Appeal from the Town Court of Cicero; the Hon. HENRY J.
SANDUSKY, Judge, presiding. Reversed.
MR. JUSTICE MCCORMICK DELIVERED THE OPINION OF THE COURT.
John Laurie, d/b/a Laurie's Pizzeria, hereafter referred to as the plaintiff, brought suit against Holland America Insurance Company, hereafter referred to as the defendant, in the Town Court of Cicero, Cook County, Illinois. The suit was brought to recover medical payments alleged to be due under an insurance policy issued by the defendant. The court, on motion of the plaintiff, entered a summary judgment on the pleadings in favor of the plaintiff for the sum of $1,316.05, from which judgment this appeal is taken.
In his complaint the plaintiff alleges that the defendant on January 14, 1958 executed and delivered its policy of insurance, No. AC 106246, whereby it insured plaintiff for medical payments payable "to or for each insured" who sustains bodily injury caused by accident through being struck by an automobile etc. for a term of one year from January 14, 1958. A copy of the policy is attached to the complaint. Plaintiff further alleges that Jerry Laurie, the son of the named insured, was struck by an automobile and incurred medical bills which the defendant refused to pay.
The defendant filed an answer in which it stated that at the time in question as alleged in the complaint there was in full force and effect another policy of insurance issued by the defendant, bearing No. AC 105809, which insured the plaintiff for medical payments payable to or for each insured who sustained bodily injury caused by an accident through being struck by an automobile etc.; that the plaintiff submitted proof under that policy of the accident sustained by Jerry Laurie; and that payment of the amount of the bills thus incurred in the amount of $1,316.05 was made to the insured under that policy of insurance. The answer further alleged that the policy of insurance sued on contained a provision in regard to "excess" insurance.
While we have only the policy of insurance sued on before us, it is agreed by both parties in their briefs that the two policies contained identical provisions with reference to the coverage and to the "excess" insurance. The provisions were as follows:
"Coverage C Automobile Medical Payments: To pay all reasonable expenses incurred within one year from the date of accident for necessary medical, surgical and dental services, including prosthetic devices, and necessary ambulance, hospital, professional nursing and funeral services:
"Division 2. To or for each insured who sustains bodily injury, sickness or disease, caused by accident, while in or upon, or while entering into or alighting from, or through being struck by an automobile."
"21. Other insurance Coverage C: . . . Under division 2 of coverage C, the insurance shall be excess over any other valid and collectible automobile medical payments insurance available to an insured under any other policy."
The injured boy was covered by both policies. He had incurred medical bills amounting to $1,316.05 on account of the accident. The question presented to us is whether the defendant, having under one policy paid all of the medical expenses incurred by Jerry Laurie as a result of his having been struck by an automobile, is under the terms of the other policy required to again make payment for the same medical expenses arising out of the same accident.
We have not been referred to any case, nor have we been able to find one, where this precise question was determined. The inclusion of clauses such as this in liability and accident policies is a comparatively recent development in insurance law. Cases have arisen between insurance companies on liability policies where one company has paid the total loss and seeks reimbursement from another company having a policy covering the same loss when both policies have "excess" insurance clauses. In determining a case such as the instant one, where the same company has issued identical policies covering the same loss, the reasoning in the above mentioned cases is helpful.
In the annotation in 122 A.L.R. 1204, at pp. 1207-8, it is said:
"An interesting situation is presented when two policies of insurance are taken out to protect against the same risk, both containing a provision that in the event other insurance, whether prior or subsequent in point of time to the present policy, is issued to cover the risk insured, the liability under the present policy shall be limited to any excess of the loss over the amount of such other insurance, and a loss occurs in an amount less than the face amount of either policy. It is apparent that there are several possible positions which might be taken with regard to the liability of either or both of the insurers under these circumstances. The view might be taken that in a suit on policy A the effect of the provision contained therein is to limit the insurer's liability to the excess of the loss over the face amount of policy B and, since the loss is admittedly less than the face amount of Policy B, the insured cannot recover. Should this view be adopted the conclusion would seem inevitable that in a suit on policy B the same reasoning must apply and no recovery could be had thereon, unless of course it could be shown that at the time the policies were issued the insured and the two insurers agreed between themselves as to which of the policies should be primarily liable for any loss. While the final result of the foregoing reasoning, namely, the inability of the insured to recover on either policy, seems at first blush to be unjust, some justification might be found for it in those considerations of public policy which condemn the procurance of overinsurance, at least where it appears that the property was at all times within the management and control of the insured.
"Another view of the legal situation presented from the existence on the same risk of two policies of insurance containing `excess coverage' clauses, which is, in essence, the converse of the position just referred to, might be adopted. The conclusion might be reached in a suit on policy A that since the excess coverage provision contained therein is not operative in the absence of other insurance on the risk and since it may be said that there was no insurance in existence by virtue of policy B, which by its terms was inoperative because there was other insurance on the risk in a sum exceeding the amount of the loss, the excess coverage provision in policy A never became effective and the insured is entitled to maintain his action. . . .
"A third view, seemingly less logical than either of the two preceding positions, is conceivable. This is, simply, that an action may be maintained only on the policy first issued. In other words, the conclusion might be reached that if one policy containing an excess coverage clause is procured on the risk in question, its effect is to limit the liability under any subsequent policies containing similar clauses to the excess of the loss over the face amount of the prior policy, and that if the loss is less than the amount of such prior contract, recovery can only be had thereunder. The difficulty with this position is, of course, that the excess coverage provisions, by their terms, seem to apply equally to policies preceding or following in point of time the policy containing the provision in question. Consequently, in order to ...