Bradford, C.J.
Case Summary
In 2018, Morgan Miller crashed his car, severely injuring his passenger, Olivia Craighead. At the time, Craighead was covered by an auto policy issued by Erie Insurance Exchange, which provided her with $100,000.00 in uninsured/underinsured motorist (“UIM”) coverage and $5000.00 in medical payments coverage (“MPC”). Miller’s insurer, United Farm Family Mutual Insurance Company, tendered its liability limit of $50,000.00 and a $5000.00 MPC payment, while Erie made a $5000.00 MPC payment pursuant to Craighead’s own coverage. While the parties agree that Erie’s UIM obligation to Craighead was properly reduced to $50,000.00 by United Farm’s liability payment of $50,000.00, Erie contended that the MPC payments from it and United Farm further reduced its UIM obligation to $40,000.00.
In June of 2020, Craighead sued Erie for breach of contract and for bad-faith denial of her claim for $10,000.00 in UIM coverage. Erie moved for summary judgment, arguing that a provision in its policy allowed it to reduce its UIM obligation by the amount of the MPC payments (“the Setoff Clause”) and that there existed no genuine issue of material fact regarding bad faith. The trial court granted partial summary judgment in favor of Craighead on the breach-of-contract claim, concluding that the Setoff Clause was unenforceable as written. The trial court also concluded that there existed a genuine issue of material fact on the bad-faith claim. Erie contends that the trial court erred in granting partial summary judgment in favor of Craighead and in denying its motion for partial summary judgment on the bad-faith claim. Because we conclude that the trial court properly entered partial summary judgment in favor of Craighead and determined that the bad-faith claim was not appropriate for summary judgment, we affirm.
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Disposition of this issue requires us to examine various provisions of Indiana Code chapter 27-7-5, which is entitled “Uninsured Motorist Coverage and Underinsured Motorist Coverage…
A. Whether UIM Coverage Above the Statutory Minimum May Be Set Off by MPC Payments
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The parties agree that the Erie’s $100,000.00 UIM obligation was properly reduced by the $50,000.00 liability payment from United Farm and that Craighead never executed a written rejection of UIM coverage. The only dispute is whether applying the Setoff Clause to further reduce the obligation by the $10,000.00 in MPC payments violates the provisions of Indiana’s UIM statutes. Erie argues that only the first $50,000.00 of UIM cannot be set off, pointing to the language in Section 27-7-5-2(a) requiring that an insurer offer at least $50,000.00 in UIM coverage. Craighead and amicus curiae the Indiana Trial Lawyers Association counter that, while Section 27-7-5-2 requires that at least $50,000.00 be offered, it is the whole of the amount that is actually purchased that cannot be set off, which, in this case, was $100,000.00. In other words, the statutory minimum of $50,000.00 is the floor but not the ceiling, which is the amount of UIM purchased by the insured.
We are persuaded by Craighead’s argument on this point. Section 27-7-5-5(c) clearly provides that the starting point for calculating “[t]he maximum amount payable for bodily injury under uninsured or underinsured motorist coverage is […] the per person limit of uninsured or underinsured motorist coverage provided in the insured’s policy[,]” not the statutory minimum of UIM coverage. [Footnote omitted.] (Emphasis added). Moreover, “[a]s we interpret [a] statute, we are mindful of both what it does say and what it does not say[,]” ESPN, 62 N.E.3d at 1196, and, as it happens, Section 27-7-5-2(a) says nothing about reductions to UIM obligations. The $50,000.00 amount mentioned in Section 27-7-5-2(a) is simply the minimum UIM coverage that must be offered and nothing more.
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B. Whether MPC Payments Qualify as Amounts Paid in Damages Pursuant to Section 27-7-5-5(c)(1)(A)
Having determined that Section 27-7-5-2(a) does not help Erie’s case, we turn to the already-mentioned Section 27-7-5-5(c). The parties agree that the $50,000.00 in liability coverage Craighead received from United Farm reduced Erie’s UIM obligation from $100,000.00 to $50,000.00. In other words, it is undisputed that the liability payment qualifies as an “amount paid in damages to the insured by or for any person or organization who may be liable for the insured’s bodily injury[.]” This leaves us with the MPC payments. While the Setoff Clause specifically provides for the setoff of “auto medical payments provision in this or any other policy applicable to the loss[,]” Appellant’s App. Vol. II p. 52, we nonetheless conclude that neither United Farm’s nor Erie’s MPC payments to Craighead can be set off.
The parties do not dispute that the MPC payments to Craighead were triggered by virtue of her being a passenger in Miller’s vehicle when she was injured, not because he was negligent in operating it. This is the key point, because Section 27-7-5-5(c)(1)(A) requires that a payment, even from a party that may be liable for the insured’s bodily injury, must be made “in damages” for it to reduce a UIM obligation… In other words, with MPC coverage being no-fault coverage, the MPC payments to Craighead were not triggered because of Miller’s wrongful act, and, as the Indiana Supreme Court has declared, “the term ‘damages’ means the sum recoverable as amends for the wrong.”…
An MPC payment, even by the liable party, does not qualify as an “amount paid in damages” pursuant to Section 27-7-5-5(c)(1)(A) because it is not made as amends for a wrong. Consequently, to the extent that the Setoff Clause allows Erie’s UIM obligations to be reduced by “any auto medical payments provision in this or any other policy applicable to the loss[,]” Appellant’s App. Vol. II p. 52, it violates the provisions of Section 27-7-5-5(c) and cannot be enforced as written. See Justice, 4 N.E.3d at 1177 (“So long as the policy language comports with our state statutes, it will control, but if it is inconsistent with those statutes, it is unenforceable.”) (citations omitted).
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Because we conclude that a genuine issue of material fact exists as to whether Erie acted in good faith at all times and in all respects, we affirm the trial court’s denial of Erie’s motion for partial summary judgment on this point.
We affirm the judgment of the trial court.
Najam, J., and Bailey, J., concur.