THIRD DIVISION
February 3, 2010
Nos. 1-08-3319 & 1-08-3628 (cons.)
ERIE INSURANCE EXCHANGE, ) Appeal from the
) Circuit Court of
Plaintiff and Counterdefendant-Appellee, ) Cook County.
)
)
v. ) No. 07 CH 4925
)
CHRISTINE TRIANA, CHRISTINE WAGNER, and )
MICHAEL WAGNER, ) Honorable
) Rita M. Novak,
Defendants and Counterplaintiffs-Appellants. ) Judge Presiding.
JUSTICE STEELE delivered the opinion of the court:
This appeal arises from an order of the circuit court of Cook County granting plaintiff
Erie Insurance Exchange’s (Erie) motion for summary judgment and denying defendants Michael
and Christine Wagner (the Wagners) and Christine Triana’s (Triana) cross-motion for summary
judgment, finding that there was only $100,000 in total underinsured motorist (UIM) benefits
remaining for all defendants under the Erie policy. Erie filed this declaratory judgment action
against the defendants, seeking a determination of the remaining policy limits under the Erie
policy when both Christine Wagner (Wagner) and Triana had previously received settlement
payments of $100,000 each from State Farm Mutual Automobile Insurance Company (State
Farm) as a result of the automobile accident. For the following reasons, we affirm.
BACKGROUND
On March 5, 2005, Triana was riding in a vehicle driven by Wagner on Illinois Route 20
in Galena, Illinois, when they were involved in an automobile accident with William Weinen
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(Weinen). Wagner and Triana both made claims against Weinen for bodily injury and damages
allegedly sustained as a result of the accident, and their claims were submitted to Weinen’s
insurance carrier, State Farm. Weinen’s insurance policy provided coverage of $100,000 per
person/$300,000 per accident. State Farm subsequently made payment under Weinen’s policy to
Wagner in the amount of $100,000 and a separate payment to Triana in the amount of $100,000.
The Erie policy was issued to the Wagners for a policy period of February 28, 2005, to
February 28, 2006. The Erie policy provided UIM coverage limits of $300,000 each
person/$300,000 each accident, subject to the limitations and reductions set forth in the policy.
Wagner and Triana then made claims under the UIM coverage available to the Wagners
under the Erie policy, claiming that Weinen was an underinsured motorist. Erie tendered the
total sum of $100,000 to Wagner and Triana, which Erie contended was the available limit under
its policy after reduction of the policy limits for payments Wagner and Triana received from
State Farm. Wagner and Triana rejected the $100,000 from Erie, contesting the amount of the
remaining policy limits, and made a demand for arbitration to the American Arbitration
Association as to their claims made under the Erie policy. Erie then commenced the underlying
action, seeking a determination of the remaining policy limits, and additionally filed a motion to
stay arbitration until such determination was made.1 The Wagners filed a counterclaim, seeking
a declaration as to the amount available under the UIM coverage of the Erie policy, and alleged
vexatious delay under section 155 of the Illinois Insurance Code (Code) (215 ILCS 5/155 (West
2006)). Erie filed a motion to dismiss the counterclaim; defendants filed cross-motions for
1
The trial court granted Erie’s motion to stay the arbitration.
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summary judgment on the declaratory judgment complaint.
The trial court entered an order on November 6, 2008, dismissing the Wagners’
counterclaim and granting Erie’s motion for summary judgment, finding that $100,000 in
remaining coverage was available under the Erie policy for the claims made by Wagner and
Triana. While acknowledging that the Erie policy was a split-limits policy, the court agreed with
Erie’s position that the $200,000 paid by State Farm to both Wagner and Triana must be set off
in the aggregate against the $300,000 per-accident limit in the Erie policy, leaving only $100,000
in UIM benefits remaining to both the Wagners and Triana to be apportioned during arbitration.
The court rejected the Wagners’ argument that because the Erie policy was a split-limits policy,
the setoff provisions required that only the $100,000 received by Wagner should be set off
against her individual $300,000 per-person limit in determining the amount of her available UIM
coverage, relying on Obenland v. Economy Fire & Casualty Co., 234 Ill. App. 3d 99 (1992).
This timely appeal followed.
DISCUSSION
The Wagners and Triana have raised the following issues on appeal: (1) whether the trial
court erroneously granted summary judgment in favor of Erie because the maximum amount of
UIM coverage available in the split-limits Erie policy after applying the $100,000 setoff against
the per-person limit of $300,000 for both the Wagners and Triana was $200,000; (2) whether the
trial court erred in not finding the setoff provisions of the Erie policy to be ambiguous, and (3)
whether the trial court improperly dismissed the Wagners’ counterclaim.
In an appeal from the granting of summary judgment, we conduct a de novo review.
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Pekin Insurance Co. v. Estate of Goben, 303 Ill. App. 3d 639, 642 (1999). Although it is
recognized that summary judgment is a drastic means of disposing of litigation, it is appropriate
in cases where there is no genuine issue of material fact and the moving party is entitled to a
judgment as a matter of law. Pekin Insurance, 303 Ill. App. 3d at 642. In reviewing a grant of
summary judgment, this court considers anew the facts and the applicable law and determines
whether the circuit court was correct in its ruling. Frigo v. Motors Insurance Corp., 271 Ill. App.
3d 50, 57 (1995).
The construction of an insurance policy is a question of law and can be appropriately
disposed of by summary judgment. Pekin Insurance, 303 Ill. App. 3d at 642. An insurance
policy is a contract and, as such, is subject to the same rules of interpretation that govern the
interpretation of contracts. Jones v. Country Mutual Insurance Co., 371 Ill. App. 3d 1096, 1098
(2007). Accordingly, when construing the language of an insurance policy, the court’s primary
objective is to determine and effectuate the parties’ intentions as expressed in their written
agreement. Pekin Insurance, 303 Ill. App. 3d at 642. If the terms in the policy are “clear and
unambiguous,” they must be given their plain and ordinary meaning. Pekin Insurance, 303 Ill.
App. 3d at 642. If the terms are ambiguous, meaning that they are susceptible to more than one
reasonable interpretation, they will be construed strictly against the insurer. Pekin Insurance, 303
Ill. App. 3d at 642. The court will interpret the policy as a whole, considering the type of
insurance purchased, the nature of the risks involved, and the purpose of the contract. Pekin
Insurance, 303 Ill. App. 3d at 642-43. Limiting provisions in the policy are construed liberally in
favor of the insured and against the insurer. Pekin Insurance, 303 Ill. App. 3d at 642.
When determining whether an ambiguity between the terms of an insurance policy exists,
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the provisions should be read together and not separately. Johnson v. Davis, 377 Ill. App. 3d
602, 607 (2007). The inquiry is whether the provision is subject to more than one reasonable
interpretation, not whether other possibilities can be suggested. Johnson, 377 Ill. App. 3d at 607.
The Wagners and Triana first contend that the maximum amount of UIM coverage
available in the split-limits Erie policy after applying the $100,000 setoff against the per-person
limit of $300,000 for both the Wagners and Triana was $200,000 and that the setoff provisions of
the Erie policy are ambiguous. Additionally, they argue that the trial court’s reliance on
Obenland was misplaced.
We disagree and find that the issue presented in the instant case is factually similar to the
one before the court in Obenland. In that case, the plaintiffs were injured as pedestrians by a
motorist whose insurance company tendered its policy limits of $100,000 per person. Obenland,
234 Ill. App. 3d at 103. Plaintiffs, who had UIM coverage with Milwaukee Guardian Insurance
Company on three vehicles and Economy Fire & Casualty Company on another vehicle, sought
to combine the UIM coverage for all of their policies.2 Obenland, 234 Ill. App. 3d at 102-03.
Both policies contained wording similar to that at issue in the case at bar. One of the issues
raised by the Obenland plaintiffs was that the trial court erred in interpreting the Economy policy
as providing for $300,000 in coverage, reduced by $200,000 from the underinsured motorist’s
insurer and paid proportionately with Milwaukee for a total coverage of $50,000. Obenland, 234
2
The Milwaukee policy had split-limit UIM coverage of $300,000 per person and
$300,000 per accident, while the Economy policy had single-limit UIM coverage of $300,000
per
accident.
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Ill. App. 3d at 112. Plaintiffs sought a ruling that the $300,000 UIM coverage limit under the
Economy policy should be interpreted as meaning that Economy would pay until each plaintiff
had received a total of $300,000 from Economy and the tortfeasor or until Economy itself had
paid out $300,000. Obenland, 234 Ill. App. 3d at 112. The Obenland court cited to our supreme
court’s holding in Sulser v. Country Mutual Insurance Co., 147 Ill. 2d 548, 556 (1992), which
explained the nature of underinsured motorist coverage, namely, that “underinsured motorist
coverage was intended to fill the gap between the claim and the tortfeasor’s insurance and was
not intended to allow the insured to recover more than the amount of coverage provided under
his policy’s underinsured motorist coverage.” Obenland, 234 Ill. App. 3d at 113. The Obenland
court concluded that the Economy policy clearly and unambiguously provided policy limits of
$300,000 per accident, reduced by the amounts paid on behalf of the tortfeasor. Obenland, 234
Ill. App. 3d at 113.
Turning to the case at bar, we reach the same conclusion. As indicated previously, the
Erie policy provided UIM coverage in the split amounts of $300,000 per person/$300,000 per
accident. The uninsured/underinsured motorist bodily injury endorsement contained the
following limitations on Erie’s duty to pay:
“If coverage is purchased on a ‘Split Limits’ basis, ‘your’
‘Declarations’ will show a PER PERSON and PER ACCIDENT
limit for Uninsured/Underinsured Motorist Bodily Injury. The
PER PERSON limit for Bodily Injury for one ‘auto’ is the most
‘we’ will pay for damages arising out of bodily injury or death to
one person in any one accident. The PER ACCIDENT for one
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‘auto’ is the most ‘we’ will pay for damages arising out of bodily
injury or death to all persons resulting from any one accident,
subject to the PER PERSON limit.
***
‘We’ will pay no more than the Uninsured/Underinsured
Motorist Coverage limits shown on the ‘Declarations’ for any
‘auto,’ regardless of the number of persons ‘we’ protect, ‘autos we
insure,’ premiums paid, claims made or ‘autos’ involved in the
accident.”
In addition, the policy also contained the following provision related to reductions of the
limits of protection available under the Uninsured/Underinsured Motorist Coverage:
“The Limits of Protection available under this
Uninsured/Underinsured Motorist Coverage will be reduced by:
1. the amounts paid by or for those liable for bodily injury
to anyone we protect.”
The Erie policy defines “anyone we protect” as: “any person or organization we specifically state
is protected under the coverage being described.” According to the UIM coverage section of the
policy, the policy protects “anyone [who] occup[ies] any owned auto it insures.”
The Erie policy clearly and unambiguously states that the per-person limit is to be applied
to bodily injury or death of one person in an accident, while the per-accident limit is the most that
will be applied to all persons involved in any one accident, regardless of the number of people
involved. Here, two persons were injured in the accident, Triana and Wagner. Therefore, the
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$300,000 per-accident policy limit applies, and that amount is the most that Erie contracted to
pay for injuries arising from any one accident. Additionally, the Erie policy clearly and
unambiguously provides that the policy limits would be reduced by the amounts paid on behalf
of the tortfeasor. In this case, $200,000 has already been paid to the injured parties, Triana and
Wagner, by State Farm on behalf of the other driver. Thus, only $100,000 of the $300,000 per-
accident policy limit remains for Triana and Wagner to recover under the Erie policy.
Accordingly, we find that the trial court did not err in concluding that the setoff provisions of the
Erie policy were unambiguous and in granting summary judgment in favor of Erie.
The disposition of this issue makes it unnecessary to address the Wagners’ other issue,
namely, that the trial court improperly dismissed their counterclaim, which sought a declaration
as to the amount available under the UIM coverage of the Erie policy and also alleged vexatious
delay under section 155 of the Code (215 ILCS 5/155 (West 2006)).
For the foregoing reasons, the judgment of the circuit court of Cook County is affirmed.
Affirmed.
COLEMAN, J., concurs.
PRESIDING JUSTICE MURPHY, specially concurring:
I concur in the affirmance of the trial court’s grant of plaintiff’s motion for summary
judgment and denial of defendants’ cross-motion for summary judgment. While Obenland is
principally about the practice of stacking coverage, I agree with the majority that the contract
language and facts of this case are in line with the ultimate conclusion in that case. Therefore, I
concur that we must apply the ruling from the learned Justice Jiganti in that case to the clear and
unambiguous terms of the policy.
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However, I write separately to express concern raised by an unanswered question
presented at oral argument that, with a stronger record, could raise ambiguities in that language.
The unanswered question of plaintiff was exactly what benefit the Wagners received for the
additional premium that they paid. It was argued that the extra premium was for the split-limit
coverage. I must admit that I read the policy several times over before clearly understanding the
import of the language. I not only empathize with defendants, but can envision a case where
additional facts might render this language ambiguous, but, since I did not find evidence of
record to overcome the fact the language of the policy is in line with established law, I concur.
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REPORTER OF DECISIONS – ILLINOIS APPELLATE COURT
Please Use
Following (Front Sheet to be Attached to Each Case)
Form:
ERIE INSURANCE EXCHANGE,
Comple te
TITLE
of Case Plaintiff and Counterdefendant-Appellee,
v.
CHRISTINE TRIANA, CHRISTINE WAGNER, and
MICHAEL WAGNER,
Defendants and Counterplaintiffs-Appellants.
Docket No. Nos. 1-08-3319 & 1-08-3628 (consolidated)
Appellate Court of Illinois
COURT First District, THIRD Division
February 3, 2010
Opinion (Give month, day and year)
Filed
JUSTICE STEELE delivered the opinion of the court:
JUSTICES
Coleman, J., concurs
Murphy, P.J., specially concurs
Lower Court and Trial Judge(s) in form indicated in the margin:
APPEAL from County Department, Chancery Division
the Circuit Ct. of The Honorable Rita M. Novak , Judge Presiding.
Cook County,
Chancery Div.
Indicate if attorney represents APPELLANTS or APPELLEES and include
attorneys of counsel. Indicate the word NONE if not represented.
Attorneys for Defendants and Counterplaintiffs-Appellants:
For (for Christine and Michael Wagner): Beerman, Swerdlove LLP, of Chicago, IL
APPELLANTS, (Alvin R. Becker and Katherine A. Grosh, of Counsel)
John Doe, of
Chicago.
Levin, Riback Law Group, P.C., of Chicago, IL
For (Richard I. Levin and Amy R. Perlman, of Counsel)
APPELLEES,
Smith and Smith (for Christine Triana): Law Offices of Craig L. Manchik & Associates, P.C., of
of Chicago,
Joseph Brown, Chicago, IL
(of Counsel) (Craig L. Manchik and Christian D. Elenbaas, of Counsel)
Attorneys for Plaintiff and
Also add Counterdefendant-Appellee: Best, Vanderlaan & Harrington, of Chicago, IL
attorneys for
third-party (Lori A. Vanderlaan and Adam F. Haussermann, of Counsel)
appellants or
appellees. McKnight, Kitzinger, McCarty & Pravdic, LLC, of Chicago, IL
(Stanley A. Kitzinger, of Counsel)
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