The opinion of the court was delivered by: Justice McBRIDE
Appeal from the Circuit Court of Cook County Honorable John G. Laurie, Judge Presiding.
Plaintiff Samuel Pearson brought suit against defendant Tanya Stedge, seeking compensation relating to an automobile accident in which Pearson had been injured. Following a settlement of the suit, plaintiff filed a motion to adjudicate a medical pay lien that had been filed by his automobile insurer, Illinois Farmers Insurance Company. The circuit court ruled in favor of plaintiff, finding that the automobile insurance policy Pearson had with Farmers did not create a subrogation lien for medical expenses Farmers had paid to Pearson. Farmers now appeals, contending that the circuit court's ruling was in error.
Plaintiff Samuel Pearson sustained injuries as a result of his involvement in a car accident with defendant Tanya Stedge on December 2, 1993. At the time of the accident, Pearson had an automobile insurance policy (policy) with Illinois Farmers Insurance Company (Farmers). Pursuant to the policy, Farmers made payments to Pearson to cover the costs of Pearson's medical treatment.
In January 1994, Pearson filed a personal injury action against Stedge, seeking compensation for injuries he had received, loss of income, and his medical costs. Pursuant to a settlement, Stedge paid Pearson $15,000 and the case was dismissed in May 1998. The court stated, in its order dismissing the case, that it retained jurisdiction to adjudicate any entitlement to a lien on the settlement amount.
In June 1998, Pearson filed a motion to adjudicate a medical pay lien Farmers had filed against the settlement proceeds. Pearson alleged in his motion that his auto insurance policy with Farmers did not give rise to the medical pay subrogation lien Farmers had filed. The circuit court granted Pearson's motion, finding that the policy did not create a subrogation lien for medical expenses paid by Farmers on behalf of plaintiff. The court also ordered that the disputed amount of $2,398.56 be held by plaintiff's counsel pending a ruling by this court on appeal. A motion for reconsideration filed by Farmers was denied and Farmers now appeals.
Part III of the Farmers auto policy concerns medical expense coverage and states, in pertinent part, that Farmers "will pay reasonable expenses for necessary medical services furnished within two years from the date of an accident arising from the maintenance or use of an automobile because of bodily injury sustained by an insured person."
Part V(5) of the policy concerns Farmers' right to recover payment, stating:
"If any person to or for whom we make payment under this policy has rights of recovery from another, those rights are transferred to us. That person must sign and deliver to us any legal papers relating to that recovery, do whatever else is necessary to help us exercise those rights and do nothing after the accident or loss to prejudice our rights.
When a person has been paid damages by us under this policy and also recovers from another, the amount recovered from the other will be held by that person in trust for us and reimbursed to us to the extent of our payment.
However, our right to recover from others does not apply to Part II-Uninsured Motorist if we:
a. Have received written notice in advance of a settlement between the insured person and the owner or operator of the uninsured motor vehicle; and
b. Fail to pay the insured person in an amount equal to the tentative settlement within 30 days after receipt of the notice." *fn1
The policy defines "bodily injury" as "injury to the body, sickness, disease or death of any person." The policy also defines damages as "the cost of compensating those who suffer bodily injury or property damage resulting from an accident."
Farmers first contends that the circuit court's decision contradicted the plain language of the provision of the policy stating that where a person has been paid damages by Farmers and also recovers from another, the amount recovered from the other will be held by that person in trust for Farmers and reimbursed to Farmers to the extent of Farmers' payment. The construction of an insurance policy is a question of law and is thus subject to de novo review. State Farm Mutual Automobile Insurance Co. v. Villicana, 181 Ill. 2d 436, 441, 692 N.E.2d 1196 (1998); American States Insurance Co. v. Koloms, 177 Ill. 2d 473, 479, 687 N.E.2d 72 (1997). Ambiguous language in an insurance policy should be construed against the drafter. Katz v. American Family Insurance Co., 163 Ill. App. 3d 549, 552, 516 N.E.2d 795 (1987). Where the terms in a policy are clear and unambiguous, they must ...