Bowers v. General Casualty Insurance Co. ( 2014 )

2014 IL App (3d) 130655
Opinion filed November 5, 2014
_____________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
THIRD DISTRICT
A.D., 2014
MARILYN K. BOWERS and ROBERT ) Appeal from the Circuit Court
BOWERS, ) of the 13th Judicial Circuit,
) Bureau County, Illinois.
Plaintiffs-Appellees, )
) Appeal No. 3-13-0655
v. ) Circuit No. 13-MR-12
)
GENERAL CASUALTY INSURANCE )
COMPANY, ) The Honorable
) Marc P. Bernabei,
Defendant-Appellant. ) Judge, presiding.
_____________________________________________________________________________
PRESIDING JUSTICE LYTTON delivered the judgment of the court, with opinion.
Justice Carter concurred in the judgment and opinion.
Justice Wright specially concurred, with opinion.
_____________________________________________________________________________
OPINION
¶1 Plaintiffs, Marilyn and Robert Bowers, filed a complaint against defendant, General
Casualty Insurance Company, seeking a declaratory judgment that their underinsured motorist
(UIM) coverage for three vehicles was not limited to one vehicle. The trial court granted
summary judgment in plaintiffs’ favor, finding that the $250,000 UIM limit for each vehicle
could be aggregated, or stacked, to arrive at a maximum coverage limit of $750,000. General
Casualty appeals, claiming that the provisions of the policy are unambiguous and prohibit
stacking of UIM coverage. We affirm.
¶2 On August 8, 2011, Marilyn sustained injuries when an underinsured motorist drove his
vehicle into a convenience store building in which Marilyn was standing. At the time of the
accident, plaintiffs were covered under a General Casualty insurance policy that provided
underinsured motorist coverage for three vehicles. The declarations page for the policy listed
three limits of UIM coverage and three premiums for each listed vehicle. Coverage information
was provided in a section entitled “Vehicle Coverages” and was listed in the following table
format:
2005 Pont Grand Prix 1997 Chry Sebring JXI 2005 Ford F150
Limit Premium Limit Premium Limit Premium
UIM $250,000 Ea Person $250,000 Ea Person $250,000 Ea Person
Bodily Injury $500,000 Ea Accident $29.00 $500,000 Ea Accident $24.00 $500,000 Ea Accident $29.00
A provision directly above the table of vehicles was entitled “Coverage Information.” It stated:
"The coverages listed below apply separately for each vehicle and are provided
only where a premium or Included is shown. The Limit of Liability applies
separately for each vehicle."
¶3 UIM coverage was added to the Bowers’ policy by an endorsement. Among other things,
the endorsement provided:
"We will pay compensatory damages which an 'insured' is legally entitled to
recover from the owner or operator of an underinsured motor vehicle because of
bodily injury:
1. Sustained by an 'insured'; and
2. Caused by an accident."
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The endorsement also contained a "Limit of Liability" provision, which stated:
"The limit of liability shown in the Schedule or in the Declarations for each
person for Underinsured Motorist Coverage is our maximum limit of liability for
all damages, including damage for care, loss of service 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 Motorist 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 Schedule of Declarations; or
4. Vehicles involved in the accident."
¶4 The underinsured motorist that drove into the building carried a per-person bodily injury
liability limit of $100,000, which was paid to Marilyn. The Bowers filed a declaratory judgment
action against defendant claiming that policy provided up to an additional $650,000 because the
UIM coverages could be stacked. General Casualty responded that the policy only provided up
to an additional $150,000, because the UIM limit was $250,000. Both parties filed motions for
summary judgment.
¶5 The trial court granted the Bowers’ motion for summary judgment and denied General
Casualty's motion. The court found that the table on the declarations page, which listed each of
the three UIM limits, and the use of the term “the limit" in the endorsement led to an ambiguous
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interpretation. It then construed the contract against General Casualty, thus allowing stacking of
the UIM coverages.
¶6 ANALYSIS
¶7 General Casualty argues that the trial court erred in finding that the insurance policy
allowed the Bowers to stack their underinsured motorist vehicle coverage limits listed for each
vehicle to arrive at a maximum per-person coverage limit of $750,000. It argues that the layout
of the declarations page, together with the antistacking provision, is unambiguous and does not
allow the insured to stack the coverage limits. It further argues that the term "separately," as
used in the coverage information section, clarifies any ambiguity that may be found in the
policy's provisions.
¶8 The construction of an insurance policy is a question of law that this court reviews de
novo. Smagala v. Owen, 307 Ill. App. 3d 213, 217 (1999). Our primary objective in construing
an insurance policy's language is to ascertain and give effect to the parties' intent, as expressed in
their agreement. Hobbs v. Hartford Insurance Co. of the Midwest, 214 Ill. 2d 11, 17 (2005).
Clear and unambiguous policy terms will be given their plain and ordinary meaning, and the
policy will be applied as written, unless it contravenes public policy. Id. If the terms are
susceptible to more than one meaning, the policy is ambiguous and will be strictly construed
against the insurer that drafted it. Pekin Insurance Co. v. Wilson, 237 Ill. 2d 446, 456 (2010). In
construing the drafter's language, we must interpret the policy as a whole, considering the type of
insurance purchased, the nature of the risks involved and the contract's overall purpose. Id.
Provisions that limit or exclude coverage will be interpreted liberally in the insured's favor and
against the insurer. Hobbs, 214 Ill. 2d at 17.
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¶9 The Illinois Insurance Code allows for the use of antistacking provisions in motor vehicle
insurance policies (215 ILCS 5/143a-2(5) (West 2010)), and our supreme court has stated that
antistacking provisions generally are not contrary to public policy (Hobbs, 214 Ill. 2d at 17-18).
Thus, unambiguous antistacking clauses will be given effect. Bruder v. Country Mutual
Insurance Co., 156 Ill. 2d 179, 184 (1993).
¶ 10 The seminal case in the interpretation of antistacking clauses is Bruder v. Country Mutual
Insurance Co., 156 Ill. 2d 179 (1993). In Bruder, our supreme court stated, in dicta, that it
"would not be difficult to find an ambiguity" where an insurance policy listed the uninsured or
underinsured motorist coverage amounts and premiums separately for each vehicle covered
under the policy. Id. at 192. The court noted that, where that occurs, it is "reasonable to assume
that the parties intended" that, in return for the premiums paid, equal amounts of uninsured or
underinsured motorist coverage were afforded, regardless of language indicating otherwise in the
policy. Id. However, in Bruder, the uninsured motorist coverage was listed only one time in the
policy, even though separate premiums were listed for each vehicle covered. The court found
that "[t]he only reasonable interpretation" was that the policy provided only the UIM amount
listed one time for each person injured regardless of the number of vehicles insured or premiums
paid. Id. at 193. Since the declarations page listed the UIM coverage only one time, the court
ruled that there was no ambiguity in the limit of liability provision and applied it as written,
without allowing aggregation or stacking of coverage. Id. at 194.
¶ 11 The distinction between listing the UIM limit of liability once and listing it more than
once was crucial to our supreme court's determination in Hobbs v. Hartford Insurance Co. of the
Midwest, 214 Ill. 2d 11 (2005). In Hobbs, the insurance policy in question listed the limits of
UIM coverage only once on the declarations page. Hobbs noted the similarities between the
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insurance policy and the policy in Bruder. Id. at 21. The antistacking provision in the policy
tied the limit of UIM coverage to the limit shown on the declarations page. The declarations page
listed the premiums for the two vehicles separately but listed the relevant limit of liability only
once. The supreme court read the antistacking provision in conjunction with the declarations
page and determined that the policy was unambiguous and that the coverages did not stack. Id.
Hobbs did not overrule Bruder but rather used the Bruder analysis in determining that coverage
could not be stacked.
¶ 12 The case law since Bruder has followed the same line of reasoning when considering
whether to allow the stacking of uninsured or underinsured motorist coverage. In Estate of
Goben, the court relied on the Bruder decision and found that because the UIM coverage was set
forth two times on the declarations page, once for each covered vehicle, there were two possible
interpretations of the policy: one that provided UIM coverage based on one limit as described in
the antistacking provision, and one that provided two coverage amounts for the two UIM limits
and the corresponding premiums listed on the declarations page. Based on the ambiguity, the
court construed the policy strictly against the insurer that drafted it and allowed the limits to be
stacked. Pekin Insurance Co. v. Estate of Goben, 303 Ill. App. 3d 639, 648-49 (1999); see also
Allen v. Transamerica Insurance Co., 128 F.3d 462 (7th Cir. 1997) (holding that the antistacking
clause was ambiguous because the declarations page to which the clause referred listed two
vehicles with separate UIM coverages and separate premiums).
¶ 13 Yates Sel. Cas. v. Farmers Automobile Insurance Ass'n, 311 Ill. App. 3d 797 (2000), also permitted
stacking. In Yates, the policy covered two vehicles and contained antistacking language in the
endorsement nearly identical to the language in this case. The underinsured motorist coverage
was said to be limited to the liability shown on the declarations page and was described as "the
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limit" in the antistacking provision. Id. at 799. The declarations page identified two vehicles
that were covered, UIM policy limits were listed under "auto one" and "auto two," and a separate
premium was listed for each vehicle. The declarations page also contained a statement that
provided, " 'COVERAGE IS PROVIDED WHERE A PREMIUM AND A LIMIT OF
LIABILITY OR THE WORD ‘INCLUDED’ ARE SHOWN FOR COVERAGE.' " Id. at 800.
Yates held that the declarations page was inconsistent with and contradictory to the antistacking
provision in the endorsement. The court construed the policy in favor of the insured, and the
UIM coverages were stacked. Id; see also Johnson v. Davis, 377 Ill. App. 3d 602, 609 (2007)
(stacking allowed based on ambiguity where the antistacking provision referred to a singular
"limit," but the policy named four vehicles and listed separate UIM coverages for each of the
vehicles).
¶ 14 In this case, the insurance policy contains contradictory provisions. The underinsured
motorist endorsement contains an antistacking provision, which states that the "limit of liability"
is the maximum limit the company would pay for all damages, regardless of the vehicles or
premiums shown. On the other hand, the antistacking provision also states that the limit of
liability is based on the description in the declarations page, which states that coverage is
provided where a premium and a limit of liability are shown. The declarations page shows three
UIM coverages of $250,000 and a UIM premium for each of the three vehicles. The language
contained in the declarations page is inconsistent with the endorsement's antistacking provision
and creates an ambiguity. Since the policy contains inconsistent provisions, we must construe it
against the drafter, General Casualty.
¶ 15 General Casualty argues that there is no per se rule that listing the UIM limits more than
once on the declarations page creates an ambiguity resulting in allowing the coverages to be
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stacked. In Hobbs, the court stated that the declarations page of a policy is but one piece of the
insurance agreement and cannot address every conceivable coverage issue. Hobbs, 214 Ill. 2d at
23. However, when read in conjunction with the antistacking provision, an ambiguity may arise.
See Yates, 311 Ill. App. 3d at 800; Johnson, 377 Ill. App. 3d at 609. In this case, reading those
two provisions together creates an ambiguity.
¶ 16 General Casualty cites Ritter in support of its position. In Ritter, the appellate court
found that the antistacking provision, which contained language identical to the endorsement
policy provision here, was unambiguous and prohibited stacking. However, Ritter does not
attempt to reconcile its decision with the Bruder dicta and fails to address language in the
declarations page that lists more than one UIM coverage and more than one UIM premium.
Accordingly, we are unpersuaded by its analysis.
¶ 17 Last, General Casualty argues that the use of the word "separately" in the coverage
information section of the declarations page, which states that "the coverages listed below apply
separately for each vehicle and are provided only where a premium or included is shown,"
precludes stacking of the three UIM coverage limits. We disagree. The word "separately" can
have more than one connotation. "Separate" means "to set or keep apart"; "to make a distinction
between"; or "to sort." Webster's Third New International Dictionary 2069 (1986). Although
use of the term "separately" may signify recovery under only one of the coverages, it may also
lead to the opposite conclusion; it may also indicate that the UIM coverage limit of $250,000
applies to each vehicle where a premium is shown. Regardless, the use of the word "separately"
in the coverage information section does not address an insured's ability to combine UIM
coverages for which the insured has paid a premium. As we noted in Progressive Premier
Insurance Co. v. Cannon, 382 Ill. App. 3d 526 (2008), by listing each vehicle separately in the
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vehicle coverages section, an ambiguity arises in the policy in that an insured may reasonably
presume separate UIM limits apply to each covered vehicle and that the limits could be stacked
because separate UIM premiums were paid for each vehicle. See id. at 529-30. Nothing in the
language of the coverage information section removes that ambiguity.
¶ 18 CONCLUSION
¶ 19 The judgment of the circuit court of Bureau County, allowing Marilyn to aggregate the
underinsured motorist coverages in the General Casualty policy, is affirmed.
¶ 20 Affirmed.
¶ 21 JUSTICE WRIGHT, specially concurring.
¶ 22 I specially concur. I respectfully submit a factual ambiguity warrants the result reached
by the majority in this case. Here, plaintiff was injured by an underinsured motorist while
plaintiff was inside a convenience store rather than present in one of the multiple vehicles subject
to her insurance policy. Due to the very unusual factual circumstances, I agree with the result.
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