ATTORNEYSFORAPPELLANTATTORNEYFORAPPELLEETimothyM.SwanAprilL.EdwardsJenniferE.Davis Boonville, Indiana

Garan Lucow Miller, P.C.

Merrillville, IndianaATTORNEYSFOR AMICUS CURIAE. THE INDIANA TRIAL

LAWYER7S ASSOCIATION

WilliamE. WininghamJonathon B.Noyes Willson

Kehoe Winingham, LLC

Indianapolis, Indiana

## Sin

## the



# Zinniana 

# éupreme Qfiuurt

N0. 

### 45$05-1605-CT-00253STATEFARM MUTUAL AUTOMOBILE

INSURANCE COMPANY,

### Appellant (Defendant below),

CAROL JAKUBOWICZ, 

### individuallyAndasParentand 

### Legal Guardian

### of JACOB

JAKUBOWICZand JOSEPH JAKUBOWICZ,

minors,Appellees 

### (Plaintifls below).

### Appeal

### fromthe Lake 

### Circuit Court,No. 

### 45C01-0810-CT-00156The 

### Honorable George C. Paras, JudgeOn

### Petitionto

### Transfer

### fromthe 

### Indiana 

### Court

### of Appeals,N 0. 

### 45A05-1502-CT-00078



### July 26, 2016



### Corrected

### David, Justice.Thismatter

### involvesthe

### interpretation

### ofan 

### automobile insurance 

### policyinthe 

### context

### ofapersonal 

### injury lawsuit



### involvingan underinsured

### motorist 

### (UIM) claim.The 

### policyat issue

requiresthata 

### UIM claim be 

### brought

### withinthree (3)years

### ofthe accidentandalso requiresthatthe insured 

## fillly comply

### withallprovisions

### ofthe 

### policypriorto 

### bringing suit.One such

### provisionisthatStateFarm

### willonlypay

# ifthe underinsured 

### motorist’s insurancehas been exhausted.

Becausethe

### provision requiringan insuredto 

### bring suit

### withinthree 

### (3)yearsis

### in direct 

### conflict

### withthe 

### policy’s exhaustion requirement,we

### holdthatthe 

### policyis ambiguousand thus, must be

construed

### infavor

### ofthe insured. 

### Accordingly,we 

### affirmthe

### trial court’sdenial

### ofState 

### Fann’s

### motion

### for summary 

### judgment.

Facts

### and 

### Procedural 

### HistoryOn 

### August 2, 2007,theJ akubowiczs (mother, Carol,andher

### two sons)were

### involved

### ina

car accident

### withRonald 

### Williamsthat resulted

### in substantial 

### injuriestothe Jakubowiczs.TheJ akubowiczswere insured 

### byStateFarm.On October 7, 2008, CarolJ 

### akubowicz 

### filed suit

against



### Williams (onher 

### behalfandon 

### behalf

## ofher sons).StateFarmalso 

### fileda 

### complaint

against



### Williams seeking

damages

### for medicaland

### property damagepayments

### itmadeasa result

### ofthe

accident.

In December 2009,J 

### akubowicz 

### putState 

### Farm’s counselon noticethatshe 

### would 

### likely

pursuean underinsured

### motorist 

### (U 

## M) claim. However,

### it wasn’t 

### until March 2011,morethanthree (3)yearsafterthe accident,thatJ 

### akubowicz 

### fileda

### motion

### forleavetoamendher 

### complaintandadda 

### UIM claim

againstStateFarm. 

### Inher

### motion

### for leave, 

### Jakubowiczstatedthatshe



### believed 

### William’s insurance 

### policy would be 

### insufficientto coverher damages.The

### trial court

granted 

### Jakubowicz’s

### motion

### forleavetoamendon 

### July 27, 2011.

Thereafter,State

### Farmmoved

### for summary 

### judgmentonthe 

### UIM claim arguingthat

### itwas

barred because

### itwas 

### filed afierthethree 

### (3)year

### limitationperiodset

### forthin 

### Jakubowicz’s

insurance 

### policy. JakubowiczopposedState 

### Farm’s motion,andthe

### trial courtdeniedit.The



### Court

### ofAppeals acceptedState 

### Farm’s 

### discretionary 

### interlocutoryappealandreversedthe

### trial

court, 

### concludingthatJ 

### akubowicz’s insurance 

### policywas unambiguousand further,thatshe

### failedto 

### comply

### withthe 

### policy’sthree 

### (3)year

### limitationperiod

### for 

### filingthe 

### UIM claim.State

### Farm



### Mut. Auto. Ins. Co.v.J 

### akubowicz, 45 

### N.E.3d 500, 506 (Ind. Ct.

### App. 2015), vacated.J 

### akubowicz

sought transfer, 

### whichwe granted, thereby vacatingthe 

### Court

### ofAppeals

### opinion. Ind.

### App. Rule



### 58(A).

### Standard

### ofReviewOrderson 

### summary 

### judgmentare

### revieweddenovoand requireanappellate courtto

### applythesamestandard

### ofreviewthatisapplied 

### bythe

### trial court.

### AM Gen. 

### LLC V. 

### Armour, 46 

### N.E.3d

436, 439 (Ind. 2015) 

### (citations 

### omitted.)That is,to be

### entitledto summary 

### judgment,the

### movant

mustdemonstratethat 

### “the

designated evidenceraisesno genuine issue

### ofmaterial factandthatthe 

### movingpartyis

### entitledto 

### judgmentasamatter

### of law.” I_d.The burdenthenshiftstothe



### nonmovingpartywho mustdemonstratethatthereisa genuine issue

### ofmaterial fact. I_d.

## All

reasonable inferencesare construed

### in

### favor

### ofthe 

### nonmovingparty. 

### Iii.



### Additionally, 

### “[a]n insurance 

### policyisa contract,andas suchis subjecttothesame rules

### of constructionasother 

### contracts.” 

### Dunn V.

### Meridian Mut. Ins. C0., 836 

### N.E.2d 249, 251 (Ind.

2005) 

### (citations omitted). 

### Interpretation

## ofa contractisa pure question

### oflawand thus,is

### revieweddenovo. 

### Harrison V.Thomas 761 

### N.E.2d 816, 818 (Ind. 2002).



### Discussion

### At issueinthis caseis

### whethertheStateFarm 

### policy language,

### with regardtothe procedure

### foran insuredto 

### bringan underinsured

### motorist claim

againstState Farm,is ambiguous. Insurance



### policies

### with directly 

### conflictingtermsare ambiguous. 

### Wert V.

### Meridian Sec. Ins. 

### Company 997



### N.E.2d 1167, 1171 

### (Ind. Ct.

### App. 2013). Wherethereis 

### ambiguity, insurance 

### policiesare

construed 

### strictly

againstthe insurer,andthe 

### policy languageis Viewed

### fromthestandpoint

### ofthe

insured.

### Allstate Ins. Co. V.Dana 

### Com, 759 

### N.E.2d 1049, 1056 (Ind. 2001).

### Thisis especially

true Wherethe language

### in question purportsto exclude coverage. 

### USA

### LifeOne Ins. Co.

### of Ind.

V. 

### Nuckolls, 682 

### N.E.2d 534, 538 (Ind. 1997). Insurersarefreeto

### limitthe coverage

## oftheir

policies, but such

### limitations must be 

### clearly expressedto be enforceable. 

### W. Bend 

### Mut.v.

Keaton, 755 

### N.E.2d 652, 654 

### (Ind. Ct.

### App. 2001),trans. 

### denied.” Where

### provisions 

### limitingcoverageare

### not 

### clearlyand

### plainly expressed,the 

### policy

## will be construedmost 

### favorablytothe

insured,to 

### furtherthe 

### policy's basic purpose

### of indemnity.”Meridian Mut. Ins. Co.v. 

### AutoOwners Ins. Co., 698 

### N.E.2d 770, 773 (Ind. 1998). Furthermore,when construingthe language

### ofan insurance 

### policy,a 

### court 

### “should construethe language

### ofan insurance 

### policysoas

### nottorenderany 

### words,phrasesorterms 

### ineffectiveor meaningless.” 

### Werti 997 

### N.E.2dat 1170 

### (citation

omitted).

Here,the 

### policy provides,

### inrelevant part:



### Deciding 

### Faultand 

### Amount—... 

### [UIM] Vehicle Coverage

1.a.The insuredandwe must

agreetotheanswerstothe 

### followingtwo questions:



### (1) Isthe insured



### legallyentitledto recover compensatory

damages

### fromthe

### owneror

### driver

### ofthe 

## [UM] vehicle?



### (2) 

# Iftheanswerto 1.a.(1) aboveis yes,then

### whatisthe

amount

### ofthe compensatory

damagesthatthe insuredis 

### legallyentitledto recover

### fromtheowneror

### driver

### ofthe... 

### [UIM] vehicle?

b. 

# Ifthereisno agreementontheanswertoeither question

### in 1.21

above,thenthe insured shall:



### (1) 

### filea 

### lawsuit,

### inastate

### orfederal 

### courtthathas 

### jurisdiction against:

(a) us;



### (b)theownerand

### driver

## ofthe... 

### [UIM] vehicle:

(1) unlesswehave consentedtoasettlement

### offerproposed



### byoron 

### behalf

### of suchowneror 

### driver;or



### (ii) unless suchowneror

### driveris 

### unknown;and

(c)anyother

### partyor parties,

### whomay be



### legally liable

### forthe insured‘s damages;

(2) consenttoa 

### jurytrial

# if requested 

### by us;

(3)

agreethatwemay contestthe issues

### of liabilityandthe

amount

## of damages;and

(4) securea 

### judgmentinthat action.The 

### judgment must bethe 

### final result

## ofan actual

### trialandany appeals,

# ifanyappealsare

taken.



# ****

13.



### Legal 

### Action

Against Us



### Legal action

### maynot be 

### brought

against us 

### untiltherehas been 

## filll

compliance

### withallthe

### provisions

### ofthis 

### policy. 

### In addition,

legal actionmay

### only be 

### brought

against us regarding:c.... 

### [UIM] Vehicle Coverage

# ifthe insuredorthat insured's

legalrepresentative

### withinthreeyears

### immediately 

### followingthedate

### ofthe accident:



### ( 1)presents...an... 

### [UIM] Vehicle Coverage 

### claimto us;and



### (2) 

### filesa 

### lawsuitin accordance

### withthe 

### Deciding 

### Faultand 

### Amountprovision

### ofthe

### involved coverage.

Exceptas

### providedin 

### c.(2) above,noother legal actionmay be



### brought

against us



### relatingto... 

### [UlM] Vehicle Coverage

### foranyother

causes

### of actionthatarise out

## oforarerelatedtothese coverages 

### untiltherehas been 

### full compliance

### withthe

### provisions

### titled Consentto

### Settlementand 

### Deciding 

### Faultand 

### Amount.

(Appellant’sApp.at 159—60, 177—78) (some

### internalemphasis 

### omitted).The 

### policyalso provides:



### [UIM] Vehicle Coverage

We

### willpay compensatory

damages

### for bodily 

### injuryan insuredis



### legallyentitledto recover

### fromtheowneror

### driver

### ofan 

### [UIM]

vehicle.The 

### bodily 

### injury must be:a. sustained 

### byan Insured,and

b. caused 

### byan accidentthat

### involvesthe operation, maintenance,or

use

### ofan [UHVI] 

### vehicleasa

### motor vehicle.

We

### willpay

### only

# ifthe 

### full amount

### ofall available

### limits

### ofall 

### bodily



### injury 

### liability bonds, 

### policies,and self-insuranceplansthat

### applytothe insured’s 

### bodily 

### injuryhave been used up 

### bypayment

### of judgments 

### 0r

settlements,orhave been

### offeredtothe insured

### in 

### writing.

(Appellant’sApp.at 159.)StateFarm sought summary 

### judgment becauseJ 

### akubowicz 

### filedher 

### UIM claim

againstStateFarm outside

### ofthethree (3)year

### limitationperiod

### providedinthe 

### policy.The 

### policyprovidesthata 

### UIM claim

againstState

### Farm 

### “may

### only be brought...

### withinthreeyears

### immediately 

### followingthedate

## ofthe 

### accident.” 

### (Appellant’sApp.at 177.) 

### However,

Jakubowicz arguesthe 

### policy languageis ambiguous,andas such,the

### limitationprovisionis

unenforceable, becauseonone hand,the 

### policy prohibits insureds

### from 

### filing suitmorethanthree

(3)yearsafterthedate

### ofthe accident,andonthe other,

### it requiresthat legal action

### maynot be



### brought 

### untiltherehas been 

### “full compliance

### withallthe

### provisions

### ofthis 

### policy.” (ld.)One

such

### provisionprovides that: 

### “We

## willpay

### only

# ifthe 

# fill amount

### ofall available

### limits

### ofall



### bodily 

### injury 

### liability bonds, 

### policies,and self-insuranceplansthat

### applytothe insured’s 

### bodily

### injuryhave been used up 

### bypayment

### of judgments

### or settlements,orhave been

### offeredtothe

insured

### in 

### writing.” (Appellant’sApp.at 159.)J 

### akubowicz arguesthatthis amountstoan

exhaustion requirementandas such,the 

### policy language

### potentially requires insuredsto 

### file suit

beforetheyare

### in 

### full compliance

### withthe 

### policy.1 Thus,as 

### Amicus,the 

### Indiana

### Trial Lawyer’s

Association, observed: 

### “[i]nsuredsare 

### simultaneously

### toldthatthey must 

### filea 

### lawsuitand cannot



### filea 

### lawsuit.” (Amicus 

### Briefat 8.)J 

### akubowiczalso arguesthatthe exhaustion 

### requirement

### inthis caseis 

### substantially

### similartotheone

### in

# m 997 

### N.E.2dat 1170-1171. 

### In 

# m,the 

### Court

### ofAppeals

### heldthata

### Meridian

insurance 

### policy, 

### which containeda

### two (2)year

### limitationsperiod

### for pursuingan underinsured

### motorist claim,was ambiguousasto

### whetherthe insuredswere requiredto 

### first pursuea 

### claimto

recoverthe

### limits

### ofthe 

### tortfeasor’s 

### liability coverage

### priorto 

### filing suit

against

### theirown insurer



### (Meridian).m.at 1171. 

### Specifically,

### inadditiontothe

### two (2)year

### limitations period,the 

### Wert



### policy provided: 

### “No

legal actionmay be 

### brought

against us 

### untiltherehas been 

### full compliance

### withtheterms

### ofthe 

### policy.” 

# m, 997 

### N.E.2dat 1170. 

### Italso 

### provided: 

### “We

### willpay damages

underthis coverage..

### .only

# if [the 

### tortfeasor’s

### limitsare 

### exhausted]

### E.at 1171.The

# mpanel



### foundthat becausethe exhaustion 

### requirementwas

### in direct 

### conflict

### withthe

### two (2)years

### limitations period,the 

### policywas ambiguous.

### E.

Here,the

### trial courtdeniedState Farm‘s

### motion

### for summary 

### judgmentand 

### seemingly

agreed

### withJ 

### akubowiczthatthe 

### policy contained 

### conflicting provisions,as

### itadvisedState Farm:

1 Jakubowiczalso arguesthat holdingthatattorneysare requiredto 

### file suitpriorto expiration

### ofthelimitations period, but beforethey know

## ifthereisa 

### UIM Claim, wouldpotentially causeattorneysto choose

between Indiana Rule

### ofProfessional Conduct 3.1and protectingtheir client’sinterests. Indiana Rule

### ofProfessional Conduct 3.1providesinrelevant part:

### Alawyershallnot bringordefenda proceeding,orassertor controvcrtan issue

therein, unlessthereisa basisinlawand factfor doingsothatisnot frivolous,

which includesa goodfaith argument

### foran extension, modificationorreversal

### of

existinglaw.

Becauseweholdthatthe policy languageat issueis ambiguous,weneednotaddress Jakubowicz’s

argumentinthis regard.

### [Y]ou couldhaveeasily 

### justwrittenthe 

### policytosay

# if there’san

uninsuredor 

### [UIM] claim

arising out

### ofany 

### incident, you must 

### bringa

cause

### of action

against us

### inthree years,period.End

### ofstory. 

### Doesn’thavetosay 

### anythingelse 

### butthat. 

### But, you chosetoadd

### alltheseother



### conditionsand 

### limiting factors.



### (Tr.at 35.)



### However,the 

### Court

### ofAppealsreversedthe

### trial court, 

### distinguishing

# mfromthepresentmatter. 

### It comparedthe 

### policiesandstatedthat 

### “none

### ofthe language

### inState 

### Farm’s



### policy would supportJ 

### akubowicz’s argumentthatshewas 

### requiredto

### wait before 

### filingher 

### claim

againstthe underinsured

### motorist coverage 

### untilthe

### limits

### of Williams’ insurancehad been

exhausted.” Jakubowicz, 45 

### N.E.3dat 505. 

### ItreasonedthattheStateFarm 

### policy carves outan



### “exception”

### fora 

### UIM claim.That is, WhiletheStateFarm 

### policy requires 

### Jakubowicztoattempttosettle 

### (withState 

### Farm)asto Whether 

### Jakubowiczis

### entitledto 

### recover

damages

### fromthe



### allegedly underinsured

### tortfeasor (here, 

### Williams),this 

### requirementdoes

### notpreventJ 

### akubowiczfrom 

### filinga 

### lawsuit

### withinthethree 

### (3)years. Instead,

### itprovidesthat

# if Jakubowicz

disagrees

### withStateFarm aboutwhetherthereisa 

### UIM claimandthe amount

### of such 

### claim,thenshe 

### “shall



### filea 

### 1awsuit[.]”

### E.

Itis truethattheStateFarm 

### policy containsa

### provision 

### allowing

### forthepartiesto reachan

agreement

### priorto 

### filing suitand setting

### forththe procedure

### for 

### filing suit,

# if necessary,that

### maynothave been

### part

### ofthe 

### policyin

# M. Itisalso truethatthis

### provision

### oftheStateFarm 

### policyprovidesthatthe insured 

### “shall” file suit

# ifan agreement can be reached. 

### However,

### itis unclear

### howthe

### provision setting

### fortha procedure

### for attemptingtoresolvea 

### UIM claim

### priorto 

### filing

suit createsa 

### meaningfifl 

### distinction betweenthe

### two 

### policies suchthatJ 

### akubowicz 

### wouldnot be

### entitledtothesame 

### findingthatthe 

### policyis ambiguousas

### in

# m. Indeed,the

### two 

### policiesare



### substantiallysimilar. 

### Both policies containa

### limitationsperiod

### forwhenthe insured

### may 

### bringa

UHVI 

### claim. Both 

### policiesalso contain

### provisions 

### requiring 

### full compliance

### withthe 

### policyand

exhaustion

### ofthe 

### tortfeasor’s insurance

### priortothe insurer



### paying 

### UIM

damages.The language

### intheStateFarm 

### policythatthe insured 

### “shall” 

### file suitis

### in direct 

### conflict

### withother

### provisions

### ofthe 

### policythat

### providethatthe insured

### may

### not recover

### fromState

### Farm 

### untilthe insuredis

### in

### full compliance

### withall 

### policyprovisions 

### which includes exhaustion

### ofthe 

### tortfeasor’s 

### policylimits.StateFarm arguesthatthe exhaustion

### provisiondoesnot 

### impactwhetherandwhena suitis 

### filed, but

### onlywhenan insured

### will bepaid. Thus,

### it arguesJ 

### akubowicz couldhave 

### filed suit

### priortothethree 

### (3)year

### limitationsperiod. 

### However,this argument

### fails becausethe

# m policyalso contains languagethatthe insurer 

### “willpay...

### only 

## if”and yet,the

# mpanel

### still foundthe



### policyto be ambiguous.

# m 997 

### N.E.2dat 1171. Further, undertheterms

### oftheStateFarm



### policy,

# iftheparties cannot agree,the

### onlyway

### foran insuredto get

### paidisto 

### file suit. Thus,paymentisnotasseparate

### from 

### filing suitasStateFarm argues.StateFarmalsoattemptsto 

### circumventthe exhaustion 

### requirement 

### by arguingthat 

### “full

compliance”doesnot 

### include exhaustion becausethe insuredhasno 

### controlover

### whatthe

underinsured

### motorist

### willdoor

### whenthe underinsured

### will exhaust

### their

### limits. (Responseto

### PetitiontoTransferat 4.) Thus,StateFarm arguesthatan insured can bein 

### full compliance

### withthe 

### policyprovisions

### priortothe underinsured 

### motorist’s insurance being exhausted. 

### However,this reading

### ofthe 

### policy languageisa stretch.The 

### policy makesno 

### exceptionor carve-outsthat

### allow

### foran insuredto

### not exhaustthe underinsured’s 

### policylimits before 

### filing suit. Instead,the

languageis 

### unequivocalthatStateFarm

### will “payonly 

## if”the 

### tortfeasor’s 

### policylimitsare

exhausted. 

### (Appellant’sApp.at 159.)

### This exhaustion 

### requirementis

### in direct 

### conflict

### withthe



### requirementthat 

### Jakubowicz 

### bring suit 

### Withinthree (3)years.



### Conclusion

Jakubowicz’sStateFarm 

### policyis 

### substantially

### similartothe 

### policyin

# m. Likethe



### policyin 

# m, Jakubowicz’s 

### policyis ambiguousto extentthat

### it contains 

### conflictingprovisions.

### Asthe

### trial court observed,the 

### policy couldhave 

### juststatedthat suit must be 

### brought

### withinthree



### (3)years.The 

### policyalso 

### couldhave called

### for exhaustion

### ofthe 

### policy

### limitspriorto 

### filinga



### UIM claim

againstStateFarm Withouta

### limitationonthe

### timetodoso. Instead,the 

### policy

containeda

### limitationperiodas

### wellas

### additional conditions.Those conditions—that 

### “[l]egal

actionmaynot be 

### brought

against us 

### untiltherehas been 

### full compliance

### withallthe

### provisions

### ofthis 

### policy”and 

### “[w]e

## willpay

### only

# ifthe 

### full amount

### ofall available

### limits

### ofall 

### bodily 

### injury



### liability bonds, 

### policies,and self-insuranceplansthat

### applytothe insured’s 

### bodily 

### injuryhave

been used up 

### bypayment

### of judgmentsor settlements,orhave been

### offeredtothe insured

### in



### writing” conflict

### withthethree (3)year

### limitationperiod. 

### (Appellant’sApp.at 177, 159.)

### AsStateFarm observed,the insuredhasno 

### controlover Whetherorwhenthe

### tortfeasoroffers 

### policylimits. Thus,thereare situations, 

### likeinthis case,wherethe insured cannot both

exhaustthe 

### tonfeasor’s 

### policylimitsand 

### filea 

### UIM suit

### withinthethree 

### (3)year

### limitationperiod.



### Ambiguous insurance 

### policiesare construed

againstthe insurer. 

### Accordingly,we 

### affirmthe

### trial

court’sdenial

### ofState 

### Farm’s

### motion

### for summary 

### judgmentandremandthematter

### for 

### filrther

proceedings consistent

### withthis

### opinion.

Rush, C.J., Rucker,Massaand Slaughter,J.J ., concur.