COURT DECISIONS

Rough Notes, Sep 2007

On November 13, Farm Bureau sent a letter to Brewington offering to "front" him $50,000 and confirming Farm Bureau's receipt of certification of the policy limit from Citizens. In this letter, Farm Bureau also asked Brewington not to make any more statements to Citizens without Farm Bureau's prior approval.

Farm Bureau and Brewington continued to communicate in letters regarding Farm Bureau's offer to pay Brewington $50,000. Brewington continued to assert that he did not agree with the terms of the Citizens settlement offer and that he did not want Farm Bureau to issue the $50,000. Finally, on March 23, 2004, Brewington sent a letter to Farm Bureau detailing the damages he had suffered as a result of the accident. In that letter he agreed to accept the $50,000 limit of the Citizens policy; however, he also requested an additional amount of $250,000 pursuant to the underinsured motorist provision of the Farm Bureau policy.

On April 2, 2004, Farm Bureau responded by forwarding $50,000 to Brewington and by advising Brewington that Farm Bureau would proceed with the settlement and negotiation of the underinsured motorist claim. Farm Bureau then filed an action against Hornberger alleging that Farm Bureau was subrogated to the rights of Brewington and requesting $6,376 in property damages, $5,000 in medical expenses, and bodily injury compensation of $200,000.

Hornberger filed a motion for summary judgment, claiming that Farm Bureau had waived its right to subrogation because it had not complied with the Indiana statute governing subrogation. The relevant statute provided: "An insurer providing underinsured motorist coverage does not have a right of subrogation against an underinsured motorist if: (1) the insurer has been provided with a written notice that (A) informs the insurer of the existence of a bona fide offer of agreement or settlement between its insured and the underinsured motorist; and (B) includes a certification of the liability coverage limits of the underinsured motorist; and (2) the insurer fails to advance payment to the insured in an amount equal to the amount provided for in the offer of agreement or settlement within thirty (30) days after the insurer receives the notice described in subdivision (1)."

According to Hornberger, Farm Bureau knew of Citizens' bona fide settlement offer for its policy limits and had received certification of Hornberger's policy limits on November 13, 2003 (as evidenced in Farm Bureau's letter to Brewington). Nevertheless, Farm Bureau waited until April 2 to issue the $50,000 check to Brewington.

According to Hornberger, because more than 30 days passed between November 13, 2003, and April 2, 2004, Farm Bureau could not be subrogated to Brewington's rights. Farm Bureau argued that it did not receive written notice of a settlement agreement until March 23, 2004, the date of Brewington's letter to Farm Bureau, and that it forwarded the $50,000 to Brewington within 30 days.

The trial court denied Hornberger's motion.