A collision occurred involving cars insured by State Farm. The drivers were Michael Dimitroff and Melissa Lain, and Joann Dimitroff was riding with her husband.

Dimitroff was reimbursed for the medical costs resulting from the accident, and he then filed suit against the other driver, Lain, and State Farm offered settlement, which was rejected. He then filed suit against State Farm, and its motion for summary judgment was granted, and Dimitroff appealed.

The controversy resulted when State Farm deducted from the proposed settlement the medical costs it had paid to Dimitroff.

The policy provided:

"When we pay medical expenses under this coverage, we are entitled to be paid out of any subsequent recovery for bodily injury from a liable party or such party's insurer the lesser of:

a. what we have paid, or

b. the amount by which the sum of the total recovery for bodily injury from all liable parties and what we have paid under this coverage exceeds the total amount of reasonable and necessary medical expenses the injured party incurred."

The offer was based upon a total settlement of $9,750 less $2,354.33 for medical expenses previously paid.

On appeal, the court pointed out that the policy specifically included reimbursement for any medical expenses previously paid. The court said: "By deducting the medical expenses out of the final settlement, State Farm merely acted pursuant to an express provision of Dimitroff's policy which limited State Farm's liability and prevented Dimitroff from receiving double recovery." The summary judgment entered in the trial court for State Farm was affirmed.

Michael Dimitroff et ux, Appellants, v. State Farm Mutual Automobile Insurance Company et al--No. 45A03-9405-CV-196--Court of Appeals of Indiana, Third District--February 22, 1995--647 North Eastern Reporter 2d 339.