A single setoff clause let Everest National trim a million-dollar coverage limit to $700,000 – and Indiana's appeals court just said the wording wins.
On May 28, 2026, the Court of Appeals of Indiana ruled that Everest National Insurance Company could subtract what an at-fault driver's insurer had already paid before working out how much underinsured motorist coverage it owed. The court affirmed the trial court, and the whole case turned on a single line of policy wording.
The setup is straightforward. On May 19, 2023, Michael Cline and Jacob Sofronko, both employees of Ohio Valley Gas Corporation, were riding in a company dump truck when it collided with a commercial cargo van in Jay County. The van's driver, Roberto Rosa Pagan, had failed to stop at a stop sign. Both workers were ejected from the truck and seriously hurt. Pagan died.
Pagan carried a Shelter General Insurance Company policy with a $300,000 bodily injury limit. Cline and Sofronko each got $150,000 of it, not enough to cover their losses. So they turned to their employer's Everest commercial auto policy, which carried a UIM limit of $1,000,000 per accident and no separate per-person cap.
That is where the dispute began. The workers wanted the full $1,000,000. Everest pointed to its endorsement, which lets it cut the limit by all sums paid or payable by or for anyone legally responsible. Pagan was responsible, his insurer paid $300,000, and Everest subtracted it, leaving $700,000.
Everest had already paid that $700,000 under a partial release. The appeal came down to whether it owed another $300,000.
Cline leaned on an Indiana Supreme Court decision, Lakes v. Grange Mutual Casualty Company, arguing the setoff should be figured per claimant rather than against the total limit. The court disagreed, drawing a line that matters for every UIM file: the statute caps what an individual can collect, but it does not tell an insurer how to calculate the coverage it makes available. As long as the wording stays within the statutory limits, the policy controls.
The numbers fit. Assuming Cline's damages alone topped $1,000,000, the most he could recover was $850,000 – the $1,000,000 limit minus his $150,000 from Shelter. With $700,000 sitting below that cap and far above Indiana's $50,000 statutory minimum, the setoff stood.
Cline's last argument was that the coverage was hollow, since Everest would never pay the full limit.
The court rejected it. Coverage fails that test only when a policy would pay nothing under any reasonably expected set of circumstances. Everest paid $700,000, so the coverage was real.
For insurers and claims teams, the lesson is plain. A clearly drafted setoff clause holds up, even when it trims a seven-figure limit, as long as the remaining coverage clears the statutory floor and stays under the individual recovery cap. The wording is the whole game.
