Appeal from the Circuit Court for the 14th Judicial Circuit, Rock Island County, Illinois No. 95--MR--112 Honorable Joseph F. Beatty Judge, Presiding
The opinion of the court was delivered by: Justice Breslin
THE COURT OF APPEALS OF THE STATE OF ILLINOIS
We are asked to determine whether an underinsured motorist (UIM) endorsement allows recovery when the insured recovered less than the damages he was legally entitled to recover from the tortfeasor's insurer, but more than the limits of recovery under his underinsured motorist endorsement. Plaintiff William McKinney contends that under the underinsured motorist clause in his American Standard Insurance (American) policy, American agreed to coverage for the entire amount of his compensable damages, subject to the limits of his policy, less any recovery from the tortfeasor. We agree. Accordingly, we reverse and remand for further proceedings.
McKinney's wife and unborn child were killed in a car accident when Robert Cromie ran a stop sign. The policy Cromie held limited liability to $100,000 per person and $300,000 per accident. Cromie's insurer paid McKinney $300,000 and Cromie personally paid McKinney another $18,000. But McKinney alleged that his total damages exceed $318,000, so he turned to his own insurance policy for coverage.
McKinney's American policy provided UIM coverage with limits of liability of $25,000 per person and $50,000 per accident. In addition, the policy stated:
"Underinsured motorists (UIM) Coverage Endorsement - We will pay compensatory damages for bodily injury which an insured person is legally entitled to recover from the owner or operator of an underinsured motor vehicle. The bodily injury must be sustained by an insured person and must be caused by accident and arise out of the use of the underinsured motor vehicle.
Underinsured motor vehicle means a motor vehicle which is insured by a liability bond or policy at the time of the accident which provides bodily injury liability limits less than the damages an insured person is legally entitled to recover.
Limits of liability - Any amounts payable will be reduced by:
1. A payment made or amount payable by or on behalf of any person or organization which may be legally liable, or under any collectible auto liability insurance, for loss caused by an accident with an underinsured motor vehicle."
McKinney brought a declaratory judgment action seeking to recover under his UIM clause. He claimed that, because Cromie was an underinsured motorist, he was entitled to prove the entire amount of damages and recover the difference between the amount paid and his total damages up to the full policy limit. American denied that it owed any amount since the $318,000 recovered exceeded McKinney's UIM limits of $50,000 and moved for summary judgment on this basis. The trial court granted American's motion and McKinney appeals.
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. Loyola Academy v. S&S Roof Maintenance, Inc., 146 Ill. 2d 263, 586 N.E.2d 1211 (1992). When the only issue concerns the construction of an insurance policy, the cause of action may appropriately be decided by summary judgment. Giardino v. American Family Insurance, 164 Ill. App. 3d 389, 517 N.E.2d 1187 (1987). Appellate review of summary judgment is de novo. In re Estate of Hoover, 155 Ill. 2d 402, 615 N.E.2d 736 (1993).
The sole issue is whether the term "amounts payable" as used in the policy refers to the total amount of damages legally due McKinney, or ...