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Mellen v. State Farm Mutual Automobile Insurance Co.

United States District Court, N.D. Indiana, South Bend Division

September 20, 2019

ELIZABETH MELLEN, et al., Plaintiffs
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant

          OPINION AND ORDER

          Robert L. Miller, Jr. Judge.

         Elizabeth Mellen and her sons, Maxwell and Jacob Mellen, filed a declaratory judgment action in state court under Ind. Code 34-24-2-2 et seq alleging that State Farm wrongfully denied their claim under the underinsured motorist provision of their auto insurance policy following an automobile accident that involved both an uninsured and an underinsured driver.[1] They seek a declaration that they are entitled to benefits under both the uninsured and the underinsured provisions of their policy, and that State Farm must pay the full policy limits under the underinsured provision ($300, 000) in addition to the benefits already paid under the uninsured provision. State Farm contends that there was only one accident in this case, that the uninsured driver caused the accident, and that it’s already paid all benefits to which the Mellens are entitled. For the following reasons, the court denies State Farm’s motion.

         II. Standard of Review

         Summary judgment is appropriate when the pleadings, discovery materials, disclosures, and affidavits demonstrate no genuine issue of material fact, such that the movant is entitled to judgment as a matter of law. Protective Life Ins. Co. v. Hansen, 632 F.3d 388, 391-92 (7th Cir. 2011). The court must construe the evidence and all inferences that reasonably can be drawn from the evidence in the light most favorable to the Mellens, the non-moving parties. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). But inferences can’t be based only on “speculation or conjecture, ” Herzog v. Graphic Packaging Int’l Inc., 742 F.3d 802, 806 (7th Cir 2014); Tubergen v. St. Vincent Hosp. & Health Care Ctr., Inc., 517 F.3d 470, 473 (7th Cir. 2008), and “the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) (emphasis in original); see also Dawson v. Brown, 803 F.3d 829, 833 (7th Cir. 2015). “[T]he requirement is that there be no genuine issue of material fact.” Id. “A genuine issue of material fact arises only if sufficient evidence favoring the nonmoving party exists to permit a jury to return a verdict for that party.” Egonmwan v. Cook County Sheriff’s Dept., 602 F.3d 845, 849 (7th Cir. 2010) (quotation marks omitted).

         I. Undisputed Facts

         On November 2, 2015, Mrs. Mellen and her two sons were involved in a multi-vehicle automobile accident involving an uninsured driver and an underinsured driver. The accident was captured on a security camera at a nearby business establishment, and shows Mrs. Mellen’s car being rear-ended by an unidentified and uninsured driver, pushed into oncoming traffic, and struck by a second vehicle driven by Michael Hensley about one second later. Mr. Hensley’s insurance company, Allstate, did not admit liability, but paid the Mellens Mr. Hensley’s policy limits ($100, 000 per occurrence) (see Doc. No. 38-1), and State Farm paid them its policy limits under the Mellens’ Uninsured Motor Vehicle Coverage provision ($300, 000). The Mellens’ injuries allegedly exceeded the $400, 000 already paid, so they submitted a claim for policy limits under State Farm’s underinsured motor vehicle coverage provisions as well. State Farm advised the Mellens that the terms of their policy only entitled them to recover under the uninsured motorist provision and denied their claim.

         The relevant policy provisions provide as follows:

Insuring Agreements
1. Uninsured Motor Vehicle Coverage
We will pay compensatory damages [for bodily injury and/or property damage] an insured is legally entitled to recover from the owner or driver of an uninsured motor vehicle. The bodily injury or property damage must be:
a. sustained by an insured; and
b. caused by an accident that involves the operation, maintenance, or use of an uninsured motor vehicle as a motor vehicle.
2. Underinsured Motor Vehicle Coverage
We will pay compensatory damages for bodily injury an insured is legally entitled to recover from the owner or driver of an underinsured motor vehicle. The bodily injury must be:
a. sustained by an insured; and
b. caused by an accident that involves the operation, maintenance, or use of an underinsured motor vehicle as a motor vehicle.
We will pay only if the full amount of all available limits of all bodily injury liability bonds, policies, and self-insurance plans that apply to the insured’s bodily injury have been used up by payment of judgments or settlements, or have been offered to the insured in writing.
Deciding Fault and Amount – Uninsured Motor Vehicle Coverage and Underinsured ...

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