Sulser v. Country Mut. Ins. Co.

• Decision Date: 20 February 1992
• Docket Number: No. 71569,71569
• Citation: 169 Ill.Dec. 254,147 Ill.2d 548,591 N.E.2d 427
• Parties: , 169 Ill.Dec. 254 Neva A. SULSER, Indiv. and as Special Adm'r of the Estate of George R. Sulser, Deceased, Appellee, v. COUNTRY MUTUAL INSURANCE COMPANY, Appellant.
• Court: Illinois Supreme Court

Page 427

591 N.E.2d 427

147 Ill.2d 548, 169 Ill.Dec. 254

Neva A. SULSER, Indiv. and as Special Adm'r of the Estate of George R. Sulser, Deceased, Appellee, v. COUNTRY MUTUAL INSURANCE COMPANY, Appellant.

No. 71569.

Supreme Court of Illinois.

Feb. 20, 1992.

Michael F. Dahlen, Feirich, Schoen, Mager & Green, Carbondale, for appellant.

Michael J. Teather and George M. Elsener, Chicago, for amicus curiae, Illinois Trial Lawyers Ass'n.

Craig R. Reeves and William L. Broom, III, Barrett, Twomey, Morris, Broom & Hughes, Carbondale, for appellee.

Justice THOMAS J. MORAN delivered the opinion of the court:

Plaintiff, Neva A. Sulser, filed suit in the circuit court of Jackson County to recover underinsured motorist benefits from defendant, Country Mutual Insurance Company (Country Mutual). Country Mutual filed a motion for judgment on the pleadings, contending that plaintiff's policy benefits were offset by the workers' compensation benefits she had received. The court granted defendant's motion, and plaintiff appealed. The appellate court reversed and remanded the cause for further proceedings. (208 Ill.App.3d 15, 153 Ill.Dec. 1, 566 N.E.2d 851.) We then allowed defendant's petition for leave to appeal (134 Ill.2d R. 315), and accepted an amicus curiae brief from the Illinois Trial Lawyers Association.

The sole issue for review is whether an insurer may reduce payments due to an insured under underinsured motorist coverage by the amount of workers' compensation benefits received by the insured. For the reasons below, we hold that such a reduction may be made.

Plaintiff's husband was killed in a motor vehicle accident involving an underinsured motorist. At the time of the accident, the Sulsers had an insurance policy with Country Mutual which provided for underinsured motorist benefits in the amount of $100,000. The policy specified that any amounts received by the insured from workers' compensation would be deducted from Country Mutual's coverage. Plaintiff recovered $50,000 from the underinsured motorist and then sought payment from Country Mutual in the amount of $50,000,that is, $100,000 (the limit of underinsured motorist benefits) less $50,000 recovered from the underinsured motorist. Country Mutual claimed that any workers' compensation benefits received by plaintiff should also be deducted from the $100,000. Because the parties had stipulated that the workers' compensation payments received by plaintiff exceeded $50,000, defendant contended that it thus had no further obligation to plaintiff under the policy.

The trial court agreed with Country Mutual, and granted its motion for judgment on the pleadings. Plaintiff appealed, and the appellate court, while recognizing that an insurance company may deduct workers' compensation benefits from uninsured motorist coverage, concluded that the Illinois Insurance Code does not authorize such a setoff of workers' compensation benefits against underinsured motorist coverage. Accordingly, the appellate court reversed.

Section 143a-2(3) of the Illinois Insurance Code (the Code) (Ill.Rev.Stat.1987, ch. 73, par. 755a-2(3)) defines an underinsured motor vehicle as one which has resulted in bodily injury or death to the insured, and for which "the sum of the limits of liability under all bodily injury liability insurance policies or under bonds or other security" maintained by the person responsible for the vehicle is less than the limits of underinsured coverage provided the insured under his policy at the time of the accident. Section 143a-2(3) then addresses the insurer's liability:

"The limits of liability for an insurer providing underinsured motorist coverage shall be the limits of such coverage, less those amounts actually recovered under the applicable bodily injury insurance policies, bonds or other security maintained on the underinsured motor vehicle." Ill.Rev.Stat.1987, ch. 73, par. 755a-2(3).

The above language is dissimilar to that used in section 143a(4) of the Code relating to uninsured motorist coverage. Section 143a(4) provides in relevant part:

"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 or judgment resulting from the exercise of any rights of recovery of such person against any person or organization legally responsible for the property damage, bodily injury or death for which such payment is made, including the proceeds recoverable from the assets of the insolvent insurer." (Ill.Rev.Stat.1987, ch. 73, par. 755a(4).)

This court has interpreted section 143a(4) to allow the insurer to reduce its liability coverage by the amount of workers' compensation payments made to the insured. Stryker v. State Farm Mutual Automobile Insurance Co. (1978), 74 Ill.2d 507, 24 Ill.Dec. 832, 386 N.E.2d 36; Ullman v. Wolverine Insurance Co. (1970), 48 Ill.2d 1, 269 N.E.2d 295.

The Ullman court rejected arguments that such a deduction violates public policy. The basis of the court's reasoning was that an employee who has received workers' compensation must reimburse the employer from any recovery the employee received from a third party responsible for the employee's injuries. (Ill.Rev.Stat.1987, ch. 48, par. 138.5(b).) The employee may retain only that portion of a recovery from the tortfeasor which exceeds the total workers' compensation benefits received. Thus, because the employee would not receive the workers' compensation anyway, allowing the insurer to deduct workers' compensation payments from uninsured motorist coverage places the insured in the same position he would occupy if the tortfeasor had been minimally insured. The court noted that, without the deduction for workers' compensation, the extent of an injured employee's recovery "would hinge on the fortuitous circumstance that the tortfeasor was uninsured and was not otherwise financially responsible." (Ullman, 48 Ill.2d at 8, 269 N.E.2d 295.) The court concluded that an insurance policy limitation which precludes such a result is not offensive to public policy.

The fact that the uninsured motorist statute was reenacted after the decision in Ullman indicates that the court's construction accurately reflects the public policy of the State. " '[T]he legislature is presumed to know the construction the statute has been given and, by reenactment, is assumed to have intended for the new statute to have the same effect.' " (Stryker, 74 Ill.2d at 513, 24 Ill.Dec. 832, 386 N.E.2d 36, quoting City of Champaign v. City of Champaign Township (1959), 16 Ill.2d 58, 64, 156 N.E.2d 543.) Thus, recognizing that workers' compensation payments may be deducted from benefits received under an uninsured motorist policy, we turn to the question of whether such payments may also offset benefits received under an underinsured motorist policy.

Plaintiff argues that the Stryker and Ullman courts' construction of the uninsured motorist provision (section 143a(4)) is inapplicable to the underinsured motorist provision (section 143a-2(3)) because the language of the two provisions is different. (Ill.Rev.Stat.1987, ch. 73, pars. 755a(4), 755a-2(3).) Defendant responds that neither provision specifically allows or prohibits a deduction for workers' compensation benefits, and that the purpose of both provisions is the same.

Section 143a(4) states that the insurer making payment under an uninsured motorist policy shall be entitled to the proceeds of any settlement or judgment recovered against the tortfeasor. Section 143a-2(3) states that the insurer making payment under an underinsured motorist policy shall be liable up to the limits of the coverage, less amounts actually recovered through insurance carried on the underinsured vehicle. The language of each provision is different because each provision addresses different circumstances. It was necessary in section 143a-2(3) to refer to deductions for payments made under the underinsured motorist's policy, because the provision specifically concerns underinsured, not uninsured, motorist coverage. That section 143a-2(3) lists only deductions for "applicable bodily injury insurance policies, bonds or other security" does not lead us to the conclusion that the list is exhaustive. Expressio unius est exclusio alterius is a rule of statutory construction, not a rule of law, and may be overcome by a strong indication of legislative intent. 2A N. Singer, Sutherland on Statutory Construction § 47.25 (Sands 4th ed. 1984).

The cardinal rule of statutory construction is to determine and give effect to the legislature's intent. (Stewart v. Industrial Comm'n (1987), 115 Ill.2d 337, 341, 105 Ill.Dec. 215, 504 N.E.2d 84.) Thus, we examine the purpose for which section 143a-2(3) was enacted. The Ullman court determined that the intent of the legislature in providing uninsured motorist coverage was to place the insured in substantially the same position he would occupy if the tortfeasor were minimally insured. (Ullman, 48 Ill.2d at 5, 269 N.E.2d 295.) This court has long held that sections of the same statute should be considered to be in pari materia, and that each section should be construed with every other part or section so as to produce a harmonious whole. (People v. Harris (1985), 105 Ill.2d 290, 300, 85 Ill.Dec. 486, 473 N.E.2d 1291; Mann v. Board of Education of Non-High School District Number 216 (1950), 406 Ill. 224, 230, 92 N.E.2d 743.) Thus we conclude that the legislature enacted its provision for underinsured motorist coverage with the same underlying purpose for which it enacted section 143a(4), i.e., to place the insured in the same position he would have occupied if the tortfeasor had carried adequate insurance.

In construing a statute, it is instructive to consider relevant statements by legislators concerning the nature and effect of the proposed law. (2A N. ...