2020 IL App (1st) 191421
Ill. App. Ct.2020Background:
- On June 21, 2012, Peter Amico was injured in a car accident with an underinsured motorist; he settled with that motorist for $100,000 and recovered $143,078 in workers’ compensation benefits.
- Amico had an Allstate auto policy showing $500,000 uninsured/underinsured motorist coverage; the policy defined an "uninsured auto" to include an "underinsured motor vehicle."
- The policy contained a "damages payable"/"limits of liability" endorsement that reduced recoverable damages by amounts paid by or on behalf of the tortfeasor (including other auto insurance) and by workers’ compensation.
- In binding arbitration the arbitrator awarded Amico $306,067.72. Allstate paid $62,989.72 after subtracting the $100,000 settlement and the workers’ compensation; the parties had agreed the maximum Allstate liability (after statutory reductions) was $256,922.
- Amico sued for a declaratory judgment claiming the policy did not permit set-offs for underinsured claims and sought additional recovery; the trial court granted Allstate’s section 2-615 motion to dismiss. Amico appealed.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Allstate's policy permits reducing damages payable in an underinsured motorist claim by amounts recovered from the tortfeasor and by workers’ compensation | Amico: the damages-payable reduction applies only to "uninsured" and not to "underinsured"—the underinsured language only reduces limits, not payable damages; he is entitled to the remaining policy limit | Allstate: policy unambiguously defines underinsured as included in uninsured; the damages-payable provision therefore applies and authorizes offsets for other payments and workers’ comp; public policy bars double recovery | Court: Affirmed dismissal. The policy’s language applies the damages-payable reductions to underinsured claims; Allstate’s payment plus other recoveries matched Amico’s arbitration award, so no further recovery was due |
Key Cases Cited
- Young v. Bryco Arms, 213 Ill. 2d 433 (2004) (section 2-615 dismissal standard and pleadings viewed in plaintiff’s favor)
- Marshall v. Burger King Corp., 222 Ill. 2d 422 (2006) (dismissal proper where no set of facts entitles plaintiff to relief)
- Nicor, Inc. v. Associated Electric & Gas Insurance Services Ltd., 223 Ill. 2d 407 (2006) (insurance policies construed like contracts; give effect to parties’ intent)
- Hobbs v. Hartford Insurance Co. of the Midwest, 214 Ill. 2d 11 (2005) (primary function is to ascertain intent from policy language)
- Rich v. Principal Life Insurance Co., 226 Ill. 2d 359 (2007) (construe policy as whole and consider nature of risks)
- Sulser v. Country Mutual Insurance Co., 147 Ill. 2d 548 (1992) (purpose of underinsured motorist coverage is to place insured in same position as if tortfeasor had adequate insurance)
- Banes v. Western States Insurance Co., 247 Ill. App. 3d 480 (1993) (definition of limits of coverage for underinsured motor vehicles)
- Allstate Ins. Co. v. Gonzalez-Loya, 226 Ill. App. 3d 446 (1992) (language treating "uninsured" as including "underinsured")
- Continental Casualty Co. v. Donald T. Bertucci, Ltd., 399 Ill. App. 3d 775 (2010) (policy provisions must be read together to ascertain intent)