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June 8, 1994


Appeal from the Circuit Court of Lake County. No. 91-MR-336. Honorable Bernard E. Drew, Jr., Judge, Presiding.

Rehearing Denied July 29, 1994.

Bowman, Doyle, Quetsch

The opinion of the court was delivered by: Bowman

JUSTICE BOWMAN delivered the opinion of the court:

Plaintiffs, Charles and Helen Gober, brought this declaratory judgment action seeking to recover additional underinsured motorist benefits under several insurance policies issued by defendants, State Farm Fire and Casualty Company (State Farm Fire) and State Farm Mutual Automobile Insurance Company (State Farm Auto). Plaintiffs appeal from an order of the circuit court of Lake County granting defendants' motions for summary judgment. Plaintiffs contend the trial court misinterpreted the provisions for underinsured motorist coverage in their State Farm policies. We affirm.

The parties stipulated to the facts. Charles Gober sustained bodily injuries in an auto collision caused by Dean Galvin, an underinsured driver. In an action against Galvin, Charles sued for bodily injury and Helen sued for loss of consortium. Galvin's insurer, Allstate Insurance Company (Allstate), offered to settle Charles' claim for $10,000 and Helen's claim for $10,000. Together the settlement amounts represented Galvin's total liability policy limits of $20,000. After being notified by plaintiffs of Allstate's proposal, State Farm authorized the settlement and waived its right of subrogation. Allstate settled with plaintiffs, and Charles and Helen each received $10,000.

Charles then made a claim for underinsured motorist benefits for his personal injuries under four different State Farm insurance policies. Policy No. S22 9950-FO5-13, which was issued by State Farm Fire, was the primary underinsured motorist policy, and policy Nos. 921 9147-FO5-13, 921 9149-FO5-13, and 121 9148-FO5-13, issued by State Farm Auto, were excess underinsured motorist policies. All four policies contained underinsured motorist coverage limits in the amount of $100,000 per person and $300,000 per accident. Charles sought $90,000 of benefits under the State Farm Fire policy and an additional $20,000 of benefits under any one of the State Farm Auto policies. State Farm Fire paid Charles $80,000 under its policy, representing the difference between the single per person limits of $100,000 and the $20,000 that Allstate had paid to Charles and Helen. Both defendants denied Charles' additional claims.

Subsequently, plaintiffs filed a complaint for declaratory relief, and both parties ultimately moved for summary judgment. The trial court granted defendants' motion, denied plaintiffs' motion, and rendered a declaratory judgment that the maximum amount of underinsured motorist coverage due under the four insurance policies was the $80,000 that State Farm had already paid to plaintiffs. Plaintiffs timely filed this appeal.

Where, as here, there are no genuine issues of material fact, summary judgment is a proper method of disposing of a cause. ( Puttman v. May Excavating Co. (1987), 118 Ill. 2d 107, 112, 112 Ill. Dec. 722, 514 N.E.2d 188; Monsalud v. State Farm Mutual Automobile Insurance Co. (1991), 210 Ill. App. 3d 102, 106, 154 Ill. Dec. 748, 568 N.E.2d 969.) However, summary judgment is a drastic remedy and should be allowed only when the moving party has a clear and certain right to judgment as a matter of law. ( Makowski v. City of Naperville (1993), 249 Ill. App. 3d 110, 119, 187 Ill. Dec. 530, 617 N.E.2d 1251; Quinton v. Kuffer (1991), 221 Ill. App. 3d 466, 470, 164 Ill. Dec. 88, 582 N.E.2d 296.) With these principles in mind, we turn to the parties' arguments.

We note initially that section 143a-2(4) of the Illinois Insurance Code (Code) states:

"The limits of liability for an insurer providing underinsured motorist coverage shall be the limits of such coverage, less those amounts actually recovered under the applicable bodily injury insurance policies, bonds or other security maintained on the underinsured motor vehicle." (Ill. Rev. Stat. (1989), ch. 73, par. 755a-2(4) (now codified, as amended, at 215 ILCS 5/143a-2(4) (West 1992)).)

State Farm Fire invokes this provision as authority for its contention that it is liable only for the difference between its stated $100,000 limit per person and the $20,000 Charles and Helen recovered from Allstate. Plaintiffs do not dispute the general proposition that an insurer's liability for underinsured motor vehicle coverage may be reduced based on the amount the insured receives under a policy on the underinsured vehicle. Rather, plaintiffs focus on the "actually recovered" language in the Code and maintain that Charles himself received only $10,000 from Allstate. They urge that State Farm Fire was entitled to set off only that $10,000 since that is all Charles actually recovered.

Similarly, plaintiffs rely on language found in an endorsement to their policy and in a notice calling policyholders' attention to the changes effected by the endorsement. The endorsement created a new "Limits of Liability" provision which addressed underinsured motor vehicle coverage ...

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