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09/21/95 HARRY LUECHTEFELD v. ALLSTATE INSURANCE

September 21, 1995

HARRY LUECHTEFELD, APPELLEE,
v.
ALLSTATE INSURANCE COMPANY, APPELLANT.



Chief Justice Bilandic delivered the opinion of the court:

The opinion of the court was delivered by: Bilandic

CHIEF JUSTICE BILANDIC delivered the opinion of the court:

The plaintiff, Harry Luechtefeld, brought a declaratory judgment action in the circuit court of St. Clair County against Allstate Insurance Company seeking a determination of his rights to uninsured-motorist coverage under a policy issued to him by Allstate. The trial court granted Allstate's motion for summary judgment, finding that the policy unambiguously excluded the plaintiff's claim. The appellate court reversed, finding that although the policy excluded coverage, the purported exclusion was invalid for public policy reasons. (267 Ill. App. 3d 222.) We allowed Allstate's petition for leave to appeal (145 Ill. 2d R. 315).

At issue in this appeal is whether an insurance policy may, consistently with public policy, exclude uninsured-motorist coverage for vehicles owned by the insured when such vehicles have uninsured-motorist coverage under another insurance policy.

The facts are not disputed. The plaintiff suffered personal injuries in an accident on December 10, 1990. The plaintiff was operating a motorcycle that he owned when he was struck by an uninsured motorist. The motorcycle was insured under a policy issued by Pekin Insurance Company to the plaintiff in November 1990. The Pekin policy provided uninsured-motorist coverage with limits of $20,000 per person/$40,000 per accident. The plaintiff settled his accident claim against Pekin for the full $20,000 limit of uninsured-motorist coverage.

The plaintiff was also the named insured in a policy issued by Allstate to cover three automobiles that the plaintiff owned. The Allstate policy provided uninsured-motorist coverage of $100,000 per person/$300,000 per accident. Because the plaintiff's injuries and damages allegedly exceeded the $20,000 settlement he received from Pekin, the plaintiff filed a claim with Allstate. The plaintiff claimed that the injuries he sustained in themotorcycle accident were covered under the uninsured-motorist provisions of the Allstate policy. Allstate denied the plaintiff's claim, citing an exclusionary clause in the policy. Allstate argued that this clause excluded the plaintiff's motorcycle from uninsured-motorist coverage because the motorcycle had uninsured-motorist coverage under another insurance policy, i.e., the Pekin policy.

The plaintiff then filed the instant declaratory judgment action, seeking a determination of his rights under the Allstate policy. The plaintiff claimed that the exclusionary clause was ambiguous and therefore must be construed against Allstate and in favor of coverage. In the alternative, the plaintiff argued that the exclusionary clause was unenforceable because it violated public policy. The plaintiff and Allstate filed cross-motions for summary judgment.

The trial court denied the plaintiff's motion and granted Allstate's motion, finding that the Allstate policy unambiguously excluded plaintiff's motorcycle from uninsured-motorist coverage. The appellate court reversed the trial court's grant of summary judgment and remanded for further proceedings. The appellate court found that, although the language of the exclusionary clause was clear and unambiguous, that clause was nevertheless unenforceable on public policy grounds. As stated, we granted Allstate's petition for leave to appeal.

The Allstate policy is divided into six parts. The exclusionary clause at issue in this appeal is found in part V and provides as follows:

"Part V

Uninsured Motorists Insurance Coverage SS

We will pay damages for bodily injury which a person insured is legally entitled to recover from the owner or operator of an uninsured auto. ***

Exclusions-What is not covered

This coverage does not ...


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