Deanne Berrey was working for Curry Ice when she was injured in a car accident caused by Sheri Campbell who only had $100,000 in liability insurance coverage.
Berrey sued Campbell and also collected $103,224 in worker’s compensation benefits. In addition, Berrey claimed underinsured-motorist benefits under a $1 million policy that Travelers Indemnity Co. sold to Curry Ice.
Campbell’s insurer settled with Berrey for $100,000 but paid all of the policy proceeds to Curry Ice because of Curry’s worker’s compensation lien. When the arbitrators considered the underinsured motorist (UIM) claim, it decided that Berrey’s damages totaled $310,000. Travelers claimed that Section D.2.4 of its insurance policy permitted it to reduce the award ($310,000) to $210,000 because Berrey had already technically received $100,000 from Campbell’s insurance policy, which was paid directly to Curry Ice.
Section D.2.4 said: “No one will be entitled to receive duplicate payments for the same elements of ‘loss’ under this coverage form and any liability coverage form.”
Berrey argued that Section D.2.4 didn’t apply because she didn’t “receive” the $100,000 Campbell’s insurer paid directly to Curry Ice. The 7th Circuit Court of Appeals in Chicago affirmed summary judgment for Travelers.
“Awarding Berrey an additional $100,000 would leave her with $310,000 in pocket, plus the $103,224.02 she received in worker’s compensation benefits, for a total of over $413,000 in damages – an unmerited windfall that far exceeds the arbitral panel’s damages calculation. To permit such a double recovery would flout the stated purpose behind Illinois’ underinsured motorist coverage scheme.”
The Illinois Supreme Court has stated time and again that the underlying purpose of underinsured motorist coverage is to “place the insured in the same position he would have occupied if the tortfeasor had carried adequate insurance.” Phoenix Insurance Co. v. Rosen, 242 Ill.2d 48 (2011).
The court of appeals stated that UIM coverage is not intended to permit an injured employee to collect more than she would have been entitled to receive from the tortfeasor alone.
In this case, if Campbell had carried liability insurance in the amount of $310,000 (Berrey’s total damages) rather than $100,000, Campbell’s policy would have fully compensated Berrey for her loss. In that hypothetical, where $310,000 was the insurance payment, $103,224.02 would have been paid to Curry Ice to satisfy its worker’s compensation lien, and the remainder ($206,775.98) would have gone to Berrey.
Accordingly, Berrey is already in a better position than she would have occupied had Campbell carried adequate liability insurance. To hold otherwise would have allowed Berrey to receive a windfall of $100,000, which the court would not allow. The summary judgment in favor of Travelers was affirmed.
Berrey v. Travelers Indemnity Co., No. 13-3869 (7th Cir. U.S. Court of Appeals, Oct. 22, 2014).
Kreisman Law Offices has been handling automobile accident cases, intersection crash cases, automotive defect cases, nursing home abuse cases, negligence cases and medical malpractice cases for individuals and families who have been harmed, injured or died as a result of the carelessness or negligence of another for more than 38 years in and around Chicago, Cook County and its surrounding areas, including Burbank, Bedford Park, Chicago Ridge, Oak Forest, St. Charles, Palatine, Lemont, Lockport, Norwood Park, Oak Park, Park Ridge, River Forest, Cicero, Chicago (Old Town Triangle, Little Italy, Lincoln Park, Austin, Back of the Yards, Belmont Gardens, Beverly, Bridgeport, Canaryville, Bucktown, DePaul University area, Edgebrook, Edgewater, Englewood), Maywood and Lansing, Ill.
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