Pahn v. State Farm Mutual Automobile Insurance

                                             Fourth Division
                                             August 7, 1997









No. 1-96-4352
                                        
YOUNG PAHN,                             )    APPEAL FROM THE 
                                        )    CIRCUIT COURT OF
     Plaintiff-Appellant,               )    COOK COUNTY.
                                        )
v.                                      )    
                                        )
STATE FARM MUTUAL AUTOMOBILE            )    HONORABLE
INSURANCE CO.,                          )    THOMAS DURKIN,
                                        )    JUDGE PRESIDING.
     Defendant-Appellee.                )


     PRESIDING JUSTICE WOLFSON delivered the opinion of the
court:
     The question we are asked to resolve is whether an insurance
company is entitled to enforce a provision of its policy which
prohibits recovery of underinsured motorist benefits (UIM) when
uninsured motorist benefits (UM) have been recovered for the same
accident and on the same policy by the same person.
     Plaintiff Young Pahn brought a declaratory judgment action
seeking a declaration that she was entitled to recover UIM
benefits in addition to the UM benefits she was awarded under a
policy of insurance issued by State Farm Mutual Automobile
Insurance Co. (SFM) to Pahn's husband.  The trial court granted
SFM's motion for summary judgment in its favor.  Pahn now brings
this appeal.  We affirm the trial court's judgment.
FACTS
     On March 27, 1994, Pahn was a passenger in a car driven by
her husband.  The car was struck by another automobile driven by
William Buss (Buss).  Pahn was injured in the accident.  Both
Buss and Pahn's husband were at fault.
     Buss had liability insurance with a limit of $20,000 per
person, the minimum liability insurance rate allowed by statute. 
625 ILCS 5/7-203 (West 1996).  This amount was paid to Pahn.
     The automobile Pahn's husband was driving was covered by a
SFM insurance policy purchased in his name.  This insurance
policy provided underinsured and uninsured motorist coverage with
limits of $100,000 per person/$300,000 per occurrence.
     Because an insured woman is legally entitled to recover from
her tortfeasor husband under an uninsured motorist policy
provision (see Hoglund v. State Farm Mutual Auto Insurance Co.,
148 Ill. 2d 272, 592 N.E.2d 1031 (1992); Allstate Insurance Co.
v. Elkins, 77 Ill. 2d 384, 396 N.E.2d 528 (1979)), SFM paid Pahn
$100,000 on her claim under the UM provision of her husband's
policy.
     In addition, however, to the UM benefits, Pahn claimed UIM
benefits because Buss' policy limit of $20,000 was less than the
UIM benefit limit in the SFM policy.  SFM denied the claim,
asserting that UIM coverage was unavailable pursuant to the terms
of the policy.  Specifically, SFM noted that section III,
entitled "UNINSURED MOTOR VEHICLE - COVERAGE U, UNINSURED MOTOR
VEHICLE - COVERAGE U1, AND UNDERINSURED MOTOR VEHICLE - COVERAGE
W" states:
     "THERE IS NO COVERAGE UNDER COVERAGE W IF THE UNINSURED
     MOTOR VEHICLE COVERAGE APPLIES TO THE ACCIDENT."
     Pahn filed a declaratory judgment action in the circuit
court to determine the limits of coverage under the SFM policy. 
SFM moved for summary judgment based on the above-quoted policy
exclusion.  Pahn moved for summary judgment, claiming that she
was entitled to UIM benefits because the provision was ambiguous
and against public policy.
     The trial court granted SFM summary judgment and Pahn
appeals.
OPINION
     On appeal, Pahn acknowledges the presence of the
exclusionary or "anti-stacking" provision in the policy of
insurance issued to her husband, but reasserts that the provision
is ambiguous, that it defeats the insured's reasonable
expectations, and that the provision is against public policy. 
None of these claims is persuasive. 
     An insurance policy should be enforced as written, unless
the policy provision is ambiguous or contravenes public policy. 
Gibbs v. Madison Mutual Insurance Co., 242 Ill. App. 3d 147, 610 N.E.2d 143 (1993).  If a provision is ambiguous, it must be
construed in favor of coverage for the insured.  Hoglund v. State
Farm Mutual Auto. Insurance Co., 148 Ill. 2d 272, 280, 592 N.E.2d 1031 (1992);  Menke v. Country Mutual Insurance Co., 78 Ill. 2d 420, 401 N.E.2d 539 (1980).  But, if it is not ambiguous, the
fact that the policy includes "anti-stacking" clauses is not per
se violative of public policy.  Menke, 78 Ill. 2d  at 425; now
codified in section 143a-2 of the Illinois Insurance Code.  215
ILCS 5/143a-2 (West 1996).
     When determining whether an ambiguity exists, the provision
must be read in its factual context.  Gibbs, 242 Ill. App. 3d at
152.  Ambiguities may be revealed in the terms used, in view of
the particular circumstances involved.  Bruder v. Country Mutual
Insurance Co., 156 Ill. 2d 179, 620 N.E.2d 355 (1993).
     In Monsalud v. State Farm Mutual Auto. Insurance Co., 210
Ill. App. 3d 102, 568 N.E.2d 969 (1991), a provision identical to
the provision at issue in this case was held to be ambiguous. 
However, the factual framework was different in Monsalud.
     In Monsalud, State Farm Mutual issued four separate
insurance policies to the insured, who was claiming both UM and
UIM benefits.  The insured claimed, and the court agreed, that
the anti-stacking clause served only to limit double recovery
under the same policy.  "Nothing in the policy *** expressly
preclude[d] coverage for both underinsured and uninsured motorist
coverage when the insured makes each claim under a different
policy issued by [SFM]."  (Emphasis added.)  Monsalud, 210 Ill.
App. 3d at 109.
     That is not the case here.  In this case, Pahn had only one
policy issued by SFM.  The factual circumstances of this case do
not give rise to an ambiguity.  The insurer is entitled to
enforcement of the unambiguous anti-stacking provision.  This is
what the parties to the insurance contract agreed to.  Double
recovery is not a reasonable expectation of the insured. 
Costello v. Illinois Farmers Insurance Co., 263 Ill. App. 3d
1052, 636 N.E.2d 710 (1993).
     Nor can it fairly be claimed that enforcement of the
exclusionary provision is against public policy.  The Illinois
Insurance Code expressly allows insurance companies to include
anti-stacking provisions in their policies.
     Section 143a-2(6) provides:
     "Nothing herein shall prohibit an insurer from setting
     forth policy terms and conditions which provide that if
     the insured has coverage available under this Section
     under more than one policy or provision of coverage,
     any recovery or benefits may be equal to, but may not
     exceed, the higher of the applicable limits of the
     respective coverage, and the limits of liability under
     this Section shall not be increased because of multiple
     motor vehicles covered under the same policy of
     insurance. 
                              ***
     Notwithstanding the provisions of this Section, an
     insurer shall not be prohibited from solely offering a
     combination of uninsured and underinsured motorist
     coverages where the limits of liability under each
     coverage is in the same amount."
          The legislature has specifically allowed for the
possibility that uninsured and underinsured motorist benefits be
combined and recovery limited to the higher of the two respective
coverages.  The exclusionary clause is not against public policy.
     "Nor do we override the clear result because separate
premiums have been paid" for the two types of coverage.  Hall v.
Burger, 277 Ill. App. 3d 757, 660 N.E.2d 1328 (1996).  The
"premium rule" does not apply when the contract provision is
unambiguous.  Grzeszczak v. Illinois Farmers Insurance Co., 168 Ill. 2d 216, 228, 659 N.E.2d 952 (1995).
     For the reasons stated above, the circuit court order
granting State Farm Mutual Automobile Insurance Company summary
judgment in its favor is hereby affirmed.
     AFFIRMED.
     McNAMARA and CERDA, JJ., concur.