Gillen v. State Farm Mutual Automobile Insurance Co., 215 Ill. 2d 381

Summary

The Illinois Supreme Court held that State Farm could not offset uninsured-motorist benefits by medical expenses paid by the City of Chicago under section 22-306 of the Illinois Pension Code and a corresponding municipal ordinance. The policy language referring to payments under workers’ compensation, disability benefits, or a similar law was not clear and specific enough to include those payments and, at minimum, was ambiguous. The court affirmed the appellate court’s judgment requiring State Farm to pay the full uninsured-motorist coverage amount.

Holdings

1. The setoff provision did not permit State Farm to deduct medical benefits paid pursuant to section 22-306 of the Illinois Pension Code and the implementing municipal ordinance from Gillen's uninsured-motorist benefits.
2. Ullman v. Wolverine Insurance Co. did not control the outcome because Ullman involved a setoff expressly authorized by the policy, whereas the State Farm policy did not expressly authorize a setoff for Pension Code benefits.
3. The circuit court erred by entering judgment on the pleadings for State Farm because State Farm was not entitled to reduce its uninsured-motorist liability by the City's medical payments.

Questions Presented

1. Whether the State Farm uninsured-motorist policy's setoff provision covering payments under any worker's compensation, disability benefits, or similar law permitted a deduction for medical benefits paid under section 22-306 of the Illinois Pension Code and the implementing Chicago ordinance.
2. Whether the setoff provision was sufficiently clear, definite, and specific to limit uninsured-motorist coverage for those municipal medical payments.
3. Whether the setoff violated public policy.

Disposition

affirmed