                                  Illinois Official Reports

                                          Appellate Court



                  Huizenga v. Auto-Owners Insurance, 2014 IL App (3d) 120937




Appellate Court              DAVID HUIZENGA and BRENDA HUIZENGA, Plaintiffs-
Caption                      Appellants, v. AUTO-OWNERS INSURANCE, a Corporation,
                             Defendant-Appellee.



District & No.               Third District
                             Docket No. 3-12-0937


Filed                        January 22, 2014



Held                         In a declaratory judgment action seeking excess uninsured motorist
(Note: This syllabus         coverage under an endorsement in plaintiffs’ umbrella policy for the
constitutes no part of the   injuries they suffered in an accident with an uninsured motorist, the
opinion of the court but     trial court properly granted summary judgment for plaintiffs’ insurer,
has been prepared by the     notwithstanding plaintiffs’ contention that the endorsement was
Reporter of Decisions        ambiguous, since the umbrella policy expressly provided coverage for
for the convenience of       “Personal Liability” and unambiguously excluded excess coverage for
the reader.)                 the insureds’ first-party injuries, and the exclusion of excess uninsured
                             motorist coverage pursuant to an umbrella policy is consistent with
                             Illinois law.




Decision Under               Appeal from the Circuit Court of Whiteside County, No. 11-L-26; the
Review                       Hon. John L. Hauptman, Judge, presiding.



Judgment                     Affirmed.
     Counsel on               Michael J. Warner, of Warner & Zimmerle, of Rock Island, for
     Appeal                   appellants.

                              J. Scott Gillman and Guy M. Conti, both of Condon & Cook, LLC, of
                              Chicago, for appellee.


     Panel                    JUSTICE HOLDRIDGE delivered the judgment of the court, with
                              opinion.
                              Justices McDade and Carter concurred in the judgment and opinion.




                                               OPINION

¶1          The plaintiffs, David and Brenda Huizenga, appeal from the trial court’s ruling in favor of
       the defendant, Auto-Owners Insurance (Auto-Owners), and against the plaintiffs (the insureds)
       on their respective motions for summary judgment. On appeal, the insureds contend that the
       trial court erred in finding that an endorsement in their umbrella policy with Auto-Owners did
       not provide excess uninsured motorist coverage for their personal injuries. We affirm the order
       of the trial court.

¶2                                                FACTS
¶3         On April 6, 2010, the insureds incurred injuries in a motor vehicle accident with an
       uninsured driver. Their injuries exceeded $500,000 in damages.
¶4         At the time of the accident, the insureds owned an underlying automobile insurance policy
       with coverage for: (1) bodily injury ($500,000 per person and per occurrence); (2) property
       damage ($100,000 per occurrence); (3) uninsured and underinsured motorist ($500,000 per
       person and per occurrence); and (4) medical payments ($5,000 per person).
¶5         In addition, at the time of the accident the insureds owned an “Executive Umbrella
       Insurance Policy” that provided $1 million in excess coverage for the insureds for “Personal
       Liability.” Personal liability under the policy was described as “the ultimate net loss in excess
       of the retained limit which the insured becomes legally obligated to pay as damages because of
       personal injury or property damage.”
¶6         The umbrella policy also included an endorsement with the following language:
                       “EXCLUSION OF PERSONAL INJURY TO INSUREDS
                                          FOLLOWING FORM
                   We do not cover personal injury to you or a relative. We will cover such injury to
               the extent that insurance is provided by an underlying policy listed in Schedule A.”
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       Schedule A listed “Underlying Insurance Requirements” and the “Minimum Primary Limits”
       required as follows:
              “A) COMPREHENSIVE PERSONAL LIABILITY
                    Single Limit                               $300,000 ea occ

              B) AUTOMOBILE LIABILITY
                  Bodily Injury Liability                            $500,000 ea person
                                                                     $500,000 ea occ
                     and Property Damage                             $100,000 ea occ”
¶7          The insureds brought a declaratory judgment action against Auto-Owners for excess
       coverage under the umbrella policy for their personal injuries (first-party claims) that were
       incurred in the April 6, 2010, motor vehicle accident with the uninsured driver. Auto-Owners
       filed a counterclaim for a declaratory judgment that the umbrella policy did not provide excess
       uninsured motorist coverage for the insureds’ personal injuries. Each party filed a motion for
       summary judgment.
¶8          In ruling on the parties’ motions for summary judgment, the trial court defined the issue as
       whether the language within the endorsement entitled “Exclusion of Personal Injury to
       Insureds Following Form” afforded the insureds excess uninsured motorist coverage. The trial
       court noted, “no Illinois court of review has rendered an opinion interpreting this language and
       its effect.” Citing Wadzinski v. Auto-Owners Insurance Co., 2012 WI 75, 342 Wis. 2d 311, 818
       N.W.2d 819, the trial court indicated that the Supreme Court of Wisconsin interpreted identical
       language in an umbrella policy’s endorsement as not affording first-party uninsured motorist
       coverage. The trial court found the analysis of the Supreme Court of Wisconsin in Wadzinski to
       be consistent with Illinois law. The trial court granted Auto-Owners’ motion for summary
       judgment and denied the insureds’ motion for partial summary judgment. The insureds
       appealed.

¶9                                              ANALYSIS
¶ 10        On appeal, the insureds argue that summary judgment should have been granted in their
       favor. Specifically, they argue that the endorsement entitled “Exclusion of Personal Injury to
       Insureds” was ambiguous and should have been read in their favor.
¶ 11        Summary judgment should be granted only where the pleadings, depositions, admissions
       and affidavits on file, when viewed in the light most favorable to the nonmoving party, show
       that there is no genuine issue of material fact and that the moving party is clearly entitled to
       judgment as a matter of law. 735 ILCS 5/2-1005(c) (West 2010). Summary judgment rulings
       are subject to a de novo review. Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154
       Ill. 2d 90 (1992).
¶ 12        When a court interprets an insurance policy, there are only two sources upon which it may
       base its analysis: (1) the plain language of the policy; and (2) the plain language of the Illinois
       Insurance Code as it existed at the time the policy was written. Harrington v. American Family
       Mutual Insurance Co., 332 Ill. App. 3d 385 (2002). Only where an ambiguity exists should the
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       court look to other materials. Id. An ambiguity exists in an insurance contract if it is subject to
       more than one reasonable interpretation. Abram v. United Services Automobile Ass’n, 395 Ill.
       App. 3d 700 (2009). We will not strain to find an ambiguity where none exists. Id.
       Unambiguous language will be applied as written unless it violates public policy. Id. Policy
       terms that limit an insurer’s liability will be liberally construed in favor of coverage but only
       where the policy language is ambiguous. Id.
¶ 13        An insurance policy is a contract, to which the general rules of contract construction apply.
       Hobbs v. Hartford Insurance Co. of the Midwest, 214 Ill. 2d 11 (2005). The primary objective
       is to ascertain and give effect to the intention of the parties, as expressed in the language of the
       policy. Id. The court reads the insurance contract as a whole, giving effect to every provision
       and taking into account the type of insurance, the nature of the risks undertaken, and the overall
       purpose of the policy. Continental Casualty Co. v. Donald T. Bertucci, Ltd., 399 Ill. App. 3d
       775 (2010). Terms are given their plain, ordinary, and generally accepted meaning, unless
       otherwise defined in the contract. Id.

¶ 14                                 I. Plain Language of the Policy
¶ 15       In this case, the express terms of the umbrella policy indicated that coverage was for
       “Personal Liability.” “Liability” means liability for injuries or other losses to persons other
       than the insured. Abram, 395 Ill. App. 3d 700. Therefore, the umbrella policy provided excess
       coverage for the insureds’ liability to third parties. The insureds do not contend the grant of
       coverage for third-party liability also created coverage for their first-party personal injuries.
       Instead, the insureds argue that the following form endorsement entitled “EXCLUSION OF
       PERSONAL INJURY TO INSUREDS” was ambiguous and should have been read in their
       favor as providing excess uninsured motorist coverage.
¶ 16       In examining the terms of the endorsement, there is no question that the first sentence of
       the endorsement specifically excludes coverage for the insureds’ personal injuries, as the
       sentence provides, “We do not cover personal injury to you or a relative.” It is in the second
       sentence that the insureds argue an ambiguity exists. The second sentence indicates, “we will
       cover such injury to the extent that insurance is provided by an underlying policy listed in
       Schedule A.” Schedule A referred to the “bodily injury liability” and “property damage”
       portions of the insureds’ underlying automobile liability policy. Schedule A makes no
       reference to uninsured motorist coverage. Therefore, the plain language of the endorsement
       unambiguously excluded excess coverage for the insureds’ first-party personal injuries.
¶ 17       Additionally, we note that Schedule A listed the “Underlying Insurance Requirements”
       and established “Minimum Primary Limits” for the insureds to carry before excess coverage
       would be provided by the $1 million umbrella policy. Schedule A indicates that the insureds
       were required to carry $500,000 of underlying bodily injury liability coverage in their
       automobile liability policy but makes no reference to and requires no minimum limit for the
       underlying uninsured motorist coverage. By operation of law, the insureds would have been
       required to have uninsured motorist coverage of at least $20,000 per person and $40,000 per
       occurrence. See 215 ILCS 5/143a-2(1) (West 2010) (allowing an insured to reject limits of
       uninsured motorist coverage that exceed the required statutory minimum of $20,000 per
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       person and $40,000 per occurrence). It is unlikely the parties intended to limit excess coverage
       for the insureds’ bodily injury liability to claims over $500,000 while potentially providing
       excess uninsured motorist coverage for any claims over $20,000 per person or $40,000 per
       occurrence if the insureds elected to have the amount of minimum uninsured motorist
       coverage. We find the fact that no “Underlying Insurance Requirements” were established in
       Schedule A for uninsured motorist coverage indicates that excess uninsured motorist coverage
       was not contemplated by the umbrella policy.
¶ 18       The insureds argue that because the provision at issue was an endorsement, its language
       may modify the grant of coverage to include excess uninsured motorist claims. However, it is
       clear the endorsement was not intended to modify the grant of coverage but intended to modify
       the exclusion section of the policy to add the exclusion for the insureds’ first-party personal
       injuries. As an exclusion, the language in the endorsement could not create insurance
       coverage. See Landmark American Insurance Co. v. NIP Group, Inc., 2011 IL App (1st)
       101155 (neither a policy exclusion nor an exception to a policy exclusion can create insurance
       coverage where coverage did not otherwise exist). Therefore, we find that the umbrella policy
       unambiguously excludes excess coverage for the insureds’ first-party injuries.

¶ 19                                     II. Illinois Insurance Code
¶ 20       Interpreting the terms of the umbrella policy as excluding first-party coverage is consistent
       with Illinois law. With some exceptions, all motor vehicles operated or registered in this state
       must be covered by a liability insurance policy with bodily injury limits of at least the
       minimum amount specified by the Illinois Safety and Family Financial Responsibility Law
       (Financial Responsibility Law) (currently $20,000 per person and $40,000 per occurrence).
       625 ILCS 5/7-601(a), 7-203 (West 2010). Section 143a of the Illinois Insurance Code requires
       every motor vehicle liability policy to include uninsured motorist coverage with at least the
       same minimum specified by the Financial Responsibility Law (currently $20,000 per person
       and $40,000 per occurrence). 215 ILCS 5/143a (West 2010); 625 ILCS 5/7-203 (West 2010).
       The purpose of requiring uninsured motorist coverage in an amount not less than the limits of
       the Financial Responsibility Law is to place the policyholder in substantially the same position
       he would occupy, so far as his being injured or killed, as if the wrongful driver had the required
       minimum amount of liability insurance. Phoenix Insurance Co. v. Rosen, 242 Ill. 2d 48 (2011).
¶ 21       Uninsured motorist insurance provides coverage where, regardless of the insured’s
       liability, the insured is protected from financial losses for his or her own injuries caused by an
       uninsured motorist. Harrington, 332 Ill. App. 3d 385. Therefore, uninsured motorist coverage
       inures to the financial benefit of the insured. Id. On the other hand, liability insurance protects
       the policyholder from financial losses due to claims brought by third parties that are legally
       recoverable against the insured. Cincinnati Insurance Co. v. Miller, 190 Ill. App. 3d 240
       (1989). An umbrella policy provides coverage in excess of the amount provided by the
       underlying liability policy in order to protect the insured from an excess judgment from a third
       party. Id. at 247 (citing Hartbarger v. Country Mutual Insurance Co., 107 Ill. App. 3d 391
       (1982)). Consequently, the monetary benefit of an umbrella policy falls upon the injured

                                                    -5-
       individual, not the insured. Harrington, 332 Ill. App. 3d at 390 (citing Hartbarger, 107 Ill.
       App. 3d 391).
¶ 22        Insurers are permitted to issue umbrella policies that exclude uninsured motorist coverage.
       215 ILCS 5/143a-2(5) (West 2010). Limiting an umbrella policy’s coverage to excess
       third-party liability and excluding excess uninsured motorist coverage is consistent with
       Illinois law and public policy. Abram, 395 Ill. App. 3d 700. Therefore, interpreting the
       umbrella policy to exclude excess uninsured motorist claim is consistent with Illinois law.

¶ 23                                           III. Case Law
¶ 24       In support of their argument that the endorsement at issue provides excess uninsured
       motorist coverage, the insureds cite to the Virginia circuit court case of Auto-Owners
       Insurance Co. v. Morris, 81 Va. Cir. 337 (2010). In Morris, the circuit court determined that an
       endorsement in an umbrella policy identical to the one at issue in this case provided coverage
       for first-party claims. The court reasoned that the language was included in a “following form”
       endorsement which may provide excess coverage identical to the coverage in underlying
       policy. As a result, the Morris court found that because the underlying policy provided
       uninsured motorist coverage, the umbrella policy did as well.
¶ 25       In Wadzinski, the Supreme Court of Wisconsin ruled the opposite way. There, the court
       determined that uninsured motorist benefits were excluded from an umbrella policy with an
       endorsement identical to the one at issue in this case. Wadzinski, 2012 WI 75, 342 Wis. 2d 311,
       818 N.W.2d 819. The Wadzinski court concluded that the endorsement excluded first-party
       coverage. The Wadzinski court also determined that the second sentence of the endorsement
       was intended to clarify that the exclusion for the insureds’ personal injuries in the umbrella
       policy was not intended to interfere with first-party coverage in underlying policies.
¶ 26       Here, the Auto-Owners’ umbrella policy in this case provided excess third-party liability
       coverage and unambiguously excluded excess coverage for the insureds’ personal injuries. The
       policy’s grant of coverage was for excess third-party liability claims. The following form
       endorsement at issue unambiguously excluded excess coverage for the insureds’ personal
       injuries. The second sentence of the endorsement did not create excess coverage for the
       insureds’ uninsured motorist claims and was not ambiguous as to whether it did so. The second
       sentence indicated that Auto-Owners would provide coverage for the insureds’ personal
       injuries “to the extent that insurance is provided by an underlying policy listed in Schedule A.”
       Schedule A did not refer to the uninsured motorist coverage in the underlying policy and,
       instead, referred only to “bodily injury liability” and “property damage.” Thus, even if the
       endorsement was intended to create excess coverage to “follow form” of the insurance
       coverage listed in Schedule A, as suggested in Morris, excess uninsured motorist coverage
       would not have been included.
¶ 27       Accordingly, we affirm the trial court’s summary judgment rulings.




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¶ 28                                       CONCLUSION
¶ 29       The judgment of the circuit court of Whiteside County granting Auto-Owners’ motion for
       summary judgment and denying the insureds’ partial motion for summary judgment is
       affirmed.

¶ 30      Affirmed.




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