HATEM ALSHWAIYAT, Plaintiff-Appellee, v. AMERICAN SERVICE INSURANCE COMPANY, an Illinois Corporation, Defendant-Appellant (Mojo Enterprises, an Illinois Corporation, Defendant).
No. 1-12-3222
Appellate Court of Illinois, First District, First Division
February 19, 2013
March 18, 2013
2013 IL App (1st) 123222
(Note: This syllabus constitutes no part of the opinion of the court but has been prepared by the Reporter of Decisions for the convenience of the reader.)
Decision Under Review
Appeal from the Circuit Court of Cook County, No. 10-CH-30870; the Hon. Sophia H. Hall, Judge, presiding.
Judgment
Reversed; judgment entered.
Sanchez Daniels & Hoffman, LLP, of Chicago (John J. Piegore and Edric S. Bautista, of counsel), for appellant.
Brustin & Lundblad, Ltd., of Chicago (Michael A. Shammas, of counsel), for appellee.
Panel
JUSTICE ROCHFORD delivered the judgment of the court, with opinion.
Justices Cunningham and Delort concurred in the judgment and opinion.
OPINION
¶ 1 In this action for declaratory judgment, plaintiff-appellee, Hatem Alshwaiyat, sought a determination that a policy of automobile insurance issued to plaintiff‘s employer by defendant-appellant, American Service Insurance Company (ASI), provided $500,000 in underinsured motorist coverage for an automobile accident involving both plaintiff and his deceased wife. ASI has appealed from an order entering summary judgment in favor of plaintiff. For the reasons that follow, we reverse.
¶ 2 I. BACKGROUND
¶ 3 On July 11, 2011, plaintiff filed a complaint for declaratory judgment, naming both ASI and plaintiff‘s employer, Mojo Enterprises (Mojo), as defendants. In that complaint, plaintiff alleged that on June 17, 2008, he was employed by Mojo as a taxi driver when the automobile he was driving was struck by a vehicle operated by Mr. Robert Pas. As a result of this accident, plaintiff suffered significant physical injuries and his wife, a passenger in the taxi, suffered injuries that resulted in her death. Claims against Mr. Robert Pas for plaintiff‘s injuries and his wife‘s wrongful death were ultimately settled for $100,000 each, the liability limits of the insurance policy held by Mr. Pas.
¶ 4 Plaintiff‘s complaint further alleged that both plaintiff and Mojo were insured under a policy of automobile insurance issued by ASI to Mojo, effective January 1, 2008, through January 1, 2009. That insurance policy was alleged to include $500,000 in liability coverage for bodily injury and property damage. It was further alleged that, due to the fact that uninsured motorist (UM) and underinsured motorist (UIM) coverage in an amount equal to that amount was never rejected by Mojo, “the policy must be construed to provide for $500,000.00 [in] underinsured motorist coverage.” Moreover, because ASI had indicated its belief that the insurance policy issued to Mojo did not provide any UIM coverage for the accident, plaintiff‘s complaint asked the circuit court to make a declaration of the rights of the “interested parties” with respect to the ASI policy and reform that policy to “include underinsured motorist coverage in an amount equal to the bodily injury limit [of] $500,000.00.”
¶ 6 ASI filed an answer and affirmative defenses to plaintiff‘s complaint. Among ASI‘s defenses was an assertion that in Mojo‘s initial application for insurance, Mojo “specifically requested limits of $20,000/$40,000 for uninsured/underinsured motorist coverage, and rejected higher limits for that coverage.” Thereafter, ASI took plaintiff‘s deposition and filed a motion for summary judgment. In turn, plaintiff filed a cross-motion for summary judgment.
¶ 7 In their respective motions, plaintiff and ASI did not dispute the underlying facts. As such, they agreed that ASI issued an original policy of automobile insurance to Mojo covering the period between June 8, 2007, and January 1, 2008 (policy C2 CM9093919-00). This policy originally provided a “combined single limit” (CSL) of $300,000 in bodily injury and property damage liability coverage. In the course of applying for this policy, Mojo‘s president was informed of Mojo‘s right to UM or UIM coverage in an amount equal to the bodily injury and property damage coverages. Mojo‘s president signed a written rejection of such coverage, and also acknowledged in writing that Mojo could “at any future date, by written request, increase this coverage.” Therefore, the original policy only provided UM coverage in the amount of $20,000 per person and $40,000 per accident. It did not specifically provide for any coverage for UIM coverage.
¶ 8 That original policy was subsequently modified by a number of endorsements, including endorsements adding additional insured drivers and adding and removing specific insured vehicles. Of particular relevance, on or about October 1, 2007, ASI received a written “GENERAL REQUEST FORM” from Mojo. On that form, Mojo checked two boxes indicating that it was requesting an “Endorsement” that would “CHANGE” its coverage. Specifically, Mojo requested a “Change of Limits to 500 CSL.” There was no request for increased UM or UIM coverage on this form. Pursuant to this request, ASI prepared an endorsement to the original policy—issued on October 3, 2007, but effective October 1, 2007—in which the bodily injury and property damage liability limits were both increased to $500,000. The amount of UM coverage was not altered.
¶ 9 When the original policy expired on January 1, 2008, ASI issued Mojo a subsequent “RENEWAL” policy covering the period from January 1, 2008, through January 1, 2009 (policy number C2 CM909319-01). This policy provided the same amount of liability (a $500,000 CSL) and UM coverage ($20,000 per person and $40,000 per accident) as the original policy, and it was this policy that was in effect at the time of the accident. Mojo did not sign another written rejection of higher UM or UIM coverage in connection with either the endorsement increasing the liability limits or the “RENEWAL” policy, nor did Mojo make a specific request for any additional UM or UIM coverage.
¶ 10 While plaintiff and ASI did not dispute these underlying facts, they did dispute their legal significance. In its motion for summary judgment, ASI contended that its underlying actions had fully complied with
¶ 11 Plaintiff argued that both the endorsement and the subsequent policy were “new policies.” As such, plaintiff contended that
¶ 12 On February 10, 2012, the circuit court entered both a written order and a written decision denying ASI‘s motion for summary judgment and granting summary judgment in favor of plaintiff on his cross-motion. The circuit court‘s ruling was largely based upon its decision to follow the reasoning contained in Nicholson v. State Farm Mutual Automobile Insurance Co., 409 Ill. App. 3d 282 (2010). In that case, the Second District of the Illinois Appellate Court found, under different facts, that an earlier version of
¶ 13 The circuit court‘s written order indicated that its written decision “shall be a final and appealable order,” and ASI filed a notice of appeal from the circuit court‘s orders on February 16, 2012. However, in an order entered on October 9, 2012, this court dismissed ASI‘s appeal for a lack of jurisdiction. Alshwaiyat v. American Service Insurance Co., 2012 IL App (1st) 120555-U.
¶ 14 In that order, this court noted that while plaintiff had named both Mojo and ASI as defendants in the instant suit, only ASI had been served and only ASI filed an appearance. Id. ¶ 14. We further noted that Mojo was nevertheless still a “party” to this suit for purposes of
¶ 15 ASI thereafter filed a motion in the circuit court seeking a finding, pursuant to Rule 304(a), that would allow it to take an appeal from the circuit court‘s prior orders. On October 23, 2012, the circuit court entered an order “pursuant to
¶ 16 II. ANALYSIS
¶ 17 On appeal, ASI contends that the circuit court incorrectly denied its motion for summary judgment and improperly granted plaintiff‘s cross-motion for summary judgment. We agree.
¶ 18 A. Standard of Review
¶ 19 Summary judgment is appropriate only where the pleadings, depositions, admissions and affidavits, viewed in the light most favorable to the nonmovant, show that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law.
¶ 20 B. Statutory Framework
¶ 21 While this appeal ultimately involves the specific requirements of
¶ 22 Thus, we first note that—subject to several exceptions not relevant here—the Illinois Safety and Family Financial Responsibility Law (Financial Responsibility Law) mandates that “[n]o person shall operate, register or maintain registration of, and no owner shall permit another person to operate, register or maintain registration of, a motor vehicle designed to be used on a public highway unless the motor vehicle is covered by a liability insurance policy.”
¶ 23 Nevertheless, a driver covered by such mandatory liability insurance is not similarly protected against damages caused by other drivers who may not possess similar insurance. Thus, the Insurance Code specifically requires that all policies of liability insurance must also provide UM insurance.
¶ 24 Of course, there is nothing to preclude a motorist from obtaining a policy of insurance providing liability coverage in excess of the minimum amounts required by the Financial Responsibility Law. If an insured does obtain liability coverage in such greater amounts, however,
“(1) Additional uninsured motor vehicle coverage. No policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle shall be renewed or delivered or issued for delivery in this State with respect to any motor vehicle designed for use on public highways and required to be registered in this State unless uninsured motorist coverage as required in Section 143a of this Code is included in an amount equal to the insured‘s bodily injury liability limits unless specifically rejected by the insured as provided in paragraph (2) of this Section. Each insurance company providing the coverage must provide applicants with a brief description of the coverage and advise them of their right to reject the coverage in excess of the limits set forth in
Section 7-203 of The Illinois Vehicle Code . The provisions of this amendatory Act of 1990 apply to policies of insurance applied for after June 30, 1991.(2) Right of rejection of additional uninsured motorist coverage. Any named insured or applicant may reject additional uninsured motorist coverage in excess of the limits set forth in
Section 7-203 of The Illinois Vehicle Code by making a written request for limits of uninsured motorist coverage which are less than bodily injury liability limits or a written rejection of limits in excess of those required by law. This election or rejection shall be binding on all persons insured under the policy. In those cases where the insured
has elected to purchase limits of uninsured motorist coverage which are less than bodily injury liability limits or to reject limits in excess of those required by law, the insurer need not provide in any renewal, reinstatement, reissuance, substitute, amended, replacement or supplementary policy, coverage in excess of that elected by the insured in connection with a policy previously issued to such insured by the same insurer unless the insured subsequently makes a written request for such coverage.”
215 ILCS 5/143a-2(1) ,(2) (West 2008) .
In addition, paragraph (4) of
¶ 25 As our supreme court has generally summarized,
¶ 26 However, the current requirement for mandatory UM and UIM coverage has resulted from a number of relevant legislative amendments over the years.1 Thus, prior to a substantial rewrite in 1990, the statutory provision that is now codified as
¶ 27 Additionally, the statutory exception to the requirement to offer matching UM and UIM coverage—in those cases where an insured has previously rejected higher UM or UIM limits—originally applied only to “renewal or supplementary” policies. Pub. Act 81-1426, § 1 (eff. Sept. 3, 1980) (adding what is now
¶ 28 Finally, we note that prior to an amendment in 2004, the requirement contained in paragraph (1) of
¶ 29 C. Discussion
¶ 30 With this background in mind, we find that
¶ 31 As resolution of this appeal will require an interpretation of
“When construing a statute, our goal is to determine and effectuate the legislature‘s intent, best indicated by giving the statutory language its plain and ordinary meaning. [Citation.] We must consider the entire statute in light of the subject it addresses, presuming the legislature did not intend absurd, unjust, or inconvenient results. [Citation.] Reviewing courts will not depart from the statute‘s plain language by reading into it conditions, exceptions, or limitations that contravene legislative intent. [Citation.]” In re Andrew B., 237 Ill. 2d 340, 348 (2010).
¶ 32 The statutory language of
¶ 33 Moreover, it is also undisputed that the liability limits contained in the original policy
¶ 34 The endorsement at issue here merely modified a term of the original policy—a policy that had already been delivered by ASI to Mojo—and did so without changing any other policy terms, the policy number, or the original policy‘s duration. Thus, the requirements of
¶ 35 Nevertheless, it was not the original policy of insurance that was in effect at the time of the accident at issue here. Rather, the policy in effect at that time was the subsequent “RENEWAL” policy (number C2 CM909319-01). Clearly, this policy was one that “renewed” the original policy, or at the very least was one that had been “delivered or issued for delivery” by ASI.2 As such, the general requirements of
¶ 36 Of course, if the general requirements of
¶ 37 Again, here it is undisputed that Mojo rejected UM or UIM coverage in excess of the statutory minimums when applying for the original policy, and did not make a written request for any higher UM or UIM coverage in connection with the “RENEWAL” policy. Moreover,
¶ 38 These terms are not specifically defined in the Insurance Code, at least not with respect to
¶ 39 In this case, the second policy was self-identified on its declaration page as being a “RENEWAL.” It was further identified by a policy number largely identical to the number identifying the original policy, merely replacing policy number C2 CM909319-00 with number C2 CM909319-01. It was issued to Mojo, the same named insured was listed in the original policy, and it covered the same drivers insured in the original policy (as modified by a number of endorsements issued during the term of that policy). It contained policy language that was identical to the policy language contained in the original policy. Finally, it provided the same coverage limits as the original policy (again, as modified by the specific endorsement to that policy discussed above) and, by its own terms, came into effect upon the expiration of the roughly six-month term of the original policy. For all these reasons, it is evident that the second policy was indeed a “renewal” policy for purposes of the paragraph (2) of
¶ 40 The only modification to the original policy that was made at the time it was renewed via the second policy was the inclusion of an additional insured vehicle. However, this change merely reinsured a vehicle that had been briefly removed from the original policy via an endorsement issued just a few weeks before the original policy expired. Indeed, not even plaintiff contends that this modification had any effect on the nature of the second policy. In light of the fact that this vehicle had been previously insured under the original policy, and considering all of the other similarities between the two policies, we do not find that this single modification alters our conclusion that the second policy constituted a renewal. It clearly represented ” ‘[t]he substitution of a new right or obligation for another of the same nature.’ ” Chatlas, 383 Ill. App. 3d at 570 (quoting Black‘s Law Dictionary 1165 (5th ed. 1979)); see also Makela, 147 Ill. App. 3d at 49 (to view “the addition of a new car to an
¶ 41 We would come to a similar conclusion even if we were to agree with plaintiff and conclude that either the endorsement to the original policy or the second policy resulted in a “new” policy that could not be described as a renewal. As noted above, the statutory exception to the requirement for matching UM and UIM coverage was substantially expanded in a 1989 revision, and now also includes “any *** substitute, amended, replacement or supplementary” policies. (Emphasis added.) Pub. Act 86-841, § 1 (eff. Jan. 1, 1990);
¶ 42 In coming to this conclusion, we necessarily reject the heavy reliance both plaintiff and the circuit court have placed upon the decision issued by the Second District of the Illinois Appellate Court in Nicholson, 409 Ill. App. 3d at 285-86, which interpreted the language of
¶ 43 In that case, the court considered a situation where the insureds’ original policy—issued in 1988—provided $100,000 in liability coverage and $50,000 in UM coverage. Id. at 284. In connection with that original policy, the insureds had signed a “coverage selection form containing a brief explanation of UM and underinsured motorist coverage and stating that the [insureds] had been provided with the opportunity to purchase UM coverage in an amount equal to their liability coverage but that they instead had selected coverage with limits of $50,000 per person.” Id. That original policy was repeatedly renewed at those coverage amounts until 1999. Id.
¶ 44 In 1999, 11 years later, the insureds made a request to increase their policy limits to $250,000 in liability coverage and $100,000 in UM coverage. The insurer treated this request as an “application” and issued a new policy at the requested coverage amounts. Id. As a result of this change, the premiums on the new policy increased by over 15%. Id. at 292. While the insurer requested that the insureds complete a new coverage selection form, that form was not signed until after the new policy was issued at the requested coverage amounts. Id. at 284. After this new policy was itself renewed several times, the insureds were fatally
¶ 45 The appellate court affirmed. Id. at 283. In doing so, the court rejected the insurer‘s reliance upon the “exception to the rule requiring insurers to offer UM coverage equal to liability coverage” in any renewal policy contained in paragraph (2) of
¶ 46 The court ultimately agreed with the insureds on this issue, reasoning as follows:
“We agree that, in this regard, the language of the statute is somewhat ambiguous. Subsection (2) exempts renewals and similar subsequent policies from the rule requiring equal UM coverage, but subsection (1) plainly states that the rule applies to policies that are being renewed. ***
Inasmuch as subsection (1) of the statute states that equal UM coverage must be offered in connection with any policy that is ‘renewed’ in Illinois, it is plain that this requirement must apply to at least some renewal policies. Moreover, subsection (2)‘s description of the policies exempted from the general rule—renewals, reinstatements, reissuances, replacements, and the like—indicates that in enacting subsection (2) the legislature was concerned with those policies that are essentially continuations of previous policies or that contain only minor changes. For instance, replacements, reinstatements, and reissuances generally mirror the terms of the original policy with at most a change in the effective date, and renewals generally contain only minor changes in terms such as the dates of coverage or cost of premiums. In addition, subsection (2) contains a further limitation, stating that it applies only when an insured has previously been offered equal UM coverage and has rejected it in favor of some lower coverage. [Citation.] We thus read subsection (2) as establishing an exception to the general rule of equal UM coverage that applies only where these two conditions are met: first, the insured has previously rejected equal coverage, and second, there are no substantial changes in the terms of the new policy being issued.” Id. at 289-90.
In light of this conclusion, the court specifically found that “a change in the level of coverage, with its attendant change in the premium cost, is a material change that results in a new policy rather than a mere continuation of the old policy.” Id. at 292. As such, “whenever liability coverage is increased above that provided under the previous policy,
¶ 47 For a number of reasons, we do not find the decision in Nicholson to be controlling or persuasive in the context of this case. First, we note that the Nicholson decision contains references to a statutory requirement to “offer” UM coverage. However, after the original policy in that case was issued in 1988, and before the 1999 policy increasing coverage was issued, the language of
¶ 48 Second, Nicholson specifically addressed whether or not to apply the exception to the requirements of
¶ 49 As we discussed above, however, that endorsement was issued during the term of the original policy and was in fact a part of that original policy. Therefore, it did not constitute a separate insurance policy being “renewed or delivered or issued for delivery.”
¶ 50 Moreover, to the extent that plaintiff also seeks to apply Nicholson to ASI‘s issuance of the renewal policy at issue here, we still find its reasoning inapplicable. As discussed above, the second policy merely incorporated the increased liability limits that had already been added to the original policy by the endorsement. As such, there were no “substantial changes in the terms of the new policy being issued” (id. at 290), and by its own reasoning Nicholson would not apply.
¶ 51 Third, we note that the discussion in Nicholson solely addressed the insurer‘s argument that the exception in paragraph (2) of
¶ 52 Finally, and more fundamentally, we note that the decision in Nicholson is grounded in the court‘s conclusion that the prior language of
¶ 53 However, in that case the court was interpreting the statutory language of
¶ 54 We conclude that our interpretation of that language best accomplishes the goal of determining and effectuating the legislature‘s intent, as we give the current language of
¶ 55 III. CONCLUSION
¶ 56 For the foregoing reasons, we reverse both the circuit court‘s denial of ASI‘s motion for summary judgment and its judgment in favor of plaintiff on his cross-motion for summary judgment. Pursuant to our authority under
¶ 57 Reversed; judgment entered.