The opinion of the court was delivered by: BUA
NICHOLAS J. BUA, UNITED STATES DISTRICT JUDGE
Plaintiff, an insurance company, filed this declaratory judgment action to resolve a dispute over liability insurance coverage. Plaintiff contends that the insured parties are not entitled to liability coverage for injuries they sustained in an automobile accident. Pursuant to Fed. R. Civ. P. 56, plaintiff now moves for summary judgment. For the reasons stated herein, plaintiff's motion is granted in part and denied in part.
Defendants Thomas Reibel and Deborah Reibel are the named insureds on an automobile insurance policy issued by plaintiff West American Insurance Company ("West American"). The policy provides uninsured motorist coverage and liability coverage to the Reibels. West American's limit of liability for each type of coverage is $ 100,000 per person and $ 300,000 per accident.
On October 1, 1988, during the policy period, the insureds were involved in an automobile collision. Thomas and Deborah Reibel were traveling with their three children when their automobile collided with an automobile driven by Harlan Noble, an uninsured motorist. The entire Reibel family suffered severe bodily injuries from the accident.
Following the accident, the Reibels filed a claim with West American for payment under the uninsured motorist provisions of their policy. West American paid the $ 300,000 policy limit. Deborah Reibel and the three children then decided to pursue an additional claim against Thomas Reibel, who was driving when the accident occurred. They asserted a claim under the liability coverage provisions of the policy based on Thomas Reibel's alleged negligence in driving the automobile. Unable to settle that claim with West American, the claimants filed suit against Thomas Reibel and Harlan Noble in the Circuit Court of Cook County.
On September 25, 1990, West American filed this diversity action for declaratory relief. In particular, West American seeks a declaration that there is no liability insurance coverage and no duty to defendant Thomas Reibel in the state court action.
West American contends that this coverage dispute may be resolved on summary judgment. In support of its motion for summary judgment, West American raises two arguments. First, West American argues that the policy expressly excludes liability coverage for claims asserted by members of the insured's family. Second, West American asserts that even if that coverage exclusion does not apply, the insurance policy contains a setoff provision which reduces the amount of liability coverage available to the Reibels.
I. Family Member Exclusion
The insurance policy excludes coverage for bodily injuries sustained by a member of the insured's family. This "family member" exclusion provides as follows:
We do not provide Liability Coverage for any person for bodily injury to you or any family member. However, this exclusion does not apply:
a. to the maintenance or use of your covered auto by any person other than you or ...