Appeal from the Circuit Court of Cook County. No. 09 P 6779 Honorable Jeffrey A. Malak, Judge Presiding.
The opinion of the court was delivered by: Justice Connors
JUSTICE CONNORS delivered the judgment of the court, with opinion. Justices Karnezis and Harris concurred in the judgment and opinion.
This case appears before us on a permissive interlocutory appeal pursuant to Supreme Court Rule 308 (Ill. S. Ct. R. 308 (eff. Feb. 1, 1994)) to consider a question certified by the trial court regarding the proper distribution of underinsured-motorist insurance proceeds. We hold that in the case of the wrongful death of an insured, proceeds recovered from an underinsured-motorist policy represent wrongful death damages distributable to those beneficiaries legally entitled to recover under the terms of the Wrongful Death Act (740 ILCS 180/2 (West 2008)).
On October 1, 2009, Frederick Anderson, Sr., was killed when his vehicle was rear-ended by an underinsured motorist. Frederick died intestate, survived by his wife, Marion Anderson, and his two sons from a previous marriage, Jonathan and Frederick Jr. Shortly thereafter, a probate estate was opened. Marion was issued letters of administration and was appointed as supervised administrator of her husband Frederick's estate. In her capacity as administrator, she filed a wrongful death action against the driver of the underinsured vehicle pursuant to the Wrongful Death Act (740 ILCS 180/0.01 et seq. (West 2008)). Additionally, Marion asserted a claim in her representative capacity with Frederick's automobile insurance carrier, State Farm Mutual Automobile Insurance Company, seeking coverage under the underinsured-motorist provisions of his policy on account of his wrongful death.
During the pendency of the suit, the underinsured motorists' insurer tendered the limits of its policy in the amount of $20,000 in settlement of the liability claim. State Farm then tendered $230,000 to Marion, as administrator, in settlement of the insurance claim, which represented the difference between its policy limits of liability and the tortfeasor's $20,000 liability limit.
Thereafter, Marion filed a petition seeking to approve the distribution of the $230,000 settlement proceeds solely to her individually as Frederick's spouse "as the only insured pursuant to the contract of insurance." She maintained that Jonathan and Frederick Jr. were not insureds under the policy as they were emancipated adults who did not live with the Andersons and, therefore, were not entitled to any of the settlement proceeds pursuant to the contract. The sons filed a response to the petition, objecting to the distribution and arguing that the proceeds should be distributed pursuant to the Wrongful Death Act or, alternatively, that they were also entitled to a share of the proceeds as insureds under the contract. After a hearing on the matter, the circuit court certified the following question for our review:
"Whether benefits paid pursuant to a policy of underinsurance should be disbursed pursuant to the Illinois Wrongful Death Act and not according to the policy of underinsurance."
Our review of this certified question is governed by Supreme Court Rule 308 (Ill. S. Ct. R. 308 (eff. Feb. 1, 1994)). "We are limited to the question certified by the trial court, which, because it must be a question of law and not fact, is reviewed de novo." Barbara's Sales, Inc. v. Intel Corp., 227 Ill. 2d 45, 58 (2007). The issue raised by the certified question requires us to consider whether proceeds recovered pursuant to the underinsured-motorist provisions of decedent's policy as a consequence of his wrongful death are to be considered damages which are distributable under the Wrongful Death Act (740 ILCS 180/0.01 et seq. (West 2008)). As framed, this issue is one of first impression in Illinois.
In order to answer the question, we begin by construing the pertinent language of the policy. An insurance policy is a contract and subject to the general rules of contract construction. Hobbs v. Hartford Insurance Co. of the Midwest, 214 Ill. 2d 11, 17 (2005). When construing the policy, a court must determine the intent of the parties as expressed in the policy. West American Insurance Co. v. Yorkville National Bank, 238 Ill. 2d 177, 293 (2010). "To determine 'the meaning of the policy's words and the intent of the parties, the court must construe the policy as a whole [citations], with due regard to the risk undertaken, the subject matter that is insured and the purposes of the entire contract [citations].' " Lapham-Hickey Steel Corp. v. Protection Mutual Insurance Co., 166 Ill. 2d 520, 529 (1995), quoting Outboard Marine Corp. v. Liberty Mutual Insurance Co, 154 Ill. 2d 90, 108 (1992). If the words are unambiguous they are to be given their "plain, ordinary, and popular meaning." Yorkville National Bank, 238 Ill. 2d at 293. The construction of an insurance policy and its provisions is a question of law, which we review de novo. Outboard Marine, 154 Ill. 2d at 108.
The underinsured-motorist provisions in the policy provide in pertinent part as follows:
"We will pay damages for bodily injury an insured is legally entitled to collect from the owner or driver of an underinsured motor vehicle. The bodily injury must be sustained by an insured and caused by an accident arising out of the operation, ...