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Kapinus v. State Farm Mutual Automobile Insurance Co.

October 26, 2000

NANCY M. KAPINUS,
PLAINTIFF-APPELLANT,
V.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY,
DEFENDANT-APPELLEE.



Appeal from the Circuit Court of the 12th Judicial Circuit, Will County, Illinois No. 99-MR-122 Honorable Edwin B. Grabiec Judge, Presiding

The opinion of the court was delivered by: Justice Homer

The plaintiff, Nancy M. Kapinus, brought a declaratory judgment action in the circuit court of Will County against the defendant, State Farm Mutual Automobile Insurance Company (State Farm). The plaintiff owned State Farm policies on two vehicles when she was injured in an accident in 1998. She sought a declaration limiting the aggregate setoff under the underinsured motorist clauses of the two policies to $50,000, the amount paid by the underinsured driver. Both parties filed motions for summary judgment. The trial court granted State Farm's motion. The plaintiff appeals, and we affirm.

FACTS

In her complaint, the plaintiff alleged that on April 4, 1998, she was insured by two State Farm policies, each providing underinsured motorist coverage limits of $100,000 per person and $300,000 per accident. On that date, she was injured in an automobile accident caused by the negligence of Richard L. Pope. Pope was insured by Guidant Insurance Company with a policy providing bodily injury liability limits of $50,000 per person and $100,000 per accident. Guidant tendered its $50,000 limit.

Both of the plaintiff's policies contain provisions defining the insurer's liability for underinsured motorist coverage. These provisions provide, in relevant part, as follows:

"The most we will pay any one insured is *** :

a. the difference between the 'each person' limit of this coverage and the amount paid to the insured by or for any person or organization who is or may be held legally liable for the bodily injury." (Emphasis in original.)

State Farm agreed to "stack" the policies. It then issued the plaintiff two separate payments of $50,000, after subtracting the $50,000 paid by Guidant from the $100,000-per-person underinsured motorist coverage limit of each State Farm policy. The plaintiff filed suit asking the court to declare that State Farm was allowed a single $50,000 setoff, thereby entitling the plaintiff to an aggregate sum of $150,000 from State Farm.

On cross-motions for summary judgment, the trial court ruled that (1) the underinsured motorist clauses of the State Farm policies were not ambiguous with respect to setoffs for amounts paid by third-party tortfeasors; (2) no ambiguities were created when reading the policy provisions in connection with the Illinois Insurance Code (Code) (215 ILCS 5/1 et seq. (1998)); and (3) no public policy of this state would be violated by allowing State Farm a $50,000 setoff against each of the plaintiff's policies. Accordingly, the court granted State Farm's summary judgment motion and denied the plaintiff's. The plaintiff appeals.

ISSUES AND ANALYSIS

In construing the language of an insurance policy, a court must ascertain and give effect to the intention of the parties as expressed in their agreement. State Farm Mutual Automobile Insurance Co. v. Villicana, 181 Ill. 2d 436, 441, 692 N.E.2d 1196, 1199 (1998). To that end, terms utilized in the policy are accorded their plain and ordinary meaning and those terms will be applied unless such application contravenes public policy. Villicana, 181 Ill. 2d at 441-42, 692 N.E.2d at 1199. In addition, a court must read the policy as a whole and consider the type of insurance purchased, the nature of the risks involved, and the overall purpose of the contract. Villicana, 181 Ill. 2d at 442, 692 N.E.2d at 1199.

The construction of an insurance policy is a question of law subject to de novo review. Villicana, 181 Ill. 2d at 441, 692 N.E.2d at 1199. Likewise, our review of a trial court's award of summary judgment is de novo. King v. Allstate Insurance Co., 269 Ill. App. 3d 190, 192, 645 N.E.2d 503, 505 (1994).

I. Illinois Insurance Code

We first consider plaintiff's contention that section 143a--2(4) of the Code creates ambiguities in the computation of an insurer's liability when multiple ...


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