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Armando v. State Farm Mutual Automobile Insurance Company

June 08, 2001

PHILIP ARMANDO, PLAINTIFF-APPELLANT,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Cook County. No. 99-CH-10024 Honorable Robert V. Boharic, Judge Presiding.

The opinion of the court was delivered by: Justice Theis

Not Released For Publication

PHILIP ARMANDO, PLAINTIFF-APPELLANT,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, DEFENDANT-APPELLEE.

Appeal from the Circuit Court of Cook County. No. 99-CH-10024 Honorable Robert V. Boharic, Judge Presiding.

The opinion of the court was delivered by: Justice Theis

Plaintiff, Philip Armando, brought a two-count declaratory judgment action against defendant, State Farm Mutual Automobile Insurance Company (State Farm), seeking a determination of his right to uninsured motorist coverage under his State Farm policy. State Farm filed a counterclaim for declaratory relief and motion for summary judgment arguing that under the "other insurance" provisions of its policy it owed no coverage to plaintiff. Thereafter, plaintiff filed a cross-motion for summary judgment, arguing that the "other insurance" clause violated the public policy of this state as expressed in section 143a of the Illinois Insurance Code (Code). 215 ILCS 5/143a (West 1998). The trial court granted summary judgment on the counterclaim and denied summary judgment on plaintiff's complaint, finding that plaintiff was not entitled to coverage, that the "other insurance" provision was consistent with public policy, and that State Farm did not act vexatiously or unreasonably in handling plaintiff's claim. For the following reasons, we affirm.

 The following facts are undisputed. On May 22, 1997, while plaintiff was operating a vehicle owned by Steven and Marie Woodman, he was struck by an uninsured motorist and suffered personal injuries. The Woodmans' vehicle was insured under a policy issued by American Family Insurance Company (American Family). The policy provided for uninsured motorist coverage with limits of $100,000 per person and $300,000 per occurrence. Plaintiff settled his accident claim against American Family for the full $100,000 limits of uninsured motorist coverage. However, he was also the named insured under a policy issued by State Farm and sought additional coverage for his injuries under that policy. The limits of liability for uninsured motorist coverage under the State Farm policy were $100,000 per person and $300,000 per accident.

State Farm denied plaintiff's claim, citing an "other insurance" clause in the policy which defeated coverage. That clause provided that, when plaintiff had other primary uninsured motorist coverage under another insurance policy, its State Farm coverage applied as excess insurance, but only in the amount by which the excess coverage exceeded the primary coverage. Thus, under the terms of the policy, since plaintiff received $100,000 from American Family, State Farm claimed it owed no additional coverage to plaintiff.

On appeal, plaintiff contends that this restrictive excess clause is contrary to the public policy of the State of Illinois as expressed in section 143a of the Code. 215 ILCS 5/143a (West 1998). Section 143a provides in relevant part that every motor vehicle liability insurance policy issued to an insured must provide coverage for bodily injury caused by an uninsured motorist. 215 ILCS 5/143a (West 1998). Specifically, plaintiff argues that, where the insured is occupying a non-owned vehicle to which another insurance policy applies, the "other insurance" clause amounts to an exclusion of uninsured motorist coverage which is void and unenforceable under Illinois law, citing Illinois Farmers Insurance Co. v. Cisco, 178 Ill. 2d 386, 687 N.E.2d 807 (1997), in support. Additionally, plaintiff argues that the operation of the "other insurance" clause deprives him of the benefit of his bargain, uninsured motorist coverage under his own policy for which he paid a premium.

The policy provision at issue provides as follows:

"If There is Other Uninsured Motor Vehicle Coverage ***

3. If the insured sustains bodily injury while occupying a vehicle not owned or leased by you, your spouse or any relative, and:

a. such vehicle is described on the declarations page of another policy providing uninsured ...


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