                                                         FILED
                                                       Dec 27 2012, 9:24 am

FOR PUBLICATION
                                                              CLERK
                                                            of the supreme court,
                                                            court of appeals and
                                                                   tax court




ATTORNEY FOR APPELLANT:                       ATTORNEYS FOR APPELLEE
                                              PROGRESSIVE CASUALTY
ADAM J. SEDIA                                 INSURANCE COMPANY:
Rubino, Ruman, Crosmer & Polen
Dyer, Indiana                                 J. THOMAS VETNE
                                              BRIAN M. KUBICKI
                                              Jones Obenchain, LLP
                                              South Bend, Indiana




                             IN THE
                   COURT OF APPEALS OF INDIANA

SLAVOJKA PISTALO,                             )
                                              )
      Appellant-Plaintiff,                    )
                                              )
             vs.                              )    No. 45A04-1204-PL-214
                                              )
PROGRESSIVE CASUALTY                          )
INSURANCE COMPANY and                         )
THE ESTATE OF IRIS M. WILKS,                  )
DECEASED,                                     )
                                              )
      Appellees-Defendants.                   )


                     APPEAL FROM THE LAKE SUPERIOR COURT
                         The Honorable Jeffery J. Dywan, Judge
                             Cause No. 45D11-1107-PL-70


                                   December 27, 2012

                              OPINION - FOR PUBLICATION

CRONE, Judge
                                       Case Summary

       In 2005, Slavojka Pistalo filed a personal injury action against Iris Wilks for injuries

stemming from a 2003 vehicle collision. Wilks was insured by Progressive Casualty

Insurance Company (“Progressive”), and Pistalo and Progressive began settlement

negotiations. Unbeknownst to Pistalo, Wilks had died in the fall of 2003, and no estate had

ever been opened. When Pistalo learned about Wilks’s death two years later, her counsel

opened an estate in Wilks’s name for purposes of the personal injury action. Prior to trial,

Pistalo offered to settle for policy limits, but Progressive refused.

       Later, a jury found Wilks’s estate liable to Pistalo in the amount of $309,000.

Progressive paid the $100,000 coverage limits under Wilks’s policy. Pistalo then filed

proceedings supplemental, seeking to recover from Progressive approximately $325,000, the

amount by which the entire damages award exceeded the policy limits, including

prejudgment interest and attorney’s fees. Unsuccessful, Pistalo then obtained from Wilks’s

estate an assignment of its rights against Progressive and filed a direct action against

Progressive seeking a $333,600 excess judgment, which also included post-judgment interest.

That action ended in a summary judgment in favor of Progressive.

       Pistalo now appeals, claiming that the trial court erred in granting Progressive’s

motion for summary judgment and in impliedly denying her motion for summary judgment.

Finding that summary judgment was inappropriate, we reverse and remand.




                                               2
                               Facts and Procedural History

       In February 2003, Pistalo was injured in a vehicle collision with Wilks, who was

insured by Progressive. In January 2005, Pistalo filed a personal injury action against Wilks

in Lake Superior Court (“Court I”). Pistalo and Progressive entered into settlement

negotiations, but Progressive refused Pistalo’s offer to settle for the $100,000 coverage limits

of Wilks’s policy. In November 2005, a representative from Progressive told Pistalo that

Wilks had died in November 2003. Because no estate had ever been opened, Pistalo’s

counsel opened an estate in probate court (“Court II”) in Wilks’s name in January 2006, for

purposes of substituting Wilks’s estate as the party defendant in her personal injury action.

William A. Padula, a colleague of Pistalo’s counsel, was appointed special representative of

Wilks’s estate. Progressive did not challenge Padula’s appointment as special representative.

       In January 2006, Pistalo amended her complaint in the personal injury action, naming

Wilks’s estate as the party defendant. When the personal injury action finally went to trial in

October 2009, Progressive defended the action on behalf of Wilks’s estate. A jury found that

Wilks had been 100% at fault and assessed damages at $309,000. Progressive paid the policy

limit of $100,000 into court post-judgment. Court I subsequently found that Pistalo was

entitled to $123,000 in prejudgment interest and $1000 in attorney’s fees. Progressive paid

the $1000 attorney’s fee. The estate contained no assets other than the insurance policy, and

Pistalo filed proceedings supplemental in Court I, seeking to recover from Progressive the

entire remainder of the damage award, plus prejudgment interest, in excess of the policy

limits. In an order dated June 17, 2010, Court I made the following findings:


                                               3
       1.     On October 7, 2009, judgment was entered against defendant [Wilks’s
              estate] in the sum of $309,000.

       2.     Pursuant to IC 34-50-1-1 et seq, [Pistalo] is entitled to fees, costs in the
              amount of $1000.

       3.     Pursuant to IC 34-51-4-8, [Pistalo] is entitled to prejudgment interest.
              An appropriate interest rate is 10% from July 11, 2005 to October 7,
              2009 for a total amount of $123,600.

       4.     Progressive has never been a party to this action. There has never been
              a claim of bad faith made against Progressive with respect to this claim.

       5.     Therefore, Progressive’s liability is limited to the amount of its policy
              limit of $100,000.

       6.     The $100,000 insurance proceeds shall be applied in partial satisfaction
              of the $433,600 judgment plus court costs.

Appellant’s App. at 533-34.

       After Court I ruled against Pistalo in the proceedings supplemental, Padula assigned to

Pistalo the estate’s rights against Progressive, asserting that the estate had a claim against

Progressive for an excess judgment. Armed with the assignment, Pistalo then filed a direct

action against Progressive in a different Lake County Superior Court (“Court III”), seeking

the $333,600 excess judgment based on the insurer’s alleged bad faith refusal to settle. Both

parties sought summary judgment, and Court III granted Progressive’s motion for summary

judgment, finding that Pistalo had no claim to any estate assets beyond the insurance

proceeds; that the limitation of Progressive’s liability to $100,000 had already been litigated

in proceedings supplemental; and that the assignment between the estate and Pistalo was

invalid. Id. at 8-9. Pistalo now appeals. Additional facts will be provided as necessary.



                                               4
                                  Discussion and Decision

       Pistalo contends that Court III erred in granting Progressive’s motion for summary

judgment and in impliedly denying her motion for summary judgment. We review a trial

court’s decision to grant or deny summary judgment using the same standard as the trial

court. Worman Enters., Inc. v. Boone Cnty. Solid Waste Mgmt. Dist., 805 N.E.2d 369, 373

(Ind. 2004). A motion for summary judgment is properly granted only when the pleadings

and designated evidence reveal that there is no genuine issue of material fact and that the

moving party is entitled to judgment as a matter of law. Ind. Trial Rule 56(C); Bank of New

York v. Nally, 820 N.E.2d 644, 648 (Ind. 2005). Our standard of review is not altered where

the parties have filed cross-motions for summary judgment. Indiana Farmers Mut. Ins.

Group v. Blaskie, 727 N.E.2d 13, 15 (Ind. Ct. App. 2000).

       Here, Court III’s summary judgment order included written findings and conclusions.

We note that the trial court is not required to provide written findings and conclusions on

summary judgment and that the conclusions are not binding on appeal, but they offer

valuable insight into the trial court’s rationale and thus facilitate our review. First Farmers

Bank & Trust Co. v. Whorley, 891 N.E.2d 604, 608 (Ind. Ct. App. 2008), trans. denied.

       Pistalo claims that Court III erred in granting Progressive’s motion for summary

judgment on the issue of whether Progressive was liable for damages exceeding the $100,000




                                              5
coverage limits of Wilks’s policy.1 She relies heavily on Economy Fire & Casualty Co. v.

Collins, 643 N.E.2d 382 (Ind. Ct. App. 1994), trans. denied (1995), as support for her

argument. In Collins, another panel of this Court affirmed an excess judgment against a

deceased tortfeasor’s insurer where the insurer asserted that it had no duty to exercise good

faith in failing to settle the aggrieved party’s claim and where the estate had assigned to the

aggrieved party all of its rights against the deceased’s insurer. Id. at 383. After engaging in

an in-depth analysis of two common approaches to measuring damages in cases where an

insurer’s bad faith failure to settle a claim results in an excess judgment, the Collins court

adopted the “judgment rule.” Id. at 385. Under the judgment rule, an insurer may be liable

for the entire excess judgment, despite its insured’s lack of actual partial payment or the

insured’s lack of capacity to pay any part of the judgment.2

        The rationale behind allowing full recovery to an insured who has not paid the
        excess judgment is to prevent bad-faith practices in the insurance industry by
        eliminating the insurer’s ability to hide behind the financial status of its
        insured. Further, the judgment rule prevents an insurer from benefitting from
        poverty of an insured who has a meritorious claim but cannot first pay the
        judgment imposed upon [her]. If payment or demonstration of ability to pay a
        judgment were the rule, then an insurer may be encouraged to refuse to settle a
        claim merely because the insured is insolvent. Such a course of action would
        impair the use of insurance by the poor.

        1
           At the outset, we acknowledge Progressive’s argument that Pistalo should be collaterally estopped
from raising her claim for excess judgment based on bad faith failure to settle. However, we agree with Court I
that the issue of bad faith was not litigated in the proceedings supplemental and that Progressive was not a
named party. We also find that the estate’s assignment to Pistalo of its rights against Progressive changed
Pistalo’s position vis-à-vis Progressive. Thus, collateral estoppel does not apply. See Huber v. United Farm
Family Mut. Ins. Co., 856 N.E.2d 713, 716 (Ind. Ct. App. 2006) (finding that to bar relitigation of issue,
collateral estoppel requires final judgment, identity of issues, and same identity of party to be estopped), trans.
denied (2007).
        2
          The other approach, the “‘payment rule,’ dictates that an insurer may be held liable for a judgment in
excess of policy limits only if part or all of the judgment has been paid by the insured.” Collins, 643 N.E.2d at
385.

                                                        6
Id. (citations omitted).

       Progressive correctly asserts that Collins is factually distinct with respect to the timing

of the aggrieved party’s claim against the tortfeasor’s estate. There, Collins filed his claim

within the applicable five-month statutory period and thus preserved a valid claim against

estate assets. Id. at 384. Because Progressive contends that the timing difference commands

a different result with respect to Pistalo’s action for an excess judgment, we now address the

extent of her statutory rights against Wilks’s estate.

       Courts I and III both concluded that because Pistalo filed her action after the

expiration of the statutory time to file a claim against an estate, she could not recover any

estate assets other than those encompassed within the insurance policy. See Ind. Code § 29-

1-7-7(e) (“[A] claim filed under IC 29-1-14-1(a) more than nine (9) months after the death of

the decedent is barred.”); see also Ind. Code § 29-1-14-1(d) (“All claims barrable under

subsection (a) shall be barred if not filed within nine (9) months after the death of the

decedent.”). However, both Courts also determined that Pistalo’s recoverable damages

against Progressive could not exceed the insurance policy’s stated liability limit of $100,000.

Pistalo argues that her recovery is not subject to Progressive’s $100,000 policy limit because

she filed her personal injury action within the timeframe for such actions. Indiana Code

Section 29-1-14-1(f) states:

       Nothing in this section shall affect or prevent the enforcement of a claim for
       injury to person or damage to property arising out of negligence against the
       estate of a deceased tort feasor within the period of the statute of limitations
       provided for the tort action. A tort claim against the estate of the tort feasor
       may be opened or reopened and suit filed against the special representative of

                                                7
       the estate within the period of the statute of limitations of the tort. Any
       recovery against the tort feasor’s estate shall not affect any interest in the
       assets of the estate unless the suit was filed within the time allowed for filing
       claims against the estate. The rules of pleading and procedure in such cases
       shall be the same as apply in ordinary civil actions.

While the statute lacks clarity with respect to harmonizing the various limitations periods for

bringing claims, we find Justice Boehm’s explanation in Indiana Farmers Mutual Insurance

Co. v. Richie to be helpful:

       [T]he most practical reading of [subsection (f)] is that a tort suit may be
       instituted at any time within the applicable tort limitation period …. By adding
       subsection (f), the legislature clearly intended to exempt tort actions for
       liability insurance proceeds from the requirements of the probate code. This
       seems to make eminent sense. The statute makes clear that the administration
       of the estate cannot be disturbed by a Johnny-come-lately tort suit because
       such a suit cannot reach the assets of the estate. If that is the case there seems
       to be no reason why a suit involving only insurance proceeds should not
       proceed as a normal tort suit uncomplicated by the Probate Code. Moreover,
       the second sentence of subsection (f) must be read in conjunction with the first.
       The first sentence clearly states that “nothing in this section shall affect or
       prevent the enforcement of a claim for injury....” Subsection (f) is among the
       things in “this section.” Accordingly we conclude that the only requirement
       that Indiana Code § 29-1-14-1(f) imposes on a tort action seeking liability
       insurance proceeds is that the suit be filed within the tort statute of limitations.

707 N.E.2d 992, 995 (Ind. 1999).

       Because Pistalo did not file a claim within the nine-month timeframe allowed for

filing claims against Wilks’s estate, she could not disturb the distribution of estate assets, had

there been any. Nevertheless, because she filed her tort action within the statute of

limitations for a personal injury claim, she is entitled to recover from Progressive whatever

sums Progressive owed to Wilks’s estate as Wilks’s insurer. In other words, Progressive not

only was obligated to insure Wilks for the $100,000 policy limit, but it also owed Wilks


                                                8
pursuant to that insurance policy an obligation to exercise good faith in handling Pistalo’s

claim against her.

        Included in that good faith obligation was Progressive’s duty to avoid exposing

Wilks’s estate to excess liability by refusing to settle for the policy limits. If Progressive

failed to act in good faith, it risked liability to the estate for any excess judgment against it.

Collins, 643 N.E.2d at 385. In that event, Progressive’s total obligation would include not

only the policy coverage limit, but also the amount of any excess judgment.3 We are unaware

of any compelling policy reason to condition the availability of the bad faith claim against

Progressive upon the subsequent liquidity of Wilks’s estate. To do so would not serve the

purpose of promoting good faith bargaining by liability carriers. In its proceedings

supplemental order, Court I found that Pistalo owned a judgment of $309,000 (less $100,000

paid) and was entitled to prejudgment interest and attorney’s fees, but not from Progressive

in that forum, because she had neither named Progressive as a party nor established a bad

faith claim against Progressive. Thus, as a judgment creditor of the insured tortfeasor’s

estate, Pistalo needed a procedural mechanism for pursuing an excess judgment directly from

the insurer. She accomplished this by obtaining an assignment from Wilks’s estate. See id.

at 386 (adopting judgment rule, which “mandates that if an insurer engages in bad faith while

failing to settle a claim, the insurer must compensate the insured or its assignees, regardless

of financial status.”) (emphasis added).




        3
          It is important to note that at the time Progressive committed the alleged bad faith, the liquidity of
Wilks’s estate had not yet been established.

                                                       9
        Pistalo contends that as an assignee, she obtained all rights that Wilks’s estate had

against Progressive as Wilks’s insurer, including the right to the $333,600 excess judgment.

The assignee of rights under a contract stands in the shoes of the assignor and can assert any

rights that the assignor could have asserted. Citimortgage, Inc. v. Barabas, 975 N.E.2d 805,

813 (Ind. 2012). “A valid assignment gives the assignee neither greater nor lesser rights than

those held by the assignor.” Indianapolis-Marion Cnty. Pub. Library v. Charlier Clark &

Linard, PC, 929 N.E.2d 838, 848 (Ind. Ct. App. 2010) (citation and quotation marks

omitted), trans. denied.

        Progressive challenges the validity of the assignment on grounds of lack of

consideration.4 We note that it is generally inappropriate for courts to inquire into the

adequacy of consideration. Stainbrook v. Low, 842 N.E.2d 386, 397 (Ind. Ct. App. 2006),

trans. denied. Moreover, it is questionable whether Progressive, as a stranger to the

assignment, has standing to raise such an inquiry. Nevertheless, we choose to address

Progressive’s argument.




        4
           Progressive also asserts that Padula lacked authority to execute an assignment due to his position as a
special representative, not a personal representative. A special representative is a type of personal
representative who is appointed for a special purpose “with limited powers and duties [and who] is responsible
to the estate only for that portion of its affairs entrusted to [him].” In re Estate of Hutman, 705 N.E.2d 1060,
1063 (Ind. Ct. App. 1999) (citation and quotation marks omitted). In cases where the party defendant dies
during the pendency of personal injury proceedings, “only a special representative—in contrast to a personal
representative to administer the estate’s assets and liabilities—needs to be appointed.” Richie, 707 N.E.2d at
995 (quoting 1 HENRY’S INDIANA PROBATE LAW § 804, at 339-40 (8th ed. 1989)). In other words, the special
representative is appointed to “satisfy[] the somewhat metaphysical notion that a suit cannot proceed against a
decedent.” Id. Here, Padula’s “portion of estate affairs” consisted of matters relating to Pistalo’s personal
injury action against the estate. The assignment to Pistalo was part of that portion of affairs because it avoided
any attempt by Pistalo to execute on her judgment against the estate. As such, Padula did not act beyond his
limited powers and duties in entering into the assignment with Pistalo.

                                                       10
       An assignment is a contract and therefore is subject to the requirement that it be

supported by consideration. Interstate Fin. Corp. v. Dodson, 105 Ind. App. 513, 518, 12

N.E.2d 989, 991 (1938).

       Consideration is defined as a benefit to the party promising, or a loss or
       detriment to the party to whom the promise is made. A benefit is a legal right
       given to the promisor to which the promisor would not otherwise be entitled.
       A detriment is a legal right the promisee has forborne.

Warner v. Estate of Allen, 776 N.E.2d 422, 428 (Ind. Ct. App. 2002) (citations and internal

quotation marks omitted), trans. denied (2003).

       Here, Pistalo had a judgment against Wilks’s estate, and the estate had rights against

Progressive as Wilks’s insurer. Under the terms of the assignment, the estate gave Pistalo its

rights against Progressive in exchange for Pistalo’s promise to forgo executing on her

judgment against Wilks’s estate. The fact that the estate had no assets goes to the

collectability of the judgment, not the right to execute on the judgment against the estate.

This is precisely what the Collins court was emphasizing when it found that a lack of

collectability on the judgment against the estate did not render the estate’s assignment to the

aggrieved party illusory. 643 N.E.2d at 386. Simply put, the assignment between Pistalo and

Wilks’s estate was supported by valid consideration.

       In sum, tortfeasor Wilks purchased $100,000 in coverage from Progressive, and

Progressive refused to settle with Wilks’s aggrieved party Pistalo for the $100,000 policy

limit when given the opportunity to do so. Post-judgment, Progressive paid Pistalo $100,000,

plus $1000 in attorney’s fees. By refusing to settle, Progressive placed its insured at risk of

incurring a judgment for an amount exceeding the policy limits. As such, the $333,600

                                              11
excess judgment Pistalo now seeks was part of Progressive’s bargained-for risk based on its

duty to act in good faith with respect to its insured. In the proceedings supplemental, Court I

found that Pistalo had neither made a claim of bad faith against Progressive nor named

Progressive as a party. However, once Pistalo obtained the assignment from Wilks’s estate,

she was in a position to file a direct action against Progressive for the entire amount of its

obligation to the estate based on its alleged bad faith refusal to settle for the policy limits.5 If

bad faith is established, Progressive’s obligation to Pistalo will include not only the stated

policy limits, but also the amount of the excess judgment. Because the issue of whether

Progressive acted in bad faith has not been established in the designated materials as a matter

of law, we conclude that summary judgment was inappropriate. Accordingly, we reverse and

remand for proceedings consistent with this decision.6

        Reversed and remanded.

RILEY, J., and BAILEY, J., concur.




        5
         “To prove bad faith, the plaintiff must establish, with clear and convincing evidence, that the insurer
had knowledge that there was no legitimate basis for denying liability.” Freidline v. Shelby Ins. Co., 774
N.E.2d 37, 40 (Ind. 2002).
        6
          While we appreciate the vigorous advocacy of counsel for both parties, we caution counsel that the
aggressive and sarcastic tone of the arguments in their briefs serves no productive purpose.

                                                      12
