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FMG attorneys prevail in Court of Appeals of Indiana on whether person with international license is subject to license exclusion in auto policy

7/8/24

By: Donald Patrick Eckler and Shari S. Shelmadine

Patrick Eckler and Shari Shelmadine, of FMG’s Chicago office, prevailed on a matter of first impression in the Court of Appeals of Indiana, arguing that an exclusion in their client’s policy voided coverage for a driver with a valid international drivers’ license, driving in violation of Indiana law.

Anita Agboalu, an undocumented immigrant from Nigeria, moved to Indiana with her parents in 2016. On November 16, 2020, she was driving a vehicle owned by her grandmother and insured by First Chicago Insurance Company when she was involved in a motor vehicle accident with Ron Jones in Indiana. Jones was injured and sought to recover damages from First Chicago. First Chicago denied coverage because Agboalu did not have an Indiana driver’s license. Agboalu had a valid Nigerian license at the time of the accident.   

Jones filed suit against Agboalu for personal injuries and against First Chicago seeking a declaratory judgment. First Chicago moved for summary judgment, arguing that liability exclusion (z) precluded coverage. Exclusion (z) bars coverage for bodily injury or property damage arising out of the use of the insured vehicle by any person, including an insured person, who is not a “properly licensed driver.” First Chicago cited to Indiana Code section 9-24-1-7(a)(4), which provides that a new Indiana resident has 60 days after becoming an Indiana resident to obtain an Indiana driver’s license. Because Agboalu had been a resident of Indiana since 2016, First Chicago argued that her Nigerian driver’s license did not make her a “properly licensed driver” in Indiana, where the accident happened.

Jones filed a cross motion for summary judgment, arguing that Agboalu’s Nigerian driver’s license conferred upon her the status of “properly licensed driver” and that Indiana Code section 9-24-1-7(a)(4) did not apply to Agboalu. The trial court agreed with Jones and granted his motion for summary judgment and denied First Chicago’s motion. 

The Appellate Court reversed and remanded with instructions for the trial court to grant summary judgment to First Chicago, holding that the Indiana Code does apply to Agboalu, that her Nigerian driver’s license was ineffective for her to drive in Indiana, and that the trial court erred in granting summary judgment in favor of Jones. The Appellate Court held that “properly licensed driver” is unambiguous, and that Agboalu was required to obtain an Indiana license within sixty days of establishing her residence in order to be “properly licensed” under Indiana law and under the First Chicago Policy.   

The decision was initially unpublished, but the court has now published the decision, making it binding on lower courts in Indiana. 

For more information on this topic, please contact Donald Patrick Eckler at patrick.eckler@fmglaw.com, Shari S. Shelmadine at shari.shelmadine@fmglaw.com, or your local FMG relationship partner.