FOR PUBLICATION


ATTORNEY FOR APPELLANT:                      ATTORNEYS FOR APPELLEES:

MARK D. GERTH                                ROBERT R. FOOS, JR.,
Kightlinger & Gray, LLP                      LESLEY A. PFLEGING
Indianapolis, Indiana                        Lewis Wagner, LLP
                                             Indianapolis, Indiana
                                                                       FILED
                                                                     Sep 20 2012, 9:26 am
                             IN THE
                                                                            CLERK
                   COURT OF APPEALS OF INDIANA                            of the supreme court,
                                                                          court of appeals and
                                                                                 tax court




STATE FARM MUTUAL AUTOMOBILE                 )
INSURANCE COMPANY,                           )
                                             )
      Appellant-Intervening Defendant,       )
                                             )
ALAN STEADY,                                 )
                                             )
      Appellee-Defendant,                    )
                                             )
             vs.                             )    No. 49A02-1201-CT-34
                                             )
RICHARD KERN,                                )
                                             )
      Appellee-Plaintiff.                    )


                   APPEAL FROM THE MARION SUPERIOR COURT
                       The Honorable Theodore M. Sosin, Judge
                         Cause No. 49D02-0809-CT-041793



                                 September 20, 2012


                            OPINION - FOR PUBLICATION


ROBB, Chief Judge
                                    Case Summary and Issue

       A jury found Alan Steady one-hundred percent at fault for injuries Ronald Kern

sustained when the two were involved in a car accident, and a $98,000 judgment was entered

against Steady to compensate Kern for his injuries. Because Steady was only insured up to

$25,000, State Farm, Kern’s insurer, paid Kern underinsured motorist benefits. Steady

requested that the trial court deem the judgment against him satisfied because Kern was

compensated by State Farm, and the trial court granted Steady’s motion. State Farm appeals,

raising one issue for our review: whether the trial court erred when it deemed the judgment

entered against Steady satisfied. Concluding the trial court did err, we reverse and remand.

                               Facts and Procedural History

       In October 2006, Kern and Steady collided while driving their vehicles, and the

accident resulted in various bodily injuries to Kern. Kern brought suit against Steady to

recover for his injuries, and Kern’s insurer, State Farm, intervened as a party defendant.

Kern’s insurance policy with State Farm provided for medical costs and underinsured

motorist coverage. After Kern filed a motion in limine, State Farm was removed as a named

party. In March 2011, a jury found Steady one-hundred percent at fault, determined Kern’s

damages were $98,000, and returned a verdict for such amount. The trial court entered a

general judgment on the jury verdict in favor of Kern and against Steady in the amount of

$98,000 plus costs and interest.




                                             2
       Because Steady’s insurance policy included a $25,000 limit, State Farm issued a check

to Kern in the amount of $68,000.1 Steady’s insurer issued two checks to Kern, one for

$25,000, the limit of Steady’s policy, and a second for $6,334.79 for medical costs and

interest. State Farm moved the trial court to allow it to be realigned as a party plaintiff so

that it could execute against the judgment as a subrogee of Kern to the extent of the payments

State Farm made to Kern. The trial court denied State Farm’s motion. Thereafter, Steady

moved the trial court to deem the judgment entered against him as satisfied. The trial court

granted Steady’s motion. State Farm now appeals. Additional facts will be supplied as

appropriate.

                                       Discussion and Decision

                                        I. Standard of Review

       Indiana Trial Rule 60(B)(7) provides that a trial court may relieve a party from a

judgment when the judgment has been satisfied. We review a trial court’s grant of a motion

for relief from judgment for abuse of discretion. TacCo Falcon Point, Inc. v. Atlantic Ltd.

P’ship XII, 937 N.E.2d 1212, 1218 (Ind. Ct. App. 2010). A trial court abuses its discretion

when its ruling is clearly against the logic and effect of the facts and circumstances before the

court. Id. We will not reweigh the evidence. Id. The movant bears the burden to

demonstrate that relief is both necessary and just. Dillard v. Dillard, 889 N.E.2d 28, 33 (Ind.

Ct. App. 2008).




       1
           State Farm had already paid Kern $5,000 for medical costs.
                                                     3
                                II. Satisfaction of Judgment

       As a threshold matter, Steady argues State Farm lacks standing to appeal. “Standing is

similar to, though not identical with, the real party in interest requirement of Trial Rule 17.

The point of both requirements is to insure that the party before the court has a substantive

right to enforce the claim that is being made in the litigation.” Pence v. State, 652 N.E.2d

486, 487 (Ind. 1995) (citations omitted). “Standing is defined as having sufficient stake in an

otherwise justiciable controversy to obtain judicial resolution of that controversy. In order to

have standing, the party challenging the law must show adequate injury or the immediate

danger of sustaining some injury.”         Indiana Civil Rights Comm’n v. Indianapolis

Newspapers, 716 N.E.2d 943, 945 (Ind. 1999) (quotations omitted).

       Steady argues State Farm lacks standing because State Farm was not a party to the

case at the time judgment was entered against Steady. We disagree. Although State Farm

was not a party to the proceeding, it did sustain a tangible injury by the trial court deeming

the judgment against Steady satisfied. Indiana’s Uninsured and Underinsured Motorist

Coverage Act requires insurers to offer coverage to their insureds for automobile accidents in

which they are entitled to recover damages from uninsured or underinsured motorists. See

Ind. Code section 27-7-5-2(a). Kern purchased such coverage from State Farm. The Act

also provides:

       The insurer shall be subrogated, to the extent of such [uninsured or
       underinsured motorist] payment, to the proceeds of any settlement or judgment
       that may later result from the exercise of any rights of recovery of [the insured]
       against any person or organization legally responsible for said bodily injury or
       death, or property damage, for which payment is made by the insurer. Such



                                               4
       insurer may enforce such rights in its own name or in the name of the [insured]
       ....

Ind. Code § 27-7-5-6(a). Thus, since State Farm has a statutory right to be subrogated to the

proceeds of the judgment entered against Steady, it was demonstrably injured by the

judgment against Steady being deemed satisfied. We therefore conclude State Farm has

standing to appeal.

       We now turn to the merits of State Farm’s appeal. State Farm contends the trial court

erred by deeming the judgment against Steady satisfied. State Farm cites Peele v. Gillespie,

658 N.E.2d 954 (Ind. Ct. App. 1995), trans. denied, for support. In Peele, Gillespie was

injured in a motor vehicle accident while riding as a passenger in Peele’s vehicle. Gillespie

sued Peele and sought damages for his injuries, but Gillespie also filed an underinsured

motorist claim with his insurer, Prudential Insurance Company of America. Prudential

ultimately paid Gillespie $100,000 in underinsured motorist benefits. Thereafter, Peele

argued any judgment entered against him and in favor of Gillespie should be set off by the

$100,000 that Prudential paid to Gillespie as compensation for his injuries because to hold

otherwise would allow Gillespie a double recovery. Id. at 956.

       We disagreed with Peele, noting that insurance policies typically include a subrogation

clause which provides that once an insured receives payment from a third-party tortfeasor,

the insurer is entitled to reimbursement for the amount of benefits it previously paid to the

insured. Thus, insureds typically do not end up with a double recovery. In Peele, however,

Prudential missed its opportunity to subrogate Gillespie’s proceeds because Prudential failed

to abide by the requirements of its policy and statutory law, so Gillespie was in a position to


                                              5
possibly receive a double recovery. Despite this fact, we concluded, “Peele is not entitled to

benefit from Gillespie’s prudence in obtaining insurance coverage or from Prudential’s

failure to abide by its policy provisions and statutory law. Instead, we find it proper for the

benefit to inure to Gillespie.” Id. at 959.

        Rather than moving for setoff, Steady moved the trial court to deem the judgment

against him satisfied because Kern was paid underinsured motorist benefits by his insurer.

Despite this difference, the principle remains the same. When an insurer compensates its

insured due to a third party tortfeasor being underinsured, the third party tortfeasor’s liability

is not reduced. Rather, Indiana Code section 27-7-5-6(a) provides that the insurer may

enforce its insured’s right of recovery against the third-party tortfeasor, either in its own

name or in the name of its insured, and that the insurer shall then be subrogated to the

proceeds of any settlement or judgment that results.2 To allow a judgment entered against the

third-party tortfeasor to be deemed satisfied due to the insurer’s underinsured motorist

payment to its insured would undermine the purpose of this statute. Thus, we conclude that

when a judgment is entered against a third-party tortfeasor, said judgment is not satisfied

when the plaintiff’s insurer compensates the plaintiff due to the third-party tortfeasor’s being

underinsured. Steady is not entitled to benefit from Kern’s carefulness and assiduousness in




        2
           Steady also argues it would be “fundamentally unfair to allow State Farm to be substituted as a party
plaintiff and pursue proceedings supplemental on the judgment.” Appellee’s Brief at 15. We disagree.
Indiana Code section 27-7-5-6(a) provides that an insurer may enforce rights of recovery, either acting in its
own name or in the name of its insured.

                                                       6
obtaining underinsured motorist insurance coverage. The trial court therefore erred in

deeming the judgment against Steady satisfied.3

                                                     Conclusion

         The judgment entered against Steady should not have been deemed satisfied due to

State Farm’s underinsured motorist coverage payment to Kern, and therefore the trial court

erred. We reverse and remand to the trial court for further proceedings consistent with this

opinion.

         Reversed and remanded.


BAKER, J., and BRADFORD, J., concur.




         3
           State Farm also argues it is entitled to recover post-judgment interest. To the extent State Farm is correct, we
leave the determination of this amount to the trial court.


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