Norris v. National Union Fire Insurance

PRESIDING JUSTICE QUINN,

dissenting.

I respectfully dissent. The majority correctly holds that in order to satisfy the requirements of section 143a — 2 of the Insurance Code (now codified as 215 ILCS 5/143a — 2 (West 2000)), National Union’s offer of uninsured motorist coverage had to meet the four-pronged test of Cloninger v. National General Insurance Co., 109 Ill. 2d 419, 425-26 (1985). While Cloninger involved an offer of underinsurance coverage, it has been applied to uninsured motorist coverage as well. Millers Mutual Insurance Ass’n of Illinois v. House, 286 Ill. App. 3d 378, 383 (1997). However, I believe that National Union met the requirements of Cloninger.

Here, National Union participated in face-to-face negotiations with Jones Truck Lines and with an insurance broker hired by Jones Truck Lines for the purpose of negotiating nationwide insurance coverage for Jones’ fleet of several thousand trucks. These negotiations took over a year to complete. Lester May was the director of risk management for Jones Truck Lines and he testified by way of deposition and in an affidavit.

Mr. May attested: “12. With respect to Illinois, it was Jones’ specific intent to reject uninsured and underinsured coverage. If that was not possible, it was Jones’ intent to purchase the minimum amount permitted by law.”

Further, May testified at his deposition,

“Q. And I think you answered earlier, I just want to make sure the record is clear. You understood at all times when procuring insurance from National Union that you could purchase uninsured coverage up to your liability limits of $2 million?
A. It was my understanding if I wanted it, they probably would sell me anything I was willing to pay for it.
Q. Anything over—
A. Let me add one comment to that. They at all times offered me uninsured and underinsured motorist, and I at all times said no, as I’ve told you in my initial presentation, I would reject — I do not want uninsured motorist or underinsured motorist to be a part of my program. If it’s mandated by law, I will have to have it and you will have to cover it, but at whatever their absolute mínimums are. And at that point in time there is no need to talk about, well we can give you $5 million. I am not interested because I don’t want it coming out of my pocket.”

May testified that Jones Truck Lines had a deductible, or a self-insured retention, of $500,000 which greatly exceeded any statutorily required uninsured motorist coverage. May’s testimony clearly showed that Jones Truck Lines was aware of the option of purchasing coverage up to the bodily injury limit, that National Union had advised Jones Truck Lines of the nature of the option and that the optional coverage was available for a relatively modest premium.

Under Illinois law, the insured has the right to make an intelligently informed decision about whether to elect or reject uninsured motorist coverage in an amount equal to the insured’s liability coverage. Millers Mutual Insurance Ass’n v. House, 286 Ill. App. 3d at 383. The majority holds that because a three-page form (which listed 40 states and the District of Columbia) supplied by National Union listed Illinois’ “Basic Limits” for uninsured motorist coverage as being $30,000, “the offer was not made in a proper manner upon which an individual or company could make an informed choice to accept or reject, [and] its purported rejection is not effective.” 326 Ill. App. 3d at 322.

I believe that this holding is in error and is contrary to section 143a — 2 of the Illinois Insurance Code, which at the pertinent time provided:

“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.

It is completely uncontested that National Union offered uninsured motorist coverage to Jones Trucking “in an amount up to the insured’s bodily injury liability limits.” It is also uncontroverted that Jones Trucking rejected this offer.

I think it is important to note that in 1990 the legislature amended section 143a — 2(1) of the Illinois Insurance Code so that it now provides:

“§ 143a — 2. (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. 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.” (Emphasis added.) 215 ILCS 5/143a — 2 (West 2000).

In interpreting this statute, our supreme court has held: “[W]e find that the 1990 statute places the burden on the insured to reject and subsequently to reduce the uninsured motorist coverage which is automatically set at an amount equal to the bodily injury liability. No longer is the insurer responsible to make an offer, but rather it is the insured’s duty to reduce the uninsured motorist coverage.” DeGrand v. Motors Insurance Corp., 146 Ill. 2d 521, 533 (1992). This shifting of the burden from the insurer to the insured is especially significant since the majority holds that “had National Union properly tendered an acceptable or rejectable offer of uninsured motorist coverage, its ultimate liability and the necessary setoffs would have severely limited its ultimate liability in this case.” 326 Ill. App. 3d at 324. May’s testimony makes it abundantly clear that National Union’s erroneous listing of $30,000 as the minimum amount of coverage required by Illinois law had no effect on Jones Truck Lines’ rejection of uninsured motorist coverage. Within months of the instant policy taking effect, the statute was amended to shift the burden to the insured. The instant case is an excellent example of why the burden belongs on the insured, rather than the insurer.

I believe that the trial court’s ruling was consistent with a finding that the information supplied by National Union was sufficient to insure that Jones Truck Lines received enough information to make an intelligently informed decision. As Jones Truck Lines made an informed choice and National Union complied with section 143a — 2 of the Insurance Code as written in 1989, I would affirm the trial court’s reformation of the policy at issue to include uninsured motorist coverage at the statutory minimum rather than at $2 million.

The majority concludes that under Sulser v. Country Mutual Insurance Co., 147 Ill. 2d 548 (1992), National Union is entitled to a set-off of the amount the Norris plaintiffs received in workers’ compensation benefits. Consequently, as the worker’s compensation benefits received were in excess of the statutory minimum for uninsured motorist coverage, I would affirm the trial court’s grant of summary judgment in favor of National Union.

The majority holds that the Workers’ Compensation Act does not bar plaintiffs’ claims for uninsured motorist coverage against the decedent’s employer’s insurer, National Union. This holding is made without any real discussion or citation to authority. I would not reach this issue as I believe the previous discussion is dispositive. Similarly, I would not reach the issue of the policy’s exclusions.