                                             THIRD DIVISION 
                                             September 25, 1996









No. 1-95-1467

FRANK HASEMANN, ANNETTE HASEMANN
and NANETTE BUCCIERI,

          Plaintiffs-Appellees,

     v.

KAREN WHITE and STEVEN HUTCHERSON,

          Defendants-Appellants,

CONSTANCE GILHAM,
     
          Defendant.)
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)Appeal from the
Circuit Court of
Cook County.








Honorable
Sidney D. Jones III,
Judge Presiding.


     PRESIDING JUSTICE TULLY delivered the opinion of the court:
     Plaintiffs, Frank Hasemann (Frank), Annette Hasemann (Annette), and
Nanette Buccieri, brought this action in the circuit court of Cook County against
defendants, Karen White, Steven Hutcherson, and Constance Gilham, seeking to
recover for personal injuries sustained in an automobile collision.  Following
mandatory arbitration, the trial court entered judgment in favor of plaintiffs. 
Defendants filed a motion for a set-off of the arbitration award in the amount of
plaintiffs' entire uninsured motorist policy limits, which the circuit court denied. 
Defendants now appeal the circuit court's judgment to this court pursuant to
Supreme Court Rule 301 (155 Ill. 2d R. 301).  Gilham is not a party to this appeal. 
     For the reasons which follow, we affirm.

                            FACTUAL BACKGROUND

     On February 23, 1990, an automobile collision occurred between two motor
vehicles, White and Hutcherson were the occupants of one vehicle and Frank and
Buccieri were the occupants of the other.  Frank and Buccieri sustained personal
injuries and brought this action against White and Hutcherson.
     At the time of the accident, plaintiffs were insured by Country Companies
(hereinafter Country) with an automobile liability policy of $50,000 per
person/$100,000 per accident and it also included uninsured motorist coverage with
the same policy limits.  Defendants were covered by Prestige Casualty Company
(hereinafter Prestige) with policy limits of $20,000 per person/$40,000 per accident. 
Prestige appointed attorneys for defendants.
     On August 16, 1994, Prestige became insolvent and was placed in liquidation.
The Illinois Insurance Guaranty Fund (hereinafter "Fund") stepped in pursuant to
Illinois Insurance Guaranty Fund Act (Act) (215 ILCS 5/532 et seq. (West 1994)).  The
Fund took over the defense of defendants.  Defendants were now regarded as
uninsured motorists, because under section 143(a), a motorist insured by an insolvent
insurer is considered an uninsured motorist (215 ILCS 5/143(a) (West 1994)). 
Plaintiffs filed a motion to stay the proceedings while they filed a claim against their
own insurance company under the uninsured motorist provision of their policy. 
Consequently, plaintiffs made a written demand for arbitration.  Country negotiated
a settlement of $7,500 for Frank and $3,000 for Buccieri, which plaintiffs accepted.
     Plaintiffs then continued their case in the circuit court and the case was sent
to mandatory arbitration.  The arbitrators awarded $9,000 to Frank and $4,000 to
Buccieri.  No rejection of the award was filed within the required time.  
     Defendants filed a motion for set-off of plaintiffs' entire uninsured policy
pursuant to the "non-duplication of recovery provision" in the Act (735 ILCS 5/546(a)
(West 1994)).  Defendants argue that since plaintiffs settled rather than arbitrate
their uninsured motorist claim, defendants were entitled to a set-off consisting of the
limits of plaintiffs' uninsured motorist coverage.  The trial court denied the motion,
and concluded that defendants were only entitled to a partial set-off.  The trial court
entered judgment against defendants in the amount of $616.50 for Hasemann and
$425.50 for Buccieri.

                        ISSUE PRESENTED FOR REVIEW

     The sole issue is whether plaintiffs first exhausted their rights under their own
uninsured motorist policy before filling a claim against defendants and the Fund.

                                  OPINION

     The Illinois Insurance Guaranty Fund is a statutory entity created by the
General Assembly to provide a limited form of relief to claimants and insureds when
insurance companies becomes insolvent.  The purpose is to place claimants in the
same position that they would have been in if the liability insurer had not become
insolvent.  Lucas v. Illinois Insurance Guaranty Fund, 52 Ill. App. 3d 237, 367 N.E.2d
469 (1977).  The Act does not permit double recovery for plaintiffs.  Section 546(a) of
the Code of Civil Procedure provides as follows:
          "Non-duplication of recovery. (a) Any insured or claimant
          having a covered claim against the Fund shall be required
          first to exhaust his rights under any provision in any other
          insurance policy which may be applicable to the claim. 
          Any amount payable on a covered claim under this Article
          shall be reduced by the amount of such recovery under
          such insurance policy." 735 ILCS 5/546(a) (West 1994).
     Defendants contend that plaintiffs must first exhaust all their rights under
their uninsured motorist policy with Country before they can recover any amount
from the Fund or from defendants.  Defendants further contend that plaintiffs should
not be allowed to settle for less than the uninsured motorist policy limits, and then
seek to recover the balance of their judgment from the Fund, whose limited assets
ultimately come from the insurance buying public of Illinois.  Plaintiffs claim that
they did indeed exhaust their rights as required under section 546(a).  We agree with
plaintiffs.
     We first look to the language and the intent of section 546(a).  "In interpreting
a disputed provision a court should first consider the statutory language itself as the
best indication of the intent of the drafters.  [Citation.]  Terms that are unambiguous,
when not specifically defined, must be given their plain and ordinary meaning." 
People ex rel. Village of McCook v. Indiana Harbor Belt R.R., 256 Ill. App. 3d 27, 29
(1993); see also Hayes v. Mercy Hospital & Medical Center, 136 Ill. 2d 450 (1990). 
In establishing the legislative intent, it is settled that a court may consider not only
the language used in the statute, but also the reason and necessity for the law, the
evils sought to be remedied, and the purposes to be achieved.  Urban v. Loham, 227
Ill. App. 3d 772, 775, 594 N.E.2d 292 (1992), citing Stewart v. Industrial Comm'n, 115
Ill. 2d 337 (1987).  "It is never proper for a court to depart from plain language by
reading into a statute exceptions, limitations or conditions which conflict with the
clearly expressed legislative intent."  Certain Taxpayers v. Sheahan, 45 Ill. 2d 75, 84
(1970).    
     In Urban v. Loham, the appellate court stated:
          "*** [W]hat is the result when a plaintiff knowingly settles
          with his insurer for less than the policy limits of his
          uninsured motorist coverage? Or as in the case at bar,
          what is the result when a plaintiff knowingly fails to
          timely seek recovery under his uninsured motorist
          coverage?  The legislative policy behind section 546(a)
          requires a plaintiff to collect as much as he can under his
          uninsured motorist coverage.  A plaintiff who knowingly
          fails to do so shall be assumed to have received the policy
          limits of his uninsured motorist coverage.  This assumption
          implements the legislative intent that the Fund be a source
          of last resort, and that the Fund's liability be offset by any
          recovery to which a plaintiff is contractually entitled under
          his own insurance policy.  Consequently, a plaintiff who
          makes a claim under his uninsured motorist coverage is
          deemed to have exhausted his rights under section 546(a),
          regardless of the amount that he actually receives." 
          (Emphasis added.) Urban, 227 Ill. App. 3d at 777, 594
          N.E.2d 292.
Yet, this court held in a later case that it "did not agree with the pronouncement in
Urban that the requirements of section 546(a) are met merely with the filing of a
claim, but we do believe that the filing of a claim for arbitration is a necessary first
step in the process of exhaustion of rights under section 546(a)."  Lonigro v. Lockett,
253 Ill. App. 3d 308, 319, 615 N.E.2d 265 (1993).
     We believe that the intent of the legislature in pronouncing section 546(a) was
to prevent claimants from receiving a double recovery or a windfall from the Fund at
the cost of the insurance-paying public.  It is evident that the General Assembly
needs to clarify what constitutes an exhaustion of rights under section 546(a),
because it is not explicitly written in the statute.  Courts have tried to interpret this
section, which undoubtedly has led to the conflicting caselaw.  See Spearman v. State
Security Insurance Co., 57 Ill. App. 3d 393, 372 N.E.2d 1008 (1978) (court held that
section 546(a) makes it clear that an insured must first proceed under any rights
conferred by the insurance policy before the Fund is required to pay); But see
Herriford v. Boyles, 193 Ill. App. 3d 947, 550 N.E.2d 654 (1990) (court found that
plaintiffs were collaterally estopped from relitigating the amount of their damages in
the common law action against the defendants because the issue of damages had been
decided in the arbitration proceedings.)  Thus, "injured persons are faced with
conflicting opinions such as Spearman, which tells them that they must proceed first
against their own uninsured motorist carrier, and Herriford, which tells them they
have an option to proceed first against either their uninsured motorist carrier [and
possibly waiving their right to a jury trial] or the insolvent tortfeasor."  (Emphasis
in original.) Lonigro, 253 Ill. App. 3d at 318, 615 N.E.2d 265.  Clearly, the filing of
a claim is the first step under section 546(a).  However, it is up to the legislature to
determine what constitutes an exhaustion of rights.  We believe a plain and ordinary
meaning of section 546(a) is that the Fund is a source of last resort, and will only be
required to pay claims after an injured party has received an amount of money from
its own policy, regardless of the amount.  
     Moreover, section 546(a) expressly limits the amount of set-off to what is
actually recovered from the uninsured motorist carrier as it states that "any amount
payable on a covered claim under this Article shall be reduced by the amount of such
recovery under such insurance policy." 215 ILCS 5/546 (West 1994).  However,
nowhere does it state that the set-off must be the entire amount of the uninsured
motorist policy, such as in this case, a set-off amount of $50,000.  Nor do defendants
cite to any Illinois authority that would declare such a rule.  
     Under these facts, we recognize that plaintiffs filed a claim against their
insurance company, Country.  Plaintiffs also filed a written demand for arbitration,
which the record on appeal reflects.  Plaintiffs and Country ended up settling the
claim, wherein Frank received $7,500 and Buccieri received $3,000.  Subsequently,
plaintiffs continued their case against defendants in the circuit court.  At that point,
plaintiffs had exhausted their rights as required by section 546(a).  Clearly, plaintiffs
did more than just merely file a claim against their insurance, as was required by the
Urban court and the Lonigro court.  Furthermore, there is no proof that plaintiffs
knowingly settled for an amount less than their actual damages.  Just because the
arbitrators awarded plaintiffs more than they received in a settlement with their
insurance company, does not mean they purposely settled for less than they deserved. 
It is unreasonable to force plaintiffs to receive up to the limit of $50,000 from their
insurance before filing a claim against the Fund.  That would go against Illinois'
public policy of promoting settlements.  Accordingly, we find that plaintiffs did
exhaust their rights within the meaning of section 546(a) and, therefore, are entitled
to receive from the Fund the difference between their settlement and the arbitration
award, $616.50 for Frank and $425.50 for Buccieri.     In light of the foregoing, we
affirm the judgment of the trial court.
     Affirmed.
.    CERDA, J., concurs.
     GREIMAN, J., dissents.

