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Earl v. State Farm Mutual Automobile Insurance Co.

Court of Appeals of Indiana

January 16, 2018

Kimberly S. Earl, Individually and as Personal Representative of the Estate of Jerry L. Earl, Appellant-Plaintiff,
v.
State Farm Mutual Automobile Insurance Company, State Farm Fire and Casualty Company, and Sarah Smith Vinnedge, Appellees-Defendants

         Appeal from the Jackson Superior Court The Honorable Bruce Markel, III, Judge, Trial Court Cause No. 36D01-1411-CT-36.

          ATTORNEYS FOR APPELLANT Matthew J. Schad Schad & Schad, P.C. New Albany, Indiana Roger L. Pardieck Karen M. Davis The Pardieck Law Firm Seymour, Indiana.

          ATTORNEYS FOR APPELLEES John B. Drummy Crystal G. Rowe J. Todd Spurgeon Kightlinger & Gray, LLP Indianapolis, Indiana.

          MAY, JUDGE.

         [¶1] Kimberly Earl, ("Kimberly"), individually, and as the personal representative of the Estate of Jerry L. Earl (collectively, "Earl") appeals the grant of summary judgment in favor of State Farm Mutual Automobile Insurance Company ("State Farm Mutual"), State Farm Fire and Casualty Company ("State Farm Fire"), and Sarah Smith Vinnedge ("Vinnedge") (collectively, "Defendants"). Earl argues the trial court erred when it granted summary judgment in favor of Defendants.

         [¶2] The parties present multiple issues for our review, which we consolidate and restate as:

1. Whether the trial court erred when it granted summary judgment for the Defendants based on the trial court's conclusion Earl's claims were impermissible collateral attacks on an earlier judgment;
2. Whether the trial court erred when it granted summary judgment for the Defendants based on the trial court's conclusion Earl was unjustified in her reliance on State Farm Mutual's representations regarding insurance coverage in the earlier litigation; and
3. Whether the trial court erred when it granted summary judgment for the Defendants regarding Earl's bad faith claim.

         We reverse and remand.

         Facts and Procedural History[1]

         [¶3] On September 3, 2008, Jerry Earl ("Jerry") sustained injuries in a motorcycle crash involving a hit-and-run semi driver. At the time, Kimberly and Jerry Earl ("the Earls") had an Uninsured Motorist ("UM") policy with available coverage of $250, 000 with State Farm Mutual and a Personal Liability Umbrella Policy ("PLUP"), including available coverage for damage done by an uninsured motorist of $2, 000, 000, with State Farm Fire. State Farm Mutual offered $40, 000 to settle the claim, which the Earls rejected.

         [¶4] On August 10, 2010, the Earls filed a claim against State Farm Mutual for UM coverage benefits for damages Jerry incurred as part of the motorcycle accident, and loss of services, society, and companionship for Kimberly ("UM Litigation"). On January 19, 2011, the Earls served their interrogatories upon State Farm Mutual, with a question stating:

Describe any policy or policies of liability insurance or any indemnification or insurance agreement in effect which covered or may cover any person or vehicle in connection with the wreck, please state as to each policy:
(a) The name and address of the insurer;
(b) The names and addresses of the insureds;
(c) Other persons covered by the policy;
(d) The number of the policy;
(e) The effective dates thereof;
(f) The amount of coverage;
(g) The limits of liability.

(App. Vol. V at 7.) Vinnedge, as a representative of State Farm Mutual, answered the interrogatories. Her answer included information about only the $250, 000 UM policy with State Farm Mutual.

         [¶5] On November 27, 2012, the jury returned a verdict of $175, 000 for the Estate of Jerry Earl[2] and $75, 000 for Kimberly individually. On November 28, State Farm Mutual directed its counsel to divulge information regarding the PLUP policy with UM coverage to Earl's counsel. On December 3, 2012, State Farm Mutual's counsel provided Earl's counsel a copy of the PLUP policy, which provided for an additional $2, 000, 000 in UM coverage.

         [¶6] On January 10, 2013, Earl filed a motion to correct error, requesting the trial court modify the jury's verdict regarding damages awarded to Earl based on State Farm Mutual's "conduct in failing to produce the [PLUP] or information about the policy in discovery and allowing the case to go to the jury after the jury had been given incomplete information about the policy limits." (App. Vol. III at 15.) Earl also requested attorney's fees and litigation expenses, alleging State Farm Mutual violated discovery rules.

         [¶7] On January 28, 2013, State Farm Mutual responded to Earl's motion, arguing a new trial was warranted because the trial court erred when it allowed evidence of the UM policy limits before the jury. In addition, State Farm Mutual indicated:

A new trial is the [sic] also the appropriate relief available to Plaintiff as a result of State Farm's belated disclosure of the [PLUP]. A new trial would not be necessary due to the belated disclosure of the [PLUP] if the underlying [UM] policy and its limit of $250, 000 had not been admitted into evidence before the jury. Because of the admission of that evidence, however, it is possible that the jury capped its award at the policy limit. Because it is possible that Plaintiff was prejudiced as a result of the belated disclosure of the [PLUP], a new trial is warranted. Plaintiff's request, however, that the court increase the jury's award to a total sum of $2, 250, 000 (the combined limits of the policies) is clearly inappropriate under Indiana law because the evidence before the jury supported a range of verdicts.

(Id. at 106-7.) State Farm Mutual opposed Earl's request for attorney's fees and litigation expenses.

         [¶8] In its Statement of Facts in its motion in opposition of Earl's motion to correct error, State Farm Mutual conceded

that during its handling of the claim prior to the initiation of the present litigation it would have been appropriate for it to have confirmed with Plaintiff or her counsel the existence of the [PLUP] and the uninsured motorist coverage available under that policy. State Farm also readily concedes that its response to Plaintiff's request for production and its answers to Plaintiff's interrogatories prepared by its counsel and, in the instance of the answers to interrogatories, signed by claim representative Sarah Smith [Vinnedge], were incomplete and should have referenced the [PLUP], even though State Farm never evaluated the claim as having a value remotely approaching the limit of the underlying policy.

(Id. at 107-8.)[3]

         [¶9] On March 23, 2013, Earl moved to withdraw her motion to correct error stating:

There are good grounds for Plaintiff's motion, but upon further review, Plaintiff feels the appropriate action to take in these unusual circumstances is to pursue other remedies against State Farm Mutual Automobile Insurance Company so that further discovery may be conducted and so ...

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