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Goss v. State Farm Mut. Auto. Ins. Co.

OPINION FILED SEPTEMBER 15, 1986.

MILDRED

v.

GOSS ET AL., PLAINTIFFS-APPELLEES,

v.

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, DEFENDANT-APPELLANT.



Appeal from the Circuit Court of Cook County; the Hon. Albert Green, Judge, presiding.

JUSTICE O'CONNOR DELIVERED THE OPINION OF THE COURT:

At issue is whether an excess-escape clause unambiguously precludes plaintiff, Mildred Goss, from "stacking" uninsured-motorist coverage under her own policy provided by defendant, State Farm Mutual Automobile Insurance Company (State Farm), with that provided by a similar State Farm policy issued to her husband, Hosea Goss. The trial court held that the excess-escape clause in her husband's policy did not unambiguously preclude aggregate coverage. We affirm.

On July 21, 1982, Mildred and Hosea Goss were passengers in a car that was involved in a collision with another automobile driven by Terry Lee Williams, an uninsured motorist. The vehicle in which plaintiffs were riding was operated by Emil Benak and was insured by the Economy Fire & Casualty Company. The insurance policy covering the Benak vehicle provided for a maximum uninsured-motorist coverage of $10,000 per person and $20,000 per accident, and applied to all passengers in the insured vehicle. Plaintiffs received $1,000 from Economy Fire & Casualty Company.

At the time of the accident, Mildred and Hosea Goss each owned separate automobile insurance policies issued by State Farm. Both policies contained uninsured-motorist coverage limits of $15,000/$30,000. The Gosses made a claim under Mildred Goss' policy. State Farm paid Mildred $15,000 and Hosea $500. Mildred then made a claim under Hosea's policy. State Farm refused to pay and the Gosses brought this suit for declaratory judgment requesting that defendant be precluded from asserting any policy defense to their claim for arbitration and that the court order defendant to arbitrate. Subsequently, the trial court denied defendant's motion for summary judgment and ordered defendant to arbitrate Mildred's claim under her husband's policy based on its finding that Hosea's policy affords uninsured-motorist coverage in addition to the coverage afforded to Mildred under her own policy. State Farm appeals.

• 1 The law to be applied when construing such provisions was set forth in the case of Greenholt v. Inland National Insurance Co. (1980), 87 Ill. App.3d 638, 640, 410 N.E.2d 150:

"A basic principle in the interpretation and enforcement of insurance policies is that the parties' agreement, to the extent that it does not contravene public policy, is to be enforced as written. (Menke v. Country Mutual Insurance Co. (1980), 78 Ill.2d 420, 423, 401 N.E.2d 539.) Where any provision of the policy is ambiguous, such ambiguity should be construed in favor of the insured, but this interpretive bias in favor of the policyholder is a rule of construction only (78 Ill.2d 420, 424), and rules of construction will not be resorted to when a contract is clear and unambiguous. (H.B.G. Corp. v. Houbolt (1977), 51 Ill. App.3d 955, 962, 367 N.E.2d 432.) Ambiguity, however, is not limited to grammatical imprecision in the policy; the particular factual setting of the insurance policy provides a framework for determining that the policy as executed is consistent with the intent of the parties. Glidden v. Farmer's Automobile Insurance Association (1974), 57 Ill.2d 330, 336, 312 N.E.2d 247."

The relevant provisions in the Goss' policies are as follows:

"Policy Conditions

Condition 9. Other Insurance

First, under coverage U with respect to bodily injury to an insured while occupying a motor vehicle not owned by named insured under coverage, the insurance hereunder shall apply only as excess insurance over any other similar insurance available to such occupant, and this insurance shall then apply only in the amount by which the applicable limit of liability of this coverage exceeds the sum of the applicable limits of liability of all such other insurance.

Subject to the foregoing paragraph, under Coverage U:

Other Uninsured Motor Vehicle Insurance Issued by the Company.

If other uninsured motor vehicle insurance issued by the company to the named insured also applies to the insured's bodily injury, the total limits of liability under all such coverage shall not exceed that ...


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