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Harper v. City Mutual Insurance Co.

OPINION FILED DECEMBER 26, 1978.

GREGORY HARPER, PLAINTIFF-APPELLANT,

v.

CITY MUTUAL INSURANCE COMPANY, DEFENDANT-APPELLEE. — GOVERNOR FLOWERS, PLAINTIFF-APPELLANT,

v.

CALUMET MUTUAL INSURANCE COMPANY, DEFENDANT-APPELLEE. — JOHN WILLIAMS, JR., PLAINTIFF-APPELLANT,

v.

CITY MUTUAL INSURANCE COMPANY, DEFENDANT-APPELLEE.



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

MR. JUSTICE BROWN*FN1 DELIVERED THE OPINION OF THE COURT: *FN1 THIS OPINION WAS PREPARED BY JUSTICE BROWN WHILE ASSIGNED TO THE ILLINOIS APPELLATE COURT, FIRST DISTRICT.

Gregory Harper, Governor Flowers, and John Williams, Jr., commenced separate declaratory judgment actions to determine their rights under the uninsured motor vehicle provisions of a liability insurance policy issued by each defendant to plaintiffs' employers. Defendants moved to dismiss the action because each policy contained a provision which excluded such coverage if workmen's compensation benefits were available. The circuit court granted defendants' motions and final judgment was entered against each plaintiff. The plaintiffs' separate actions were consolidated on appeal.

The issues presented on appeal are (1) whether a claimant may be denied the right to seek recovery under the uninsured motor vehicle provision of his employer's insurance policy when that policy contains a clause which excludes such coverage if benefits are available under workmen's compensation insurance, and (2) whether plaintiff Williams' claim is barred by laches because he did not commence his action until nine years after he was injured. The pertinent facts follow.

Each plaintiff, while employed by a cab company and in the scope of his employment, sustained bodily injury when his cab was involved in a collision with an uninsured motor vehicle. Flowers' collision occurred in July of 1975; Harper's in May of 1973; and Williams' in August of 1968. Williams did not make a demand on defendant, City Mutual Insurance Company, until 1973. All three actions were commenced in 1977.

At the time of the collisions, there was in effect an automobile liability insurance policy issued by the defendants to each plaintiff's employer. As required by section 143a of the Illinois Insurance Code (Ill. Rev. Stat. 1967, ch. 73, par. 755a), the policies contained a clause providing the cab company with uninsured motor vehicle coverage with limits of $10,000/$20,000. The policies also contained a provision which stated:

"Uninsured motorist coverage shall not apply:

(d) To bodily injury of any employee of the named insured sustained while in the course of his employment, if benefits for bodily injury are available under workmen's compensation insurance."

At the time of the collisions, plaintiffs were covered by workmen's compensation insurance, although neither Harper nor Flowers made a claim under the Act. Williams, however, did make a claim and he received a $750 lump sum settlement.

Plaintiffs contend that they have a right to coverage under the uninsured motor vehicle provisions contained in the insurance policies issued by defendants to their employer. They maintain that the workmen's compensation clause excluding coverage is against public policy and in violation of section 143a of the Insurance Code (Ill. Rev. Stat. 1967, ch. 73, par. 755a).

Defendants maintain that this exclusionary clause does not contravene the uninsured motorist provisions of section 143a. They claim that the net effect of substituting the workmen's compensation remedy for the uninsured motorist remedy is to provide plaintiffs with uninsured motor vehicle benefits without the necessity of establishing fault, and without a $10,000 limitation on recovery. They further claim that this provisions was approved by the Illinois Director of Insurance, and that such approval has persuasive effect.

• 1, 2 While parties are generally free to make their own contracts, a statute which is in force at the time the policy is issued is controlling, and policy provisions in conflict with that statute are void. (Bertini v. State Farm Mutual Automobile Insurance Co. (1st Dist. 1977), 48 Ill. App.3d 851, 362 N.E.2d 1355.) Furthermore, the approval of the Director of Insurance does not validate a provision which is in violation of a statute. Bertini v. State Farm Mutual Automobile Insurance Co.

• 3 Therefore, in order to determine the validity of the exclusionary clause, an examination of section 143a of the Insurance Code is necessary. That section provides:

"(1) On or after the effective date of this amendatory Act of 1963, no policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle shall be renewed or delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state unless coverage is provided therein or supplemental thereto, in limits for bodily injury or death set forth in Section 7-203 of the `Illinois Motor Vehicle Law', approved July 11, 1957, as heretofore and hereafter amended, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles and hit-and-run motor vehicles because of bodily injury, sickness or disease, including death, resulting therefrom * * *." (Ill. Rev. Stat. 1967, ch. 73, par. 755a.)

In Ullman v. Wolverine Insurance Co. (1970), 48 Ill.2d 1, 4, 269 N.E.2d 295, the supreme court stated that the purpose of this provision was to place the policyholder in substantially the same position he would have occupied if the wrongful driver had obtained the minimum liability insurance required by the ...


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