Opinion
No. 99 C 1570
February 17, 2000
MEMORANDUM OPINION AND ORDER
Chris and Joni Acres, individually and as joint special administrators of Sheena Marie Acres' estate ("the Acres"), sue West American Insurance Company ("West American") The Acres seek a declaratory judgment stating that $300,000 per person of underinsured motorist coverage is available pursuant to an automobile policy they purchased from West American. The Acres claim they are entitled to stack underinsured motorist coverage benefits from three vehicles they insured under one policy. The Acres originally filed this claim in the Circuit Court of Cook County and West American removed the case to this court on March 9, 1999. On April 1, 1999, West American filed a counterclaim seeking declaratory judgment prohibiting the Acres from stacking the benefits and limiting liability under the policy to $100,000 per person. The Acres and West American filed cross motions for summary judgment pursuant to Fed.R.Civ.P. 56 and Local Rule 56.1 (formerly Rule 12).
BACKGROUND
All facts are undisputed unless otherwise noted. West American is a California corporation with its principal place of business in Indianapolis, Indiana and the Acres are residents of Crete, Illinois. The Acres purchased a motor vehicle insurance policy numbered DPW 03745987 from West American for the effective policy period of May 11, 1996 to August 11, 1996. The policy provided for automobile liability insurance and other coverages, including underinsured motorists coverage for the Acres family. In May 1996, Sheena Marie Acres, the Acres' daughter, was an insured person under the policy terms and conditions.
On May 26, 1996, Sheena Acres was struck and killed in a one car hit and run accident while walking down the street with friends. Two other girls were killed in the accident and another suffered serious injuries. Richard Devon was identified as the driver of the vehicle that struck the girls. He was convicted of four felony counts of failure to report an accident that involved personal injury or death. After completion of the criminal case, the Acres and the parents of the other girls filed civil claims of wrongful death against Devon. At the time of the accident, Devon was insured by Allstate Insurance Company. Devon's Allstate policy provided liability coverage in the amount of $100,000 per person and $300,000 per occurrence. The Acres and the other parents agreed to settle their claims against Devon with Allstate for the extent of the insurance coverage available to Devon under his policy. Under the terms of the settlement, Allstate paid the Acres $68,733.33 for the wrongful death of Sheena Acres. The Acres notified West American of the proposed settlement with Allstate pursuant to their policy and the Illinois Underinsured Motorist Statute, 215 ILCS 5/143a-2(6) West American did not object to the terms.
The Acres insured three vehicles under the policy with West American. The limit of liability for underinsured motorist's bodily injury was $100,000 for each person, and $300,000 for each accident involving each vehicle. There was a separate premium amount for each of the three vehicles that was added together for a single total premium paid on the policy. The underinsured motorist coverage endorsement in the policy contained a limit of liability provision. The provision provided:
LIMIT OF LIABILITY
The limit of liability shown in the Schedule or in the Declarations for each person for Underinsured Motorists Coverage is our maximum limit of liability for all damages, including damages for care, loss of services or death, arising out of "bodily injury" sustained by any one person in any one accident. Subject to this limit for each person, the limit of liability shown in the Schedule or in the Declarations for each accident for Underinsured Motorists Coverage is our maximum limit of liability for all damages for "bodily injury" resulting from any one accident. This is the most we will pay regardless of the number of:
1. "Insureds;"
2. Claims made;
3. Vehicles or premiums shown in the Declarations; or
4. Vehicles involved in the accident.
Acres' 12M statement ex. D ("Acres 12M"). In the declarations page, the three vehicles are listed separately as "Auto 1," "Auto 2," and "Auto 3". Id. The $100,000 per person/$300,000 per accident liability limit for underinsured motorist's bodily injury is listed under each vehicle, so the limits appear three times in the declarations page Id. The schedules contained in the endorsements issued to the Acres had spaces to list the limit of liability, but were left blank and did not state the liability limit for underinsured motorist's coverage effective on May 26, 1996. Acres 12M ¶¶ 27, 29, 32, 33.
The parties dispute the liability limit for underinsured motorist coverage under the Acres' policy. The Acres claim the policy is ambiguous and can be reasonably interpreted to allow the liability limits for the three separate vehicles covered by the policy to be "stacked" to provide total coverage of $300,000 per person and $900,000 per occurrence. West American denies the policy is ambiguous and claims the policy clearly prohibits the liability limits from being stacked. It concludes the policy's limit is $100,000 per person and $300,000 per occurrence regardless of the number of vehicles that were insured.
DISCUSSION
I Legal standard
A movant is entitled to summary judgment under Rule 56 when the moving papers and affidavits show there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Core. v. Catrett, 477 U.S. 317, 322 (1986); Unterreiner v. Volkswagen of America, Inc., 8 F.3d 1206, 1209 (7th Cir. 1993). Once a moving party has met its burden, the non-moving party must go beyond the pleadings and set forth specific facts showing there is a genuine issue for trial. Fed.R.Civ.P. 56(e); Becker v. Tenenbaum-Hill Assoc., Inc., 914 F.2d 107, 110 (7th Cir. 1990). The court considers the record as a whole and draws all reasonable inferences in the light most favorable to the party opposing the motion. Fisher v. Transco Services-Milwaukee, Inc., 979 F.2d 1239, 1242 (7th Cir. 1992). A genuine issue of material fact exists when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Stewart v. McGinnis, 5 F.3d 1031, 1033 (7th Cir. 1993)
Under Illinois law, the interpretation of an insurance policy is a question of law. Employers Ins. of Wausau v. Bodi-Wachs Aviation Ins. Agency, Inc., 39 F.3d 138, 141-42 (7th Cir. 1994);Crum Forster Managers Corp. v. Resolution Trust Corp., 620 N.E.2d 1073, 1077 (Ill. 1993). When construing an insurance policy, the court's primary objective is to ascertain and give effect to the intentions of the parties as expressed in their agreement. Pekin Ins. Co. v. Estate of Goben, 707 N.E.2d 1259, 1262 (Ill.App. 1999). If the terms found within the policy are "clear and unambiguous," they must be given their plain and ordinary meaning. Allen v. Transamerica Ins. Co., 128 F.3d 462, 466 (7th Cir. 1997). All provisions of an insurance contract should be read in light of each other to determine whether an ambiguity exists. FDIC v. American Casualty Co. of Reading, 998 F.2d 404, 408 (7th Cir. 1993). If the terms within a policy are reasonably susceptible to more than one meaning, they are considered ambiguous and will be construed strictly against the insurer. Employers Ins. of Wausau, 39 F.3d at 142. Provisions that limit or exclude coverage are interpreted liberally in favor of the insured and against the insurer. Pekin, 707 N.E.2d at 1562.
II Analysis
It is undisputed that the Acres are entitled to benefits pursuant to their West American underinsured motorist policy. The vehicle owned and operated by Devon was underinsured with respect to the damages sustained as a result of Sheena Acres' death; the amount paid to the Acres pursuant to the Allstate settlement, $68,733.33, is less than the per person limit of underinsured motorist's protection contained in the Acres' policy with West American. This is true regardless of whether the limit is $100,000 or $300,000. The parties dispute whether the Acres are entitled to stack the $100,000 per person liability limits from each of their three vehicles insured under the policy for a total available benefit of $300,000 per person. Because Illinois law directs the court to construe ambiguous insurance policies strictly against the insurer, the issue for the court is clear: does the policy clearly and unambiguously prohibit the Acres from stacking their liability limits? If the policy is unambiguous, summary judgment is appropriate for West American. However, if the policy is ambiguous, it must be interpreted in favor of the insured and summary judgment must be granted for the Acres.
West American claims stacking is not allowed. It argues the policy's anti-stacking provision is clear and unambiguous. It contends Illinois courts have routinely considered nearly identical anti-stacking clauses and have consistently held that the provision is unambiguous, and thus limited the underinsured motorist protection to the amount stated in the endorsement. According to West American, the provision expressly states that regardless of the number of vehicles or premiums shown in the declarations, West American agreed to pay only up to the limit of insurance indicated under the underinsured motorist coverage, which is $100,000 per person and $300,000 per accident. West American concludes the provision should be enforced to preclude the Acres from stacking the underinsured motorist coverage for the three vehicles and coverage should be limited to $100,000 for Sheena Acres' death.
The Acres argue the policy is ambiguous as to whether stacking is permitted. They argue this case is controlled by the Seventh Circuit's decision in Allen v. Transamerica Ins. Co., 128 F.3d 462 (7th Cir. 1997) and the Illinois Supreme Court's decision inBruder v. Country Mutual Ins. Co., 620 N.E.2d 355 (Ill. 1993). The Acres claim that in these decisions, the Seventh Circuit and the Illinois Supreme Court have effectively resolved the issue before the court and determined anti-stacking provisions to be ambiguous in indistinguishable situations. The Acres also argue the policy is ambiguous because the anti-stacking provision in the policy does not apply under the Illinois Appellate Court's decision in Gibbs v. Madison Mutual Ins. Co., 610 N.E.2d 143 (Ill.App. 1993). Because all ambiguities must be interpreted in favor of the insured, the Acres conclude the policy should be interpreted to allow stacking and provide a liability limit of $300,000 per person.
The Acres' are correct; this case is controlled by Allen andBruder. The Illinois Supreme Court addressed the question of whether underinsured motorist coverage for multiple vehicles covered in a single insurance policy can be stacked so as to provide additional coverage. Bruder, 620 N.E.2d at 362. InBruder, the plaintiffs insured two pickup trucks under the same insurance policy. The policy contained an anti-stacking provision that referred the reader to the declarations page for the limit of liability. Id. On the declarations page of the policy, the two vehicles were listed separately. Id. However, there was only one liability limit listed for both vehicles. Id. Since the liability limit was only listed once on the declarations page, the court determined the anti-stacking clause was unambiguous and did not allow the plaintiff to stack coverage. Id. The court noted, however, that if there was a liability limit listed for each vehicle in the declarations page, the policy would likely be ambiguous and stacking would be allowed. Id. The court reasoned that if there was a separate liability limit listed for each vehicle listed on the declarations page, there would be little to suggest that the parties intended to limit coverage to the amount provided for only one of the two vehicles. Id. The court remarked, "it would be more reasonable to assume that the parties intended that, in return for the two premiums, two $100,000 coverage amounts were afforded." Id.
In Allen, the Seventh Circuit cited Bruder and allowed the plaintiff to stack underinsured motorist coverage due to ambiguity in her policy. Allen, 128 F.3d 462. In Allen, the plaintiff insured two vehicles under the same policy. Id. Each vehicle had an underinsured motorist liability limit of $50,000 per person and $100,000 per incident. Id. at 464. The policy also contained a limit of liability provision that stated:
The limit of liability shown in the Schedule or in the Declarations for each person for Underinsured Motorists Coverage is our maximum limit of liability for all damages, including damages for care, loss of services or death, arising out of "bodily injury" sustained by any one person in any one accident. Subject to this limit for each person, the limit of liability shown in the Schedule or in the Declarations for each accident for Underinsured Motorists Coverage is our maximum limit of liability for all damages for "bodily injury" resulting from any one accident. This is the most we will pay regardless of he number of;
1. "Insureds;"
2. Claims made;
3. Vehicles or premiums shown in the Declarations; or
4. Vehicles involved in the accident.
Id. The schedule referred to in the anti-stacking provision was left blank. However, in the declarations page, there were two limits of liability listed; one for each vehicle. Id. at 463.
The Allen court concluded that, standing alone, there was no ambiguity in the underinsured motorists language of the policy.Id. at 466. However, the court determined there was ambiguity when it tried to determine what was the "limit of liability" referred to in the anti-stacking provision. Id. The provision directs the reader to either the "Schedule" or the "Declarations" to determine the amount of the limit. The court concluded that because the limit of liability sections on the schedules were left blank, the only place to look to determine the limits was the declarations page. Id. The court then turned to Bruder for guidance in interpreting the anti-stacking provision. Id. at 465. The court noted that the declarations sheet in Bruder listed the amount of coverage only once, and not twice as did the declarations page in Allen's policy. Id. The Allen court explained the significance of this distinction by quoting Bruder:
Understanding the arrangement of entries in the columns is important in determining the effect of what is not there included. Specifically, the limits of liability are not set out within the column arrangement in the same manner as the page lists the premium amounts and totals. That is, there is no column for which the limit of liability for bodily injury is to be listed like a premium amount so that the $100,000 limit for each person would appear in both sentence-like lines for the pickup truck.
It would not be difficult to find an ambiguity created by such a listing of the bodily injury liability limit for each person insured. It could easily be interpreted that an insured enjoyed a total limit of $200,000 in coverage because a figure of $100,000 would be shown for each pickup truck. There would be little to suggest in such a listing that the parties intended that coverage was to be limited to that provided for only one of the pickup trucks. It would be more reasonable to assume that the parties intended that, in return for the two premiums, two $100,000 coverage amounts were afforded.620 N.E.2d at 362. The court determined "[t]he Bruder dicta predicts that the Illinois Supreme Court would find the anti-stacking clause ambiguous when viewed in conjunction with the columnar arrangement of the declarations page, and would therefore rule in favor of coverage." Id. at 467. Thus, the anti-stacking provision in Allen's policy was ambiguous according to Illinois law and the limits were stacked for total coverage of $100,000. Id.
Here, we have the almost identical situation as in Allen. In both cases, plaintiffs insured multiple vehicles under one policy. The anti-stacking language in the Acres' policy is identical to the language in Allen. The provisions instruct the reader to go the "Schedule" or the "Declarations" to determine the limits of liability. In both situations, the schedules were left blank. In Allen, two separate liability limits are listed in the declarations page, one for each insured vehicle. In Acres' policy, three separate liability limits are listed in the declarations page, one for each insured vehicle. Just as it could be interpreted in Allen that the insured enjoyed a limit of $100,000 in coverage where an amount of $50,000 was shown for each vehicle, it can be interpreted that the Acres' enjoy a limit of $300,000 per person in underinsured coverage due to the fact that an amount of $100,000 per person is listed for each of three vehicles on the declarations page. Thus, under to the Seventh Circuit's analysis of Illinois law in Allen, the Acres policy is ambiguous. Because the policy is ambiguous, it must be interpreted in favor of the insured and the Acres are allowed to stack the liability limits.
This interpretation of the Acres' insurance policy is further supported by the Illinois Appellate Court's decision in Pekin Ins. Co. v. Estate of Goben, 707 N.E.2d 1259 (Ill.App. 1999). There, the court interpreted facts similar to the present case and relied on Bruder in concluding the anti-stacking provision in an insurance policy was ambiguous. Id. In Pekin, the plaintiff insured two vehicles under a single insurance policy that provided underinsured motorist coverage. Id. The policy had an anti-stacking provision that referred to the endorsement for the liability limit amount, and if no amount was listed, referred to the declarations page. Id. at 1264. On the declarations page, two vehicles were listed separately and a $500,000 liability limit was listed after each. The court determined that "when the anti-stacking clause is read together with the language in the endorsement that refers the reader to the declarations page to obtain the limits of coverage, the ambiguity with respect to the amount of underinsured motorist coverage becomes apparent." Id. at 1265. The court concluded that the policy could reasonably be interpreted to allow stacking the $500,000 in coverage for each of the cars listed in the declarations for a total of $1,000,000 in coverage. Id.
In determining the policy was ambiguous, the Pekin court stated:
In Bruder, the Illinois Supreme Court considered whether a plaintiff should be allowed to stack underinsured-motorist coverage on two vehicles set forth on a single business automobile policy. The court reviewed and focused on the declarations page of the insurance policy and the method used by the insurer to set forth its limit of underinsured-motorist coverage. The Bruder court held, however, that when the anti-stacking clause was read together with the declarations page, it was unambiguous because the limit of underinsured-motorist coverage was set forth only one time on the declarations page. The Bruder court's decision hinged on the fact that the underinsured-motorist coverage limit was set forth only once on the declarations page, instead of two times, as in the instant case.Id. at 1265. It continued: "[t]he Bruder court even discussed a case like ours, where the underinsured-motorist coverage limit was set forth two times on the declarations page, once adjacent to each insured vehicle." Here, we have the same situation. The Acres' policy coverage limit was set forth three times on the declarations page, one adjacent to each insured vehicle. Under Illinois law, as set forth in Bruder, Allen and Pekin, the Acres' policy is ambiguous and therefore stacking is permitted.
This case is unlike those where anti-stacking provisions were unambiguous and consistently enforced. West American relies onFrigo v. Motors Ins. Corp., 648 N.E.2d 180 (Ill. 1995) andObenland v. Economy Fire Casualty Co., 599 N.E.2d 999 (Ill.App. 1992) for the notion the anti-stacking provision is unambiguous and enforceable regardless of the number of vehicles insured. However, both cases are distinguishable. Neither case involved a situation where the anti-stacking provision referred to both schedules and the declarations and where the coverages were listed multiple times on the declarations page. Also, both cases were distinguished by the Seventh Circuit in Allen. 128 F.3d at 466. The Allen court determined that none of the Illinois cases cited by the district court or the parties, including bothFrigo and Obenland, were on point because none addressed the particular arrangement of the declaration page present in Allen. The court concluded that the "Bruder dicta, on the other hand, addresses the precise factual scenario before us, in which we must consider the schedule in conjunction with the declarations page." Id. Furthermore, the cases cited by West American are not mentioned in Pekin, the most recent case to deal with this factual scenario. Pekin, 707 N.E.2d 1259. Allen and the present case deal with the same circumstances. Thus, Bruder, Allen andPekin are the controlling precedent. Id.
West American attempts to distinguish this case from Bruder andAllen because the columnar arrangement of the declarations pages in Bruder and Allen was key in the Allen court's decision. It contends that unlike the declarations page at issue in Allen orBruder, the West American declarations page does not provide any potentially confusing columnar arrangement. It asserts the page carefully and unambiguously identifies the types and amounts of coverage for each vehicle. It concludes that because the arrangement of the declarations page is different in this case,Bruder and Allen do not control and the policy is unambiguous.
West America's attempts to distinguish Bruder and Allen are unpersuasive. The ambiguity anticipated in Bruder and found inAllen did not depend on the columnar nature of the declarations pages in the insurance policies. The ambiguity is created by the language of the anti-stacking provision, the fact that the schedules were left blank, and the fact that separate liability limits are listed for each vehicle on the declarations page. The confusion arises because when the declarations page is consulted to determine the limit of liability, it is unclear whether or not the liability limits separately listed next to each vehicle should be added together. As the Illinois Appellate Court stated in Pekin:
The Bruder court's decision hinged on the fact that the underinsured motorist coverage limit was set forth only once on the declarations page, instead of two times, as in the instant case. The Bruder court even discussed a case like ours, where the underinsured-motorist coverage is set forth two times on the declarations page, once adjacent to each insured vehicle.Pekin, 707 N.E.2d at 1265. In short, the ambiguous insurance policies in Allen and Pekin were determined to be susceptible to more than one interpretation because more than one liability limit was listed on the declarations pages, not because the declarations pages were columnar in nature.
This is precisely the case we have here. Thus, under Bruder, Allen and Pekin, the Acres' insurance policy is ambiguous and should be interpreted in favor of coverage. Accordingly, summary judgment must be granted in favor of the Acres. The Acres are entitled to declaratory judgment that $300,000 per person in underinsured motorist coverage is available under their policy with West American.
CONCLUSION
The Acres' motion for summary judgment is granted. West American's motion for summary judgment on its counterclaim is denied.