delivered the opinion of the court:
The plaintiff, State Farm Mutual Automobile Insurance Company (State Farm), filed a complaint for declaratory judgment seeking a determination that the defendant, Steven E. Coe, was not entitled to underinsured motorist benefits under his automobile liability policy with State Farm. Both parties filed motions for summary judgment. Mr. Coe appeals the order of the circuit court of Cook County granting summary judgment to State Farm and denying Mr. Coe’s motion for summary judgment.
The sole issue on appeal is the correctness of the circuit court’s order. The pertinent facts are summarized below.
On November 20, 2001, Mr. Coe, a police officer for the Village of Park Forest, was directing traffic when he was struck by a car driven by Nicole Moorehouse. Ms. Moorehouse was insured for automobile liability, with limits of $50,000. Mr. Coe received over $100,000 in workers’ compensation benefits, but claimed special damages in the amount of $150,000. 1
At the time of the accident, Mr. Coe was insured by State Farm for automobile liability. The policy provided underinsured motorist coverage with a $100,000 limit. Under the underinsured motorist coverage, State Farm agreed to “pay damages for bodily injury an insured is legally entitled to collect from thе owner or driver of an underinsured motor vehicle.” State Farm’s agreement to pay damages pursuant to the underinsured motorist provision was subject to the following policy limitations:
“1. The amount of coverage is shown on the declarations page under ‘Limits of Liability — W—Each Person, Each Accident.’ Under ‘Each Person’ is the amount of coverage for all damages due to bodily injury to one person. ‘Bodily injury to one person’ includes all injury and damages to others resulting from this bodily injury and all emotional distress resulting from this bodily injury sustained by other persons who do not sustain bodily injury. *** 2. Any amount paid or payable to or for the insured under any workers’ compensation, disability benefits, or similar law shall reduce the amount payable under this coverage. The reduction may be taken only once and shall first be applied to the amount payable by any policy providing coverage on a primary basis. *** * * *
5. a. The most we will pay any one insured is the lesser of:
(1) the amount by which the ‘each person’ limit of this coverage exceeds the sum of the ‘each person’ limits of liability of all bodily injury liability insurance coverages that apply to the accident; or
(2) the amount by which the insurеd’s damages for bodily injury exceed the sum of the ‘each person’ limits of liability of all bodily injury liability insurance coverages that apply to the accident.” 2
Pursuant to the policy terms, Mr. Coe sought arbitration of his underinsured coverage claim. State Farm responded by filing the instant complaint for declaratory judgment. The complaint alleged that Ms. Moorehouse’s insurance company had agreed to pay the $50,000 limit of liability under her policy to Mr. Coe and that Mr. Coe was entitled to in excess of $100,000 in workers’ compensation benefits. Based on those amounts, State Farm sought а declaration that Mr. Coe was not entitled to any benefit under the underinsured motorist provision of his State Farm policy. In response to a request to admit facts, Mr. Coe admitted he settled his workers’ compensation claim with the Village of Park Forest for an amount not less than $100,000. Both parties filed motions for summary judgment.
In its motion, State Farm argued that, under the underinsured motorist limitations provisions, it was entitled to set off Mr. Coe’s workers’ compensation settlement against the underinsured coverage amount. The settlement amount of $100,000 reduced the underinsured benefits of $100,000 to -0-. Therefore, Mr. Coe was not entitled to any recovery under the underinsured motorist provisions of the policy.
In his motion, Mr. Coe maintained that his special damages were well in excess of $150,000. He further maintained, “[T]o the extent that the Illinois Insurance Code permits any set-off for benefits received though [sic] Workers’ Compensation, the Code, the plain language of the insurance policy, and public policy define the ‘amounts payable’ to which such a set-off may be applied as the total damages of the insured Defendant, not the limits of [underinsured motorist] coverage.” (Emphasis in original.)
Thе circuit court granted summary judgment to State Farm and denied Mr. Coe’s summary judgment motion. In its ruling, the circuit court relied on the supreme court’s decisions in Sulser v. Country Mutual Insurance Co.,
ANALYSIS
I. Standard of Review
The court reviews motions for summary judgment de novo. Chubb Insurance Co. v. DeChambre,
By filing cross-motions for summary judgment, the parties invite the court to determine the issues as a matter of law and enter judgmеnt in favor of one of the parties. Wolfram Partnership, Ltd. v. LaSalle National Bank,
II. Principles Applicable to the Construction of Insurance Policies
“An insurance policy is a contract, and the general rules governing the interpretation of other types of contracts also govern the interpretation of insurance policies.” Hobbs v. Hartford Insurance Co. of the Midwest,
“Importantly, a policy provision that purports to exclude or limit coverage will be read narrowly and will be applied only where its terms are clear, definite, and specific.” Gillen,
III. Discussion
Section 143a — 2(4) of the Illinois Insurance Code (215 ILCS 5/143a — 2(4) (West 2000)) (the Insurance Code) provides in pertinent part as follows:
“For the purpose of this Code the term ‘underinsured motor vehicle’ means a motor vehicle whose ownership, maintenance or use has resulted in bоdily injury or death of the insured, as defined in the policy, and for which the sum of the limits of liability under all bodily injury liability insurance policies or under bonds or other security required to be maintained under Illinois law applicable to the driver or to the person or organization legally responsible for such vehicle and applicable to the vehicle, is less than the limits for underinsured coverage provided the insured as defined in the policy at the time of the accident. The limits of liability for an insurer providing underinsured motorist coverage shall be the limits of such coverage, less those amounts аctually recovered under the applicable bodily injury insurance policies, bonds or other security maintained on the underinsured motor vehicle. However, the maximum amount payable by the underinsured motorist coverage carrier shall not exceed the amount by which the limits of the underinsured motorist coverage exceeds the limits of the bodily injury liability insurance of the owner or operator of the underinsured motor vehicle.” 215 ILCS 5/143a — 2(4) (West 2000).
The underlying purpose of underinsured motorist coverage is to place the insured in the same position he would have occupiеd if the tortfeasor had carried adequate insurance. Sulser,
Mr. Coe contends that the policy language, “amount payable under this coverage,” does not mean policy limits but refers to “all legally available damages for bodily injury.” In support of his argument, Mr. Coe suggests that the policy could have been, but was not, drafted to state that any underinsured motorist payment would be reduced by subtracting the workers’ compensation benefits from the limits of the underinsured coverage provided under the policy. We conclude that no redrafting is necessary.
We begin by addressing Mr. Coe’s argument thаt the circuit court’s reliance on Sulser and Ullman was misplaced as the focus of those cases was whether workers’ compensation benefits could be set off against underinsured or uninsured coverage amounts. Nonetheless, the circuit court noted that in both cases, the policies contained an “amount payable” phrase.
In Ullman, the policy provided, “ ‘any amount payable under the terms of this Endorsement [uninsured motorist coverage] because of bodily injury sustained in an accident by a person who is an insured under this coverage shall be reduced by *** (2) the amount paid and the present value of all amounts payable on account of such bodily injury under any workmen’s compensation law.’ ” Ullman,
In addition to holding that the workers’ compensation deduction from the uninsured motorist coverage was not against public policy, the Ullman court rejected an argument that Mr. Coe raises here, stating as follows:
“An argument of the plaintiff is that the provable damages sustained through the decedent’s death far exceeded $10,000. If this were a case involving an insured tortfeasor, reimbursement of the employer would not be required, she contends, as the claim against the tortfeasor was not satisfied in full. Therefore, the protection available under the uninsured motorist coverage provides less protection than would have been afforded had the tortfeasor been insured. However, the plaintiff errs. Our workmen’s compensation statute does not make the employee’s obligation to reimburse his employer dependent on the employee’s recovering his full measure of damages from the tortfeasor. The appellate court correctly observed: ‘To the extent that workmen’s compensation benefits have been received, the obligation of reimbursement exists regardless of the amount recovered or the total damages sustained by the injured employee.’ [Citations.]” Ullman,48 Ill. 2d at 8 .
In Sulser, Mr. Sulser was killed in an automobile accident. The Sulsers’ policy with Country Mutual provided $100,000 in underinsured motorist coverage but specified that any amounts received from workers’ compensation would be deducted from Country Mutual’s coverage amount. Mrs. Sulser recovered $50,000 from the underinsured motorist and sought $50,000 from Country Mutual, the difference between the $100,000 underinsured motorist coverage and the recovery from the underinsured motorist. Based on the parties’ stipulation that over $50,000 had been paid in workers’ compensation benefits, Country Mutual declined to pay the $50,000 under the underinsured motorist coverage. The circuit court agreed with Country Mutual, but the appellate court reversed, finding that the Insurance Code did not provide for the setoff of workers’ compensation benefits against underinsured motorist coverage. See Sulser v. Country Mutual Insurance Co.,
The Sulser court then addressed the argument raised by the amicus curiae that Mrs. Sulser should receive the compensation paid for by her underinsured motorist premiums. The court noted that “an insurance policy is a contract between the company and the policyholder, the benefits of which are determined by the tеrms of the contract unless the terms are contrary to public policy. [Citation.] The legislature intended for the insurer to state clearly in the policy what coverage was offered.” Sulser,
“ ‘Amounts payable for damages under Underinsured Motorists Coverage will be reduced by:
a. all sums paid by or on behalf of persons or organizations who may be legally responsible for the bodily injury. This includes all amounts paid under the liability coverage of this policy;
b. the present value of all amounts payable under any workmen’s compensation ***.’ ” (Emphasis in original.) Sulser,147 Ill. 2d at 559 .
Observing that “[pjarties to a contract may agree to any terms they choose unless their agreement was contrary to public policy,” the court held that Country Mutual had no obligation to Mrs. Sulser under the underinsured motorist coverage. Sulser,
Mr. Coe relies on McKinney v. American Standard Insurance Co. of Wisconsin,
In reversing the summary judgment for the insurer, the reviewing court noted that the policy provided that the insurer would pay “all compensable damages.” McKinney,
We agree with State Farm that McKinney is distinguishable from the present case. First, under the policy in McKinney, an underinsured motor vehicle was defined as having “ ‘bodily injury liability limits less than the damages an insured person is legally entitled to recover.’ ” (Emphasis in original.) McKinney,
Significantly, the McKinney court did not conclude that the term “amounts payable” always meant total damages. Rаther, the court reasoned that, having provided that the insurer would pay all compensable damages, the insured reasonably could have interpreted the term “amounts payable” to mean the total amount of damages incurred, thus creating an ambiguity. The existence of the ambiguity required that the “amounts payable” clause be interpreted in the insured’s favor. McKinney,
Finally, Mr. Coe relies on Bergmann v. Hutton,
In reversing the grant of summary judgment for the insurer, the Oregon Supreme Court explained that uninsured coverage was subject to section 742.504 of the Oregon Insurance Code (Or. Rev. Stat. §742.504) which sets out required provisions for uninsured motorist coverage. That section provided in pertinent part:
“ ‘(c) Any amount payable under the terms of this coverage because of bodily injury sustained in an accident by a person who is an insured under this coverage shall be reduced by:
(A) ***
(B) The amount paid and the present value of all amounts payable on account of such bodily injury under any workers’ compensation law ***.’ ” (Emphasis in original.) Bergmann,337 Or. at 602 ,101 P.3d at 357 , quoting Or. Rev. Stat. §742.504(7)(c).
The court noted, first, that the term “coverage” was not synonymous with the term “policy.” While the terms of the policy between the insured and the insurer contained limits of liability, the only statutory limit as to coverage was the minimum limits. The court further noted that the phrase, “ ‘any amount payable under the terms of this coverage because of bodily injury sustained in an accident by a person who is insured under this coverage’ ” tracked the wording of the statute defining the insurer’s liability for uninsured coverage. (Emphasis in original.) Bergmann,
“Thus, thе amount that is ‘payable’ by the insurer under the ‘coverage’ is ‘all sums’ that the insured is ‘legally entitled to recover’ as a result of an accident with an uninsured motorist. In the usual case, that amount would be equal to the insurer’s total damages, although there may be cases in which the insured would not be ‘legally entitled to recover’ all of his or her damages, such as when the tortfeasor is immune from liability or when there has been a determination of comparative fault. Notably, in defining the insurer’s liability for coverage, ORS 742.504(l)(a) does not speak to any limits on the insurer’s liability under a policy.” (Emphasis in original.) Bergmann,337 Or. at 605 ,101 P.3d at 358 .
Finally, noting that the uninsured/underinsured motorist statute repeatedly employed the terms “limits of liability” and “liability limits,” the court concluded that “if the legislature had intended the phrase, ‘any amount payable under the terms of this coverage’ in ORS 742.504(7) (c) to mean the insurer’s liability limit, it would have done so expressly.” Bergmann,
State Farm concedes that its policy language is similar to the language in section 742.504(7)(c) of the Oregon Insurance Code. However, State Farm points out that the decisions of other state courts are not binding on Illinois courts and need not be followed where the Illinois Supreme Court has addressed the issue. See Fosse v. Pensabene,
Mr. Coe then argues that the term “amount payable under this coverage” is ambiguous and must be resolved in his favor as the insured. In determining the extent to which the limits of liability clause affects the insured’s underinsured motorist claim, it is appropriate to consider an insured’s reasonable expectations and the coverage intendеd by the policy. McKinney,
Under the terms of the policy, State Farm promised to pay “damages for bodily injury an insured is legally entitled to collect from the owner or driver of an underinsured motor vehicle.” 3 (Emphasis omitted.) This promise to pay was subject to the policy’s limits of liability clause under which any workers’ compensation benefits “shall reduce the amount payable under these coverages.” “Amount payable under this coverage” is not ambiguous but clearly refers to the $100,000 available under the underinsured motorist provision, not the total amount of Mr. Coe’s damages.
Mr. Coe then contends that allowing the workers’ compensation setoff against the underinsured coverage amount without considering the total damages he sustained violates the purpose behind the under-insured motorist statute. He argues that the circuit court’s interpretation of Sulser conflicts with the supreme court’s decision in Hoglund v. State Farm Mutual Automobile Insurance Co.,
In Hoglund, Ms. Hoglund was insured under her father’s automobile liability policy, which provided $100,000 in uninsured motorist coverage. While a passenger on an uninsured motorcycle, she was injured when it collided with another vehicle. Both drivers were at fault, and Ms. Hoglund received the policy limits of $100,000 from the other driver. As her total damages were over $200,000, she sought the policy limit of $100,000 under the uninsured motorist coverage of her father’s policy.
The uninsured motorist coverage contained a limits of liability provision stating: “ ‘Any amount payable under this coverage shall be reduced by any amount paid or payable to or for the insured-. *** or c. under any worker’s compensation, disability benefits or similаr law.’ ” Hoglund,
Based on its review of the policies and the Insurance Code, the court found that the meaning of the setoff provisions was to prevent a double recovery by the insured. Hoglund,
The court concluded that by adopting State Farm’s argument, the purpose of placing the injured party in the same position he would be in if the uninsured driver had been insured would be frustrated. The court pointed out that if the uninsured driver had carried $100,000 in coverage, as did the other driver, Ms. Hoglund would have been entitled to collect $100,000 from each driver, which would have “fully compensated her for her $200,000 in damages.” Hoglund,
Mr. Coe’s reliance on Hoglund is misplaced. In Banes v. Western States Insurance Co.,
Moreover, unlike the present case, Hoglund did not involve a setoff for workers’ compensation benefits. In Roberts, the supreme court explained that setoffs for benefits received from workers’ compensation implicate different considerations than setoffs for amounts received from a tortfeasor’s liability insurer. Roberts,
In any event, Hoglund does not support Mr. Coe’s argument that “amount payable under this coverage,” means the injured party’s total damages. The Hoglund court agreed that the policies, which contained the same “amount payable under this coverage” language and the rights to setoffs similar to those in the present case, permitted the setoffs to reduce State Farm’s obligation under the uninsured motorist coverage to -0-. The “total amount of damages” played no part in the court’s analysis of why the provision was ambiguous; the court was concerned only with the amount of coverage available. See Hoglund,
Had Ms. Moorehouse carried $100,000 in liability coverage, Mr. Coe would have been required to reimburse his employer for the $100,000 in workers’ compensation benefits he acknowledged receiving for the accident up to the full amount of the insurance proceeds of $100,000. See Roberts,
Mr. Coe received $50,000 from Ms. Moorehouse and $100,000 in workers’ compensation benefits from his employer. Without the workers’ compensation setoff, had he also reсeived the $50,000 from his underinsured motorist coverage (the difference between Ms. Moore-house’s policy limits and Mr. Coe’s $100,000 underinsured motorist coverage) he sought in this case, Mr. Coe would receive $200,000, or twice as much as he would have received had Ms. Moorehouse not been an underinsured motorist. Allowing State Farm a setoff for the $100,000 workers’ compensation benefit would reduce the amount to $100,000 or the same amount Mr. Coe would have received if Ms. Moorehouse had carried the same liability limits.
Crediting State Farm with the workers’ compensation benefit, Mr. Coe is in substantially the samе position as he would have been had Ms. Moorehouse carried the same insurance coverage. Unlike Hoglund, the setoff sought by State Farm is related to the fault of the underinsured Ms. Moorehouse. Unlike the insured in Hoglund, Mr. Coe did receive the insurance protection for which he paid because he was as fully compensated as he would have been had Ms. Moorehouse carried the same liability limits as he did. But see McKinney,
We conclude that the term “amount payable under this coverage” was not ambiguous and did not include the total damages incurred by Mr. Coe. We further conclude that the setoff for workers’ compensation benefits in this case did not violate the purpose of the underinsured motorist statute and, therefore, did not violate public policy. Thus, the circuit court’s order granting summary judgment to State Farm and denying summary judgment to Mr. Coe was correct.
The judgment of the circuit court is affirmed.
Affirmed.
GARCIA, EJ., and WOLFSON, J., concur.
Notes
Mr. Coe’s workers’ compensation settlement was struсtured as follows: Total settlement $75,000; minus $15,000 for attorney fees and $136.03 (unexplained deduction), leaving Mr. Coe with $59,863.97. In addition, Mr. Coe’s employer agreed to waive its lien under section 5(b) of the Workers’ Compensation Act (820 ILCS 305/5(b) (West 2004)) against the portion of the recovery funded by Ms. Moorehouse’s coverage.
Mr. Coe notes that the record contains two different insurance policies. As there is no dispute as to what the policy states, as opposed to what it means, the language quoted is from the copy of the policy attached to State Farm’s motion for summary judgment.
There is no dispute in this case that Ms. Moorehouse’s vehicle was an underinsured vehicle.