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Thursday, May 18, 2006

Ind. Decisions - Supreme Court posts a second ruling today

In Northern Indiana Public Service Company v. John S. Bloom, a 17-page opinion (with Justice Dickson's concurring opinion beginning on p. 16), Justice Boehm writes:

We hold that self-insurers are statutorily liable to pay damages caused by the negligence of permissive users of their vehicles up to the minimum amounts required by the Financial Responsibility Act. We further hold that a self-insured employer who furnishes its vehicle for use by an employee has a duty to inform its employee of the limits of the employer’s statutory obligation to third parties and the employee’s potential exposure for negligent operation of the vehicle. We conclude that failure to perform this duty imposes an obligation to indemnify and defend the employee against liability arising out of the employee’s permissive use of the employer’s vehicle, and precludes the employer from asserting indemnity or subrogation rights against the employee. * * *

Conclusion. The order of the trial court that is the subject of this interlocutory appeal is vacated. This case is remanded for further proceedings consistent with this opinion.

Shepard, C.J., Sullivan and Rucker, J.J. concur.
Dickson, Justice, concurring.

I agree with the Court's conclusion that the present language of the Indiana Financial Re-sponsibility Act does not "make a self-insurer a quasi-insurance carrier and require it to indemnify a permissive user," slip opin. at 9, and that permissive users are not the "insureds" of self-insurers, slip opin. at 12. As a result of today's opinion, it is reasonable to anticipate that self-insured employers providing vehicles for use by an employee or an employee's designee will likely issue advisements including warnings of the minimum coverage limits provided by self-insured employers and the risks of a permissive user's personal liability to indemnify or reimburse any liability payments made by the self-insurer to persons injured by the negligence of the permissive user. Thus understood and applied, however, the statute may present substantial issues that invite legislative attention, or, if none, common law response.

Posted by Marcia Oddi on May 18, 2006 02:24 PM
Posted to Ind. Sup.Ct. Decisions