In the

United States Court of Appeals

For the Seventh Circuit ____________________

Nos. 18-3181 & 18-3241

PHILADELPHIA INDEMNITY INSURANCE COMPANY,

Plaintiff, Counterdefendant-Appellee,

v.

THE CHICAGO TRUST COMPANY, as Administrator of the Estate of Kianna Rudesill, and THE BABY FOLD,

Defendants, Counterplaintiffs-Appellants.

____________________

Appeals from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 16 C 10161 — Joan Humphrey Lefkow, Judge.

____________________

ARGUED APRIL 16, 2019 — DECIDED JULY 19, 2019

____________________

Before EASTERBROOK, KANNE, and SCUDDER, Circuit Judges.

EASTERBROOK, Circuit Judge. The Baby Fold is a nonprofit 

corporation that provides foster-care services in Illinois. In 

2010 Baby Fold placed three-year-old Kianna Rudesill in the 

care of Joshua and Heather Lamie. Heather killed Kianna in 

May 2011 and has been convicted of murder. The Chicago 

Trust Company, as administrator of Kianna’s estate, main-
2 Nos. 18-3181 & 18-3241

tained a wrongful death action in Illinois state court against 

Baby Fold for its failure to supervise and protect Kianna. In 

February 2019 Chicago Trust and Baby Fold se]led their 

dispute for $4 million.

The question in this case is what portion of the se]lement 

(and any other losses related to Kianna’s death) must be 

paid by Baby Fold’s insurer. Philadelphia Indemnity filed 

this declaratory-judgment suit under the diversity jurisdiction and asked the judge to declare how much it owes under

two policies covering Baby Fold at the time of Kianna’s 

death. We refer to the policies as the primary policy and the 

excess policy. The insurer asked for a declaration that its 

maximum indemnity is $1 million under the primary policy 

and $250,000 under the excess policy. Baby Fold and Chicago Trust filed counterclaims: They agree that the primary 

policy provides $1 million of coverage but contend that the 

excess policy’s limit is $5 million, not $250,000. Philadelphia 

moved to dismiss Chicago Trust’s counterclaim under Fed. 

R. Civ. P. 12(b)(6). The district judge concluded that the policies’ language favors the insurer and granted the motion to 

dismiss. The opinion declared that Philadelphia’s potential 

liability under the excess policy is $250,000. 2018 U.S. Dist.

LEXIS 165071 at *25–26 (N.D. Ill. Sept. 26, 2018).

Unfortunately, the district court entered a judgment that 

does not declare the parties’ rights. Instead the judgment 

reads: “Case is dismissed.” This means that Philadelphia 

loses (contradicting the judge’s opinion) and that the wrong 

parties have appealed, jeopardizing our appellate jurisdiction. We asked counsel for both sides at oral argument about 

this incongruity. They surmised that the opinion and judgment, taken together, fully resolve the case in Philadelphia’s 
Nos. 18-3181 & 18-3241 3

favor. That’s wrong. A judgment must provide the relief to 

which a prevailing party is entitled. See, e.g., Greenhill v. Vartanian, 917 F.3d 984, 987 (7th Cir. 2019) (collecting authority). 

This judgment does the opposite, awarding the prevailing 

party a loss. And Fed. R. Civ. P. 58(a) prohibits an opinion 

from serving as a declaratory judgment. See Foremost Sales 

Promotions, Inc. v. Director, Bureau of Alcohol, Tobacco & Firearms, 812 F.2d 1044, 1045–46 (7th Cir. 1987).

Counsel also speculated that this document represents a 

take-nothing judgment for the counterclaims. But this would 

mean that Philadelphia’s claim remains unresolved, and if so 

the suit is not over. Moreover, this judgment suffers from 

other problems. It fails to mention one defendant (Chicago 

Trust). It does not address the counterclaims. And it transgresses Rule 58(b) because it was entered by a clerk. District 

judges must review all judgments other than simple judgments on jury verdicts and judgments entirely in the defendants’ favor. This judgment does not fall under those exceptions and thus requires the district judge’s approval. Rule 

58(b) requires this judicial inspection to ensure the entry of 

proper judgments, especially when dispositions are complicated. See Rush University Medical Center v. LeaviJ, 535 F.3d 

735, 737 (7th Cir. 2008). And lawyers must alert judges to 

problems with judgments. We are disappointed by counsel’s

failure to adhere to our repeated admonitions on this subject. 

See, e.g., Azeez v. Fairman, 795 F.2d 1296, 1297 (7th Cir. 1986).

We remanded with instructions to enter a new judgment 

that implements the district judge’s opinion, abides by Rule 

58, and resolves the whole case. The district judge complied, 

and the revised judgment provides Philadelphia with the 

declaratory relief described in the opinion. It also dismisses 
4 Nos. 18-3181 & 18-3241

the defendants’ counterclaims. With the new judgment in 

hand we turn to the merits.

Chicago Trust and Baby Fold contend that the excess policy provides a $5 million limit, or at least that the language is 

ambiguous and thus must be construed in favor of more 

coverage under Illinois law. See, e.g., Gillen v. State Farm Mutual Automobile Insurance Co., 215 Ill. 2d 381, 393 (2005). But 

the policies’ language supports Philadelphia’s interpretation.

The primary policy comprises several “coverage parts,” 

each of which outlines specific types of losses. One part covers losses arising out of Baby Fold’s negligent supervision 

of foster parents who commit physical abuse; both sides 

agree that this part provides $1 million of coverage. The excess policy then provides an additional layer of insurance 

with a general limit of $5 million. The excess policy, however, contains a sublimit for physical abuse claims:

Sexual or Physical Abuse or Molestation Liability Coverage 

Form Sublimit

This endorsement modifies insurance provided under the following: COMMERCIAL EXCESS LIABILITY POLICY

This policy is intended to include the Sexual or Physical Abuse 

or Molestation Coverageform [sic], but only with the limits set 

forth below. These limits are included within, and not excess of, 

nor in addition to the Limits of Insurance stated in the Declarations.

SEXUAL OR PHYSICAL ABUSE OR MOLESTATION 

LIABILITY COVERAGE SUBLIMITS

Each “Abusive Conduct” Limit 250,000

Aggregate Limit 500,000

All other terms and conditions of this Policy remain unchanged.
Nos. 18-3181 & 18-3241 5

This means that the excess policy covers physical-abuse 

claims, but the background limit of $5 million drops to 

$250,000 for each instance of “abusive conduct”, a term that

aggregates multiple acts of abuse by multiple persons. (The 

parties agree that the $500,000 figure is irrelevant.) This is 

straightforward from the word “sublimit,” which must refer 

to a limit within a limit. If that’s not enough, the sublimit is 

“within, and not excess of, nor in addition to” the excess policy’s general limit. What else could this mean?

Defendants’ efforts to gin up ambiguity fail. Baby Fold 

argues that this sublimit restricts the primary policy’s coverage, not the excess policy’s. How? The sublimit is the fourth 

page of the excess policy, and its first sentence says that it 

modifies the excess policy. Baby Fold also asserts that “including” the primary policy’s physical abuse part in the excess policy does not limit anything, but instead creates a second source of excess insurance. Even if we ignore the illogic 

of a sublimit adding coverage, Baby Fold misapprehends the 

structure of the excess policy. It does not cover a variety of 

loss types like the primary policy; instead, it provides a single layer of additional insurance—one that is reduced by the 

sublimit.

Chicago Trust suggests that, even if “abusive conduct” 

occurred, the losses still stem from “bodily injury” caused by 

an “occurrence”, which are broader categories and remain 

governed by the excess policy’s $5 million limit. But this 

proves too much. This reasoning would render the sublimit 

(along with every other sublimit and exclusion) ineffective, 

which is contrary to Illinois law. See, e.g., Minnesota Mutual 

Life Insurance Co. v. Link, 131 Ill. App. 89, 94 (1907); Old Second National Bank v. Indiana Insurance Co., 2015 IL App (1st) 
6 Nos. 18-3181 & 18-3241

140265 ¶19. Finally, Chicago Trust observes that the insurer 

could have used alternative ways to substitute the $250,000 

sublimit for the $5 million general limit. But the presence of 

other contractual routes does not render the policy’s language ineffectual or ambiguous. This language has one 

meaning; the ambiguity tiebreaker is irrelevant when the 

match is a blowout. Cf. Hall v. Life Insurance Co., 317 F.3d 

773, 776 (7th Cir. 2003).

Two more points. Philadelphia insured Baby Fold under 

primary and excess policies in both 2010 and 2011. The consecutive primary policies are identical, as are the excess policies. Chicago Trust contends that the 2010 and 2011 excess 

policies both supply coverage because Kianna suffered 

abuse during both years. But Chicago Trust concedes in its 

opening brief that the limiting language in the primary policy’s abuse part prevents more than one primary policy from 

providing coverage. Given that the excess policy “include[s]” this physical abuse part’s very terms, the same limitation must apply to consecutive excess policies. We do not 

understand how Chicago Trust can seek indemnity under 

one primary policy and two excess policies when they all 

contain the same limiting language.

What’s more, these policies contain anti-stacking provisions. This language prevents an insured from benefi]ing 

from consecutive policies’ limits when injuries or losses span 

multiple periods. The primary policy accomplishes this 

through the definition of “abusive conduct”:

[E]ach, every and all actual, threatened or alleged acts of physical abuse, sexual abuse, sexual molestation or sexual misconduct 

commi]ed by, participated in by, directed by, instigated by or 

knowingly allowed to happen by one or more persons shall be 

considered to be one “abusive conduct” regardless of:
Nos. 18-3181 & 18-3241 7

a. The number of injured parties;

b. The period of time over which the acts of physical abuse, 

sexual abuse, sexual molestation or sexual misconduct took 

place; and

c. The number of such acts or encounters.

“Abusive conduct” consisting of or comprising more than one 

act of physical abuse, sexual abuse, sexual molestation or sexual 

misconduct shall be deemed to take place, for all purposes within the scope of this policy, at the time of the first such act or encounter.

This language aggregates multiple acts of abuse into one 

unit and applies the policy in effect when the first act of 

abuse occurred. So either the 2010 policy or the 2011 policy 

applies, but not both. The first act cannot occur in both years. 

And there is more:

The limit of insurance shown in the Declarations for each “abusive conduct” is the most we will pay for all “damages” incurred 

as the result of any claim of “abusive conduct”. Two or more 

claims for “damages” because of the same incident or interrelated incidents of “abusive conduct” shall be:

a. Considered a single claim. [sic]; and

b. Such claims, whenever made, shall be assigned to only 

one policy (whether issued by this or any another [sic] insurer) and if that is this policy, only one limit of insurance shall 

apply.

In other words, only one policy’s limit applies to a claim 

for “abusive conduct”, no ma]er how many instances of 

abuse occur or how many consecutive policies apply. This 

exhaustive approach creates long insurance policies, but it 

also provides an answer in this appeal: insured parties may 

not stack policies. And the excess policies’ inclusion of the 

primary policies’ physical abuse part extends this prohibi-
8 Nos. 18-3181 & 18-3241

tion to the excess policies. “[T]here are no ‘magic terms’ that 

are required to incorporate another document by reference.” 

Ward v. Hilliard, 2018 IL App (5th) 180214 ¶47.

Illinois enforces anti-stacking provisions when multiple 

policies cover the same loss. See, e.g., Hobbs v. Hartford Insurance Co., 214 Ill. 2d 11, 27 (2005), citing Grinnell Select Insurance Co. v. Baker, 362 F.3d 1005 (7th Cir. 2004). And we’re 

confident that the state’s highest court would enforce an 

analogous provision that bars an insured from stacking consecutive one-year policies. In Great Lakes Dredge & Dock Co. v. 

Chicago, 260 F.3d 789, 794 (7th Cir. 2001), we drew an inference from insurance pricing clues and concluded that the 

relevant policies barred stacking consecutive coverage periods. We also noted that appellate courts in Illinois “make 

policies’ language the benchmark for stacking.” Id. at 793–94, 

citing Missouri Pacific R.R. v. International Insurance Co., 288 

Ill. App. 3d 69 (1997); Outboard Marine Corp. v. Liberty Mutual 

Insurance Co., 283 Ill. App. 3d 630 (1996). See also Hartford 

Casualty Insurance Co. v. Medical Protective Co., 266 Ill. App. 

3d 781 (1994) (concluding that a policy’s language barred 

stacking two one-year renewals on the initial year). Here the 

policies contain explicit anti-stacking language, making this 

case easier than Great Lakes Dredge. Cf. Sybron Transition 

Corp. v. Security Insurance, 258 F.3d 595, 600–02 (7th Cir.

2001).

Finally, Chicago Trust contends that the district court 

prematurely declared Philadelphia the prevailing party on 

the pleadings. We do not see any error. Both policies were 

a]ached to Philadelphia’s complaint. These provided everything the district judge needed to resolve the dispute under 

Fed. R. Civ. P. 12(c), despite her failure to mention that rule. 
Nos. 18-3181 & 18-3241 9

See United States v. Rogers Cartage Co., 794 F.3d 854, 860–61 

(7th Cir. 2015); Smith v. Check-N-Go of Illinois, Inc., 200 F.3d 

511, 514 (7th Cir. 1999) (noting that a judgment on the pleadings may be affirmed even though the district judge mistakenly cites Rule 12(b)(6)). We reject Chicago Trust’s contention that additional materials require consideration.

AFFIRMED