ATTORNEY FOR APPELLANTS
Michael J. Anderson
South Bend, Indiana
ATTORNEYS FOR APPELLEE
Sean E. Kenyon
Robert J. Konopa
South Bend, Indiana
Ind. Code § 27-7-5-4(b) (1998).
AFI contends this statutory language requires a comparison of the $600,000 per accident bodily injury liability limits provided by the two Balderas policies to the $300,000 per accident UIM limit under either James or Pamelas policy. Under this comparison, AFI contends the van was not underinsured because the aggregate limits of Balderas bodily injury liability coverage exceeded the limit of either James or Pamela Corrs UIM coverage. This contention is phrased in terms of the per accident limits, not the per person limits. For support, AFI relies on Allstate Ins. Co. v. Sanders, 644 N.E.2d 884, 886-87 (Ind. Ct. App. 1994), where the court held that if more than one person is injured in an accident, the tortfeasors per accident liability limit controls for purposes of determining whether a vehicle is underinsured. In that case both injured parties were insured by the same UIM policy. Id. at 885. Under those circumstances the per accident limits may have been relevant. Here, however, Janel was the only injured party insured under the Corrs UIM policies. Indiana Code section 27-7-5-5(c) states that the maximum amount payable for bodily injury under UIM coverage is the lesser of (1) the difference between the amount paid in damages to the insured by the tortfeasor and the per person limit of UIM coverage held by the insured, and (2) the difference between the total amount of damages incurred by the insured and the amount paid by the tortfeasor. Accordingly, if a limits-to-limits comparison is to be employed, where only one insured is injured in an accident, the appropriate limits to compare to determine if a vehicle is underinsured are the per person limit of the tortfeasors liability policy and the per person limit of the insureds UIM coverage.
The mediation resolved that Balderas mothers policy operated in this circumstance as an excess policy over the fathers policy. The aggregate per person coverage under the two Balderas policies is therefore $200,000. The per person limit under Pamelas UIM coverage is $100,000. The per person limit under James UIM coverage is disputed. James claims the amount is $250,000, and AFI contends it is $100,000. The amount actually recovered by the two Corrs was $57,500 each, or a total of $115,000. The issue is whether we are to compare the Balderas policy limits ($200,000) or the amount recovered ($57,500) to the amount of each Corrs UIM coverage.
AFI relies on Sanders, 644 N.E.2d at 887, where the Court of Appeals, relying on Colorado case law interpreting Colorados UIM statute, held a policy limits to policy limits comparison was mandated in Indiana. The Corrs contend, and the Court of Appeals in the Shultz case agreed, that under the Indiana statute the proper comparison is between the amount of each Corrs UIM coverage and the amount of the coverage limits actually available for payment to each Corr from Balderas coverage. Under that comparison, the Corrs argue, the van is underinsured because the amount available for payment to each Corr ($57,500) is less than the limit of each Corrs UIM coverage ($100,000 for Pamela, and either $100,000 or $250,000 for James). Although neither sides view of the statute is problem-free, for the reasons that follow we agree with the Corrs.
As Judge Kirsch writing for the Court of Appeals in the Shultz case pointed out, the Colorado statute interpreted in Leetz v. Amica Mut. Ins. Co., 839 P.2d 511 (Colo. Ct. App. 1992), and relied upon by Sanders, is not the same as Indianas UIM statute. 743 N.E.2d at 1198. The Colorado statute provides: An underinsured motor vehicle is a land motor vehicle [which] is insured . . . but the limits of liability for bodily injury or death . . . are: (a) Less than the limits for uninsured motorist coverage under the insureds policy. Colo. Rev. Stat. § 10-4-609(4) (2001). Thus, the statute expressly requires a limits-to-limits comparison. The Indiana statute turns on the amount of the coverage limits available for payment to the insured not the overall coverage limits of the policy. Indianas UIM statute does not express this clear preference for limits-to-limits comparison. Instead it uses the phrase available for payment to the insured to describe the coverage limits to which it is referring. That term, though not as clear as it might be, has some judicial history. The Ohio UIM statute uses language identical to Indianas statute. See footnote In Motorists Mut. Ins. Co. v. Andrews, 604 N.E.2d 142, 145 (Ohio 1992), the Supreme Court of Ohio held that where the claims of multiple parties had resulted in a reduction of the amount available for payment to the insured below the underinsured motorist limits, the statute required a comparison between the amount actually available for payment to an insured and the policy limits of the insureds underinsured motorist coverage. That holding was recently reaffirmed in Clark v. Scarpelli, 744 N.E.2d 719, 726-27 (Ohio 2001), in which the court noted that the holding of Andrews had survived subsequent changes to the Ohio statute. See footnote
A cardinal rule of statutory construction in Indiana, now codified, is that [w]ords and phrases shall be taken in their plain, or ordinary and usual, sense. I.C. § 1-1-4-1(1). Available ordinarily means present or ready for immediate use. Merriam Websters Collegiate Dictionary 79 (10th ed. 1993). Thus, available for payment to the insured, when describing coverage limits, is money present or ready for immediate use by the insured, not amounts potentially accessible. Under this view, the amount available is the $57,500 each Corr actually recovered, not the $200,000 theoretically available from Balderas. Moreover, if the term available for payment did not achieve this result, it would apparently be wholly surplusage, contrary to standard principles of statutory construction. State ex rel. Hatcher v. Lake Superior Court, 500 N.E.2d 737, 740 (Ind. 1986); see also Ind. Dept of Envtl. Mgmt. v. Chem. Waste Mgmt., Inc., 643 N.E.2d 331, 339 (Ind. 1994) (mere surplusage unacceptable according to ordinary canons of statutory construction).
Our holding today is also congruent with the underlying purpose of UIM coverage, which broadly stated 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. 12 Lee R. Russ & Thomas F. Segalla, Couch on Insurance 3d § 171:2 (1995). In United Natl Ins. Co. v. DePrizio, 705 N.E.2d 455, 459 (Ind. 1999), this Court held that UIM coverage is designed to provide individuals indemnification in the event negligent motorists are not adequately insured. We noted the statute requiring UIM and uninsured motorist coverage is a mandatory coverage, full-recovery, remedial statute. Id. at 460. Because the statute is remedial, it is to be liberally construed. Id. at 459-60. Although we agree with AFI that a full-recovery statute will not necessarily assure full indemnification for all potential damage to all potential insureds, we do not read the statute as narrowly as AFI does. As the Court of Appeals pointed out in Shultz, the interpretation AFI advances leads to the anomalous result that when multiple people are injured in an accident, an injured party is in a better position if the driver responsible for the accident is not insured at all than if he or she has insurance. 743 N.E.2d at 1197. Here, if Balderas had no insurance, the Corrs uninsured motorist coverage would have applied and they each could have filed a claim up to the limits of that coverage. Because Balderas was covered, however, AFI argues the Corrs recovery is limited to a total of $115,000. This is inconsistent with the view of the statute as a full-recovery, remedial measure.
We recognize that the view we take of the statute creates it own anomalies. If, as here, there are multiple claimants they may reduce the amount available to any single claimant below the minimum UIM coverage even if the limits if applied to only one claimant would be adequate. We conclude that the legislature has chosen to look to available amounts, and accordingly accept this anomaly as less problematic than leaving the victim of an underinsured motorist worse off than the victim of a wholly uninsured motorist.
Finally, AFI argues the language of its policy dictates a limits-to-limits comparison. See footnote If so, the policy provides less coverage than the statute requires. We agree with the Court of Appeals in the Shultz case that although parties may contract to limit liability, insurers may not offer less coverage than the law requires. 743 N.E.2d at 1199. Thus, although the phrase subject to the terms and conditions of such coverage in section 27-7-5-4(b) allows parties to contract for more coverage than the law requires, it does not allow them to contract for less. See, e.g., Ind. Ins. Co. v. Allis, 628 N.E.2d 1251, 1253-54 (Ind. Ct. App. 1994), trans. denied (same language in section 27-7-5-4(a) means insurer providing statutory coverage may also offer greater, albeit very specific coverage). To the extent the Corrs policies provide less coverage than required by Indiana law, the law mandates that the coverage be expanded to the statutory requirement.
SHEPARD, C.J., and DICKSON, SULLIVAN, and RUCKER, JJ., concur.