                                                                           FILED
                                                                      Mar 26 2020, 9:36 am

                                                                           CLERK
                                                                       Indiana Supreme Court
                                                                          Court of Appeals
                                                                            and Tax Court




ATTORNEYS FOR APPELLANT                                    ATTORNEYS FOR APPELLEE
Robert J. Palmer                                           Crystal Gates Rowe
Jon R. Rogers                                              Kightlinger & Gray, LLP
Georgianne M. Walker                                       New Albany, Indiana
May Oberfell Lorber                                        Casey R. Stafford
Mishawaka, Indiana                                         Kightlinger & Gray, LLP
                                                           Indianapolis, Indiana



                                            IN THE
    COURT OF APPEALS OF INDIANA

Christine Catanzarite,                                     March 26, 2020
Appellant-Plaintiff,                                       Court of Appeals Case No.
                                                           19A-CT-2338
        v.                                                 Appeal from the St. Joseph
                                                           Superior Court
Safeco Insurance Company of                                The Honorable David C.
Indiana,                                                   Chapleau, Judge
Appellee-Defendant.                                        Trial Court Cause No.
                                                           71D06-1809-CT-451



Riley, Judge.




Court of Appeals of Indiana | Opinion 19A-CT-2338 | March 26, 2020                             Page 1 of 16
                                STATEMENT OF THE CASE
[1]   Appellant-Plaintiff, Christine Catanzarite (Catanzarite), appeals the trial court’s

      summary judgment concluding that there was no genuine issue of material fact

      precluding judgment in favor of the Appellee-Defendant, Safeco Insurance

      Company of Indiana (Safeco).


[2]   We affirm.


                                                     ISSUE
[3]   Catanzarite presents one issue on appeal, which we restate as: Whether the

      trial court erred by granting summary judgment in favor of Safeco.


                       FACTS AND PROCEDURAL HISTORY
[4]   On February 1, 2018, Catanzarite was driving eastbound on Sample Street,

      South Bend, Indiana. At around the same time, Timothy Smith (Smith) was

      driving westbound on Sample Street, and as he was turning south onto Edison

      Street, an intersection on Sample Street, he struck Catanzarite’s vehicle. The

      accident was caused by Smith’s negligence. As a result of the collision,

      Catanzarite suffered broken legs and was hospitalized at Memorial Hospital for

      approximately three weeks, during which time reasonable and necessary

      medical expenses in the amount of $269,841.32 were incurred by Catanzarite.

      On April 13, 2018, Memorial Hospital timely filed with the St. Joseph County




      Court of Appeals of Indiana | Opinion 19A-CT-2338 | March 26, 2020        Page 2 of 16
      Recorder’s Office its hospital lien for the recovery of the costs of the health care

      services rendered to Catanzarite. 1


[5]   At the time of the collision, Smith was insured by Hanover Insurance

      (Hanover), and he had tortfeasor’s liability insurance coverage with a policy

      limit of $100,000 per person. Catanzarite had underinsured motorist (UIM)

      coverage with Safeco which had a policy limit of $100,000 per person.


[6]   On March 25, 2018, Hanover sent a letter to Catanzarite, stating that upon a

      signed release, it would pay Catanzarite $100,000, the maximum payable under

      Smith’s bodily injury liability coverage. With preliminary medical expenses

      amounting to $269,841.32, through her lawyer, Catanzarite wrote to Safeco and

      claimed that her total damages were in excess of Smith’s bodily injury liability

      coverage, and she asserted a claim under the Underinsured Motorist (UIM)

      provision of her own policy. Safeco denied this claim, claiming that Smith’s

      $100,000 bodily injury liability limits were equal to Catanzarite’s $100,000

      UIM coverage limits, thus Catanzarite was precluded from further payment.


[7]   On September 26, 2018, Catanzarite filed a Complaint for Declaratory

      Judgment, seeking a declaration as to whether she was entitled to her UIM

      coverage from Safeco. On December 5, 2018, Safeco filed its response.




      1
       At the summary judgment hearing, Catanzarite claimed that Memorial Hospital had reduced her medical
      expenses to $25,000. Safeco did not challenge the reduced medical lien and the record is devoid of any
      evidence that Memorial Hospital perfected another lien with respect to the adjusted amount. Thus, we rely
      on the testimony offered at the summary judgment hearing.

      Court of Appeals of Indiana | Opinion 19A-CT-2338 | March 26, 2020                             Page 3 of 16
[8]   On May 10, 2019, Catanzarite filed a motion for summary judgment against

      Safeco arguing that there was no genuine issue of material fact and was entitled

      to judgment as a matter of law. In her memorandum in support, Catanzarite

      argued that once her hospital lien is deducted from the $100,000 settlement she

      and was receiving from Hanover, the balance of any payment available to her

      under Smith’s bodily injury liability policy would be less than the limits under

      her UIM policy at the time of the accident. Based on her computation,

      Catanzarite asserted that Smith was underinsured at the time of the accident,

      and that she was entitled to her own UIM coverage benefits from Safeco.

      Safeco filed a response on June 17, 2019, opposing Catanzarite’s summary

      judgment motion. Safeco did not factor in the hospital lien reducing the

      available payments under Smith’s policy and it ultimately argued that Smith

      was not operating an underinsured motor vehicle at the time of the accident,

      therefore, no UIM coverage benefits were available to Catanzarite. On

      September 13, 2019, the trial court conducted a hearing on the parties’ motions,

      and it granted summary judgment in favor of Safeco stating, in pertinent part

      that


              After review of the submissions for summary judgment and oral
              argument, [the trial court] finds that there is no genuine issue of
              material fact and denies [Catanzarite’s] [m]otion for [s]ummary
              [j]udgment and grants summary judgment in favor of Safeco as a
              matter of law. Specifically, the [c]ourt finds that payment of a
              hospital lien by a tortfeasor’s liability insurer does not reduce the
              limit of liability coverage under the tortfeasor’s insurance policy
              for purposes of determining whether the tortfeasor is
              underinsured. As such, the [c]ourt declares that in relation to the

      Court of Appeals of Indiana | Opinion 19A-CT-2338 | March 26, 2020          Page 4 of 16
               February 1, 2018 automobile accident between [Catanzarite] and
               [] Smith, there are no [UIM] coverage benefits available to
               [Catanzarite] under the automobile insurance policy issued to
               [Catanzariet] by Safeco under Policy No. K2487269.


               The [c]ourt finds that no just cause for delay exists and expressly
               directs entry of final judgment on Safeco’s behalf.


       (Appellant’s App. Vol. II, p. 8)


[9]    Catanzarite now appeals. Additional information will be provided as

       necessary.


                                DISCUSSION AND DECISION
                                             I. Standard of Review

[10]   Summary judgment is appropriate only when there are no genuine issues of

       material fact and the moving party is entitled to judgment as a matter of law.

       Ind. Trial Rule 56(C). “A fact is material if its resolution would affect the

       outcome of the case, and an issue is genuine if a trier of fact is required to

       resolve the parties’ differing accounts of the truth . . ., or if the undisputed facts

       support conflicting reasonable inferences.” Williams v. Tharp, 914 N.E.2d 756,

       761 (Ind. 2009).


[11]   In reviewing a trial court’s ruling on summary judgment, this court stands in the

       shoes of the trial court, applying the same standards in deciding whether to

       affirm or reverse summary judgment. First Farmers Bank & Trust Co. v. Whorley,

       891 N.E.2d 604, 607 (Ind. Ct. App. 2008), trans. denied. Thus, on appeal, we


       Court of Appeals of Indiana | Opinion 19A-CT-2338 | March 26, 2020            Page 5 of 16
       must determine whether there is a genuine issue of material fact and whether

       the trial court has correctly applied the law. Id. at 607-08. In doing so, we

       consider all of the designated evidence in the light most favorable to the non-

       moving party. Id. at 608. “Any doubt as to any facts or inferences to be drawn

       therefrom must be resolved in favor of the non-moving party.” Goodwin v.

       Yeakle’s Sports Bar & Grill, Inc., 62 N.E.3d 384, 386 (Ind. 2016). The party that

       lost in the trial court bears the burden of persuading us that the trial court erred.

       Biedron v. Anonymous Physician 1, 106 N.E.3d 1079, 1089 (Ind. Ct. App. 2018),

       trans. denied.


[12]   In Indiana, the interpretation of an insurance policy is a matter of law. Westfield

       Cos. v. Knapp, 804 N.E.2d 1270, 1273-74 (Ind. Ct. App. 2004). Insurance

       contract provisions are subject to the same rules of construction as other

       contracts. Id. Thus, courts must construe insurance policies as a whole, rather

       than considering individual words, phrases, or paragraphs. Id. If the contract

       language is clear and unambiguous, it should be given its plain and ordinary

       meaning. Newnam Mfg., Inc. v. Transcon. Ins. Co., 871 N.E.2d 396, 401 (Ind. Ct.

       App. 2007). Additionally, “[i]nsurance companies are free to limit their

       liability, so long as they do so in a manner consistent with public policy as

       reflected by case or statutory law.” Gheae v. Founders Ins. Co., 854 N.E.2d 419,

       423 (Ind. Ct. App. 2006). Thus, “[a]n insurance policy that is unambiguous

       must be enforced according to its terms, even those terms that limit an insurer’s

       liability.” Klepper v. ACE Am. Ins. Co., 999 N.E.2d 86, 90 (Ind. Ct. App. 2013).

       “Where an ambiguity exists, that is, where reasonably intelligent people may

       Court of Appeals of Indiana | Opinion 19A-CT-2338 | March 26, 2020         Page 6 of 16
       interpret the policy’s language differently, Indiana courts construe the insurance

       policies strictly against the insurer.” Auto-Owners Inc. Co. v. Benko, 964 N.E.2d

       886, 890 (Ind. Ct. App. 2012). However, “an ambiguity is not affirmatively

       established simply because controversy exists, and one party asserts an

       interpretation contrary to that asserted by the opposing party.” Beam v. Wausau

       Ins. Co., 765 N.E.2d 524, 528 (Ind. 2002) (citations omitted).


                               II. Applicable Statutes and Policy Provisions

[13]   At the summary judgment hearing, Catanzarite stated that Memorial Hospital

       had reduced her medical expense from $269,841.32 to $25,000. While

       acknowledging that Hanover had agreed to pay her $100,000, the maximum

       payable under Smith’s bodily injury liability coverage, Catanzarite argued that

       her net recovery (the actual available amount) payable to her under Smith’s

       bodily injury liability policy would be $75,000, an amount less than her

       $100,000 UIM policy limits by Safeco. Thus, Catanzarite argued that the

       medical lien would reduce the recovery amount accessible for payment under

       the terms set out in Indiana Code section 27-7-5-4(b), that Smith was operating

       an underinsured motor vehicle at the time of the accident to the extent of the

       medical lien, and she was entitled to her UIM coverage benefits from Safeco.


[14]   Indiana’s UIM statute allows insurers and their insured to set their own UIM

       liability limits, but it prescribes the comparative mechanism for determining

       whether an insured is eligible to collect under a policy’s UIM provision. See

       Corr v. Am. Family Ins., 767 N.E.2d 535, 540-41 (Ind. 2002). Indiana Code

       section 27-7-5-4(b) defines an underinsured motor vehicle as follows:
       Court of Appeals of Indiana | Opinion 19A-CT-2338 | March 26, 2020        Page 7 of 16
               For the purpose of this chapter, the term underinsured motor
               vehicle, subject to the terms and conditions of such coverage,
               includes an insured motor vehicle where the limits of coverage
               available for payment to the insured under all bodily injury liability
               policies covering persons liable to the insured are less than the limits for
               the insured’s underinsured motorist coverage at the time of the accident,
               but does not include an uninsured motor vehicle as defined in
               subsection (a).


       (emphasis added). The aim of UIM coverage is “to give the insured the

       recovery he or she would have received if the underinsured motorist [the

       tortfeasor] had maintained an adequate policy of liability insurance.” Corr, 767

       N.E.2d at 540. UIM coverage is “designed to provide individuals with

       indemnification in the event that negligent motorists are inadequately insured.”

       Id. Given the remedial nature of UIM coverage, “underinsured motorist

       legislation is to be liberally construed” and “read in a light most favorable to the

       insured.” Masten v. AMCO Ins. Co., 953 N.E.2d 566, 570 (Ind. 2011).


[15]   Catanzarite’s UIM coverage contained the following pertinent language:


               INSURING AGREEMENT
               A. We will pay damages which an insured is legally entitled to
               recover from the owner or operator of an underinsured motor
               vehicle because of bodily injury:

               1. Sustained by that insured; and
               2. Caused by an accident.


               The owner’s or operator’s liability for these damages must arise
               out of the ownership, maintenance or use of the underinsured
               motor vehicle. We will pay damages under this coverage caused

       Court of Appeals of Indiana | Opinion 19A-CT-2338 | March 26, 2020                     Page 8 of 16
               by an accident with an underinsured motor vehicle only if [C] 1.
               or 2. below applies:


               ****


               C. “Underinsured motor vehicle” means a land motor vehicle or
               trailer of any type for which the sum of the limits of liability
               under all bodily injury liability bonds or policies applicable at the
               time of the accident is either:


               1. Less than the limit of liability for this coverage; or


               2. Reduced by payments to persons, other than insureds, injured
               in the accident to less than the limit of liability for this coverage.


               ****


       (Appellant’s App. Vol. II, pp. 53-54).


[16]   Also, to determine whether a tortfeasor’s available coverage may be reduced by

       the payment of a hospital lien, we must consider the fundamental nature of the

       hospital lien itself. Indiana Code section 32-33-4-3 governs hospital liens and

       provides:


               (a) A person, a firm, a partnership, an association, a limited
               liability company, or a corporation maintaining a hospital in
               Indiana or a hospital owned, maintained, or operated by the state
               or a political subdivision has a lien for all reasonable and
               necessary charges for hospital care, treatment, and maintenance
               of a patient (including emergency ambulance services provided
               by the hospital) upon any cause of action, suit, or claim accruing


       Court of Appeals of Indiana | Opinion 19A-CT-2338 | March 26, 2020           Page 9 of 16
        to the patient, or in the case of the patient’s death, the patient’s
        legal representative, because of the illness or injuries that:


                 (1) gave rise to the cause of action, suit, or claim; and


                 (2) necessitated the hospital care, treatment, and
                 maintenance.


        (b) The lien provided for in subsection (a):


                 (1) except as provided in subsection (c), applies to any
                 amount obtained or recovered by the patient by settlement
                 or compromise rendered or entered into by the patient or
                 by the patient’s legal representative;


                 (2) is subject and subordinate to any attorney’s lien upon
                 the claim or cause of action;


        ****


        (4) is not assignable; and


        (5) must


                 (A) first be reduced by the amount of any benefits to which
                 the patient is entitled under the terms of any contract,
                 health plan, or medical insurance; and


                 (B) reflect credits for all payments, contractual
                 adjustments, write- offs, and any other benefit in favor of
                 the patient;



Court of Appeals of Indiana | Opinion 19A-CT-2338 | March 26, 2020             Page 10 of 16
               after the hospital has made all reasonable efforts to pursue the
               insurance claims in cooperation with the patient.


               (c) If a settlement or compromise that is subject to subsection
               (b)(1) is for an amount that would permit the patient to receive
               less than twenty percent (20%) of the full amount of the
               settlement or compromise if all the liens created under this
               chapter were paid in full, the liens must be reduced on a pro rata
               basis to the extent that will permit the patient to receive twenty
               percent (20%) of the full amount.


[17]   By this statute, our legislature gives the hospital a specific interest in property

       otherwise accruing to the patient for the amount of the health care, treatment,

       and maintenance rendered by the hospital to its patient when the hospital has

       properly perfected its lien. National Ins. Ass’n v. Parkview Mem’l Hosp., 590

       N.E.2d 1141, 1144 (Ind. Ct. App. 1992). With a properly perfected lien for the

       amount of services provided to the hospital’s patient, the hospital has a direct

       right to the insurance proceeds and other settlement funds which are paid to the

       patient by the person claimed to be liable for the patient’s injuries or that

       person’s agent. Id.


                                                   III. Analysis

[18]   The undisputed facts disclose that Hanover offered to settle with Cantanzarite,

       and pay her $100,000, the maximum amount under Smith’s liability policy. At

       the summary judgment hearing, Catanzarite claimed that her unpaid medical

       lien was roughly $25,000 and that the amount would be settled from her

       settlement proceeds from Hanover. Catanzarite’s argument on appeal is that

       she should be entitled to collect an additional $25,000, the difference between
       Court of Appeals of Indiana | Opinion 19A-CT-2338 | March 26, 2020         Page 11 of 16
       her UIM policy limit and the funds she will receive from Hanover after her

       medical expenses are paid off.


[19]   Safeco maintains that Catanzarite’s unpaid medical expenses continue to be her

       responsibility, and her medical expenses should not seek to reduce Smith’s

       bodily injury coverage or concomitantly increase her UIM coverage. Safeco

       continues by arguing that there are several underlying factors that foreclose

       Catanzarite’s claim on appeal: (1) Catanzarite’s UIM policy had an applicable

       limit of $100,000, and the maximum payable limit under Smith’s bodily injury

       coverage was equal to Catanzarite’s UIM policy; and (2) the medical lien does

       not serve to reduce Smith’s liability coverage limit for purposes of determining

       whether Catanzarite is eligible to collect under her UIM policy. Therefore,

       Safeco maintains that Catanzarite’s arguments are contrary to the provisions of

       Indiana Code section 27-7-5-4(b).


[20]   Turning to Safeco’s first claim that we should compare Catanzarite’s UIM

       policy limits to Smith’s liability insurance policy limits for the purposes of

       determining whether Smith was underinsured at the time of the accident, we

       find our supreme court holding in Corr insightful. In Corr, our supreme court

       held that the tortfeasor’s liability limit was not the appropriate amount to

       compare with the insured’s UIM policy limit for purposes of determining

       whether the tortfeasor’s vehicle was underinsured. Corr, 767 N.E.2d at 540.

       The plaintiffs in that case were in a group of multiple claimants and received

       payment in an amount less than the liability limit on their UIM policy. Id. at

       538. However, the tortfeasor’s liability limits were not less than the limits on

       Court of Appeals of Indiana | Opinion 19A-CT-2338 | March 26, 2020        Page 12 of 16
       the UIM policy. Id. As a result, the tortfeasor’s vehicle would only be

       underinsured under Indiana law if the court compared the UIM limits with the

       amount of the payment that the plaintiffs received, and the dispositive issue was

       whether the court should compare the UIM policy limits to the tortfeasor’s

       policy limits or to the amount that the plaintiffs recovered. Id.


[21]   The Corr court determined that Indiana Code section 27-7-5-4(b) qualifies the

       tortfeasor’s “limits of coverage” with the phrase “available for payment to the

       insured” rather than directing courts to compare the tortfeasor’s limits with the

       insured’s UIM limits. Id. at 539. The Corr court concluded that the statute’s

       use of the phrase “available for payment,” indicates that it “does not express [a]

       clear preference for limits-to-limits comparison.” Id. Instead, the statute’s

       determination of whether a tortfeasor’s vehicle is underinsured turns on the

       meaning of what amounts qualify as being “available for payment.” Id. The

       Corr court then examined the meaning of “available for payment,” and

       concluded that this phrase means “money present or ready for immediate use

       by the insured, not amounts potentially accessible.” Id. at 540. It went on to

       conclude that the tortfeasor’s liability limit was not an amount that was

       “available for payment” under the statute because that amount was

       “theoretically available”; instead, the appropriate amount for comparison was

       the payment that the insured had received. Id.


[22]   In Lakes v. Grange Mut. Cas. Co., 964 N.E.2d 796, 805 (Ind. 2012), our supreme

       court further clarified that a limits-to-limits comparison is not the proper

       approach to determine whether a vehicle is underinsured under Indiana law.

       Court of Appeals of Indiana | Opinion 19A-CT-2338 | March 26, 2020       Page 13 of 16
       The Lakes court discussed the statutory definition of an underinsured motor

       vehicle at length and ultimately held that “whether a vehicle is underinsured

       depends, in all cases, on whether the amount received from the tortfeasor’s

       policy is less than the per-person limits on UIM coverage.” Id.


[23]   In the present case, Hanover agreed to pay Catanzarite $100,000, the maximum

       payable under Smith’s bodily injury liability coverage, and pursuant to Corr but

       contrary to Safeco’s argument on appeal, we are not permitted to compare

       Catanzarite’s $100,000 UIM policy limit to Smith’s $100,000 bodily injury

       liability coverage to determine if Smith was underinsured at the time of the

       accident; rather, the proper assessment should be to determine the actual

       amount that Catanzarite would ultimately receive from the settlement that

       Hanover was offering. With that said, it brings us to our next discussion, i.e.,

       whether a medical lien reduces the amount payable under Smith’s bodily injury

       liability coverage for the purposes of triggering Catanzarite’s UIM benefits

       under her policy.


[24]   Our reading of the UIM and Hospital Lien statutes leads us to conclude that

       Catanzarite’s entire argument on appeal misinterprets the purpose of the UIM

       statute as well as the underlying purpose of the Hospital Lien statute. The

       Hospital Lien statute provides that a lien applies to any amount obtained or

       recovered by the patient through settlement. See I.C. § 32-33-4-3. The $100,000

       that Hanover was offering, which is a settlement, is subject to any lien that

       Memorial Hospital has against Catanzarite. See Gheae, 854 N.E.2d at 423

       (holding that “[i]nsurance companies are free to limit their liability, so long as

       Court of Appeals of Indiana | Opinion 19A-CT-2338 | March 26, 2020        Page 14 of 16
       they do so in a manner consistent with public policy as reflected by case or

       statutory law.”). Further, as the Corr court held, the “available for payment to

       the insured” language has been construed by Indiana courts as follows:


               ‘Available’ ordinarily means ‘present or ready for immediate
               use.’ Thus, ‘available for payment to the insured,’ when
               describing coverage limits, is money present or ready for
               immediate use by the insured, not amounts potentially accessible.


[25]   Corr, 767 N.E.2d at 539-40 (citation omitted). Catanzarite does not claim that

       the hospital bill is not her responsibility, and we find that when a tortfeasor’s

       liability carrier pays a hospital lien to a hospital pursuant to the Hospital Lien

       statute, it does so for the obvious benefit of the insured, and the insured receives

       protection for her actual loss, within the limits of the policy of which she is a

       beneficiary. While it is true that any payment of the lien directly to Memorial

       Hospital does diminish the amount of funds actually passing through

       Catanzarite’s hands, it does not diminish the $100,000 settlement proceeds she

       is receiving from Hanover, to which Catanzarite is entitled under the operative

       insurance policy, i.e., Smith’s bodily injury liability policy. Stated differently,

       Smith’s entire $100,000 is available for Catanzarite for her immediate use and

       benefit. If Catanzarite is permitted to collect an additional $25,000 from Safeco

       under her UIM policy, such payment would create a windfall, and it could

       ultimately increase her UIM coverage and permit an additional recovery which

       would disregard the stated purpose behind Indiana’s UIM statutory coverage

       scheme. See Corr, 767 N.E.2d at 540 (holding that the purpose of UIM coverage

       under Indiana law is “to give the insured the recovery he or she would have

       Court of Appeals of Indiana | Opinion 19A-CT-2338 | March 26, 2020         Page 15 of 16
       received if the underinsured motorist [the tortfeasor] had maintained an

       adequate policy of liability insurance.”). As the $100,000 under Smith’s

       liability policy is adequate and readily accessible for Catanzarite’s immediate

       use and benefit, any payment of Catanzarite’s medical bills can be off set from

       the settlement proceeds she receives from Hanover, and payment of her lien

       does not reduce the actual amount she receives from Hanover. Accordingly,

       we hold that Smith had an adequate bodily injury liability policy at the time of

       the accident and was therefore not an underinsured motorist and that

       Catanzarite was not entitled to a claim her UIM coverage benefits from Safeco.

       Thus, we affirm the trial court’s summary judgment in favor of Safeco.


                                              CONCLUSION
[26]   For the foregoing reasons, we affirm the trial court’s entry of summary

       judgment in favor of Safeco.


[27]   Affirmed.


[28]   Baker, J. and Brown, J. concur




       Court of Appeals of Indiana | Opinion 19A-CT-2338 | March 26, 2020      Page 16 of 16
