Appeal from the Circuit Court of Cook County. Honorable Kathy M. Flanagan, Judge Presiding.
Rehearing Denied November 27, 1996. Released for Publication December 10, 1996.
The Honorable Justice Buckley delivered the opinion of the court: Wolfson and Braden, JJ., concur.
The opinion of the court was delivered by: Buckley
The Honorable Justice BUCKLEY delivered the opinion of the court:
Plaintiff, Greg Beukema, brought an action against defendant Yomac, Inc., for personal injuries he sustained while he was a patron at E.J. Dukester's, a tavern owned and operated by defendant. Plaintiff's complaint contained two counts of common-law negligence and one count of liability under the Dram Shop Act. 235 ILCS 5/6-21 (West 1994). Defendant was insured under two insurance policies, a general liability policy which specifically excluded dram shop liability from coverage, and a separate dram shop policy issued by a now insolvent carrier. The negligence counts were settled, and defendant filed a motion to dismiss the dram shop count. The trial court granted defendant's motion, ruling that the "non-duplication of recovery" provision of the Illinois Insurance Guaranty Fund Act (215 ILCS 5/546(a) (West 1994)) bars plaintiff from recovering from the Illinois Insurance Guaranty Fund. Plaintiff filed a timely notice of appeal.
On August 17, 1990, defendant employed John Miller to install bathroom tile in the restroom of E.J. Dukester's. Miller began his work at approximately 11 a.m., and worked straight through until midnight. Throughout that day and night, employees and agents of the tavern provided Miller with alcoholic beverages, and Miller became intoxicated. Plaintiff alleges that at approximately 12 a.m., Miller attacked plaintiff without provocation by striking him with a bar stool. Plaintiff further alleges at this attack resulted in serious and permanent injuries requiring plaintiff to undergo surgery to have his spleen removed.
At the time of the incident, defendant had two mutually-exclusive insurance policies for E.J. Dukester's. The first policy (the Travelers policy) was a general liability policy issued by Travelers Insurance Co. with a policy limit of $1 million. It contained a provision expressly excluding from coverage any liability incurred in connection with the distribution of alcohol.
The second policy (the Fund policy), issued by State Security Insurance Co., was a dram shop policy which only covered liability arising out of the distribution of alcoholic beverages. On June 16, 1993, State Security was found to be insolvent. Pursuant to the Illinois Insurance Guaranty Fund Act (the Fund Act), the Illinois Insurance Guaranty Fund (the Fund) assumed State Security's obligation to defend the dram shop claim. 215 ILCS 5/532 et seq. (West 1994).
Plaintiff filed a three-count complaint seeking compensation for his injuries. Counts I and III alleged common law negligence. Count II alleged liability under the Dram Shop Act.
On November 16, 1993, plaintiff, defendant, and Travelers settled the common-law negligence counts for $55,017.70. The settlement agreement and release states that "plaintiff expressly reserves all claims against Yomac *** relative to Count II of its complaint."
On January 10, 1994, defendant moved to dismiss count II, arguing that the "non-duplication of recovery" provision of the Fund Act disallows any further recovery. That provision states:
"Any insured or claimant having a covered claim against the Fund shall be required first to exhaust his rights under any provision in any other insurance policy which may be applicable to the claim. Any amount payable on a covered claim under this Article shall be reduced by the amount of such recovery under such insurance policy." 215 ILCS 5/546(a) (West 1994).
The trial court found that "claim" means "injury" and since the Travelers policy was applicable to plaintiff's injury, it was applicable to plaintiff's claim. Therefore, the court held that the non-duplication provision required plaintiff to exhaust his rights under the Travelers policy before he may seek recovery from the Fund. Since plaintiff settled with Travelers for less than the policy limit, the trial court found that he had not exhausted his rights under the Travelers policy, and he was barred from pursuing his action against the Fund.
Plaintiff argues that the dismissal of count II was in error. He contends that the non-duplication provision of the Fund Act does not apply to this case because the Fund policy is the ...