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Wilhelm v. Universal Underwriters Ins.





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


Herbert E. Wilhelm, Jr., was a rider on a motorcycle owned and operated by Randy Henning when a collision occurred with a vehicle owned and operated by Wayne Andrews. Wilhelm was killed, and plaintiff, Wilhelm's mother, acting as administrator of his estate, brought suit against Andrews and Henning. Andrews was covered by liability insurance issued by Country Mutual Insurance Company (Country Mutual). Henning was insured by Universal Underwriters Insurance Company (Universal). Universal refused to extend liability coverage to Wilhelm under its policy, claiming that it had no liability to persons riding upon the insured motorcycle. Plaintiff then made a claim to State Farm Mutual Automobile Insurance Company (State Farm) under the uninsured motorist provisions of her own policy, asserting that decedent was covered under that policy. State Farm denied coverage, asserting that its policy was not applicable and that primary uninsured motorist coverage should be found under Henning's insurance policy issued by Universal.

Plaintiff then brought this suit for declaratory judgment against Universal and State Farm, asking that the uninsured motorist provisions of defendants' policies be held to entitle plaintiff to assert a claim pertaining to any liability Henning may have. The trial court, after a hearing, granted State Farm's motion for judgment on the pleadings. The court also held that should plaintiff recover any money from Andrews' liability insurance company, Country Mutual, no claim could be made under the uninsured motorist provisions of Henning's policy issued by Universal. Further, the court held that if plaintiff does not recover any money from Andrews' liability insurance company, Country Mutual, the uninsured motorist provisions of the Universal policy do apply. Plaintiff appeals from these orders.


Under the Universal insurance policy issued to Henning, providing insurance on the motorcycle, liability coverage did not apply to bodily injury to riders or "any person while on or getting on or alighting from the insured vehicle." It is clear that Wilhelm was not covered under the liability provisions of the Universal policy.

However, the uninsured motorist coverage provisions of the Universal policy, which provided basic protection to insureds of $10,000 per person, $20,000 per accident, stated:

"The company will pay all sums which the insured or his legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured automobile because of bodily injury, sickness or disease, including death resulting therefrom, hereinafter called `bodily injury', sustained by the insured, caused by accident and arising out of the ownership, maintenance or use of such uninsured automobile * * *."

An insured was defined as including any "person while occupying an insured automobile." *fn1 Wilhelm, being a rider on the motorcycle at the time of the collision, was therefore an "insured" under the terms of the uninsured motorist section of the Universal policy.

Universal argues that, although Wilhelm may be an "insured" under the uninsured motorist provisions, the motorcycle was not uninsured, and no claim that Henning was an uninsured motorist can be asserted under that section. The portion of the policy which defined an uninsured automobile specifically excluded an automobile insured under the policy from the definition, i.e., the motorcycle owned by Henning. *fn2 If we give effect to this exclusion, the plaintiff must be denied recovery.

In Barnes v. Powell (1971), 49 Ill.2d 449, 275 N.E.2d 377, plaintiff attacked the validity of a similar policy exclusion limiting the scope of uninsured motor vehicle coverage. The plaintiff had been injured in a one-car accident while riding in an automobile which she owned but which was driven at the time by a person who was an uninsured motorist. Due to a policy provision, as in the present case, she was unable to recover under the liability portion of her policy. An express provision also prescribed that an "uninsured automobile" did not include an "insured automobile." The issue presented to the court was whether the automobile occupied by plaintiff at the time of the accident was an "uninsured automobile." The majority opinion held in the affirmative.

The court stated that, since plaintiff was not covered under the liability provisions of her policy, "the automobile was not an insured automobile and the driver was not an insured motorist, notwithstanding that as to all others the automobile and the driver may have been insured." (49 Ill.2d 449, 454, 275 N.E.2d 377, 380.) Recognizing a conflict between this interpretation and the policy definition of an "uninsured automobile", the court expressed the opinion that the policy definition was unduly restrictive in view of the expansive uninsured motor vehicle coverage mandated by section 143a of the Insurance Code. (Ill. Rev. Stat. 1971, ch. 73, par. 755a.) Numerous authorities were cited for the proposition that the legislative purpose behind section 143a was "to assure that compensation will be available to policyholders, in the event of injury by an uninsured motorist, to at least the same extent compensation is available for injury by a motorist who is insured in compliance with the Financial Responsibility Law." 49 Ill.2d 449, 453, 275 N.E.2d 377, 379.

It was further noted that "the intent of the legislature was that the uninsured motorist coverage would protect an insured generally against injuries caused by motorists who are uninsured, and by hit-and-run motorists, and that this would complement the liability coverage." (49 Ill.2d 449, 454, 275 N.E.2d 377, 379.) The court observed:

"It is clear that there is an inconsistency between the liability coverage provision and the uninsured motorist provision of plaintiff's policy. On the one hand plaintiff is excluded from the liability coverage for the driver, and on the other, the driver does not qualify as an uninsured motorist even though there is no insurance available. So LaSalle would have us designate the automobile as insured, even though in fact as to the plaintiff it is uninsured. As stated by the court in Smiley v. Estate of Toney, 44 Ill.2d 127, at 130-131: `We are not persuaded that the policy definition of an "uninsured vehicle," if it is unambiguous, must always control the application of the statute. The statutory coverage is mandatory, and it may not be whittled away by an unduly restrictive definition. Indeed, the defendant concedes as much, pointing out that "research of the case law" indicates that before the uninsured motorist provisions of a policy come into operation it is necessary "that the tortfeasor does in fact constitute an uninsured motorist, either being insured for less than the Financial Responsibility Law of the state in which the accident occurred, or by his insurance company denying coverage due to a variety of reasons." And indeed, it is generally recognized, for example, that despite a contrary policy definition, the purpose of an uninsured vehicle statute requires that a motorist be considered uninsured if he carries liability insurance in an amount below the minimum required by the financial responsibility law. Corrigan v. Allstate Ins. Co. (1967), 108 N.H. 131, 229 A.2d 179; Allstate Insurance Co. v. Fusco, 101 R.I. 350, 223 A.2d 447; Taylor v. Preferred Risk Mut. Ins. Co. (1964), 225 Cal.App.2d 80, 37 Cal. Rptr. 63.'" 49 Ill.2d 449, 453-54, 275 N.E.2d 377, 379.

Therefore, it was held that, to the extent the policy definition conflicted with the breadth of coverage envisioned by the statute, ...

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