{ "id": 910180, "name": "NORTH AMERICAN SPECIALTY INSURANCE COMPANY, a/s/o R.O.D. Leasing, Inc., d/b/a Dollar Rent-A-Car, Plaintiff-Appellee, v. LIBERTY MUTUAL INSURANCE COMPANY, Defendant-Appellant", "name_abbreviation": "North American Specialty Insurance v. Liberty Mutual Insurance", "decision_date": "1998-06-19", "docket_number": "No. 1\u201497\u20143887", "first_page": "595", "last_page": "599", "citations": [ { "type": "official", "cite": "297 Ill. App. 3d 595" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "677 N.E.2d 1321", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1997, "pin_cites": [ { "parenthetical": "Griffin" } ], "opinion_index": 0 }, { "cite": "287 Ill. App. 3d 61", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 520920 ], "weight": 2, "year": 1997, "pin_cites": [ { "parenthetical": "Griffin" }, { "page": "75-76" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/287/0061-01" ] }, { "cite": "285 N.E.2d 185", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1972, "opinion_index": 0 }, { "cite": "5 Ill. App. 3d 847", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2526132 ], "year": 1972, "pin_cites": [ { "page": "853" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/5/0847-01" ] }, { "cite": "542 N.E.2d 954", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1989, "opinion_index": 0 }, { "cite": "186 Ill. App. 3d 891", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2657680 ], "year": 1989, "pin_cites": [ { "page": "898" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/186/0891-01" ] }, { "cite": "228 N.E.2d 141", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1967, "opinion_index": 0 }, { "cite": "84 Ill. App. 2d 200", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 2554043 ], "year": 1967, "pin_cites": [ { "page": "207" } ], "opinion_index": 0, "case_paths": [ "/ill-app-2d/84/0200-01" ] }, { "cite": "676 N.E.2d 278", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1997, "opinion_index": 0 }, { "cite": "286 Ill. App. 3d 417", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 1544441 ], "year": 1997, "pin_cites": [ { "page": "419" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/286/0417-01" ] }, { "cite": "681 N.E.2d 552", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1997, "opinion_index": 0 }, { "cite": "288 Ill. App. 3d 743", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 1596976 ], "year": 1997, "pin_cites": [ { "page": "751" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/288/0743-01" ] } ], "analysis": { "cardinality": 462, "char_count": 8814, "ocr_confidence": 0.786, "pagerank": { "raw": 6.018710036547874e-08, "percentile": 0.37320341842323623 }, "sha256": "e5aea7f16d7c5973265500b5fe865fffb4857682cf62c444818271e64a5956c0", "simhash": "1:521765d3061aa2fd", "word_count": 1340 }, "last_updated": "2023-07-14T14:41:46.412422+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "NORTH AMERICAN SPECIALTY INSURANCE COMPANY, a/s/o R.O.D. Leasing, Inc., d/b/a Dollar Rent-A-Car, Plaintiff-Appellee, v. LIBERTY MUTUAL INSURANCE COMPANY, Defendant-Appellant." ], "opinions": [ { "text": "JUSTICE HARTMAN\ndelivered the opinion of the court:\nPlaintiff, North American Specialty Insurance Company (North American), filed suit for declaratory judgment against defendant, Liberty Mutual Insurance Company (Liberty), seeking indemnification or, in the alternative, contribution from Liberty for a settlement made pursuant to an insurance policy it had issued. On cross-motions for summary judgment, the circuit court entered judgment for North American in the amount of $29,738.10, apportioning liability between the insurers in proportion to their policy limits. Liberty appeals, contending that the court erred in using the \u201cpolicy limits\u201d method of apportioning loss, instead of the \u201cequal shares\u201d method, to calculate Liberty\u2019s contribution.\nOn July 10, 1994, Charlotte Coble rented a car from R.O.D. Leasing, Inc., d/b/a Dollar Rent-a-Car (Dollar), North American\u2019s policyholder, for use while on a business trip for her employer, Modern Business Systems, Inc. (MBS), Liberty\u2019s policyholder. Pursuant to MBS\u2019s policy with Liberty, Coble was an \u201cadditional insured,\u201d covered up to $2 million for a single accident. Coble also was covered by Dollar\u2019s policy with North American in the amount of $50,000 for a single accident.\nOn July 11, 1994, Coble was involved in a collision with another vehicle, causing damage to the other vehicle. At the time, both the North American and the Liberty policies were in effect and contained the same coverage form, entitled \u201cBusiness Auto Coverage Form.\u201d Both forms contained an \u201cother insurance\u201d clause, which provided that the coverage was primary for any automobile the policyholder owned and excess for any nonowned vehicle. Both \u201cother insurance\u201d clauses also provided that, wheii sharing losses with other policies, the \u201cpolicy limits\u201d method was to be used:\n\u201cWhen this Coverage Form and any other Coverage Form or policy covers on the same basis, either excess or primary, we will pay only our share. Our share is the proportion that the Limit of Insurance of our Coverage Form bears to the total of the limits of all the Coverage Forms and policies covering on the same basis.\u201d\nThe policies were endorsed, however, with amendatory provisions that deleted the \u201cother insurance\u201d clauses in their entireties, including the methods of sharing provisions, replacing them with language designating both policies as \u201cexcess\u201d over other insurance policies. Neither policy, however, readopted the \u201cpolicy limits\u201d method of sharing; rather, each was silent as to the method of sharing.\nAfter paying the owner of the vehicle struck by Coble $30,481.55 for his losses, North American filed suit against Liberty, seeking indemnification from Liberty or, in the alternative, contribution from Liberty in the amount of its proportionate share. In its motion for summary judgment, North American sought contribution from Liberty, using the \u201cpolicy limits\u201d method, where each insurer contributes to the loss, up to the amount of its limit of liability, based on the ratio of its policy limit to the aggregate of available coverage. In its cross-motion, Liberty sought to contribute using the \u201cequal shares\u201d method, where each insurer contributes the same amount until the limit of liability of one is exhausted.\nFinding that the \u201cbetter\u201d method of calculating the manner of sharing the loss between the two insurance providers to be the \u201cpolicy limits\u201d method, the circuit court granted North American\u2019s motion for summary judgment. Liberty appeals, contending that the court erred, as a matter of law, in using the \u201cpolicy limits\u201d method to apportion liability.\nReview of the circuit court\u2019s disposition under the circumstances presented here is de novo. Mobil Oil Corp. v. Maryland Casualty Co., 288 Ill. App. 3d 743, 751, 681 N.E.2d 552 (1997).\nTwo insurers, both having mutually repugnant \u201cother insurance\u201d clauses establishing \u201cexcess\u201d coverage, must divide the liability equally where neither policy specifies the method of apportionment. United States Fidelity & Guaranty Co. v. Alliance Syndicate, Inc., 286 Ill. App. 3d 417, 419, 676 N.E.2d 278 (1997). \u201c[E]quity requires that both companies be on equal footing requiring an equal apportionment of the settlement which is within the limits of the respective policies.\u201d Continental Casualty Co. v. Travelers Insurance Co., 84 Ill. App. 2d 200, 207, 228 N.E.2d 141 (1967). A loss covered solely by two excess carriers forces \u201cthe insurers to divide the liability equally between themselves.\u201d Continental National America Insurance Co. v. Aetna Life & Casualty Co., 186 Ill. App. 3d 891, 898, 542 N.E.2d 954 (1989).\nIn the instant case, although both North American\u2019s and Liberty\u2019s policies initially specified the use of the \u201cpolicy limits\u201d method, amendatory endorsements specifically deleted those provisions. Neither insurer chose to readopt the \u201cpolicy limits\u201d method; instead, both policies remained silent as to the method of apportionment. Although North American urges application of the deleted method, to apply that method now contravenes the purpose of the endorsements. See Manchester Insurance & Indemnity Co. v. Universal Underwriters Insurance Co., 5 Ill. App. 3d 847, 853, 285 N.E.2d 185 (1972).\nNotwithstanding its failure to readopt the deleted apportionment language, North American maintains that the \u201cpolicy limits\u201d method is the more equitable in the instant case and urges its use, relying upon Universal Underwriters Insurance Group v. Griffin, 287 Ill. App. 3d 61, 677 N.E.2d 1321 (1997) (Griffin). There, however, both insurance carriers agreed to share the loss in proportion to their policy limits; moreover, language in one of the policies specified that the insurer would be liable for a \u201cproportionate share with other collectible liability insurance.\u201d Griffin, 287 Ill. App. 3d at 75-76. The Griffin court, in using the \u201cpolicy limits\u201d method to calculate liability, therefore enforced a valid, uncontradicted provision in one insurance policy and also implemented the parties\u2019 express intentions.\nUnlike the insurance carriers in Griffin, in the case sub judice, North American and Liberty do not agree as to the method of apportioning loss. Moreover, neither insurance policy specifies the method to be used in apportioning loss. Significantly, both policies deliberately deleted express language specifying the use of the \u201cpolicy limits\u201d method.\nNotwithstanding the distinguishable facts of Griffin, North American relies upon the reasoning of the Griffin court. Pointing to language in the Griffin opinion suggesting that the insurance carrier which receives the higher premium for the greater coverage should bear the \"majority of the loss, North American argues that the \u201cpolicy limits\u201d method is more equitable because \u201cit is reasonable to assume that Liberty collected higher premiums for its higher liability limit.\u201d\nNorth American\u2019s presumption and reasoning, however, ignore the fact that North American contracted to cover a loss up to the limits of the policy, or $50,000. Until that point is reached, application of the \u201cpolicy limits\u201d method amounts to a subsidy from the high-coverage to the low-coverage carrier. The insurer providing higher coverage has undertaken to protect an insured against accidents incurring high losses; when high losses, above the limit of the smaller insurer, result, the larger insurer will pay a greater portion. In cases of low losses, however, the larger insurer is in an inequitable position compared to an insurer providing lesser coverage if the \u201cpolicy limits\u201d apportionment method is used. The Griffin court did not consider this facet of the issue.\nNorth American justifies what would amount to a subsidy by pointing to the theoretically higher premiums received by Liberty. Even if the premiums charged by Liberty were greater, however, this alone does not justify application of the \u201cpolicy limits\u201d method. North American contracted to provide $50,000 in coverage and charged a premium commensurate with that risk. Until the coverage amount is surpassed, North American is liable for an equal share of the loss.\nFor the forgoing reasons, the judgment of the circuit court is reversed and the cause is remanded with instructions to enter summary judgment for Liberty, apportioning loss by utilizing the \u201cequal shares\u201d method as the predicate.\nReversed and remanded with instructions.\nHOFFMAN, EJ, and HOURIHANE, J, concur.", "type": "majority", "author": "JUSTICE HARTMAN" } ], "attorneys": [ "Meachum & Hittle, of Chicago (Joseph P. Postel, of counsel), for appellant.", "Leahy, Eisenberg & Frankel, of Chicago (J. Scott Humphrey, of counsel), for appellee." ], "corrections": "", "head_matter": "NORTH AMERICAN SPECIALTY INSURANCE COMPANY, a/s/o R.O.D. Leasing, Inc., d/b/a Dollar Rent-A-Car, Plaintiff-Appellee, v. LIBERTY MUTUAL INSURANCE COMPANY, Defendant-Appellant.\nFirst District (5th Division)\nNo. 1\u201497\u20143887\nOpinion filed June 19, 1998.\nMeachum & Hittle, of Chicago (Joseph P. Postel, of counsel), for appellant.\nLeahy, Eisenberg & Frankel, of Chicago (J. Scott Humphrey, of counsel), for appellee." }, "file_name": "0595-01", "first_page_order": 613, "last_page_order": 617 }