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Doyle v. State Farm Mutual Automobile Insurance Co.

August 8, 2002

ROBERT DOYLE, INDIV. AND AS GUARDIAN OF THE ESTATE OF DEREK DOYLE, A MINOR, PLAINTIFF-APPELLANT,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, DEFENDANT-APPELLEE.



Appeal from the Circuit Court for the 10th Judicial Circuit, Peoria County, Illinois No. 01MR100 Honorable Donald C. Courson Judge Presiding

The opinion of the court was delivered by: Justice Breslin

Claiming that he was entitled to underinsured motorist (UIM) benefits under two separate policies of insurance, plaintiff Robert Doyle filed this declaratory judgment action against defendant State Farm Mutual Automobile Company on behalf of his son Derek. The trial court granted State Farm's motion for a judgment on the pleadings, and we concur with its determination that the language of the policies was unambiguous and did not allow for the proration of UIM benefits to reach the highest limit of liability of any one policy.

FACTS

In February of 1999, Derek was seriously injured when he was struck by a motor vehicle while walking. The driver of the vehicle was insured by Allstate Insurance under a policy that contained only a $25,000-per-person bodily liability limit. Robert alleged that the value of his claims exceeded $130,000. Fortunately, Robert and Derek were insured by State Farm under two identical personal automobile policies, which were paid for by separate premiums, and each had $100,000 in underinsured motorist coverage. The policies stated:

"1. If the insured sustains bodily injury as a pedestrian and other underinsured motor vehicle coverage issued by us or any other insurer applies:

a. the total limits of liability under all such coverages shall not exceed that of the coverage with the highest limit of liability;

5. The most we will pay any one insured is the lesser of:

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 caused by an underinsured motor vehicle." (Emphasis in original).

With State Farm's consent, Allstate tendered its policy limit of $25,000. Robert made a demand to State Farm that it pay $100,000 pursuant to the terms of its policies to cover the remainder of Derek's damages. State Farm refused, claiming that its maximum exposure under the UIM policies was $75,000.

ANALYSIS

The issue on appeal is whether the trial court properly determined that the maximum UIM benefits State Farm was required to pay is $75,000. We review the trial court's interpretation of an insurance contract de novo. Whiting v. Prestige Casualty Co., 238 Ill. App. 3d 376, 606 N.E.2d 397 (1992).

Robert claims that the language of paragraph 1a, which states that "the total limits of liability under all such coverages shall not exceed that of the coverage with the highest limit of liability," allows him to collect a total of $100,000 in UIM benefits because that is the highest limit of liability under any one policy. He argues that he can receive this sum using the aggregate of the two policies ($50,000 per policy). Robert denies that he is attempting to "stack" the policies, but claims that section 143a-2(5) of the Illinois Insurance Code (Code) (215 ILCS 5/143a-2(5) (West 2000)) and applicable case law support his position. Finally, Robert contends that State Farm's inconsistent application of the policy language in another case demonstrates that the policy language is ambiguous and, therefore, the policy should be construed in his favor.

When construing the language of an insurance policy, courts must ascertain and give effect to the intention of the parties as expressed in their agreement. Kapinus v. State Farm Mutual Automobile Insurance Co., 317 Ill. App. 3d 185, 738 N.E.2d 1003 (2000). The terms utilized in the policy are accorded their plain and ordinary meaning, and those terms will be applied unless such application contravenes public policy. Kapinus, 317 Ill. App. 3d at 187, 738 N.E.2d at 1005. If the policy language is unambiguous, courts will determine the parties' intent directly from the language without resorting to rules of construction. American Family Mutual Insurance Co. v. Martin, 312 Ill. App. 3d 829, 728 N.E.2d 115 (2000). If an ambiguity exists, courts will adopt a liberal construction of the language used in favor of the insured, while the policy will be construed strictly and strongly against the insurer. Yates v. Farmers Automobile Insurance Ass'n, 311 Ill. App. 3d 797, 724 N.E.2d 1042 (2000).

In our view, the policy language is unambiguous. It provides that the most State Farm is required to pay in UIM benefits is the highest limit of liability of any one policy minus the amount paid by the party legally responsible for the injury. In this case, the highest limit of liability of any one policy is $100,000. The amount recovered by the party legally responsible for the injury is ...


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