Court Opinion

ID: 9741653
Source: CourtListenerOpinion
Date Created: 2023-08-26 21:00:11.942763+00
Date Added: 2024-06-11T07:24:25.307318
License: Public Domain

RATLIFF, Senior Judge,
dissenting with opinion.
I respectfully dissent. Bradtmueller’s argument before the trial court was that because the term “award” was not defined in the insurance policy, “award” meant the original amount awarded by the arbitration panel, before any credits were applied, or $50,-000.00. Therefore, under Bradtmueller’s reasoning, Bradtmueller would be allowed the option to pursue a cause of action under the terms of the policy, the “escape clause,” because the award amount exceeded the financial responsibility limits of $25,000.00. See Ind.Code § 9-25-2-3.
Insurance Company argued that Bradt-mueller was precluded from bringing her cause of action because the amount awarded to her was less than the financial responsibility limits of $25,000.00. Insurance Company argued that the award amount was $22,-694.00, or the amount awarded after the credits were applied. I agree with Insurance Company.
An ambiguity does not exist simply because a controversy exists between the parties, with each favoring a different interpretation. Stevenson v. Hamilton Mutual Insurance Company, 672 N.E.2d 467, 471 (Ind.Ct.App.1996), reh’g. denied, trans. denied. Moreover, the failure to define a term in an insurance policy does not necessarily make it ambiguous. Id. An ambiguity exists only where the provision is susceptible to more than one reasonable interpretation and reasonably intelligent people honestly would differ as to its meaning. Id.
Insurance Company cites to D'Antonio v. State Farm Mutual Automobile Insurance Company, 262 N.J.Super. 247, 620 A.2d 1060 (1993) in support of its interpretation of the arbitration provision. In D’Antonio, the insured submitted a claim for underinsured motorist benefits after settling with the tort-feasor for his policy limits of $25,000.00. After unsuccessfully attempting to resolve their dispute over coverage, the insurer and insured submitted the issue of the claim to arbitration pursuant to the policy. The arbitrators awarded the insured the gross sum of $40,000.00. The award did not state so, but the insurer and insured did not disagree that the $25,000.00 recovered from the tortfeasor should be credited against the $40,000.00 award, and that the insurer, therefore, was liable for $15,000.00 The financial responsibility limits in New Jersey were $15,000.00.
The policy provided that the decision of the arbitrators was binding as to the amount of damages. The insured sued the insurer on the issue of the amount of damages claiming that because the $40,000.00 award was greater than the $15,000.00 financial responsibility limit, she was entitled to a trial. The trial court’s decision that the insurer’s liability, not the tortfeasor’s liability, should determine whether the matter warrants a trial, was upheld on appeal. Id. at 1061.
In Bauso v. Allstate Insurance Company, 227 A.D.2d 578, 643 N.Y.S.2d 190 (N.Y.App.Div.1996), the insured claimed underinsured motorist benefits from the insurer after settling his claim against the tortfeasor for his policy limits of $50,000.00. The parties, after unsuccessfully attempting to agree on compensation, submitted the claim to arbitration pursuant to the policy terms. The arbitrators awarded the insured $60,000.00, but expressly stated that the amount did not account for offsets or other payments. A trial de novo was provided for in the policy if the arbitration award exceeded $10,000.00, the financial responsibility limits of New York.
The trial court’s decision to allow a trial de novo was reversed on appeal. The New York Supreme Court, Appellate Division held that in order to receive a trial de novo, the amount of benefits payable by the insurer must exceed the minimum financial responsi*1000bility limits in effect. Id. at 192. (Emphasis added). Since the amount of benefits payable by the insurer was $10,000.00, the arbitration amount was binding and a trial de novo was inappropriate.
Also persuasive, is the reasoning in Krizanich v. Liberty Mutual Fire Insurance Company, 181 Ariz. 108, 887 P.2d 989 (1994). In Krizanich, the insured settled with the tort-feasor for $40,000.00 of his $50,000.00 policy limits. The insured then claimed $100,000.00 in underinsured motorist benefits with his own insurer. The parties submitted the matter of damages in excess of $50,000.00 to arbitration. The arbitrators did not place a dollar amount on the insured’s injuries, but found that the $40,000.00 settlement fully compensated the insured. Therefore, the insured was not entitled to underinsured motorist benefits.
The trial court’s decision that the arbitration was binding was upheld on appeal. The insured had argued that he was entitled to a trial de novo because the settlement amount of $40,000.00 was in excess of the $15,000.00 financial responsibility limits of Arizona. The insurer successfully argued that the arbitrators had awarded the insured nothing by way of underinsured motorist benefits, and because that amount was less than $15,-000.00, the award was binding on the parties. Id. at 991-992. (Emphasis added).
I disagree with the majority’s application of National General Insurance Company v. Riddell, 705 N.E.2d 465 (Ind.Ct.App.1998), to the case at bar. In National General, the insurer sought a trial under the policy which provided for a trial in the event that arbitration resulted in an award in excéss of the minimum financial responsibility limit. The arbitration award amount in National General, $220,000.00, was clearly in excess of the minimum financial responsibility limit in Indiana, $25,000.00. The panel in National General, determined that the insurer was entitled to a trial pursuant to the “escape clause” of the policy because of the amount of the award. Id. at 468. That panel held that the “escape clause” providing for a trial de novo after arbitration in certain situations was enforceable. Id. I do not find National General to be dispositive of the issue in the case at hand.
I find persuasive the reasoning of D’Antonio, Bauso, and Krizanich. Therefore, I would hold that the amount which determines whether an arbitration award is in excess of the financial responsibility limits of Indiana is the amount payable to the insured after credit has been applied for amounts already recovered by the insured. To hold otherwise would defeat the purpose of the arbitration provision of the policy.
Bradtmueller would not be able to recover a judgment of $50,000.00 from Insurance Company. However, she would be entitled to recover $22,694.95, which is less than the financial responsibility limits of Indiana, from Insurance Company. The matter presented to the arbitrators is the amount due the insured pursuant to underinsured motorist coverage. It is that amount which should determine whether a trial de novo is warranted.
Bradtmueller was able to recover $25,-000.00 under the tortfeasor’s liability coverage limits. At issue between Bradtmueller and Insurance Company was the amount Insurance Company should pay out to Bradt-mueller under the uninsured/underinsured motorist provision of her policy with Insurance Company.
In my opinion the arbitrators’ finding is unambiguous. The arbitrators found Bradt-mueller’s damages to be $50,000.00. Bradt-mueller had already received $27,305.05 under the tortfeasor’s policy and medical pay benefits. The arbitrators determined that Insurance Company owed Bradtmueller $22,-694.95. The arbitrators’ job was to determine how much, if anything, Insurance Company owed to Bradtmueller, its insured. The $50,000.00 sum included amounts Bradtmuel-ler was entitled to from sources other than Insurance Company. Again, it is my opinion that it defeats the purpose of the arbitration provision of the policy to hold, as the majority holds, that the tortfeasor’s liability, and not the insurer’s liability, determines whether the escape clause can be utilized.
I would hold that an arbitration award which becomes binding upon the parties and *1001precludes a trial de novo if the amount is less than the financial responsibility limits of Indiana, is determined by the amount the insurer must pay the insured pursuant to underinsured motorist coverage after credits for amounts already recovered by the insured have been applied. I would hold that the trial court erred in denying Insurance Company’s motion for summary judgment.