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Thurman v. Grinnell Mutual Reinsurance Co.

January 29, 2002

REBECCA THURMAN, PLAINTIFF-APPELLEE,
v.
GRINNELL MUTUAL REINSURANCE COMPANY, DEFENDANT-APPELLANT,
AND NORTHLAND INSURANCE COMPANY AND UNION AUTO INDEMNITY COMPANY, DEFENDANTS-APPELLEES.
GRINNELL MUTUAL REINSURANCE COMPANY, PLAINTIFF-APPELLANT,
v.
REBECCA THURMAN, NORTHLAND INSURANCE COMPANY, AND UNION AUTOMOBILE INDEMNITY COMPANY, DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Jackson County. No. 00-MR-4, Consolidated with No. 00-MR-5 Honorable William G. Schwartz, Judge, presiding.

The opinion of the court was delivered by: Justice Welch

UNPUBLISHED

The issue in this case is whether Rebecca Thurman (plaintiff) is entitled to underinsured-motorist coverage from Grinnell Mutual Reinsurance Company (defendant) where the limits of the underinsured-motorist coverage are less than the limits of the bodily-injury liability insurance of the owner or operator of the underinsured motor vehicle. The circuit court of Jackson County granted plaintiff's motion for summary judgment, denied defendant's, and declared that the underinsured-motorist coverage from defendant provides coverage for the claims of plaintiff. Defendant appeals this decision. For the following reasons, we reverse the judgment of the circuit court.

The facts in this case are undisputed. On November 13, 1997, plaintiff and Shelley Huffman were passengers in an automobile owned and operated by Clarence Huffman (Huffman). While traveling on an Illinois highway, they were involved in an automobile collision when Prudence Smout, the driver of an oncoming vehicle, crossed the center line. As a result of the collision, Huffman was killed, and Shelley Huffman and plaintiff suffered various injuries.

At the time of the accident, Smout, the at-fault driver, was insured by State Farm Insurance Company (State Farm). Her insurance policy provided for liability limits of $50,000 per person and $100,000 per accident. On July 20, 1999, State Farm paid $100,000 to the court and filed an interpleader action seeking a determination as to the distribution of the $100,000 for the benefit of the injured parties. Following a hearing and a determination by the court regarding the extent of the injuries suffered by the parties involved, the court apportioned $9,070 of the $100,000 to plaintiff.

Huffman, the driver of the vehicle in which plaintiff was a passenger, was insured by defendant. The policy issued by defendant to Huffman provided underinsured-motorist coverage for his passengers in the amount of $25,000 per person and $50,000 each occurrence. Plaintiff sought arbitration with defendant, seeking to recover up to $25,000 under Huffman's policy, after offsetting the $9,070 received from State Farm. Defendant refused to arbitrate, claiming that under section 143a-2(4) of the Illinois Insurance Code (Code) (215 ILCS 5/143a-2(4) (West 1998)), the maximum amount payable by defendant to plaintiff for underinsured-motorist benefits is zero because the underinsured-motorist-coverage limits provided for in Huffman's policy do not exceed the liability limits in Smout's policy.

On January 13, 2000, plaintiff filed a complaint in the circuit court of Jackson County. Plaintiff sought a declaratory order requiring defendant to engage in arbitration with plaintiff under the policy. On January 14, 2000, defendant filed a complaint in the same court. Defendant sought a declaratory judgment stating that there is no underinsured-motorist coverage available. The two complaints were consolidated on March 6, 2000.

On July 19, 2000, plaintiff filed a motion for summary judgment. Plaintiff asked the court to find that plaintiff is entitled to underinsured-motorist coverage from defendant in the amount of $25,000, less any set-off for plaintiff's prior recovery from State Farm. In support of her motion, plaintiff cited the Illinois Supreme Court case of Cummins v. Country Mutual Insurance Co., 178 Ill. 2d 474 (1997). In Cummins, in a plurality decision, the supreme court held that to the extent that the amount of liability insurance actually recovered is less than the amount of underinsured-motorist coverage, the liable driver is considered underinsured and the injured party is entitled to underinsured-motorist benefits. Cummins, 178 Ill. 2d at 486.

On July 27, 2000, defendant filed a motion for summary judgment and argued that plaintiff is not entitled to any benefits because the limits of liability insurance in Smout's policy are greater than the limits of the underinsured-motorist coverage in the policy issued to Huffman by defendant. In support of its argument, defendant cited section 143a-2(4) of the Code, specifically, a portion that was amended to be effective after the accident giving rise to the Cummins case and therefore not considered by the supreme court in Cummins. Defendant argued that the amended portion specifically precludes plaintiff from recovering benefits because, under the statute, where the limits of the bodily-injury liability insurance of the owner or operator of the underinsured motor vehicle exceed the limits of the underinsured-motorist coverage, no amount is payable.

On October 5, 2000, the circuit court granted plaintiff's motion for summary judgment and denied defendant's. The circuit court examined Cummins and the amended portion of section 143a-2(4), and it ruled that section 143a-2(4) allows plaintiff to "recover the entire amount of the tortfeasor's liability policy and the difference between that policy and the amount of the underinsured coverage." Defendant now appeals.

Before addressing the issue raised by defendant on appeal, we begin by noting that plaintiff has not taken part in this appeal. Plaintiff did not file an appellee brief, and plaintiff did not participate in oral argument. However, as defendant's brief and the record are sufficient to resolve this issue, we shall consider this appeal. See First Capitol Mortgage Corp. v. Talandis Construction Corp., 63 Ill. 2d 128, 133 (1976).

A circuit court's decision to grant a motion for summary judgment is reviewed de novo. American Service Insurance Co. v. Passarelli, 323 Ill. App. 3d 587, 589 (2001). Where there is no dispute as to an issue of material fact, the sole function of this court is to determine whether the trial court's judgment was correct as a matter of law. Cates v. Cates, 156 Ill. 2d 76, 78 (1993). We need not give deference to the judgment of the trial court. Advincula v. United Blood Services, 176 Ill. 2d 1, 12 (1996).

The dispositive question before this court is whether section 143a-2(4) of the Code prohibits plaintiff from recovering any underinsured-motorist-coverage benefits from defendant under a policy issued to Huffman. Defendant argues that section 143a-2(4) of the Code clearly prohibits the payment of underinsured-motorist-coverage benefits because that section specifically states that the "maximum amount payable" shall not exceed the amount by which the limits of liability of the underinsured-motorist coverage exceed the limits of the bodily-injury liability insurance of the owner or operator of the underinsured motor vehicle. 215 ILCS 5/143a-2(4) (West 1998). Defendant argues that because, in the instant case, the limits of liability of the underinsured-motorist coverage do not exceed the limits of the bodily-injury liability insurance of the owner or operator of the underinsured motor vehicle, that maximum amount payable is zero, so plaintiff is entitled to no benefits from defendant. Defendant acknowledges our supreme court's decision in Cummins but argues that it is inapplicable because it dealt with section 143a-2(4) before the effective date of the amendment that is applicable to the instant case. We begin our analysis by turning first to section 143a-2(4) of the Code and then to the Cummins decision.

Since January 1, 1997, section 143a-2(4), the underinsured-motorist provision of the Code, ...


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