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Bertini v. State Farm Mutual Auto. Ins.

OPINION FILED MAY 5, 1977.

JOSEPH R. BERTINI, INDIV. AND AS ADM'R OF THE ESTATE OF MICHAEL J. BERTINI, DECEASED, PLAINTIFF-APPELLEE,

v.

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, DEFENDANT-APPELLANT. — (CENTRAL NATIONAL INSURANCE COMPANY OF OMAHA, DEFENDANT-APPELLEE.)



APPEAL from the Circuit Court of Cook County; the Hon. ARTHUR L. DUNNE, Judge, presiding.

MR. JUSTICE ROMITI DELIVERED THE OPINION OF THE COURT:

Rehearing denied June 2, 1977.

This appeal involves an action for declaratory judgment instituted by plaintiff, Joseph R. Bertini, individually and as administrator of the estate of Michael J. Bertini, deceased, against State Farm Mutual Automobile Insurance Co. (State Farm) and Central National Insurance Company of Omaha (Central).

The issues in this case are two: whether an automobile insurer can limit uninsured motorist coverage to the named insured although it affords liability coverage to omnibus insureds, albeit through an escape clause, and whether an insurer issuing three policies to the same insured can escape liability through reliance on an escape clause where there is primary insurance in the minimum amount.

We reverse and remand with directions.

The facts in this case are undisputed. On August 18, 1972, Michael J. Bertini died when the motorcycle he was riding was struck by an automobile driven by an uninsured motorist. Michael Bertini allegedly was a resident of his father's household, Joseph Bertini, who is the plaintiff in this action, both individually and as administrator of Michael's estate.

Joseph Bertini at the time of the accident owned three automobiles which were insured by three separate policies issued by State Farm, one of the defendants in this action. Each of these policies provides uninsured motorist coverage with the minimum $10,000/$20,000 limits required by statute. If the deceased was in fact a member of his father's household, as alleged, then clearly he was insured under the policies. (7 Appleman, Insurance Law & Practice § 4331 (1962).) There has been no contention on appeal that the deceased was not an insured under State Farm's policies.

All of State Farm's policies contain "other insurance" clauses. In two of the policies the clause reads:

"Under coverage U with respect to bodily injury to an insured while occupying a motor vehicle not owned by a named insured under this coverage, the insurance hereunder shall apply only as excess insurance over any other similar insurance available to such occupant, and this insurance shall then apply only in the amount by which the applicable limit of liability of this coverage exceeds the sum of the applicable limits of liability of all such other insurance.

Subject to the foregoing paragraph, under coverage U if the insured has other similar insurance available to him against a loss covered by this coverage, then the damages shall be deemed not to exceed the higher of the applicable limits of liability of this insurance and such other insurance, and the company shall not be liable under this coverage for a greater proportion if the applicable limit of liability of this coverage than such limit bears to the sum of the applicable limits of liability of this insurance and such other insurance."

In the policy covering the third vehicle, to-wit, a Chevrolet station wagon, the language of the other insurance clause is identical except that the excess clause is only applicable when the insured is occupying an automobile not owned by a named insured under the coverage.

The motorcycle the deceased was riding at the time of the accident was owned by Michael Shanahan, and insured by Central. The Family Protection Coverage (Uninsured Motorist Coverage) endorsement limits its coverage to the named insured as stated in the policy. The liability portion of the policy covered besides the named insured:

"(b) any other person using or legally responsible for the use of an insured vehicle covered by this policy with the permission of the named insured, only if such other person (1) has no liability insurance of his (her) own, either primary or excess, or (2) is not included in `Persons Injured' or `Definition of Insured' in any other liability insurance policy, either primary or excess. Insurance afforded by this sub paragraph (b) shall not exceed the minimum limit of liability specified in the Financial Responsibility Law of the state in which the accident occurs. However, if such person has another policy available but said other policy has limits less than the minimum specified in the Financial Responsibility Law of the state in which the accident occurs, then this policy shall apply only as excess insurance for the difference between said minimum limits and the limits under said other policy * * *."

When both insurance companies refused to arbitrate the plaintiff's claim, he brought a declaratory judgment action against both insurers seeking a declaration of coverage and an order to arbitrate. The trial court ruled that Central afforded no coverage and that the total amount of insurance available ...


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