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Gallant Insurance Company v. Allstate Insurance Company1/31/2000
STATEMENT OF THE CASE
Gallant Insurance Company ("Gallant") appeals the garnishment order against its policy issued to Kelli Moore, who was involved in an automobile accident with Donald Richey, Jr. Allstate Insurance Company, as Richey's subrogee ("Allstate"), brought proceedings supplemental to collect a default judgment against Moore. The sole issue presented for review is whether Moore's failure to forward suit papers to Gallant precludes recovery where the insurance policy states that Gallant shall not be liable unless it receives actual notice of a lawsuit before a judgment has been entered.
We reverse.
FACTS
On October 4, 1997, Richey sustained personal injuries and property damage from an automobile collision with Moore. Richey was insured under a liability policy issued by Allstate. Moore was insured by Gallant. On October 6, 1997, Moore notified Gallant of the accident.
Richey filed suit against Moore in Shelby Circuit Court, and Gallant provided counsel for Moore. The parties resolved the Shelby County action by compromise and settlement when Gallant paid Richey in return for the release of his personal injury claim against Moore. Allstate paid Richey $9,565.58 for his property damage claim and then, on October 20, 1998, filed suit on its subrogation claim against Moore in the Marion Superior Court. The complaint and summons were served on Moore at her residence, but Allstate did not send a copy of the complaint to Moore's attorney or to Gallant. Moore neither answered the complaint nor sent a copy of the suit papers to Gallant.
While the parties were negotiating the property damage claim, Allstate moved for a default judgment against Moore on Friday, February 19, 1999. On that same date, Allstate mailed a copy of the subrogation suit to Gallant. The following Monday, February 22, 1999, the trial court entered a default judgment against Moore for $9,565.58, plus costs. Allstate then moved for proceedings supplemental to execution, naming Moore as the judgment debtor and Gallant as the garnishee defendant.
The trial court ordered Gallant to appear and answer Allstate's interrogatories about Moore's insurance coverage on the 1997 accident. Moore and Gallant entered separate appearances. In its answer, Gallant asserted Moore's failure to comply with the policy notice requirements as an affirmative defense. At a hearing on Allstate's motion, Gallant again argued that there was no coverage for Richey's property damage because it had not received notice of the lawsuit before entry of the default judgment. Moore's attorney testified that he had not known that a lawsuit had been filed. Allstate argued that Gallant should have been aware of the lawsuit. The trial court found that Gallant "was given notice of the claim" against Moore and was not prejudiced by the entry of judgment. Thus, the court entered a garnishment order against Gallant. Gallant now appeals.
DISCUSSION AND DECISION
Standard of Review
In proceedings supplemental to recover judgment from a liability insurer, the judgment creditor bears the burden of showing a judgment, the insurance policy, and facial coverage under the policy. Hermitage Ins. Co. v. Salts, 698 N.E.2d 856, 859 (Ind. Ct. App. 1998). Once the judgment creditor establishes this prima facie case, the liability insurer must go forward with evidence creating a genuine issue of fact. Id. Here, the trial court entered several findings with its garnishment order. It is well settled that special findings do not apply in proceedings supplemental. First Bank of Whiting v. Samocki Bros. Trucking Co., 509 N.E.2d 187, 189-90 n.1 (Ind. Ct. App. 1987),
Page 1 2 3 Indiana Personal Injury Attorneys
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