Tate v. Secura Insurance

Thomas Tate (plaintiff) promptly notified his automobile insurer, Secura Insurance (Secura) (defendant), that he had been seriously injured in a car accident. Tate notified Secura that he intended to settle within the limits of the tortfeasor’s minimal insurance and then submit a claim under his own policy’s underinsured-motorist coverage. Over the next four months, Tate remained in frequent contact with Secura, kept Secura posted as to his settlement negotiations with the tortfeasor, and notified Secura when a settlement agreement was reached. Secura never voiced any objection to Tate’s settlement negotiations. Moreover, Secura never asserted the policy clause obligating Tate to obtain Secura’s written consent to any settlement agreement. Nor did Secura ever assert the policy clause subrogating Secura to Tate’s claims against third parties. Nevertheless, shortly after Tate signed the settlement agreement and released his claim against the tortfeasor, Secura denied Tate’s claim for underinsured-motorist coverage. Secura’s denial letter made no mention of its policy’s settlement-consent and subrogation clauses. Only after Tate sued for indemnification did Secura claim that Tate’s release of his claim against the tortfeasor without Secura’s consent destroyed Secura’s subrogation rights against the tortfeasor and breached Tate’s policy contract. The trial court’s summary judgment for Secura was affirmed by an intermediate court on appeal. Tate appealed to the Indiana Supreme Court.