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Berrey v. Travelers Indem. Co. of Am.

United States Court of Appeals, Seventh Circuit

October 22, 2014

DEANNE BERREY, Plaintiff-Appellant,
v.
TRAVELERS INDEMNITY COMPANY OF AMERICA, Defendant-Appellee

Argued September 26, 2014.

Appeal from the United States District Court for the Central District of Illinois. No. 3:11-cv-03426 -- Sue E. Myerscough, Judge.

For Deanne Berrey, Plaintiff - Appellant: Randall A. Wolter, Attorney, Wolter, Beeman & Lynch, Springfield, IL.

For Travelers Indemnity Company, Defendant - Appellee: Dennis Michael Dolan, Attorney, Litchfield Cavo Llp, Chicago, IL.

Before FLAUM, MANION, and KANNE, Circuit Judges.

OPINION

Page 592

Flaum, Circuit Judge.

Deanne Berrey was injured in an automobile accident at work. The at-fault driver, who did not work with Berrey, carried liability insurance, but the cost of Berrey's injuries exceeded the insurance policy's limit. Berrey received partial compensation under her employer's workers' compensation scheme but, because her employer was not legally responsible for the accident, state law granted the workers' compensation carrier a lien on any recovery Berrey received from the at-fault driver. To satisfy that lien, the at-fault driver's liability insurer paid its full policy limit directly to the workers' compensation carrier.

Defendant Travelers Indemnity Company of America provided underinsured motorist coverage to Berrey's employer. The policy covered an employee injured by a third-party tortfeasor who did not carry

Page 593

adequate auto insurance to fully compensate the employee for her loss. Pursuant to this policy, Travelers paid Berrey the difference between her total calculated damages and the at-fault driver's policy limit. Berrey claims that Travelers improperly deducted the at-fault driver's insurance payment from the total it owed to Berrey because that payment was made directly to the workers' compensation carrier rather than to Berrey herself. She argues that the language of Travelers's underinsured motorist policy precludes such a deduction. Because we read the language of the policy to support Travelers's calculation and because Berrey's reading would undermine the purpose of underinsured motorist coverage, we disagree and affirm the district court's grant of summary judgment in favor of Travelers.

I. Background

On March 26, 2009, Berrey, an employee of Curry Ice & Coal, Inc., was on duty when her vehicle collided with another driven by Sheri A. Campbell. Campbell, who was not employed by Curry Ice, was found at fault for the accident. An arbitral panel constituted pursuant to an agreement between Berrey and Curry Ice issued a binding opinion, which calculated Berrey's total damages at $310,000, inclusive of all medical expenses.

Berrey, an Illinois resident, initiated three independent proceedings to recover for her injuries: (1) a workers' compensation claim against Curry Ice; (2) a liability claim against Campbell; and (3) an underinsurance claim against Travelers, a Connecticut corporation which provided underinsured motorist (" UIM" ) coverage to ...


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