                                                                    Oct 29 2015, 9:42 am




ATTORNEYS FOR APPELLANT                                    ATTORNEY FOR APPELLEE
Timothy M. Swan                                            April L. Board
Garan Lucow Miller, P.C.                                   Boonville, Indiana
Merrillville, Indiana



                                            IN THE
    COURT OF APPEALS OF INDIANA

State Farm Mutual Automobile                               October 29, 2015
Insurance Company,                                         Court of Appeals Case No.
                                                           45A05-1502-CT-78
Appellant-Defendant,
                                                           Appeal from the Lake Circuit Court
        v.                                                 The Honorable George C. Paras,
                                                           Judge
Carol Jakubowicz, Individually,                            Cause No. 45C01-0810-CT-156
and as Parent and Legal
Guardian of Jacob Jakubowicz
and Joseph Jakubowicz, Minors,
Appellees-Plaintiffs.




Riley, Judge.




Court of Appeals of Indiana | Opinion 45A05-1502-CT-78 | October 29, 2015                  Page 1 of 12
                                    STATEMENT OF THE CASE

[1]   Appellant-Defendant, State Farm Mutual Automobile Insurance Company

      (State Farm), appeals the trial court’s denial of its motion for summary

      judgment in favor of Appellees-Plaintiffs, Carol Jakubowicz, Individually, and

      as Parent and Legal Guardian of Jacob and Joseph Jakubowicz, Minors

      (Collectively, Jakubowicz).


[2]   We reverse and remand.


                                                      ISSUE

[3]   State Farm raises one issue on appeal, which we restate as: Whether the trial

      court properly denied summary judgment when it determined that Jakubowicz’

      underinsured motorist vehicle claim against State Farm is not barred even

      though it was filed outside the policy’s three-year limitations period for claims

      arising under the underinsured motorist coverage.


                            FACTS AND PROCEDURAL HISTORY

[4]   On August 2, 2007, Jakubowicz and Ronald Williams, Jr. (Williams) were

      involved in an automobile accident in Highland, Indiana, resulting in

      substantial injuries to Jakubowicz. At the time of the accident, Jakubowicz had

      an automobile insurance policy with State Farm, which included underinsured

      motorist coverage.


[5]   On October 7, 2008, Jakubowicz filed her Complaint against Williams. On

      April 6, 2009, State Farm also filed a Complaint against Williams, seeking

      Court of Appeals of Indiana | Opinion 45A05-1502-CT-78 | October 29, 2015   Page 2 of 12
      damages for payments under the medical payments provision and for property

      damages paid on behalf of Jakubowicz and arising from the automobile

      collision. On August 19, 2009, both causes were consolidated. On December

      10, 2009, Jakubowicz notified State Farm’s counsel that “please, consider this

      correspondence directed to your client, [State Farm] putting them on notice that

      it is likely that [Jakubowicz] will pursue underinsured motors claims [sic] in this

      case.” (Appellant’s App. p. 108).


[6]   On March 31, 2011, Jakubowicz filed her motion for leave to amend the

      Complaint to add State Farm as a defendant in order to institute a claim against

      the underinsured motorist provision of the insurance policy. The trial court

      granted the motion on July 27, 2011 1. Jakubowicz filed her Amended

      Complaint that same day.


[7]   On September 11, 2013, State Farm filed its motion for summary judgment, as

      well as its designated evidence in support thereof, contending that it was

      entitled to summary judgment because Jakubowicz’ Amended Complaint was

      filed after the expiration of the three-year contractual limitation period.

      Jakubowicz opposed State Farm’s motion by filing a brief in opposition with




      1
        State Farm asserts that the Amended Complaint was filed October 3, 2012. However, during a hearing on
      October 3, 2012, the trial court noted that the Amended Complaint had been previously sent in and included
      in the file. Accordingly, for purposes of this appeal, we will accept the file date of July 27, 2011, as stamped
      on Jakubowicz’ Amended Complaint.

      Court of Appeals of Indiana | Opinion 45A05-1502-CT-78 | October 29, 2015                           Page 3 of 12
       designation of evidence. On February 19, 2014, the trial court conducted a

       hearing on State Farm’s motion, which was summarily denied on April 9, 2014.


[8]    After an unsuccessful attempt at mediation, Jakubowicz and State Farm filed a

       joint belated motion to certify for interlocutory appeal, which was granted by

       the trial court on January 26, 2015. We accepted jurisdiction on March 27,

       2015.


[9]    In this interlocutory appeal, State Farm now challenges the trial court’s denial

       of its motion for summary judgement. Additional facts 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,


       Court of Appeals of Indiana | Opinion 45A05-1502-CT-78 | October 29, 2015    Page 4 of 12
       891 N.E.2d 604, 607 (Ind. Ct. App. 2008), trans. denied. Thus, on appeal, we

       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. The party appealing the grant of summary judgment

       has the burden of persuading this court that the trial court’s ruling was

       improper. Id. When the defendant is the moving party, the defendant must

       show that the undisputed facts negate at least one element of the plaintiff’s

       cause of action or that the defendant has a factually unchallenged affirmative

       defense that bars the plaintiff’s claim. Id. Accordingly, the grant of summary

       judgment must be reversed if the record discloses an incorrect application of the

       law to the facts. Id.


[12]   We observe that, in the present case, the trial court did not enter findings of fact

       and conclusions of law in support of its Judgment. Special findings are not

       required in summary judgment proceedings and are not binding on appeal. Id.

       However, such findings offer this court valuable insight into the trial court’s

       rationale for its decision and facilitate appellate review. Id.


                                                     II. Analysis


[13]   State Farm contends that the trial court erred in denying its motion for

       summary judgment because Jakubowicz filed her claim for underinsured motor

       vehicle benefits outside the three-year contractual limitation of the policy. In

       general, “[i]nsurance policies are governed by the same rules of construction as


       Court of Appeals of Indiana | Opinion 45A05-1502-CT-78 | October 29, 2015   Page 5 of 12
       other contracts . . .” Peabody Energy Corp. v. Roark, 973 N.E.2d 636, 640 (Ind.

       Ct. App. 2012), aff’d on reh’g, 978 N.E.2d 503 (Ind. Ct. App. 2012), trans. denied.

       However, because of the disparity in bargaining power between insurance

       companies and insureds, courts have developed distinct rules for those

       contracts. Auto-Owners Ins. Co. v. Harvey, 842 N.E.2d 1279, 1283 (Ind. 2006).

       When interpreting an insurance contract, “if an insurance contract is clear and

       unambiguous, the language therein must be given its plain and ordinary

       meaning.” Castillo v. Prudential Prop. & Cas. Ins. Co., 834 N.E.2d 204, 206 (Ind.

       Ct. App. 2005). The mere fact that a controversy exists and the insured asserts

       an interpretation contrary to that asserted by the insurer is insufficient to

       establish an ambiguity. Shelter Ins. Co. v. Woolems, 759 N.E.2d 1151, 1155 (Ind.

       Ct. App. 2001), trans. denied.


[14]   “If an ambiguity exists, ‘insurance policies are to be construed strictly against

       the insurer and the policy language is viewed from the standpoint of the

       insured.’” Wert v. Meridian Sec. Ins. Co., 997 N.E.2d 1167, 1170 (Ind. Ct. App.

       2013), reh’g denied, trans. denied (quoting Shelter Ins. Co., 759 N.E.2d at 1155).

       This is especially important “where the language in question purports to

       exclude coverage.” State Auto Mut. Ins. Co. v. Flexdar, Inc., 964 N.E.2d 845, 848

       (Ind. 2012), reh’g denied. We typically “accept an interpretation of the contract

       language that harmonizes the provisions rather than one which supports a

       conflicting version of the provisions.” Castillo, 834 N.E.2d at 206 (citing Burkett

       v. Am. Family Ins. Grp., 737 N.E.2d 447, 452 (Ind. Ct. App. 2000)). A court

       should construe the language of an insurance policy so as not to render any

       Court of Appeals of Indiana | Opinion 45A05-1502-CT-78 | October 29, 2015   Page 6 of 12
       words, phrases, or terms ineffective or meaningless. FLM, LLC v. Cincinnati Ins.

       Co., 973 N.E.2d 1167, 1174 (Ind. Ct. App. 2012), reh’g denied, trans. denied.


[15]   Our supreme court has stated that contractual provisions that shorten the time

       to commence suit are enforceable “as long as a reasonable time is afforded,

       except where there is fraud, duress, and the like.” Bradshaw v. Chandler, 916

       N.E.2d 163, 166 (Ind. 2009). “[C]ontractual limitations shortening the time to

       commence suit are not favored” even though “they do ‘protect insurers from

       policy holders who voice no claim until the year has long since expired,

       promote early notification while evidence is available, and provide carriers with

       a basis for forming business judgments concerning claim reserves and premium

       rates.’” Id. at 167 (quoting Summers v. Auto-Owners Ins. Co., 719 N.E.2d 412,

       414 (Ind. Ct. App. 1999)).


[16]   Turning to State Farm’s policy, the contested provisions read as follows:

                                              GENERAL TERMS
                                                         ...
               13. Legal Action Against Us
               Legal action may not be brought against us until there has been full
               compliance with all the provisions of the policy. In addition, legal
               action may only be brought against us regarding:
               a. Liability and Coverage after the amount of damages an insured is
                  legally liable to pay has been finally determined by:
                        (1) judgment after an actual trial, and any appeals of that
                            judgment if any appeals are taken; or
                        (2) agreement between the claimant and us.
               ...


       Court of Appeals of Indiana | Opinion 45A05-1502-CT-78 | October 29, 2015      Page 7 of 12
        c. Uninsured Motor Vehicle Coverage and Underinsured Motor
        Vehicle Coverage if the insured or that insured’s legal representative
        within three years immediately following the date of the accident:
                 (1) presents either an Uninsured Motor Vehicle Coverage
                 claim or an Underinsured Motor Vehicle Coverage claim to us;
                 and
                 (2) files a lawsuit in accordance with Deciding Fault and
                 Amount provision of the involved coverage.
        Except as provided in c.(2) above, no other legal action may be
        brought against us relating to Uninsured Motor Vehicle Coverage or
        Underinsured Motor Vehicle Coverage for any other causes of action
        that arise out of or are related to these coverages until there has been
        full compliance with the provisions titled Consent to Settlement and
        Deciding Fault and Amount.


        Deciding Fault and Amount – Uninsured Motor Vehicle Coverage
        and Underinsured Motor Vehicle Coverage
        1. a. The insured and we must agree to the answers to the following
           two questions:
             (1) Is the insured legally entitled to recover compensatory damages
                 from the owner or driver of the uninsured motor vehicle or
                 underinsured motor vehicle?
             (2) If the answer to 1.a.(1) above is yes, then what is the amount of
                 the compensatory damages that the insured is legally entitled to
                 recover from the owner or driver of the uninsured motor
                 vehicle or underinsured motor vehicle.
        b. If there is no agreement on the answer to either question in 1.a
           above, then the insured shall:
             (1) File a lawsuit, in a state or federal court that has jurisdiction
                 against:
                 (a) Us;
                 (b) The owner and driver of the uninsured motor vehicle or
                     underinsured motor vehicle:
                      (i)     Unless we have consented to settlement offer
                              proposed by or on behalf of such owner or driver; or

Court of Appeals of Indiana | Opinion 45A05-1502-CT-78 | October 29, 2015            Page 8 of 12
                             (ii)    Unless such owner or driver is unknown; and
                        (c) Any other party or parties, who may be legally liable for the
                            insured’s damages;
                    (2) Consent to a jury trial if requested by us;
                    (3) Agree that we may contest the issues of liability and the
                        amount of damages; and
                    (4) Secure a judgment in that action. The judgment must be the
                        final result of an actual trial and any appeals, if any appeals are
                        taken.
       (Appellant’s App. pp. 177-78; 159-60) (internal emphasis omitted).


[17]   Jakubowicz urged below, with apparent approval of the trial court, and here on

       appeal, that State Farm’s policy provisions with respect to the contractual

       shortened limitation period are ambiguous and therefore invalid. According to

       Jakubowicz, the provision requiring a lawsuit to be filed within three years

       contradicts the requirement that a lawsuit cannot be filed until all provisions

       have been complied with and the limits of the tortfeasor’s insurance exhausted.

       In general support of her allegation of ambiguity, Jakubowicz refers to Wert v.

       Meridian Security Ins. Co., 997 N.E.2d 1167 (Ind. Ct. App. 2013), reh’g denied,

       trans. denied.


[18]   In Wert, the insureds similarly argued that the insurance policy was ambiguous

       because the two-year contractual limitation provision conflicted with policy

       language requiring full compliance with the policy terms before the insureds

       pursued an underinsured motor vehicle claim. Id. at 1170. The policy at issue

       in Wert explicitly stated that no legal action would be permitted against the

       insurance company unless the insureds fully complied with the policy terms.


       Court of Appeals of Indiana | Opinion 45A05-1502-CT-78 | October 29, 2015          Page 9 of 12
       Id. In addition, the Wert policy only allowed a lawsuit to be filed against the

       insurance company if it was filed within two years of the date of the accident.

       Id. at 1170-71. Importantly, the policy noted that Meridian Insurance would

       not pay underinsured motorist benefits to its policyholder until the claim was

       either resolved or settled with the underinsured motorist. Id. at 1171. The Wert

       court noted the conflict between the policy terms and stated:

               Meridian’s policy prohibits the Werts from filing any lawsuit against it
               for an underinsured motorist claim until the limits of Offill’s liability
               coverage have been exhausted. At the same time, Meridian attempts
               to prevent the Werts from filing more than two years after the date of
               the accident, potentially requiring them to file a lawsuit before they are
               in full compliance with the policy. Unless a policyholder settles with
               an underinsured motorist within two years of the collision, these
               provisions are in direct conflict and therefore ambiguous.
       Id. See also Clevenger v. Progressive Northwestern Ins. Co., 838 N.E.2d 1111, 1117-

       18 (Ind. Ct. App. 2005) (concluding that the insurance policy was ambiguous

       because the provision requiring the exhaustion of the tortfeasor’s policy limits

       by payments of judgments or settlements conflicted with the provision

       contractually shortening the limitations period within which an insured could

       bring an action against Progressive for failing to pay underinsured motorist

       coverage).


[19]   While Jakubowicz’ coverage contains similar language, none of the language in

       State Farm’s policy would support Jakubowicz’ argument that she was required

       to wait before filing her claim against the underinsured motorist coverage until

       the limits of Williams’ insurance had been exhausted. Even though State

       Farm’s language parallels Wert’s language in the existence of a shortened

       Court of Appeals of Indiana | Opinion 45A05-1502-CT-78 | October 29, 2015       Page 10 of 12
       limitation period of three years following the collision and the mandate that a

       lawsuit can only be brought after full compliance with the provision of the

       policy, State Farm’s policy then subsequently carves out an exception for the

       underinsured motor vehicle claim. Specifically, the policy dictates that whereas

       Jakubowicz and State Farm must settle as to whether Jakubowicz is “legally

       entitled to recover compensatory damages” as well as their amount, the absence

       of this settlement—and full compliance with the terms—does not prevent the

       commencement of a lawsuit. Rather, the policy’s provision expressly states that

       “[i]f there is no agreement,” then Jakubowickz “shall file a lawsuit[.]”

       (Appellant’s App. p. 159).


[20]   Accordingly, unlike Wert, which included a categorical prohibition of legal

       action unless there was exhaustion of the limits of liability “by payments of

       judgments or settlements,” State Farm’s policy encourages a negotiation

       between the insurance company and Jakubowicz. See Wert, 997 N.E.2d at

       1171. However, the absence of an agreement does not prevent Jakowicz from

       filing a lawsuit within three years following the automobile collision.

       Therefore, we cannot say that State Farm’s policy was ambiguous.


[21]   Here, the collision occurred on August 2, 2007 and thus, pursuant to the

       provisions of the policy, Jakubowicz had to present State Farm with an

       underinsured motor vehicle claim and file a lawsuit within three years, i.e., by

       August 2, 2010. Jakubowicz filed her Amended Complaint on July 27, 2011,

       almost a full year outside the contractual limitation period. Even if we were to

       construe Jakubowicz’ notification to State Farm on December 10, 2009 that a

       Court of Appeals of Indiana | Opinion 45A05-1502-CT-78 | October 29, 2015   Page 11 of 12
       claim was “likely” to be instituted, Jakubowicz would still not be in compliance

       with the provisions of the policy as these require both the notification of the

       claim and the lawsuit to be filed within the three-year contractual limitation

       period. Therefore, we reverse the trial court’s denial of State Farm’s motion for

       summary judgment and we remand with instruction to grant summary

       judgment to State Farm.


                                                CONCLUSION

[22]   Based on the foregoing, we conclude the trial court erred in denying State

       Farm’s motion for summary judgment.


[23]   Reversed and remanded.


[24]   Brown, J. and Altice, J. concur




       Court of Appeals of Indiana | Opinion 45A05-1502-CT-78 | October 29, 2015   Page 12 of 12
