Appeal from the Circuit Court of Madison County. No. 90-L-1712. Honorable P.J. O'Neill, Judge Presiding. Appeal from the Circuit Court of Madison County. No. 90-L-1713. Honorable A. A. Matoesian, Judge Presiding.
Petition for Leave to Appeal Denied October 6, 1994.
The opinion of the court was delivered by: Welch
JUSTICE WELCH delivered the opinion of the court:
The matter before us on appeal is a consolidation of two cases filed on December 28, 1990, in the circuit court of Madison County: Barbara A. Purlee v. Liberty Mutual Fire Insurance Co., case no. 90-L-1712, and Kathleen Allen v. Liberty Mutual Fire Insurance Co., case no. 90-L-1713. Plaintiff Purlee appeals from the October 13, 1991, order of the circuit court granting defendant's motion for summary judgment and the December 23, 1991, order of the circuit court denying plaintiff's motion to reconsider. Plaintiff Allen appeals from the December 6, 1991, order of the circuit court granting defendant's motion for summary judgment and the January 24, 1992, order of the circuit court denying plaintiff's motion to reconsider. Plaintiffs present the following issues for our consideration on appeal:
(1) whether the availability of underinsured motorist coverage to a claimant, when the at-fault motorist's liability insurance is exhausted by payments to other claimants injured in the same occurrence, should be determined by comparing the amount of the claimant's underinsured motorist coverage to the stated amount of the at-fault motorist's liability coverage or to the amount the claimant actually recovers from the at-fault motorist's coverage;
(2) whether, if the underinsured motorist coverage statute is interpreted to deny coverage to Purlee and Allen upon the facts they allege, the statute involves an improper legislative classification which denies them equal protection of the laws and due process of law, in violation of the United States and Illinois Constitutions;
(3) whether, in comparing the amount of the claimant's underinsured motorist coverage with the liability coverage of an at-fault motorist who carries combined single-limit coverage, to determine the availability of the underinsured motorist coverage to an occurrence, the amount of the at-fault motorist's liability coverage should be reduced by the amount of property damage coverage required by the Illinois Safety Responsibility Law (Ill. Rev. Stat. 1989, ch. 95 1/2, par. 7-100 et seq.) (applies to Purlee case only);
(4) whether an insurance company, by its conduct in failing to furnish its insured with a copy of her policy despite repeated requests, in failing to timely advise its insured that it denies coverage of her claim, and in failing to offer its insured a reasonable and accurate explanation on the basis of her insurance policy or applicable law why her claim should be denied, is estopped from claiming, in the insured's subsequent suit to recover insurance benefits she claims are due, that coverage does not apply; and
(5) whether the viability of an insured's statutory and common law causes of action against her insurance company alleging that it violated various provisions of the Illinois Insurance Code (Insurance Code) (Ill. Rev. Stat. 1989, ch. 73, par. 613 et seq.) and failed to act in good faith and deal fairly with her in handling her insurance claim depends on whether her underlying insurance claim is resolved in her favor.
Plaintiffs alleged in their respective complaints that they were injured on January 31, 1989, when a motor vehicle driven by Bobby Loew collided with a building in which they were located. The record indicates that plaintiffs and five other individuals were attending a craft class on that date in the building into which Loew's pickup truck crashed and that Loew was charged with driving under the influence of alcohol. Plaintiffs alleged that as a result of that collision, they sustained damages, including severe and permanent injuries, pain and suffering, disability, disfigurement, past and future medical expenses, and past and future lost wages. Plaintiff Allen alleged that her damages exceeded $20,000; plaintiff Purlee alleged that her damages exceeded $100,000.
Plaintiffs alleged that along with the five other persons who were also injured in this accident, they were made party-defendants to an interpleader action filed by Loew's insurance carrier and that the purpose of the action was to divide Loew's $100,000 insurance limit among the seven injured claimants, because Loew's insurance was insufficient to pay such claims in full. In the settlement reached among the seven claimants in the interpleader action, plaintiff Allen received $3,822.39 and plaintiff Purlee received $27,658.14. Plaintiffs Allen and Purlee each alleged in her complaint that the proceeds of the settlement were less than the total amount of her damages.
Plaintiff Allen holds a policy of automobile insurance with defendant including a provision for underinsured motorist coverage in the amount of $50,000 per person. Plaintiff Purlee holds a policy of automobile insurance with defendant including a provision for underinsured motorist coverage in the amount of $20,000 per person, the minimum coverage which is automatically provided in all insurance policies, unless the insured requests a higher limit.
Plaintiffs alleged in their complaints that prior to settlement of the interpleader action, they notified defendant of their intention to enter into the settlement and offered defendant the opportunity to match the proceeds to be paid under the settlement, but defendant elected not to do so. Plaintiffs alleged that after receiving their settlements, they each made a claim with defendant upon the underinsured motorist coverage provision of their respective insurance policies for the remaining unpaid balance of their claims. The record indicates that the value of plaintiff Allen's case is $22,128.17 and that the value of plaintiff Purlee's case is $134,294.20.
Plaintiffs alleged in their complaints that in breach of defendant's duty under its contracts of insurance with plaintiffs, it refuses to make or offer any payment upon plaintiffs' underinsured motorist coverage claims. Plaintiffs sought damages from defendant for breach of contract. Plaintiffs also included counts in their respective complaints alleging that in its handling of their claims defendant engaged in unreasonable and vexatious conduct entitling them to damages in excess of $15,000 and to reasonable attorney fees, costs, and penalties pursuant to section 155 of the Insurance Code (Ill. Rev. Stat. 1989, ch. 73, par. 767). In addition, plaintiffs included counts in their complaints alleging that defendant breached its implied duty to act in good faith and deal fairly with plaintiffs in all matters arising out of and relating to their relationship as insurer and insured and sought compensatory and punitive damages for such breach in excess of $50,000.
Defendant filed a motion to dismiss in each case, alleging that its policy of insurance included a provision requiring the resolution of the action by arbitration and that plaintiff Allen and plaintiff Purlee had not complied with the requirement of demanding arbitration prior to filing suit against defendant. The circuit court ruled, however, that defendant was estopped from raising the argument of plaintiffs' failure to pursue policy arbitration as a defense in this case. We have not been provided with the reports of proceeding for the hearings on defendant's motions to dismiss, but plaintiffs alleged in their complaints that demand had been made with defendant on numerous occasions to provide them with a copy of their insurance policies, that the insurance policies are in the control of defendant, but that defendant has refused to provide a copy of the policies to plaintiffs.
In its answer filed to plaintiff Allen's complaint defendant raised, as an affirmative defense, that Allen's action for coverage under the underinsured motorist coverage provided by her policy with defendant is barred by the terms of that coverage, which applies only when the insurance covering the motor vehicle causing the plaintiff's alleged injuries was less than the underinsured coverage in plaintiff's policy with defendant. Defendant further stated that because plaintiff Allen's underinsured motorist coverage was $50,000 per person and the coverage for the motor vehicle involved in the accident allegedly causing Allen's injuries was $100,000, the terms of the policy bar any underinsured motorist claim by plaintiff Allen. Defendant attached to its answer as Exhibit A a copy of plaintiff Allen's insurance policy with defendant. Plaintiff Allen filed a motion for leave to amend her complaint on September 17, 1991, proposing to add a count for a declaratory judgment to determine the coverage issue raised by defendant in its affirmative defense to her complaint, and the record indicates that such motion was allowed.
Defendant filed a motion for summary judgment in case no. 90-L-1713 against plaintiff Purlee on August 14, 1991, and a motion for summary judgment in case no. 90-L-1712 against plaintiff Allen on September 20, 1991. In its motion directed against plaintiff Allen's complaint, defendant stated that each of the four counts of plaintiff Allen's complaint are premised on a theory that defendant wrongfully or vexatiously refused to pay plaintiff's claim for underinsured motorist coverage. Defendant noted that schedule C of plaintiff Allen's policy defines underinsured motor vehicle" as a land motor vehicle or trailer of any type to which a bodily injury liability bond or policy applies at the time of the accident but its limit for bodily injury liability is less than the limit of liability for this coverage. Defendant maintained that because there is no material dispute that plaintiff's underinsured motorist coverage was $50,000 and the alleged tortfeasor's coverage was $100,000, there is no underinsured motorist coverage under plaintiff Allen's policy. Accordingly, defendant prayed for judgment in its favor against plaintiff Allen. Plaintiff Allen filed a cross-motion for summary judgment and for summary determination on count V of her amended complaint which sought a declaratory judgment that the underinsured motorist coverage in the insurance policy issued by defendant applies and is available to the extent of $46,177.61, the difference between the $50,000 underinsured motorist coverage and the amount she received in settlement from Bobby Loew's insurance company.
In its motion for summary judgment directed against plaintiff Purlee's complaint, defendant stated that plaintiff's claim is based on a theory that the insurance policy was issued to plaintiff with underinsured limits of $20,000, that plaintiff's theory of recovery under the counts of the complaint is that defendant has refused to pay said underinsured coverage amounts and is subject to penalties under section 155 of the Insurance Code and had wrongfully refused to affirm coverage or explain its refusal for payment, and that this vexatious refusal has estopped limits of coverage. Defendant argued that plaintiff Purlee's complaint failed to state a valid claim upon which relief could be granted because the claim in question was clearly excluded by the insuring agreement provisions of the underinsured motorist coverage (paragraph C, subsection 2), which define an underinsured motor vehicle as a land motor vehicle which has a bodily injury bond or policy limit which is less than the minimum limit for bodily injury liability specified by the Safety Responsibility Law of Illinois. Defendant noted that the bodily injury liability for Bobby Loew's automobile was $100,000. Moreover, defendant asserted, because paragraph B, subsection 2, of the limits of liability provisions of the underinsured motorist coverage would require that any underinsured motorist coverage by reduced be the amount paid by the tortfeasor and $27,658.14 had been paid by the tortfeasor, defendant would have no liability to plaintiff Purlee, in the event $20,000 coverage was found under the policy. A copy of plaintiff Purlee's insurance policy was attached to the motion for summary judgment. Defendant further argued that a fourth district appellate court decision, Moriconi v. Sentry Insurance of Illinois, Inc. (1990), 193 Ill. App. 3d 904, 550 N.E.2d 637, 140 Ill. Dec. 752, mandated summary judgment in its favor on this issue.
Plaintiff Purlee moved to amend her complaint on September 27, 1991, to allege that defendant had breached its duty to properly offer underinsured motorist coverage and that had she been properly advised of the nature and purpose of underinsured motorist coverage she would have elected to obtain such coverage in the amount of her liability coverage, and she sought to reform her policy to provide coverage in the amount of $100,000, the amount of single-limit liability coverage under her policy.
We have not been provided with a report of proceedings for the hearings on defendant's motions for summary judgment and plaintiff Allen's cross-motion for summary judgment and for summary determination. The December 6, 1991, order of the circuit court which entered summary judgment against plaintiff Allen merely recites that defendant's motion for summary judgment is granted, that plaintiff's motion for summary determination of facts is denied, and that there is no just reason to delay the enforcement of this order.
In the October 31, 1991, order of the circuit court which granted defendant's motion for summary judgment against plaintiff Purlee, the court noted that defendant's motion was premised on the proposition that underinsured motorist coverage was excluded by two different policy provisions: (1) paragraph C, subsection 2, which would exclude coverage for plaintiff because the tortfeasor's vehicle was covered by a $100,000 liability policy, which was not less than the amount required by the Illinois Safety Responsibility Law; and (2) no amount would be payable because any amount due under part C would be reduced pursuant to the limit of liability provision, paragraph B, subsection 2, by the amount paid on behalf of the tortfeasor, which was $27,658.14. The court also noted that defendant had argued that plaintiff Purlee was not an underinsured motorist as defined by section 143a-2(3) of the Insurance Code (Ill. Rev. Stat. 1989, ch. 73, par. 755a-2(3)), because the limits of liability on the policy covering the tortfeasor's vehicle were not less than the limits for underinsured motorist coverage provided in the insured's policy. The court agreed that the policy exclusion and statutory definitions of underinsured motorist supported defendant's proposition.
The court noted that in Moriconi the appellate court observed that the language of the statute in question was not ambiguous, and absent questions of implied coverage it is clear from a comparison of the coverages of the plaintiff and the tortfeasor that the latter was not an underinsured motorist. With regard to the implied-coverage issue raised in plaintiff Purlee's amended complaint seeking to reform her policy of insurance, the court noted that cases such as Krska v. Allstate Insurance Co. (1987), 162 Ill. App. 3d 549, 515 N.E.2d 1304, 114 Ill. Dec. 33, interpret section 143a-2 of the Insurance Code (Ill. Rev. Stat. 1989, ch. 73, par. 755a-2) to require that an insured's underinsured coverage be implied to the limits of bodily injury liability, even if some lesser amount of underinsured coverage has in fact been purchased, where no proper offer of coverage up to the limit of bodily injury coverage had been made. The court observed that if plaintiff's underinsured motorist coverage is extended by implication pursuant to Fuoss v. Auto Owners (Mutual) Insurance Co. (1986), 148 Ill. App. 3d 526, 499 N.E.2d 539, 101 Ill. Dec. 951, aff'd (1987), 118 Ill. 2d 430, 516 N.E.2d 268, 114 Ill. Dec. 113), to the limits of her $100,000 bodily injury liability, the tortfeasor with his $100,000 single-limit liability coverage would still not be an underinsured motorist as defined in section 755a-2(3) because the tortfeasor's limits would be the same, not less than, the limits for underinsured coverage provided by implication to the insured.
The circuit court rejected plaintiff Purlee's contention, based on Rutter v. Horace Mann Insurance Co. (1989), 190 Ill. App. 3d 467, 545 N.E.2d 1381, 137 Ill. Dec. 366, that because the property damage claims in the amount of $17,115.09 were presented in the interpleader action involving the tortfeasor's coverage, he should be deemed an underinsured motorist for bodily injury liability to that extent. The court distinguished Rutter on its facts, noting that the coverages the court was called upon to compare in that case were $100,000 per person and $300,000 per accident versus a $100,000 single-limit policy with a property damage provision which actually reduced the amount of bodily injury coverage available to the plaintiff. In the instant case, the court noted, the comparison involved two $100,000 single-limit liability coverages, and there was no showing that tortfeasor Bobby Loew's policy required that payments made to all claimants under Loew's policy include some amount attributable to property damage claims there was no showing that the interplay of property damage and bodily injury provisions in his policy was less favorable than any similar provisions in plaintiff's policy. The court noted that plaintiff was seeking to have the court imply underinsured coverage in an amount greater than the bodily injury limits originally selected by the insured, a result insupportable under Fuoss.
The court also rejected plaintiff Purlee's argument that the tortfeasor should be deemed an underinsured motorist because there were multiple claimants against his policy and the limits of liability coverage available to her under the tortfeasor's policy were in effect less than the limits of her implied underinsured coverage. The court noted that the Moriconi case and Price v. State Farm Mutual Automobile Insurance Co. (1983), 116 Ill. App. 3d 463, 452 N.E.2d 49, 72 Ill. Dec. 117, specifically defeat the multiple-claimant argument and were controlling and binding on the court.
The circuit court ruled in its October 31, 1991, order that defendant's motion for summary judgment was allowed, noting that although the motion was not directed to a particular count of the complaint, resolution of the issues as set out in the order disposed of the entire complaint. Accordingly, the court entered judgment in favor of defendant and against plaintiff Purlee on all counts and denied plaintiff Purlee's motion for leave to amend.
Summary judgment should only be granted when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. ( Giardino v. American Family Insurance (1987), 164 Ill. App. 3d 389, 390, 517 N.E.2d 1187, 1187, 115 Ill. Dec. 501.) Moreover, we will reverse the trial court's granting of summary judgment only when there is a material issue of fact and the moving party is not entitled to summary judgment as a matter of law. ( Giardino, 164 Ill. App. 3d at 390, 517 N.E.2d at 1187.) We note that in each case before us on appeal, summary judgment was granted in favor of defendant because of a finding by the court (albeit implicit in the Allen case) that under the insurance policy exclusions and the insurance statute the tortfeasor was not an "underinsured motorist," precluding recovery by plaintiffs under any of the counts of their complaints. Construction of both the ...