Bertini v. State Farm Mut. Auto. Ins. Co., 76--161

• Decision Date: 02 June 1977
• Docket Number: No. 76--161,76--161
• Citation: 48 Ill.App.3d 851,362 N.E.2d 1355,6 Ill.Dec. 435
• Parties: , 6 Ill.Dec. 435 Joseph R. BERTINI, Individually and as Administrator of the Estate of Michael J. Bertini, Deceased, Plaintiff- Appellee, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, a corporation, Defendant- Appellant, and Central National Insurance Company of Omaha, a corporation, Defendant- Appellee. . Rehearing Denied
• Court: United States Appellate Court of Illinois

Page 1355

362 N.E.2d 1355

48 Ill.App.3d 851, 6 Ill.Dec. 435

Joseph R. BERTINI, Individually and as Administrator of the Estate of Michael J. Bertini, Deceased, Plaintiff- Appellee, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, a

corporation, Defendant- Appellant,

and

Central National Insurance Company of Omaha, a corporation,

Defendant- Appellee.

No. 76--161.

Appellate Court of Illinois, First District, Fourth Division.

Rehearing Denied June 2, 1977.

May 5, 1977.

John T. Kennedy of Querrey, Harrow, Gulanick & Kennedy, Ltd., Chicago, for defendant-appellant.

Peter D. Corti of Karlin & Fleisher, Chicago, for plaintiff-appellee.

Arthur H. Barton, Chicago (David F. Holland, Chicago, of counsel), for defendant-appellee.

ROMITI, Justice.

This appeal involves an action for declaratory judgment instituted by plaintiff, Joseph R. Bertini, individually and as administrator of the estate of Michael J. Bertini, Deceased, against State Farm Mutual Automobile Insurance Co. (State Farm) and Central National Insurance Company of Omaha (Central).

The issues in this case are two: whether an automobile insurer can limit uninsured motorist coverage to the named insured although it affords liability coverage to omnibus insureds, albeit through an escape clause, and whether an insurer issuing three policies to the same insured can escape liability through reliance on an escape clause where there is primary insurance in the minimum amount.

We reverse and remand with directions.

The facts in this case are undisputed. On August 18, 1972 Michael J. Bertini died when the motorcycle he was riding was struck by an automobile driven by an uninsured motorist. Michael Bertini allegedly was a resident of his father's household, Joseph Bertini, who is the plaintiff in this action, both individually and as administrator of Michael's estate.

Joseph Bertini at the time of the accident owned three automobiles which were insured by three separate policies issued by State Farm, one of the defendants in this action. Each of these policies provides uninsured motorist coverage with the minimum $10,000/$20,000 limits required by statute. If the deceased was in fact a member of his father's household, as alleged then clearly he was insured under the policies. (7 Appleman Insurance Law and Practice § 4331.) There has been no contention on appeal that the deceased was not an insured under State Farm's policies.

All of State Farm's policies contain 'other insurance' clauses. In two of the policies the clause reads:

'Under coverage U with respect to bodily injury to an insured while occupying a motor vehicle not owned by a named in sured under this coverage, the insurance hereunder shall apply only as excess insurance over any other similar insurance available to such occupant, and this insurance shall then apply only in the amount by which the applicable limit of liability of this coverage exceeds the sum of the applicable limits of liability of all such other insurance.

Subject to the foregoing paragraph, under coverage U if the insured has other similar insurance available to him against a loss covered by this coverage, then the damages shall be deemed not to exceed the higher of the applicable limits of liability of this insurance and such other insurance, and the company shall not be liable under this coverage for a greater proportion if the applicable limit of liability of this coverage than such limit bears to the sum of the applicable limits of liability of this insurance and such other insurance.'

In the policy covering the third vehicle, to-wit, a Chevrolet station wagon, the language of the other insurance clause is identical except that the excess clause in only applicable when the insured is occupying an Automobile not owned by a named insured under the coverage.

The motorcycle the deceased was riding at the time of the accident was owned by Michael Shanahan, and insured by Central. The Family Protection Coverage (Uninsured Motorist Coverage) endorsement limits its coverage to the named insured as stated in the policy. The liability portion of the policy covered basides the named insured:

'(b) any other person using or legally responsible for the use of an insured vehicle covered by this policy with the permission of the named insured, only if such other person (1) has no liability insurance of his (her) own, either primary or excess, or (2) is not included in 'Persons Injured' or 'Definition of Insured' in any other liability insurance policy, either primary or excess. Insurance afforded by this sub paragraph (b) shall not exceed the minimum limit of liability specified in the Financial Responsibility Law of the state in which the accident occurs. However, if such person has another policy available but said other policy has limits less than the minimum specified in the Financial Responsibility Law of the state in which the accident occurs, then this policy shall apply only as excess insurance for the difference between said minimum limits and the limits under said other policy * * *.'

When both insurance companies refused to arbitrate the plaintiff's claim, he brought a declaratory judgment action against both insurers seeking a declaration of coverage and an order to arbitrate. The trial court ruled that Central afforded no coverage and that the total amount of insurance available under the State Farm policies, for the payment of plaintiff's claim was $30,000.

I.

Since if there is no other insurance, the other insurance clauses of State Farm's policies do not come into play (8 Appleman Insurance Law and Practice § 4914), and under the authority of Glidden v. Farmers Automobile Insurance Association (1974), 57 Ill.2d 330, 312 N.E.2d 247, State Farm would, as the trial court held, be liable for $30,000, we must first determine whether Central's policy afforded the plaintiff uninsured motorist coverage protection. Clearly, if the limitation of coverage to the named insured in the endorsement is valid, Bertini, who was not a named insured, was not covered. To determine the limitation's validity, we must look at section 143a of the Insurance Code (Ill.Rev.Stat.1971 ch. 73, par. 755a), since, while generally the parties are free to make their own contract (12 Appleman Insurance Law and Practice § 7005; 13 Appleman Insurance Law and Practice § 7381), statutes which are in force at the time the policy was issued are controlling, and policy provisions in conflict with the statute are void. (12 Appleman Insurance Law and Practice § 7041.) Nor, contrary to Central's contentions, does the approval by the Insurance Commissioner of a particular provision or policy, validate a provision which is void as contrary to statute. American Motorists Insurance Co. v. Thompson (1969), 253 Or. 76, 453 P.2d 164; American Liberty Insurance Co. v. Ranzau (Tex.1972), 481 S.W.2d 793; 19 Appleman Insurance Law and Practice § 10425; 7 Appleman Insurance Law and Practice § 4331.

Section 143a of the Insurance Code requires that all persons insured under the liability portion of an automobile liability policy be protected under the Uninsured Motorist Coverage. As stated by the court in Roach v. Central National Insurance Co. (1975), 60 Mich.App. 40, 230 N.W.2d 297, at 301 which construed a practically identical statute:

'The clear purpose and the mandatory language of the statute require that uninsured motorist coverage must be provided to the same persons included as insureds in the liability policy. When the provisions of a policy of insurance differ or vary from this statutory requirement, they must be read into the provisions of the policy.'

Thus if one is an insured for the purpose of liability protection, he is deemed an insured for the purpose of uninsured motorist protection. Rice v. Detroit Automobile Inter-Insurance Exchange (1976), 66 Mich.App. 600, 239 N.W.2d 675.

Accordingly, the threshold issue before us is whether the deceased was insured under the liability portion of Central's policy. If he was, then the limitation of coverage in the uninsured motorist portion was invalid.

The provision in Central's policy affording omnibus insureds liability coverage only if they have no other insurance, either primary or excess, is commonly known as an 'escape' clause. Many courts have enforced this provision (8 Appleman Insurance Law and Practice § 4914), particularly where, as here, it appears not in the 'Other Insurance' section of the policy but in that section designating the persons insured. Others have not. Illinois is one of the latter. Our Supreme Court in Automobile Underwriters, Inc. v. Hardware Mutual Casualty Co. (1971), 49 Ill.2d 108, 273 N.E.2d 360 ruled that an escape clause, similar in language to the one in Central's policy, was ineffective to relieve the owner's insurer from affording primary coverage to the omnibus insured, even though he was, in fact, covered by other insurance. That case is controlling here. And since Central's policy did afford the deceased liability protection, indeed primary protection, the limitation in the uninsured motorist coverage was void.

Central's policy which had the usual 'pro-rata' clause affords primary coverage since it insured the accident vehicle. Normally it alone would afford primary coverage and any policies insuring the driver would provide only excess coverage. (7 Appleman Insurance Law and Practice § 4331; 8 Appleman Insurance Law and Practice § 4914.) Nevertheless the policy language controls the relationships between the insurers and if State Farm's policies do not have excess clauses which apply to the accident involved here, then its and Central's pro rata clause will govern and the coverages will be prorated.

Two of State Farm's three policies provide that their coverage will be excess over any other available coverage if the insured at the time of the accident was occupying a motor vehicle not owned by the named insured. Since a motorcycle clearly is a motor...