Court Opinion

ID: 3146211
Source: CourtListenerOpinion
Date Created: 2015-10-22 18:14:16.489729+00
Date Added: 2024-06-11T12:08:20.490968
License: Public Domain

FIRST DIVISION
                                                    June 19, 2006

No. 1-05-0025

THOMAS W. ROTH,                        )     Appeal from the
                                       )     Circuit Court of
           Plaintiff-Appellant,        )     Cook County.
                                       )
                      v.               )
                                       )
ILLINOIS INSURANCE GUARANTY FUND,      )     Honorable
                                       )     Dorothy Kirie Kinnaird,
           Defendant-Appellee.         )     Judge Presiding.

     JUSTICE BURKE delivered the opinion of the court:

     Plaintiff Thomas Roth appeals from an order of the circuit

court granting summary judgment in favor of defendant Illinois

Insurance Guaranty Fund (the Fund) on plaintiff's complaint for

declaratory judgment against the Fund, arising from the Fund's

denial of plaintiff's claim for payment of the policy limits of an

insurance policy issued to the driver of a vehicle who injured

plaintiff by an insurer that subsequently became insolvent.            On

appeal, plaintiff contends that the trial court erred in granting

the Fund summary judgment because: (1) payments to him under a

medical   insurance   plan   or   policy   and/or   payments   under   his

disability plan or policy should not, pursuant to section 546(a) of

the Illinois Insurance Guaranty Fund Act (Act) (215 ILCS 5/546(a)

(West 2004)), reduce the obligation of the Fund under section 537.2

of the Act (215 ILCS 5/537.2 (West 2004)); and (2) the "covered
1-05-0025

claim" definition in section 534.3(b)(v) of the Act (215 ILCS

5/534.3(b)(v) (West 2004)) does not exclude negotiated lien claims

of plaintiff's medical insurers against the Fund.         For the reasons

set forth below, we affirm.

                              STATEMENT OF FACTS

     On June 7, 1998, plaintiff was injured when he was struck by a

car being driven by Jamilla Bryant at or near 4025 West Marquette

Road in Chicago, Illinois.        Bryant was insured under an automobile

liability insurance policy issued by Valor Insurance (Valor), with

a liability limit of $20,000.        Plaintiff filed a complaint against

Bryant and, in November 2001, settled the case for Valor's policy

limits of $20,000.     Plaintiff was also insured by HMO Illinois and

Chicago Partners, Inc./Meyer Medical Group (plaintiff's medical

insurers), who ultimately paid plaintiff $128,067.82 in medical

benefits,     and   Liberty    Mutual   Insurance   Company   (plaintiff's

disability insurer), who paid him $7,259.02 in long-term disability

benefits, for his June 7 injuries.

     Prior to plaintiff receiving the $20,000 settlement funds,

Valor became insolvent and an order of liquidation was entered

against it.    Thereafter, plaintiff submitted a claim to the Fund, a

nonprofit entity created by article 34 of the Illinois Insurance

Code (Insurance Code) (215 ILCS 5/535 (West 2004)) for the $20,000

limits of Bryant's policy with Valor.        The Fund denied plaintiff's

claim pursuant to section 546(a) of the Act, maintaining that

plaintiff was required to set off any amount received from his

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medical and disability insurers from his $20,000 claim against the

Fund.    On January 26, 2004, plaintiff filed a complaint against the

Fund, seeking a declaration that the Fund violated section 537.4 of

the Act by refusing to pay plaintiff's claim equal to Valor's

applicable policy limits of $20,000.

        The   Fund    filed     an   answer       to    plaintiff's     complaint.       As

affirmative defenses, the Fund alleged that: (1) pursuant to

section 546(a) of the Act, the Fund's obligation is reduced by any

amount recovered or recoverable from an "other insurer" and, since

plaintiff had recovered in excess of the $20,000 policy limits of

the Valor policy, the amount recoverable from the Fund was zero;

and (2) pursuant to section 534.3 of the Act, which pertains to

what    is    and    is   not   a    "covered          claim,"   "plaintiff's      medical

insurer's [sic] claim for reimbursement of those medical insurance

benefits, by way of subrogation or otherwise, is not included

within the definition of covered claims payable by the [Fund]."

        In reply to the Fund's affirmative defenses, plaintiff denied

that he had " 'recovered' in excess of $20,000 from said insurers

within the meaning of [section 546(a) of the Act]" or "that the

obligation of the [Fund] is reduced by any sums paid by Plaintiff's

medical insurance carrier or plan."                     Plaintiff further stated that

his     "insurers     and     medical    plans          are   limited    to    $6,917.35"

(representing the negotiated liens of his medical insurers); denied

"that     said      insurers/medical          plans       have    claims      by   way   of

subrogation"; and denied that section 534.3 is applicable to the

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purported reimbursement claims of his medical insurers.

     The Fund filed a motion for summary judgment on September 27,

2004.   In its motion, the Fund argued that, pursuant to section

546(a) of the Act, it was "entitled to set-off the $128,067.82 in

medical insurance payments made to or on behalf of the plaintiff by

[plaintiff's] two solvent medical insurers *** and the $7,259.01 in

disability payments made to plaintiff by [his] solvent disability

insurer" because they were in excess of Valor's $20,000 policy

limits and because plaintiff's claim arose from the same injuries

as his claim against the Fund.       The Fund also made the same

subrogation/lien argument as to the nonapplicability of section

534.3(b)(v) of the Act.

     On October 26, 2004, plaintiff filed a cross-motion for

summary judgment and response to the Fund's motion for summary

judgment, arguing that, while section 546(a) provides that the

Fund's obligation is to be reduced by the amount recovered or

recoverable under other insurance policies, he did not receive any

recovery within the meaning of this section.     Plaintiff defined

"recovery" as being obtained by a judicial action or proceeding.

Plaintiff also asserted that the medical expenses and disability

benefits he had received were "not the kind of payments which have

historically been interpreted as offsets to claims against the

Guaranty Fund."   Plaintiff also again argued that the liens of his

two medical insurers were not excluded by the "covered claim"

definition of section 534.3(b)(v), and, with respect to Liberty's

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payment of $7,259.01 for long-term disability, Liberty would not be

entitled    to   reimbursement   from    plaintiff's   settlement   and,

therefore, the Fund would not be entitled to a setoff of that

amount under section 534.3(b)(v).       Plaintiff concluded that he was

entitled to the same benefit that he would have received under the

negotiated $20,000 settlement had Valor not become insolvent.

     On November 16, 2004, the Fund filed its reply to plaintiff's

response to its motion for summary judgment and to plaintiff's

cross-motion for summary judgment, making arguments similar to

those in its motion for summary judgment.      The Fund further argued

that plaintiff's assertion that the other insurance benefits paid

to plaintiff did not constitute "recovered" insurance amounts under

section 546(a) was "senseless," since that section contains no

requirement that the other insurance must have been recovered in a

judicial proceeding.     The Fund also argued that the legislature

amended section 546(a) in 1997 "to expressly cover all other

insurance recoveries 'arising from the same facts, injury, or loss

that gave rise to the covered claim against the Fund.' "      According

to the Fund, the addition of language in section 546(a) that

stated, " 'whether or not such other insurance policy was written

by a member company,' " made it clear that medical insurance

payments were required to be set off.      In support thereof, the Fund

relied on MacDougall v. Hartford Insurance Group, No. 197637, (Va.

Cir. Ct. February 20, 2003), as an analagous case to the facts of

the case at bar with a statutory provision similar to Illinois'

                                   5
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section   546(a),   in     which   the    Virginia    court   agreed     with   the

defendant    Virginia      Property      and    Casualty    Insurance    Guaranty

Association "that health insurance benefits actually paid are an

offset    from   covered    claims."          MacDougall,   slip   op.   at     7-8.

Accordingly, the Fund argued, since section 546(a) "expressly

applies to the insured's recovery of a claim under any other

insurance policy as long as that claim 'arises from the same facts,

injury or loss that gave rise to the covered claim against the

Fund,' " and plaintiff's recovery of $128,067.82 from his medical

insurers and $7,259.01 from his disability insurer "were undeniably

claims arising from 'the same injury' that gave rise to plaintiff's

covered claim against the Fund, the Fund's $20,000 obligation must

be reduced by those other insurance payments."

     In plaintiff's reply in support of his cross-motion for

summary judgment, plaintiff argued that the Fund's interpretation

of what constituted "other insurance" went against "the statutory

intent of placing the injured party in the same position as he

would have been had the tortfeasor's insurer remained solvent."

Plaintiff also maintained that the Virginia court's construction of

a statute similar to Illinois' section 546(a) was not binding on

Illinois courts.    In conclusion, plaintiff requested that the trial

court declare that the Fund was not entitled to set off the

$128,067.82 paid to him by his medical insurers and $7,259.02

received by him as disability benefits and that the Fund was

obligated to pay plaintiff the $20,000 limits of Bryant's Valor

                                          6
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policy.     In the alternative, plaintiff requested that the trial

court declare that the Fund was obligated to pay plaintiff the

$20,000 limits of Bryant's Valor policy, less the negotiated liens

of plaintiff's medical insurers, in the amount of $6,917.35, and

declare the liens null and void as subrogated interests against the

Fund.

     On November 30, 2004, the trial court held a hearing on the

parties' motions.    The parties presented similar arguments to those

contained in their pleadings.    The court granted the Fund's motion

for summary judgment and denied plaintiff's cross-motion, stating

that no genuine issue of material fact existed and that the Fund

"is entitled to set-off the $128,067.82 in medical insurance paid

by HMO Illinois and Chicago Partners/Meyer Medical Group to or on

behalf of plaintiff, and therefore the defendant Fund has no

obligation to pay plaintiff the $20,000 limit of the policy of the

insolvent insurer, Valor Insurance Company."    This appeal followed.

                               ANALYSIS

     This court reviews the granting of a summary judgment motion

de novo.     Mack v. Ford Motor Co., 283 Ill. App. 3d 52, 56, 669
N.E.2d 608 (1996).    "Summary judgment is appropriate when there is

no genuine issue of material fact and the moving party's right to

judgment is clear and free from doubt."    Espinoza v. Elgin, Joliet

& Eastern Ry. Co., 165 Ill. 2d 107, 113, 649 N.E.2d 1323 (1995).

The granting of summary judgment is a drastic method of disposing

of a case and should not be employed unless the right of the moving

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party is free from doubt.      Murphy v. Urso, 88 Ill. 2d 444, 464, 430
N.E.2d 1079 (1981).

       On appeal, plaintiff contends that payments under a medical

insurance plan or policy and/or payments under a disability plan or

policy should not, pursuant to section 546(a) of the Act (215 ILCS

5/546(a) (West 2004)), reduce the Fund's obligation under section

537.2 of the Act (215 ILCS 5/537.2 (West 2004)).                     Plaintiff

maintains that the Act's purpose is to place a claimant in the same

position that he would have occupied if the defendant's liability

insurer had remained solvent.               Plaintiff further states that

section 546, "formerly known as the 'Non-Duplication of Recovery'

section," requires only that a claimant first exhaust any available

coverage applicable to the "same claim," e.g., coverage under a

liability policy issued by a solvent insurer where the policy

issued by an insolvent insurer was for liability coverage, rather

than a solvent health insurer and an insolvent automobile liability

insurer, as here.      Plaintiff maintains that if health insurance

benefits were determined to reduce the Fund's obligation, the

effect would be to penalize "the proverbial ant and reward the

grasshopper," as would, hypothetically, setoffs for Medicare and

Medicaid, medical benefits under a company funded medical plan,

disability insurance payments, and long-term disability benefits,

which reduce a claimant's retirement benefits.          Plaintiff maintains

that   such   a   result   would   be   harsh   and   unfair   and   that   the

legislature could not have intended same.

                                        8
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     Plaintiff       lastly     argues    that    further    evidence     of   the

legislature's intention regarding the setoff provision of section

546 is the fact that the section speaks of amounts "recovered or

recoverable" under other insurance.              Plaintiff interprets this to

mean such amounts be recovered or recoverable as a result of

judicial action or by cause of law.             According to plaintiff, if the

legislature had intended otherwise, it could have included medical

or disability benefits under section 546 of the Act as a reduction,

as well as that the Fund's obligation be reduced by the amount

"paid or payable" under such other insurance.

     The Fund counters that the trial court applied section 546(a)

of the Act exactly as the language and intent of the statute

required and that the "other insurance" setoff is not harsh or

unfair   to    persons   who    purchase      medical   insurance.       The   Fund

maintains that the Illinois legislature created the Fund to provide

a minimal amount of insurance from some source to claimants and

insureds      when   insurers    become       insolvent;    the   Fund   is    "not

insurance" and it does not undertake all the obligations of an

insolvent insurer for all purposes, nor is the Fund's liability on

a "covered claim" coextensive with the obligations of an insolvent

insurer's obligations to its insured under its policy.                   The Fund

further maintains the provisions of the Act were enacted to insure

that the Fund is a recovery of "last resort" by requiring that a

claimant seek to cover his loss first with funds available from

other insurers.      The Fund also maintains, contrary to plaintiff's

                                          9
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contention that the legislature's purpose was to place a claimant

in the same position that he would have occupied if his liability

insurer had remained solvent, that Illinois courts have repeatedly

recognized that the Fund and the Act "do not always make the

insured or the claimant whole or avoid a loss."

     The Fund further contends that the language of section 546(a)

of the Act makes clear that a claimant must exhaust all coverage

provided by any insurance company where the insurance claim arises

"from the same facts, injury or loss" that gave rise to the claim

against the Fund, and that the amount recovered or recoverable

therefrom must be set off from the Fund's obligation.          Accordingly,

the Fund argues that the trial court properly determined that the

payments made to plaintiff by his medical insurers in the amount of

$128,067.82 were a proper setoff from the Fund's liability to

plaintiff.

     The interpretation of a statute is reviewed de novo.             Kroke v.

City of Bloomington, 204 Ill. 2d 392, 395, 789 N.E.2d 1211 (2003).

The primary goal when construing a statute is to determine and give

effect   to   the   intent   of   the    legislature.      Illinois    Health

Maintenance Organization Guaranty Ass'n v. Shapu, 357 Ill. App. 3d
122, 149, 826 N.E.2d 1135 (2005).            The most reliable indicator of

the legislature's intent in enacting a particular law is the

language of the statute.      Seasons-4, Inc. v. Hertz Corp., 338 Ill.

App. 3d 565, 571, 788 N.E.2d 179 (2003).           Statutory language must

be given its plain and ordinary meaning, and when the language is

                                        10
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clear and unambiguous, we must apply the statute without resorting

to additional aids of statutory construction.         Seasons-4, Inc., 338
Ill. App. 3d at 571; Allen v. Lin, 356 Ill. App. 3d 405, 411, 826
N.E.2d 1064 (2005); Cargill v. Czelatdko, 353 Ill. App. 3d 654,

658, 818 N.E.2d 898 (2004).          In construing a statute, the reason

and necessity for the statute and the evils it was intended to

remedy may be considered.       Shapu, 357 Ill. App. 3d at 149; Allen,
356 Ill. App. 3d at 411.      When construing a provision of a statute,

no phrase or word is to be rendered meaningless or superfluous.

Compton v. Ubilluz, 351 Ill. App. 3d 223, 229, 811 N.E.2d 1225

(2004).   " 'Where statutes are enacted after judicial opinions are

published, it must be presumed that the legislature acted with

knowledge of the prevailing case law.' "        Cargill, 353 Ill. App. 3d

at 658, quoting People v. Hickman, 163 Ill. 2d 250, 262, 644 N.E.2d
1147 (1994).

       The Fund was established by the Insurance Code and created to

protect policyholders of insolvent insurers and third parties who

make    claims    under   policies    issued   by   insurers   that   become

insolvent.       IPF Recovery Co. v. Illinois Insurance Guaranty Fund,

356 Ill. App. 3d 658, 663, 826 N.E.2d 943 (2005).               The Fund's

members include all insurance companies authorized to transact

business in Illinois.       IPF Recovery Co., 356 Ill. App. 3d at 663.

All insurers transacting business in Illinois are required to

contribute to the Fund in direct proportion to their premium

income, and, since all insurers must contribute, " 'it is the

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philosophy of the Fund to have all potential claims against the

Fund's assets reduced by a solvent insurer, and not the Fund,

whenever possible.' " Harrell v. Reliable Insurance Co., 258 Ill.

App. 3d 728, 730, 631 N.E.2d 296 (1994), quoting Pierre v. Davis,

165 Ill. App. 3d 759, 760, 520 N.E.2d 743 (1987); Norberg v. Centex

Homes Corp., 247 Ill. App. 3d 267, 275, 616 N.E.2d 1342 (1993).

These contributions "are passed along to the insurance-buying

public in the form of higher premiums."           Norberg, 247 Ill. App. 3d

at 274.   The legislative intent in establishing the Fund as set out

in the Act was to create

            "a mechanism for the payment of covered claims

            under certain insurance policies, to avoid

            excessive delay in payment, to avoid financial

            loss to claimants or policyholders because of

            the entry of an Order of Liquidation against

            an insolvent company, and to provide a Fund to

            assess    the   cost   of   such   protection   among

            member    companies."            Illinois   Insurance

            Guaranty Fund v. Farmland Mutual Insurance

            Co., 274 Ill. App. 3d 671, 674, 653 N.E.2d 856

            (1995).

Under the the Act, the Fund is to be "a source of last resort" in

the event of the insolvency of an insurer.                  Farmland Mutual

Insurance Co., 274 Ill. App. 3d at 673;           Urban v. Loham, 227 Ill.

App. 3d 772, 776, 592 N.E.2d 292 (1992).

                                        12
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     The Fund's liability, however, is subject to the limitations

of the Act, which include, inter alia, that the claim must be a

"covered claim" (215 ILCS 5/534.3 (West 2004)), the liability of

the Fund is to be reduced by "other insurance" before a claimant or

insured can recover from the Fund (215 ILCS 5/546 (2004)), and the

Fund's liability on any claim shall not exceed $300,000, except as

to workers compensation claims or certain unearned premiums (215

ILCS 5/537.2 (West 2004)).         The Fund is entitled to set off the

full limits of a policy's coverage of an insolvent insurer even

though said limits were not recovered in a judicial proceeding, but

rather through a settlement.        Hasemann v. White, 177 Ill. 2d 414,

420-21, 686 N.E.2d 571 (1997).               Section 534.3 of the Act,

defining "covered claim," states:

                 "(a)   'Covered    claim'   means   an   unpaid

            claim for a loss arising out of and within the

            coverage of an insurance policy to which this

            Article applies and which is in force at the

            time of the occurrence giving rise to the

            unpaid claim, *** made by a person insured

            under such policy or by a person suffering

            injury or damage for which a person insured

            under such policy is legally liable ***[;]

                   (b) 'Covered claim' does not include:

                                     ***

                        (v) any claim for any amount due any

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                         reinsurer, insurer *** as subrogated

                         recoveries,                         reinsurance

                         recoverables,                   contribution,

                         indemnification or otherwise.                  No

                         such    claim    held     by    a   reinsurer,

                         insurer, *** may be asserted in any

                         legal       action      against      a    person

                         insured under a policy issued by an

                         insolvent company other than to the

                         extent such claim exceeds the Fund's

                         obligation limitations set forth in

                         Section 537.2 of this Code."                   215

                         ILCS 5/534.3(a), (b)(v) (West 2004).

Section 546(a), currently entitled "Other insurance," requires a

claimant to first exhaust all coverage provided by any other

insurance policy before he can recover from the Fund due to the

insolvency of an insurer.            215 ILCS 5/546(a) (West 2004).

     Prior to its amendment in 1997, section 546(a) of the Act was

referred to as the nonduplication of recovery provision, and

stated:

          "Any   insured        or    claimant    having      a   covered

          claim against the Fund shall be required first

          to exhaust his rights under any provision in

          any    other     insurance       policy       which     may   be

          applicable to the claim.               Any amount payable

                                                        14
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             on a covered claim under this Article shall be

             reduced by the amount of such recovery under

             such insurance policy."            (Emphasis added.)

             215 ILCS 5/546(a) (West 1994).

This section was interpreted in Bukema v. Yomac, Inc., 284 Ill.

App. 3d 790, 672 N.E.2d 755 (1996).                  Bukema involved a lawsuit

filed by the plaintiff against the defendant on the grounds of

negligence and liability under the Dram Shop Act.                The defendant

was the owner of a tavern where the plaintiff was injured by a

patron.    The defendant was insured under two insurance policies, a

general    liability      policy    issued     by    Travelers   Insurance    Co.

(Travelers), which excluded coverage for any liability incurred in

connection with the distribution of alcohol, and a separate dram

shop   policy    issued     by    State     Security    Insurance     Co.   (State

Security),      which    only     covered     liability     arising    from   the

distribution of alcoholic beverages.                Bukema, 284 Ill. App. 3d at

791.

       State Security subsequently became insolvent.              The plaintiff

settled its negligence claims with Travelers, the defendant's

solvent insurer.        The Fund, which assumed the obligation of the

dram shop insolvent insurer State Security, moved to dismiss the

plaintiff's dram shop claim based on section 546(a).                  Bukema, 284
Ill. App. 3d at 791-92.          The trial court granted the Fund's motion,

finding:     a "claim" meant "injury," and therefore section 546(a)

was applicable to the plaintiff's "claim"; the plaintiff had

                                                       15
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settled   his     negligence     claims        with      the    defendant's      solvent

liability insurer for less than the policy limits; and, because the

plaintiff was required to exhaust his rights under the liability

policy, which he failed to do, he was barred from pursuing his

action against the Fund.

     On appeal, the Bukema court reversed the trial court, finding

that because the Travelers policy explicitly excluded dram shop

liability from coverage, that policy was not a " 'policy which may

be applicable to the claim,' as would be required for the the non-

duplication of recovery provision to bar plaintiff's dram shop

claim against the Fund."             Bukema, 284 Ill. App. 3d at 793.

Specifically, the Bukema court stated:

            "[I]n    this    case,    plaintiff's              claim      with

            Travelers was that defendant failed to protect

            its   patrons    from    attack         by   others      in   the

            tavern, whereas his claim with the Fund is

            that defendant caused Miller [employed by the

            defendant] to become intoxicated and attack

            plaintiff.       There    is       no     'other     insurance

            policy      which       may        be        applicable         to

            [plaintiff's]       claim'     that       defendant        caused

            Miller     to   become    intoxicated              and   assault

            plaintiff.      The Travelers policy specifically

            excludes    such    a   claim      from      its     coverage."

            (Emphasis added.)        Bukema, 284 Ill. App. 3d at

                                          16
          1-05-0025

          793.

     Following the Bukema decision, in which the appellate court

had rejected the Fund's argument that the term "claim" should be

equated with the term "injury," section 546(a) was amended by

Public Act 90-499, section 91, effective August 19, 1997, and the

term "injury" was, inter alia, added.          Specifically, that section

was amended as follows:

                  "An insured or claimant shall be required

          first to exhaust all coverage provided by any

          other insurance policy, regardless of whether

          or not such other insurance policy was written

          by a member company, if the claim under such

          other    policy    arises   from   the     same     facts,

          injury, or loss that gave rise to the covered

          claim against the Fund.       The Fund's obligation

          under Section 537.2 shall be reduced by the

          amount recovered or recoverable, whichever is

          greater, under such other insurance policy.

          Where such other insurance policy provides

          uninsured or underinsured motorist coverage,

          the amount recoverable shall be deemed to be

          the full applicable limits of such coverage.

          To the extent that the Fund's obligation under

          Section 537.2 is reduced by application of

          this    Section,   the   liability    of      the   person

                                                   17
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               insured by the insolvent insurer's policy for

               the   claim    shall      be   reduced         in   the    same

               amount."    (Emphasis added.)        215 ILCS 5/546(a)

               (West 2004).

Black's Law Dictionary defines "claim" as "[t]he aggregate of

operative facts giving rise to a right enforceable by a court";

"[a] demand for money or property to which one asserts a right  (Black's Law Dictionary 240 (7th ed. 1999)) and "an

act that damages, harms, or hurts," "a demand for compensation,

benefits, or payment (as one made *** under any insurance policy

upon the happening of the contingency against which it is issued"

(Webster's Third New International Dictionary 414 (1993)).                         "Arise"

is defined as "[t]o originate; to stem (from)"; "[t]o result
                                                         th
(from)."       Black's Law Dictionary 102 (7                   ed. 1999).        "Fact" is

defined    as    "[s]omething       that      actually        exists."      Black's     Law

Dictionary 610 (7th ed. 1999).             "Injury" is defined as "an act that

damages, harms, or hurts"; a violation of another's rights for

which the law allows an action to recover damages or specific

property or both"; and "appl[ies] to an act or result involving an

impairment or destruction of *** health *** or loss of something of

value."    Webster's Third New International Dictionary 1164 (1993).

"Loss"    is    defined      as   "the   amount    of     an       insured's     financial

detriment due to the occurrence of a stipulated contingent event

(as *** injury, destruction, or damage) in such a manner as to

charge    the    insurer     with   a    liability       under      the   terms    of   the

                                                          18
1-05-0025

policy)."    Webster's   Third   New   International   Dictionary   1338

(1993).

     In the case at bar, there is no dispute that upon Bryant's

insurer, Valor, becoming insolvent after plaintiff had negotiated

the $20,000 settlement with Valor, plaintiff had a "covered claim"

against the Fund arising out of and within the coverage of Bryant's

automobile liability policy issued by Valor.     However, pursuant to

section 546(a) of the Act, plaintiff was required to exhaust all

coverage provided by any other insurance policy where the claim

under such other policy arose from the same facts, injury or loss

that gave rise to his claim against the Fund.           The main issue

before this court, therefore, is whether the health insurance

policy benefits received by plaintiff from his solvent medical

insurers fall within the meaning of "other insurance" as provided

in amended section 546(a).   As stated above, plaintiff's position

is that health insurance benefits do not, since a health insurance

"claim" is not the same type of "claim" as automobile liability

insurance.   The Fund's position is that health insurance benefits

do fall within the meaning of "other insurance" because plaintiff's

"claim" for same arose out of the same "injury" that was the basis

of his "claim" against the Fund for which he received the health

insurance benefits.

     The 1997 amendment of section 546(a) excised the phrase,

"applicable to the claim," regarding exhaustion of a claimant's

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rights under any provision in any other insurance policy, which

occurred after the Bukema decision, and added the words, regarding

any other insurance policy, (1) "regardless of whether or not such

other insurance policy was written by a member company," and (2)

"if the claim under such other policy arises from the same facts,

injury, or loss that gave rise to the covered claim against the

Fund."    We find it clear that the legislature, by excising the

language, "applicable to the claim," intended to broaden the scope

of the types of insurance that a claimant under the Act must

utilize in exhausting his rights from solvent insurers before

seeking recovery from the Fund and to limit the Fund's liability.

We believe the addition of the words "regardless of whether a

member    company"     was   intended   to   broaden    the      solvent   "other

insurance" provision to other insurers than only an insurer who

insures for the same kind of insurance as an insolvent insurer,

which was how the preamended section 546(a) had been interpreted in

Bukema.        We also believe that this comports with the legislative

intent to prevent the nonduplication of recoveries and to have

claimants exhaust their rights by recovering from solvent insurers,

rather than the Fund.         Moreover, there would have been no reason

for the legislature to amend section 546(a) if it had not intended

a   change     to   that   section;   otherwise,     the    additional     words,

"regardless of whether a member company" and "arises from the same

facts, injury or loss that gave rise to the covered claim," would

simply    be    superfluous    and    meaningless.         The   fact   that   the

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legislature   chose   not   to   specify   certain    types   of   insurance

companies were excepted, such as health insurance companies as

plaintiff argues, is, contrary to plaintiff's argument, further

indicative that health insurance companies, or other specific

types, are not to be excepted, especially since the amendment

occurred following the Bukema decision.       Section 546(a) simply does

not impose any such restriction.           In fact, the legislature's

addition of the words, "regardless of whether or not such insurance

policy was written by a member company," which health insurance

companies are not (215 ILCS 5/533(a) (West 2004)), supports our

conclusion.

     We therefore find that plaintiff's claim against the Fund to

recover the $20,000 negotiated settlement he would have received

from Valor was for the same "injury" he received as a result of the

 car accident, and that his claims under his medical insurance

policies, for which he received $128,067.82 in medical benefits,

arose from the same "injury."       In other words, plaintiff's injury

arose out of (originated/stemmed from) the same facts (physically

injured while a pedestrian by Bryant), injury (physical injury) or

loss (incurrence of medical bills for the same injury) that gave

rise to his $20,000 claim against the Fund.          Because plaintiff had

recovered more than the $20,000 already, requiring the Fund to pay

him an additional $20,000 would be a duplication of his recovery

for the same injury, and counter to the legislature's intention

that the Fund be a source of last resort and not an insurer of

                                    21
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other insurance companies.

     Since there are no cases by an Illinois reviewing court

addressing whether medical benefits received by a claimant, who

seeks to recover from the Fund due to the insolvency of an insurer,

 are to be set off from the Fund's obligation, we may look to other

jurisdictions.   See Pekin Insurance Co. v. Fidelity & Guaranty

Insurance Co., 357 Ill. App. 3d 891, 898, 830 N.E.2d 10 (2005).

     We find that MacDougall, a Virginia circuit court case in

which the legislative history of the Virginia statute is similar to

section 546(a) of our statute, supports our conclusion that health

insurance benefits are to be set off.   MacDougall involved a motor

vehicle accident in which a number of people were killed.       The

plaintiffs filed a motion for declaratory judgment against the

defendants, seeking to recover from the defendant Virginia Property

and Casualty Guaranty Association (the Guaranty Association), which

was named as a defendant as a result of the insolvency of two

insurance companies.   The Guaranty Association filed a counterclaim

for declaratory relief.   MacDougall, slip op. at 2.

     The MacDougall plaintiffs sought a declaration that, inter

alia, the Guaranty Association had no right to set off any amounts

paid by health insurers to "anyone" on the bases that the Virginia

Code (Va. Code Ann. '38.1-1600 et seq. (1986)) (the Virginia Code)

specifically excluded health insurers from its scope and was

limited to liability policy insurers of the same or similar type to

the insolvent insurer.    MacDougall, slip op at 3.    The Guaranty

                                 22
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Association sought a declaration, inter alia, that any of the

plaintiffs having a claim against an insurer under any provision in

an insurance policy, other than a policy of an insolvent insurer,

was required to first seek recovery under the policy covered by the

solvent insurer and any health insurance benefits received by the

plaintiffs for their treatment of injuries was to be set off from

the Guaranty Association's obligation.   MacDougall, slip op. at 4.

     Under the Virginia Code, like Illinois' Act, a "covered claim"

is defined as "[a]n unpaid claim *** submitted by a claimant, which

arises out of and is within the coverage and is subject to the

applicable limits of a policy covered by this chapter and issued by

an insurer who has been declared to be an insolvent insurer."

MacDougall, slip op. at 5.   The MacDougall plaintiffs argued that

covered claims could only be set off by recoveries on other covered

claims, i.e., "by payments received from insurers on a claim that

'arises out of and is within the coverage of a policy issued by an

insolvent insurer.' "   MacDougall, slip op. at 5.   The plaintiffs

maintained that "medpay" and "seat belt" claims, " ' although

occasioned by the same accident, [were] not the "covered claim"

that arises out of the occurrence and to which [one of the

insolvent insurer's] policies would have applied.' " MacDougall,

slip op. at 5.

     The Guaranty Association argued that, under section 38.1-

767(1) of the former Virginia Code (the exhaustion of remedies

provision and the predecessor statute to section 38.2-1610(A)),

                                23
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that it would not have been entitled to a setoff for medpay, seat

belt coverage or first party insurance, since the predecessor

statute provided:

            "Any person having a claim against an insurer

            under any provision in an insurance policy

            other than a policy of an insolvent insurer

            which   is   also   a   covered   claim,   shall   be

            required to exhaust first his right under such

            policy.    Any amount payable on a covered claim

            under this chapter shall be reduced by the

            amount of any recovery under such insurance

            policy."     (Emphasis in original.)    MacDougall,

            slip op. at 6.

The Guaranty Association pointed out, however, that the same was

not true based on the 1986 revision of the exhaustion of remedies

provision (revisions underlined and deletions in italics), which

provided:

            "Any person having a claim against an insurer

            under any provision in an insurance policy,

            other than a policy of an insolvent insurer

            which is also a covered claim under which the
            claim is also covered, shall be required to

            exhaust first his right first seek recovery

            under such the policy covered by the insurer
            which is not insolvent.        Any amount payable of

                                      24
          1-05-0025

          a covered claim under this chapter shall be

          reduced by the amount of any recovery under

          such the insurance policy."                     MacDougall, slip

          op. at 6.

The MacDougall court went on to clarify the revisions, stating

that,

          "[a]s presently enacted, the exhaustion of

          remedies provision requires the claimant to

          first seek recovery from a solvent insurer.

          Any        'amount      payable           [by     the        Guaranty

          Association]         on    a    covered         claim'       is   then

          reduced      by   the     claimant's            recovery      from    a

          solvent       insurer.              The    statute       does      not

          distinguish between claims that are 'within

          the    coverage'          provided         by     the    insolvent

          insurer and ancillary claims.                    In short, there

          is    no    longer    the       restriction           that   covered

          claims      are   offset        only      by    recoveries        from

          solvent       insurers         on     'covered         claims.'       "

          (Emphasis added.)              MacDougall, slip. op. at 6.

Accordingly,    the    court    agreed         with       the   Guaranty       Association,

concluding that the amount it was obligated to pay on the covered

claim should be reduced by any amounts that the claimants had

received under the medpay or seat belt provisions of any insurance

policies issued by their solvent insurers.                      MacDougall, slip op. at

                                                            25
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6.

     The MacDougall court then considered whether the Guaranty

Association's obligation should be reduced by health insurance

benefits paid to the plaintiffs.      The plaintiffs argued that the

Virginia Code did not apply to health or disability insurance;

rather, the Act applied only to property or casualty insurance

benefits payable from the same loss.

     In response, the Guaranty Association maintained that the

section of the Virginia Code relied on by the plaintiffs in support

of their argument only excluded health insurers from membership in

the Guaranty Association; it did not limit the broad reach of the

exhaustion of remedies provided in section 38.2-1610(A) of the

Viginia Code.   MacDougall, slip op. at 7.   The Guaranty Association

further argued that health insurance benefits are no different than

benefits paid pursuant to medpay or seat belt coverage for purposes

of the exhaustion of remedies provision of the Act, and that a

claimant therefore " 'must first seek recovery' from any insurance

from a solvent insurer."   (Emphasis in original.)   MacDougall, slip

op. at 7.

     The MagDougall court held that health insurance benefits

"actually paid" to the plaintiffs were to be set off from covered

claims made against the Guaranty Association.    MacDougall, slip op.

at 7-8.   In rendering its decision, the MacDougall court relied on

Bogle Development Co., Inc. v. Buie, 250 Va. 431, 463 S.E.2d 467

                                 26
1-05-0025

(1995).   In Buie, the plaintiff was injured on the job and received

workers' compensation benefits from his employer's subsequently

insolvent insurer, as well as some health insurance payments from

his solvent health insurer.         Buie, 250 Va. at 433.              The Guaranty

Association   paid    the     plaintiff       for   his   out-of-pocket       medical

expenses, but refused to reimburse him or his health insurer for

his medical bills that were paid by his health insurer.                      Buie, 250
Va. at 433.   The Buie court held that once the plaintiff had been

reimbursed for his out-of-pocket medical expenses, he "had no right

to seek compensation from the Guaranty Association for medical

bills covered by his health insurance."              Buie, 250 Va. at 434.         See

also   Sulkowski    v.   Pennsylvania         Property    &   Casualty      Insurance

Guaranty Ass'n, ___ Pa. ___, ___, 871 A.2d 227, 230-31 (2005)

(Pennsylvania      Guaranty     Association         was   entitled     to    set   off

disability    insurance       benefits    paid       to   a   victim    of    medical

malpractice, pursuant to a nonduplication of recovery provision,

where the setoff was for the        same loss, i.e., lost wages); Shepard

v. Washington Insurance Guaranty Ass'n, 120 Wash. App. 263, 268, 84
P.3d 940 (2004) (the insolvent liability carrier's coverage applied

to the same claims the plaintiff's underinsured motorist, personal

injury protection and medical insurance covered and, therefore, the

Guaranty Association was entitled to setoffs for these payments);

Strickler v. Desai, 571 Pa. 621, 656-57, 813 A.2d 650, ___ (2002)

(the   Guaranty      Association     was       entitled,       pursuant       to   the

nonduplication of recovery provision, to set off health insurer's

                                         27
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payment in a medical malpractice action).

     We find several similarities between Illinois' section 546(a)

of the Act and Virginia's section 38.2-1610(A) of its Code.        First,

prior to amendment of section 546(a) and the revision of section

38.1-767(1) of the Virginia Code, both had been interpreted as

allowing a setoff only of claims against the Fund or Guaranty

Association   on   recoveries   from   insolvent   insurers    providing

insurance policies for the same type of claims, e.g., claims made

pursuant to a liability policy issued by a solvent insurer with a

claim under a liability policy issued by an insolvent insurer.

Second, after amendment and revision of the predecessor statutes,

both statutes deleted and added language broadening the word

"claim."    With respect to section 546(a) of Illinois' Act, the

language, "applicable to the claim," was deleted, and the following

language was added:     "regardless of whether or not such other

insurance policy was written by a member company" and "if the claim

under such other policy arises from the same facts, injury or loss

that gave rise to the covered claim against the Fund."              With

respect to the Virginia statute, the language, "which is also a

covered claim," was deleted and, substituted therefor with the

language, "under which the claim is also covered," thereby deleting

any requirement that a claim against a solvent insurer had to be a

"covered claim" before it was required to be set off.         Third, both

statutes, while created to protect claimants or policyholders from

loss as a result of insolvent insurers, also clearly require the

                                  28
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exhaustion of rights from solvent insurers and a setoff, where

applicable,      from   the     liability       of   the     Fund    and   Guaranty

Association.

      We therefore find that the legislature never intended that the

Fund step into the shoes of an insolvent insurer and make a

claimant or policyholder "whole."             In light of the changes in both

statutes,   it    defies      common    sense    and   the    very    concepts   of

nonduplication of recovery and exhaustion of rights to state that

the   Illinois    and   Virginia       legislatures    intended      claimants   or

policyholders of insolvent insurance companies to receive a double

recovery for the same injury, i.e., first, recovery from a solvent

insurer for an injury covered by that insurer and, secondly, an

additional recovery from the Fund or Guaranty Association for the

policy limits on a policy issued by an insolvent insurer for

coverage arising from the same injury.               Additionally, plaintiff's

claim against the Fund arose out of his claim for his physical

injuries, for which his medical insurers paid him $128,067.82, and

the $20,000 settlement was for those same physical injuries.

Accordingly, we find that the trial court correctly determined that

no genuine issue of material fact existed, and that the Fund was

entitled to set off the health insurance benefits received by

plaintiff in the amount of $128,067.82 from plaintiff's claim

against the Fund for the $20,000 Valor policy limits, thereby

resulting in the Fund owing no amount to plaintiff.

      In light of our disposition above, it is unnecessary to

                                         29
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address the remaining issues raised by plaintiff.            We briefly note

only that, with respect to plaintiff's assertion that in order for

a setoff to apply to the Fund's obligation, the "other insurance"

benefits recovered by a plaintiff must have been in a judicial

proceeding, plaintiff has failed to cite to any applicable case law

supporting such a "rule."      See Obert v. Saville, 253 Ill. App. 3d
677, 682, 624 N.E.2d 928 (1993) ("Bare contentions in the absence

of argument or citation of authority do not merit consideration on

appeal and are deemed waived").           Moreover, in instances where a

claimant seeking recovery from the Fund has settled for less than

the policy limits issued by a subsequently insolvent insurer,

Illinois courts have held that the Fund is entitled to set off the

full amount of the policy limits that the claimant could have

recovered    from   the   policy.         With   respect    to   plaintiff's

hypotheticals about various unpaid future benefits, we find these

hypotheticals to be irrelevant, since this case involved only the

medical insurance benefits that were actually paid to plaintiff by

solvent health insurers in the amount of $128,067.82 for the same

injury involved in his claim against the Fund.             We similarly need

not address plaintiff's arguments concerning disability insurance,

the negotiated liens, or the covered claim exception in section

534.3(b)(v) of the Act, since plaintiff has failed to cite to any

authority in support of his "arguments" and, again, the Fund's

obligation   was    reduced   by   the    $128,067.82   actually    paid   to

plaintiff from his medical insurers.

                                     30
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                           CONCLUSION

     For the reasons stated, we affirm the judgment of the circuit

court of Cook County.

     Affirmed.

     GORDON and McBRIDE, JJ., concur.

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