DIRECT AUTO INSURANCE COMPANY, Plaintiff-Appellant, v. ROYCELYNNE MERX, Defendant-Appellee.
No. 2-19-0050
Appellate Court of Illinois, Second District
July 22, 2020
2020 IL App (2d) 190050
PRESIDING JUSTICE BIRKETT delivered the judgment of the court, with opinion. Justices Schostok and Brennan concurred in the judgment and opinion.
Appeal from the Circuit Court of Kane County, No. 17-MR-934; the Hon. Kevin T. Busch, Judge, presiding. Judgment Affirmed.
William H. Ransom, of Newman Ransom LLC, of Chicago, for appellant.
Michael Silverman, of Horwitz, Horwitz & Associates, Ltd., of Chicago, for appellee.
¶ 1 Plaintiff, Direct Auto Insurance Company (Direct Auto), appeals the circuit court’s orders denying its motion for summary judgment and granting the motion for judgment on the pleadings filed by defendant, Roycelynne Merx.1 Direct Auto argues on appeal that (1) the plain and unambiguous language of the vehicle insurance policy it issued to Merx provides uninsured-motorist coverage only when the insured is an occupant in her own vehicle covered under the policy and (2) the circuit сourt erred in concluding that Illinois’s public policy as reflected in
I. BACKGROUND
¶ 3 On June 18, 2015, Merx was injured when she was a passenger in a 2013 Chevrolet Cruze that was owned and operated by Brandon Motley and Motley struck another vehicle while attempting to cross an intersection in Evanston. Motley was both an uninsured motorist and at fault for the accident. Merx filed a claim for uninsured-motorist coverage under her personal automobile insurance policy with Direct Auto, the insurer of her 2012 Chevrolet Sonic. Her vehicle was not involved in the collision. Merx’s policy provided for automobile
¶ 4 On July 21, 2017, Direct Auto filed a complaint for declaratory judgment, arguing that there was no uninsured-motorist coverage for the accident because, at the time of the accident, Merx was not an occupant in an “insured automobile” as that term is defined in the policy. Specifically, it argued that there was no uninsured-motorist coverage because Merx did not occupy the 2012 Chevrolet Sonic covered by her policy at the time of the accident. Direct Auto attached to the complaint a copy of the policy, which pertinently provides as follows:
“PART II—UNINSURED MOTORIST COVERAGE
COVERAGE C: UNINSURED MOTORIST BODIL [sic] INJURY and
COVERAGE D: UNINSURED MOTORIST PROPERTY DAMAGE.
If you have paid for this coverage(s), have provided prompt and proper notice of the loss pursuant to Condition 3, and have submitted your written claim by certified mail, return receipt requested, for Uninsured Motorist coverage within two (2) years from the date of the accident, unless otherwise set forth herein, we will pay all sums (up to your applicable policy limits) which the named insured or his legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle because of *** bodily injury *** sustained by the insured provided the damages were:
(1) caused by accident; and
(2) while ‘you’ are an occupant in an ‘insured automobile’ as defined herein, and(3) were as a result of the ownership, maintenanсe or use of such uninsured motor vehicle.
* * *
‘insured automobile’ means:
(a) an owned automobile as defined under Part I of this policy for which a specific premium charge for Uninsured Motorist coverage has been paid.” (Emphasis added.)
Part I of the policy, in turn, defines “owned automobile” as “a private passenger, farm, or utility automobile described in this policy.”
¶ 5 Merx answered the complaint for declaratory judgment on April 16, 2018, admitting that she was a passenger in the 2013 Chevrolet Cruze driven by Motley during the accident but denying Direct Auto’s assertion that there was no uninsured-motorist coverage.
¶ 6 Direct Auto moved for summary judgment on May 21, 2018, arguing that the plain and unambiguous language of the policy provided uninsured-motorist coverage only if the insured occupied an “insured vehicle,” here, the 2012 Chevrolet Sonic, at the time of the accident. Because there was no dispute that Merx did not occupy the 2012 Chevrolet Sonic at the time of the accident, Direct Auto argued that there was no uninsured-motorist coverage and thus Direct Auto was entitled to judgment as a matter of law.
¶ 7 Merx responded to the motion for summary judgment on September 6, 2018. She asserted that the terms of the uninsured-motorist provision were contrary to
¶ 8 On October 18, 2018, the circuit court denied Direct Auto’s motion for summary judgment. Pertinently, the order provided as follows:
“The court having determined the 1995 amendment to [
section 143a of the Insurance Code ] applied to owned vehicles, not listed in the policy, and the statute and public policy preclude denial of uninsured coverage for an insured (Merx) when she is a passenger in an uninsured vehicle, involved in a collision, and the driver of the uninsured vehicle is at-fault.”
¶ 9 On October 30, 2018, Merx filed a motion for judgment on the pleadings pursuant to
II. ANALYSIS
¶ 11 This appeal comes before us following the circuit court’s entry of judgment on the parties’ motions seeking a judgment on the pleadings and summary judgment. “Either a judgment on the pleadings or summary judgment is proper when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law.” Hess v. Estate of Klamm, 2020 IL 124649, ¶ 14. A motion for a judgment on the pleadings is like a motion for summary judgment, but it is limited to the pleadings. Allstate Property & Casualty Insurance Co. v. Trujillo, 2014 IL App (1st) 123419, ¶ 15. The standard of review is de novo under either type of motion. Id.
¶ 12 Direct Auto’s argument on appeal is twofold. First, it argues that the circuit court erred in denying its motion for summary judgment because the plain and unambiguous language of the insurance policy provides uninsured-motorist coverage only for accidents that occur while the insured is an occupant in the vehicle covered under the policy for which a specific premium charge for uninsured-motorist coverage has been paid. In other words, it asserts that the policy provides uninsured-motorist coverage to Merx only for injuries sustained while occupying the 2012 Chevrolet Sonic (the only vehicle for which Merx was paying а specific premium for insured-motorist coverage under the policy). Because it is undisputed that she did not occupy the 2012 Chevrolet Sonic at the time of the accident, Direct Auto maintains that summary judgment should have been entered in its favor. Second, it asserts that neither public policy nor the Insurance Code precludes the denial of coverage to Merx because
¶ 13 We begin by examining the terms of the insurance policy, the construction of which presents a question of lаw, which we review de novo. See Shefner v. Illinois Farmers Insurance Co., 243 Ill. App. 3d 683, 686 (1993). Our primary objective in construing the language of an insurance policy is to ascertain and give effect to the parties’ intentions as set forth in their agreement. Rosenberg v. Zurich American Insurance Co., 312 Ill. App. 3d 97, 101 (2000). In interpreting the meaning of provisions in an insurance policy, we construe the policy as a whole, keeping in mind the risk undertaken, the subject matter that is insured, and the purpose of the contract. Id. Where the policy language is clear and unambiguous, the language must be given its plain, ordinary, and popular meaning. Id. If, however, the terms are ambiguous, they are construed strictly against the insurer who drafted the policy and in favor of the insured. Menke v. Country Mutual Insurance Co., 78 Ill. 2d 420, 423 (1980).
¶ 14 As noted, Direct Auto maintains that summary judgment should have been entered in its favor because the plain language of the policy’s uninsured-motorist prоvision establishes that “there is only uninsured-motorist coverage when the insured is occupying an insured vehicle, [which is] a 2012 Chevrolet Sonic.” Merx makes no attempt to refute this assertion, and she does not argue that the uninsured-motorist provision is ambiguous. We agree with Direct Auto that, on its face, the uninsured-motorist provision affords Merx no coverage for the June 18, 2015, accident. The policy unambiguously provides uninsured-motorist coverage for bodily injury, provided that the injuries were “(1) caused by accident; and (2) while ‘you’ are an occupant in an ‘insured automobile’ as defined herein, and (3) were as a result of the ownership, maintenance or use of such uninsured motor vehicle.” The policy pertinentlydefines “you” as “the named insured,” meaning Merx, and it defines “insured automobile” as “an owned automobile as defined under Part I of this policy for which a specific premium charge for Uninsured Motorist coverage has been paid.” Part I of the policy defines “owned automobile” as “a private passenger, farm or utility automobile described in this policy,” meaning the 2012 Chevrolet Sonic. As Direct Auto stresses, it is uncontested that Merx did not occupy the 2012 Chevrolet Sonic during the accident but, instead, occupied the 2013 Chevrolet Cruze.
¶ 15 However, the fact that the terms of the policy preclude Merx from receiving uninsured-motorist coverage is not dispositive of the issue. It is well established that, “[i]f the insurance policy terms are clear and unambiguous, they must be enforced as written, unless doing so would violate public policy.” (Emphasis added.) Thounsavath v. State Farm Mutual Automobile Insurance Co., 2018 IL 122558, ¶ 17. “The construction of the terms of an insurance policy and whether the insurance policy comports with statutory requirements present questions of law that are properly decided on a motion for summary judgment.” Id. ¶ 15. We review de novo “whether a provision in a contract, insurance policy, or other agreement is invalid because it violates public policy.” In re Estate of Feinberg, 235 Ill. 2d 256, 263 (2009). Public policy is necessarily a question of law. Id.
¶ 16 Our state constitution, statutes, and judicial decisions reflect our public policies. Thounsavath, 2018 IL 122558, ¶ 17. Although an insurance policy is a contract, its terms must comply with the statutory requirements in effect at the time the policy was issued. Id. ¶ 30. Insurers hаve no right to depart from valid statutory requirements in their policies, and contractual terms that do so are void and unenforceable. Id. ¶¶ 17, 30. Likewise, the terms of an insurance policy may not circumvent the purpose of a statute in effect when the policy is issued. Id. ¶ 17. However, an insurance contract “will not be invalidated unless it is clearly contrary to what the constitution, the statutes, or the decisions of the courts have declared to be the public policy of Illinois or unless the agreement is ‘manifestly injurious to the public welfare.’ ” (Internal quotation marks omitted.) Goldstein v. Grinnell Select Insurance Co., 2016 IL App (1st) 140317, ¶ 16 (quoting Phoenix Insurance Co. v. Rosen, 242 Ill. 2d 48, 55 (2011)). An insured seeking to invalidate an agreement as against public policy bears a “heavy burden” of demonstrating a violation of public policy. Id.
¶ 17 We turn now to an overview of the applicable law. Subject to certain exceptions not pertinent here,
¶ 18
¶ 19
“(1) No policy insuring against loss resulting from liability imposed by law for bodily injury *** suffered by any person arising out of the *** use of a motor vehicle that is designed for use on public highways *** shall be *** issued for delivery in this State unless coverage is provided *** for bodily injury *** of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles *** because of bodily injury *** resulting therefrom. Uninsured motor vehicle coverage does not apply to bodily injury *** of an insured while occupying a motor vehicle owned by, or furnished or available for the regular use of the insured, a resident spouse or resident relative, if that motor vehicle is not described in the policy under which a claim is made or is not a newly acquired or replacement motor vehicle covered under the terms of the policy.”
Id. § 143a .
¶ 20 Our supreme court has stressed that this section is plain and unambiguous in mandating that every policy contain the specified uninsured-motorist coverage. Thounsavath, 2018 IL 122558, ¶ 33. Illinois law and public policy regarding uninsured-motorist coverage provide that no automobile liability insurance policy shall be issued without coverage protecting against damages cause by uninsured motorists. Id. (citing Squire v. Economy Fire & Casualty Co., 69 Ill. 2d 167, 176 (1977)). Uninsured-motorist coverage must extend to all who are insured under the policy’s liability provisions. Id. ¶ 19. “If a рerson constitutes an insured for purposes of liability coverage under a policy, the insurance company may not, either directly or indirectly, deny uninsured-motorist coverage to that person.” Schultz v. Illinois Farmers Insurance Co., 237 Ill. 2d 391, 403 (2010).
¶ 21 Nevertheless, “[n]either the statute nor the case law places any restriction on the right of the parties to an insurance contract to agree on which persons are to be the ‘insureds’ under an automobile insurance policy. [Citation.] However, once a person qualifies as an insured for purposes of the policy’s bodily injury liability provisions, she must be treated as an insured for purposes of uninsured and underinsured motorist coverage as well.” Thounsavath, 2018 IL 122558, ¶ 31.
¶ 22 It is well established that uninsured-motorist coverage is required so that the policyholder is placed in substantially the same position he or she would occupy if injured or killed in an accident where the party at fault carried the minimum liability coverage required by law. Phoenix Insurance Co., 242 Ill. 2d at 57.
¶ 23 Liability, uninsured motorist, and underinsured motorist provisions are “inextricably linked.” Schultz, 237 Ill. 2d at 404. All three types of coverage “serve the same underlying public policy: ensuring adequate compensation for damages and injuries sustained in motor vehicle accidents.” Phoenix Insurance Co., 242 Ill. 2d at 58.
¶ 24 Here, applying the insurance policy’s uninsured-motorist provision to the June 18, 2015, accident would impermissibly thwart the legislative purpose behind
¶ 25 Doxtater v. State Farm Mutual Automobile Insurance Co., 8 Ill. App. 3d 547 (1972), relied on by Merx, is instructive. There, an insured was injured when the motorcycle he was riding collided with an automobile driven by an uninsured motorist. Id. at 549. The motorcycle was not listed on the declarations page of the insured’s automobile insurance policy,2 and the policy contained an “owned vehicle” exclusion that excluded bodily injury coverage to an insured while occupying a motor vehicle owned by the named insured or any household resident if the vehicle was not an “ ‘owned vehicle,’ ” meaning a “ ‘motor vehicle *** described in the declarations.’ ” Id. at 548-49. The plaintiff argued that
in the policy, was unduly restrictive under
“Although we recognize the facts of Barnes v. Powell are distinguishable from the facts at bar, we nonetheless cannot overlook the Supreme Court’s statements therein regarding the legislative intent behind
Section 143a . The expansive interpretation applied by a majority of that court leads us to conclude that, presented with the issue at bar, our Supreme Court would interpretSection 143a of the Insurance Code as a direction to insurance companies to provide uninsured motor vehicle coverage for ‘insureds,’ regardless of whether, at the time of injury, the insureds occupied or operated vehicles declared in the subject policy.” (Emphasis added.) Doxtater, 8 Ill. App. 3d at 552.
¶ 26 The Doxtater court’s reasoning was adopted subsequently by our supreme court, as recognized in Squire, 69 Ill. 2d at 179. There, the plaintiff pedestrian was injured by an uninsured motorist. The plaintiff was insured under both a primary policy, which covered the family automobile, and an endorsement thereto, which provided coverage for a second family automobile and for which an additional premium was paid. Id. at 171-72. The primary policy and the endorsement included uninsured-motorist coverage. The primary policy excluded coverage for “ ‘bodily injury to аn insured while occupying an automobile (other than an insured automobile) owned by the named insured or a relative, or through being struck by such an automobile.’ ” Id. at 171. “ ‘Insured automobile’ ” meant “ ‘an automobile described in the policy for which a specific premium charge indicates that coverage is afforded.’ ” Id. The endorsement included a similar exclusion.
¶ 27 The plaintiff argued she was entitled to stack the uninsured-motorist coverage provided under both the primary policy and the endorsement. In response, the defendant insurance company asserted that the endorsement did not provide additional indemnification but, instead, insured against accidents caused by uninsured motorists while the insureds occupied the second vehicle. It further argued that the purpose of the endorsement was to allow the insureds to collect the coverage that was barred by the exclusion in the primary policy. Id. at 173-74. Plaintiff maintained that she already had this coverage under the primary policy because the exclusion violated
¶ 28 Relying on Doxtater, the court in Squire held that the exclusion in the primary policy was unenforceable insofar as it “would make coverage dependent upon the insured not being in a vehicle unlisted in the policy.” Id. at 179. Stated another way, the exclusion impermissibly made coverage dependent upon the insured being in a vehicle listed in the policy. See Roby v. Illinois Founders Insurance Co., 57 Ill. App. 3d 89, 94-95 (1978). The Squire court, citing Phelan, 59
¶ 29 Squire was discussed at length in Roby, 57 Ill. App. 3d 89. In Roby, the plaintiff police officer was injured when an uninsured motorist struck his squad car while the plaintiff was on duty. Id. at 90. The plaintiff filed a claim under the uninsured-motorist provision in his personal vehicle insurance policy, but the defendant insurance company denied it because the plaintiff was not driving an “insured automobile” as defined in the policy at the time of the accident. Id. at 91. The policy exempted from the definition of “insured automobile” any “ ‘automobile furnished for the regular use of the principal named insured or any resident of the same household.’ ” The policy also excluded “ ‘bodily injury to an insured while occupying an automobile (other than an insured automobile) owned by a named insured or any relative resident in the same household.’ ” Id. at 92. The trial court concluded that the policy did not provide uninsured-motorist coverage for the accident because the policy “ ‘excluded an insured driving an automobile regularly furnished to him in his employment.’ ” Id. Relying on Squire, the appellate court reversed, finding that the exclusionary clause violated
¶ 30 Turning to the case at bar, it is uncontested that Merx was injured while riding as a passenger in a vehicle other than her 2012 Chevrolet Sonic covered under the Direct Auto policy. Instead, she occupied Motley’s 2013 Chevrolet Cruze. Motley was both an uninsured motorist and at fault for the accident. As noted recently by our supreme court, if a passenger is injured while riding in an uninsured motor vehicle, the passenger must look to his or her own policy for recovery under its uninsured-motorist provision. Thounsavath, 2018 IL 122558, ¶ 39 (citing Rockford Mutual Insurance Co. v. Economy Fire & Casualty Co., 217 Ill. App. 3d 181, 187 (1991)). As explained in Rockford Mutual,
“[p]olicyholders and named insureds may recover under their own insurance policy when they are injured as a result of an accident in or with an uninsured motorist or vehicle, just as an injured third party may recover under his or her own uninsured motorist insurance if he or she is injured as a result of an accident in or with an uninsured motorist or vehicle.” Rockford Mutual, 217 Ill. App. 3d at 186-87.
The
¶ 31 The policy in the instant matter unambiguously affords Merx uninsured-motorist coverage for bodily injury only if she occupied an “insured vehicle,” meaning the 2012 Chevrolet Sonic, at the time of the accident. Put simply, conditioning uninsured-motorist coverage on the insured bеing “an occupant in an ‘insured automobile,’ ” as it relates to Merx and the June 18, 2015, accident, would violate public policy and conflict with our supreme court’s interpretation of
¶ 32 Direct Auto erroneously argues that the 1995 amendment to
¶ 33 In Direct Auto’s estimation, the 1995 amendment to
¶ 34 We acknowledge that, to the extent that the facts of Doxtater, Squire, and Roby involved “owned-vehicle” exclusions, those cases might well have yielded different results had they been decided after the 1995 amendment to
¶ 35 It is uncontested that (1) the 2013 Chevrolet Cruze was not “owned by, or furnished or available for the regular use” of Merx and (2) Motley was not a “resident spouse or resident relative” of Merx. Thus, we agree with Merx that the language the 1995 amendment added to
¶ 36 The cases Direct Auto relies on are distinguishable from the instant matter. In Goldstein, the insured was operating his riding lawnmower on a street when he was struck and killed by a minimally insured driver. Goldstein, 2016 IL App (1st) 140317, ¶ 3. He had, among other automobile insurance, a policy with the defendant insurance company containing underinsured-motorist coverage. Id. The defendant denied coverage under the owned-vehicle exclusion in the policy, which excluded coverage
¶ 37 The Goldstein court reiterated that the purpose of uninsured-motorist coverage is to place the insured “in substantially the same position he would occupy if he were injured or killed in an accident where the party at fault carried the minimum liability coverage” (id. ¶ 21), yet it recognized that the 1995 amendment to
¶ 38 Further evidence that the public policy underpinning the uninsured-motorist statute remains intact following the 1995 amendment can be found in numerous cases published post-1995, all of which continuе to state that the public policy behind uninsured-motorist coverage is to place the insured in substantially the same position he or she would occupy had the party at fault carried liability insurance in at least the amount required by law. See Thounsavath, 2018 IL 122558, ¶ 25; Phoenix Insurance Co., 242 Ill. 2d at 57; Rosenberg, 312 Ill. App. 3d at 107. Even Goldstein, upon which Direct Auto principally relies, makes this clear. See Goldstein, 2016 IL App (1st) 140317, ¶ 21.
¶ 39 The other cases Direct Auto relies on—Rosenberg, 312 Ill. App. 3d 97, and Cohs, 329 Ill. App. 3d 930—are likewise distinguishable. In Rosenberg, the policy endorsement defined an “insured” for purposes of uninsured-motorist coverage as (1) “you,” meaning the incorporated retirement village that had taken out the business automobile insurance policy for its lone vehicle, and (2) “ ‘[i]f you are an individual, any “family member.” ’ ” Rosenberg, 312 Ill. App. 3d at 99. The policy defined “family member” as “ ‘a person related to you by blood, marriage[,] or adoption who is a resident of your household, including a ward or foster child.’ ” Id. The decedent was a resident of the retirement village and was struck and killed as a pedestrian by an uninsured motorist. Id. at 98. The appellate court affirmed the trial court’s dismissal of the complaint, reasoning that because the defendant was a corporation, not an individual, and corporations cannot have family members (id. at 101-02), the “family member” provision was not triggered (id. at 101) and thus the decedent was not an “insured” under the uninsured-motorist policy. Direct Auto’s reliance on the rejection of the public-policy argument advanced by the plaintiff in Rosenberg simply misses the mark because, unlike in the instant case, the plaintiff there did not satisfy the definition of an “insured,” and public policy did not warrant extending uninsured-motorist coverage to someone who did not meet that definition. Here, it is uncontested that Merx was an “insured” under the policy. Indeed, Merx just as easily could have cited Rosenberg for the proposition that “courts are obliged *** to ensure that individuals insured by uninsured motorist policies receive that coverage when injured by uninsured motorists.” Rosenberg, 312 Ill. App. 3d at 107.
¶ 40 In Cohs, an underinsured-motorist policy endorsement defined an “insured” as (1) “[y]ou,” meaning the plaintiff’s corporate employer and (2) “ ‘[a]nyone else “occupying” a covered “auto” or a temporary substitute for a covered “auto.” ’ ” Cohs, 329 Ill. App. 3d at 932. The policy defined “occupying” as “ ‘in, upon, getting in, on, out or off.’ ” Id. The plaintiff was working some 12 feet away from the insured vehicle when he was struck by an underinsured motorist. Id. at 930-31. The First District upheld the definition of the term “insured” under theunderinsured-motorist provision, even though that definition was narrower than the definition under the liability coverage in the same pоlicy,3 and it concluded that the term neither was unduly restrictive nor violated
¶ 41 Both Rosenberg and Cohs hinged on whether the injured party fell within the definition of an “insured” under the policies at issue. This determination was critical to the resolution of those cases because “[n]either the statute nor the case law places any restriction on the right of the parties to an insurance contract to agree on which persons are to be the ‘insureds’ under an automobile insurance policy.” Thounsavath, 2018 IL 122558, ¶ 31. Once someone qualifies as an insured under an automobile insurance policy, however, “the statute and case law become applicable and prohibit an insurance company from either directly or indirectly denying uninsured-motorist coverage to an ‘insured.’ ” Phelan, 59 Ill. 2d at 395. Here, again, it is uncontested that Merx is an “insured” under the Direct Auto policy.
¶ 42 Because Merx unquestionably constituted an “insured” at the time of the June 18, 2015, accident, uninsured-motorist coverage extends to her under the policy’s liability provisions. To deny uninsured-motorist coverage to Merx simply because she did not occupy her insured automobile at the time of the accident, for which Direct Auto advocates, would contravene public policy and the legislative purpose behind
III. CONCLUSION
¶ 44 For the reasons stated, we affirm the circuit court’s orders granting judgment on the pleadings in favor of Merx and denying Direct Auto’s motion for summary judgment.
¶ 45 Affirmed.