Robb, J.
Case Summary and Issue
A jury found Alan Steady one-hundred percent at fault for injuries Ronald Kern sustained when the two were involved in a car accident, and a $98,000 judgment was entered against Steady to compensate Kern for his injuries. Because Steady was only insured up to $25,000, State Farm, Kern’s insurer, paid Kern underinsured motorist benefits. Steady requested that the trial court deem the judgment against him satisfied because Kern was compensated by State Farm, and the trial court granted Steady’s motion. State Farm appeals, raising one issue for our review: whether the trial court erred when it deemed the judgment entered against Steady satisfied. Concluding the trial court did err, we reverse and remand.
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Rather than moving for setoff, Steady moved the trial court to deem the judgment against him satisfied because Kern was paid underinsured motorist benefits by his insurer. Despite this difference, the principle remains the same. When an insurer compensates its insured due to a third party tortfeasor being underinsured, the third party tortfeasor’s liability is not reduced. Rather, Indiana Code section 27-7-5-6(a) provides that the insurer may enforce its insured’s right of recovery against the third-party tortfeasor, either in its own name or in the name of its insured, and that the insurer shall then be subrogated to the proceeds of any settlement or judgment that results. [Footnote omitted.] To allow a judgment entered against the third-party tortfeasor to be deemed satisfied due to the insurer’s underinsured motorist payment to its insured would undermine the purpose of this statute. Thus, we conclude that when a judgment is entered against a third-party tortfeasor, said judgment is not satisfied when the plaintiff’s insurer compensates the plaintiff due to the third-party tortfeasor’s being underinsured. Steady is not entitled to benefit from Kern’s carefulness and assiduousness in obtaining underinsured motorist insurance coverage. The trial court therefore erred in deeming the judgment against Steady satisfied. [Footnote omitted.
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BAKER, J., and BRADFORD, J., concur.