Pursuant to Ind. Appellate Rule 65(D), this
Memorandum Decision shall not be
regarded as precedent or cited before any
court except for the purpose of
establishing the defense of res judicata,
collateral estoppel, or the law of the case.


ATTORNEYS FOR APPELLANT:                        ATTORNEY FOR APPELLEE:

DAVID W. STONE IV                               JOSEF D. MUSSER
Stone Law Office & Legal Research               Spitzer Herriman Stephenson
Anderson, Indiana                               Holderead Musser & Conner, LLP
                                                Marion, Indiana
THOMAS D. BLACKBURN
Blackburn & Green
Fort Wayne, Indiana
                                                                        Apr 18 2013, 9:16 am


                              IN THE
                    COURT OF APPEALS OF INDIANA

TORY SIMMERS,                                   )
                                                )
       Appellant-Plaintiff,                     )
                                                )
              vs.                               )      No. 17A04-1211-CT-577
                                                )
UNITED FARM FAMILY MUTUAL                       )
INSURANCE COMPANY,                              )
                                                )
       Appellee-Defendant.                      )


                    APPEAL FROM THE DEKALB SUPERIOR COURT
                     The Honorable Nancy Eshcoff Boyer, Special Judge
                              Cause No. 17D01-1008-CT-32


                                      April 18, 2013

               MEMORANDUM DECISION – NOT FOR PUBLICATION

BAKER, Judge
      Following a motor vehicle accident, Tory Simmers settled with at-fault party’s

insurer for the liability coverage policy limit of $50,000. Simmers then sought to recover

additional compensation from United Farm Family Mutual Insurance Company (Insurer)

under an insurance policy containing provisions for medical expense coverage up to

$5000 per person and underinsured motorist coverage up to $100,000 per person. The

parties disagreed about whether the policy language entitled Simmers to receive the full

amounts of both the medical expense coverage and the underinsured motorist coverage,

and each party filed a motion for summary judgment asking the trial court to interpret the

policy in its favor. In granting summary judgment to Insurer, the trial court determined

that the policy entitled Insurer to a setoff against the underinsured motorist coverage in

the amount of $5000 for medical payments that Insurer had previously made.

      On appeal, Simmers contends that the trial court erred in granting summary

judgment to Insurer. Although we disagree with the provision upon which the trial court

apparently relied in granting summary judgment, we nevertheless conclude that the trial

court correctly determined that Insurer was entitled to a $5000 setoff and summary

judgment in its favor. Accordingly, we affirm the judgment of the trial court.

                                         FACTS

      On December 29, 2008, Simmers was seriously injured in a motor vehicle accident

for which the driver of the other vehicle was at fault. The parties agree that Simmers

suffered damages in excess of $105,000, $43,388.49 of which were medical expenses.



                                            2
        At the time of the accident, Simmers was a passenger in a vehicle driven by

Chelsea Neuhaus and owned by Neuhaus’s mother, Beth Jennings. Amber Eib, the driver

of the other vehicle, had been driving a vehicle owned by her father, Kenneth Eib. Both

vehicles were insured through Insurer. The Eib policy provided liability coverage of up

to $50,000 per person for bodily injury. The Jennings policy included medical expense

coverage for up to $5000 per person and underinsured motorist coverage of up to

$100,000 per person and $300,000 per accident.

        On August 5, 2010, Simmers filed a complaint against Amber Eib and Insurer,

requesting compensatory damages from Eib and medical expense and underinsured

motorist benefits from Insurer under the Jennings policy. At some point, Insurer paid

$5000 toward Simmers’s medical expenses under the Jennings policy. Simmers later

settled his claim against Eib for $50,000, which was equal to the policy limits of Eib’s

liability coverage for bodily injury. Simmers then sought to recover $50,000 under

Jennings’s underinsured motorist coverage.1 Although Insurer agreed that Simmers was

an insured under the Jennings policy, it claimed that the policy’s underinsured motorist

coverage provided for a subrogation lien against the $5000 that Insurer had already paid

out in medical payments, thus reducing its remaining liability under the Jennings policy

to $45,000 rather than $50,000.




1
 The parties agree that Insurer was entitled to a setoff against its underinsured motorist coverage limit of
$100,000 for the $50,000 received by Simmers under the Eib policy.
                                                     3
       After stipulating to the relevant facts and designating the insurance policy as

evidence, both parties filed motions for summary judgment. The trial court granted

summary judgment in favor of Insurer. Simmers now appeals.

                             DISCUSSION AND DECISION

       On appeal, Simmers argues that the trial court erred by determining that Insurer

could offset $5000 in medical payments made against the Jennings policy’s underinsured

motorist coverage limit. More particularly, Simmers contends that the policy terms

required his written consent for such a setoff, which he did not give, and that allowing a

setoff made the medical expense coverage illusory.

       In reviewing the grant of a motion for summary judgment, we apply the same

standard applicable to the trial court, namely that summary judgment is proper only when

there is no genuine issue of material fact and the moving party is entitled to judgment as a

matter of law.   Wagner v. Yates, 912 N.E.2d 805, 808 (Ind. 2009). Here, the parties

have stipulated to the relevant facts, leaving only terms of the insurance policy at issue.

We interpret the terms of an insurance policy using the same rules of interpretation that

apply to other contracts. Briles v. Wausau Ins. Cos., 858 N.E.2d 208, 213 (Ind. Ct. App.

2006). More specifically, the following rules apply:

       When interpreting an insurance policy, our goal is to ascertain and enforce
       the parties’ intent as manifested in the insurance contract. We construe the
       insurance policy as a whole and consider all of the provisions of the
       contract and not just individual words, phrases or paragraphs. If the
       language is clear and unambiguous, we give the language its plain and
       ordinary meaning. An ambiguity exists where a provision is susceptible to
       more than one interpretation and reasonable persons would differ as to its

                                             4
       meaning. However, an ambiguity does not exist merely because the parties
       proffer differing interpretations of the policy language.

Id. (internal citations omitted).

       Where an ambiguity does exist, we are required to construe an insurance policy

strictly against the insurer and to view the policy language from the insured’s perspective.

Wagner, 912 N.E.2d at 805. Such strict construction is essential “particularly where an

exclusion of coverage is concerned.” Masten v. AMCO Ins. Co., 953 N.E.2d 566, 570

(Ind. Ct. App. 2011), trans. denied. However, “the power to interpret contracts does not

extend to changing their terms and we will not give insurance policies an unreasonable

construction to provide additional coverage.” Briles, 858 N.E.2d at 213.

       Here, both the medical expense coverage provision and the underinsured motorist

coverage provision from the Jennings policy are at issue. The relevant language from the

medical expense coverage provision, found in Part II of the Jennings policy, states:

       We will pay the reasonable medical expenses incurred by or for an insured
       who sustains bodily injury caused by an accident.

                                            ...

       OUR LIMIT OF LIABILITY

       Regardless of the number of vehicles insured, insureds, claims made or
       vehicles involved in the accident, the most we will pay for all medical
       expenses for an insured in any one accident is the limit of the Medical
       Expense Coverage shown in the declarations for “Each Person.”

                                            ...

       Medical expenses payable under this coverage will be reduced by any
       amounts owed or paid under the . . . Uninsured/Underinsured Bodily Injury

                                             5
       coverages of this policy. No payment will be made under this coverage
       unless the injured person or his legal representative agrees, in writing, that
       any payment will be applied toward any settlement or judgment the person
       receives under . . . Part IV.

Appellant’s App. p. 85-86.

       The underinsured motorist coverage provision is found in Part IV of the Jennings

policy and states:

       We will pay damages for bodily injury an insured is legally entitled to
       collect from the owner or driver of an uninsured or underinsured motor
       vehicle. The bodily injury must be caused by an accident arising out of the
       ownership, maintenance or use of an uninsured or underinsured motor
       vehicle.

                                            ...

       OUR LIMIT OF LIABILITY

       1. Regardless of the number of insured automobiles, insureds, claims
       made, or motor vehicles involved in the accident, our limit of liability is as
       follows:

          a. If separate amounts are shown in the declarations for Coverage K,
          Bodily Injury and Coverage L, Property Damage:

              (1) The most we will pay for all damages resulting from bodily
                  injury under Coverage K to any one person caused by any one
                  accident is the Bodily Injury limit shown in the declarations for
                  “Each Person.”

                                            ...

       2. Subject to the “Each Accident” limit of liability, the most we will pay
       under Coverage K will be the lesser of:

          a. the difference between the amount paid or payable in damages to the
          insured by or for any person or organization who may be liable for the


                                             6
           bodily injury and the “Each Person” limit of Uninsured or Underinsured
           Motorists coverage provided in the insured’s policy; or

           b. the difference between the total amount of damages incurred by the
           insured and the amount paid or payable by or for any person or
           organization liable for the insured’s bodily injury.

                                             ...

       4. Any amounts payable for damages under these coverages shall be
       reduced by any amount paid or payable to or for the insured:

           a. under any workmen’s compensation law, disability benefits law or
           other similar law; or

           b. for bodily injury under Part I of this policy.

       5. We shall not be obligated to pay under these coverages that portion of
       the damages which the insured may be entitled to recover which represent
       medical expenses paid or payable to the insured under Part II . . . .

Id. at 90-91.

       The trial court found that the policy language was not ambiguous and that “[t]he

policy clearly states [Insurer] shall not be obligated to pay that portion of damages which

represent medical expenses previously paid to the insured.” Appellant’s App. p. 6. Thus,

it appears that the trial court based its decision to grant summary judgment to Insurer on

subsection 5 of the underinsured motorist coverage limitation of liability provisions.

Then, citing to Shelter Insurance Company v. Woolems, 759 N.E.2d 1151 (Ind. Ct. App.

2011), the trial court stated that “where the policy clearly states the limit of liability, the

insured cannot receive more than that amount from the insurer.” Id.




                                              7
       Simmers contends that Shelter is distinguishable and that Standard Mutual

Insurance Company v. Pleasants, 627 N.E.2d 1327 (Ind. Ct. App. 1994), demands a

different result. In Pleasants, this Court held that language similar to that of subsection 5

was unambiguous and that it prohibited double recovery under the uninsured motorist

coverage for the exact same expenses already paid under the uninsured motorist

coverage, but it “does not prohibit an insured from recovering the limits of both her

uninsured motorist coverage and her medical payments coverage, when the amount of

damages the insured is entitled to recover equals or exceeds the combined limits of the

medical payments and uninsured motorists coverage. 627 N.E.2d at 1330. Here, where

both parties agree that Simmers’s total damages are in excess of $105,000, there is no

risk of double recovery, and this provision would therefore seem not to provide for a

$5000 setoff against the uninsured motorist coverage limit of $100,000.

       Nevertheless, another provision in the Jennings policy arguably does provide for

the setoff granted by the trial court under the circumstances of this case. A provision in

the medical expense coverage limitation of liability section provides in part that

“[m]edical expenses payable under this coverage will be reduced by any amounts owed

or paid under the . . . Uninsured/Underinsured Bodily Injury coverages of this policy.”

Appellant’s App. p. 86. The phrase “medical expenses payable under this coverage”

refers back to the initial insuring agreement, which provides that Insurer “will pay the

reasonable medical expenses incurred by or for an insured who sustains bodily injury

cause by an accident.” Appellant’s App. p. 85; see Beam v. Wausau Ins. Co., 765 N.E.2d

                                             8
524, 530-31 (Ind. 2002) (holding that the phrase “under this coverage” “is a general

phrase contained in insurance agreements that refers to the scope of the initial insuring

agreement, not the dollar amount of the policy limit”). “Medical expenses” are defined

under the Jennings policy as “expenses for necessary medical, surgical, x-ray, dental,

ambulance, hospital, and professional nursing services . . . .” Id. at 80.

          As noted above, Simmers had $43,388.49 in medical expenses, of which Insurer

paid $5000 in an initial payment under the Jennings policy. As discussed earlier, it does

not appear that Insurer was entitled to a $5000 setoff against the underinsured motorist

coverage under subsection 5 of that coverage’s limitation of liability provisions.

However, this provision makes clear that Insurer is entitled to reduce the amount owed

under the medical expense coverage by any amount owed under the underinsured

motorist coverage. Thus, Simmers is seemingly entitled to a setoff of $100,000 against

his total medical expenses of $43,388.49 under this provision, making his recovery under

the medical expense coverage $0.

          Contrary to Simmers’s contentions, permitting this setoff does not render the

medical expense coverage illusory. This is because had Simmers’s medical expenses

been greater than $100,000, he would have been entitled to receive the amount in excess

of the setoff amount up to the medical expense coverage policy limit of $5000. See

Meridian Mut. Ins. Co. v. Richie, 544 N.E.2d 488, 489-90 (Ind. 1989) (concluding that

coverage is not illusory if one theoretically could have received coverage under different

facts).

                                              9
         Simmers also contends that Insurer waived its right to any setoff against the

medical expense coverage when it made $5000 in medical payments on his behalf

without first securing his written consent as required by the policy. Simmers directs us to

the next sentence in the medical expense coverage limitation of liability provision, which

provides that “[n]o payment will be made under this coverage unless the injured person

or his legal representative agrees, in writing, that any payment will be applied toward any

settlement or judgment the person receives under . . . Part IV.” Appellant’s App. p. 86.

Simmers argues that this sentence, requiring his written consent prior to any medical

expense payments, creates a condition precedent to the setoff contemplated by the

previous sentence. Stated otherwise, Simmers contends that because Insurer made a

$5000 payment under the medical expense coverage without first receiving his consent,

Insurer waived its right to the setoff under the Jennings policy.

          When reading this provision along with the entire policy as a whole, we conclude

that the provision did not create a condition precedent to the application of the medical

expense setoff.     Rather, the provision appears to have been intended to create a

substantive right to the setoff and to further establish a suitable procedure for

guaranteeing that setoff. Although Insurer failed to follow its own procedure, this does

not change the fact that the substantive right to the setoff nevertheless exists under the

Jennings policy when the policy is interpreted as a whole. Indeed, there is no express

provision anywhere else in the policy that would allow for the waiver that Simmers

seeks.

                                             10
       Finally, we note as an aside that we are not convinced by Insurer’s argument that

Simmers admitted providing his written consent to the setoff by entering into “Stipulation

No. 21,” which provided that “Tory Simmers has cooperated and complied with all

conditions precedent with regard to the [Jennings policy].” Appellant’s App. p. 69. We

find that the parties intended this stipulation to show that Simmers was able to bring an

action against Insurer under the policy, not as evidence that he provided his written

consent to a setoff for the medical expenses paid. See Appellant’s App. p. 94 (requiring

“full compliance with all the terms of this policy” before an insured can bring legal action

against Insurer); see also Marshall Cnty. Redi-Mix, Inc. v. Matthew, 458 N.E.2d 219, 222

(Ind. 1984) (stating that a stipulation should be given the meaning intended by the parties

and not extended by construction).

       Accordingly, we conclude that although summary judgment may have been

granted based upon an erroneous interpretation of one provision in the policy, the trial

court was nevertheless correct in its ultimate conclusion that Insurer was entitled to a

$5000 setoff for the medical payments it made under the medical expense coverage.

Thus, summary judgment in favor of Insurer was proper.

       The judgment of the trial court is affirmed.

MAY, J., and MATHIAS, J., concur.




                                            11
