COA affirms for insurer in UIM coverage case

After being struck by a vehicle driven by Timothy Smith, Christine Catanzarite suffered two broken legs and incurred $269,841.32 in medical expenses after a three-week hospital stay.

Catanzarite – who had underinsured motorist coverage with Safeco Insurance Company of Indiana, which had a policy limit of $100,000 per person – wrote to her insurer and claimed that her total damages were in excess of Smith’s bodily injury liability coverage of $100,000 per person with his insurer, Hanover Insurance. She also asserted a claim under the UIM provision of her own policy, but Safeco denied her claim after finding Smith’s bodily injury liability limits were equal to Catanzarite’s UIM coverage limits, leaving her precluded from further payment.

Catanzarite then filed a motion for summary judgment against Safeco, arguing that there was no genuine issue of material fact and that she was entitled to judgment as a matter of law.

She argued that the hospital had reduced her medical expenses to $25,000 and that her net recovery payable to her under Smith’s bodily injury liability policy would be $75,000, an amount less than her $100,000 UIM policy limits. Thus, she argued that the medical lien would reduce the recovery amount accessible for payment under the terms in Indiana Code section 27-7-5-4(b), and that Smith was operating an underinsured motor vehicle at the time of the accident to the extent of the medical lien.

However, the trial court granted summary judgment to Safeco, concluding that payment of a hospital lien by a tortfeasor’s liability insurer does not reduce the limit of liability coverage under the tortfeasor’s insurance policy for purposes of determining whether the tortfeasor is underinsured.

Catanzarite appealed, arguing that the trial court erred in its decision and that she should be entitled to collect an additional $25,000, the difference between her UIM policy limit and the funds she will receive from Smith’s insurer after her medical expenses are paid off.

The Indiana Court of Appeals affirmed in Christine Catanzarite v. Safeco Insurance Company of Indiana, 19A-CT-02338,  addressing whether a medical lien reduces the amount payable under Smith’s bodily injury liability coverage for the purposes of triggering Catanzarite’s UIM benefits under her policy.

“As the $100,000 under Smith’s liability policy is adequate and readily accessible for Catanzarite’s immediate use and benefit, any payment of Catanzarite’s medical bills can be off set from the settlement proceeds she receives from Hanover, and payment of her lien does not reduce the actual amount she receives from Hanover,” Judge Patricia Riley wrote for the appellate court.

“Accordingly, we hold that Smith had an adequate bodily injury liability policy at the time of the accident and was therefore not an underinsured motorist and that Catanzarite was not entitled to … her UIM coverage benefits from Safeco. Thus, we affirm the trial court’s summary judgment in favor of Safeco.”