{ "id": 5369197, "name": "STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Plaintiff-Appellee, v. PATRICK T. MURPHY, Guardian of the Estate of Jessie Stewart, Incompetent, Defendant-Appellant", "name_abbreviation": "State Farm Mutual Automobile Insurance v. Murphy", "decision_date": "1994-04-29", "docket_number": "No. 1\u201492\u20144096", "first_page": "100", "last_page": "107", "citations": [ { "type": "official", "cite": "263 Ill. App. 3d 100" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "30 Ill. App. 3d 899", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2624081 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/30/0899-01" ] }, { "cite": "147 Ill. 2d 548", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 3277987 ], "weight": 3, "pin_cites": [ { "page": "557" }, { "page": "556" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/147/0548-01" ] }, { "cite": "247 Ill. App. 3d 480", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2930313 ], "pin_cites": [ { "page": "483" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/247/0480-01" ] }, { "cite": "148 Ill. 2d 272", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 3282947 ], "weight": 8, "pin_cites": [ { "page": "275" }, { "page": "279-80" }, { "page": "280" }, { "page": "280-81" }, { "page": "279-81" }, { "page": "279" }, { "page": "280" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/148/0272-01" ] }, { "cite": "74 Ill. 2d 507", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 2994690 ], "weight": 3, "opinion_index": 0, "case_paths": [ "/ill-2d/74/0507-01" ] }, { "cite": "48 Ill. 2d 1", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 2907350 ], "weight": 4, "pin_cites": [ { "page": "4" }, { "page": "7" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/48/0001-01" ] } ], "analysis": { "cardinality": 639, "char_count": 16586, "ocr_confidence": 0.779, "pagerank": { "raw": 6.119192924641495e-08, "percentile": 0.3813175980530139 }, "sha256": "80acd800c7bfb5564bc0d86b2e7b74076f922e475882278a54b91bc28879b2b2", "simhash": "1:48a95c5c11e0964d", "word_count": 2631 }, "last_updated": "2023-07-14T21:36:39.761555+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Plaintiff-Appellee, v. PATRICK T. MURPHY, Guardian of the Estate of Jessie Stewart, Incompetent, Defendant-Appellant." ], "opinions": [ { "text": "JUSTICE COUSINS\ndelivered the opinion of the court:\nDefendant, Patrick T. Murphy (Murphy), guardian of the estate of Jessie Stewart (Stewart), appeals from the order of summary judgment entered against him in an insurance coverage dispute. The trial court held that plaintiff, State Farm Mutual Automobile Insurance Company (State Farm), had no liability to Stewart because his policy benefits were offset by the worker\u2019s compensation benefits he had received. On appeal, Murphy argues that the circuit court erred by: (1) failing to find the setoff provision in the insurance policy contrary to public policy; and (2) failing to find the setoff provision ambiguous.\nWe affirm.\nBACKGROUND\nThe facts of the instant case are not disputed. On February 3, 1985, Stewart, a Chicago fire department employee, was involved in an accident with a car driven by Gilberto Cisneros (Cisneros). As a result of the accident, Stewart sustained multiple permanent bodily injuries including, inter alia, paralysis, muscle atrophy, loss of bowel and bladder control, and an inability to take nourishment by mouth. In short, Stewart was rendered totally dependant upon others to perform the activities of daily living.\nAt the time of the accident, Stewart was driving a car owned by the City of Chicago (City) and acting in the course of his employment. Pursuant to the Illinois Pension Code (40 ILCS 5/1\u2014101 et seq. (West 1992)), the City provided payments in excess of $100,000 for hospital and medical expenses incurred by Stewart in connection with his injuries. The City did not provide payments for pain and suffering or actual bodily injuries, such as permanent disfigurement.\nAlthough Cisneros was insured by Reliable Insurance Company at the time of the accident, he became an uninsured motorist when the insurance company was placed in liquidation. Stewart was covered by a State Farm automobile liability policy, which included uninsured motor vehicle coverage benefits of up to $100,000 per person and up to $300,000 per accident. The policy contained the following limit of liability provision:\n\"UNINSURED MOTOR VEHICLE \u2014 COVERAGE U\n* * *\nLimits of Liability\n* * *\n2. Any amount payable under this coverage shall be reduced by any amount paid or payable to or for the insured'. \u25a0\n* * *\nc. under any worker\u2019s compensation, disability benefits, or similar law.\u201d\nSometime after the accident, Stewart submitted a claim to State Farm for uninsured motor vehicle coverage. In response, State Farm filed a complaint against Patrick T. Murphy, as Stewart\u2019s guardian, seeking a judgment declaring that the policy did not provide uninsured coverage for the accident of February 3, 1985, because the payments made by the City for Stewart\u2019s medical and healthcare expenses totally offset the coverage limits of $100,000. State Farm then moved for summary judgment, asserting that it was entitled to judgment as a matter of law. After hearing argument, the trial court granted summary judgment in favor of State Farm, declaring that there was no uninsured motorist coverage available to Murphy, as guardian of Stewart. This appeal followed.\nOPINION\nI\nInitially, Murphy contends that under the unique facts of this case, enforcement of the worker\u2019s compensation setoff provision would violate the public policy underlying the Illinois Insurance Code (215 ILCS 5/1 et seq. (West 1992)). The Illinois Insurance Code requires that every automobile liability policy issued in this State must provide uninsured motorist vehicle coverage in an amount not less than the limits described in the financial responsibility law (625 ILCS 5/7\u2014203 (West 1992)). (See 215 ILCS 5/143a (West 1992).) As our supreme court explained in Ullman v. Wolverine Insurance Co. (1970), 48 Ill. 2d 1, 4, the purpose of this provision is \"to place the policyholder in substantially the same position he would occupy *** if the wrongful driver had had the minimum liability insurance required by the Financial Responsibility Act.\u201d\nOur supreme court has previously construed the worker\u2019s compensation setoff and concluded that it does not violate the public policy underlying the uninsured motorist statute. (See Stryker v. State Farm Mutual Automobile Insurance Co. (1978), 74 Ill. 2d 507; Ullman, 48 Ill. 2d 1.) In Ullman, the plaintiff\u2019s decedent was killed by an uninsured motorist, and his employer paid $14,000 in worker\u2019s compensation benefits. The decedent had carried uninsured motorist coverage in the amount of $10,000 per person, and the plaintiff sought to recover this amount from the insurer. However, the insurer maintained that it was entitled to offset the worker\u2019s compensation benefits against its maximum liability and, therefore, it owed nothing. The plaintiff sought a judgment declaring that the worker\u2019s compensation setoff provision violated the public policy behind the uninsured motorist statute. The plaintiff argued that the statute manifested a legislative intent to prevent an insurer from reducing its liability below the minimum provided in the financial responsibility law, by any method, including a reduction for worker\u2019s compensation benefits.\nIn holding for the defendant, the court based its decision on the fact that the Workers\u2019 Compensation Act (820 ILCS 305/5 (West 1992)) required an employee who had received compensation under the Act to reimburse the employer from any recovery the employee received from a third party legally responsible for the employee\u2019s injuries. The court reason\u00e9d:\n\"[I]f the deduction challenged here is permitted, the employee\u2019s position is the same under the uninsured motorist\u2019s coverage as it would be had the tortfeasor carried the minimum insurance. Where the tortfeasor is insured, the employee reimburses his employer in full from the recovery from the tortfeasor. Where the tortfeasor is uninsured, the benefits paid by the employer are deducted from the recovery. If the benefits paid by the employer exceed the amount payable under the coverage, as here, the insurance carrier is without liability. In neither instance does the employee retain both compensation from the employer and identical damages from the tortfeasor. The deduction provision does not cause the employee with uninsured motorist\u2019s coverage to have less financial protection than he would have had if the tortfeasor had carried insurance in the minimal amount.\u201d Ullman, 48 Ill. 2d at 7.\nHere, Murphy argues that the rule of Ullman was modified in Hoglund v. State Farm Mutual Automobile Insurance Co. (1992), 148 Ill. 2d 272. Murphy asserts that under Hoglund, the worker\u2019s compensation setoff is only enforceable if it acts to prevent a double recovery by the insured. Murphy argues that Stewart\u2019s damages greatly exceed the amount the City has paid and, therefore, there is no danger of double recovery.\nIn Hoglund, the plaintiff was injured in part by an uninsured motorist and in part by an insured motorist; the plaintiff\u2019s total damages exceeded $200,000. The insured motorist paid $100,000 to the plaintiff. The plaintiff then sought to recover the $100,000 limit of uninsured motorist coverage from its insurer, State Farm. However, plaintiff\u2019s policy contained a setoff provision stating that any amounts paid or payable to the insured \"by or for any person or organization who is or may be held legally liable for the bodily injury to the insured.\u201d (Emphasis omitted.) (Hoglund, 148 Ill. 2d at 275.) State Farm argued that because the insured had received $100,000 from a legally liable party, State Farm was entitled to a $100,000 setoff and, therefore, owed the plaintiff nothing.\nThe supreme court rejected State Farm\u2019s argument, finding that it would frustrate the purpose of the uninsured motorist statute, which is to place the insured in substantially the same position as if the uninsured driver had been insured. (Hoglund, 148 Ill. 2d at 279-80.) The court explained:\n\"If, for instance, the uninsured motorcycle driver had been insured for $100,000, Miss Hoglund could have collected that sum in full from that driver\u2019s insurer, along with the $100,000 she collected from the other insured driver. The separate collections of $100,000 from each of the two culpable drivers would have fully compensated her for her $200,000 in damages. State Farm\u2019s position, however, is to insist that it receive a full setoff for the payment made on behalf of the insured driver. Such a result would violate the public policy behind the uninsured motorist statute that the injured party be placed in the same position as if the uninsured driver had been insured.\u201d (Hoglund, 148 Ill. 2d at 280.)\nThe court held that the insurer was entitled to a setoff only to the extent necessary to prevent a double recovery. Hoglund, 148 Ill. 2d at 280-81.\nMurphy\u2019s reliance on Hoglund is misplaced. The rule of Hoglund is limited to factual situations involving more than one tortfeasor. (See Banes v. Western States Insurance Co. (1993), 247 Ill. App. 3d 480, 483.) In Hoglund, the supreme court determined that where more than one tortfeasor causes injury, public policy would be violated if the injured party\u2019s insurance company were allowed to deduct the amount paid by the insured tortfeasor from its liability for uninsured motorist coverage, except where necessary to prevent double recovery. (Hoglund, 148 Ill. 2d at 279-81.) On the other hand, where only one party is at fault, like the case at bar, the supreme court has held that public policy is not violated by allowing an insurer to deduct worker\u2019s compensation benefits, so long as the insured does not end up in a worse situation than he would have been in if the party at fault had been minimally insured. See Sulser v. Country Mutual Insurance Co. (1992), 147 Ill. 2d 548; Stryker, 74 Ill. 2d 507; Ullman, 48 Ill. 2d 1.\nThe case at bar is analogous to Ullman. At the time of the accident, the minimum required amount of uninsured motorist coverage was $15,000, and Stewart actually carried $100,000 of uninsured motorist coverage. However, Stewart\u2019s employer paid him $100,000 in benefits. Allowing Stewart\u2019s insurer to set off the $100,000 of benefits against its liability for uninsured motorist coverage does not place Stewart in a worse situation than he would have been in if the driver had carried the $15,000 minimum amount of insurance. This is so because if the driver had been minimally insured for $15,000, Stewart\u2019s employer would have been able to seek that amount from the driver.\nMurphy next contends that this case is distinguishable from Ullman and its progeny because unlike the plaintiffs in those cases, Stewart received benefits under the Pension Code, and not under the Workers\u2019 Compensation Act. Murphy points out that under the Workers\u2019 Compensation Act, the employer acquires a lien on all funds that an employee recovers and no such lien accrues under the Pension Code. Instead, under the Pension Code the employer only acquires a right of subrogation which he must take affirmative steps to enforce. (Sullivan v. Sudiak (1975), 30 Ill. App. 3d 899.) Murphy hypothesizes that a case could arise under the Pension Code where the employer forgoes its right of subrogation, thus allowing the employee to keep worker\u2019s compensation benefits as well as damages received from the insured tortfeasor.\nMurphy invites this court to compare the hypothetical situation to the situation at bar. He argues that since Stewart received only worker\u2019s compensation benefits and nothing under his uninsured motorist policy, but he could have received both worker\u2019s compensation benefits and damages if his employer did not exercise its rights, he was put in a worse situation by enforcement of the setoff provision. We disagree. In our view, the rule established by the supreme court in Ullman was premised upon the employer\u2019s right to reimbursement from an employee\u2019s recovery of damages. This rule does not depend upon whether the employer chooses to exercise its rights. (See, e.g., Stryker, 74 Ill. 2d 507.) Thus, we conclude that the fact that no lien is established in favor of the employer under the Pension Code, unlike the Workers\u2019 Compensation Act, is a distinction without a difference; Ullman controls the outcome of this case.\nII\nFinally, Murphy argues that a latent ambiguity exists in the policy regarding how the worker\u2019s compensation setoff is to be applied. A latent ambiguity exists in an insurance contract \"where the language employed is clear and intelligible and suggests but a single meaning, but some extrinsic fact or extraneous evidence creates a necessity for interpretation or a choice among two or more possible meanings.\u201d (Hoglund, 148 Ill. 2d at 279.) Under Illinois law, any ambiguity in an insurance policy must be construed in favor of coverage for the insured. Hoglund, 148 Ill. 2d at 280.\nThe setoff reads as follows: \"[a]ny amount payable under this coverage shall be reduced by any amount *** payable to *** the insured *** under any worker\u2019s compensation *** or similar law.\u201d (Emphasis in original.) Murphy takes issue with the words \"amount payable under this coverage.\u201d Murphy concedes that under a literal interpretation of the policy, State Farm\u2019s liability is to be computed by subtracting the worker\u2019s compensation benefits from the amount of uninsured motorist coverage, $100,000. However, Murphy argues that if we take into account other language from the policy as well as Stewart\u2019s reasonable expectations, another interpretation is possible. Murphy argues that State Farm\u2019s liability could be computed by subtracting the worker\u2019s compensation benefits from Stewart\u2019s total loss, which greatly exceeds $100,000.\nMurphy argues that the language, \"[w]e will pay damages for bodily injury that an insured is entitled to collect from the owner or driver of an uninsured motor vehicle,\u201d supports his contention. However, when read in the context of the entire policy, we fail to see how this language aids Murphy\u2019s position. In light of the fact that Stewart purchased $100,000 of insurance, it is not reasonable to interpret the words \"amount payable\u201d to mean any amount greater that $100,000.\nMurphy also argues that the setoff provision is ambiguous when examined in light of Stewart\u2019s reasonable expectations. Murphy argues that because Stewart purchased more than the minimum required amount of uninsured motorist coverage ($15,000), he had a reasonable expectation of receiving more than the minimum coverage. Murphy points out that if the setoff is applied literally, he would receive the same amount of coverage regardless of whether he purchased $15,000 or $100,000 \u2014 nothing. He argues that it is reasonable to expect more for $100,000 of coverage than $15,000, especially since State Farm received more money from Stewart.\nMurphy\u2019s argument is not well taken. The fact that Stewart would receive the same amount of coverage under the facts of this case regardless of whether he purchased the $15,000 minimum or $100,000 can be attributed to how much his employer paid in worker\u2019s compensation benefits, and not how the setoff provision is applied. As the supreme court observed in Sulser, the insurer\u2019s liability under an uninsured motorist policy might range from 0% to 100% depending upon the amount of worker\u2019s compensation benefits paid by the employer. (See Sulser, 147 Ill. 2d at 557.) Here, Stewart\u2019s employer paid over $100,000. Thus, whether Stewart had coverage of $15,000 or $100,000, State Farm would owe nothing. However, if his employer had paid only $15,000 in benefits, Stewart would receive nothing from State Farm if he had $15,000 in coverage, and $85,000 from State Farm if he had $100,000 of coverage. Stewart was entitled to compensation of $100,000 for his injuries. However, he was not necessarily entitled to collect the total $100,000 from his insurer, but only that portion of the $100,000 which was not recovered from worker\u2019s compensation. (See Sulser, 147 Ill. 2d at 556.) The fact that Stewart may have expected a different result does not render the policy ambiguous.\nFor the foregoing reasons, the judgment of the trial court is affirmed.\nAffirmed.\nMURRAY, P.J., and McNULTY, J., concur.", "type": "majority", "author": "JUSTICE COUSINS" } ], "attorneys": [ "Alan C. Hoffman & Associates, of Chicago (Alan C. Hoffman and Linda C. Bell, of counsel), for appellant.", "Taylor, Miller, Sprowl, Hoffnagle & Merletti, of Chicago (Roger LeRoy, of counsel), for appellee." ], "corrections": "", "head_matter": "STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Plaintiff-Appellee, v. PATRICK T. MURPHY, Guardian of the Estate of Jessie Stewart, Incompetent, Defendant-Appellant.\nFirst District (5th Division)\nNo. 1\u201492\u20144096\nOpinion filed April 29, 1994.\nAlan C. Hoffman & Associates, of Chicago (Alan C. Hoffman and Linda C. Bell, of counsel), for appellant.\nTaylor, Miller, Sprowl, Hoffnagle & Merletti, of Chicago (Roger LeRoy, of counsel), for appellee." }, "file_name": "0100-01", "first_page_order": 118, "last_page_order": 125 }