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10/27/89 Cincinnati Insurance v. Susan Miller

October 27, 1989

CINCINNATI INSURANCE COMPANY, PLAINTIFF-APPELLANT AND CROSS-APPELLEE

v.

SUSAN MILLER, DEFENDANT-APPELLEE AND CROSS-APPELLANT



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, SIXTH DIVISION

546 N.E.2d 700, 190 Ill. App. 3d 240, 137 Ill. Dec. 755 1989.IL.1700

Appeal from the Circuit Court of Cook County; the Hon. Robert Sklodowski, Judge, presiding.

APPELLATE Judges:

JUSTICE LaPORTA delivered the opinion of the court. McNAMARA and QUINLAN, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE LAPORTA

On August 24, 1985, defendant, her husband, and three other persons were on a family vacation in the van which defendant had purchased for her sole day-care business, The Children's Discovery Center. While in Utah, the van was struck by an uninsured motorist.

Defendant's husband, who was driving, suffered only minor injuries, but all four passengers in the van were hospitalized. Defendant was the most severely injured, ultimately undergoing a below-the-knee amputation of her right leg. At the time of the accident, defendant was approximately 11 weeks pregnant. Defendant's injuries included a claim for the loss of the fetus. Her medical expenses totaled $105,447.48.

The van was insured under a business auto liability policy issued to The Children's Discovery Center, covering both the van and a second vehicle. The business auto policy included uninsured motorist coverage with limits of $100,000 per individual and $300,000 per accident. The Children's Discovery Center was also insured under a commercial umbrella liability policy which provided additional insurance coverage in excess of amounts in certain listed underlying insurance policies, including the automobile policy, up to $1 million. Plaintiff issued both the automobile policy and the umbrella policy.

Plaintiff filed its complaint for declaratory judgment against defendants Susan Miller, the sole proprietor of Children's Discovery Center, her husband Larry Miller, and the estate of Baby Miller. The suit sought a declaration by the court of the rights and liabilities of the parties under the business auto liability policy and the commercial umbrella liability policy issued to the Children's Discovery Center by the plaintiff. The complaint alleged (1) that both policies were in effect on the date of the accident, (2) that defendant Susan Miller was injured, (3) that plaintiff had paid her $100,000, which was the limit under the uninsured motorist coverage of the business auto liability policy, and (4) that payment of $100,000 represented full satisfaction of plaintiff's obligation to defendant. The complaint further alleged that an actual controversy existed between the parties, because the defendant took the position that uninsured motorist coverage under the business auto liability policy could be stacked to provide a $200,000 limit since the policy insured two vehicles. The defendants also took the position that plaintiff was required to offer uninsured motorist coverage in its commercial umbrella liability policy under the requirements of the Illinois Insurance Code (Ill. Rev. Stat. 1983, ch. 73, par. 755a) and having failed to do so, plaintiff breached a duty to defendants.

Defendants moved for summary judgment and a finding that by operation of law the commercial umbrella liability policy contains uninsured motorist coverage limits in the amount of $1 million and a finding that the business auto liability policy contains uninsured motorist coverage limits of $200,000 per person and $600,000 each accident.

By an agreed order, defendants Susan Miller and Larry Miller were appointed jointly as special administrators of the estate of Baby Miller for purposes of this litigation. Subsequently settlement was reached for the death of the fetus, and all defendants except Susan Miller were dismissed. For purposes of this appeal, all references in this opinion to defendant refer to Susan Miller.

Plaintiff moved for summary judgment and for a finding that the uninsured motorist coverage under the business auto liability policy may not be stacked and/or a declaration that the Illinois Insurance Code does not require an insurer to offer uninsured motorist coverage on its umbrella policy whether the policy was designated as a commercial lines or personal lines policy.

The trial court ruled in favor of plaintiff and against defendant on the question of stacking, thereby limiting the recovery under the business auto liability policy's uninsured motorist coverage to defendant to the $100,000 amount already paid. The trial court ruled in favor of defendant and against plaintiff on their respective summary judgment motions on the question of the alleged requirements to offer uninsured motorist coverage under the commercial umbrella policy. Defendant then filed a motion for finding that by operation of law the commercial umbrella liability policy issued by plaintiff contains uninsured motorist coverage with limits of $1 million.

Following a full hearing the trial court made the following findings and declaration of rights and obligations: (1) Under the statutory language of section 143a-2 of the Insurance Code (Ill. Rev. Stat. 1983, ch. 73, par. 755a-2), plaintiff had an affirmative duty to offer uninsured motorist coverage to the insured defendant under the commercial umbrella liability policy; (2) from the evidence produced at the hearing, the court found the defendants would have purchased $500,000/$1 million uninsured motorist coverage under the umbrella policy if it had been offered; (3) the defendant's motion for finding that by operation of law the umbrella policy included uninsured motorist coverage of $1 million was denied; and (4) the uninsured ...


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