FIFTH DIVISION

	June 8, 2001

No. 1-00-1242

PHILIP ARMANDO,				)           Appeal from        

							)        the Circuit Court

		Plaintiff-Appellant,	)         of Cook County.

							)

	v.						)

							)         No. 99-CH-10024

STATE FARM MUTUAL AUTOMOBILE		)

INSURANCE COMPANY,				)            Honorable

							)        Robert V. Boharic,

		Defendant-Appellee.		)         Judge Presiding. 

	JUSTICE THEIS delivered the opinion of the court:

	Plaintiff, Philip Armando, brought a two-count declaratory

judgment action against defendant, State Farm Mutual Automobile

Insurance Company (State Farm), seeking a determination of his right

to uninsured motorist coverage under his State Farm policy.  State

Farm filed a counterclaim for declaratory relief and motion for

summary judgment arguing that under the "other insurance" provisions

of its policy it owed no coverage to plaintiff.  Thereafter, plaintiff

filed a cross-motion for summary judgment, arguing that the "other

insurance" clause violated the public policy of this Sstate as

expressed in section 143a of the Illinois Insurance Code (Code).  215

ILCS 5/143a (West 1998).  The trial court granted summary judgment on

the counterclaim and denied summary judgment on plaintiff's complaint, finding that plaintiff was not entitled to coverage, that the "other

insurance" provision was consistent with public policy, and that State

Farm did not act vexatiously or unreasonably in handling plaintiff's

claim.  For the following reasons, we affirm.

	The following facts are undisputed.  On May 22, 1997, while

plaintiff was operating a vehicle owned by Steven and Marie Woodman,

he was struck by an uninsured motorist and suffered personal injuries. 

The Woodmans' vehicle was insured under a policy issued by American

Family Insurance Company (American Family).  The policy provided for

uninsured motorist coverage with limits of $100,000 per person and

$300,000 per occurrence.  Plaintiff settled his accident claim against

American Family for the full $100,000 limits of uninsured motorist

coverage.  However, he was also the named insured under a policy

issued by State Farm and sought additional coverage for his injuries

under that policy.  The limits of liability for uninsured motorist

coverage under the State Farm policy were $100,000 per person and

$300,000 per accident.

     State Farm denied plaintiff's claim, citing an "other insurance"

clause in the policy which defeated coverage.  That clause provided

that, when plaintiff had other primary uninsured motorist coverage

under another insurance policy, its State Farm coverage applied as

excess insurance, but only in the amount by which the excess coverage

exceeded the primary coverage.  Thus, under the terms of the policy,

since plaintiff received $100,000 from American Family, State Farm

claimed it owed no additional coverage to plaintiff.

	On appeal, plaintiff contends that this restrictive excess clause is contrary to the public policy of the State of Illinois as expressed

in section 143a of the Code.  215 ILCS 5/143a (West 1998).  Section

143a provides in relevant part that every motor vehicle liability

insurance policy issued to an insured must provide coverage for bodily

injury caused by an uninsured motorist.  215 ILCS 5/143a (West 1998). 

Specifically, plaintiff argues that, where the insured is occupying a

nonowned vehicle to which another insurance policy applies, the "other

insurance" clause amounts to an exclusion of uninsured motorist

coverage which is void and unenforceable under Illinois law, citing

Illinois Farmers Insurance Co. v. Cisco, 178 Ill. 2d 386, 687 N.E.2d 807 (1997), in support.  Additionally, plaintiff argues that the

operation of the "other insurance" clause deprives him of the benefit

of his bargain, uninsured motorist coverage under his own policy for

which he paid a premium.

	The policy provision at issue provides as follows:

		"If There is Other Uninsured Motor Vehicle Coverage

***

	* * *

		3. 	If the insured sustains bodily injury while occupying a vehicle not owned or

leased by you, your spouse or any

relative, and:

			a.	such vehicle is described on the declarations page of

another policy providing

uninsured motor vehicle coverage, ***

			***

			this coverage applies:

			a.	as excess to any uninsured motor vehicle coverage which

applies to the vehicle or

driver as primary coverage, but

			b.	only in the amount by which it exceeds the primary coverage."

(Emphasis omitted.)

	The terms of an insurance policy are to be applied as written

unless those terms are in conflict with public policy.  Menke v. Country Mutual Insurance Co., 78 Ill. 2d 420, 423, 401 N.E.2d 539, 541 (1980).   While our supreme court has long ago found "other insurance"

clauses to be valid limitations on liability (Putnam v. New Amsterdam Casualty Co., 48 Ill. 2d 71, 83, 269 N.E.2d 97, 103 (1970)), it has more recently addressed the public policy concerns of section 143a

with respect to various "other insurance" clauses in Luechtefeld v. Allstate Insurance Co., 167 Ill. 2d 148, 656 N.E.2d 1058 (1995), and Cisco, 178 Ill. 2d 386, 687 N.E.2d 807.  We find these cases instructive.

	In Luechtefeld, the plaintiff was injured when an uninsured motorist struck his motorcycle.  He made a claim under the policy

which insured the motorcycle, and additionally sought coverage under a

policy issued to him by another insurer which covered his other

vehicles.  Although the latter policy provided for greater uninsured motorist coverage than the policy covering his motorcycle, it excluded

coverage for owned vehicles covered by another policy.  The plaintiff

argued that the exclusion was unenforceable, and that he was entitled

to coverage under both policies for which he paid a premium.  167 Ill.

2d at 149-50, 656 N.E.2d at 1059-1060.  

     The court held that the exclusion did not violate public policy

because the purpose of the statute was to place the policyholder in

substantially the same position he would occupy if the uninsured

motorist had the minimum liability insurance required under the Code. 

167 Ill. 2d at 152, 656 N.E.2d at 1061.  Where the insured selected

the policy limits that applied to the vehicle in which the injury

occurred, as long as the coverage under that policy equaled or

exceeded the statutory minimum required under the Code, the court

found no conflict between the exclusionary clause in the policy and

section 143a.  167 Ill. 2d at 152, 656 N.E.2d at 1061.

     In Cisco, the plaintiffs were injured in accidents with uninsured motorists while driving vehicles owned by their employers.  The

uninsured motorist coverage provided by the employers' insurance

policies was $20,000 per person and $40,000 per occurrence, the

minimum required under the Code at that time.  The plaintiffs' also

sought coverage under policies issued to them by their own insurers. 

Those policies provided coverage in the amounts of $100,000 per person

and $300,000 per occurrence.  However, the "other insurance" clause in

the plaintiffs' policies completely excluded uninsured motorist

coverage for a vehicle not owned by plaintiffs unless the owner of

that vehicle had no other applicable insurance.  Cisco, 178 Ill. 2d at 387-389, 687 N.E.2d at 808-09.  

     The court held that this exclusion violated public policy because

it attempted to condition coverage on the availability of similar

coverage on a nonowned vehicle rather than on the uninsured status of

the person causing the injury.  Additionally, unlike the plaintiff in

Luechtefeld, the plaintiffs in Cisco did not select the limits of liability on the nonowned vehicle which provided them with less

coverage than they had bargained for when purchasing their own

policies.  The court expressed that the insured should not be limited

to the uninsured motorist coverage choices made by a third party over

which the insured has no control.  178 Ill. 2d at 393, 687 N.E.2d at

811.

	Thus, based on the holdings in Luechtefeld and Cisco, public policy dictates (1) that the insured must be placed in substantially

the same position he would have occupied if the tortfeasor had been

minimally insured; and (2) that an insured who chooses to purchase

higher levels of uninsured motorist coverage is entitled to the

difference between his own coverage and the coverage afforded to him

by a nonowned vehicle.

     Applying these principles to the present case, we find that State

Farm's "other insurance" clause does not violate public policy. 

Unlike the exclusion in Cisco, the State Farm provision ensures that the insured is never deprived of uninsured motorist protection and

ensures that he will receive uninsured motorist coverage up to the

limits for which he paid.  Thus, his coverage selection is never

undermined.  If the uninsured motorist coverage on the nonowned vehicle were less than the amount of coverage plaintiff purchased

under his State Farm policy, State Farm would pay the difference up to

but not exceeding the applicable limits of the State Farm coverage.

	Moreover, plaintiff's proposal that the policies be "stacked" to

allow double compensation would violate public policy.  Plaintiff has

already recovered from the American Family policy the amount he would

have received had the tortfeasor been insured to the extent required

by statute and has recovered the amount for which he bargained.  If

the policies were "stacked," plaintiff would receive greater

compensation by virtue of the fact that the tortfeasor violated the

financial responsibility laws of Illinois.  See Putnam, 48 Ill. 2d at 86, 269 N.E.2d at 104 (addressing same public policy concerns in

relation to validity of similar "other insurance" clause prior to

enactment of financial responsibility law).

     While under State Farm's policy plaintiff does not receive the

$100,000 from State Farm, to whom he paid a premium, payment of a

premium does not always create a reasonable expectation that the

insured will receive the full amount of coverage from his insurer. 

Luechtefeld, 167 Ill. 2d at 158, 656 N.E.2d at 1063.  The Code specifically provides that where the insured has uninsured motorist

coverage under more than one policy the insurer may insert terms that

limit recovery to the highest limits in any applicable policy. 

Section 143a-2(5) provides:

			"Scope.  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 ***."    215 ILCS 5/143a-2(5)

(West 1998).

Nothing in the statute limits this application to policies issued by

the same insurer.  Darwish v. Nationwide Mutual Insurance Co., 246 Ill. App. 3d 903, 907, 617 N.E.2d 72, 75 (1993). Accordingly, under

the terms of the applicable insurance policies and Code provisions,

plaintiff received the full amount of uninsured motorist coverage to

which he was entitled.  We therefore find no violation of public

policy.  Furthermore, because there is no coverage under the State

Farm policy, we find that State Farm did not act vexatiously or

unreasonably in handling plaintiff's claim.  Martin v. Illinois Farmers Insurance, 318 Ill. App. 3d 751, 764, 742 N.E.2d 848, 858 (2000). 

	Accordingly, the judgment of the circuit court is affirmed.

	Affirmed.

	QUINN, P.J., and GREIMAN, J., concur.