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Stryker v. State Farm Mutual Auto. Ins.

OPINION FILED JULY 22, 1977.

DONALD R. STRYKER, PLAINTIFF-APPELLANT,

v.

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, DEFENDANT-APPELLEE.



APPEAL from the Circuit Court of Lake County; the Hon. THOMAS R. DORAN, Judge, presiding.

MR. JUSTICE GUILD DELIVERED THE OPINION OF THE COURT:

This is an action for a declaratory judgment that the plaintiff, Donald R. Stryker, is entitled to uninsured motorist benefits under his automobile insurance policy issued by the defendant, State Farm Mutual Insurance Company. Defendant filed a motion for summary judgment which was granted by the trial court. Plaintiff appeals.

The main issue on appeal is whether an automobile liability insurance policy which reduces uninsured motorist coverage by amounts paid under workmen's compensation is against public policy where the workmen's compensation carrier has waived its subrogation rights to payments under the uninsured motorist coverage and the damages are greatly in excess of the uninsured motorist coverage.

The plaintiff was involved in an automobile accident with an uninsured motorist on April 17, 1973. At that time plaintiff was insured with the defendant under an automobile liability policy which included the minimum statutory uninsured motorist coverage of $10,000 per person and $20,000 per accident. On August 19, 1975, plaintiff filed a complaint for declaratory judgment under section 57.1 of the Civil Practice Act (Ill. Rev. Stat. 1975, ch. 110, par. 57.1). In his complaint the plaintiff alleged he was injured in an automobile accident with an uninsured motorist and that his damages were greatly in excess of $10,000; that plaintiff had received workmen's compensation benefits for his injuries; that the workmen's compensation carrier had waived subrogation rights to payments under the uninsured motorist coverage; and that the defendant refused to submit plaintiff's demand to arbitration. After making its appearance, defendant filed a motion for summary judgment, asserting that the workmen's compensation benefits to plaintiff exceeded the $10,000 limits of the liability under the uninsured motorist provision to plaintiff's policy; that the policy reduced the limits of uninsured coverage to amounts paid under workmen's compensation; and that the Illinois Supreme Court has approved such limitation provisions in Ullman v. Wolverine Insurance Co. (1970), 48 Ill.2d 1, 269 N.E.2d 295.

On November 17, 1975, the plaintiff, in response to a request of the defendant, admitted that the plaintiff's workmen's compensation payments exceeded $10,000. On January 27, 1976, counsel for both parties appeared before Judge Thomas R. Doran and argued the motion for summary judgment. Following arguments, Judge Doran granted the defendant's motion and entered judgment accordingly. Plaintiff appeals from that order.

On appeal plaintiff argues that since the workmen's compensation carrier has waived its rights to subrogation of amounts which may be paid under the uninsured motorist provisions of the policy, that Ullman is not controlling. Plaintiff contends that the waiver of the "Limits of Liability" provision, the same provision as the Supreme Court construed in Ullman, places him in a different position than the plaintiff in Ullman. Plaintiff concludes that therefore the "Limits of Liability" provision is contrary to the stated purpose of the uninsured motorist act (Ill. Rev. Stat. 1973, ch. 73, par. 755a), and is void as against public policy.

In Ullman the Supreme Court was presented with the issue of whether the "Limits of Liability" provision of the uninsured motorist coverage in Ullman's automobile liability insurance policy with Wolverine Insurance Company violated public policy. In the majority opinion of Ullman, the court quoted the pertinent parts from the uninsured motorist act (Ill. Rev. Stat. 1969, ch. 73, par. 755a); the financial responsibility act (Ill. Rev. Stat. 1969, ch. 95 1/2, par. 7A-203) and the "Limits of Liability" provision in question. The court noted that the legislative intent of the uninsured motorist act was,

"* * * to place the policyholder in substantially the same position he would occupy, so far as his being injured or killed is concerned, if the wrongful driver had had the minimum liability insurance required by the Financial Responsibility Act." (48 Ill.2d 1, 4.)

The court then pointed out that under the Illinois Workmen's Compensation Act (Ill. Rev. Stat. 1969, ch. 48, par. 138.5(b)) an employee who receives compensation under the Act is required to reimburse the employer from any recovery the employee received from a third party legally responsible for the employee's injuries. The majority concluded that if the deduction challenged were permitted, that the employee's position would in fact be the same under the policy as where the tortfeasor carried minimum insurance. In such a case, if the injured employee recovered any money damages from a minimally insured tortfeasor he would be required to fully reimburse the workmen's compensation carrier to the extent of the $10,000 recovery. The effect is a wash of the funds through the employee's hands and of no benefit to him. This has the same effect upon the injured employee as if the uninsured motorist coverage "Limits of Liability" provision were enforced. Therefore, the court held that the provision in question did not violate public policy.

Under Ullman the "Limits of Liability" provision is enforceable and, therefore, the insured injured employee had no right to recover from the defendant insurance company under the uninsured motorist coverage. Thus, in the case at hand, the workmen's compensation carrier's waiver was a waiver of a right that was nonexistent. We fail to see how this waiver of a nonexisting right of subrogation can be held to alter the holding of Ullman. The plaintiff has received minimum statutory compensation from his employer's workmen's compensation carrier and that is the maximum compensation that the uninsured motorist act was intended to guarantee. The act is not intended to guarantee the plaintiff any more than he has received. No one is guaranteed that his injury will be fully compensated, only that he will be able to receive up to $10,000 compensation when injured in an automobile which is under the provisions of an uninsured motorist policy. We therefore find Ullman is controlling and that the "Limits of Liability" provision is not violative of public policy.

In light of our holding we find no need to pass upon the plaintiff's other argument that "double recovery" does not justify the ruling because plaintiff's damages are greatly in excess of workmen's compensation benefits.

For the above reasons, the judgment of the trial court is affirmed.

Affirmed.

NASH, J., ...


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