Country Preferred Insurance Company v. Groen
69 N.E.3d 911
Ill. App. Ct.2017Background
- Lori Groen was struck by an uninsured vehicle while acting in the scope of her employment and received workers’ compensation benefits (including $410,266.63 in medical payments and weekly disability benefits).
- Groen also sought uninsured motorist (UM) benefits under a policy with $250,000 per-person limits issued by Country Preferred Insurance Co.
- The UM policy contained a setoff clause: amounts payable under UM coverage "will be reduced by the present value of all amounts paid or payable under any workers’ compensation, disability benefits or any similar law."
- Country Preferred sued for declaratory judgment and moved for summary judgment, arguing Groen’s workers’ compensation recoveries exhausted the UM limits.
- The trial court granted summary judgment for Country Preferred, finding the setoff provision enforceable, unambiguous, and not against public policy; Groen appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are employer-paid medical expenses under the Illinois Workers’ Compensation Act "amounts paid or payable" subject to the UM policy setoff? | Such payments are amounts paid or payable under the Act and thus reduce UM recovery. | Employer-paid medical bills are paid to providers for the employer’s benefit and therefore not "for" the insured, so not subject to setoff. | Held: Payments made or due under the Act benefit the employee and are subject to setoff. |
| Is the setoff clause ambiguous because it lacks "to or for the insured" language used elsewhere? | The clause unambiguously reduces UM by amounts paid or payable under the Act; specific phrasing is unnecessary. | Omission of "to or for the insured" creates ambiguity; drafters used that phrase elsewhere intentionally. | Held: Clause is unambiguous; payments under the Act are covered regardless of phrasing. |
| Does the setoff provision violate the Workers’ Compensation Act or public policy (by nullifying 820 ILCS 305/5(b))? | The clause is a valid contractual allocation; setoffs are routinely enforced and the Act itself requires reimbursement to the employer from third-party recoveries. | The setoff nullifies the Act’s "notwithstanding" language and defeats the statute’s purpose to allow recovery from third parties. | Held: Clause does not violate the Act or public policy; setoffs are consistent with precedent and the Act’s reimbursement scheme. |
| Should appellant’s brief be struck for Rule 341 noncompliance? | Country Preferred argued the brief lacked relevant authority as required by Rule 341. | Groen did not meaningfully respond to that specific contention on this point. | Held: Court noted deficiencies but declined to strike the brief; proceeded to decide the merits. |
Key Cases Cited
- Cassens Transport Co. v. Illinois Industrial Comm’n, 218 Ill. 2d 519 (2006) (describing the Act’s purpose to provide prompt, equitable compensation for work injuries)
- Crum & Forster Managers Corp. v. Resolution Trust Corp., 156 Ill. 2d 384 (1993) (policy interpretation and coverage are questions of law suitable for summary judgment)
- Founders Insurance Co. v. Munoz, 237 Ill. 2d 424 (2010) (ambiguity in policy language is resolved in favor of coverage; no ambiguity, apply as written)
- Hobbs v. Hartford Insurance Co. of the Midwest, 214 Ill. 2d 11 (2005) (unambiguous policy language governs unless contra public policy)
- Ullman v. Wolverine Insurance Co., 48 Ill. 2d 1 (1970) (setoff provisions are enforceable; they place employee in same position as if tortfeasor minimally insured)
- Stryker v. State Farm Mutual Insurance Co., 74 Ill. 2d 507 (1978) (recognizing enforceability of setoff clauses)
- Sulser v. Country Mutual Insurance Co., 147 Ill. 2d 548 (1992) (parties may contract freely unless contrary to public policy; upheld similar setoff language)