ILLINOIS FARMERS INSURANCE COMPANY, Appellant, v. GLORIA CISCO, Appellee.—CHARLES SHANE, Appellee, v. ILLINOIS FARMERS INSURANCE COMPANY, Appellant.
No. 80980.—No. 81048.
Supreme Court of Illinois
September 11, 1997
Rehearing denied December 1, 1997.
178 Ill. 2d 386
HEIPLE, J., dissenting.
Kevin J. O‘Shea and John E. Navigato, of Serpico, Novelle & Navigato, Ltd., of Chicago, for appellee.
Danny L. Worker and Julie A. Hoffman, of Worker & Power, of Chicago, for appellant.
Charles Winkler, of Winkler & Gorey, Ltd., of North Riverside, for appellee.
JUSTICE MILLER delivered the opinion of the court:
In these consolidated cases, Richard Cisco and Charles Shane were involved in separate motor vehicle accidents with uninsured motorists. Cisco and Shane were driving vehicles owned by their respective employers. The vehicles being driven by Cisco and Shane were insured by their employers under policies of motor vehicle insurance providing uninsured-motorist benefits in the amounts of $20,000 per person and $40,000 per occurrence, the minimums required under
The appellate court, in each case, found that Illinois Farmers’ exclusionary language violated
“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 offered in an amount up to the insured‘s bodily injury liability limits.”
Ill. Rev. Stat. 1989, ch. 73, par. 755a-2(1) .
In Cisco‘s case, the appellate court affirmed the trial judge‘s ruling in favor of Cisco‘s estate. 278 Ill. App. 3d 1022. In Shane‘s case, the appellate court reversed the trial judge‘s grant of summary judgment in favor of Illinois Farmers. No. 1-95-1870 (unpublished order under Supreme Court Rule 23). Thus, the appellate court‘s rulings allowed Cisco‘s estate and Shane to collect uninsured-motorist benefits under the policies issued by Illinois Farmers.
Illinois Farmers filed a petition for leave to appeal in each case. 155 Ill. 2d R. 315(a). We allowed both of Illinois Farmers’ petitions and consolidated them for purposes of this appeal. We affirm the judgments of the appellate court.
BACKGROUND
Cause No. 80980
In cause No. 80980, Richard Cisco was fatally injured
At the time of the accident, Cisco and his wife, Gloria, were insured under automobile insurance policies issued by Illinois Farmers for the two vehicles owned by the Ciscos. Each policy provided bodily injury liability coverage and uninsured-motorist coverage in the amounts of $100,000 per person and $300,000 per occurrence. Gloria, on behalf of Richard‘s estate, sought uninsured-motorist benefits from Illinois Farmers under the policies. Illinois Farmers denied coverage based on paragraph 4 of the policies’ “Other Insurance” provision. Each policy contains the following pertinent language:
“PART II—UNINSURED MOTORIST
Coverage C—Uninsured Motorist Coverage
(Including Underinsured Motorist Coverage)
We will pay all sums which an insured person is legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle because of bodily injury sustained by the insured person. The bodily injury must be caused by accident and arise out of the ownership, maintenance or use of the uninsured motor vehicle.
* * *
Other Insurance
* * *
4. We will not provide insurance for a vehicle other than your insured car, unless the owner of that vehicle has no other insurance applicable to this part.”
Illinois Farmers, as plaintiff, filed a declaratory judgment action in the circuit court of Cook County against
The appellate court affirmed. 278 Ill. App. 3d 1022. The appellate court explained that under
The appellate court stated the Ciscos’ case was distinguishable from the cases relied on by Illinois Farmers. Illinois Farmers relied on Vanek v. Illinois Farmers Insurance Co., 268 Ill. App. 3d 731 (1994), Shefner v. Illinois Farmers Insurance Co., 243 Ill. App. 3d 683 (1993), Nationwide Mutual Insurance Co. v. Hecker, 183 Ill. App. 3d 13 (1989), and on remand and reconsideration, Luechtefeld v. Allstate Insurance Co., 167 Ill. 2d 148 (1995). In these cases, the insured in question owned multiple vehicles and obtained insurance coverage for the vehicles. In each case, at least one of the vehicles owned by the insured had a lower level of uninsured-motorist benefits than did the insured‘s other vehicles. The insured was injured by an uninsured motorist while the insured was occupying one of the owned vehicles
The courts in Luechtefeld, Vanek, Shefner, and Hecker found that the uninsured-motorist coverage under the policy purchased for the vehicle involved in the accident applied. Thus, the insured in question received the level of uninsured-motorist benefits selected for the particular vehicle the insured occupied when injured by an uninsured motorist. See Luechtefeld, 167 Ill. 2d 148; Vanek, 268 Ill. App. 3d 731; Shefner, 243 Ill. App. 3d 683; Hecker, 183 Ill. App. 3d 13. The appellate court found the Ciscos’ case distinguishable. The appellate court stated that unlike the insureds in Luechtefeld, Vanek, Shefner, and Hecker, the Ciscos did not own the vehicle in which the injury occurred and did not choose the level of uninsured-motorist benefits for the vehicle in which the injury occurred. 278 Ill. App. 3d at 1027-28.
Illinois Farmers filed a petition for leave to appeal. 155 Ill. 2d R. 315(a). We allowed Illinois Farmers’ petition and consolidated it with cause No. 81048.
Cause No. 81048
In cause No. 81048, Charles Shane was injured in a motor vehicle accident involving an uninsured motorist. The vehicle driven by Shane at the time of the accident was owned by his employer and insured under a policy issued to his employer by Casualty Insurance Company. The Casualty Insurance policy provided uninsured-motorist benefits of $20,000 per person and $40,000 per occurrence. As a result of the collision, Casualty Insurance paid Shane $20,000 in uninsured-motorist benefits.
At the time of the accident, Shane was insured under a personal automobile insurance policy issued by Illinois Farmers. The policy provided bodily injury li-
Shane, as plaintiff, filed an action in the circuit court of Cook County against defendant, Illinois Farmers, seeking a declaration of coverage for uninsured-motorist benefits. The parties filed cross-motions for summary judgment. The trial judge granted summary judgment in favor of Illinois Farmers.
The appellate court reversed. No. 1-95-1870 (unpublished order under Supreme Court Rule 23). The appellate court held that the exclusionary language found in Illinois Farmers’ policy violated
Illinois Farmers filed a petition for leave to appeal. 155 Ill. 2d R. 315(a). We allowed Illinois Farmers’ petition and consolidated it with cause No. 80980.
DISCUSSION
The terms of an insurance policy are to be applied as written unless those terms contravene public policy. Menke v. Country Mutual Insurance Co., 78 Ill. 2d 420, 423 (1980). Insurance policy provisions that conflict with a statute are void. American Family Mutual Insurance Co. v. Baaske, 213 Ill. App. 3d 683, 688 (1991). Under
The Insurance Code states that if an insurance company provides a motor vehicle liability policy to an insured, the insurance company must provide a statutory minimum of uninsured-motorist coverage (
Paragraph 4 of Illinois Farmers’ “Other Insurance” provision states that uninsured-motorist coverage will not apply “for a vehicle other than your insured car, unless the owner of that vehicle has no other insurance applicable to this part.” By the “Other Insurance” provision of its policy, Illinois Farmers attempts to condition the uninsured-motorist coverage of its policy on the availability of similar coverage on a nonowned vehicle rather than on the uninsured status of the person causing the insured‘s injury. Because the focus of the statute requiring coverage is on the uninsured status of the person causing the insured‘s injury, we believe that a provision conditioning uninsured-motorist coverage on the availability of another party‘s uninsured-motorist coverage is contrary to the statute and is therefore void. The Insurance Code specifically outlines the scope of coverage under an uninsured-motorist provision. Automobile policies must provide coverage “for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles.”
Illinois Farmers argues that this result conflicts with Luechtefeld, 167 Ill. 2d 148, Vanek, 268 Ill. App. 3d 731, Shefner, 243 Ill. App. 3d 683, and Hecker, 183 Ill. App. 3d 13. We disagree. In Luechtefeld, Vanek, Shefner, and Hecker, the insured in question selected the policy and the uninsured-motorist limits that applied to the owned vehicle in which the injury occurred. The insured was therefore bound by his or her choice of lower uninsured-motorist coverage for that owned vehicle.
In these consolidated cases, the Ciscos and Shane made a choice regarding their own policies and opted for a higher level of uninsured-motorist coverage. Pursuant to
Next, Illinois Farmers argues that if Richard Cisco and Charles Shane desired uninsured-motorist coverage in excess of the statutory minimums provided by their employers, Cisco and Shane should have purchased additional insurance on their employers’ vehicles. Illinois Farmers premises this argument on the idea that Cisco and Shane had an insurable interest in their employers’ vehicles because the vehicles were furnished or available for their regular use. Because Cisco and Shane did not obtain uninsured-motorist coverage in excess of the minimum limits to cover themselves while operating an
This argument is waived. There was no determination made in the trial court regarding whether the vehicles owned by Cisco‘s and Shane‘s employers were furnished or available for the insureds’ regular use. Nor was this issue addressed in the appellate court. Furthermore, paragraph 4 of Illinois Farmers’ “Other Insurance” provision is not limited to situations in which an insured is injured by an uninsured motorist while occupying a vehicle furnished or available for an insured‘s regular use.
Finally, Illinois Farmers argues that an exclusion found in the “LIABILITY” portion of its policy serves to exclude uninsured-motorist coverage provided in the “UNINSURED MOTORIST” portion of its policy. Illinois Farmers claims that because liability coverage for Cisco and Shane is excluded when they operate a vehicle furnished by an employer for their regular use, uninsured-motorist coverage is also excluded under the same set of circumstances. This argument was never addressed or ruled upon by the trial or appellate courts. Also, Illinois Farmers raises this argument for the first time in its reply brief. Under
CONCLUSION
For the foregoing reasons, we find that under the facts of these consolidated cases, paragraph 4 of Illinois Farmers’ “Other Insurance” provision violates
No. 80980—Affirmed.
No. 81048—Affirmed.
Illinois, like virtually every other state, has enacted a redistributive scheme commonly known as the uninsured-motorist statute.
The statute, however, does not provide the uninsured motorist‘s victim with a full recovery or even a fair recovery. Rather, recognizing the enormous costs inherent in mandating uninsured-motorist coverage, the legislature expressly limited the minimum amount of coverage in
The insurance policies at issue provided the policyholders with uninsured-motorist coverage in the amounts of $100,000 per person and $300,000 per occur-
“We will not provide insurance for a vehicle other than your insured car, unless the owner of that vehicle has no other insurance applicable to this part.”
Here the insureds bargained for uninsured-motorist coverage in excess of the statutory minimum but clearly subject to the above exclusion. Because each of the insureds in this consolidated case was driving an employer‘s vehicle (i.e., a vehicle other than his or her own) and the employer‘s vehicle was covered by an insurance policy, the insureds were not entitled to recover under their own policies. Each insured did, however, recover under his employer‘s insurance policy, which provided uninsured-motorist benefits of $20,000 per person and $40,000 per occurrence—the minimum amount of coverage mandated by statute.
As this court has repeatedly stated, the purpose behind the uninsured-motorist statute is “‘to place the policyholder in substantially the same position he would occupy, so far as his being injured or killed is concerned, if the wrongful driver had had the minimum liability insurance required by the [Illinois Vehicle Code].‘” Squire v. Economy Fire & Casualty Co., 69 Ill. 2d 167, 176 (1977), quoting Ullman v. Wolverine Insurance Co., 48 Ill. 2d 1, 4 (1970). This purpose is not frustrated so long as the policyholder receives the statutory minimum. Luechtefeld, 167 Ill. 2d at 153-54. In Luechtefeld, this court interpreted a similar exclusionary clause and voted unanimously to enforce the clause which excluded uninsured-motorist coverage when the policyholder was in a vehicle which he owned but which was covered by another policy: “As long as the coverage under the other policy equals or exceeds the minimum sums set forth in
The exclusionary clause at issue here only applies if the insured is injured in a vehicle covered under another policy. Enforcement of this exclusion by its plain terms would never frustrate the purpose behind the uninsured-motorist statute because the provision operates to exclude coverage only when the insured can seek recovery under another policy. Thus, enforcement of this exclusionary clause would never leave an insured without coverage.
A majority of this court—discontented with the result which would obtain in this case under the sound application of traditional contract principles—has seen fit to rewrite the parties’ insurance contract. The majority declares the exclusionary clause to be “contrary” to the statute and thus void.
Simply stated, the uninsured-motorist statute requires only that an insured recover the statutory minimum.
Accordingly, I respectfully dissent.