Appeal from the Circuit Court of Cook County. No. 10 CH 30870 Honorable Sophia H. Hall, Judge Presiding.
The opinion of the court was delivered by: Justice Rochford
JUSTICE ROCHFORD delivered the judgment of the court, with opinion. Justices Cunningham and Delort concurred in the judgment and opinion.
¶ 1 In this action for declaratory judgment, plaintiff-appellee, Hatem Alshwaiyat, sought a determination that a policy of automobile insurance issued to plaintiff's employer by defendant-appellant, American Service Insurance Company (ASI), provided $500,000 in underinsured motorist coverage for an automobile accident involving both plaintiff and his deceased wife. ASI has appealed from an order entering summary judgment in favor of plaintiff. For the reasons that follow, we reverse.
¶ 3 On July 11, 2011, plaintiff filed a complaint for declaratory judgment, naming both ASI and plaintiff's employer, Mojo Enterprises (Mojo), as defendants. In that complaint, plaintiff alleged that on June 17, 2008, he was employed by Mojo as a taxi driver when the automobile he was driving was struck by a vehicle operated by Mr. Robert Pas. As a result of this accident, plaintiff suffered significant physical injuries and his wife, a passenger in the taxi, suffered injuries that resulted in her death. Claims against Mr. Pas for plaintiff's injuries and his wife's wrongful death were ultimately settled for $100,000 each, the liability limits of the insurance policy held by Mr. Pas.
¶ 4 Plaintiff's complaint further alleged that both plaintiff and Mojo were insured under a policy of automobile insurance issued by ASI to Mojo, effective January 1, 2008, through January 1, 2009. That insurance policy was alleged to include $500,000 in liability coverage for bodily injury and property damage. It was further alleged that, due to the fact that uninsured motorist (UM) and underinsured motorist (UIM) coverage in an amount equal to that amount was never rejected by Mojo, "the policy must be construed to provide for $500,000.00 [in] underinsured motorist coverage." Moreover, because ASI had indicated its belief that the insurance policy issued to Mojo did not provide any UIM coverage for the accident, plaintiff's complaint asked the circuit court to make a declaration of the rights of the "interested parties" with respect to the ASI policy and reform that policy to "include underinsured motorist coverage in an amount equal to the bodily injury limit [of] $500,000.00."
¶ 5 The record reflects that ASI was served with summons on July 28, 2010, and filed its appearance in this matter on August 10, 2010. There is no evidence in the record that service upon Mojo was ever attempted or completed, and Mojo never filed an appearance.
¶ 6 ASI filed an answer and affirmative defenses to plaintiff's complaint. Among ASI's defenses was an assertion that in Mojo's initial application for insurance, Mojo "specifically requested limits of $20,000/$40,000 for uninsured/underinsured motorist coverage, and rejected higher limits for that coverage." Thereafter, ASI took plaintiff's deposition and filed a motion for summary judgment. In turn, plaintiff filed a cross-motion for summary judgment.
¶ 7 In their respective motions, plaintiff and ASI did not dispute the underlying facts. As such, they agreed that ASI issued an original policy of automobile insurance to Mojo covering the period between June 8, 2007, and January 1, 2008 (policy C2 CM9093919-00). This policy originally provided a "combined single limit" (CSL) of $300,000 in bodily injury and property damage liability coverage. In the course of applying for this policy, Mojo's president was informed of Mojo's right to UM or UIM coverage in an amount equal to the bodily injury and property damage coverages. Mojo's president signed a written rejection of such coverage, and also acknowledged in writing that Mojo could "at any future date, by written request, increase this coverage." Therefore, the original policy only provided UM coverage in the amount of $20,000 per person and $40,000 per accident. It did not specifically provide for any coverage for UIM coverage.
¶ 8 That original policy was subsequently modified by a number of endorsements, including endorsements adding additional insured drivers and adding and removing specific insured vehicles. Of particular relevance, on or about October 1, 2007, ASI received a written "GENERAL REQUEST FORM" from Mojo. On that form, Mojo checked two boxes indicating that it was requesting an "Endorsement" that would "CHANGE" its coverage. Specifically, Mojo requested a "Change of Limits to 500 CSL." There was no request for increased UM or UIM coverage on this form. Pursuant to this request, ASI prepared an endorsement to the original policy--issued on October 3, 2007, but effective October 1, 2007--in which the bodily injury and property damage liability limits were both increased to $500,000. The amount of UM coverage was not altered.
¶ 9 When the original policy expired on January 1, 2008, ASI issued Mojo a subsequent "RENEWAL" policy covering the period from January 1, 2008, through January 1, 2009 (policy number C2 CM909319-01). This policy provided the same amount of liability (a $500,000 CSL) and UM coverage ($20,000 per person and $40,000 per accident) as the original policy, and it was this policy that was in effect at the time of the accident. Mojo did not sign another written rejection of higher UM or UIM coverage in connection with either the endorsement increasing the liability limits or the "RENEWAL" policy, nor did Mojo make a specific request for any additional UM or UIM coverage.
¶ 10 While plaintiff and ASI did not dispute these underlying facts, they did dispute their legal significance. In its motion for summary judgment, ASI contended that its underlying actions had fully complied with section 143a-2 of the Illinois Insurance Code (Insurance Code), which contains certain requirements with respect to UM and UIM coverage. 215 ILCS 5/143a-2 (West 2008). Specifically, ASI asserted that the provisions of section 143a-2 did not require Mojo to again reject higher UM or UIM coverage at the time of the endorsement or when the policy was renewed, despite the fact that the amount of liability coverage had been increased. Thus, the policy only provided a total of $40,000 in UM coverage at the time of the accident. That coverage was irrelevant to the accident at issue here because Mr. Pas was covered by a total of $200,000 in liability insurance.
¶ 11 Plaintiff argued that both the endorsement and the subsequent policy were "new policies." As such, plaintiff contended that section 143a-2 did indeed require Mojo to again reject higher UM and UIM coverage, both when the liability coverage limits were increased via endorsement and when the subsequent policy was issued with liability coverage limits that were higher than the original amounts. Because it was undisputed that no such rejection was made in connection with either the endorsement or the subsequent policy, plaintiff further asserted that section 143a-2 required that the policy be reformed to provide UM and UIM coverage in an amount equal to the $500,000 bodily injury liability limit.
¶ 12 On February 10, 2012, the circuit court entered both a written order and a written decision denying ASI's motion for summary judgment and granting summary judgment in favor of plaintiff on his cross-motion. The circuit court's ruling was largely based upon its decision to follow the reasoning contained in Nicholson v. State Farm Mutual Automobile Insurance Co., 409 Ill. App. 3d 282 (2010). In that case, the Second District of the Illinois Appellate Court found, under different facts, that an earlier version of section 143a-2 required that insurers must again offer and must obtain a written rejection of higher UM coverage whenever there is a material change to an original insurance policy; more specifically, where there is an increase in the amount of liability coverage in a subsequent policy. Id. at 293. The circuit court therefore found that, because ASI had failed to comply with the provisions of section 143a-2 by obtaining a rejection of higher UM and UIM limits at the time of the endorsement increasing the amount of liability coverage in the original policy, the "RENEWAL" policy it issued to Mojo should be "reformed to set uninsured/underinsured motorist coverage limits at $500,000 to match the bodily injury liability limit."
¶ 13 The circuit court's written order indicated that its written decision "shall be a final and appealable order," and ASI filed a notice of appeal from the circuit court's orders on February 16, 2012. However, in an order entered on October 9, 2012, this court dismissed ASI's appeal for a lack of jurisdiction. Alshwaiyat v. American Service Insurance Co., 2012 IL App (1st) 120555-U.
¶ 14 In that order, this court noted that while plaintiff had named both Mojo and ASI as defendants in the instant suit, only ASI had been served and only ASI filed an appearance. Id. ¶ 14. We further noted that Mojo was nevertheless still a "party" to this suit for purposes of Illinois Supreme Court Rule 304(a) (Ill. S. Ct. R. 304(a) (eff. Feb. 26, 2010)), which provides this court with jurisdiction over an appeal "taken from a final judgment as to one or more but fewer than all of the parties or claims only if the trial court has made an express written finding that there is no just reason for delaying either enforcement or appeal or both." Because the circuit court's February 10, 2012, written order only entered a judgment against ASI and because it did not include such a finding, we concluded that we did not have jurisdiction over ASI's prior appeal. Alshwaiyat, 2012 IL App (1st) 120555-U, ¶¶ 15-17.
¶ 15 ASI thereafter filed a motion in the circuit court seeking a finding, pursuant to Rule 304(a), that would allow it to take an appeal from the circuit court's prior orders. On October 23, 2012, the circuit court entered an order "pursuant to Supreme Court Rule 304(a) that there is no just reason for delaying enforcement or appeal of this court's written DECISION and order filed February 10, 2012 and the handwritten order also entered February 10, 2012." ASI thereafter filed a timely notice of appeal from the orders entered by the circuit court on October 25, 2012. On November 28, 2012, we entered an order allowing the record and the briefs filed in the prior appeal to stand as the record and briefs in the instant appeal.
¶ 17 On appeal, ASI contends that the circuit court incorrectly denied its motion for summary judgment and improperly granted plaintiff's ...