Ackermann v. Prudential Property and Cas. Ins. Co.

• Decision Date: 23 April 1980
• Docket Number: No. 79-632,79-632
• Citation: 404 N.E.2d 534,83 Ill.App.3d 590,39 Ill.Dec. 150
• Parties: , 39 Ill.Dec. 150 Jeffrey ACKERMANN, Plaintiff-Appellee, v. PRUDENTIAL PROPERTY AND CASUALTY INSURANCE COMPANY, Defendant-Appellant.
• Court: United States Appellate Court of Illinois

Page 534

404 N.E.2d 534

83 Ill.App.3d 590, 39 Ill.Dec. 150

Jeffrey ACKERMANN, Plaintiff-Appellee, v. PRUDENTIAL PROPERTY AND CASUALTY INSURANCE COMPANY Defendant-Appellant.

No. 79-632.

Appellate Court of Illinois, First District, Third Division.

April 23, 1980.

McKenna, Storer, Rowe, White & Farrug, Robert Soderstrom and Richard Clark, Chicago, for defendant-appellant.

Schwartzberg, Barnett & Cohen, Heller & Morris, Chicago, for plaintiff-appellee.

McGILLICUDDY, Presiding Justice:

On October 2, 1976, the plaintiff, Jeffrey Ackermann, was a passenger in an automobile operated by Paul Short which collided with a vehicle driven by William Wallete. At the time of the collision, Wallete was insured by Allstate Insurance Company (Allstate) under an automobile casualty insurance policy which provided for public liability coverage in the amount of $25,000. Short and the vehicle he was operating were uninsured. The plaintiff was insured by the defendant, Prudential Property and Casualty Insurance Company (Prudential), and his policy included coverage for personal injuries resulting from a collision involving an uninsured vehicle.

The plaintiff pursued his claim for damages against Wallete and sought uninsured motorist benefits from Prudential. Subsequently, Allstate offered the plaintiff $20,000 in settlement of his claim against Wallete. Prudential asserted its right to subrogation against the settlement offer in accordance with the terms of its policy which provided in pertinent part that:

"Trust Agreement. In the event of payment to any person under this Part: (a) the company shall be entitled to the extent of such payment to the proceeds of any settlement or judgment that may result from the exercise of any rights of recovery of such person against any person or organization legally responsible for the bodily injury because of which such payment is made; (b) such person shall hold in trust for the benefit of the company all rights of recovery which he shall have against such other person or organization because of the damages which are the subject of claim made under this Part; . . ."

Thereafter, the plaintiff filed a complaint for declaratory judgment which requested that the court declare that he was entitled to recovery under the uninsured motorist provisions of his policy and that Prudential was entitled to subrogation rights only as to any assets of the uninsured motorists but not as to any assets of any other insured co-tortfeasor. In response, Prudential filed a motion to strike the complaint and dismiss the cause of action, asserting that the plaintiff was not entitled to the relief sought as a matter of law. After hearing argument concerning the motion the trial court entered an order declaring that,

"(A)ssuming but not deciding that Plaintiff is an insured under Coverage J Uninsured Motorist of the insurance policy referred to in the Complaint and is otherwise entitled to make a claim under said coverage, the rights of the Defendant under the paragraph of said coverage entitled 'Trust Agreement', . . . are limited to the pursuit of rights against and to the pursuit of the assets of the allegedly uninsured motorist Paul Short only and may not be pursued against William Wallete, Allstate Insurance Company as Wallete's insurer, or against any other person or organization not defined in said policy as an uninsured motorist."

It is from this order that Prudential appeals.

Prudential contends that the trial court erred in failing to grant its motion to strike and dismiss. It asserts that the language of the trust agreement provision in the policy clearly provides that Prudential is entitled to reimbursement from the proceeds received by the plaintiff from "any person or organization legally responsible for the bodily injury." It contends that there is no distinction in this provision between proceeds received from an insured tortfeasor or an uninsured tortfeasor. Moreover, Prudential contends that the wording of the trust agreement closely parallels the language of section 143(a) of the Illinois Insurance Code concerning uninsured motorist insurance. This section states:

"In the event of payment to any person under the coverage required by this Section and subject to the terms and conditions of such coverage, the insurer making such payment shall, to the extent thereof, be entitled to the proceeds of any settlement of judgment resulting from the exercise of any rights of recovery of such person against any person or organization legally responsible for the bodily injury or death for which such payment is made, including the proceeds recoverable from the assets of the insolvent insurer. . .." Ill.Rev.Stat., 1975, ch. 73, par. 755a(3).

This issue was decided by the Supreme Court in Glidden v. Farmers Automobile Insurance Association (1974), 57 Ill.2d 330, 312 N.E.2d 247. In that case Glidden's wife, a pedestrian, was struck and killed by an uninsured motorist. In addition to his uninsured motorist claim against the defendant insurance company, Glidden filed suit against a dram shop defendant. The Supreme Court specifically held that the insurer was entitled to be subrogated, to the extent of payment made under the uninsured motorist coverage, to any proceeds received by the plaintiff from both the uninsured motorist and the dram shop defendant.

The plaintiff argues that the recent decision of Wilhelm v. Universal Underwriters Insurance Co. (1978), 60 Ill.App.3d 894, 17 Ill.Dec. 872, 377 N.E.2d 62, supports the trial court's order. In Wilhelm an insurance policy contained a provision purporting to allow the insurer to set off from its liability under an...