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Kaufmann v. Economy Fire & Casualty Co.

OPINION FILED MAY 18, 1979.

JUSTIN KAUFMANN ET AL., APPELLEES,

v.

ECONOMY FIRE AND CASUALTY COMPANY, APPELLANT. — JANET BOHNEN SALERNO, APPELLEE,

v.

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, APPELLANT.



No. 50195. — Appeal from the Appellate Court for the First District; heard in that court on appeal from the Circuit Court of Cook County, the Hon. Arthur L. Dunne, Judge, presiding.

No. 50403. — Appeal from the Appellate Court for the First District; heard in that court on appeal from the Circuit Court of Cook County, the Hon. Raymond K. Berg, Judge, presiding.

MR. CHIEF JUSTICE GOLDENHERSH DELIVERED THE OPINION OF THE COURT:

James J. Hoffnagle, of Taylor, Miller, Magner, Sprowl & Hutchings, of Chicago, for appellant.

Michael J. McArdle and Donald R. Crowe, of Mahoney & McArdle Chartered, of Chicago, for appellee.

In cause No. 50195, defendant, Economy Fire and Casualty Company (hereafter Economy), appealed from the judgment of the circuit court of Cook County entered in favor of plaintiffs, Justin Kaufmann, Geraldine Kaufmann, Daniel E. Kaufmann and Judd Kaufmann, in an action for declaratory judgment. The appellate court affirmed (52 Ill. App.3d 940), and we allowed Economy's petition for leave to appeal. In cause No. 50403, defendant, State Farm Mutual Automobile Insurance Company (hereafter State Farm), appealed from a similar judgment entered in favor of plaintiff, Janet Bohnen Salerno. The appellate court affirmed (55 Ill. App.3d 735), and we allowed State Farm's petition for leave to appeal. The causes were consolidated for argument and opinion.

On March 9, 1973, Economy issued to plaintiffs Justin and Geraldine Kaufmann a policy of automobile liability insurance which included uninsured motorist coverage with limits of $10,000 for each person and $20,000 for each accident. On December 26, 1973, Economy issued to plaintiff Daniel Kaufmann a similar policy which included identical uninsured motorist coverage. Although at the time the policy was issued to plaintiffs Justin and Geraldine Kaufmann, Daniel Kaufmann did not reside with his parents, it appears from the pleadings that after May 1, 1973, he had at all times resided with them.

On November 10, 1974, an uninsured motorist struck an automobile owned and operated by Daniel, and he, his parents and his brother, Judd, were injured. Economy admitted liability under the uninsured motorist coverage in Daniel's policy, but refused to pay additional amounts under the policy issued to his parents. Plaintiffs sought a declaration that the limits of liability under the uninsured motorist coverage of each policy, $10,000 per person and $20,000 per accident, could be cumulated so as to provide coverage of $20,000 per person and $40,000 per accident despite an "other insurance" clause in Justin and Geraldine's policy which provided:

"Other Insurance: With respect to bodily injury to an insured while occupying an automobile not owned by the named insured, the insurance under Part IV [uninsured motorist coverage] shall apply only as excess insurance over any other similar insurance available to such insured and applicable to such automobile as primary insurance, and this insurance shall then apply only in the amount by which the limit of liability for this coverage exceeds the applicable limit of liability of such other insurance.

Except as provided in the foregoing paragraph, if the insured has other similar insurance available to him and applicable to the accident, 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 for a greater proportion of any loss to which this coverage applies than the limit of liability hereunder bears to the sum of the applicable limits of liability of this insurance and such other insurance."

In cause No. 50403, defendant, State Farm, had issued to plaintiff, Janet Salerno, a policy of automobile liability insurance effective August 21, 1973, and at other times during 1973 had issued to Janet's father, Howard Bohnen, two similar policies, providing coverage for two automobiles owned by him. Each of the three policies provided uninsured motorist coverage of $10,000 per person and $20,000 per accident, and contained an "other insurance" provision virtually identical to the one set forth above. On December 30, 1973, Janet, while a passenger in an uninsured automobile, was injured when that automobile was struck by another uninsured vehicle. It is undisputed that at the time of the accident Janet resided with her father.

The circuit court entered judgments holding the uninsured motorist coverage provided in the policy issued to Justin and Geraldine Kaufmann and in the policies issued to Howard Bohnen applicable to the respective accidents, and the appellate court affirmed.

Defendants contend that under Morelock v. Millers' Mutual Insurance Association (1971), 49 Ill.2d 234, the judgments of the circuit and appellate courts> must be reversed. Plaintiffs contend that the "other insurance" clauses are ambiguous and ineffective to prevent aggregated coverage under policies issued by the same insurer to members of the same family and that "other insurance" clauses which purport to preclude the aggregating of uninsured motorist coverage are contrary to public policy, repugnant to the uninsured motorist statute, and void.

In Putnam v. New Amsterdam Casualty Co. (1970), 48 Ill.2d 71, the court considered the various types of "other insurance" clauses found in uninsured motorist coverages, and in its discussion criticized certain resolutions of the conflicts created by the various policy provisions for the reason that they "place no emphasis whatever ...


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