A woman who sued an insurance company after she and her child were injured in a multi-vehicle crash showed a meritorious defense and misconduct of an adverse party in the case, the Indiana Court of Appeals ruled Wednesday. The appeals court sent the case back to the trial court for full consideration of her claims.
After Robin Dunn and her minor child asserted injuries stemming from a crash in 2017, Dunn’s attorney, Darron S. Stewart, contacted First Chicago Insurance Company to inform the insurer of his law firm’s representation of Dunn, individually and as the parent of her child.
The insurer filed an interpleader complaint against several defendants, including Dunn, admitting that it owed liability in the amount of $50,000 under the insurance policy to one or more of the defendants. The Marion Superior Court ultimately granted First Chicago’s motion for summary judgment, ordering the insurance company discharged from any further contractual obligation regarding payment/indemnification to any party claims arising from the crash. It also freed the insurer from liability of all personal injury claims resulting from the crash.
Full distribution of the $50,000 was ordered to be tendered to the three non-defaulted defendants, prompting Dunn, to file a motion for relief from the default judgment pursuant to Indiana Trial Rule 60(B).
Dunn alleged that First Chicago failed to serve her its summons, that neither she nor Stewart had been aware of the interpleader action filed Dec. 27, 2017, and that Stewart first became aware of the action in February 2019, despite First Chicago’s knowledge since June 2017 that he represented Dunn in all matters relating to the crash.
The trial court granted Dunn’s motion, concluding that First Chicago was granted summary judgment as to all parties except Dunn. It similarly discharged First Chicago of any duty as to all personal injury claims arising from the accident, except as to Dunn and her child. Finally, the trial court concluded that First Chicago must make up to $25,000 of insurance coverage available to Dunn and her child for their claims.
First Chicago appealed, arguing that the trial court erred in granting Dunn’s motion for relief from default judgment and that it abused its discretion in ordering the insurer to make up to $25,000 in coverage available.
The Indiana Court of Appeals agreed with Dunn that First Chicago waived its arguments challenging relief from default judgment, finding the insurer failed to raise those arguments in the trial court. Additionally, the appellate court concluded that “Dunn and her counsel had no reason to believe FCIC would not honor Stewart’s instruction regarding communication and every reason to believe that FCIC would inform Stewart of significant developments related to Dunns’ claims.”
“They certainly had no reason to believe that FCIC would file a lawsuit regarding Dunn’s claims without notifying her legal counsel. Yet, that is just what FCIC did,” Judge L. Mark Bailey wrote for the court. In a footnote, the appellate court pointed out that had there been evidence that First Chicago’s attorney was the one who had knowledge of Dunn’s legal representation, that attorney could have been subject to disciplinary action under the Indiana Rules of Professional Conduct.
In concluding that FCIC’s actions led to any potential liability of Dunn “over-and-above the policy limit”, the appellate court found no abuse of the trial court’s discretion. However, it found no evidentiary basis for the order limiting the potential relief available to Dunn to $25,000.
“Consequently, the trial court erred when it ordered FCIC to set aside a sum certain to satisfy Dunn’s claims,” the appellate court wrote. “Until evidence is presented unencumbered by the protections sought by FCIC through the invocation of Trial Rule 22, Dunn’s damages cannot be ascertained.”
The appellate court therefore reversed the order requiring FCIC to make up to $25,000 available for Dunn’s claims and remanded the matter to the trial court for further proceedings in First Chicago Insurance Company v. Candace Collins, et al., 19A-PL-02000.
This article was first published by The Indiana Lawyer.
