             NOTICE
                                       2016 IL App (5th) 150325
 Decision filed 06/14/16.   The
 text of this decision may be               NO. 5-15-0325
 changed or corrected prior to
 the filing of a Peti ion for
 Rehearing or the disposition of              IN THE
 the same.

                                   APPELLATE COURT OF ILLINOIS

                           FIFTH DISTRICT
________________________________________________________________________

DEBORAH DeSTEFANO, as Mother and       )    Appeal from the
Next Friend of Caroline DeStefano, a   )    Circuit Court of
Minor, and DEBORAH DeSTEFANO,          )    Madison County.
Individually,                          )
                                       )
      Plaintiff-Appellee,              )
                                       )
v.                                     )    No. 11-MR-226
                                       )
FARMERS AUTOMOBILE INSURANCE           )
ASSOCIATION,                           )    Honorable
                                       )    John B. Barberis, Jr.,
      Defendant-Appellant.             )    Judge, presiding.
________________________________________________________________________

      JUSTICE GOLDENHERSH delivered the judgment of the court, with opinion.
      Presiding Justice Schwarm and Justice Cates concurred in the judgment and
opinion.

                                             OPINION

¶1       This case arises out of a demand for underinsured motorist (UIM) benefits by

plaintiff, Deborah DeStefano, as mother and next friend of Caroline DeStefano, a minor,

against defendant, Farmers Automobile Insurance Association (Farmers), incorrectly

sued as Pekin Insurance Company. Plaintiff filed this declaratory judgment action in the

circuit court of Madison County after her daughter, who was operating a Honda

motorcycle, was struck by a motor vehicle operated by a rural United States postal
                                       1
worker, Donald Sprinot, as she crossed the family's driveway on August 28, 2010. The

accident was due to the negligence of Mr. Sprinot, who had a single limit policy of

$25,000, through Progressive Insurance Company (Progressive). Progressive paid its

policy limit of $25,000 to plaintiff. Plaintiff maintained a $100,000 UIM policy with

defendant and made a demand on defendant for the balance of the underinsured limits of

$75,000.

¶2     The parties stipulated to the facts. They agreed, inter alia, that Mr. Sprinot was

negligent when, acting as a rural mail carrier, he drove his 2001 GMC Jimmy pickup

truck off the public road and "traversed onto the driveway of the DeStefano property"

striking Caroline as she rode a motorcycle on the family's driveway. Farmers did not

contest coverage under the underinsured motorist provision issued to Caroline's father,

Patrick, but during the stipulated bench trial asserted it was entitled not only to a $25,000

setoff paid by Progressive, but also a $49,900 setoff paid by the United States in

exchange for a release of plaintiff's claims against the United States and its agents and

employees.

¶3     It is uncontested that the claimed damages exceed all available underinsured

motorist coverage, even if credits are allowed for the payment made by the United States.

Ultimately, the trial court entered judgment in favor of plaintiff and against Farmers in

the amount of $75,000, finding Farmers is not entitled to set off the money paid by the

United States to plaintiff. The only issue raised in this appeal is whether the trial court

erred in entering judgment in favor of plaintiff in the amount of $75,000. We affirm.


                                             2
¶4                                    ANALYSIS

¶5    There is disagreement between the parties as to the standard of review to be

applied. Farmers contends review is de novo while plaintiff asserts the correct standard

of review is abuse of discretion because the trial court drew inferences and made

credibility determinations. We agree with Farmers that review is de novo.

¶6    The construction of an insurance policy presents a question of law which is subject

to de novo review. American States Insurance Co. v. Koloms, 177 Ill. 2d 473, 479-80,

687 N.E.2d 72, 75 (1997). "A court must construe the policy as a whole and take into

account the type of insurance purchased, the nature of the risks involved, and the overall

purpose of the contract." Koloms, 177 Ill. 2d at 479, 687 N.E.2d at 75. Moreover, where,

as here, the question is a legal conclusion to be drawn from a given set of facts, and

witness credibility is not at issue, review is de novo.      Independent Trust Corp. v.

Hurwick, 351 Ill. App. 3d 941, 952, 814 N.E.2d 895, 905 (2004).

¶7    In the instant case, the only question is whether Farmers is entitled to a $49,900

setoff. The parties stipulated to the facts, and the trial court made a legal conclusion,

which we review de novo. While we agree with Farmers as to the standard of review to

be applied, we do not agree with Farmers' argument regarding setoff.

¶8    Farmers argues it is entitled to a setoff of not only the $25,000 Progressive paid to

plaintiff, but also the $49,900 the United States paid to plaintiff, making the maximum

amount recoverable by plaintiff under the UIM provision of its policy $25,100.

According to Farmers, both the $25,000 paid by Progressive and the $49,900 paid by the

United States were paid on behalf of the underinsured motorist, Mr. Sprinot, which
                                        3
allows Farmers to deduct those amounts from its UIM limit. Plaintiff responds that

Farmers is not entitled to reduce from its UIM limits the $49,900 paid to plaintiff by the

United States because the United States was extinguishing its own, independent liability

from that of Mr. Sprinot through its $49,900 settlement.

¶9     Both parties rely on Farmers Automobile Insurance Ass'n v. Coulson, 402 Ill. App.

3d 779, 931 N.E.2d 1257 (2010), in support of their respective positions; however, we

find Coulson supports plaintiff's position rather than Farmers'. In Coulson, the plaintiff

was severely injured when a vehicle owned and operated by Robert Roy drove through

the window of a Subway restaurant and struck the plaintiff and two other patrons who

were eating there. 402 Ill. App. 3d at 779, 931 N.E.2d at 1258. The plaintiff alleged

damages in excess of $900,000. Roy was insured by State Farm and had bodily injury

liability limits of $50,000. State Farm paid $24,000 to the plaintiff and $26,000 to the

other injured patrons. The property owner and franchisee settled with the plaintiff for

$410,000. At the time of the accident, the plaintiff was a "family member" covered under

her stepfather's automobile insurance policy with Farmers, which contained the exact

same UIM provision at issue here, but provided UIM coverage in the amount of $300,000

per person and $500,000 per occurrence. 402 Ill. App. 3d at 779-80, 931 N.E.2d at 1258.

¶ 10   The plaintiff made a demand for UIM benefits, but Farmers declined to pay

benefits. Farmers alleged the policy contained setoff provisions which entitled Farmers

to set off the $434,000 the plaintiff had already received against the $300,000 in UIM

coverage provided under the Farmers policy, meaning Farmers would pay the plaintiff

nothing. 402 Ill. App. 3d at 780, 931 N.E.2d at 1258. We disagreed with Farmers'
                                        4
assertion and found "the only amounts deductible from the UIM coverage are those

amounts paid on behalf of the underinsured motor vehicle" which in that case constituted

"the $24,000 paid by State Farm and not the amounts paid in settlement by the property

owner and the franchisee." 402 Ill. App. 3d at 786, 931 N.E.2d at 1263-64.             We

specifically explained:

       "[The plaintiff's] stepfather paid premiums to have UIM coverage in the amount of

       $300,000 per person. Roy was a UIM, having liability limits of $50,000 but

       paying only $24,000 to [the plaintiff]. Thus, [the plaintiff] could recover from

       Farmers under her stepfather's UIM policy up to $276,000 (i.e., $300,000 minus

       $24,000 equals $276,000). The property owner and the franchisee were not UIMs,

       and it is irrelevant to the amount Farmers could deduct from its UIM liability

       limit, so long as there is no double recovery by [the plaintiff]. This is consistent

       with other Illinois Appellate Court cases that have addressed similar

       circumstances." 402 Ill. App. 3d at 784, 931 N.E.2d at 1262.

While Farmers insists that here the $49,900 paid by the United States was paid on behalf

of the UIM, Mr. Sprinot, the stipulations between the parties belie that assertion and

support plaintiff's argument that in paying $49,900, the United States was extinguishing

its own liability independent of Mr. Sprinot's.

¶ 11   First, paragraph 18 of the stipulation of facts specifically states:

       "At all times mentioned herein, there were in existence certain rules and

       regulations governing rural route carrier's delivery of parcels onto private


                                               5
       property. Plaintiff contends that the failure to enforce these rules, and the failure

       to formulate others, was a proximate cause of the plaintiff's injuries."

Second, the "Stipulation for Compromise Settlement and Release of Federal Tort Claims

Act Pursuant to 28 U.S.C. § 2677" entered into between the United States and plaintiff

specifically states that by paying $49,900, the United States was extinguishing ALL

liability. Paragraph 2 of the stipulation states:

       "The United States of America agrees to pay the sum of $49,900.00, which sum

       shall be in full settlement and satisfaction of any and all claims, demands, rights

       and causes of action of whatsoever kind and nature, arising from, and by reason of

       any and all known and unknown, foreseen and unforeseen bodily and personal

       injuries, damage to property and the consequences thereof, resulting, and to result,

       from the subject matter of this settlement, including any and all claims of any kind

       for which plaintiff or plaintiff's guardians, heirs, executors, administrators, or

       assigns, and each of them, now have or may hereafter acquire against the United

       States of America, its agents, servants, and employees."

Under these circumstances, where by payment of $49,900, the Unites States extinguished

all liability in conjunction with the August 28, 2010, accident, Farmers is not entitled to a

UIM setoff in that amount.

¶ 12   Farmers also asserts the application of the setoff provision in the instant case does

not frustrate the public policy of the UIM statute. We disagree. If we allowed Farmers to

deduct the amount paid by the United States to plaintiff, we would frustrate the public

policy behind UIM coverage, which is to place the insured in substantially the same
                                       6
position he would have occupied if the tortfeasor carried adequate insurance. Coulson,

402 Ill. App. 3d at 783-84, 931 N.E.2d at 1262 (citing Sulser v. Country Mutual

Insurance Co., 147 Ill. 2d 548, 555, 591 N.E.2d 427, 429 (1992)).

¶ 13   Here, plaintiff's father paid premiums for $100,000 of UIM coverage. The parties

agree plaintiff's damages exceed $149,900.      It is clear plaintiff will never be fully

compensated for her damages; however, if we accept Farmers' argument, plaintiff will be

in a substantially worse financial situation, and Farmers will only be required to pay

$25,100, even though it collected premiums for $100,000 worth of UIM coverage. To

allow Farmers to offset against its UIM limits the amount paid by the United States to

extinguish its own liability would frustrate the public policy of placing plaintiff in the

same position as if Mr. Sprinot was fully insured.

¶ 14                                CONCLUSION

¶ 15   Taking into account Progressive paid Mr. Sprinot's policy limits of $25,000, we

find plaintiff is entitled to recover $75,000 of the $100,000 under the UIM coverage

provided by Farmers. Farmers cannot deduct the $49,900 paid by the United States to

extinguish its liability. Accordingly, we find the trial court did not err in entering

judgment in favor of plaintiff and against Farmers in the amount of $75,000.

¶ 16   For the foregoing reasons, we hereby affirm the judgment of the circuit court of

Madison County.



¶ 17   Affirmed.


                                            7
                              2016 IL App (5th) 150325
                                   NO. 5-15-0325
                                       IN THE
                        APPELLATE COURT OF ILLINOIS
                                 FIFTH DISTRICT


DEBORAH DeSTEFANO, as Mother and        )     Appeal from the
Next Friend of Caroline DeStefano, a    )     Circuit Court of
Minor, and DEBORAH DeSTEFANO,           )     Madison County.
Individually,                           )
                                        )
      Plaintiff-Appellee,               )
                                        )
v.                                      )     No. 11-MR-226
                                        )
FARMERS AUTOMOBILE INSURANCE            )
ASSOCIATION,                            )     Honorable
                                        )     John B. Barberis, Jr.,
      Defendant-Appellant.              )     Judge, presiding.
__________________________________________________________________________

Opinion Filed:        June 14, 2016
__________________________________________________________________________

Justices:          Honorable Richard P. Goldenhersh, J.

                 Honorable S. Gene Schwarm, P.J., and
                 Honorable Judy L. Cates, J.,
                 Concur
__________________________________________________________________________

Attorneys        Robert Marc Chemers, Richard M. Burgland, Pretzel & Stouffer,
for              Chartered, One South Wacker Drive, Suite 2500, Chicago, IL 60606
Appellant
__________________________________________________________________________

Attorney         Lanny Darr, Darr Firm, 307 Henry Street, Suite 406, P.O. Box 940,
for              Alton, IL 62002
Appellee
__________________________________________________________________________
