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Prime Insurance Co. v. Wright

Court of Appeals of Indiana

September 26, 2019

Prime Insurance Co., Appellant,
v.
Darnell Wright, et al., Appellees.

          Appeal from the Allen Superior Court The Honorable Craig J. Bobay, Judge Trial Court Cause No. 02D02-1503-CT-121

          ATTORNEYS FOR APPELLANT Siobhan M. Murphy Lewis Brisbois Bisgaard & Smith LLP Scott B. Cockrum Lewis Brisbois Bisgaard & Smith LLP

          ATTORNEYS FOR APPELLEE DARNELL WRIGHT David A. Singleton Chad E. Romey

          Bradford, Judge.

         Case Summary

         [¶1] The issue before us is whether an insurance company, which has been relieved of all responsibility under its liability policy through judicial declaration, has an adequate interest in the underlying liability-related lawsuit to warrant participation in said lawsuit for the purpose of attempting to limit its potential future liability stemming from the same events under an MCS-90 Endorsement. Because the insurance company's remaining interest in the lawsuit is contingent, rather than cognizable, we conclude that it does not.

         Facts and Procedural History [1]

          [¶2] On November 12, 2013, Darnell Wright was injured in a collision with a vehicle driven by Decardo Humphrey. At the time of the collision, Humphrey was acting as an agent for/in the scope of his employment with Ali Faruq, Riteway Trucking, Inc. ("Riteway"), Riteway Transportation, Inc. ("RTI"), and Prudential Trucking, Inc. ("PTI"). On March 27, 2015, Wright filed suit against Humphrey, Faruq, Riteway, RTI, and PTI (collectively, "Defendants"). For whatever reason, Riteway would not cooperate with its insurance provider, Prime Insurance Co. ("Prime"), and failed to appear or present any defense in a subsequent lawsuit brought against it by Wright.

         [¶3] On or about May 1, 2015, Prime filed an action in the Northern District of Indiana seeking a declaration that it had no duty to defend Riteway or any other defendant in Wright's state-court action. Meanwhile, back in the trial court, on June 17, 2015, Wright filed a motion for a default judgment. In July of 2015, Prime sought and was granted permission to intervene in Wright's state-court action.

         [¶4] The trial court conducted a hearing on Wright's motion for a default judgment on August 19, 2015. Defendants and Prime failed to appear, despite each having notice of the hearing.[2] The next day, on August 20, 2015, the trial court entered default judgment against Faruq, Riteway, RTI, and PTI, finding that they were in default. The trial court did not enter default judgment against Prime. The trial court entered judgment in favor of Wright for $400, 000.

         [¶5] Prime filed an answer and affirmative defenses on August 21, 2015, and a motion to obtain discovery from Wright on November 4, 2015. Wright objected to Prime's discovery requests on the grounds that judgment had already been entered against Riteway on liability and damages. In response to Wright's objection, on January 4, 2016, Prime filed motions to set aside the default judgment and to obtain discovery. The trial court denied Prime's motion to obtain discovery and stayed the case until Prime's federal action was resolved.

         [¶6] After its attempts to obtain discovery from Wright in the state-court action were rejected, Prime requested permission to issue discovery requests to Wright regarding the issues of liability and damages in the federal-court action. The federal court denied Prime's request, noting that the information sought was irrelevant to the pending request for a declaratory judgment. The federal court stated that it would not permit Prime "to subvert limitations on discovery in another proceeding, by attempting to obtain discovery in [the federal] case that has already been denied in the underlying Allen Superior Court action." Appellee's App. Vol. II p. 76 (internal quotation omitted). On January 29, 2018, the federal court ordered that Prime did not owe a duty to defend or indemnify Riteway, that Riteway had failed to meet its obligations under its insurance policy, and that Riteway and its "alter egos" shall be liable to Prime for any payments made under an MCS-90 Endorsement[3] to the insurance policy. Appellee's App. Vol. II p. 58.

         [¶7] Following resolution of the federal-court action, the trial court held a hearing on Prime's motion to set aside the default judgment. On October 25, 2018, the trial court issued an order denying ...


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