Appeal from the Circuit Court of Cook County. No. 99 M1 308042 Honorable John G. Laurie Judge Presiding Appeal from the Circuit Court of Cook County No. 01 CH 2404 Honorable Dorothy Kinnaird Judge Presiding Appeal from the Circuit Court of Cook County No. 00 CH 27 Honorable Victor J. Cacciatore Judge Presiding
The opinion of the court was delivered by: Justice Tully
In December 1997 a vehicle driven by Noel Ramos collided with a vehicle driven by Sherita Burton. The insurance company that provided Ramos' automobile liability policy was subsequently declared insolvent. The collision and subsequent insolvency prompted three separate actions in the circuit court and the four consolidated appeals before us now.
Burton filed a complaint sounding in negligence against Ramos. The complaint proceeded to mandatory arbitration. Ramos did not participate in the arbitration and the arbitrators awarded Burton $6,000. The Illinois Insurance Guaranty Fund (the Fund) subsequently undertook Ramos' defense on behalf of the insolvent insurer that had provided his automobile liability policy. Ramos filed a rejection of the arbitration award and Burton filed a motion to bar rejection of the award. The trial court granted Burton's motion and entered judgment on the arbitrator's award. Ramos subsequently filed a postjudgment motion to declare the judgment satisfied arguing that he was entitled to a set-off equal to the amount of Burton's uninsured motorist coverage, $20,000. The trial court denied Ramos' motion. In no. 1-01-0735, Ramos appeals the trial court's order denying his postjudgment motion.
While the tort action was pending, Ramos and the Fund filed a declaratory judgment action seeking a declaration that Burton's insurance carrier, American Service Insurance Co. (American), was obligated to provide uninsured motorist coverage to Burton. American moved to dismiss the action and the trial court granted the motion. In no. 1-01-2805, Ramos and the Fund appeal the dismissal of their declaratory judgment action.
In the final action, American filed a declaratory judgment action against Burton seeking a declaration that it was not required to provide Burton with uninsured motorist coverage. American argued that Burton's claim for uninsured motorist protection was untimely filed. Ramos and the Fund were subsequently granted leave to intervene. American filed for summary judgment and the trial court granted the motion. The trial court held that American was not required to provide uninsured motorist coverage because Burton's claim was untimely. In no. 1-02-1025, Ramos and the Fund appeal the trial court's order granting summary judgment. In no. 1-02-1197, Burton appeals the trial court's order granting summary judgment.
On the parties' motions, we consolidated these four cases for appeal.
In this appeal, Ramos appeals contending that under section 546(a) of the Illinois Insurance Code (the Code) (215 ILCS 5/546(a) (West 1996)) he is entitled to a set-off against the judgment entered against him equal to the limits of liability of Burton's uninsured motorist policy. The Fund, although not technically a party to this appeal, has filed a joint brief with Ramos that address each of the consolidated appeals. In its appellee's brief, American argues that it has no interest in whether the Fund or Ramos is liable for the judgment entered in Burton's favor and presents no argument on this issue. Burton has not filed a brief. Accordingly, we are effectively without an appellee's brief addressing this appeal. However, we find that the issues and record are relatively simple and we will address the merits of the appeal in accordance with the standards of First Capitol Mortgage Corp. v. Talandis Construction Corp., 63 Ill. 2d 128 (1976).
Our disposition of this case is governed by the application of section 546(a) of the Code. Section 546(a) provides:
"An insured or claimant shall be required first to exhaust all coverage provided by any other insurance policy, regardless of whether or not such other insurance policy was written by a member company, if the claim under such other policy arises from the same facts, injury, or loss that gave rise to the covered claim against the Fund. The Fund's obligation under Section 537.2 shall be reduced by the amount recovered or recoverable, whichever is greater, under such other insurance policy. Where such other insurance policy provides uninsured or underinsured motorist coverage, the amount recoverable shall be deemed to be the full applicable limits of such coverage. To the extent that the Fund's obligation under Section 537.2 is reduced by application of this Section, the liability of the person insured by the insolvent insurer's policy for the claim shall be reduced in the same amount." 215 ILCS 5/546(a)(West 1996).
The plain language of this statutory provision appears to grant Ramos and the Fund a set-off against the judgment equal to the limits of Burton's uninsured motorist coverage without regard to whether she actually received a payment from her insurer or even filed an uninsured motorist claim. This interpretation is supported by the case of Urban v. Loham, 227 Ill. App. 3d 772 (1992) which interpreted an earlier version of section 546(a).
In Urban, the reviewing court held that a plaintiff who failed to file a timely uninsured motorist claim with his insurer could proceed against the fund. Urban, 227 Ill. App. 3d at 777-78. However, the reviewing court held that any recovery from the Fund would be offset by the maximum amount that the plaintiff could have recovered if he had timely sought uninsured motorist coverage from his own insurer. Urban, 227 Ill. App. 3d 777-78. The Urban court made the following comments regarding the policy considerations that guided its ruling:
"The legislative policy behind section 546(a) requires a plaintiff to collect as much as he can under his uninsured motorist coverage. A plaintiff who knowingly fails to do so shall be assumed to have received the policy limits of his uninsured motorist coverage. This assumption implements the legislative intent that the Fund be a source of last resort, and that the Fund's liability be offset by any recovery to ...