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Thounsavath v. State Farm Mutual Automobile Insurance Co.

Court of Appeals of Illinois, First District, Fifth Division

June 30, 2017

PHOUNGEUN THOUNSAVATH, Plaintiff and Counterdefendant-Appellee,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant and Counterplaintiff-Appellant.

         Appeal from the Circuit Court of Cook County. No. 2014 CH 02511, Honorable Kathleen M. Pantle, Judge Presiding.

          HALL JUSTICE delivered the judgment of the court, with opinion. Justices concurred in the judgment and opinion.

          OPINION

          HALL JUSTICE.

         ¶ 1 The plaintiff, Phoungeun Thounsavath, filed a complaint for declaratory judgment against the defendant, State Farm Mutual Automobile Insurance Company (State Farm). The plaintiff sought a declaration that, as applied to her, the driver exclusion endorsement in the automobile liability policies issued to her by State Farm violated section 143a-2 of the Illinois Insurance Code (Insurance Code) (215 ILCS 5/143a-2 (West 2012)) and the public policy of Illinois. State Farm answered the complaint and filed a counterclaim for declaratory judgment, seeking a declaration that the plaintiff was not entitled to underinsured coverage under her automobile liability policies with State Farm. The circuit court denied State Farm's motion for summary judgment and granted the plaintiff's motion for summary judgment. State Farm appeals.

         ¶ 2 On appeal, State Farm contends that, as to the plaintiff, its driver exclusion endorsement does not violate section 7-317(b)(2) of the Illinois Safety and Family Financial Responsibility Law (Financial Responsibility Law) (625 ILCS 5/7-317(b)(2) (West 2012)), section 143a-2 of the Insurance Code, or Illinois public policy.

         ¶ 3 BACKGROUND

         ¶ 4 The facts are not in dispute. The plaintiff was injured while a passenger in a vehicle driven by Clinton M. Evans. At the time of the accident, Mr. Evans was insured by American Access Insurance Company (AAIC), and the plaintiff was insured by State Farm under two automobile liability policies. The plaintiff made a claim against Mr. Evans for her personal injuries, which was paid by AAIC in the amount of $20, 000.

         ¶ 5 The plaintiff then filed an underinsured motorist claim with State Farm. State Farm denied coverage under the following provision contained in both of the automobile liability policies it issued to the plaintiff: "

'IT IS AGREED WE SHALL NOT BE LIABLE AND NO LIABILITY OR OBLIGATION OF ANY KIND SHALL ATTACH TO US FOR BODILY INJURY, LOSS OR DAMAGE UNDER ANY OF THE COVERAGES OF THIS POLICY WHILE ANY MOTOR VEHICLE IS OPERATED BY: CLINTON M. EVANS' " (Emphasis in original.)

         ¶ 6 On May 27, 2015, the circuit court denied State Farm's motion for summary judgment. The court found that while named driver exclusions are recognized in Illinois, the issue was whether such exclusions may be used to deny coverage to the named insured. The court determined that such exclusions do not override the plain language of section 7-317(b)(2) of the Financial Responsibility Act and denied State Farm's motion for summary judgment. Thereafter, the plaintiff filed her motion for summary judgment, which was granted by the circuit court on May 4, 2016.

         ¶ 7 On May 10, 2016, State Farm filed its notice of appeal from the May 27, 2015, and May 4, 2016, orders of the circuit court.

         ¶ 8 ANAYLSIS

         ¶ 9 I. Standards of Review

         ¶ 10 We review the granting of summary judgment, the construction of an insurance policy and the construction of a statute de novo. Goldstein v. Grinnell ...


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