Luechtefeld v. Allstate Ins. Co.

• Decision Date: 21 September 1995
• Docket Number: No. 78252,78252
• Citation: 656 N.E.2d 1058,167 Ill.2d 148,212 Ill.Dec. 224
• Parties: , 212 Ill.Dec. 224 Harry LUECHTEFELD, Appellee, v. ALLSTATE INSURANCE COMPANY, Appellant.
• Court: Illinois Supreme Court

Page 1058

656 N.E.2d 1058

167 Ill.2d 148, 212 Ill.Dec. 224

Harry LUECHTEFELD, Appellee, v. ALLSTATE INSURANCE COMPANY, Appellant.

No. 78252.

Supreme Court of Illinois.

Sept. 21, 1995.

John B. Gunn and Leslie G. Offergeld, Walker & Williams, P.C., Belleville, appellant.

Harriet H. Hamilton, Cook, Shevlin, Ysursa, Brauer & Bartholomew, Ltd., Belleville, for appellee.

Chief Justice BILANDIC delivered the opinion of the court:

The plaintiff, Harry Luechtefeld, brought a declaratory judgment action in the circuit court of St. Clair County against Allstate Insurance Company seeking a determination of his rights to uninsured-motorist coverage under a policy issued to him by Allstate. The trial court granted Allstate's motion for summary judgment, finding that the policy unambiguously excluded the plaintiff's claim. The appellate court reversed, finding that although the policy excluded coverage, the purported exclusion was invalid for public policy reasons. (267 Ill.App.3d 222, 204 Ill.Dec. 640, 641 N.E.2d 1259.) We allowed Allstate's petition for leave to appeal (145 Ill.2d R. 315).

At issue in this appeal is whether an insurance policy may, consistently with public policy, exclude uninsured-motorist coverage for vehicles owned by the insured when such vehicles have uninsured-motorist coverage under another insurance policy.

The facts are not disputed. The plaintiff suffered personal injuries in an accident on December 10, 1990. The plaintiff was operating a motorcycle that he owned when he was struck by an uninsured motorist. The motorcycle was insured under a policy issued by Pekin Insurance Company to the plaintiff in November 1990. The Pekin policy provided uninsured-motorist coverage with limits of $20,000 per person/$40,000 per accident. The plaintiff settled his accident claim against Pekin for the full $20,000 limit of uninsured-motorist coverage.

The plaintiff was also the named insured in a policy issued by Allstate to cover three automobiles that the plaintiff owned. The Allstate policy provided uninsured-motorist coverage of $100,000 per person/$300,000 per accident. Because the plaintiff's injuries and damages allegedly exceeded the $20,000 settlement he received from Pekin, the plaintiff filed a claim with Allstate. The plaintiff claimed that the injuries he sustained in the motorcycle accident were covered under the uninsured-motorist provisions of the Allstate policy. Allstate denied the plaintiff's claim, citing an exclusionary clause in the policy. Allstate argued that this clause excluded the plaintiff's motorcycle from uninsured-motorist coverage because the motorcycle had uninsured-motorist coverage under another insurance policy, i.e., the Pekin policy.

The plaintiff then filed the instant declaratory judgment action, seeking a determination of his rights under the Allstate policy. The plaintiff claimed that the exclusionary clause was ambiguous and therefore must be construed against Allstate and in favor of coverage. In the alternative, the plaintiff argued that the exclusionary clause was unenforceable because it violated public policy. The plaintiff and Allstate filed cross-motions for summary judgment.

The trial court denied the plaintiff's motion and granted Allstate's motion, finding that the Allstate policy unambiguously excluded plaintiff's motorcycle from uninsured-motorist coverage. The appellate court reversed the trial court's grant of summary judgment and remanded for further proceedings. The appellate court found that, although the language of the exclusionary clause was clear and unambiguous, that clause was nevertheless unenforceable on public policy grounds. As stated, we granted Allstate's petition for leave to appeal.

The Allstate policy is divided into six parts. The exclusionary clause at issue in this appeal is found in part V and provides as follows:

"Part V

Uninsured Motorists Insurance

Coverage SS

We will pay damages for bodily injury * * * which a person insured is legally entitled to recover from the owner or operator of an uninsured auto. * * *

* * * * * *

Exclusions--What is not covered

This coverage does not apply to:

* * * * * *

(3) Any person while in, on, getting into or out of a vehicle you own which is insured for this coverage under another policy."

Allstate contends that the language of paragraph 3 of the "Exclusions" (hereafter, exclusionary clause) unambiguously prohibits the plaintiff from looking to the Allstate policy for uninsured-motorist coverage under the facts of the instant case. We agree. The exclusionary clause unambiguously excludes coverage here. The plaintiff was injured on a motorcycle that he owned and that had uninsured-motorist coverage under the policy issued by Pekin.

The plaintiff argued in the trial and the appellate courts that, when the exclusionary clause referred to "this coverage," it could have been understood to mean "coverage in the amount stated in the declarations." We agree with the trial and appellate courts' conclusions, however, that the language of the exclusionary clause is clear and unambiguous. When the term "this coverage" is used in the policy, it obviously refers to the type of insurance (e.g., liability or uninsured motorist) rather than the amount of insurance purchased.

The plaintiff now argues, for the first time, that the provision entitled "Combining Limits of Two or More Autos Prohibited" creates an ambiguity. Basically, the plaintiff is again attempting to argue that the phrase "this coverage" in the exclusionary clause refers to the amount of coverage stated on the declarations page, rather than to uninsured-motorist coverage. We reject this argument and find that the language of the exclusionary clause is subject to only one reasonable interpretation. That clause unambiguously excludes uninsured-motorist coverage when the insured is injured in a vehicle that he owns and that has uninsured-motorist coverage under another policy.

The next issue we must consider is whether the exclusionary clause violates the public policy of this State as expressed in section 143a of the Illinois Insurance Code (215 ILCS 5/143a (West 1992)). Section 143a provides that every liability insurance policy issued for any motor vehicle registered or principally garaged in Illinois must provide coverage for bodily injury or death caused by an uninsured or hit-and-run vehicle. (215 ILCS 5/143a (West 1992).) Uninsured-motorist coverage must be at least in the amount set forth in section 7-203 of the Illinois Vehicle Code (625 ILCS 5/7-203 (West 1992)).

Allstate argues that the exclusion does not violate the policy underlying section 143a because it does not take effect unless the insured has uninsured-motorist coverage under another policy in the minimum amounts established by law. Allstate points out that the plaintiff here was able to collect $20,000 in uninsured-motorist coverage under the Pekin policy. Allstate argues that the exclusionary clause is therefore consistent with the public policy expressed in section 143a, because it places the insured in the same position as if the uninsured motorist had been minimally insured.

We agree. This court has consistently recognized that the purpose of the uninsured-motorist statute is to place the insured policyholder in substantially the same position he would occupy if the uninsured driver had been minimally insured. (Hoglund v. State Farm Mutual Automobile Insurance Co. (1992), 148 Ill.2d 272, 277, 170 Ill.Dec. 351, 592 N.E.2d 1031; Menke v. Country Mutual Insurance Co. (1980), 78 Ill.2d 420, 36 Ill.Dec. 698, 401 N.E.2d 539; Putnam v. New Amsterdam Casualty Co. (1970), 48 Ill.2d 71, 89, 269 N.E.2d 97; see also Glidden v. Farmers Automobile Insurance Association (1974), 57 Ill.2d 330, 338, 312 N.E.2d 247.) This purpose is not defeated by application of the exclusionary clause in Allstate's policy here. The plaintiff has already received $20,000 in uninsured-motorist coverage under the Pekin policy. Thus, he is in substantially the same position he would occupy if the uninsured driver had been minimally insured. In fact, the clause, by its very terms, takes effect only if the policyholder already has uninsured-motorist coverage under another policy. It states that the exclusion will apply only where a person is injured "while in, on, getting into or out of a vehicle you own which is insured for [uninsured-motorist] coverage under another policy." (Emphasis added.) As long as the coverage under the other policy equals or exceeds the minimum sums set forth in the Illinois Vehicle Code (625 ILCS 5/7-203 (West 1992)), there is no conflict between the exclusionary clause in Allstate's policy and section 143a.

We emphasize that our holding here is narrow. The legislative purpose behind section 143a is " 'to place the policyholder in substantially the same position he would occupy, so far as his being injured or killed is concerned, if the wrongful driver had had the minimum liability insurance required by the [Illinois Vehicle Code].' " (Squire v. Economy Fire & Casualty Co. (1977), 69 Ill.2d 167, 176, 13 Ill.Dec. 17, 370 N.E.2d 1044, quoting Ullman v. Wolverine Insurance Co. (1970), 48 Ill.2d 1, 4, 269 N.E.2d 295; Barnes v. Powell (1971), 49 Ill.2d 449, 452-53, 275 N.E.2d 377.) Enforcement of Allstate's exclusionary clause does not violate this legislative purpose because the clause leaves the plaintiff in substantially the same position he would have occupied if the driver of the uninsured vehicle had obtained the minimum liability insurance required by law.

The plaintiff argues, however, that the exclusionary clause is invalid under the reasoning expressed in Squire v. Economy Fire & Casualty Co. (1977), 69 Ill.2d 167, 13 Ill.Dec. 17, 370 N.E.2d 1044. We disagree. The issue in Squire was whether the plaintiff could stack coverage under two insurance policies issued to the plaintiff's family by a single insurer. In finding that the plaintiff could...