Court Opinion

ID: 7075926
Source: CourtListenerOpinion
Date Created: 2022-07-24 08:14:28.102233+00
Date Added: 2024-06-11T16:12:46.084870
License: Public Domain

SHARPNACK, Judge,
concurring in part and dissenting in part.
I concur in part and respectfully dissent in part. I coneur that NIPSCO's obligation to respond in damages to the Min-niefields as self-insurer of the vehicle driven by Zurbrick for Zurbrick's Hability would not be. limited to Fifty Thousand Dollars or One Million Dollars for bodily injuries to the Minniefields. It would be limited only by the extent of the Minnic-fields' damages.
I dissent from the conclusion that NIP-SCO is obligated to defend Zurbrick's Estate against the Minniefields' claims, although it strikes me that it would be in NIPSCO's interest to do so.
It is the relationship between NIPSCO as self-insurer and Zurbrick that determines NIPSCO's obligations. That relationship is not defined in any contract between them. As a self-insurer, NIPSCO is not an automobile liability insurance company and Zurbrick was not an insured under a policy contract issued by NIPSCO. City of Gary v. Allstate Ins. Co., 612 N.E.2d 115, 118-119 (Ind.1993) ("In choosing to be self-insured for purposes of the financial responsibility law, the City obligated itself to pay judgments rendered against it. In exchange for assuming the risk of paying judgments, the City has saved the expense of purchasing a policy of insurance which would cover this risk. This does not mean, however, that the City has issued a 'policy of insurance' or that it has become an 'insurer' for anything be*894yond meeting the requirements of the financial responsibility act").
The relationship between an insurer and the insured is governed by the contract between them. Erie Ins. Co. v. Hickman by Smith, 622 N.E.2d 515, 518 (Ind.1993) ("Clearly, a relationship exists between an insurer and its insured because they are in privity of contract"). Typically, the insurer agrees to pay any liability for damages the insured incurs as a result of using the automobile described in the policy. Also typically, the insurer agrees to defend the insured against any claims and retains the right to control that defense. It is in the insurer's interest to do this, because it will be the one obligated to pay the damages for which its insured is liable.
Here, there is no contract. The obligations here arise from the financial responsibility statutes as they pertain to self-insurers. NIPSCO has met its obligation to provide proof of financial responsibility by obtaining a "certificate of self insurance" as provided for in Ind.Code $ 9-25-4-4 (1998). Under that statute, NIPSCO provided its "ability to respond in damages for liability arising out of the ... use of the motor vehicle" driven by Zurbrick. I.C. § 9-25-4-4 (1998). The "lability" is defined by "arising out of the use of the motor vehicle" not by whose use created the liability. Id. NIPSCO could itself have liability to the Minniefields vicariously under respondeat superior, but in any event would be liable to pay the Minnie-fields' damages resulting from the use of the vehicle driven by Zurbrick.
There is nothing in the statute that imposes any other obligation on NIPSCO, and there is no contract by which it has agreed to any other obligation. I therefore conclude it has no initial obligation to defend the estate.
However, the effect of the statute is to require NIPSCO to pay the damages for which Zurbrick might be liable. If Zur-brick's estate were liable to pay, it could seek indemnity from NIPSCO to require it to pay the damages and to pay the costs the estate incurred in defending against liability to pay damages that NIPSCO is required by the statute to pay. Bethlehem Steel Corp. v. Sercon Corp., 654 N.E.2d 1163, 1169 (Ind.Ct.App.1995) ("An indem-nitee, who incurs legal expenses through defending an action against him for which he is entitled to indemnification, is entitled to recover the expense of creating his defense, including reasonable attorney fees"), reh'g denied, trans. demied. The net effect of my analysis is that ultimately NIPSCO may have liability to pay the costs of defending the estate, but is under no present obligation to do so.