Appeal from the Circuit Court of Cook County; the Hon. Arthur
L. Dunne, Judge, presiding.
JUSTICE MURRAY DELIVERED THE OPINION OF THE COURT:
This cause involves an appeal by plaintiff-appellant Karen Makela (plaintiff) and defendant-appellant State Farm Mutual Automobile Insurance Company (State Farm) from the trial court's entry of summary judgment in favor of defendant-appellee Central Security Mutual Insurance Company (Central). Plaintiff was injured in an automobile accident while a passenger in a 1979 Datsun owned by Harry Shank and insured by Central. The other involved vehicle was driven by an uninsured motorist. Plaintiff filed a two-count declaratory judgment action against Central and State Farm, her own insurer. Count I of the complaint seeks a declaration that plaintiff is entitled to $50,000 uninsured-motorist coverage under the language of Shank's policy with Central. In count II, plaintiff seeks coverage of $50,000 based upon Central's failure to comply with the provisions of section 143a-2 of the Illinois Insurance Code (Ill. Rev. Stat. 1983, ch. 73, par. 755a-2), which requires insurers to offer uninsured-motorist coverage up to the limits of bodily injury liability in a policy.
The facts are not disputed. On March 23, 1983, plaintiff was a passenger in a 1979 Datsun, driven by Shank's daughter with his permission. The car was involved in a collision with an uninsured motorist. The Datsun, owned by Shank, was insured by Central. Plaintiff also has uninsured-motorist coverage in the amount of $25,000 under her own automobile policy issued by State Farm. The Central policy issued to Shank originally covered two cars, a 1972 Gremlin and a 1977 Oldsmobile, both of which had 50/100 bodily injury liability coverage. In 1980, Shank signed a form from Central authorizing different limits of uninsured-motorist coverage for the two cars: $50,000 per person and $100,000 per occurrence (50/100) for the Oldsmobile, and the statutory minimum of $15,000 per person and $30,000 per occurrence (15/30) for the Gremlin.
At his deposition, Shank stated that when he purchased the Datsun in 1982, he telephoned his insurance agent and told the agent that he wanted the same coverage on the Datsun that he had on the Gremlin. Shank was not quoted a premium for the Datsun. Shank also stated that he did not know what coverage he had on the Gremlin at the time of the call. He also testified that he never received any information from Central as to what uninsured-motorist coverage in the amount of 50/100 would cost for the Datsun. Subsequently, the uninsured-motorist coverage for the Datsun was 15/30, the same amount as that for the Gremlin. Shank did not recall having signed the 1980 uninsurance form. However, several months later, in an affidavit, Shank remembered that he had received a "dear policyholder" letter explaining the available uninsurance options, which letter was accompanied by a form listing the choices of uninsured-motorist limits. The affidavit further stated that when Shank filled out and signed the form choosing the 15/30 uninsured-motorist coverage for the Gremlin, he understood that he could have chosen coverage in the same amount as his bodily injury coverage, but that he chose not to.
Cross-motions for summary judgment were filed by all three parties, the Shank affidavit being attached to Central's motion. The trial court granted Central's motion for summary judgment on both counts, holding that the limit pursuant to the Shank policy for uninsured-motorist coverage was 15/30. It was also held that plaintiff's State Farm policy was in excess to Shank's Central policy.
On appeal, plaintiff contends that Central failed to offer Shank uninsured-motorist coverage as required by law in connection with the Datsun. She also asserts that the trial court improperly considered the Shank affidavit which contradicted his prior deposition statements, and that entry of summary judgment on both counts was error where count I was not argued or briefed before the trial court. Plaintiff also contends that the language of Shank's policy entitles her to $50,000 in uninsured-motorist coverage. State Farm makes a similar argument concerning Central's failure to offer limits of uninsured-motorist coverage up to the bodily injury liability limits of 50/100 for the Datsun. State Farm contends that section 143a-2 (Ill. Rev. Stat. 1983, ch. 73, par. 755a-2) requires a new offer when a car is added to a multiple-vehicle policy. Central contends that its 1980 offer to Shank was in compliance with section 143a-2 and that the addition of a car was not a new or separate policy which would require a new uninsurance offer. Central also responds that the anti-stacking provision of the Shank policy precludes stacking of the uninsured-motorist coverages.
• 1 All parties apparently agree that the relevant statutory provisions require an insurance carrier to notify an insured of the right to obtain uninsured-motorist coverage up to the limits of the policy limits for bodily injury liability. (Ill. Rev. Stat. 1983, ch. 73, par. 755a-2.) The parties also agree that under the offer requirements delineated by the court in Tucker v. Country Mutual Insurance Co. (1984), 125 Ill. App.3d 329, 465 N.E.2d 956, Central's 1980 offer of uninsured-motorist coverage for the Gremlin and Oldsmobile was adequate. The Tucker holding requires that where the uninsurance offer is made other than on a face-to-face negotiation: (1) it must be commercially reasonable; (2) the limits of optional coverage must be stated in specific rather than general terms; (3) the insurer must intelligently advise the insured of the nature of the optional coverages; and (4) the insured must be advised that the optional coverages are available at a relatively modest increase in premium. 125 Ill. App.3d 329, 335, 465 N.E.2d 956, 960-61.
The real issue in this case is whether Central should have sent a new offer to Shank in 1982 when he added the Datsun to his policy. Resolution of this issue necessitates interpretation of that portion of the statute providing for the right of an insured to elect or reject additional uninsured-motorist coverage. Section 143a-2(2) provides in part:
"In those cases where the insured has elected to purchase limits of uninsured motorist coverage which are less than bodily injury liability limits or rejects limits in excess of that required by law, the insurer need not offer in any renewal or supplementary policy, coverage in excess of that elected by the insured in connection with a policy previously issued to such insured by the same insurer unless the insured subsequently makes a written request for such coverage." Ill. Rev. Stat. 1983, ch. 73, par. 755a-2(2).
• 2 It appears from a plain reading of the statute that if the addition of the Datsun to the policy resulted in a renewal or supplementary policy, there was no need for Central to send a new offer of uninsured-motorist coverage to Shank. On the other hand, if the addition of the Datsun was not a renewal or supplementary policy, as those terms are used in the statute, then Central's failure to send a new offer in 1982 was violative of the statutory requirement of section 143a-2. Such a violation requires that uninsured-motorist coverage at the limit of bodily injury liability coverage, which would be 50/100 in this case, is read into the policy by operation of law. Tucker v. Country Mutual Insurance Co. (1984), 125 Ill. App.3d 329, 337, 465 N.E.2d 956, 962.
Therefore, the issue is whether section 143a-2 requires a new offer of uninsured-motorist coverage when a new car is added to an existing policy. In other words, we must determine whether the term "renewal or supplementary policy" as used in section 143a-2 covers the addition of a car or whether that addition constitutes a new policy. In order to determine the legal meaning of this term, as it applies to the present case, it is necessary to examine relevant case law, the policy, and, of course, the statute itself.
Since this is a case of first impression in Illinois, we will first consider the manner in which other jurisdictions have resolved the issue. Florida is the only State to have issued many decisions regarding this specific matter. In 1973, the Florida legislature enacted an uninsurance/underinsurance statute (Fla. Stat. sec. 627.727 (1984)) similar in wording to the Illinois statute in this case. A Florida district court, in United States Fire Insurance Co. v. Van Iderstyne (Fla. App. 1977), 347 So.2d 672, held that the addition of an endorsement covering a new car to an existent policy, with an additional premium charged, constituted a separate and severable contract and the endorsement should have included the mandated coverage. This reasoning was followed in Hartford Accident & Indemnity Co. v. Sheffield (Fla. App. 1979), 375 So.2d 598, wherein an insured lowered her liability limits thus creating an amended declarations page. The court decided that the change in terms and conditions prohibited applying the statutory renewal exception to the amendment and held that a new offer of uninsured-motorist coverage should have been made. (Cf. United States Fidelity & Guaranty Co. v. Waln (Fla. App. 1981), 395 So.2d 121 (substitute automobile does not change policy in a material respect where liability limits do not change, and no new offer is required).) However, other district courts interpreted the same statute regarding rejections of offers in a contrary manner. See Kerr v. State Farm Mutual Automobile Insurance Co. (Fla. App. 1983), 434 So.2d 970 (substitution of wife's name on deceased spouse's policy not a material change); Sentry Insurance, A Mutual Co. v. McGowan (Fla. App. 1982), 425 So.2d 98 (addition of vehicles to existent policy does not require a new rejection of uninsured-motorist coverage).
In 1983, the Florida Supreme Court in American Fire & Indemnity Co. v. Spaulding (Fla. 1983), 442 So.2d 206, considered the issue with respect to several policy changes addition of a driver and addition of a vehicle and concluded that the statute does not require a new offer with every material policy endorsement. The statute instead requires that a rejection of uninsured-motorist coverage or a selection of lower limits must be knowingly made, which is a question for the trier of fact. Florida has subsequently amended its statute to provide that uninsured-motorist coverage need not be offered and rejected in connection with a renewal policy "or any other policy which extends, changes, supersedes, or replaces an existing policy." (Fla. Stat. sec. 627.727(1) (1983).) Thus, Florida courts, by a circuitous route, have concluded that the mere addition of another person or vehicle to an existing policy is not a reissuance of a whole policy. This is so because an endorsement and policy are but one contract for insurance and the policy itself establishes the primary terms of coverage. Metropolitan Property & Liability Insurance Co. v. Gray (Fla. App. 1984), 446 So.2d 216.
Texas courts have also interpreted a statute similar to that of Illinois' as not requiring a new offer of uninsurance coverage with every policy change. The court in El-Habr v. Mountain States Mutual Casualty Co. (Tex. App. 1981), 626 S.W.2d 171, held that an endorsement adding a new vehicle did not create a new contract of insurance but rather merged into the original policy and no new offer of uninsurance coverage was necessary. (See also 1 Couch on Insurance 2d sec. 4:36 (rev. ed. 1984).) In Louisiana, the relevant statute states that no new coverage offer is necessary "in or supplemental to a renewal or substitute policy" once the insured has rejected the coverage as to a policy previously issued by the same insurer. (La. Rev. Stat. Ann. sec. 22:1406D(1) (West 1978).) In Myers v. Thibeaux (La. App. 1978), 365 So.2d 266, a plaintiff purchased his original policy in 1962 and rejected uninsured-motorist coverage. Renewal policies were issued until 1973, when the policy was changed to cover a different automobile with different coverages. No new offer of uninsured-motorist coverage was made at that time. The Meyers court held that the 1973 policy was merely a renewal and/or substitute for the original 1962 policy. Tennessee also appears to follow this line of reasoning in the manner its courts interpret its statute which requires that insureds be given an opportunity to purchase higher uninsurance coverage. Tennessee courts require only that the insured possess the knowledge that he could purchase excess insurance; it makes no difference where he received the information as long as an opportunity to purchase it was once relayed to the insured. (Groover v. Torkell (Tenn. App. 1982), 645 S.W.2d 403 (insured rejected higher coverage while insured under a Georgia policy; ...