Madison Consolidated Schools v. Thurston 2019 WL 5415842 (Ind. Ct. App. 2019)
After an accident, an injured school bus passenger’s mother was contacted by an adjuster for the school’s insurer to discuss potential resolution of the passenger’s claim. The adjuster repeatedly advised the passenger’s mother that the passenger’s claim had to be resolved before the statute of limitations expired (two years after the passenger, then a minor, turned 18). The adjuster, however, did not tell the passenger’s mother that the Tort Claims Act required the passenger to provide the school with notice of her potential claim within a certain time. I.C. § 34-13-3-8(a)(1-10). The adjuster later told the passenger’s mother that she would probably need an attorney because her claim was unlikely to be resolved before the statute of limitations expired. So, the passenger’s mother hired counsel and sued the school for the alleged negligence of its bus driver.
The school moved for summary judgment, contending that the passenger failed to comply with the Tort Claims Act, as she did not provide the school with timely notice of her potential claim. Although the passenger conceded that she did not provide the school with notice, she argued that the actions of the school’s insurer estopped the school from using that as a defense. The trial court denied the school’s summary judgment motion, and the Court of Appeals affirmed.
The Court of Appeals found that an issue of fact existed over whether the school should be estopped from asserting the non-compliance defense based upon the actions of its insurer. In doing so, the Court of Appeals cited to the designated evidence of communications from the insurer’s adjuster, recommending that the passenger’s mother wait until medical treatment was completed before seeking a settlement. While the adjuster advised the passenger’s mother that the claim had to be resolved within the statute of limitations, the Court of Appeals noted that the adjuster did not advise her about the Tort Claims Notice requirement.
The Court of Appeals also rejected the school’s contention that all of the adjuster’s communications occurred after the Tort Claims Notice deadline had passed. The school argued that even if its insurer had referred to the notice requirement in the designated communications, the passenger could not have complied with the Tort Claims Act. In rejecting the school’s argument, the Court of Appeals relied on an affidavit from the passenger’s mother, who claimed there were additional but unspecified oral communications with the adjuster, before the Tort Claims Notice deadline, advising her to wait until medical treatment was completed before starting settlement negotiations.
This case demonstrates the definite challenges that an insurer can face when attempting to adjust a claim on behalf of its insured, and how the insurer’s actions may affect the insured’s defense once litigation begins. This case also shows the Court of Appeals’ attempts to erode application of the Tort Claims Notice requirements. The Court of Appeals ignored the duty of a plaintiff to be aware of the law, including the Tort Claims Notice requirements. Insurers will have to be careful when communicating with claimants so that they do not hurt the insured’s defense down the road.