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IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF INDIANA 

HAMMOND DIVISION 

DEE FRYE, et al., 

 Plaintiffs, 

 vs. 

AUTO-OWNERS INSURANCE 

CO., et al.,

 Defendants. 

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NO. 3:13–CV-113 

OPINION AND ORDER

 This matter is before the Court on: (1) Plaintiffs’ Motion 

for Certification of Questions of Indiana Law to the Indiana 

Supreme Court, filed by Plaintiffs Dee Frye and Lanhui Frye on May 

12, 2015 (DE# 92); (2) Defendant Auto-Owners Insurance Company’s 

Motion for Summary Judgment, filed on May 29, 2014 (DE# 94); and 

(3) Plaintiffs’ Motion for Partial Summary Judgment, filed on June 

11, 2015 (DE# 96). For the reasons set forth below, Plaintiffs’ 

Motion for Certification (DE# 92) is DENIED. Defendant’s Motion 

for Summary Judgment (DE# 94) is GRANTED. Plaintiffs’ Motion for 

Partial Summary Judgment (DE# 96) is DENIED. The Defendant is 

ORDERED to submit evidence that it has paid the full amount it 

concedes it owes to Plaintiffs under the Commercial Umbrella 

Insurance Policy ($382,314.21) within thirty (30) days of the date 
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of this Order. When the Court is satisfied that Auto-Owners has 

paid this amount to Plaintiffs, it will dismiss this case. 

FACTS 

For the purposes of these motions for summary judgment, the 

facts below are undisputed: 

Plaintiff Dee Frye (“Frye”) was involved in a car accident in 

LaPorte County, Indiana, on January 27, 2011, in which he was 

seriously injured. Frye was driving a vehicle insured by 

Nationwide Mutual Insurance Company (“Nationwide”). The accident 

was caused by the negligence of Myron Dampier (“Dampier”), the 

driver of the other vehicle. The accident occurred while Frye was 

driving a vehicle in the scope of his employment with Tri City 

Data & Electronic, Inc. (“Tri City”). Through Tri City, Frye was 

covered by a Commercial Automobile Insurance Policy (“Automobile 

Policy”) issued by an affiliate of Auto-Owners Insurance Company 

(“Auto-Owners”). Tri City also provided a Commercial Umbrella 

Insurance Policy issued by Auto-Owners that extended coverage to 

Frye (“Umbrella Policy”). 

Auto-Owners’ Automobile Policy 

Auto-Owners’ Automobile Policy provides underinsured motorist 

(“UIM”) coverage of $1 million per person. (See DE# 46-3 at 5-

7.) The Automobile Policy sets forth the following relevant 

provisions regarding UIM coverage: 
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2. COVERAGE 

a. We will pay compensatory damages, including but 

not limited to loss of consortium, [that] any 

person is legally entitled to recover from the 

owner or operator of an uninsured automobile or 

underinsured automobile because of bodily injury 

sustained by an injured person while occupying 

an automobile that is covered by SECTION II – 

LIABILITY COVERAGE of the policy. 

. . . 

4. LIMIT OF LIABILITY 

We will pay damages for bodily injury or property 

damage as follows: 

a. Our limit of liability for compensatory damages, 

including but not limited to loss of consortium, 

because of or arising out of bodily injury to 

any one person in any one occurrence is the least 

of: 

(1) the difference between: 

(a) the amount paid in compensatory 

damages, including but not limited 

to loss of consortium, to the 

injured person by or for any person 

or organization who may be liable 

for the injured person’s bodily 

injury; and 

(b) the “each person” limit for 

Uninsured or Underinsured Motorist 

Coverage stated in the 

Declarations; or 

(2) the difference between: 

(a) the total amount of compensatory 

damages, including but not limited 

to loss of consortium, incurred by 

the injured person; and 

(b) the amount paid by or for any person 

or organization liable for the 

injured person’s bodily injury. 

 . . . 

e. The amount we pay will be reduced by any amounts 

paid or payable for the same bodily injury: 
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(1) under SECTION II – LIABILITY 

COVERAGE of the policy; 

(2) under any workers compensation or 

similar law; or 

(3) by or on behalf of any person or 

organization who may be legally 

responsible for the bodily injury. 

5. OTHER [UM] OR [UIM] COVERAGE 

If there is other [UM] or [UIM] Coverage which 

applies, we will pay our share of the damages. Our 

share will be the ratio of our limit of liability 

to the total of all limits which apply. Total 

damages payable for one occurrence shall be 

considered not to exceed the limit of liability of 

the applicable policy that has the highest limit of 

liability. 

The coverage extended to automobiles you do not own 

will be excess over any other coverage available to 

you. 

(DE# 46-3 at 49-52 (emphases omitted).) 

 Auto-Owners’ Umbrella Policy 

 Auto-Owners originally issued the Umbrella Policy to Tri City 

on November 9, 2007. The Umbrella Policy was subsequently renewed 

each year through November 9, 2011. (DE# 95-1 at 2 (Reiner Aff. 

¶ 7(b)-(f)).) The Umbrella Policy’s liability limit and UIM 

coverage limit were each $1 million per occurrence from 2007 

through May 4, 2010. (Id.) Beginning on May 5, 2010, a change 

endorsement increased the liability limit to $5 million per 

occurrence, while the UIM coverage limit remained at $1 million. 

(Id. at ¶ 7(b).) At the time of Frye’s accident in 2011, the 

Declarations pages of the Umbrella Policy provided a UIM coverage 
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limit of $1 million, and a liability limit of $5 million. (DE# 

46-4 at 5-7.) There is no written rejection of UIM coverage limits 

less than $5 million. The Umbrella Policy states in relevant part: 

2. COVERAGE 

[UM 

UIM 

UM] PROPERTY DAMAGE 

Subject to 4. CONDITIONS below 

a. (1) We will pay compensatory damages to an 

injured person covered by an underlying policy 

in accordance with the provisions of the 

automobile insurance shown in the Schedule of 

Underlying Insurance or such policy’s 

replacement; . . . 

. . . 

4. CONDITIONS 

The following provisions shall apply irrespective of any 

similar conditions in an underlying policy: 

. . . 

b. The following additional provisions are only 

applicable to this endorsement: 

(1) Limit of Liability 

(a) The most we shall pay under this 

endorsement for all compensable damages 

in any one occurrence shall not exceed 

the Limit of Liability shown in the 

Declarations for: 

1) The combined coverages of [UM] 

and [UIM]; 

. . . 

(c) For [UIM] coverage, our Limit of 

Liability shall be reduced by the any 

amounts: 
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1) Paid under the Bodily Injury 

Liability coverage of this policy for 

the same bodily injury; 

2) Paid or payable for the same 

bodily injury covered under any 

workers compensation or similar law; 

and 

3) Paid by or on behalf of any person 

or organization who may be legally 

responsible for the bodily injury 

which are in excess of the retained 

limit. 

(DE# 46-4 at 31-33.) 

Background and Procedural History 

After the accident, Frye received worker’s compensation 

benefits in the amount of $692,895.79, which included payments for 

medical expenses, temporary total disability and permanent partial 

impairment. (DE # 95-2 at 2.) Dampier’s insurer made an offer to 

Frye of its applicable per person policy limit of $100,000, and 

Frye accepted. Frye offered to assign the $100,000 payment to the 

worker’s compensation insurer and his counsel. (DE# 97-1 at 4.) 

Pursuant to the written agreement, Tri City and Auto-Owners (as 

the worker’s compensation insurer) accepted the assignment of 

$75,000 in partial satisfaction of their statutory lien, and 

$25,000 was paid to Frye’s counsel. (Id.) 

On January 7, 2013, Frye and his wife, Lanhui Frye 

(collectively, “Plaintiffs”), filed a complaint against AutoOwners and Nationwide in the St. Joseph County Circuit Court of 
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the State of Indiana, alleging that they are entitled to recover 

UIM coverage for all damages resulting from the car accident, up 

to the limits of coverage. (DE# 1-1.) The action was removed to 

federal court. (DE# 1.) Plaintiffs and Nationwide filed motions 

for summary judgment. On February 4, 2015, this Court denied 

Plaintiffs’ motions for summary judgment, granted Nationwide’s 

motion for summary judgment, and dismissed Nationwide from the 

case. (DE# 88.)

Auto-Owners reached a partial settlement agreement with 

Plaintiffs, and paid them $1,188,799.60 in November 2014. (DE# 

95-1 at 2 (Reiner Aff. ¶ 8).) This amount consisted of $900,000 

from the UIM coverage of the Automobile Policy ($1 million coverage 

limit less a setoff of the $100,000 paid by Dampier’s insurer), 

and $288,799.60 from the UIM coverage of the Umbrella Policy 

(assuming a $1 million coverage limit less a setoff of amounts 

paid in worker’s compensation benefits). (Id.) Auto-Owners 

indicates that it is in the process of paying Plaintiffs an 

additional amount of $18,304.61 owed under the Umbrella Policy. 

(DE# 95 at 23.) 

On May 12, 2015, Plaintiffs filed a motion for certification 

of three questions of Indiana law to the Indiana Supreme Court. 

(DE# 92.) Auto-Owners objects to certification of these questions. 

(DE# 91.) On June 11, 2015, Auto-Owners filed a motion for summary 

judgment, which the parties have fully briefed. (DE# 94.) On the 
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same day, Plaintiffs filed a motion for partial summary judgment. 

(DE# 96.) Auto-Owners filed a response to this motion. Plaintiffs 

did not file a reply brief. The Court is prepared to rule on these 

motions. 

SUMMARY JUDGMENT STANDARD 

 Summary judgment must be granted when “there is no genuine 

dispute as to any material fact and the movant is entitled to 

judgment as a matter of law.” Fed. R. Civ. P. 56(a). A genuine 

dispute of material fact exists when “the evidence is such that a 

reasonable jury could return a verdict for the nonmoving party.” 

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 

2505, 91 L. Ed. 2d 202 (1986). Not every dispute between the 

parties makes summary judgment inappropriate; “[o]nly disputes 

over facts that might affect the outcome of the suit under the 

governing law will properly preclude the entry of summary 

judgment.” Id. To determine whether a genuine dispute of material 

fact exists, the Court must construe all facts in the light most 

favorable to the non-moving party and draw all reasonable 

inferences in that party’s favor. See Ogden v. Atterholt, 606 

F.3d 355, 358 (7th Cir. 2010). A party opposing a properly 

supported summary judgment motion may not rely on allegations in 

his own pleading, but rather must “marshal and present the court 

with the evidence [he] contends will prove [his] case.” Goodman 
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v. Nat'l Sec. Agency, Inc., 621 F.3d 651, 654 (7th Cir. 2010). 

“[I]nferences relying on mere speculation or conjecture will not 

suffice.” Stephens v. Erickson, 569 F.3d 779, 786 (7th Cir. 2009) 

(citation omitted). If the non-moving party fails to establish 

the existence of an essential element on which he bears the burden 

of proof at trial, summary judgment is proper. See Massey v. 

Johnson, 457 F.3d 711, 716 (7th Cir. 2006). 

DISCUSSION 

For the purpose of the parties’ motions for summary judgment, 

no dispute of material fact exists. Rather, the motions raise 

issues of insurance contract interpretation. Auto-Owners’ motion 

for summary judgment asserts that Auto-Owners has paid or is in 

the process of paying all amounts due under the Automobile Policy 

and the Umbrella Policy. Plaintiffs oppose this motion, and move 

for summary judgment, arguing that Auto-Owners is not entitled to 

set off the $100,000 payment from Dampier’s insurer. Plaintiffs 

also assert that the UIM coverage limit under the Umbrella Policy 

is $5 million, rather than $1 million, by operation of law. 

Finally, Plaintiffs maintain that under the Umbrella Policy, AutoOwners is not entitled to set off the amount paid by the worker’s 

compensation insurer, and that, if such setoff is allowed, it 

should be taken from the amount of Plaintiffs’ damages, rather 

than the UIM coverage limit. 
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In Indiana,1 “[t]he interpretation of an insurance policy is 

primarily a question of law for the court, and it is therefore a 

question which is particularly suited for summary judgment.” 

Wagner v. Yates, 912 N.E.2d 805, 808 (Ind. 2009) (citation 

omitted). Insurance policies are analyzed “using the same rules 

of interpretation applied to other contracts.” Auto–Owners Inc. 

Co. v. Benko, 964 N.E.2d 886, 890 (Ind. Ct. App. 2012) (citation 

omitted). Courts “interpret an insurance policy with the goal of 

ascertaining and enforcing the parties’ intent as revealed by the 

insurance contract.” Westfield Cos. v. Knapp, 804 N.E.2d 1270, 

1274 (Ind. Ct. App. 2004) (citation omitted). “[C]lear and 

unambiguous language in an insurance policy should be given its 

plain and ordinary meaning, even if those terms limit an insurer’s 

liability.” Everett Cash Mut. Ins. Co. v. Taylor, 926 N.E.2d 1008, 

1012 (Ind. 2010) (citation omitted)). “Where an ambiguity exists, 

that is, where reasonably intelligent people may interpret the 

policy’s language differently, Indiana courts construe insurance 

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

at 890 (citation omitted). However, “an ambiguity is not 

affirmatively established simply because controversy exists and 

                                                            

1 Where, as here, “neither party raises a conflict of law issue in 

a diversity case, the federal court simply applies the law of the 

state in which the federal court sits.” Citadel Group Ltd. v. 

Washington Reg’l Med. Ctr., 692 F.3d 580, 587 n.1 (7th Cir. 2012) 

(quotation omitted).
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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) (citation omitted). Ultimately, the meaning of a 

policy “can only be gleaned from a consideration of all its 

provisions, not from an analysis of individual words or phrases. 

[The Court] must accept an interpretation of the contract language 

that harmonizes the provisions rather than the one which supports 

a conflicting version of the provisions.” Adkins v. Vigilant Ins. 

Co., 927 N.E.2d 385, 389 (Ind. Ct. App. 2010) (citations omitted); 

see Masten v. AMCO Ins. Co., 953 N.E.2d 566, 569 (Ind. Ct. App. 

2011). 

The Automobile Policy’s Setoff of the Tortfeasor’s Payment 

 Auto-Owners argues that the terms of the Automobile Policy 

entitle it to set off Dampier’s insurer’s $100,000 payment from 

the $1 million UIM per person limits available under the policy, 

thereby reducing Auto-Owners’ liability to $900,000. Plaintiffs 

assert that no deduction should be made for the $100,000 payment. 

The parties rely upon Section 4(a) of the Automobile Policy, 

which limits payment for UIM losses: 

Our limit for liability for compensatory damages . . . 

is the least of: 

(1) the difference between: 

(a) the amount paid in compensatory 

damages . . . to the injured person 

by or for any person or organization 
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who may be liable for the injured 

person’s bodily injury; and 

(b) the “each person” limit for 

Uninsured or Underinsured Motorist 

Coverage stated in the 

Declarations; or 

(2) the difference between: 

(a) the total amount of compensatory 

damages . . . incurred by the 

injured person; and 

(b) the amount paid by or for any person 

or organization liable for the 

injured person’s bodily injury. 

(DE# 46-3 at 51.) The parties do not dispute that Dampier’s 

insurer paid $100,000 for Frye’s injuries. Applying these facts 

to Section 4(a), Auto-Owners asserts that the maximum amount 

payable is the lesser of: the difference between the amount paid 

in damages by Dampier’s insurer ($100,000), and the per-person 

limit of its UIM coverage ($1,000,000), which is $900,000; or the 

difference between the amount of damages incurred by Frye 

(allegedly more than $1 million), and the amount paid by Dampier’s 

insurer ($100,000), which is presumed to be more than $900,000. 

Because $900,000 is the smaller amount, Auto-Owners asserts that 

it owes Plaintiffs $900,000 under Section 4(a)(1). 

Plaintiffs agree that the amount calculated under Section 

4(a)(2) will exceed the amount under Section 4(a)(1), and thus, 

Section 4(a)(1) applies here. However, Plaintiffs argue that the 

$100,000 payment from Dampier’s insurer should not be deducted 
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under Section 4(a)(1) because there has been no “amount paid . . 

. to the injured person.” (Id. (emphasis added).) Rather, 

Plaintiffs assigned the $100,000 payment to the worker’s 

compensation insurer (Auto-Owners) and their own attorneys. (See

DE# 102 at 6 (asserting that the payment to Auto-Owners “was done 

through a willing agreement between the parties”).) Plaintiffs 

claim that because the $100,000 was paid to others, and not to 

themselves, the clear language of Section 4(a)(1) determines that 

the limit for liability is $1 million. 

The assignment agreement states that the limits of liability 

of Dampier’s policy ($100,000) “have been tendered to the employee” 

Frye, and that Frye “has offered to assign” the amount to the 

employer and its worker’s compensation insurer, less the 25% 

statutory attorney’s fee of $25,000. (DE# 97-1 at 4, ¶¶ 4, 7.) 

The amount assigned to Auto-Owners, i.e., $75,000, was accepted as 

partial satisfaction of the worker’s compensation lien. (Id. ¶ 

8.) Because Plaintiffs had constructive receipt of the $100,000 

payment for their injuries, and willingly assigned those funds to 

address the worker’s compensation lien and attorneys’ fees, the 

Court finds that the $100,000 paid by Dampier’s insurer is an 

“amount paid . . . to the injured person.” 

Plaintiffs argue that the language of Section 4(a)(2)(b) is 

ambiguous because it references “amounts paid . . . for the injured 

person’s bodily injury,” without indicating to whom the amount was 
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paid. The Court disagrees. As explained above, Section 4(a)(2) 

does not apply here, given Plaintiffs’ contention that “the total 

amount of damages will be well in excess of the policy limits.” 

(DE# 102 at 7.) Moreover, an insurance policy is not ambiguous 

simply because parties assert conflicting interpretations. Beam,

765 N.E.2d at 528. The language in Section 4(a) – including 

Section 4(a)(2)(b) – is substantially similar to the limitations 

on UM and UIM coverage codified in Indiana Code § 27-7-5-5(c).2 

See Ind. Code § 27-7-5-5(c)(2)(B). Indiana courts have held that 

this statutory language “is clear and unambiguous and is not open 

to interpretation.” Kinslow v. GEICO Ins. Co., 858 N.E.2d 109, 

114 (Ind. Ct. App. 2006). 

                                                            

2 Section 27-7-5-5(c) states: 

The maximum amount payable for bodily injury under 

uninsured or underinsured motorist coverage is the 

lesser of: 

(1) the difference between: 

(A) the amount paid in damages to the 

insured by or for any person or 

organization who may be liable for the 

insured’s bodily injury; and 

(B) the per person limit of uninsured or 

underinsured motorist coverage provided 

in the insured’s policy; or 

(2) the difference between: 

(A) the total amount of damages incurred 

by the insured; and 

(B) the amount paid by or for any person 

or organization liable for the insured’s 

bodily injury. 

Ind. Code § 27-7-5-5(c) (emphasis added). 
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Auto-Owners maintains that Section 4(e) of the Automobile 

Policy provides for a setoff of the $100,000 paid by Dampier’s 

insurer. Section 4(e) states in part, 

[t]he amount we pay will be reduced by any amounts paid 

or payable for the same bodily injury . . . by or on 

behalf of any person or organization who may be legally 

responsible for the bodily injury. 

(DE# 46-3 at 53.) Indiana courts have enforced setoff provisions 

in connection with UIM coverage. See, e.g., Progressive Ins. Co., 

Inc. v. Bullock, 841 N.E.2d 238, 241 (Ind. Ct. App. 2006) (allowing 

UIM insurer to set off payment by liability insurer). Because 

Dampier’s insurer paid $100,000 for Frye’s injuries, Auto-Owners 

asserts that its payment of $900,000 exhausts the remaining UIM 

coverage under the Automobile Policy. 

Plaintiffs argue that under Section 4(e), Auto-Owners’ 

$900,000 payment does not exhaust the UIM coverage because their 

damages allegedly exceed $1 million. Citing Beam v. Wausau 

Insurance Company, 765 N.E.2d at 530-31, they claim that Section 

4(e) provides for a setoff from the total amount of damages, rather 

than the policy limit. In Beam, the policy at issue stated, “[a]ny 

amount payable for damages under this coverage shall be reduced by 

all sums paid or payable under any workers’ compensation, 

disability benefits or similar law.” 765 N.E.2d at 527. The 

Indiana Supreme Court found that the phrase “[a]ny amount payable 

for damages under this coverage” clearly provides that the 
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reduction will be taken from the amount of damages incurred, rather 

than from the policy limit. Id. at 530. 

Auto-Owners maintains that the language of Section 4(e) 

differs significantly from that of the policy at issue in Beam. 

According to Auto-Owners, “the amount we pay” in Section 4(e) does 

not refer to Plaintiffs’ damages, but rather, the amount AutoOwners pays under the Automobile Policy. Section 4(a)(1)(a) 

expressly limits the amount Auto-Owners “will pay [for] damages 

for bodily injury” to the “Limit of Liability,” subject to setoffs 

of amounts paid by those legally responsible for the injury. Thus, 

Section 4(a)(1) establishes the maximum amount Auto-Owners will 

pay for a UIM claim, i.e., $1 million, subject to certain setoffs. 

According to Auto-Owners, it follows that in Paragraph 4(e), the 

“amount we pay” cannot exceed the UIM coverage limit of $1 million. 

The Court agrees. Paragraph 4(e) provides that “the amount [AutoOwners] pay[s]” (which is, at most, the UIM coverage limit of $1 

million) “will be reduced by any amounts paid or payable of the 

same bodily injury . . . by or on behalf of any person or 

organization who may be legally responsible.” (DE# 46-3 at 53.) 

The Court finds this language to be clear and unambiguous. See

Medley v. Am. Economy Ins. Co., 654 N.E.2d 313, 316 (Ind. Ct. App. 

1995) (holding that “[t]he limit of liability will be reduced by 

all sums paid because of the bodily injury . . . by or on behalf 

of persons or organizations who may be legally responsible” policy 
‐17‐ 

language was clear and unambiguous and provided a setoff from the 

policy’s maximum limit of liability) (emphasis omitted). Section 

4(e) provides a setoff from the Automobile Policy’s maximum limit 

of liability, rather than the amount of Plaintiffs’ damages. 

Plaintiffs claim that Auto-Owners is receiving a benefit 

twice because (1) the Automobile Policy provides for a setoff of 

Dampier’s $100,000 payment, and (2) a portion of the payment was 

assigned to Auto-Owners as the worker’s compensation insurer. 

Auto-Owners insists it only receives a benefit once, as a setoff 

per the terms of Section 4(a)(1). The second alleged benefit, 

that is, Plaintiffs’ assignment of $75,000 to Auto-Owners, reduced 

the worker’s compensation lien by $75,000. The Umbrella Policy 

provides for a setoff of amounts paid by the worker’s compensation 

insurer. Auto-Owners concedes that this setoff should reflect the 

$75,000 reduction of the worker’s compensation lien. (DE# 103 at 

7, 13 n.3.) If Plaintiffs had not assigned the $75,000 to AutoOwners, the setoff would be $75,000 greater, and Plaintiffs would 

receive $75,000 less under the Umbrella Policy. Under these 

circumstances, Auto-Owners does not receive a benefit twice.3

                                                            

3

Auto-Owners’ initial memorandum in support of its Motion for 

Summary Judgment does not reflect a $75,000 reduction of the 

worker’s compensation lien in its calculation of the amount owed 

to Plaintiffs under the Umbrella Policy. (DE# 95 at 23.) However, 

in its reply brief, Auto-Owners concedes that $75,000 should be 

reduced from the setoff amount, and recalculates the amount owed 

under the Umbrella Policy to reflect the $75,000 reduction. (DE# 

103 at 7, 13 & n.3; see also DE# 101 at 9 n.5 (acknowledging 
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Finally, Plaintiffs assert that the Court should interpret 

the Automobile Policy in their favor because the policy failed to 

include language stating that Auto-Owners “would get a credit for 

underlying tort feasor [sic] limits even if the credit is taken by 

another carrier.” (DE# 97 at 3.) Citing Wagner v. Yates, 912 

N.E.2d 805 (Ind. 2009), Plaintiffs claim that where an insurer 

could have done more to clearly address stacking situations, 

failure to do so requires interpreting the policy in the insured’s 

favor. Auto-Owners maintains that the Automobile Policy expressly 

addresses the situation where other UIM coverage is available. 

Section 5 of the policy states: 

Other [UM] or [UIM] Coverage 

If there is other [UM] or [UIM] Coverage which applies, 

we will pay our share of the damages. Our share will be 

the ratio of our limit of liability to the total of all 

limits which apply. Total damages payable for one 

occurrence shall be considered not to exceed the limit 

of liability of the applicable policy that has the 

highest limit of liability. 

(DE# 46-3 at 52.) This language contemplates that other UIM 

coverage may apply to the same occurrence, and provides that 

coverage will not exceed the policy with the highest limit of 

liability. In other words, the coverage will not stack.4 

                                                            

$75,000 assignment reduces the worker’s compensation amount AutoOwners is entitled to set off in Auto-Owner’s response brief to 

Plaintiffs’ Motion for Partial Summary Judgment).) 

4 “‘Stacking’ of insurance policies occurs when more than one policy 

is applicable to a loss thus allowing the insured to recover under 
‐19‐ 

The Indiana Supreme Court has noted that “because the purpose 

of insurance is to indemnify, double recovery by an insured is 

prohibited even when multiple policies apply to a loss.” Wagner,

912 N.E.2d at 812 (emphasis added; citation omitted). Indiana 

allows for anti-stacking clauses that “limit coverage when 

coverage under another policy is currently available so as to 

preclude stacking or double recovery of [UIM] coverages.” Id.

(citation and quotations omitted). Indiana Code section 27-7-5-

5(a) provides that a “policy or endorsement affording [UIM] 

coverage . . . may provide that the total limit of all insurers’ 

liability arising out of any one (1) accident shall not exceed the 

highest limits under any one (1) policy applicable to the loss. . 

. .” Ind. Code § 27-7-5-5(a). 

In arguing that the Automobile Policy must explicitly state 

that a tortfeasor’s payment for damages will be set off even if 

another insurer sets off the same payment, Plaintiffs endorse 

stacking UIM coverage where more than two insurers are involved. 

But Section 27-7-5-5(a) clearly allows for anti-stacking 

provisions, and does not limit the number of policies to which 

these provisions may apply. Section 5 of the Automobile Policy 

provides that UIM coverage will not be stacked, without limiting 

                                                            

all policies applicable to the loss (i.e., stack the policies) up 

to the total damages.” Fairmont Specialty Ins. Co. v. 1039012 

Ontario, Inc., 2:10 CV 070, 2011 WL 3651333, at *7 (N.D. Ind. Aug. 

19, 2011) (citation omitted).
‐20‐ 

the number of policies involved. The Court finds that Section 5 

clearly and unambiguously precludes the stacking of UIM coverage, 

regardless of the number of policies involved. For these reasons, 

the Court finds that Auto-Owners’ payment of $900,000 exhausts the 

remaining UIM coverage under the Automobile Policy. 

The Umbrella Policy’s UIM Coverage Limit 

 The parties disagree as to the amount of the UIM coverage 

available under the Umbrella Policy. Auto-Owners asserts that the 

Umbrella Policy’s UIM coverage limit is $1 million because the 

policy’s Declarations pages identify $1 million of UIM coverage. 

Plaintiffs argue that Indiana Code section 27-7-5-2(a) requires 

insurers to provide UIM coverage in limits equal to the limits of 

liability, unless the coverage was rejected in writing. (DE# 97 

at 5). Plaintiffs assert that because the Umbrella Policy provides 

a limit of liability of $5 million, by operation of law, it must 

also provide UIM coverage of $5 million.5

In Indiana, a “statute is given its clear and plain meaning 

if unambiguous, but if ambiguous the court must try to ascertain 

the legislature’s intent, and the court’s primary goal is to 

interpret the statute to effectuate that intent.” Miller v. 

LaSalle Bank Nat. Ass'n, 595 F.3d 782, 786 (7th Cir. 2010) 

                                                            

5 Neither party asserts that Tri City rejected UIM coverage.
‐21‐ 

(citations omitted). Because Indiana’s “UIM statute ‘is a 

mandatory, full-recovery, remedial statute,’ it ‘is to be 

liberally construed’ and ‘read in a light most favorable to the 

insured.’” Lakes v. Grange Mut. Cas. Co., 964 N.E.2d 796, 804 

(Ind. 2012) (quoting DePrizio, 705 N.E.2d at 460). 

When the Umbrella Policy was first issued in 2007, Section 

27-7-5-2(a) stated in part: 

(a) The insurer shall make available, in each automobile 

liability or motor vehicle liability policy of insurance 

which is delivered or issued for delivery in this state 

with respect to any motor vehicle registered or 

principally garaged in this state, insuring against loss 

resulting from liability imposed by law for bodily 

injury or death suffered by any person and for injury to 

or destruction of property to others arising from the 

ownership, maintenance, or use of a motor vehicle, or in 

a supplement to such a policy, [UM and UIM coverage]. 

The [UM] and [UIM] coverages must be provided by insurers 

. . . in limits at least equal to the limits of liability 

specified in the bodily injury liability provisions of 

an insured’s policy, unless such coverages have been 

rejected in writing by the insured. . . . 

Ind. Code § 27-7-5-2(a) (2007) (emphasis added) (“subsection 

(a)”). At that time, Section 27-7-5-2 applied to commercial 

umbrella policies. United Nat. Ins. Co. v. DePrizio, 705 N.E.2d 

455, 463 (Ind. 1999) (noting that “[a]bsent an express directive 

from our legislature, we decline the invitation to carve out an 

exemption for particular policies”). In 2009, the Indiana 

legislature amended Section 27-7-5-2 to add subsection (d), which 

exempted commercial umbrella policies from subsection (a): 
‐22‐ 

(d) An insurer is not required to make available the 

coverage described in subsection (a) in a commercial 

umbrella or excess liability policy, including a 

commercial umbrella or excess liability policy that is 

issued or delivered to a motor carrier (as defined in IC 

8-2.1-17-10) that is in compliance with the minimum 

levels of financial responsibility set forth in 49 CFR 

Part 387. 

Ind. Code § 27-7-5-2(d) (2009) (emphasis added) (“subsection 

(d)”). Subsection (a) was also amended to begin with the phrase, 

“[e]xcept as provided in subsection (d), the insurer shall make 

available, in each automobile liability or motor vehicle policy of 

insurance,” UM and UIM coverage. Ind. Code § 27-7-5-2(a) (2009) 

(emphasis added) (together with subsection (d), the “2009 

Amendment”). The parties disagree as to whether the 2009 Amendment 

applies to the Umbrella Policy. 

Plaintiffs assert that the 2009 Amendment does not apply 

because the Umbrella Policy was first issued in 2007, two years 

before the 2009 Amendment. Auto-Owners insists that the 2009 

Amendment applies because the Umbrella Policy was renewed after 

the 2009 Amendment’s effective date of July 1, 2009. See Ind. 

Code § 27-7-5-2 (2009).6 The question is whether the Indiana 

legislature intended the 2009 Amendment to apply to renewals. 

                                                            

6 The Umbrella Policy was issued in 2007 with a UIM coverage limit 

of $1 million and a liability coverage limit of $1 million, and 

was renewed at these coverage limits several times. The Umbrella 

Policy’s liability coverage limit was increased to $5 million, 

while maintaining the $1 million of UIM coverage, in an endorsement 

effective May 5, 2010. On November 9, 2010, the Umbrella Policy 

was renewed at these new limits. Thus, the endorsement and renewal 
‐23‐ 

Looking at the plain language of the statute, Section 27-7-

5-2 applies to automobile liability policies “delivered or issued 

for delivery” in Indiana. Ind. Code § 27-7-5-2(a). Renewal 

policies are policies delivered or issued for delivery. See Ind. 

Code § 27-7-6-3 (2009) (defining renewals as the “issuance and 

delivery by an insurer of a policy replacing at the end of the 

policy period a policy previously issued and delivered by the same 

insurer insuring the same insured . . . .”) (emphasis added). 

Nothing in the language of Section 27-7-5-2 indicates that the 

2009 Amendment does not apply to renewals. 

In determining whether an amendment to Section 27-7-5-2 

applies to renewals, Indiana courts have relied upon the 

amendment’s legislative notes. In United Farm Bureau Mutual 

Insurance Company v. Lowe, 583 N.E.2d 164 (Ind. Ct. App. 1991), 

the court considered whether an amendment to Section 27-7-5-2 in 

1987 (“1987 amendment”) applied to policies issued before, and 

renewed after, the amendment’s effective date.7 There, the 

plaintiffs maintained that the 1987 amendment should apply to the 

renewal policies, thereby providing them with additional insurance 

                                                            

of the Umbrella Policy occurred after the 2009 Amendment went into 

effect. 

7 The 1987 amendment to Section 27-7-5-2 required that “insurers 

provide underinsured coverage, in addition to the uninsured 

coverage, in amounts equal to the insured’s own bodily injury 

limits in the insured’s policy, unless the insured has rejected 

the coverages in writing.” Lowe, 583 N.E.2d at 167.
‐24‐ 

coverage. The court reviewed the historical notes of the 1987 

amendment and found that “the legislature included a special 

section so that the amended statute applies only to policies first 

issued after December 31, 1987.” Id. at 167-68 (citing P.L. 391-

1987(ss), Sec. 4) (emphasis added). Relying on those notes, the 

court held that the Indiana legislature intended for the 1987 

amendment to apply only to policies first issued after December 

31, 1987. Id. at 168. Because the plaintiffs’ renewal policies 

were not “policies first issued” after December 31, 1987, they 

were not subject to the amendment. Id.; see also Millikan v. U.S. 

Fidelity and Guar. Co., 619 N.E.2d 948, 950 (Ind. Ct. App. 1993) 

(holding that the 1987 amendment to section 27-7-5-2 “applies to 

policies ‘first issued’ after December 31, 1987”) (citing P.L. 

391-1987(ss), Sec. 4). 

When the Indiana legislature enacted the 2009 Amendment of 

Section 27-7-5-2, it included notes to the amendment. See P.L. 

124-2009, Sec. 1-3. Unlike the 1987 amendment of Section 27-7-5-

2, the notes to the 2009 Amendment do not direct that the 2009 

Amendment apply only to policies first issued after the amendment’s 

effective date. Because the legislature did not limit the 

application of the 2009 Amendment to policies first issued after 

the amendment’s effective date, the Court finds that the Umbrella 

Policy is subject to the 2009 Amendment of Section 27-7-5-2. 
‐25‐ 

Plaintiffs also argue that, even if the Umbrella Policy is 

subject to the 2009 Amendment of Section 27-7-5-2, an insurer that 

provides UIM coverage in an umbrella policy must comply with 

subsection (a)’s requirement that such coverage be provided “in 

limits at least equal” to the bodily injury liability coverage 

limits. They assert that subsection (d) only states that umbrella 

policies are not required to provide UIM coverage; if an insurer 

chooses to provide UIM coverage, nothing in Section 27-7-5-2 allows 

the insurer to determine the amount of UIM coverage provided. 

Plaintiffs claim that Section 27-7-5-2 did not allow umbrella 

policies to provide UIM coverage in amounts that differ from bodily 

injury liability coverage limits until years after the accident at 

issue. In 2013, Section 27-7-5-2 was amended to include subsection 

(h), which allows personal umbrella insurers to determine the 

amount of excess UIM coverage it will provide (“2013 amendment”). 

Subsection (h) states in part: 

an insurer that makes available the coverage described 

in subsection (2) under a personal umbrella or excess 

liability policy: (A) may make available the coverage 

in limits determined by the insurer; and (B) is not 

required to make available the coverage in limits equal 

to the limits specified in the personal umbrella or 

excess liability policy. 

Ind. Code § 27-7-5-2(h). Plaintiffs argue that the addition of 

this language indicates that Section 27-7-5-2 did not allow 

insurers to determine the amount of umbrella UIM coverage to 

provide prior to the 2013 amendment. However, subsection (h) 
‐26‐ 

addresses personal umbrella policies, rather than commercial

umbrella policies. Plaintiffs point to no evidence that the 2013 

amendment changed Section 27-7-5-2 as it relates to commercial 

umbrella policies. Furthermore, neither the 2009 Amendment to 

Section 27-7-5-2 nor the notes to the 2009 Amendment indicates 

that the legislature intended to require an insurer to abide by 

the obligations of subsection (a) if it elects to provide UIM 

coverage in a commercial umbrella policy. Rather, Section 27-7-

5-2(d) and the language added to subsection (a) in the 2009 

Amendment clearly and unambiguously provide that commercial 

umbrella insurers are not required to make available UIM coverage 

under the requirements set forth in subsection (a). 

When the liability limit of the Umbrella Policy increased to 

$5 million in May 2010, and the policy was renewed in November 

2010, Section 27-7-5-2 no longer required commercial umbrella 

policies to make available the insurance coverage required in 

subsection (a), i.e., UIM coverage with limits that were at least 

equal to liability limits. As such, the Court finds that the UIM 

coverage limit under the Umbrella Policy is the amount provided on 

its Declarations pages: $1 million. 

The Umbrella Policy’s Setoff of Worker’s Compensation Amounts 

Plaintiffs argue that setting off amounts paid by a worker’s 

compensation insurer from the UIM coverage limit of the Umbrella 

Policy is against public policy. They claim that because Section 
‐27‐ 

27-7-5-2 allegedly gives an insured a “statutory right to purchase 

[UIM] coverage in an amount equal to the limits of liability he 

purchased,” allowing a setoff of worker’s compensation amounts 

diminishes this statutory right. (DE# 97 at 7.) But this argument 

assumes that the Umbrella Policy is not subject to the 2009 

Amendment of Section 27-7-5-2. As explained above, the Court finds 

that the Umbrella Policy is subject to the 2009 Amendment of 

Section 27-7-5-2. Because the 2009 Amendment explicitly excludes 

commercial umbrella policies from the requirements of Section 27-

7-5-2(a), this argument fails.8

Auto-Owners asserts that the Umbrella Policy allows a setoff 

of worker’s compensation amounts from the UIM coverage limit. 

Auto-Owners relies upon Section 4(b)(1)(c) of the Umbrella Policy, 

which states, “[f]or [UIM] coverage, our Limit of Liability shall 

be reduced by any amounts . . . [p]aid or payable for the same 

bodily injury covered under any workers compensation or similar 

law . . . which are in excess of the retained limit.” (DE# 46-4 

at 33.) The Indiana Supreme Court has found that similar policy 

language allowed a setoff of worker’s compensation benefits from 

the policy’s coverage limits. In Justice v. American Family Mutual 

                                                            

8 Plaintiffs also assert that Auto-Owners relies upon section (e) 

of the Automobile Policy as the basis for the worker’s compensation 

setoff. (DE# 97 at 6 (citing DE# 46-3).) Because Auto-Owners 

does not rely upon this provision of the Automobile Policy in its 

briefing, the Court will not address it here. 
‐28‐ 

Insurance Company, 4 N.E.3d 1171 (Ind. 2014), the Indiana Supreme 

Court found the following policy language to be unambiguous: “[t]he 

limits of coverage will be reduced by . . . [a] payment made or 

amount payable because of bodily injury under any worker’s 

compensation or disability benefits law or any similar law.” Id. 

at 1177. The Court held that this language meant that the setoff 

was applied to the limits of the policy, rather than the insured’s 

damages. Id.9

Plaintiffs contend that any setoff of worker’s compensation 

amounts should be deducted from the amount of their damages, rather 

than the Umbrella Policy’s limit of liability. They attempt to 

distinguish Section 4(b)(1)(c) from the provision approved in 

Justice by focusing on Section 4(b)(1)(c)’s phrase, “which are in 

excess of the retained limit.” According to Plaintiffs, this 

                                                            

9 In Justice, after determining that the setoff provision was 

unambiguous, the Court considered whether the provision was 

unenforceable as a violation of public policy. There, the UIM 

coverage limit was $50,000, which was the minimum amount allowed 

by statute in Indiana. 4 N.E.3d at 1178-79. Justice had received 

$25,000 from the tortfeasor’s carrier, and over $70,000 in worker’s 

compensation. Applying the setoff provision to the worker’s 

compensation amount operated to reduce the UIM coverage to zero. 

Id. at 1197. The Court found that Justice was entitled to recover 

an additional $25,000 from the UIM insurer in order to receive the 

statutory minimum of $50,000 of UIM coverage. Id. This is not an 

issue here because Plaintiffs received more than the statutory 

minimum of $50,000 from the Dampier’s insurer. See Hardiman v. 

Gov’t Interins. Exch., 588 N.E.2d 1331, 1335 (Ind. Ct. App. 1992) 

(allowing setoff of full amount of worker’s compensation payment 

against UIM limit where employee received the statutory minimum 

from the tortfeasor’s insurer). 
‐29‐ 

phrase – which is not found in the Justice provision - means that 

the Umbrella Policy’s limit of liability is only reduced for 

payments that exceed the “retained limit” of $1 million. Because 

the worker’s compensation amount is less than the retained limit 

of $1 million, Plaintiffs argue that the worker’s compensation 

amount is not set off from the limit of liability. 

Auto-Owners responds that the amounts paid “which are in 

excess of the retained limit” means the amounts paid that are above 

and beyond the coverage limit of the underlying Automobile Policy. 

The Court agrees. The Umbrella Policy defines the “retained limit” 

as “the greater of: (a) [t]he highest applicable limits of 

liability of any and all underlying policy(ies); or (b) 1) $500,000 

for bodily injury. . . .” (DE# 46-4 at 31.) In their briefs, the 

parties agree that the “retained limit” is the $1 million UIM 

coverage limit under the underlying Automobile Policy. (DE# 102 

at 17-18; DE# 103 at 12.) The Court finds that this language to 

be clear and unambiguous, and that the language of Section 

4(b)(1)(c) is substantially similar to the provision the Justice

Court found to be unambiguous. 

Here, the worker’s compensation amounts were not part of the 

“retained limit” nor were they set off from the amounts paid under 

the Automobile Policy. Thus, they are “amounts paid . . . in 

excess of the retained limits.” Because the $1 million limit was 

reached under the Automobile Policy ($100,000 from Dampier’s 
‐30‐ 

insurer, and $900,000 from Auto-Owners), Section 4(b)(1)(c) allows 

a setoff of the worker’s compensation amounts from the Umbrella 

Policy’s UIM coverage limit of $1 million. The Court therefore 

holds that Auto-Owners is entitled to set off the amounts paid by 

the worker’s compensation insurer from the UIM coverage limits of 

the Umbrella Policy. 

At this time, it is unclear whether Auto-Owners has paid 

Plaintiffs the amount it acknowledges Plaintiffs are owed under 

the Umbrella Policy. Auto-Owners concedes that Plaintiffs’ 

assignment of $75,000 to Auto-Owners reduced the worker’s 

compensation lien to $617,685.79, and that, after setting off 

worker’s compensation amounts, Plaintiffs are entitled to 

$382,314.21 under the Umbrella Policy. (DE# 103 at 13 & n.3.) 

Auto-Owners claims that it has paid Plaintiffs $288,799.60, and is 

in the process of paying them $18,304.61, for a total of 

$307,104.21. (DE# 95-1 at 3, DE# 95 at 23.) Auto-Owners does not 

indicate whether it has paid Plaintiffs the remaining balance owed 

under the Umbrella Policy. The Court therefore ORDERS Auto-Owners 

to submit evidence sufficient to show that it is has paid the full 

amount it concedes it owes to Plaintiffs under the Umbrella Policy 

($382,314.21) within thirty (30) days of the date of this Order.
‐31‐ 

Certification of Questions to the Indiana Supreme Court 

Plaintiffs seek to certify three questions to the Indiana 

Supreme Court, which are paraphrased as follows: 

(1) Where a UIM insurer is entitled to set off a 

tortfeasor’s liability limit, is a second UIM 

insurer entitled to benefit from the same setoff, 

without violating Indiana law and policy; 

(2) Where an umbrella UIM policy was issued in 2007, 

and was renewed thereafter, and where the version 

of Section 27-7-5-2 in effect in 2007 required that 

UIM limits match liability limits, does a 

subsequent amendment to Section 27-7-5-2, which 

took effect on July 1, 2009, and excludes 

commercial umbrella policies from the requirement 

of matching limits, apply to the policy; and 

(3) Is a policy provision allowing for a setoff against 

limits for payments of worker’s compensation 

unenforceable in light of the Indiana Supreme 

Court’s holdings in Justice and DePrizio. 

(See DE# 92 at 3-4.) Federal courts may “certify a question of 

Indiana law to the Supreme Court when it appears to the federal 

court that a proceeding presents an issue of state law that is 

determinative of the case and on which there is no clear 

controlling Indiana precedent.” Ind. R. App. P. 64(A). The 

decision to grant or deny a motion to certify a question of state 

law is discretionary with the district court. United Farm Bureau 

Mut. Ins. Co., Inc. v. Metro. Human Rel. Comm’n, 24 F.3d 1008, 

1015, n.4 (7th Cir. 2001). 

The most important consideration guiding the exercise of 

discretion to certify is whether the court is “genuinely uncertain” 
‐32‐ 

about a question of state law that is critical to resolution of 

the case. Golden v. State Farm Mut. Auto. Ins. Co., 745 F.3d 252, 

257 (7th Cir. 2014) (citation omitted). This Court is not 

“genuinely uncertain” about the issues presented. While there is 

no directly controlling precedent in Indiana on these issues, there 

is sufficient precedent from which this Court can determine how 

the Indiana courts would decide them. The Court therefore DENIES

Plaintiffs’ motion to certify these questions of Indiana law to 

the Indiana Supreme Court. 

CONCLUSION 

 For the reasons set forth above, Plaintiffs’ Motion for 

Certification (DE# 92) is DENIED. Defendant Auto-Owners’ Motion 

for Summary Judgment (DE# 94) is GRANTED. Plaintiffs’ Motion for 

Partial Summary Judgment (DE# 96) is DENIED. The Defendant is 

ORDERED to submit evidence that it has paid the full amount it 

concedes it owes to Plaintiffs under the Commercial Umbrella 

Insurance Policy ($382,314.21) within thirty (30) days of the date 

of this Order. When the Court is satisfied that Auto-Owners has 

paid this amount to Plaintiffs, it will dismiss this case. 

DATED: January 19, 2016 /s/ RUDY LOZANO, Judge 

 United States District Court