Opinion ID: 2121350
Heading Depth: 1
Heading Rank: 1

Heading: actual trial

Text: The first issue raised by AUI concerns the following portion of Indiana's Financial Responsibility Act: [T]he liability of the insurance carrier under a motor vehicle liability policy which is furnished for proof of financial responsibility in the future as set out in this chapter shall become absolute whenever loss or damage covered by such policy occurs... . No action shall lie against the insurance carrier by or on behalf of any claimant under the policy until after final judgment has been obtained after actual trial by or on behalf of any claimant under the policy. Ind. Code 9-2-1-5(c). AUI contends the no action clause renders an actual trial against the insured a condition precedent to its otherwise absolute liability. Thus, before instituting proceedings supplemental against AUI, the claimants should be required to establish the liability of the insured in an actual, contested and adversary trial. AUI concludes that the default judgment in favor of claimants against the insured falls short of an actual trial and, therefore, the no action clause constitutes a good defense in the claimants' garnishment proceedings against AUI. Conceding the logic of AUI's reasoning, [2] we hold AUI has failed to preserve this issue for review. We hold that an insurer's defense under the no action clause constitutes an affirmative defense which must be specifically pleaded by AUI in its answer to the claimants' garnishment action. AUI's failure to specifically plead is fatal. Although distinguishable, [3] decisions from other jurisdictions require insurance companies to present by special plea the defense that suit was prematurely brought. Federal Automobile Insurance Ass'n. v. Abrams, (1928) 217 Ala. 539, 117 So. 85; United States Fidelity & Guaranty Co. v. Newton, (1911) 50 Colo. 379, 115 P. 897. All affirmative defenses must be specially pleaded by a clear and definite allegation of the facts constituting such defense, and a defense not so pleaded will be regarded as waived. Matters which must be pleaded affirmatively and specially included [sic] many defenses, such as the bringing of the action before or after the period of time limited by policy or statute... . (emphasis added) 46 C.J.S. Insurance § 1294 (1946). AUI failed to raise the no action clause as an affirmative defense in its answer to the claimants' action. Nearly a year later at the hearing on the garnishment proceedings, AUI again failed to assert this defense. Not until after the hearing did AUI raise the no action clause. Since this defense was neither raised affirmatively in its answer [4] nor tried by implied consent, AUI has waived any error. Lawshe v. Glen Park Lumber Co., Inc., (1978) Ind. App., 375 N.E.2d 275, 277-78.