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PRINCIPAL MUT. LIFE INS. CO. v. BARON

May 28, 1997

PRINCIPAL MUTUAL LIFE INSURANCE COMPANY, an Iowa Corporation, Plaintiff,
v.
ELLEN BARON, Defendant.



The opinion of the court was delivered by: BUCKLO

 The defendant, Ellen Baron, was an insured "dependent" under a health insurance policy issued by the plaintiff, Principal Mutual Life Insurance Company ("Principal"). *fn1" Ms. Baron was injured by an uninsured motorist. Pursuant to the health insurance policy, Principal paid $ 51,859.99 to the health care providers on behalf of Ms. Baron. Ms. Baron sued her automobile insurance carrier, USF&G, under the uninsured motorist provision. The parties settled for $ 780,000, $ 300,000 of which was an initial lump sum payment with the balance to be paid over 20 years. Principal sued Ms. Baron to recover $ 51,859.99 pursuant to a reimbursement clause in the health insurance policy. Both parties moved for summary judgment. For the following reasons, both parties' motions are granted, in part, and denied, in part.

 Insurance policies are subject to the general rules of contract construction. Scottish & York Int'l Ins. Group/Guar. Ins. Co. v. Comet Cas. Co., 207 Ill. App. 3d 881, 566 N.E.2d 477, 481, 152 Ill. Dec. 790 (1990). If the contract terms are unambiguous, the parties' intent must be ascertained exclusively from the express language of the contract. Meyer v. Marilyn Miglin, Inc., 273 Ill. App. 3d 882, 652 N.E.2d 1233, 1238, 210 Ill. Dec. 257 (1995). If the policy is unambiguous, the clause at issue "may be applied as written, unless it contravenes public policy." Frigo v. Motors Ins. Corp., 271 Ill. App. 3d 50, 648 N.E.2d 180, 185, 207 Ill. Dec. 724 (1995). However, if the policy terms are ambiguous, they must be construed in favor of the insured. Id.

 The Principal's health insurance policy provides, in relevant parts, as follows:

 
Part IV - BENEFITS
 
Section E(1) - Right of Reimbursement
 
Article 1 - Applicability
 
Where allowed by law, this section will apply to any Member or Dependent who:
 
a. receives payment under this policy for confinement, treatment or service as the result of a sickness or injury; and
 
b. had a lawful claim against other parties or insurers for compensation damages or other payment because of that same sickness or injury; and
 
c. recovers payment from such parties or insurers which includes an amount applicable to confinement, treatment or service for which benefits have been paid under this policy.
 
Article 2 - Right of Reimbursement
 
When those provisions apply, the Member or Dependent will reimburse the Company to the extent of the benefit payments made under this policy. Such reimbursement will not exceed the lesser of:
 
a. the amount of benefit payment made under this policy for confinement, treatment or service as a result of the sickness or injury for which payment is ...

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