APPEAL from the Circuit Court of Lake County; the Hon. HARRY
D. STROUSE, JR., Judge, presiding.
MR. JUSTICE WOODWARD DELIVERED THE OPINION OF THE COURT:
Rehearing denied November 28, 1978.
Plaintiff, Johanna Zurich, brought this action against Country Mutual Insurance Company (Country), American Interstate Insurance Company of Wisconsin (American) and Everett C. Gentry (Gentry), asking that the court determine and adjudicate the rights and liabilities of the parties thereto with respect to the policies of insurance involved; that the court find that Country was obligated under its insurance policy issued to plaintiff's husband, to provide uninsured motorist coverage, and to compel arbitration by Country if no agreement to settle the claim under the uninsured motorist coverage was achieved. The trial court found for the plaintiff and entered a judgment order to compel arbitration. Country appeals.
Country insured Gilbert Zurich under a personal vehicle policy covering a 1972 Buick Skylark, which included uninsured motorist coverage. Plaintiff, wife of the insured, was driving this vehicle when she was involved in an automobile collision with an automobile driven and owned by Gentry, and insured by American. Subsequently, plaintiff filed suit (hereinafter referred to as the P.I. suit) against Gentry, who was served with summons under the Illinois long arm statute (Ill. Rev. Stat. 1975, ch. 110, par. 17). American was also notified of the P.I. suit and employed local counsel to defend Gentry. Country was not a party to the P.I. suit. Thereafter, upon notice to plaintiff's attorneys, American's attorneys filed a motion to withdraw as attorneys for Gentry on the ground of his non-cooperation, occasioned by his disappearance and their inability to locate him. The motion to withdraw was granted. Plaintiff then sent Country a notice of claim and selection of an arbitrator under the uninsured motorist coverage of the policy. Country responded, denying that there was uninsured motorist coverage as to this occurrence and refused to arbitrate.
Plaintiff then instituted this suit for declaratory judgment, joining as defendants Country, American and Gentry; both Country and American were served with summons and appeared by counsel. Plaintiff's complaint alleged the facts set forth above including the withdrawal of American's defense based on Gentry's violation of his requirements as an insured with American. Further, attached to the complaint was a copy of American's motion to withdraw in the P.I. suit describing American's attorneys' efforts to locate Gentry who had moved without leaving a forwarding address and the inability of private investigators hired by American to locate him. Country filed an answer which admitted the foregoing but denied any liability under the uninsured motorist coverage of plaintiff's policy; the answer further set forth an affirmative defense alleging that American improperly denied coverage to Gentry and that it failed to prove Gentry's non-cooperation. American filed a reply denying the allegations of Country's affirmative defense.
Memorandums of law were submitted to the trial court and thereafter the cause came on for hearing based on the pleadings, exhibits and statements of counsel representing plaintiff and Country and American. It appears from the record of this hearing that Gentry had been indicted for burglary by the Lake County grand jury on September 2, 1975, and that a bench warrant was issued for his arrest and his bond was fixed at $10,000; that the warrant has never been served and that this criminal proceeding is still pending. It further appears that at this hearing the trial court indicated it was ready to decide the case; counsel for American was present and indicated he had witnesses available; counsel for Country considered making an offer of proof; court was recessed and there was no further evidence offered. The trial court entered an order requiring Country to proceed with the resolution and arbitration of plaintiff's uninsured motorist claim.
Country contends first that the unilateral act of American withdrawing its coverage for Gentry did not constitute Gentry an uninsured motorist within the meaning of section 143a of the Illinois Insurance Code (Ill. Rev. Stat. 1963, ch. 73, par. 755a).
Under the policy in question, an "uninsured vehicle" is defined as follows: "(1) a vehicle with respect to the ownership, maintenance or use of which there is no bodily injury liability bond or bodily injury liability insurance policy applicable at the time of the accident with respect to any person or organization legally responsible for the use of such vehicle, or (2) a vehicle where on, prior to or after the accident date the liability insurer thereof is unable to make payment with respect to the legal liability of its insured within the limits specified in the policy because of the entry by a court of competent jurisdiction of an order of rehabilitation or liquidation by reason of insolvency on or after the accident date, or (3) a hit-and-run vehicle as hereinafter defined."
The trial court here found that the language as written in the above policy was unduly restrictive and that in fact it should cover as uninsured a driver where there is a disclaimer of insurance as in the present case, and therefore plaintiff should be in a position to pursue her claim directly with her own insurance company.
1 Prior to 1963, an insurance company had the right to limit the coverage on the policies it issued, including uninsured motorist coverage. However, in 1963 the legislature enacted section 143a of the Insurance Code which prohibited the issuance of any motor vehicle insurance policy unless it provided uninsured motorist coverage. In view of the requirement of mandatory coverage our supreme court in Kaszeski v. Fidelity & Casualty Co. (1973), 54 Ill.2d 241, 246, 296 N.E.2d 743, 746, determined that, "* * * a motorist who is not covered by insurance is an `uninsured motorist,' and it is immaterial whether insurance coverage never existed or whether it once existed but has since been removed. Similarly, it is immaterial whether the insurance coverage has been removed by the voluntary act of the insurance company or by its involuntary insolvency. * * *" Further in the prior case of Smiley v. Estate of Toney (1969), 44 Ill.2d 127, 130, 254 N.E.2d 440, 441, the supreme court stated, "We are not persuaded that the policy definition or an `uninsured vehicle', if it is unambiguous, must always control the application of the statute. * * *"
2 In the past Illinois courts> have not hesitated to reject restrictive definitions in insurance policies in favor of coverage to the insured in an uninsured motorist situation. (See Barnes v. Powell (1971), 49 Ill.2d 449, 275 N.E.2d 377; Doxtater v. State Farm Mutual Automobile Insurance Co. (1972), 8 Ill. App.3d 547, 290 N.E.2d 284; Franey v. State Farm Mutual Automobile Insurance Co. (1972), 5 Ill. App.3d 1040, 285 N.E.2d 151.) While these cases are factually distinguishable from each other and the case at bar, it is clear from the holdings of these cases that the legislative intent was to provide extensive uninsured motorist coverage for those insured under an automobile liability policy. Having contracted for and paid the premiums for uninsured motorist coverage, plaintiff is entitled to the maximum protection possible consonant with the fairness to the insurer.
3 On the basis of the above, we conclude that the trial court correctly determined that Country's insurance policy was too restrictive and should extend to the situation involving a disclaimer of coverage.
Secondly, Country contends that the insurer who asserts a breach of the cooperation clause has the burden of proving such breach. Country relies on M.F.A. Mutual Insurance Co. v. Cheek (1977), 66 Ill.2d 492, 363 N.E.2d 809. In M.F.A. Mutual Insurance Co. the insurance company brought an action for declaratory judgment seeking a finding that it was not liable under an insurance policy issued to Cheek for damages suffered by a pedestrian struck by Cheek's car, due to an alleged violation of the cooperation clause of the policy. The trial court found in favor of defendants and the appellate court affirmed. On appeal, the issue before the supreme court was whether there was a breach of the cooperation clause in the standard automobile insurance policy so that the responsibility of the insurer would be extinguished. In affirming the decisions of the trial court and the appellate court, the supreme court held that unless the alleged breach of the cooperation clause substantially prejudiced the insurer in defending the primary action, it is not a defense under the contract. Country also relies on Mazzuca v. Eatmon (1977), 45 Ill. App.3d 929, 360 N.E.2d 454, where the court held that the burden of proof is on the insurer to establish the affirmative defense of breach of the cooperation clause.
While both contain accurate statements of the law, neither M.F.A. Mutual Insurance Co. nor Mazzuca are applicable here. In those cases the insurance carrier was seeking to avoid its policy obligation to pay damages to a third party because of an alleged breach of the policy conditions by its insured; in that situation the burden of proof is properly placed on the insurance carrier. However, in the case at bar it is the insured seeking recovery from her ...