State Farm Mutual Automobile Insurance Company v. Brian D. Pate

In the
United States Court of Appeals
For the Seventh Circuit
No. 01-2108
STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY,
Plaintiff-Appellee,
v.
BRIAN D. PATE and JENNIFER PATE,
Individually and on Behalf of
the Minors, DANIELLE PATE and
ANDREW PATE,
Defendants-Appellants.
Appeal from the United States District Court
for the Southern District of Indiana, Indianapolis Division.
No. 97 C 753--David F. Hamilton, Judge.
ARGUED NOVEMBER 8, 2001--DECIDED December 31, 2001
Before BAUER, RIPPLE and WILLIAMS, Circuit
Judges.
RIPPLE, Circuit Judge. Brian D. Pate and
Jennifer Pate, on behalf of themselves
and their minor children (collectively
"the Pates"), appeal the decision of the
United States District Court for the
Southern District of Indiana that held
that they could not recover under the
uninsured motorist provision in the
automobile insurance policy issued to
them by State Farm Mutual Automobile
Insurance Company ("State Farm"). The
Pates were injured in an accident caused
by an unidentified vehicle that left the
scene and did not strike the Pates’ car.
In such circumstances, their insurance
policy limits recovery to situations in
which there is an impact between the
unidentified vehicle and their vehicle.
In granting summary judgment to State
Farm, the district court held that, under
the law of Indiana, as manifested in a
series of decisions of the Court of
Appeals of Indiana, this policy provision
was enforceable. We believe that the
district court correctly relied upon the
decisions of the state appellate court;
therefore, we affirm the judgment of the
district court.

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I
BACKGROUND
The Pates, domiciliaries of Indiana,
were injured in an automobile accident
while traveling in Dixie County, Florida.
Another vehicle, whose driver did not
observe a stop sign, drove into the
Pates’ right of way. Mr. Pate swerved to
the left to avoid the vehicle. Although
he was successful in this regard, the
maneuver caused him to strike another
vehicle. As a result, all of the Pates
suffered injuries. The vehicle that
caused Mr. Pate to swerve left the scene
and has never been identified.
The Pates brought an action in the
United States District Court for the
Northern District of Florida against
William Bruton, the driver of the other
vehicle in the collision and State Farm,
their insurance company. Bruton later was
dismissed from that action because he was
uninsured. State Farm maintained that the
accident was caused by the driver of the
unidentified vehicle who had failed to
stop at the stop sign and then left the
scene. The jury, in response to specific
interrogatories, concluded that the
unidentified "miss-and-run" driver was in
fact the cause of the accident.
State Farm then brought this action for
declaratory judgment in the Southern
District of Indiana. It sought a judgment
that the "impact clause" in the Pates’
automobile insurance policy was valid
under Indiana law. The impact clause
requires that the unidentified motorist
must make physical contact with their car
in order for the Pates to be paid under
their uninsured motorist policy./1 The
district court granted summary judgment
to State Farm, concluding that, if the
issue had been presented to the Supreme
Court of Indiana, that court likely would
have taken the same view as had the Court
of Appeals of Indiana in a series of
decisions.
II
DISCUSSION
A.
In fulfilling the mandate of Erie

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Railroad v. Tompkins, 304 U.S. 64 (1938),
a United States district court sitting in
diversity, see 28 U.S.C. sec. 1332, must
apply the law of the state as it believes
the highest court of the state would
apply it if the issue were presently
before that tribunal. See Erie, 304 U.S.
at 80; see also Wichita Royalty Co. v.
City Nat’l Bank, 306 U.S. 103, 107
(1938); Lexington Ins. Co. v. Rugg &
Knopp, Inc., 165 F.3d 1087, 1090 (7th
Cir. 1999). When the state Supreme Court
has not decided the issue, the rulings of
the state intermediate appellate courts
must be accorded great weight, unless
there are persuasive indications that the
state’s highest court would decide the
case differently. See Lexington, 165 F.3d
at 1090; Allen v. Transamerica Ins. Co.,
128 F.3d 462, 466 (7th Cir. 1997). "Where
an intermediate appellate state court
rests its considered judgment upon the
rule of which it announces, that is a
datum for ascertaining state law which is
not to be disregarded by a federal court
unless it is convinced by other
persuasive data that the highest court of
the state would decide otherwise." West
v. Am. Tel. & Tel. Co., 311 U.S. 223, 237
(1940).
In assessing these contentions, we
therefore first must turn to the
decisions of the Court of Appeals of
Indiana. On three occasions, that court
has upheld the validity of impact
clauses. See Rice v. Meridian Ins. Co.,
751 N.E.2d 685, 689-70 (Ind. Ct. App.
2001) trans. denied Nov. 14, 2001;
Indiana Ins. Co. v. Allis, 628 N.E.2d
1251, 1255-56 (Ind. Ct. App. 1994) trans.
denied Jul. 20, 1994; Ely v. State Farm
Mut. Auto. Ins. Co., 268 N.E.2d 316, 320
(Ind. Ct. App. 1971). The Pates argue
that the Indiana Supreme Court would not
follow these decisions.
1.
We begin by examining the development of
the Indiana case law. In Ely, the court
held that the "policy requirement of
’physical contact’ is not unreasonable
and does not unduly restrict the
[uninsured motorist] statute." Ely, 268
N.E.2d at 319. The impact clause
"attempts to prevent fraudulent claims by
requiring of the claimant tangible proof
of collision with the vehicle of the
uninsured motorist. Thus, its function is

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to define the risk underwritten by the
insurers in the state." Id. "It would be
within the province and authority of [the
Commissioner of Insurance] to reject
policy provisions which require physical
contact as a condition of recovery. He
has not seen fit do so." Id. at 320.
Therefore, concluded the court, the
question was one of contract
interpretation and the insurance
contract, like the Pates’ policy, did not
provide for miss-and-run coverage. See
id.
In Allis, the court followed the
reasoning of Ely and expanded upon it.
The court, aware of the broadening of the
statute since Ely, found that the
"legislature’s clear and unambiguous
definition of ’uninsured motorist’
demonstrates that the Act’s purpose is to
mandate basic coverage for vehicles
registered or garaged in Indiana." Allis,
628 N.E.2d at 1253 (emphasis in
original). "Any additional or greater
coverage is a matter of contract--which
contemplates coverage in exchange for a
premium." Id. The court found the
definition of an uninsured motor vehicle
to be clear and unambiguous, which
"prevented [the court] from making an
expansive interpretation of this term."
Id. at 1254. Finally, the court presumed
that the legislature, when revising the
statute, "was aware of our court’s
interpretation of the original Act, and
did not intend to make any changes beyond
what it declared either in express terms
or by unmistakable implication." Id. at
1255. "Although the legislature expanded
the types of damages that would be
compensated under the Act (bodily injury
and property damage), and broadened
coverage to include underinsured as well
as uninsured motorists, it did not
include ’hit and run’ or ’miss and run’
drivers in its definition of an uninsured
motorist." Id. at 1255./2
Most recently, the court in Rice
reaffirmed the holdings of Ely and Allis.
See Rice, 751 N.E.2d at 689-90./3 The
court found that, although "hits" was an
ambiguous term and ought to be construed
to include both direct and indirect
contact, it was unambiguous about the
need for some actual contact. See id. at
688-89. The court then emphasized that
"Ind. Code sec. 27-7-5-2 [the Indiana
Uninsured Motorist Act] does not require

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insurance policies to cover any hit-and-
run accidents, so any coverage they do
provide extends beyond the requirements
of the Act." Id. at 690. Finally, the
court noted that "[s]even years have
passed since our decision in Allis, and
if the legislature wanted miss-and-run
motorists to be included in the Act as a
type of uninsured motorist for whom
insurers must provide coverage, the
legislature could have amended the Act to
provide for such coverage." Id. In short,
Indiana law does not require miss-and-run
coverage in an automobile insurance
policy. If an insurer elects to provide
such coverage, it is free to limit that
coverage to contractually stated
conditions.
2.
We also must conclude that the Pates
cannot rely on the decision of the
Supreme Court of Indiana in United
National Insurance Company v. DePrizio,
705 N.E.2d 455 (Ind. 1999), to suggest
that the Supreme Court of Indiana would
embark on a course different from the one
already set by the Court of Appeals.
DePrizio was a response to a certified
question from the Northern District of
Indiana. See DePrizio, 705 N.E. 2d at 456
n.1. The question presented was: "Is an
umbrella liability policy that does not
provide for uninsured/underinsured
motorist coverage by its own terms an
’automobile liability policy or motor
vehicle liability policy’ within the
meaning of Indiana Code sec. 27-7-5-
2(A)?" Id. The court, interpreting the
meaning of "automobile liability or motor
vehicle liability polic[ies] of
insurance," Ind. Code sec. 27-7-5-2(a),
held that there was no limitation on the
meaning of the term and that the umbrella
policy fell within the statute’s ambit.
See id. at 461-63.
The court traced the expansion of the
uninsured motorist statute, noting its
increased liberalization over the years.
See id. at 460-62. The Pates point to
this analysis as evidence that the court
would find coverage mandated in this
case. We do not believe that DePrizio can
be read in this manner. DePrizio simply
interpreted the uninsured motorist
statute to cover umbrella policies on the
ground that such coverage was mandated by
the language of the Indiana statute. See

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id. at 463. In reaching this conclusion,
the Supreme Court of Indiana noted that
the "law has moved from imposing limits
on such coverage to allowing full
recovery." Id. at 461. By contrast, the
Pates ask us to predict that the Supreme
Court of Indiana would expand the statute
beyond its terms.
3.
The Pates also invite our attention to
the practice of other states; they point
out that 30 of 44 states impose some
restriction on the enforcement of impact
clauses. Fourteen states enforce them in
their entirety; seventeen reject them;
thirteen others have a modified,
independent corroboration rule which
mandates coverage when a third party can
verify the existence of the phantom
vehicle. It is not our place to decide
which of these perspectives Indiana ought
to choose. Its intermediate appellate
court has held three times that the plain
language of the statute does not mandate
the coverage of hit-and-run drivers.
Although there may be persuasive policy
reasons for the adoption of the Pates’
position, we have no reason to believe
that the Supreme Court of Indiana would
take a view different from that of the
Court of Appeals of Indiana./4
B.
The Pates also ask that we certify to
the Supreme Court of Indiana the question
of whether the exclusion of miss-and-run
coverage is permitted under the uninsured
motorist statute. Certification is a
useful tool of cooperative federalism. It
permits a federal court to seek a
definitive ruling from the highest court
of a state on the meaning of state law.
See City of Houston v. Hill, 482 U.S.
451, 470 (1987). However, use of the
procedure is not without costs to the
litigants and to the state court which
already must contend with a crowded
docket of its own. Therefore, a respect
for the burdens of our colleagues on the
state bench and concern for the litigants
before us counsel that we approach the
decision to certify with circumspection.
Consequently, federal courts consider
several factors when deciding whether to
certify a question to a state supreme
court. "The most important consideration
guiding the exercise of this discretion .

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. . is whether the reviewing court finds
itself genuinely uncertain about a
question of state law that is vital to a
correct disposition of the case." Tidler
v. Eli Lilly & Co., 851 F.2d 418, 426
(D.C. Cir. 1988). "Federal courts have
denied requests for certification when
the status of state law on the particular
point was not in sufficient doubt to
justify use of the procedure." Wright,
Miller & Cooper, Federal Practice &
Procedure: Jurisdiction 2d, sec. 4507, at
1777. At some level there is uncertainty
in every application of state law. There
is always a chance that a state supreme
court, if it had the same case before it,
might decide the case differently. This
ever-present possibility is not
sufficient to warrant certification.
In applying our Circuit Rule 52,/5 we
have said that "certification is
appropriate when the case concerns a
matter of vital public concern, where the
issue will likely recur in other cases,
where resolution of the question to be
certified is outcome determinative of the
case, and where the state supreme court
has yet to have an opportunity to
illuminate a clear path on the issue." In
re Badger Lines, Inc., 140 F.3d 691, 698-
99 (7th Cir. 1998); see also Doe v. Am.
Nat’l Red Cross, 976 F.2d 372, 374-75
(7th Cir. 1992). We also consider whether
the issue is of interest to the state
supreme court in its development of state
law, see Stephan v. Rocky Mountain
Chocolate Co., 129 F.3d 414, 418 (7th
Cir. 1997); see also Nagy v. Riblet Prod.
Corp., 79 F.3d 572, 577 (7th Cir. 1996)
("Recognizing the nationwide application
of Delaware corporate law, and the
benefits of making that law more certain,
we think the best way to resolve this
debate is to ask the Supreme Court of
Delaware."), and the interest of future
litigants in the clarification of state
law, see Hanlon v. Town of Milton, 186
F.3d 831, 835 (7th Cir. 1999).
Certification to a state supreme court is
more likely when the result of the
decision will almost exclusively impact
citizens of that state, see Brownsburg
Area Patrons Affecting Change v. Baldwin,
137 F.3d 503, 509 (7th Cir. 1998), or
when there is a conflict between
intermediate courts of appeal, see Todd
v. Societe BIC, 9 F.3d 1216, 1221-22 (7th
Cir. 1993) (en banc); DeGrand v. Motors
Ins. Co., 903 F.2d 1100, 1104 (7th Cir.

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1990), or if it is an issue of first
impression, see Woodbridge Place
Apartments v. Washington Square Corp.,
965 F.2d 1429, 1434 (7th Cir. 1992).
These factors insure that federal courts
will not overburden state courts with
requests for certification when what is
required is not the promulgation of new
law but rather, the exercise of a court’s
judgment.
On the other hand, we have held that
"[f]act specific, particularized
decisions that lack broad, general
significance are not suitable for
certification to a state’s highest
court." Woodbridge, 965 F.2d at 1434.
Further, if there is no room for "serious
doubt" about how a state’s highest court
would resolve a question, certification
is not appropriate. See Patz v. St. Paul
Fire & Marine Ins. Co., 15 F.3d 699, 705
(7th Cir. 1994). Of course, if a question
may not be dispositive to a case, then it
is a weak candidate for certification.
See LTV Steel Co., Inc. v. Northwest
Eng’g & Constr., Inc., 41 F.3d 332, 338
(7th Cir. 1994)./6
Many cases fall between these two
extremes and, with respect to them, the
guideposts are necessarily less categori
cal. We have noted that, even if there is
no clear guidance from a state court, and
a case technically meets the standards
for certification, certification is
neither mandated nor always necessary.
See In re Makula, 172 F.3d 493, 496-97
(7th Cir. 1999) ("[T]here are a number of
Illinois appellate court decisions on
which we can rely to decide this case.
The fact that we may need to probe below
the surface of some of them in order to
tease out a consistent rule is hardly
reason enough on its own to burden the
Illinois Supreme Court with this
issue."). Notably, we have said that if
there is no disagreement between the
intermediate appellate courts and the
issue is likely to recur frequently in
state courts, giving the state supreme
court "ample opportunity to revisit the
subject," certification is unnecessary.
Schmitt v. Am. Family Mut. Ins. Co., 161
F.3d 1115, 1117 (7th Cir. 1998).
Under these circumstances, we do not
believe that certification is indicated
in the present case. The law in Indiana
is neither indefinite nor unclear. The

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Supreme Court of Indiana has had the
opportunity to address the question and
has not done so./7 Although the Indiana
legislature has visited the statute on
several occasions, it has not attempted
to amend the statute to alter the view of
the Court of Appeals of Indiana. See Rice
v. Meridian Ins. Co., 751 N.E.2d 685,
689-90 (Ind. Ct. App. 2001) trans. denied
Nov. 14, 2001. Moreover, that court has
addressed the issue on several occasions
and has consistently taken the same
position on this issue. We are not
uncertain about the content of Indiana
law on the issue. We therefore deny the
motion for certification.
Conclusion
Accordingly, the judgment of the
district court is affirmed. The motion
for certification is denied.
AFFIRMED
MOTION FOR CERTIFICATION DENIED
FOOTNOTES
/1 Coverage U, in the State Farm policy issued to
Mr. Pate reads:
We will pay damages for bodily injury an in-
sured is legally entitled to collect from the
owner or driver of an uninsured motor vehicle.
The bodily injury must be caused by accident
arising out of the operation, maintenance or use
of an uninsured motor vehicle.
R.1, Ex.A.
The policy defines "uninsured motor vehicle," in
pertinent part as: "a ’hit-and-run’ land motor
vehicle whose owner or driver remains unknown and
which strikes: a. the insured or b. the vehicle
the insured is occupying and causes bodily injury
to the insured." Id.
/2 The court also surveyed other states’ laws and
found that states with uninsured motorist acts
similar to Indiana’s have not interpreted them to
include hit-and-run vehicles within the defini-
tion of uninsured motor vehicles. Id. at 1254 n.2
(citing Hammon v. Farmer’s Ins. Co., 707 P.2d
397, 399 (Idaho 1985) and Balistrieri v. Hartford
Accident & Indem. Ins. Co., 540 P.2d 126, 129
(Ariz. 1975) overruled by Lowing v. Allstate Ins.
Co., 859 P.2d 724 (Ariz. 1993)).
/3 The court also distinguished the line of "indi-

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rect physical contact" cases, which Pate raises
as evidence that the Supreme Court of Indiana
might rule differently from the Court of Appeals.
These cases permit an insured to recover where a
hit-and-run driver makes contact with another
object, which is then propelled into the in-
sured’s automobile. See Allied Fid. Ins. Co. v.
Lamb, 361 N.E.2d 174, 178-79 (Ind. Ct. App.
1977). The rule applies where "(1) the possibili-
ties of fraud appear to be slight and, (2) a
causal connection between the hit-and-run automo-
bile and the intermediate object exists." Id. at
178. These cases hinge on the ambiguity of the
term "physical contact" in the insurance con-
tracts and not on any requirement of the unin-
sured motorist statute. See Ackles v. Hartford
Underwriters Ins. Corp., 699 N.E.2d 740, 745-46
(Ind. Ct. App. 1998).
/4 The Pates also point to an Indiana trial court
decision in support of their position that the
Supreme Court of Indiana would disagree with the
rulings of the Court of Appeals. See Progressive
N. Ins. Co. v. Davis, Cause # 84D02-9609-CP-1487
(Vigo Super. Ct. 1998). In light of the appellate
court decisions, we cannot give that decision
significant weight.
/5 Circuit Rule 52 reads:
(a) When the rules of the highest court of
state provide for certification to that court by
a federal court of questions arising under the
laws of that state which will control the outcome
of a case pending in the federal court, this
court, sua sponte or on motion of a party, may
certify such a question to the state court in
accordance with the rules of that court, and may
stay the case in this court to await the state
court’s decision of the question certified. The
certification will be made after the briefs are
filed in this court. A motion for certification
shall be included in the moving party’s brief.
(b) If the state court decides the certified
issue, then within 21 days after the issuance of
its opinion the parties must file in this court
a statement of their positions about what action
this court should take to complete the resolution
of this appeal.
/6 Indeed, the states within the Seventh Circuit
require that a certified question be determina-
tive of the result in the pending federal case.
In Indiana, the question may come from the Su-
preme Court of the United States, any federal
court of appeals, or any federal district court
"when it appears to the federal court that a
proceeding presents an issue of state law which
is determinative of the case and on which there

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is no clear controlling Indiana precedent." Ind.
R. App. Pr. 64. Illinois has a similar rule but
will receive certified questions only from this
court and the Supreme Court. Ill. S. Ct. Rule 20.
Wisconsin will accept "questions of law of this
state which may be determinative of the cause
then pending" from the Supreme Court, any federal
court of appeals and any state supreme court.
Wis. Stat. ch. 821.01.
/7 Petitions for transfer were denied in Rice and
Allis.

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