Sherrod v. Esurance Insurance Services, Inc. , 2016 IL App (5th) 150083 ( 2016 )

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Appellate Court Date: 2016.12.27
10:35:16 -06'00'
Sherrod v. Esurance Insurance Services, Inc., 2016 IL App (5th) 150083
Appellate Court APRYL SHERROD, Plaintiff-Appellee, v. ESURANCE
Caption INSURANCE SERVICES, INC., Defendant-Appellant.
District & No. Fifth District
Docket No. 5-15-0083
Rule 23 order filed October 4, 2016
Motion to publish
granted November 21, 2016
Opinion filed November 21, 2016
Decision Under Appeal from the Circuit Court of St. Clair County, No. 13-MR-411;
Review the Hon. Richard A. Aguirre, Judge, presiding.
Judgment Reversed and remanded.
Counsel on Elizabeth M. Bartolucci, of O’Hagen, LLC, of Chicago, for appellant.
Appeal
Jeremy A. Gogel, of The Gogel Law Firm, of St. Louis, Missouri, for
appellee.
Panel PRESIDING JUSTICE SCHWARM delivered the judgment of the
court, with opinion.
Justice Welch concurred in the judgment and opinion.
Justice Goldenhersh dissented, with opinion.
OPINION
¶1 The defendant, Esurance Insurance Services, Inc. (Esurance), appeals from an order of the
circuit court of St. Clair County entering summary judgment in favor of the plaintiff, Apryl
Sherrod, after the parties filed cross-motions for summary judgment. The trial court
determined that the plaintiff and the estate of the deceased daughter were entitled to the
underinsured motorist limits under the plaintiff’s Esurance policy in excess to the bodily injury
liability limits the plaintiff and the estate of the plaintiff’s deceased daughter recovered under
the at-fault driver’s separate automobile insurance policy, despite the fact that the at-fault
driver’s bodily injury liability limits exceeded the plaintiff’s underinsured motorist coverage
limits. Specifically, the trial court found an ambiguity in the Esurance policy’s “Other
Insurance” clause, which it held must be construed in favor of coverage. We reverse and
remand.
¶2 BACKGROUND
¶3 On April 15, 2011, the plaintiff and her daughter, Amari Clark, were involved in an
automobile accident after their vehicle was struck by a drunk driver, Andrew Fraticelli. Amari
Clark died as a result of the accident, and the plaintiff herself sustained severe injuries. At the
time of the accident, Fraticelli was covered under an insurance policy with liability limits of
$100,000 per person and $300,000 per occurrence. Pursuant to this policy, Fraticelli’s
insurance company paid $100,000 to the plaintiff and $100,000 to the estate of Amari Clark.
¶4 Also at the time of the accident, the plaintiff was covered under a personal automobile
policy issued by Esurance with underinsured motorist liability limits of $50,000 per person and
$100,000 per occurrence. The relevant provisions of plaintiff’s Esurance policy are as follows:
“PART III: UNINSURED AND UNDERINSURED MOTORIST COVERAGE
***
INSURING AGREEMENT: UNDERINSURED MOTORIST BODILY INJURY
COVERAGE
In return for payment of the premium for this coverage when due, and subject to the
limits of liability, ‘we’ agree with ‘you’ as follows:
1. ‘We’ will pay compensatory damages that an ‘insured’ is legally entitled to
recover from the ‘owner’ or operator of an ‘underinsured motor vehicle’ because of
‘bodily injury’:
A. Sustained by an ‘insured’; and
B. Caused by an ‘accident’.
The liability of that ‘owner’ or operator for these damages must arise out of the
ownership, maintenance, or use of the ‘underinsured motor vehicle’. Any judgment for
damages arising out of a lawsuit brought without ‘our’ written consent is not binding
on ‘us’.
***
ADDITIONAL DEFINITIONS FOR PART III: UNINSURED AND
UNDERINSURED MOTORIST COVERAGE
***
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‘Underinsured motor vehicle’ means a land motor vehicle of any type to which a bodily
injury liability bond, policy or other security required to be maintained under Illinois
law applies at the time of the ‘accident’ but the sum of the limits of liability for ‘bodily
injury’ under that bond, policy or other security to an ‘insured’ is less than the
Underinsured Motorist Bodily Injury Coverage limit of liability under this policy.”
¶5 There is also a “Limit of Liability” section provided under the uninsured and underinsured
motorist coverage portion of plaintiff’s policy. This section states in relevant part:
“LIMIT OF LIABILITY
1. The limit of liability shown in the Declarations page for each person for
Uninsured Motorist Coverage or Underinsured Motorist Coverage is ‘our’ maximum
limit of liability for all damages, including, but not limited to, damages for:
A. Loss of society;
B. Loss of companionship;
C. Loss of services;
D. Loss of consortium; or
E. Wrongful death;
arising out of ‘bodily injury’ sustained in any one ‘accident’. Subject to this limit for
each person, the limit of liability shown on the Declarations page for each accident for
Uninsured/Underinsured Motorist Coverage is ‘our’ maximum limit of liability for all
damages for ‘bodily injury’ resulting from any one ‘accident’. The limit of liability
shown in the Declarations page for ‘property damage’ is ‘our’ maximum limit of
liability for all damages for ‘property damage’ resulting from any one ‘accident’.
This is the most ‘we’ will pay regardless of the number of:
A. ‘Insureds’;
B. Claims made;
C. Vehicles or premiums shown in the Declarations page; or
D. Vehicles involved in the ‘accident’.
There will be no stacking or combining of coverage afforded to more than one ‘auto’
under this policy. If more than one policy of uninsured or underinsured motorist
coverage applies to an ‘accident’, the maximum the ‘insured’ may recover from all of
the applicable coverage is the highest limit available under one policy for one ‘auto’.
2. No one will be entitled to receive duplicate payments for the same elements of
damages under this coverage and:
A. Part I: Liability Coverage;
B. Part II: Medical and Funeral Services Payments Coverage of this policy; or
C. Any other source.
3. ‘We’ will not make a duplicate payment under this coverage for any element of
damages for which payment has been made by or on behalf of persons or organizations
who may be legally responsible.
***
5. The limit of liability shown in the Declarations page for ‘bodily injury’ under
Part III shall be reduced by all sums:
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A. Paid because of ‘bodily injury’ by or on behalf of any persons or
organizations that may be legally responsible, including, but not limited to, all sums
paid under Part I;
***
7. The maximum amount payable pursuant to any underinsured motor vehicle
insurance settlement agreement shall not exceed the amount by which the limits of the
underinsured motorist coverage exceed the limits of the ‘bodily injury’ liability
insurance of the ‘owner’ or operator of the ‘underinsured motor vehicle’.”
¶6 In addition to the “Limit of Liability” section above, the policy further includes an “Other
Insurance” clause. Specifically, the “Other Insurance” clause states in relevant part:
“OTHER INSURANCE
If there is other applicable insurance available under one or more policies or provisions
of coverage that is similar to the Uninsured Motorist Coverage or Underinsured
Motorist Coverage provided in this section, ‘we’ will only pay ‘our’ share of the
damages. ‘Our’ share is the proportion that ‘our’ limit of liability provided in this Part
III bears to the total of all applicable limits on either a primary or excess basis.
However:
1. Any recovery for damages under all policies or provisions of coverage may
equal, but not exceed, the highest applicable limit for any one vehicle under any
one insurance policy providing coverage on either a primary or excess basis.
2. Any insurance ‘we’ provide with respect to a vehicle ‘you’ do not ‘own’,
including any temporary substitute, shall be excess over any collectible insurance
providing such coverage on a primary basis.”
¶7 After the plaintiff agreed to settle with Fraticelli’s insurance company for the limits under
Fraticelli’s policy, the plaintiff submitted a claim to Esurance seeking to recover $50,000 for
her personal damages and $50,000 for the estate of Amari Clark. Esurance denied the
plaintiff’s claim. Esurance advised the plaintiff that pursuant to the terms of her policy,
underinsured motorist coverage was not available because the amount the plaintiff and the
estate of Amari Clark each received under Fraticelli’s policy ($100,000) exceeded the
plaintiff’s own policy coverage limits ($50,000).
¶8 The plaintiff subsequently filed a petition for declaratory judgment, seeking a
determination of the amount of underinsured motorist coverage she was entitled to under her
Esurance policy. The plaintiff and Esurance then filed cross-motions for summary judgment.
The trial court returned a judgment in favor of the plaintiff and against Esurance after finding
an ambiguity in the policy’s “Other Insurance” clause. Because Illinois law requires
ambiguities in insurance policies to be construed in favor of the insured, the trial court
determined that the plaintiff and the estate of Amari Clark were each entitled to $50,000 under
the plaintiff’s Esurance policy in addition to the $100,000 each recovered under Fraticelli’s
policy. After the trial court denied Esurance’s motion for reconsideration, Esurance timely
filed its notice of appeal.
¶9 ANALYSIS
¶ 10 This appeal is taken from the trial court’s grant of a summary judgment in favor of the
plaintiff and against Esurance. Summary judgment is appropriate when there is no genuine
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issue of material fact and the moving party is entitled to judgment as a matter of law. Valley
Forge Insurance Co. v. Swiderski Electronics, Inc., 223 Ill. 2d 352, 360 (2006). When parties
file cross-motions for summary judgment, they agree that only a question of law is involved
and the court should decide the issue based on the record. Millennium Park Joint Venture, LLC
v. Houlihan, 241 Ill. 2d 281, 309 (2010). A trial court’s entry of a summary judgment is subject
to de novo review, and the construction of an insurance policy, which presents a question of
law, is similarly reviewed de novo. Valley Forge Insurance Co., 223 Ill. 2d at 360.
¶ 11 An insurance policy is a contract, and the general rules governing the interpretation of
contracts also govern the interpretation of insurance policies. Hobbs v. Hartford Insurance Co.
of the Midwest, 214 Ill. 2d 11, 17 (2005). Accordingly, when a court construes an insurance
policy, the agreement is to be enforced as written provided that it is unambiguous and only to
the extent it does not contravene public policy. Johnson v. Davis, 377 Ill. App. 3d 602, 606-07
(2007). Any ambiguity in the policy must be construed in favor of the insured. Id. at 607.
¶ 12 When determining whether an ambiguity exists, the court must read the provisions of an
insurance contract together and not in isolation. Id. Policy provisions are considered
ambiguous if they are subject to more than one reasonable interpretation. Id. Reasonableness is
essential, and the key is whether the provision is subject to more than one reasonable
interpretation, not whether creative possibilities may be suggested. Id. As such, we will not
strain to find an ambiguity where none exists. Hobbs, 214 Ill. 2d at 17.
¶ 13 In the instant case, the issue for our consideration is whether the trial court erred when it
determined that the plaintiff and the estate of Amari Clark were entitled to the underinsured
motorist limits under the plaintiff’s Esurance policy, in addition to the amount recovered under
Fraticelli’s policy, where the amount recovered under Fraticelli’s policy exceeded the
plaintiff’s own policy limits. The trial court found that when all the provisions of the plaintiff’s
policy were considered, there existed an ambiguity in the “Other Insurance” clause that must
be construed in favor of coverage for the plaintiff and the estate of Amari Clark and against
Esurance.
¶ 14 On appeal, Esurance argues that the statutory and policy definitions of an “underinsured
motor vehicle” demonstrate that Fraticelli’s vehicle was not an underinsured vehicle, and
therefore, underinsured motorist coverage was not triggered under the plaintiff’s policy.
¶ 15 The burden is on the insured to prove that its claim falls within the coverage of an
insurance policy. Addison Insurance Co. v. Fay, 232 Ill. 2d 446, 453-54 (2009). Once the
insured has demonstrated coverage, the burden shifts to the insurer to prove that a limitation or
exclusion applies. Id. The issue of ambiguity regarding the extent of underinsured motorist
coverage, as opposed to the existence of underinsured motorist coverage, only arises when the
existence of coverage is established. See Hobbs, 214 Ill. 2d at 23; see also Bruder v. Country
Mutual Insurance Co., 156 Ill. 2d 179, 187 (1993) (issue of whether coverages can be stacked
arises only because it is a given that coverage exists under the policies).
¶ 16 In the present case, the underinsured motorist coverage portion of the policy provides that
Esurance will pay compensatory damages that an insured “is legally entitled to recover from
the ‘owner’ or operator of an ‘underinsured motor vehicle’ because of ‘bodily injury’ ”
sustained by the insured and caused by the accident. The Illinois Insurance Code defines an
underinsured motor vehicle as follows:
“For the purpose of this Code the term ‘underinsured motor vehicle’ means a motor
vehicle whose ownership, maintenance or use has resulted in bodily injury or death of
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the insured, as defined in the policy, and for which the sum of the limits of liability
under all bodily injury liability insurance policies or under bonds or other security
required to be maintained under Illinois law applicable to the driver or to the person or
organization legally responsible for such vehicle and applicable to the vehicle, is less
than the limits for underinsured coverage provided the insured as defined in the policy
at the time of the accident. 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.” 215 ILCS 5/143a-2(4) (West 2008).
¶ 17 Section 143a-2(4) of the Insurance Code clearly reveals the General Assembly’s intent to
limit underinsured motorist carriers from having to provide benefits where the limits of the
bodily injury liability insurance applicable to an at-fault driver’s vehicle exceed the limits of
the relevant underinsured motorist coverage. Id.; Thurman v. Grinnell Mutual Reinsurance
Co., 327 Ill. App. 3d 920, 927-28 (2002) (statute mandated no amount payable by underinsured
motorist insurer because coverage limits of underinsured motorist policy were less than the
liability limits of the at-fault driver’s policy); see also Roberts v. Northland Insurance Co., 185
Ill. 2d 262, 269 (1998) (General Assembly intended that underinsured motorist coverage place
insured in same position he would have occupied if injured by a tortfeasor who carried liability
insurance in the same amount as the insured).
¶ 18 Consistent with the statutory definition above, the policy at issue defines an underinsured
motor vehicle as follows:
“ ‘Underinsured motor vehicle’ means a land motor vehicle of any type to which a
bodily injury liability bond, policy or other security required to be maintained under
Illinois law applies at the time of the ‘accident’ but the sum of the limits of liability for
‘bodily injury’ under that bond, policy or other security to an ‘insured’ is less than the
Underinsured Motorist Bodily Injury Coverage limit of liability under this policy.”
¶ 19 Notably, the plaintiff concedes that the definition of an underinsured motor vehicle is not
ambiguous. Thus, the contract between Esurance and the plaintiff clearly states that an
underinsured motor vehicle is a vehicle whose limits for bodily injury liability are “less than
the Underinsured Motorist Bodily Injury Coverage limit of liability under this policy.” Since
Fraticelli’s coverage was not less than the limit of liability under the plaintiff’s policy,
Fraticelli’s vehicle did not constitute an “underinsured motor vehicle” under either the
plaintiff’s policy or the Insurance Code, and there is no basis for underinsured motorist
coverage.
¶ 20 Moreover, a plain reading of the “Limit of Liability” section of the policy is also consistent
with the statutory language of the Insurance Code and further supports the conclusion that
Esurance is not obligated to pay underinsured motorist coverage to its insured. See Thurman,
327 Ill. App. 3d at 929 (section 143a-2(4) makes it “clear that where the limits of the
underinsured-motorist coverage do not exceed the limits of the bodily injury liability insurance
of the owner or operator of the underinsured motor vehicle, there is no amount payable by the
underinsured-motorist-coverage carrier” (emphases in original)). In the “Limit of Liability”
portion of the plaintiff’s insurance policy, the contract provides that “[t]he limit of liability
shown in the Declarations page for ‘bodily injury’ under Part III shall be reduced by all sums
*** [p]aid because of ‘bodily injury’ by or on behalf of any persons *** that may be legally
responsible.”
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¶ 21 The effect of this provision is to set off the $100,000 paid by Fraticelli’s insurer against the
$50,000 coverage provided by the defendant. The underinsured motorist coverage, therefore,
is not excess coverage as the plaintiff argues. Instead, that coverage provides a total amount of
protection to be paid to the plaintiff if other persons legally responsible for the plaintiff and her
daughter’s injuries have less liability limits than those provided under the plaintiff’s
underinsured motorist coverage. Indeed, the plaintiff concedes that Esurance’s policy’s setoff
provisions are also unambiguous and clearly limit Esurance’s coverage. Thus, this section
bolsters our conclusion that Esurance is not obligated to pay the plaintiff underinsured motorist
coverage because the plaintiff and the estate of Amari Clark each received coverage under
Fraticelli’s policy ($100,000) that is a greater amount than the limits of the plaintiff’s own
policy ($50,000).
¶ 22 The plaintiff argues that all of the provisions—including the definition of an underinsured
motor vehicle, the policy’s setoff provisions, and the policy’s “Other Insurance” clause—when
read together, create an ambiguity in the policy as a whole and require coverage in her and the
estate’s favor.
¶ 23 As noted above, in part III of the policy relating to uninsured and underinsured motorist
coverage, it states the following under the heading “OTHER INSURANCE”:
“If there is other applicable insurance available under one or more policies or
provisions of coverage that is similar to the Uninsured Motorist Coverage or
Underinsured Motorist Coverage provided in this section, ‘we’ will only pay ‘our’
share of the damages. ‘Our’ share is the proportion that ‘our’ limit of liability provided
in this Part III bears to the total of all applicable limits on either a primary or excess
basis. However:
***
2. Any insurance ‘we’ provide with respect to a vehicle ‘you’ do not ‘own’,
including any temporary substitute, shall be excess over any collectible insurance
providing such coverage on a primary basis.”
¶ 24 The plaintiff contends that this paragraph creates an ambiguity because this language “can
reasonably be interpreted by an average lay person to mean that the [underinsured motorist]
coverage is available in excess to the amounts recovered from the tortfeasor.” The plaintiff
argues that “[b]ecause the Esurance’s policy specifically states that [underinsured motorist]
coverage is provided by Esurance with respect to a vehicle not owned by [the plaintiff], it ‘shall
be excess over any collectible insurance providing such coverage on a primary basis’ ” thereby
triggering Esurance’s duty to pay its proportion of the total policy limits.
¶ 25 Esurance argues that the “other insurance” provisions in the policy are limiting provisions
and do not in themselves create coverage. Esurance further argues that when the “excess over
any collectible insurance” paragraph is read in conjunction with the introductory paragraph, it
is clear that the other “collectible insurance providing such coverage on a primary basis” refers
to uninsured motorist, underinsured motorist, or similar coverage.
¶ 26 “Only when a policy is triggered and the insurer becomes obligated to pay *** does the
‘other insurance’ clause come into play” to allow liability to be apportioned among insurers.
Zurich Insurance Co. v. Raymark Industries, Inc., 145 Ill. App. 3d 175, 200 (1986); see also
Farmers Automobile Insurance Ass’n v. Rowland, 379 Ill. App. 3d 696, 698 (2008) (before the
“other insurance” clause comes into play, there must be insurance under the policy in the first
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place). “ ‘Other,’ as relevant here, means ‘additional.’ Merriam-Webster’s Collegiate
Dictionary 821 (10th ed. 2001).” Farmers Automobile Insurance Ass’n, 379 Ill. App. 3d at
698. Because there is no insurance under the policy, there can be no “other” insurance with
which Esurance can share the loss. Id. “Put another way, because [the] policy unambiguously
denies [underinsured motorist] coverage here, its proportional share of the total coverage
would be zero.” Id.
¶ 27 The plaintiff cites Hartford Underwriters Insurance Co. v. Ledbetter, 353 S.W.3d 645
(Mo. Ct. App. 2011), a Missouri Court of Appeals case, which interpreted an underinsured
motorist provision that is similar to the one in this case. The plaintiff’s reliance on Ledbetter,
however, is misplaced. Ledbetter is a Missouri case, applying Missouri law, and is therefore
not binding precedent in Illinois. See Fosse v. Pensabene, 362 Ill. App. 3d 172, 186 (2005)
(“this court is not bound to follow decisions from other states”). Moreover, the policy here
contained a choice-of-law provision, explicitly stating that any dispute “as to the coverage
provided or the provisions of the Policy shall be governed by the laws of Illinois.”
¶ 28 In sum, pursuant to the Insurance Code and the express terms of the policy, the plaintiff and
the estate of Amari Clark cannot recover the policy limits under plaintiff’s Esurance policy,
since each recovered an amount under Fraticelli’s policy ($100,000) that is greater than
plaintiff’s policy limits ($50,000). The foregoing definitions of an underinsured motor vehicle
provide that Fraticelli’s vehicle was not underinsured because Fraticelli’s policy limits
($100,000) exceed plaintiff’s policy limits ($50,000). “[A]n ‘other insurance’ provision does
not create an ambiguity where an unambiguous provision otherwise bars coverage.” Farmers
Automobile Insurance Ass’n, 379 Ill. App. 3d at 698. Accordingly, the plaintiff’s attempt to
rely on the “other insurance” provision to create an ambiguity fails.
¶ 29 CONCLUSION
¶ 30 For the reasons stated herein, we reverse the judgment of the circuit court of St. Clair
County granting summary judgment in favor of the plaintiff. We remand the cause to the
circuit court to enter judgment in Esurance’s favor.
¶ 31 Reversed and remanded.
¶ 32 JUSTICE GOLDENHERSH, dissenting.
¶ 33 I respectfully dissent. A plain reading of the “Limit of Liability” section quoted in the
majority opinion, when read in isolation, would suggest Esurance is not obligated to pay
underinsured motorist coverage to its insured when its insured has received coverage under a
separate policy that exceeds the insured’s own policy limits. Thus, as it relates to the instant
case, this section alone suggests Esurance is not obligated to pay plaintiff’s underinsured
motorist coverage because plaintiff and the estate of Amari Clark each received coverage
under Fraticelli’s policy ($100,000) that is a greater amount than the limits of plaintiff’s own
policy ($50,000). However, when interpreting an insurance contract, courts must read the
policy provisions together and not in isolation. Johnson, 377 Ill. App. 3d at 607.
¶ 34 In addition to the “Limit of Liability” section, the policy further provides an “Other
Insurance” clause which contains ambiguity which must be construed in favor of plaintiff and
the estate of Amari Clark. Specifically, the “Other Insurance” clause states in relevant part:
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“OTHER INSURANCE
If there is other applicable insurance available under one or more policies or provisions
of coverage that is similar to the Uninsured Motorist Coverage or Underinsured
Motorist Coverage provided in this section, ‘we’ will only pay ‘our’ share of the
damages. ‘Our’ share is the proportion that ‘our’ limit of liability provided in this Part
III bears to the total of all applicable limits on either a primary or excess basis.
However:
1. Any recovery for damages under all policies or provisions of coverage may
equal, but not exceed, the highest applicable limit for any one vehicle under any
one insurance policy providing coverage on either a primary or excess basis.
2. Any insurance ‘we’ provide with respect to a vehicle ‘you’ do not ‘own’,
including any temporary substitute, shall be excess over any collectible insurance
providing such coverage on a primary basis.”
¶ 35 The plain language of the “Other Insurance” clause indicates Esurance has contemplated
situations in which an insured may recover underinsured motorist coverage in excess to
amounts already recovered under the tortfeasor’s separate insurance policy. The “Other
Insurance” clause expressly states that Esurance will provide underinsured motorist coverage
to a vehicle not owned by the insured, and this coverage “shall be excess over any collectible
insurance providing such coverage on a primary basis.” Accordingly, I find plaintiff’s
Esurance policy containing underinsured motorist coverage limits of $50,000 per person and
$100,000 per occurrence which may be obtained in excess of what was recovered under
Fraticelli’s insurance policy.
¶ 36 Esurance’s primary argument on appeal concerns whether plaintiff’s underinsured
motorist coverage was triggered. Esurance argues the statutory and policy definitions of an
underinsured motor vehicle demonstrate that Fraticelli’s vehicle was not an underinsured
vehicle, and, therefore, underinsured motorist coverage was not triggered under plaintiff’s
policy. Esurance contends underinsured motorist coverage cannot be owed to plaintiff and the
estate of Amari Clark, since plaintiff was not involved in an accident with an underinsured
motor vehicle.
¶ 37 The Insurance Code defines an underinsured motor vehicle as follows:
“For the purpose of this Code the term ‘underinsured motor vehicle’ means a motor
vehicle whose ownership, maintenance or use has resulted in bodily injury or death of
the insured, as defined in the policy, and for which the sum of the limits of liability
under all bodily injury liability insurance policies or under bonds or other security
required to be maintained under Illinois law applicable to the driver or to the person or
organization legally responsible for such vehicle and applicable to the vehicle, is less
than the limits for underinsured coverage provided the insured as defined in the policy
at the time of the accident. 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.” 215 ILCS 5/143a-2(4) (West 2008).
¶ 38 Consistent with the statutory definition above, the policy at issue defines an underinsured
motor vehicle as follows:
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“ ‘Underinsured motor vehicle’ means a land motor vehicle of any type to which a
bodily injury liability bond, policy or other security required to be maintained under
Illinois law applies at the time of the ‘accident’ but the sum of the limits of liability for
‘bodily injury’ under that bond, policy or other security to an ‘insured’ is less than the
Underinsured Motorist Bodily Injury Coverage limit of liability under this policy.”
¶ 39 As indicated above, the insuring agreement provided under the underinsured motorist
coverage portion of the Esurance policy incorporates the above definition of an underinsured
motor vehicle, and states in relevant part:
“INSURING AGREEMENT: UNDERINSURED MOTORIST BODILY INJURY
COVERAGE
In return for payment of the premium for this coverage when due, and subject to the
limits of liability, ‘we’ agree with ‘you’ as follows:
1. ‘We’ will pay compensatory damages that an ‘insured’ is legally entitled to
recover from the ‘owner’ or operator of an ‘underinsured motor vehicle’ because of
‘bodily injury’:
A. Sustained by an ‘insured’; and
B. Caused by an ‘accident’.”
¶ 40 I disagree with Esurance’s assertion that plaintiff and the estate of Amari Clark cannot
recover the policy limits under plaintiff’s Esurance policy. While the foregoing definitions of
an underinsured motor vehicle suggest Fraticelli’s vehicle was not underinsured because
Fraticelli’s policy limits ($100,000) exceed plaintiff’s policy limits ($50,000), this does not
preclude plaintiff and the estate of Amari Clark from recovery under plaintiff’s Esurance
policy.
¶ 41 The instant case closely resembles Hartford Underwriters Insurance Co. v. Ledbetter, 353
S.W.3d 645 (Mo. Ct. App. 2011), a Missouri Court of Appeals case that interpreted a nearly
identical underinsured motorist provision. Although this court is not bound to follow a
Missouri appeals court decision, such decision can provide guidance and serve as persuasive
authority.
¶ 42 The litigation in Ledbetter arose from an automobile accident in which the insured was
injured after her vehicle was struck by a vehicle operated by Danny Harris (Harris). The
insured brought suit against Harris for injuries sustained in the accident. At the time of the
accident, Harris was covered by an insurance policy with limits of $50,000 for injuries
sustained by a single person in an automobile accident. The insured’s suit against Harris was
settled in exchange for the insured receiving Harris’s policy limits of $50,000 and a dismissal
of the lawsuit.
¶ 43 Also at the time of the accident, the insured held an insurance policy with Hartford
Underwriters Insurance Company (Hartford), which provided $50,000 underinsured motorist
coverage on each of the insured’s four covered vehicles. The insured claimed entitlement to
underinsured motorist coverage under the terms of the Hartford policy, which Hartford denied.
Hartford argued that the vehicle operated by Harris was not an underinsured motor vehicle
under the terms of the policy because Harris and Hartford each contained the same liability
limits of $50,000 and Harris had already paid the insured $50,000. Since the Hartford policy
defined an underinsured motor vehicle as one with liability limits less than the limits of its
policy, Hartford asserted Harris’s vehicle could not be considered as being underinsured.
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¶ 44 In relevant part, the Hartford policy set out as follows:
“ ‘SECTION II—UNDERINSURED MOTORISTS COVERAGE
***
A. We will pay compensatory damages which an insured is legally entitled to
recover from the owner or operator of an underinsured motor vehicle because of bodily
injury ***
***
C. “Underinsured motor vehicle” means a land motor vehicle or trailer of any type
to which a bodily injury liability bond or policy applies at the time of the accident but
its limit for bodily injury liability is less than the limit of liability for this coverage.
***
LIMIT OF LIABILITY
A. The limit of liability shown in the Declarations for each person for
[underinsured motorist] is our maximum limit of liability for all damages, including
damages for care, loss of services or death, arising out of bodily injury sustained by any
one person in any one accident. Subject to this limit for each person, the limit of
liability shown in the Declarations for each accident for [underinsured motorist] is our
maximum limit of liability for all damages for bodily injury resulting from any one
accident.
This is the most we will pay regardless of the number of:
1. Insureds;
2. Claims made;
3. Vehicles or premiums shown in the Declarations; or
4. Vehicles involved in the accident
***
OTHER INSURANCE
If there is other applicable insurance available under one or more policies or provisions
of coverage that is similar to the insurance provided by this Part:
1. Any recovery for damages under all policies or provisions of coverage may equal
but not exceed the highest applicable limit for any one vehicle under any insurance
providing coverage on either a primary or excess basis.
2. Any insurance we provide with respect to a vehicle you do not own shall be
excess over any collectible insurance providing such coverage on a primary basis.’ ”
(Emphasis in original.) Ledbetter, 353 S.W.3d at 647-48.
¶ 45 The trial court entered summary judgment for Hartford, and the insured appealed. The
court of appeals reversed the trial court after finding the “other insurance” provision of the
policy created an ambiguity that must be construed in favor of the insured. As indicated above,
the “other insurance” clause at issue provided:
“ ‘Any insurance we provide with respect to a vehicle you do not own shall be excess
over any collectible insurance providing such coverage on a primary basis.’ ”
Ledbetter, 353 S.W.3d at 648.
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¶ 46 After reviewing the “Other Insurance” clause, the court determined:
“[A]n objective examination of the ‘excess’ language of the Other Insurance clause
suggests not just that this language might reasonably be interpreted by an average lay
person to mean underinsured coverage was excess to amounts recovered from the
tortfeasor ***, it could also be interpreted to mean that this language prevailed over the
preceding and apparently conflicting language contained in the [P]olicy’s definition of
underinsured and Limits of Liability sections. [Citation.] This created an ambiguity
which must be resolved in favor of Insured and in favor of [underinsured motorist]
coverage under the terms of the Policy.” (Internal quotation marks omitted.) Ledbetter,
353 S.W.3d at 652.
¶ 47 Similar to Ledbetter, plaintiff here is seeking to recover underinsured motorist limits
($50,000) in excess to an amount recovered under a separate policy ($100,000), despite the
amount already recovered being equal to or greater than plaintiff’s underinsured motorist
limits. As in Ledbetter, this court is being asked to examine the excess language in the “Other
Insurance” clause of plaintiff’s Esurance policy. Notably, the policy provisions in Ledbetter
and the instant case contain nearly identical “Limit of Liability” and “Other Insurance”
clauses. Both policy provisions also contain corresponding definitions of what constitutes an
underinsured motor vehicle.
¶ 48 Given the plain language of the “Other Insurance” clause, “[a]ny insurance we provide
with respect to a vehicle you do not own shall be excess over any collectible insurance
providing such coverage on a primary basis,” along with the court’s reasoning in Ledbetter,
which is persuasive authority, I find there is an ambiguity in plaintiff’s policy which must be
construed in favor of the insured. This is not a case where one must be creative to find an
ambiguity. As in Ledbetter, the excess language of the “Other Insurance” clause can
reasonably be interpreted to denote underinsured coverage in excess to amounts recovered
from the tortfeasor. Further, the “Other Insurance” clause can also reasonably be interpreted to
denote that the excess language prevails over the conflicting language contained in the policy’s
definitions regarding the underinsured and limit of liability provisions.
¶ 49 For these reasons, I conclude there is an ambiguity in plaintiff’s Esurance policy that must
be construed in favor of the insured. Thus, plaintiff and the estate of Amari Clark may obtain
coverage under plaintiff’s Esurance policy in excess to what was received under Fraticelli’s
policy. Accordingly, the trial court did not err in awarding $50,000 to plaintiff and $50,000 to
the estate of Amari Clark under plaintiff’s Esurance policy in addition to the $100,000 each
received under Fraticelli’s policy.
¶ 50 Esurance cites this court’s decision in Thurman v. Grinnell Mutual Reinsurance Co., 327
Ill. App. 3d 920 (2002), in support of its argument that underinsured motorist coverage cannot
properly be found to be owed to plaintiff. At issue in Thurman was whether the plaintiff was
entitled to underinsured motorist coverage under her policy where the limits of her coverage
were less than the limits of the bodily injury liability insurance of the at-fault driver from
which the plaintiff recovered the maximum amount. The dispositive question presented to this
court was whether section 143a-2(4) of the Insurance Code prohibited plaintiff from
recovering the underinsured motorist coverage benefits under her policy.
¶ 51 The version of section 143a-2(4) in effect at the time of the accident included the following
provision:
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“ ‘[T]he maximum amount payable by the underinsured[-]motorist[-]coverage carrier
shall not exceed the amount by which the limits of the underinsured[-]motorist
coverage exceeds [sic] the limits of the bodily[-]injury liability insurance of the owner
or operator of the underinsured motor vehicle.’ (Emphasis added.) 215 ILCS
5/143a-2(4) (West 1998).” Thurman, 327 Ill. App. 3d at 928.
¶ 52 After reviewing the above provision, this court found no ambiguity. Specifically, this court
stated that section 143a-2(4) makes it “clear that where the limits of the underinsured-motorist
coverage do not exceed the limits of the bodily injury liability insurance of the owner or
operator of the underinsured motor vehicle, there is no amount payable by the
underinsured-motorist-coverage carrier.” (Emphases in original.) Thurman, 327 Ill. App. 3d at
929.
¶ 53 Thurman is distinguishable from the instant case; there is no evidence that the policy at
issue in Thurman contained language similar to the “Other Insurance” provision of plaintiff’s
Esurance policy. For the reasons stated above, the “Other Insurance” clause creates an
ambiguity when interpreting the policy as a whole, which must be construed in favor of
coverage for the insured.
¶ 54 Citing section 143a-2(4) of the Insurance Code in its current version, Esurance further
alleges the trial court improperly interpreted or ignored the policy and Insurance Code’s setoff
provisions. Esurance asserts the policy’s setoff provisions unambiguously establish its right to
set off the amount plaintiff received under Fraticelli’s policy.
¶ 55 Section 143a-2(4) of the Insurance Code provides, in relevant part:
“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.” 215 ILCS 5/143a-2(4) (West 2008).
¶ 56 Esurance’s argument is misplaced. Here, plaintiff does not argue the policy’s setoff
provisions are ambiguous. Rather, plaintiff concedes the policy’s setoff provisions are
unambiguous when read in isolation from the rest of the policy, as those provisions clearly
limit Esurance’s coverage. However, insurance policies are not to be read in isolation, but as a
whole. After carefully considering the setoff provisions along with all other portions of the
policy, particularly the “Other Insurance” clause, I find an ambiguity which must be construed
in favor of the insured.
¶ 57 Esurance also argues plaintiff’s claim should be barred by the anti-stacking language
provided in the policy. In support of its argument, Esurance cites the following three cases:
Willison v. Economy Fire & Casualty Co., 294 Ill. App. 3d 793 (1998); McElmeel v. Safeco
Insurance Co. of America, 365 Ill. App. 3d 736 (2006); Hobbs v. Hartford Insurance Co. of the
Midwest, 214 Ill. 2d 11 (2005).
¶ 58 Each of the above-referenced cases involved a plaintiff seeking to stack the insurance
benefits of either multiple policies issued by the same insurer or the coverage benefits for
multiple vehicles covered under the same policy. These courts held that the anti-stacking
clauses provided in the policies unambiguously prohibited the plaintiff from stacking
uninsured motorist benefits.
¶ 59 The instant case is distinguishable from the three cases cited above. Here, plaintiff is not
seeking to stack coverage. Rather, plaintiff is requesting the underinsured motorist limits
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provided in the declarations page of her personal automobile policy for the single vehicle she
owned in excess to the bodily injury limits recovered under Fraticelli’s separate policy. Unlike
the three cases Esurance cites above, plaintiff is not attempting to stack similar coverage limits.
¶ 60 Lastly, Esurance asserts the introductory language in the “Other Insurance” section of the
policy demonstrates that the “Other Insurance” section is only implicated in situations where
the insured attempts to stack multiple underinsured motorist limits or coverage that is similar
to the insured’s underinsured motorist coverage, which Esurance alleges is not the case here.
The introductory language Esurance references provides:
“If there is other applicable insurance available under one or more policies or
provisions of coverage that is similar to the Uninsured Motorist Coverage or
Underinsured Motorist Coverage provided in this section, ‘we’ will only pay ‘our’
share of the damages.”
¶ 61 Esurance argues that even if plaintiff’s underinsured motorist coverage were to be
triggered, the policy’s “Other Insurance” provisions are not implicated because plaintiff is not
attempting to obtain underinsured motorist coverage under different policies. I disagree with
Esurance’s proposition.
¶ 62 Here, plaintiff is seeking the uninsured motorist limits under her personal automobile
policy in excess of the bodily injury limits recovered under Fraticelli’s policy for injuries
sustained in the same accident. Importantly, both Fraticelli’s bodily injury liability coverage
and plaintiff’s underinsured motorist coverage protect similar risks in this case, as both
concern the damages sustained by plaintiff and Amari Clark in the accident. I cannot say these
two coverages are so dissimilar such that the “Other Insurance” clause does not apply.
Accordingly, I would reject Esurance’s argument concerning the introductory language of the
“Other Insurance” clause.
¶ 63 For the reasons stated herein, the judgment of the circuit court of St. Clair County granting
summary judgment in favor of plaintiff and against Esurance should be affirmed.
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