## Facts

- Thomas Tate was seriously injured while assisting a stalled car parked in a street parking lane when an intoxicated driver struck the vehicle.
- The tortfeasor’s liability insurer paid Tate its $50,000 bodily-injury policy limit in settlement.
- Tate’s damages exceeded that recovery, including significant medical expenses, income losses, permanent impairment, and possible future amputation; total damages were alleged to exceed $100,000.
- Tate had an automobile policy with Secura Insurance providing $50,000 in underinsured-motorist (UIM) coverage.
- After the tortfeasor’s settlement, Tate sought UIM benefits for uncompensated damages; Secura denied coverage based on its reading of the UIM provisions and policy conditions addressing exhaustion and consent to settlement/subrogation.
- Tate sued Secura for breach of contract; the trial court granted summary judgment for Secura, and the intermediate appellate court affirmed.

## Issues

1. Whether UIM benefits are unavailable as a matter of law when the tortfeasor’s liability limits equal the insured’s UIM limits, despite total damages exceeding the tortfeasor’s payment.
2. Whether the policy’s exhaustion requirement barred Tate’s UIM claim even though he recovered the tortfeasor’s liability policy limits.
3. Whether Tate’s settlement and release of the tortfeasor without Secura’s written consent barred coverage by impairing Secura’s subrogation rights, or whether waiver/estoppel created a fact issue.

## Decision

- The Indiana Supreme Court reversed summary judgment for Secura and remanded for further proceedings.
- The court held the policy did not clearly impose Secura’s “limit-to-limit” approach; “amounts payable” was construed to refer to Tate’s compensable damages (subject to offsets), not only to stated limits.
- The court held the exhaustion language did not entitle Secura to judgment as a matter of law where Tate had collected the tortfeasor’s liability limits; the clause could be satisfied by exhausting an applicable liability policy rather than all conceivable coverage.
- The court held the consent-to-settlement/subrogation defense could not support summary judgment because material fact questions existed on waiver or estoppel, given Tate’s notice to Secura about negotiations and Secura’s alleged silence and late reliance on those clauses.

## Legal Principles

- Ambiguous UIM policy language is construed against the insurer; absent clear drafting, courts will not read a “limit-to-limit” restriction into an UIM definition or “amounts payable” provision.
- UIM “amounts payable” provisions may be construed to measure benefits by the insured’s total damages reduced by amounts received from the tortfeasor, capped by the UIM limit.
- Exhaustion clauses requiring exhaustion of “applicable” liability insurance do not necessarily require exhaustion of every potentially available policy; collecting the limits of an applicable liability policy may suffice under the contract’s text.
- An insurer’s conduct after receiving notice of settlement negotiations can create triable issues of waiver or estoppel that may limit enforcement of consent-to-settlement and subrogation conditions.

## Conclusion

The court permitted Tate to pursue UIM benefits because the policy did not clearly bar recovery when the tortfeasor’s limits matched the UIM limits, the exhaustion provision did not defeat the claim as a matter of law, and fact issues on waiver or estoppel prevented summary judgment based on consent-to-settlement and subrogation clauses.


Tate v. Secura Ins., 587 N.E.2d 665 (Ind. 1992)