insurance in addition to traditional insurance, Ind.Code ch. 9–25–4. Thus, Indiana remains a “compulsory financial responsibility state.” Transamerica Ins. Co. v. Henry, 563 N.E.2d 1265, 1267–68 (Ind.1990). “Indiana's current financial responsibility scheme, like the prior one, demonstrates a policy to protect automobile owners ... from damages which might be inflicted on them by other cars out on the road.” Id. at 1268. To this end, insurers must offer uninsured and underinsured motorist coverage in every insurance contract. See Ind.Code § 27–7–5–2. “The purpose of uninsured motorists insurance is to place the insured in substantially the same position as if the other party had complied with the minimum requirements of the insurance statutes.” Smith v. Allstate Ins. Co., 681 N.E.2d 220, 222 (Ind.Ct.App.1997) (emphasis added). “The purpose of our financial responsibility statute is to compel ... other motorists to make provisions for our protection.” Transamerica Ins. Co., 563 N.E.2d at 1268. But the statutes do not “constitute a social policy to guarantee compensation to all victims of motor vehicle accidents.” Id.

[9] The out-of-jurisdiction cases cited by Hoke's Estate are not particularly instructive to this case. Hoke's Estate cites Woody v. Georgia Farm Bureau Mut. Ins. Co., 250 Ga.App. 454, 551 S.E.2d 836 (2001), and Adams v. Thomas, 729 So.2d 1041 (La.1999), both of which addressed policy provisions excluding unlicensed drivers from coverage. In Woody, a split Georgia Court of Appeals held that the unlicensed driver exclusion, although unambiguous and generally enforceable, was unenforceable in that particular case because...