‐1‐ 

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 the: (1) Motion for 

Partial Summary Judgment Against Defendants, filed by Plaintiffs 

Dee Frye and Lanhui Frye, on October 11, 2013 (DE# 48); (2) 

Plaintiffs’ Alternative Motion for Partial Summary Judgment, 

filed by Plaintiffs Dee Frye and Lanhui Frye on October 11, 2013 

(DE# 50); (3) Supplemental Motion for Summary Judgment filed by 

Defendant Nationwide Mutual Insurance Company on May 29, 2014 

(DE# 72); (4) Partial Stipulation of Dismissal, filed jointly by 

Plaintiffs Dee Frye and Lanhui Frye and Defendant Nationwide 

Mutual Insurance Company on June 2, 2014 (DE# 74); and (5) 

Partial Stipulation of Dismissal, filed jointly by Plaintiffs 

Dee Frye and Lanhui Frye and Defendant Auto-Owners Insurance 
‐2‐ 

Company on October 30, 2014 (DE# 86). For the reasons set forth 

below, the Motion for Partial Summary Judgment (DE# 48) and the 

Alternative Motion for Partial Summary Judgment (DE# 50) are 

DENIED. The Supplemental Motion for Summary Judgment (DE# 72) 

and the Partial Stipulation of Dismissals (DE## 74 & 86) are 

GRANTED. Defendant Nationwide Mutual Insurance Company is 

hereby DISMISSED from 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. (Comp., DE# 80-1, ¶¶ 6-9; Aff. of Dee Frye 

(“Frye Aff.”), DE# 80-19, ¶¶ 5-7.) The accident was caused by 

the negligence of Myron Dampier (“Dampier”), the driver of the 

other vehicle. (Frye Aff. ¶ 6.) As a result of the accident, 

Frye sustained serious permanent injuries and damages. (Id. ¶¶ 

8, 10.) 

At the time of the accident, Dampier was insured by Farmers 

Insurance (“Farmers”). (See Comp. ¶ 10; DE## 80-6 – 80-11.) 

Frye was driving a vehicle owned by Arthur and Mary Webber (“the 

Webbers”). (See Comp. ¶ 5; Frye Aff. ¶ 10; DE# 80-2.) The 

Webbers’ vehicle was insured by an insurance policy (“Nationwide 
‐3‐ 

Policy”) issued by Nationwide Mutual Insurance Company 

(“Nationwide”). (Comp. ¶ 5; Frye Aff. ¶ 10; Nationwide Policy, 

DE# 80-2.) The accident occurred while Frye was driving that 

vehicle in the scope of his employment with Tri City Data & 

Electronic, Inc. (“Tri City”). (Comp. ¶ 6; Frye Aff. ¶ 10.) 

Through Tri City, Frye was covered by a commercial automobile 

insurance policy (“Auto-Owners Policy”) issued by an affiliate 

of Auto-Owners Insurance Company (“Auto-Owners”). (Comp. ¶ 4; 

Auto-Owners Policy, DE# 80-3.) Tri City also provided a 

commercial umbrella policy issued by Auto-Owners that extended 

coverage to Frye (“Auto-Owners Umbrella Policy”). (Comp. ¶ 4; 

Auto-Owners Umbrella Policy, DE# 80-4.)1

At issue here are the terms of the Nationwide Policy and 

the Auto-Owners Policy. 

Nationwide Policy: 

 The Nationwide Policy includes an endorsement for 

underinsured motorist (“UIM”) coverage. (DE# 80-2 at 2-6.) It 

defines an underinsured motor vehicle as “one for which there is 

bodily injury liability bonds or insurance at the time of the 

                                                            

1 Auto-Owners’ response brief repeatedly notes that this Court has not yet 

decided whether UIM coverage is available to Plaintiffs under the Auto-Owners 

Policy. (See DE# 62.) Auto-Owners offers no facts to suggest that the 

policy does not provide UIM coverage to Frye. As such, for the purposes of 

these motions, the Court will consider the fact that the Auto-Owners Policy 

provides coverage to Frye to be undisputed. See N.D. Ind. Local R. 56 

(e)(2). 
‐4‐ 

accident in at least the amounts required by the financial 

responsibility laws where your auto is principally garaged. 

Their total amount, however, is less than the limits of this 

coverage.” (Id. at 3 (emphasis omitted).) The Nationwide 

Policy’s Declarations provides UIM coverage of $100,000 per 

person. (Id. at 14.) 

Under the UIM endorsement, Nationwide agrees to pay 

compensatory damages for an insured’s bodily injury caused by 

the driver or owner of an underinsured motor vehicle and 

compensatory damages due by law to other persons who suffer 

bodily injury while occupying “your auto.” (Id. at 3.) The 

provision entitled, “LIMITS AND CONDITIONS OF PAYMENT, AMOUNTS 

PAYABLE FOR UNDERINSURED MOTORISTS LOSSES,” states in part: 

We agree to pay losses up to the limits stated in the 

policy Declarations. The following applies to these 

limits: 

. . . 

6. The maximum amount payable for bodily injury is 

the lesser of: 

a) the difference between: 

(1) 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 

(2) the per-person limit of 

underinsured motorists coverage; 

or 

b) the difference between: 
‐5‐ 

(1) the total amount of damages 

incurred by the insured; and 

(2) the amount paid by or for any 

person or organization liable for 

the insured’s bodily injury. 

(Id. at 5-6 (emphasis omitted).) 

The Nationwide Policy’s UIM endorsement also addresses 

“Other Insurance”: 

1. If there is other insurance for bodily injury 

suffered by an insured while occupying a motor 

vehicle other than your auto, our coverage is 

excess over any other collectible: 

a) insurance; 

b) self insurance; 

c) proceeds for a governmental entity; or 

d) sources of recovery. 

However, this insurance will apply only in the 

amount by which the limit of coverage under this 

policy exceeds the total amount collectible from 

all of the above noted recovery sources. 

2. Except as stated above, if there is other 

insurance similar to this coverage under any 

other policy, we will be liable for only our 

share of the loss. Our share is our proportion 

of the total insurance limits for the loss. 

. . . 

(Id. at 6 (emphasis omitted).) 

Auto-Owners Policy: 

Tri City’s Auto-Owners Policy extends liability coverage 

“to any automobile . . . while operated in your business.” (DE# 

80-3 at 46.) Its Declarations provides UIM coverage of $1 
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million per person. (See DE# 80-3 at 5-7.) The Auto-Owners 

Policy sets forth the following relevant provisions regarding 

UIM coverage: 

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 . . . underinsured 

automobile2 because of bodily injury sustained 

by an injured person while occupying an 

automobile that is covered by SECTION II – 

LIABILITY COVERAGE of the policy. 

. . . 

3. EXCLUSIONS 

The insurance provided by this endorsement does 

not apply: 

. . . 

d. to directly or indirectly benefit an insurer or 

self-insurer under any workers compensation law 

or disability benefits law. 

. . . 

4. LIMIT OF LIABILITY 

We will pay damages for bodily injury or property 

damage as follows: 

 . . . 

e. The amount we pay will be reduced by any 

amounts paid or payable for the same bodily 

injury: 

 (1) under SECTION II – LIABILITY 

COVERAGE of the policy; 

 (2) under any workers compensation or 

similar law; or 

                                                            

2 The Auto-Owners Policy defines an underinsured automobile as “an automobile 

to which a bodily injury liability bond or liability insurance policy applies 

at the time of the occurrence; (a) in at least the minimum amounts required 

by the Financial Responsibility Law in the state where your automobile is 

normally garaged; but (b) provides limits of liability less than those stated 

in the Declarations for Underinsured Motorist Coverage.” (DE# 80-3 at 49 

(emphasis omitted).) 
‐7‐ 

 (3) by or on behalf of any person or 

organization who may be legally 

responsible for the bodily injury. 

5. OTHER . . . UNDERINSURED MOTORIST COVERAGE 

If there is other . . . Underinsured Motorist 

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.3

(DE# 80-3 at 49-52 (emphases omitted).) 

Pre-suit Communications with Insurers 

 In 2011, Farmers made an offer to Frye of its applicable 

per person policy limit of $100,000, and Frye accepted. (Comp. 

¶ 10; Frye Aff. ¶ 9; see also DE# 80-6 at 1.) Prior to and 

following the acceptance, counsel for Dee Frye and his wife, 

Lanhui Frye (collectively, “Plaintiffs”), corresponded with 

Nationwide and Auto-Owners regarding Plaintiffs’ position on the 

application and availability of UIM coverage under their 

respective insurance policies. (DE## 80-6 - 80-17.) In those 

communications, Plaintiffs stressed their belief that Nationwide 

and Auto-Owners would be responsible for sharing the first 

                                                            

3 The Auto-Owners Policy defines “you” as “the first named insured shown in the 

Declarations,” which is Tri City. (DE# 80-3 at 26 (emphasis omitted); see 

id. at 4.)
‐8‐ 

$100,000 of coverage on a pro rata basis, asserting that Frye 

had primary coverage under both the Auto-Owners policy for one 

million, and the Nationwide Policy for $100,000. (See, e.g.,

DE## 80-6, 80-7.) Nationwide responded that its review had 

determined that no UIM coverage was available “because our 

limits match those of the tort-feasor carrier.” (DE# 80-12.) 

Ultimately, no agreement could be reached between Plaintiffs and 

either insurer. 

On January 7, 2013, Plaintiffs filed a complaint against 

Auto-Owners and Nationwide in the St. Joseph County Circuit 

Court of the State of Indiana. (DE# 1-1.) The complaint 

alleges that Plaintiffs are entitled to recover UIM coverage 

from each of the Defendants for all damages resulting from the 

car accident, up to the limits of coverage, and that Nationwide 

and Auto-Owners breached their duties of good faith by failing 

to respond to and/or denying Plaintiffs’ claims. (Comp. ¶¶ 13-

15.) Plaintiffs further seek a declaration that the Nationwide 

Policy and the Auto-Owners Policy do not apply to directly or 

indirectly benefit any insurer under any worker’s compensation 

law and that the policies provide for a pro rata payment by 

Nationwide and Auto-Owners under the primary limits of coverage. 

(Id. ¶¶ 2, 3.) Plaintiffs allege that their damages exceed two 

million dollars. (DE# 73-3 at 6.) 
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On February 8, 2013, Nationwide removed the action to 

federal court. (DE# 1.) Both Auto-Owners and Nationwide 

answered the complaint. (DE## 12, 13.) On August 16, 2013, 

Nationwide filed a motion for summary judgment, which the 

parties fully briefed. (DE# 32.) On October 11, 2013, 

Plaintiffs filed a partial summary judgment motion against all 

defendants, and an alternative motion for partial summary 

judgment. (DE## 48, 50.) On November 8, 2013, Nationwide filed 

its response to Plaintiffs’ partial summary judgment motion, and 

Auto-Owners filed its response to both of Plaintiffs’ partial 

summary judgment motions. (DE## 60, 62.) Plaintiffs did not 

submit reply briefs to either partial summary judgment motion. 

On March 31, 2014, the Court denied without prejudice 

Nationwide’s summary judgment motion as premature because it 

would have required Plaintiffs to respond to arguments regarding 

their breach of duty of good faith claims without an opportunity 

to conduct discovery in support of their position. (DE# 67 at 

10-11.) 

On May 29, 2014, Nationwide filed its supplemental motion 

for summary judgment. (DE# 72.) Plaintiffs filed their 

response to this motion on July 1, 2014. (DE# 79.) On July 15, 

2014, Nationwide filed a reply brief in support of its motion. 

(DE# 83.) Since the instant motions were filed, the parties 

have stipulated to the dismissal of Plaintiffs’ claims of breach 
‐10‐ 

of duty of good faith against both Nationwide and Auto-Owners. 

(DE## 74 & 86.) 

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 

issue 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 v. Nat'l Sec. Agency, Inc., 621 F.3d 651, 

654 (7th Cir. 2010). “[I]nferences relying on mere speculation 
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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 these motions, no dispute of material 

fact exists. Rather, the motions raise issues of insurance 

contract interpretation. Nationwide’s summary judgment motion 

argues that the Nationwide Policy allows a setoff of Farmers’ 

$100,000 payment, thereby reducing Nationwide’s liability to 

zero. (DE## 72, 73.) Plaintiffs oppose this motion, and move 

for summary judgment, arguing that the Nationwide Policy and the 

Auto-Owners Policy provide for pro rata sharing of the UIM 

coverage limits allegedly available to Plaintiffs. (DE## 48, 

79.) Plaintiffs also seek a determination that any such 

benefits will not be subject to worker’s compensation liens. 

(DE# 48.) In their alternative summary judgment motion, 

Plaintiffs argue that Auto-Owners must make available one 

million dollars of UIM benefits, without any setoffs, to 

Plaintiffs’ claim. (DE# 50.) 
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In Indiana,4 “[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 one party asserts an interpretation 

contrary to that asserted by the opposing party.” Beam v. 

                                                            

4 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).
‐13‐ 

Wausau Ins. Co., 765 N.E.2d 524, 528 (Ind. 2002) (quotation 

omitted). Ultimately, “[t]he meaning of an insurance contract 

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). 

When interpreting UIM policy provisions, the Court is 

mindful of the general objectives of Indiana’s UIM legislation. 

See Masten, 953 N.E.2d at 570. Indiana Code section 27-7-5-2 is 

“a mandatory coverage, full-recovery, remedial statute,” and 

“its provisions are to be considered a part of every automobile 

liability policy the same as if written therein.” United Nat. 

Ins. Co. v. DePrizio, 705 N.E.2d 455, 460 (Ind. 1999) 

(quotations omitted). The underlying purpose of UIM coverage 

“is to give the insured the recovery he or she would have 

received if the underinsured motorist had maintained an adequate 

policy of liability insurance.” Corr v. Am. Family Ins., 767 

N.E.2d 535, 540 (Ind. 2002). However, “a full-recovery statute 

will not necessarily assure full indemnification for all 
‐14‐ 

potential damage to all potential insureds[.]” Id. The intent 

of the legislature is to: 

give insureds the opportunity for full compensation 

for injuries inflicted by financially irresponsible 

motorists. Due to the remedial nature of this type of 

coverage, underinsured motorist legislation is to be 

liberally construed, and similar to all insurance 

statutes and policies, is to be read in a light most 

favorable to the insured. 

Masten, 953 N.E.2d at 570 (internal quotation and citation 

omitted). 

Nationwide’s Supplemental Motion for Summary Judgment 

 In its Supplemental Motion for Summary Judgment, Nationwide 

argues that the terms of the Nationwide Policy entitle it to set 

off Farmers’ $100,000 payment from the $100,000 UIM per person 

limits available under the policy, thereby reducing Nationwide’s 

liability to zero. Nationwide relies upon a provision in the 

Nationwide Policy that specifically limits payment for UIM 

losses (“UIM Limitation Provision”): 

The maximum amount payable for bodily injury is the 

lesser of: 

a) the difference between: 

(1) 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 

(2) the per-person limit of underinsured 

motorists coverage; or 
‐15‐ 

b) the difference between: 

(1) the total amount of damages incurred by 

the insured; and 

(2) the amount paid by or for any person or 

organization liable for the insured’s 

bodily injury. 

(DE# 80-2 at 5-6 (emphasis omitted).) The parties do not 

dispute that Farmers paid Frye $100,000 for his injuries, or 

that the Nationwide Policy provides UIM coverage of $100,000 per 

person. Applying these facts to the UIM Limitation Provision, 

Nationwide asserts that the maximum amount payable is the lesser 

of: the difference between the amount paid in damages by Farmers 

($100,000), and the per-person limit of its UIM coverage 

($100,000), which is zero; or the difference between the amount 

of damages incurred by the insured (allegedly more than $2 

million), and the amount paid by Farmers ($100,000), which is 

$1.9 million. Because zero is less than $1.9 million, 

Nationwide contends that it owes Plaintiffs nothing. 

Nationwide relies on Castillo v. Prudential Property & 

Casualty Insurance Co., 834 N.E.2d 204 (Ind. Ct. App. 2005), to 

support its position. In that case, Castillo was injured in a 

car hit-and-run accident while he was a passenger in a vehicle 

driven by Moreno. Id. at 205. Moreno’s vehicle was insured by 

Prudential. Id. Castillo sued Moreno for negligence and 

separately sued Prudential for uninsured motorist (“UM”) 
‐16‐ 

coverage. Id. Castillo settled with Moreno for Prudential’s 

policy limit of $50,000 and pursued his suit against Prudential 

for an additional $50,000 of UM coverage. Id. The Prudential 

policy stated that UM payments “will be reduced by any amount 

payable by persons responsible for the accident. Payments under 

this part will also be reduced by any amount payable under this 

policy or by other sources.” Id. at 207. The Indiana Court of 

Appeals found that this clause “clearly and unambiguously 

reduced this amount by ‘any amount payable under this policy,’ 

i.e., the $50,000.00 settlement already tendered.” Id. The 

court held that, pursuant to this clause, Prudential was 

entitled to set off the $50,000 settlement from its UM coverage 

limit of $50,000, for a further recovery of zero. Id. at 207. 

Citing Castillo, Nationwide argues that the UIM Limitations 

Provision entitles it to set off Farmers’ $100,000 payment from 

the Nationwide Policy’s UIM coverage limit. 

Plaintiffs do not take issue with Nationwide’s 

interpretation of the UIM Limitations Provision or Castillo. 

Rather, they argue that the Nationwide Policy is ambiguous as to 

whether the UIM Limitations Provision applies when its “other 

insurance” provision comes into play. (DE# 79 at 22-24.) The 

“other insurance” provision states in part that “if there is 

other insurance similar to this coverage under any other policy, 

we [Nationwide] will be liable for only our share of the loss. 
‐17‐ 

Our share is our proportion of the total insurance limits for 

the loss.” (DE# 80-2 at 6 (“Other Insurance Provision”).) 

Plaintiffs assert the Auto-Owners Policy and the Nationwide 

Policy provide similar primary UIM coverage, thus triggering the 

Other Insurance Provision. (See DE# 79 at 1-2.) They argue 

that because the phrase “our share is our proportion of the 

total insurance limits for the loss” is ambiguous, it must be 

construed against Nationwide. (Id. at 23.) As such, the UIM 

Limitations Provision should be disregarded entirely, precluding 

any setoff of the $100,000 payment from Farmers. (Id. at 22.) 

In reply, Nationwide asserts that its “share of the loss” 

is zero because Plaintiffs received from Farmers the entire 

amount of UIM coverage available under the Nationwide Policy. 

(DE# 83 at 7.) Nationwide further argues that making it liable 

for a proportionate share of insurance limits relative to AutoOwners’ limits would “render[] set-offs immaterial” - a result 

not contemplated by the contracting parties or Indiana’s 

legislature. (Id.) 

While not addressed by any party, the Court notes that 

Nationwide’s UIM Limitations Provision is nearly identical to 

the limitations on coverage codified in Indiana Code section 27-

7-5-5(c).5

 The Indiana Court of Appeals considered the language 

                                                            

5 Section 27-7-5-5(c) states: 
‐18‐ 

of Section 27-7-5-5(c) in Kinslow v. Geico Insurance Co., 858 

N.E.2d 109 (Ind. Ct. App. 2006). In that case, Mr. and Mrs. 

Kinslow were injured (fatally and seriously, respectively) in a 

multiple-vehicle accident, after which one vehicle fled the 

scene. Id. at 110. Mrs. Kinslow (“Kinslow”) settled with one 

tortfeasor’s insurer and sued her insurer, Geico, for recovery 

of UM benefits under two Geico insurance policies. Id. Geico 

refused to pay, arguing that any UM benefits owed under its 

policies were completely offset by the settlement payment 

Kinslow had received from the tortfeasor’s insurer. Id. The 

court noted that “the statutes governing UM/UIM insurance are 

considered a part of every automobile liability policy the same 

as if written therein.” Id. at 114 (citation omitted). It held 

that Section 27-7-5-5(c) “establish[es] maximum and minimum 

parameters for the amount of a recovery a plaintiff is entitled 

to as a result of a UM or UIM claim,” and that the language of 

                                                                                                                                                                                               

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 denotes language not found in Nationwide’s 

UIM Limitations Provision). 
‐19‐ 

Section 27-7-5-5(c) “is clear and unambiguous and is not open to 

interpretation.” Id. (citation omitted). Applying Section 27-

7-5-5(c), the court found that the maximum UM coverage 

recoverable was zero. Id. The court refused to interpret the 

policies in the manner suggested by Kinslow, explaining that 

“allowing Kinslow to recover anything under either Geico policy 

would contravene clear and unambiguous statutory language.” 

Id.; see also Edwards v. Vernon Fire & Cas. Ins. Co., 571 N.E.2d 

1306, 1308 (Ind. Ct. App. 1991) (applying Section 27-7-5-5(c) to 

find plaintiff “cannot recover because his policy has [a UIM] 

coverage limit of $25,000 and he has received $25,000 from the 

tortfeasor’s insurance company”). 

Based on this Court’s independent review of the UIM 

Limitations Provision and Kinslow’s validation of the nearly 

identical language of Section 27-7-5-5(c), the Court finds the 

language of the UIM Limitations Provision to be clear and 

unambiguous. “[W]here an insurer crafts a policy using clear 

and unambiguous language that comports with public objectives 

expressed in state statute, we apply that plain language, even 

if the result is to limit the insurer’s liability.” Justice v. 

Am. Family Mut. Ins. Co., 4 N.E.3d 1171, 1774 (Ind. 2014) 

(citation omitted). Applying the UIM Limitations Provision to 

the undisputed facts, the difference between the amount paid by 

Farmers ($100,000) and the per person limit for UIM coverage 
‐20‐ 

under the Nationwide Policy ($100,000) is zero, and the 

difference between Plaintiffs’ alleged damages ($2 million) and 

the amount paid by Farmers ($100,000) is $1.9 million. Zero is 

less than $1.9 million. Thus, the UIM Limitations Provision 

dictates that the maximum amount payable under the Nationwide 

Policy is zero. See Castillo, 834 N.E.2d at 207; Kinslow, 858 

N.E.2d at 114. 

Contrary to Plaintiffs’ assertions, this outcome is not 

altered by the Nationwide Policy’s Other Insurance Provision. 

Plaintiffs assert that because the Auto-Owners Policy qualifies 

as “other insurance similar to this coverage,” and Nationwide’s 

“share of the loss” is allegedly ambiguous, the Court should 

disregard the UIM Limitations Provision entirely. Plaintiffs’ 

interpretation of the Nationwide Policy supports a conflicting 

version of its provisions, rather than harmonizing them. Cf.

Adkins, 927 N.E.2d at 389 (courts “must accept an interpretation 

of the contract language that harmonizes the provisions rather 

than the one which supports a conflicting version of the 

provisions.”). 

The Court finds that the provisions of the Nationwide 

Policy can be harmonized. According to the Other Insurance 

Provision, Nationwide’s “share of the loss” is its proportion of 

“the total insurance limits for the loss,” which Plaintiffs 

concede is the $100,000 UIM coverage limit stated in the policy 
‐21‐ 

Declarations. (See DE# 79 at 22-23.) The UIM Limitations 

Provision is found in the “Limits and Conditions of Payment, 

Amounts Payable for [UIM] Losses” provision, which begins, “[w]e 

agree to pay losses up to the limits stated in the policy 

Declarations. The following applies to these limits: . . . 6. 

[the UIM Limitations Provision].” (DE# 80-2 at 5-6 (emphasis 

added).) Reading these provisions together, the “total 

insurance limits for the loss” (i.e., the $100,000 UIM coverage 

limit) is subject to the UIM Limitations Provision. Thus, the 

UIM Limitations Provision limits the amount payable to insureds, 

even when “other insurance” applies. Cf. Am. Econ. Ins. Co. v. 

Motorists Mut. Ins. Co., 605 N.E.2d 162, 164-65 (Ind. 1992) 

(instructing that insureds had recourse against primary and 

excess insurers for UIM coverage limits, less amounts previously 

paid on the tortfeasor’s behalf). Given the undisputed facts 

presented here, the UIM Limitations Provision dictates that the 

maximum amount payable is zero, even if “other insurance” 

applies. 

This interpretation harmonizes provisions that were 

contracted for by the parties to the Nationwide Policy. See

Westfield Cos., 804 N.E.2d at 1274 (courts must interpret an 

insurance policy with the goal of ascertaining and enforcing the 

parties’ intent as revealed by the insurance contract as whole). 

Moreover, this interpretation does not violate the underlying 
‐22‐ 

purpose of Indiana’s UIM statute, which defines an uninsured 

motor vehicle as: “an insured motor vehicle where the limits of 

coverage available for payment to the insured under all bodily 

injury liability policies covering persons liable to the insured 

are less than the limits for the insured's underinsured motorist 

coverage at the time of the accident. . . .” Ind. Code § 27-7-

5-4(b) (emphasis added). Here, the statutory aim of Section 27-

7-5-4(b) is satisfied because Plaintiffs received $100,000 from 

Farmers, the same UIM coverage limit provided under the 

Nationwide Policy. See Lakes v. Grange Mut. Cas. Co., 964 

N.E.2d 796, 803 (Ind. 2012) (citation omitted) (“[T]he proper 

comparison in determining whether the tortfeasor’s vehicle was 

underinsured was a comparison of what the claimant actually 

received and the UIM policy limit.”). The Nationwide Policy 

thus comports with the Section 27-7-5-4(b) and does not violate 

its intent. 

For these reasons, the Court GRANTS Nationwide’s 

Supplemental Motion for Summary Judgment. 

Plaintiffs’ Motion for Partial Summary Judgment 

 In their Motion for Partial Summary Judgment, Plaintiffs 

argue that the “other insurance” provisions contained in the 

Nationwide Policy and Auto-Owners Policy can be read in harmony 

to provide for pro rata sharing of the contribution of UIM 
‐23‐ 

benefits. Because the Court has determined Nationwide’s 

liability is zero, Plaintiffs’ motion as it relates to 

Nationwide is denied.6

Plaintiffs also argue that any UIM benefits available under 

the Auto-Owners Policy are not subject to any worker’s 

compensation lien. (DE# 49 at 5-7.) Auto-Owners concedes that 

“no workers compensation lien identified by the workers 

compensation carrier would be enforceable against the [UIM] 

coverage.” (DE# 62 at 2.) Both Plaintiffs and Auto-Owners cite 

Walkup v. Wabash Nat. Corp., 702 N.E.2d 713 (Ind. 1998), as 

dispositive of this issue. In Walkup, Walkup was injured in a 

                                                             6 Even if Nationwide’s liability had not been zeroed out, the Court has 

its doubts about Plaintiffs’ pro rata argument. Under Indiana Code section 

27-8-9-7 (“Owner’s Statute”), where a vehicle owner’s insurance coverage is 

considered primary, the owner’s coverage limit must be exhausted before 

recovery under any other vehicle insurance coverage. See Ind. Code § 27-8-9-

7(b) & (c). This statute “provide[s] statutory tiebreakers for determining 

the priority of insurance coverage in circumstances where the priority of 

coverage might not otherwise be immediately clear.” Old Republic Ins. Co. v. 

RLI Ins. Co., 887 N.E.2d 1003, 1010 (Ind. Ct. App. 2008) (citation omitted). 

The Owner’s Statute “was clearly intended to resolve coverage disputes caused 

by competing primary insurers’ ‘other insurance clauses.’” Monroe Guar. Ins. 

Co. v. Langreck, 816 N.E.2d 485, 498-99 (Ind. Ct. App. 2004). 

Plaintiffs and Nationwide do not dispute that Nationwide insured the 

vehicle owner and that the Nationwide Policy and the Auto-Owners Policy both 

provided primary coverage. (See DE## 80-6, 80-7; DE# 83 at 6.) Given these 

facts, the Owner’s Statute appears to apply here. 

Plaintiffs contend that the Owner’s Statute does not apply because 

Nationwide’s and Auto-Owner’s “other insurance” provisions can be read in 

harmony to provide UIM benefits on a pro rata basis. However, the cases 

cited by Plaintiffs in support of this proposition involve insurers affording 

different levels of coverage. See id. (involving a primary insurer and an 

excess insurer); Old Republic, 887 N.E.2d at 1012 (same); Citizens Ins. Co. 

v. Ganschow, 859 N.E.2d 786, 792 (Ind. App. Ct. 2007) (same); Cincinnati Ins. 

Co. v. Am. Alternative Ins. Corp., 886 N.E.2d 326, 333 (Ind. Ct. App. 2007) 

(same). In several cases, the courts declined to apply statutory tiebreakers 

because of the insurers’ different coverage levels. See, e.g., Monroe Guar., 

816 N.E.2d at 498; Old Republic, 887 N.E.2d at 1012. Because Nationwide is 

dismissed from this case on other grounds, the Court need not delve further 

into, or decide, this issue. 
‐24‐ 

motor vehicle accident while driving in the course of his 

employment. Id. at 713. Walkup’s employer sued to enforce a 

lien for worker’s compensation benefits after Walkup settled his 

claims with a UM insurer. Id. at 714. The Supreme Court of 

Indiana found that the insurance policy at issue included an 

exclusion for costs covered by worker’s compensation benefits, 

and thus, Walkup’s settlement with the insurer did not include 

such costs. Id. at 715. The employer’s lien was ineffective 

because no proceeds were left after the exclusion that could be 

identified with the lien. Id.

Similar to the insurance policy in Walkup, the Auto-Owners 

Policy states that UIM coverage does not apply “to directly or 

indirectly benefit an insurer or self-insurer under any workers 

compensation law or disability benefits law.” (DE# 80-3 at 50.) 

However, unlike Walkup, Plaintiffs do not allege that any party 

holds, or has attempted to enforce, any worker’s compensation 

lien requiring the application of this policy provision. 

Given the lack of allegations of an actual controversy 

regarding a worker’s compensation lien, Plaintiffs’ motion 

appears to be an invitation for an advisory opinion, which this 

Court cannot provide. “[D]istrict judges can’t suspend the 

application of Article III or grant themselves the power to 

issue advisory opinions one case at a time, and litigants can’t 

stipulate to the enlargement of federal jurisdiction. A case or 
‐25‐ 

controversy must be present at every moment of the litigation.” 

U.S. v. Accra Pac, Inc., 173 F.3d 630, 633 (7th Cir. 1999); see

Coffman v. Breeze Corp., 323 U.S. 316, 324, 65 S. Ct. 298, 89 L. 

Ed. 264 (1945) (declaratory judgment procedure “may not be made 

the medium for securing an advisory opinion in a controversy 

which has not arisen.” (citations omitted)). Therefore, the 

Court DENIES Plaintiffs’ Motion for Partial Summary Judgment. 

Plaintiffs’ Alternative Motion for Partial Summary Judgment 

 Plaintiffs argue that if the Court dismisses Nationwide 

from this action, it should “declar[e] that the entire one 

million dollar policy limits of Auto[-]Owners’ policy is excess 

coverage available to the Plaintiffs beyond the $100,000.00 

limits of Nationwide’s policy.” (DE# 51 at 3.) Plaintiffs 

claim that they have a combined amount of $2.1 million in UIM 

benefits ($100,000 under the Nationwide Policy, $1 million under 

the Auto-Owners Policy, and $1 million under the Auto-Owners 

Umbrella Policy) and that the $100,000 paid by Farmers reduces 

their total UIM benefits to $2 million. (Id. at 4.) Citing no 

case law, statute, or policy provision, Plaintiffs assert that 

“if the Court determines that Nationwide gets the entire setoff, then Auto[-]Owners will be required to cover entirely 

without any set-off.” (Id.) 
‐26‐ 

 Auto-Owners responds that if the Auto-Owners Policy is 

found to afford coverage to Plaintiffs for this loss, it should 

be allowed to set off the $100,000 amount paid by Farmers. (DE# 

62 at 4-5.) Auto-Owners points to a provision in the AutoOwners Policy that states, “[t]he amount we pay will be reduced 

by any amounts paid or payable for the same bodily injury . . . 

under any worker’s compensation or similar law; or . . . by or 

on behalf of any person or organization who may be legally 

responsible for the bodily injury.” (Id. at 3-4.) Plaintiffs 

do not reply to this argument. 

Indiana courts have enforced setoff provisions in 

connection with UIM coverage. See, e.g., Hardiman v. Govt’l 

Interins. Exch., 588 N.E.2d 1331, 1334 (Ind. Ct. App. 1992); see 

also Wagner, 912 N.E.2d at 808-09 (“hav[ing] no quarrel” with 

the general proposition that policy language requiring setoffs 

has been and should be enforced). Here, Plaintiffs do not 

explain why the Court should disregard the setoff provision in 

the Auto-Owners Policy. Construing the facts and drawing all 

reasonable inferences in the light most favorable to AutoOwners, the Court finds that Plaintiffs are not entitled to 

judgment as a matter of law on this issue. Therefore, 

Plaintiffs’ Alternative Motion for Partial Summary Judgment is 

DENIED. 
‐27‐ 

CONCLUSION 

 For the reasons set forth above, the Motion for Partial 

Summary Judgment (DE# 48) and the Alternative Motion for Partial 

Summary Judgment (DE# 50) are DENIED. The Supplemental Motion 

for Summary Judgment (DE# 72) and the Partial Stipulation of 

Dismissals (DE## 74 & 86) are GRANTED. Defendant Nationwide 

Mutual Insurance Company is hereby DISMISSED from this case. 

DATED: February 4, 2015 /s/ RUDY LOZANO, Judge 

 United States District Court