Thounsavath v. State Farm Mutual Automobile Insurance Co.
104 N.E.3d 1239
Ill.2018Background
- Phoungeun Thounsavath (plaintiff) held two State Farm auto policies (100/300) that included uninsured/underinsured motorist (UIM) coverage and a signed named-driver exclusion listing Clinton M. Evans.
- On June 17, 2012, plaintiff was injured as a passenger in a vehicle owned and driven by Evans; Evans’s insurer paid its $20,000 limit but plaintiff’s damages exceeded that amount.
- Plaintiff sought UIM benefits under her State Farm policies; State Farm denied coverage based on the driver-exclusion endorsement excluding Evans.
- Both parties filed declaratory-judgment actions; the trial court granted summary judgment to plaintiff; the appellate court affirmed; State Farm appealed to the Illinois Supreme Court.
- Central legal question: whether a named-driver exclusion that bars UIM coverage to the named insured (here, plaintiff) violates the Insurance Code (215 ILCS 5/143a-2) and Illinois public policy when the insured purchased UIM limits above statutory minimums.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a named-driver exclusion can bar the named insured from recovering UIM benefits under her own policy | Exclusion is invalid because section 143a-2 mandatorily requires UIM coverage to extend to persons insured under the liability provisions; plaintiff is a named insured entitled to UIM benefits | Exclusion is enforceable; parties contracted to exclude Evans, plaintiff knowingly signed the endorsement, and named-driver exclusions are permitted in Illinois | Exclusion unenforceable as to the named insured: applying it to bar plaintiff from statutorily mandated UIM coverage violates section 143a-2 and public policy |
| Whether insurer can contractually avoid statutorily mandated UIM coverage by private agreement | Statutory UIM/underinsured protections are mandatory and cannot be circumvented by policy language | Insurer may define insureds and contractually limit coverage by exclusions signed by insured | Statutory mandates prevail; insurer cannot use contract language to deny statutorily required UIM coverage to a named insured |
| Whether prior cases permitting named-driver exclusions control when the excluded driver is the tortfeasor and the named insured seeks UIM recovery | Emphasize distinction: earlier cases barred recovery by excluded drivers or involved different facts; here the named insured (not the excluded driver) seeks UIM benefits | Relies on precedents allowing exclusions and on cases where insured sought coverage but exclusion was enforced | Court distinguishes precedents (Phelan, Rockford Mutual, Villicana, Fuoss) and finds them inapplicable; mandates enforcement of statutory UIM coverage for the named insured |
| Whether plaintiff had adequate control over Evans such that exclusion is reasonable | Plaintiff lacked control over Evans’s liability limits and should be able to rely on her own purchased UIM protection when injured as a passenger | Insured could avoid risk by choosing not to ride with Evans or by negotiating policy terms | Court rejects control argument: statute protects insureds without forcing them to police other drivers’ coverage levels |
Key Cases Cited
- Schultz v. Illinois Farmers Ins. Co., 237 Ill. 2d 391 (clarifies that uninsured/underinsured coverages must extend to those insured under liability provisions)
- State Farm Mut. Auto. Ins. Co. v. Villicana, 181 Ill. 2d 436 (discusses enforceability of family-car exclusion and insured's control over coverage choices)
- Squire v. Economy Fire & Casualty Co., 69 Ill. 2d 167 (establishes mandatory nature of uninsured motorist coverage)
- Phoenix Ins. Co. v. Rosen, 242 Ill. 2d 48 (addresses purpose of uninsured/underinsured statutes to place insureds in position as if tortfeasor carried adequate coverage)
- Fuoss v. Auto Owners (Mut.) Ins. Co., 118 Ill. 2d 430 (limits on post-loss reformation and electing higher UIM after the fact)
- Heritage Ins. Co. of Am. v. Phelan, 59 Ill. 2d 389 (distinguishes cases where excluded driver—not named insured—sought uninsured motorist benefits)
- Rockford Mut. Ins. Co. v. Economy Fire & Casualty Co., 217 Ill. App. 3d 181 (passenger-case discussing recovery under passenger’s own uninsured motorist coverage)