Cincinnati Ins. Co. v. Miller

• Decision Date: 27 October 1989
• Docket Number: No. 88-1603,88-1603
• Citation: 546 N.E.2d 700,190 Ill.App.3d 240
• Parties: CINCINNATI INSURANCE COMPANY, Plaintiff-Appellant, Cross-Appellee, v. Susan MILLER, Defendant-Appellee, Cross-Appellant.
• Court: United States Appellate Court of Illinois

190 Ill. App. 3d 240

546 N.E.2d 700,

CINCINNATI INSURANCE COMPANY, Plaintiff-Appellant and Cross-Appellee

v SUSAN MILLER, Defendant-Appellee and Cross-Appellant

No. 1-88-1603

Appellate Court of Illinois, First District, Sixth Division

October 27, 1989, Filed

As Corrected October 16, 1990.

Appeal from the Circuit Court of Cook County; the Hon. Robert Sklodowski, Judge, presiding.

Affirmed in part and reversed in part.

Hinshaw, Culbertson, Moelmann, Hoban & Fuller, of Chicago (Stephen R. Swofford, Peter C. Morse, and Robert G. Black, of counsel), for appellant.

Jay A. Baier, Ltd., of Chicago (Jay A. Baier and Joseph P. Schreiber, of counsel), for appellee.

JUDGES: JUSTICE LaPORTA delivered the opinion of the court. McNAMARA and QUINLAN, JJ., concur.

OPINION BY: LaPORTA

OPINION

On August 24, 1985, defendant, her husband, and three other persons were on a family vacation in the van which defendant had purchased for her sole day-care business, The Children's Discovery Center. While in Utah, the van was struck by an uninsured motorist.

Defendant's husband, who was driving, suffered only minor injuries, but all four passengers in the van were hospitalized. Defendant was the most severely injured, ultimately undergoing a below-the-knee amputation of her right leg. At the time of the accident, defendant was approximately 11 weeks pregnant. Defendant's injuries included a claim for the loss of the fetus. Her medical expenses totaled $ 105,447.48.

The van was insured under a business auto liability policy issued to The Children's Discovery Center, covering both the van and a second vehicle. The business auto policy included uninsured motorist coverage with limits of $ 100,000 per individual and $ 300,000 per accident. The Children's Discovery Center was also insured under a commercial umbrella liability policy which provided additional insurance coverage in excess of amounts in certain listed underlying insurance policies, including the automobile policy, up to $ 1 million. Plaintiff issued both the automobile policy and the umbrella policy.

Plaintiff filed its complaint for declaratory judgment against defendants Susan Miller, the sole proprietor of Children's Discovery Center, her husband Larry Miller, and the estate of Baby Miller. The suit sought a declaration by the court of the rights and liabilities of the parties under the business auto liability policy and the commercial umbrella liability policy issued to the Children's Discovery Center by the plaintiff. The complaint alleged (1) that both policies were in effect on the date of the accident, (2) that defendant Susan Miller was injured, (3) that plaintiff had paid her $ 100,000, which was the limit under the uninsured motorist coverage of the business auto liability policy, and (4) that payment of $ 100,000 represented full satisfaction of plaintiff's obligation to defendant. The complaint further alleged that an actual controversy existed between the parties, because the defendant took the position that uninsured motorist coverage under the business auto liability policy could be stacked to provide a $ 200,000 limit since the policy insured two vehicles. The defendants also took the position that plaintiff was required to offer uninsured motorist coverage in its commercial umbrella liability policy under the requirements of the Illinois Insurance Code (Ill. Rev. Stat. 1983, ch. 73, par. 755a) and having failed to do so, plaintiff breached a duty to defendants.

Defendants moved for summary judgment and a finding that by operation of law the commercial umbrella liability policy contains uninsured motorist coverage limits in the amount of $ 1 million and a finding that the business auto liability policy contains uninsured motorist coverage limits of $ 200,000 per person and $ 600,000 each accident.

By an agreed order, defendants Susan Miller and Larry Miller were appointed jointly as special administrators of the estate of Baby Miller for purposes of this litigation. Subsequently settlement was reached for the death of the fetus, and all defendants except Susan Miller were dismissed. For purposes of this appeal, all references in this opinion to defendant refer to Susan Miller.

Plaintiff moved for summary judgment and for a finding that the uninsured motorist coverage under the business auto liability policy may not be stacked and/or a declaration that the Illinois Insurance Code does not require an insurer to offer uninsured motorist coverage on its umbrella policy whether the policy was designated as a commercial lines or personal lines policy.

The trial court ruled in favor of plaintiff and against defendant on the question of stacking, thereby limiting the recovery under the business auto liability policy's uninsured motorist coverage to defendant to the $ 100,000 amount already paid. The trial court ruled in favor of defendant and against plaintiff on their respective summary judgment motions on the question of the alleged requirements to offer uninsured motorist coverage under the commercial umbrella policy. Defendant then filed a motion for finding that by operation of law the commercial umbrella liability policy issued by plaintiff contains uninsured motorist coverage with limits of $ 1 million.

Following a full hearing the trial court made the following findings and declaration of rights and obligations: (1) Under the statutory language of section 143a -- 2 of the Insurance Code (Ill. Rev. Stat. 1983, ch. 73, par. 755a -- 2), plaintiff had an affirmative duty to offer uninsured motorist coverage to the insured defendant under the commercial umbrella liability policy; (2) from the evidence produced at the hearing, the court found the defendants would have purchased $ 500,000/$ 1 million uninsured motorist coverage under the umbrella policy if it had been offered; (3) the defendant's motion for finding that by operation of law the umbrella policy included uninsured motorist coverage of $ 1 million was denied; and (4) the uninsured motorist coverage under the business auto liability coverage was limited to $ 100,000 and defendant's motion with respect to stacking to increase coverage to $ 200,000 under that policy was denied.

Plaintiff appeals from the trial court's decision which held that plaintiff insurer had a duty to offer uninsured motorist coverage to defendant as part of its commercial liability coverage. Defendant appeals the trial court's decision which denied stacking of coverage under the business auto liability policy to double the policy limits and further appeals the court's decision in denial of defendant's motion for a finding that by operation of law the commercial umbrella policy included uninsured motorist coverage with limits equal to the bodily injury liability limits of the policy. Defendant argues that the trial court's ruling was contrary to the manifest weight of the evidence and based on inadmissible evidence.

We first consider the nature of the insurance coverage purchased by defendant. Plaintiff issued a business auto liability policy for the period from October 5, 1984, to October 5, 1989, naming as the insured The Children's Discovery Center, operated by the defendant as a sole proprietorship. The automobile schedule attached to the policy identified as the covered autos a 1979 Plymouth Van and "Hired and Non-Owned" vehicles. On July 22, 1985, by automobile change endorsement, a 1985 Plymouth Voyager was added to the policy coverage and an additional premium was paid. This is the vehicle involved in the accident on August 24, 1985. The policy provided liability insurance with bodily injury limits of $ 100,000 each person/$ 300,000 each accident and property damage liability $ 50,000 each accident, automobile medical payments insurance with a $ 5,000 limit, uninsured motorists insurance with bodily injury limits of $ 100,000 each person/$ 300,000 each accident, comprehensive physical damage coverage, collision physical damage coverage less $ 250 deductible, and towing and labor coverage of $ 25 for each disabled auto.

Plaintiff issued its separate commercial umbrella liability policy with liability limits of $ 1 million each occurrence and $ 1 million aggregate for the period from October 5, 1984, to October 5, 1987, naming as the insured The Children's Discovery Center. The coverage portion of the policy provided: "We will pay on behalf of the insured the ultimate net loss for occurrences during the policy period in excess of the underlying insurance or for occurrences covered by this policy which are either excluded or not covered by underlying insurance because of Personal Injury, Property Damage or Advertising Liability, anywhere in the world." The underlying policies listed in Schedule A were three policies issued by plaintiff for employer's liability coverage, comprehensive general liability, including contractual liability, completed operations, products liability, personal injury liability, and the business auto liability policy, including owned automobiles, nonowned automobiles and hired automobiles in this appeal. The umbrella policy contained no separate endorsement provision for uninsured motorist coverage.

When a court interprets an insurance policy, there are only two sources upon which it may base its analysis: the plain language of the policy and the plain language of the Insurance Code of 1937 as it existed at the time the policy was written. ( Bailey v. State Farm Fire & Casualty Co. (1987), 156 Ill. App. 3d 979, 984, 509 N.E.2d 1064, 1067.) Unless an ambiguity exists, the court should not refer to other materials. ( Price v. State Farm Mutual Automobile Insurance Co. (1983), 116 Ill. App. 3d 463, 470, 452 N.E.2d 49, 52.) When interpreting the effects of a statute, all relevant parts of the statute must be read in conjunction, not in isolation. People v. Jordan (1984), 103 Ill. 2d 192, 206, 469 N.E.2d 569, 576.

The Illinois Insurance Code of 1937 at section 4 classifies insurance into...