Michael Cline v. Everest National Insurance Company

• Court: Indiana Court of Appeals
• Decided: May 28, 2026
• Docket: 25A-CT-01976
• Status: Published
• Author: Judge Kenworthy

Opinion

IN THE

Court of Appeals of Indiana FILED Michael Cline and Jacob Sofronko, May 28 2026, 8:52 am

Appellants-Plaintiffs CLERK Indiana Supreme Court Court of Appeals and Tax Court

v.

Everest National Insurance Company, Appellee-Defendant

May 28, 2026 Court of Appeals Case No. 25A-CT-1976 Appeal from the Jay Superior Court The Honorable Gail M. Dues, Judge Trial Court Cause No. 38D01-2407-CT-11

Opinion by Judge Kenworthy Judges Bradford and Pyle concur.

Court of Appeals of Indiana | Opinion 25A-CT-1976 | May 28, 2026 Page 1 of 13 Kenworthy, Judge.

Case Summary [1] During the scope of their employment, Michael Cline and Jacob Sofronko

(collectively, “Plaintiffs”) were seriously injured in an automobile accident with

an at-fault, underinsured motorist. Plaintiffs’ employer had a commercial

automobile policy with Everest National Insurance Company (“Everest”) that

provided $1,000,000 in underinsured motorist (“UIM”) coverage. After the

tortfeasor’s insurer paid its bodily injury liability limit of $300,000, Plaintiffs

filed complaints seeking UIM coverage from Everest and declaratory judgment

that they were entitled to $1,000,000 in UIM coverage. Everest moved for

summary judgment, arguing it was entitled to a setoff of $300,000 and the

maximum UIM coverage available to Plaintiffs was $700,000. The trial court

granted judgment in Everest’s favor.

[2] Cline now appeals, arguing the trial court erred in determining the amount of

UIM coverage available to Plaintiffs. We affirm.

Facts and Procedural History [3] On May 19, 2023, Cline and Sofronko were employees of Ohio Valley Gas

Corporation. Sofronko was driving and Cline was a passenger in a company-

owned dump truck when it collided with a commercial cargo van at the

intersection of State Road 26 and County Road 200 West in Jay County.

Plaintiffs were ejected from the truck and suffered serious personal injuries.

The van’s driver, Roberto Rosa Pagan, died.

Court of Appeals of Indiana | Opinion 25A-CT-1976 | May 28, 2026 Page 2 of 13 [4] Pagan was at fault for the accident, as he had failed to stop at the intersection’s

stop sign and yield to the truck. Pagan was insured by a Shelter General

Insurance Company (“Shelter”) policy with a bodily injury liability coverage

limit of $300,000. Cline and Sofronko each received $150,000 from the

$300,000—sums insufficient to cover their losses.

[5] At the time, Plaintiffs were insured by their employer’s commercial automobile

insurance policy with Everest. The Everest policy includes a UIM coverage

endorsement with a $1,000,000 per accident limit. (It has no separate per

person limit.) The endorsement provides: “The Limit of Insurance under this

coverage shall be reduced by all sums paid or payable by or for anyone who is

legally responsible[.]” Appellant’s App. Vol. 2 at 124.

[6] In July 2024, Cline filed a two-count complaint against Everest seeking

declaratory judgment that he was entitled to UIM coverage and alleging Everest

engaged in unfair settlement practices by failing to extend a fair settlement offer.

The trial court granted Sofronko’s motion to be joined as a party.

[7] Everest offered to settle the claims for $700,000, representing the UIM coverage

available to Plaintiffs after a setoff for the $300,000 Shelter payment. In a

second amended complaint, Cline abandoned his unfair settlement practices

claim but requested declaratory judgment that the total amount of UIM

coverage available to Plaintiffs was $1,000,000. In October 2024, the parties

executed a partial release, and Everest paid Plaintiffs the undisputed UIM limits

Court of Appeals of Indiana | Opinion 25A-CT-1976 | May 28, 2026 Page 3 of 13 of $700,000. This effectively narrowed the case to a dispute over whether

Everest owed Plaintiffs an additional $300,000 of UIM coverage.

[8] Cline moved for declaratory judgment on the calculation of UIM coverage, and

Sofronko joined the motion. Everest in turn moved for summary judgment on

the issue and designated as evidence the Everest policy, UIM endorsement,

Plaintiffs’ complaints, and the partial release. The parties filed responses and

replies, and the trial court held a hearing on the motions. In a combined order,

the trial court found there was no genuine issue of material fact and “$700,000

is the maximum amount . . . Everest owes in [UIM] Limits to Plaintiffs under

[the] policy in connection with the May 2023 accident.” Id. at 3. The trial

court granted final judgment in Everest’s favor. Only Cline appeals.

The total UIM coverage available to Plaintiffs is $700,000. [9] A party seeking summary judgment must establish “the designated evidentiary

matter shows . . . there is no genuine issue as to any material fact and . . . the

moving party is entitled to a judgment as a matter of law.” Ind. Trial Rule

56(C). We review a trial court’s summary judgment decision de novo, applying

the same standard as the trial court. U.S. Automatic Sprinkler Corp. v. Erie Ins.

Exch., 204 N.E.3d 215, 220 (Ind. 2023). In doing so, we consider only the

evidence designated to the trial court and draw all reasonable inferences in the

non-movant’s favor. Ebert v. Ill. Cas. Co., 188 N.E.3d 858, 863 (Ind. 2022).

[10] In Indiana, insurance policies are subject to the same rules of interpretation as

other contracts. Id. at 864. We construe ambiguous policy provisions in favor

Court of Appeals of Indiana | Opinion 25A-CT-1976 | May 28, 2026 Page 4 of 13 of the insured, but “we give clear and unambiguous language in a policy its

plain and ordinary meaning.” Id. “The interpretation of an insurance policy is

primarily a question of law for the court, and therefore well-suited for summary

judgment.” Id. at 863.

[11] As the trial court found, there is no genuine issue of material fact. The parties

agree on the following:

• Pagan was legally responsible for the accident.

• Pagan’s insurance company paid its bodily injury liability coverage limit of $300,000 to Plaintiffs, with each receiving $150,000.

• $300,000 was insufficient to cover Plaintiffs’ losses.

• Pagan’s vehicle was underinsured.

• Plaintiffs are “insureds” under the Everest policy.

• The Everest policy provides UIM coverage with a per accident limit of $1,000,000.

See Appellant’s App. Vol. 2 at 2–3. The issue presented to the trial court and on

appeal, therefore, is a discrete legal question about the proper calculation of

UIM coverage available to Plaintiffs under the Everest policy.

[12] Everest argues that under the terms of the UIM endorsement, it is entitled to a

setoff for the $300,000 Shelter paid Plaintiffs, leaving only $700,000 in coverage

available to Plaintiffs. Everest’s position is based on the UIM endorsement

Court of Appeals of Indiana | Opinion 25A-CT-1976 | May 28, 2026 Page 5 of 13 language, which includes a setoff provision for all liability payments made to its

insureds:

D. Limit Of Insurance

1. Regardless of the number of covered “autos”, “insureds”, premiums paid, claims made or vehicles involved in the “accident”, the most we will pay for all damages resulting from any one “accident” is the limit shown in this endorsement.

2. The Limit of Insurance under this coverage shall be reduced by all sums paid or payable by or for anyone who is legally responsible, including all sums paid under this Coverage Form’s Covered Autos Liability Coverage.

3. No one will be entitled to receive duplicate payments for the same elements of “loss” under this Coverage Form and any Liability Coverage form or Medical Payments Coverage endorsement attached to this Coverage Part.

We will not make a duplicate payment under this coverage for any element of “loss” for which payment has been made by or for anyone who is legally responsible.

We will not pay for any element of “loss” if a person is entitled to receive payment for the same element of “loss” under any workers’ compensation, disability benefits or similar law.

4. No “insured” shall recover duplicate payments for the same elements of “loss” or payments in excess of damages sustained.

Id. at 124 (emphasis added).

Court of Appeals of Indiana | Opinion 25A-CT-1976 | May 28, 2026 Page 6 of 13 [13] We agree with Everest’s straightforward application of the unambiguous

contract language. The limit of insurance under the UIM endorsement is

$1,000,000, but the limit is reduced by “all sums” paid by or for anyone who is

“legally responsible,” in this case, Pagan. Accordingly, Everest is entitled to a

setoff for the entire $300,000 payment made by Pagan’s insurer, Shelter. This

reduces the limit of UIM coverage available to Plaintiffs under the Everest

policy to $700,000. See, e.g., Beam v. Wausau Ins. Co., 765 N.E.2d 524, 531 (Ind.

2002) (holding the language “Limit of Insurance under this coverage shall be

reduced by all sums paid or payable by or for anyone who is legally

responsible” unambiguously provides setoffs are taken from the policy limit);

Medley v. Am. Econ. Ins. Co., 654 N.E.2d 313, 316 (Ind. Ct. App. 1995) (holding

the phrase “limit of liability will be reduced by all sums paid” is unambiguous

and provides for a reduction of UIM policy limits by the total liability payments

made), trans. denied; Gardner v. State Farm Mut. Ins. Co., 589 N.E.2d 278, 282

(Ind. Ct. App. 1992) (holding a UIM policy provision allowing for a setoff of

“the amount paid all insureds” means the coverage limit is reduced by the total

amount of all liability payments to all insureds, even where one insured makes

no claim for UIM coverage), trans. denied.

[14] Cline does not argue for a different interpretation of the insurance contract

terms or contend the policy language is ambiguous. Cline instead mounts a

statutory and common-law challenge, arguing the Indiana Supreme Court’s

opinion in Lakes v. Grange Mutual Casualty Company, 964 N.E.2d 796 (Ind.

2012), requires UIM coverage calculations to be performed on an individual

Court of Appeals of Indiana | Opinion 25A-CT-1976 | May 28, 2026 Page 7 of 13 claimant basis, irrespective of the Everest policy’s aggregate setoff provision.

Under Cline’s approach, he recovered $150,000 from Shelter, and therefore he

is entitled to $850,000 in UIM coverage under the Everest policy. Similarly, the

Everest policy provides Sofronko with $850,000 in UIM coverage after his

$150,000 recovery from Shelter. According to Cline, Plaintiffs together are

entitled to a total of $1.7 million in UIM coverage; but because the UIM

coverage limit in the Everest policy is $1,000,000 per accident, Plaintiffs’

recovery is limited to $1,000,000.

[15] In Lakes, several family members were injured in a two-car accident with a

tortfeasor. 964 N.E.2d at 797. The primary question in that case was whether

the tortfeasor’s vehicle was “underinsured” as that term is statutorily defined. 1

Under Lakes, this determination depends on a comparison of the liability

payments actually received by an individual claimant and the per person

coverage limit of the UIM endorsement. Id. at 805. Here, it is clear (and

undisputed) Pagan’s vehicle is “underinsured” as defined by statute and

explained in Lakes. Under any calculation, the $150,000 Cline and Sofronko

each received from Shelter’s $300,000 payment is far less than the $1,000,000

UIM coverage limit in the Everest policy.

1 “For the purpose of this chapter, the term underinsured motor vehicle, subject to the terms and conditions of such coverage, includes an insured motor vehicle where the limits of coverage available for payment to the insured under all bodily injury liability policies covering persons liable to the insured are less than the limits for the insured’s underinsured motorist coverage at the time of the accident, but does not include an uninsured motor vehicle as defined in subsection (a).” Ind. Code § 27-7-5-4(b) (1993) (emphasis added).

Court of Appeals of Indiana | Opinion 25A-CT-1976 | May 28, 2026 Page 8 of 13 [16] Cline, however, contends Lakes not only controls the analysis of whether Pagan’s

vehicle was underinsured but also extends to the calculation of the UIM

coverage available to Plaintiffs. See Appellant’s Br. at 10 (Cline arguing the Lakes

Court “also held that the same analysis of using only each individual claimant

applied to determining the amount payable for UIM benefits”). Cline’s

argument is based on a footnote in Lakes about Indiana Code Section 27-7-5-5,

which concerns limitations on uninsured and underinsured motorist coverage.

[17] “The underinsured motorist statute sets forth the minimum and maximum

amount of coverage an insurance company is obligated to provide to a victim

who has not been fully compensated for his injuries.” Medley, 654 N.E.2d at

314. As to the minimum, the statute provides:

(a) The policy or endorsement affording coverage specified in this chapter may provide that the total limit of all insurers’ liability arising out of any one (1) accident shall not exceed the highest limits under any one (1) policy applicable to the loss, but in no event may coverage be less than the minimum set forth in IC 9-25-4-5.[ 2]

I.C. § 27-7-5-5(a) (1993). UIM coverage must be made available in limits of not

less than $50,000. I.C. § 27-7-5-2(a) (2020). Again, there is no dispute the UIM

endorsement of the Everest policy provides Plaintiffs coverage above the

2 The statutory minimum liability coverage for bodily injury or death is currently $25,000 per person or $50,000 per accident. See I.C. § 9-25-4-5(1)–(2) (2017).

Court of Appeals of Indiana | Opinion 25A-CT-1976 | May 28, 2026 Page 9 of 13 statutory minimum, as in this case Plaintiffs are entitled to $700,000 collectively

and $350,000 individually (assuming an equal division).

[18] As to the maximum amount of UIM coverage payable to an insured, the statute

states:

(c) The maximum amount payable for bodily injury under uninsured or underinsured motorist coverage is the lesser of:

(1) the difference between:

(A) the amount paid in damages to the insured by or for any person or organization who may be liable for the insured’s bodily injury; and

(B) the per person limit of uninsured or underinsured motorist coverage provided in the insured's policy; or

(2) the difference between:

(A) the total amount of damages incurred by the insured; and

(B) the amount paid by or for any person or organization liable for the insured’s bodily injury.

I.C. § 27-7-5-5(c). In other words, an individual claimant’s recovery under a

UIM policy is limited to either the UIM per person coverage limit (minus a

setoff equal to the individual’s recovery from the legally responsible party) or

the individual’s total damages (minus the same setoff)—whichever is less. This

Court of Appeals of Indiana | Opinion 25A-CT-1976 | May 28, 2026 Page 10 of 13 statute embodies the principle that an individual plaintiff cannot recover more

than their damages or the per person UIM coverage limit. Lakes confirms this

section of the statute sets caps on an individual claimant’s recovery. See 964

N.E.2d at 804 n.3 (citing I.C. § 27-7-5-5(c)) (observing “the statutory caps on

UIM benefits payable are concerned only with each individual claimant,

regardless of whether there are other claimants”) (emphasis added). Assuming

Cline’s damages alone exceed $1,000,000, the statutory maximum Cline could

recover is $850,000, representing the $1,000,000 limit minus the $150,000

Shelter payment to him. Because $700,000 does not exceed this individual

statutory cap, the policy’s setoff provision is consistent with the statute.

[19] Cline, however, reads Section 27-7-5-5(c) and the Lakes footnote as providing a

formula for calculating the amount of per person UIM insurance Everest must

provide to each claimant, rather than capping an individual plaintiff’s recovery.

And he interprets the statute and case law together to prohibit a UIM insurer

from reducing coverage by the aggregate liability payments made by any legally

responsible party.

[20] Contrary to Cline’s assertion, this is not what the statute requires or Lakes holds.

The statutory language “is indicative not of the legislature’s intent to provide a

set formula, but to provide maximum and minimum parameters for the amount

of damages a plaintiff is entitled to as a result of an underinsured motorist

claim.” Gardner, 589 N.E.2d at 281. Put differently, Indiana Code Section 27-

7-5-5(c) sets a ceiling on what an individual may recover; it does not prescribe

how a UIM insurer must calculate its aggregate available coverage. And an

Court of Appeals of Indiana | Opinion 25A-CT-1976 | May 28, 2026 Page 11 of 13 insurer may still limit its liability to an insured through the policy terms. See id.

at 282 (“An insurer, however, is free to limit liability to its insureds in any

manner that is not inconsistent with public policy and which does not violate

statutory mandates.”); Lakes, 964 N.E.2d at 805 (acknowledging “the per-

accident limits come into play only to limit the insurer’s liability to the

claimants”). So long as insurance policy language comports with our state

statutes, the policy language controls. Justice v. Am. Fam. Mut. Ins. Co., 4

N.E.3d 1171, 1177 (Ind. 2014). Therefore, “if by applying a [UIM insurer’s]

‘per accident’ provision, its coverage is still within the statutory parameters, the

policy does not violate the underinsured motorist statute.” Gardner, 589 N.E.2d

at 281.

[21] Here, after the $300,000 setoff for “all sums paid” by or for Pagan, the UIM

coverage available to Plaintiffs under the Everest policy is $700,000. As that

sum is more than the statutory minimum of $50,000 and does not violate the

statutory maximum on individual recovery, the policy language governs. See

Justice, 4 N.E.3d at 1176 (“[W]here an insurer crafts a policy using clear and

unambiguous language that comports with public objectives expressed in state

statute, we apply that plain language, even if the result is to limit the insurer’s

liability.”); see also Gardner, 589 N.E.2d at 281–82.

[22] Finally, Cline contends Everest’s policy renders the UIM coverage illusory,

because under no circumstances will Everest pay the full $1,000,000 limit.

“Coverage under an insurance policy is not illusory unless the policy would not

pay benefits under any reasonably expected set of circumstances.” Haag v.

Court of Appeals of Indiana | Opinion 25A-CT-1976 | May 28, 2026 Page 12 of 13 Castro, 959 N.E.2d 819, 824 (Ind. 2012) (citation omitted). Here, $700,000 in

benefits is available to Plaintiffs, so the UIM coverage under the Everest policy

is not illusory.

[23] Under the plain and ordinary language of the unambiguous UIM endorsement,

Everest is entitled to a $300,000 setoff. The maximum UIM coverage benefit

available to Plaintiffs under the Everest policy is $700,000. Accordingly, the

trial court did not err in granting judgment in Everest’s favor.

Conclusion [24] We affirm the trial court’s judgment in favor of Everest.

[25] Affirmed.

Bradford, J., and Pyle, J., concur.

ATTORNEYS FOR APPELLANT CLINE Jason A. Shartzer Shannon B. Mize Shartzer Law Firm LLC Indianapolis, Indiana

ATTORNEYS FOR APPELLEE Pamela A. Paige Plunkett Cooney, P.C. Indianapolis, Indiana Stephen P. Brown Plunkett Cooney, P.C. Bloomfield Hills, Michigan

Court of Appeals of Indiana | Opinion 25A-CT-1976 | May 28, 2026 Page 13 of 13