In the

United States Court of Appeals

For the Seventh Circuit

No. 14-1913

NATIONWIDE AGRIBUSINESS

INSURANCE COMPANY,

Plaintiff-Appellee,

v.

TONI L. DUGAN and JAMES R. DUGAN,

Defendants-Appellants.

Appeal from the United States District Court for the 

Southern District of Illinois.

No. 3:12-cv-01205-MJR-SCW — Michael J. Reagan, Chief Judge.

ARGUED NOVEMBER 5, 2014 — DECIDED JULY 21, 2015

Before BAUER, ROVNER, and TINDER, Circuit Judges.

BAUER, Circuit Judge. At the heart of this diversity action is

an automobile insurance policy that plaintiff-appellee, Nationwide Agribusiness Insurance Company, issued to defendantsappellants, Toni L. Dugan and James R. Dugan. The parties

filed cross-motions for summary judgment to resolve a dispute

as toNationwide’sunderinsured motorist coverageobligations

under the policy. The district court granted Nationwide’s
2 No. 14-1913

motion for summary judgment and denied the Dugans’ crossmotion, holding that Nationwide did not owe the Dugans

underinsured motorist coverage. The Dugans appeal. For the

reasons that follow, we affirm.

I. BACKGROUND

The facts are not in dispute. In late December 2010, Toni

Dugan was involved in an automobile accident with a vehicle

owned by Chelsea Rainey. The Dugans claimed upwards of

$200,000 in damages as a result of the collision. Rainey’s

insurer, American Family Mutual Insurance Company, offered

$100,000 (the limit under Rainey’s policy) to Toni Dugan and

her husband James Dugan, who claimed loss of consortium

due to his wife’s injuries, to settle their claims. The Dugans

accepted the settlement.

The Dugans then sought additional recovery from Nationwide pursuant to the underinsured motorist provisions of their

Nationwide policy. That policy insured four vehicles, including the vehicle Toni Dugan was driving at the time of the

accident, and provided underinsured motorist coverage limits

of $100,000 per person and $300,000 per accident for each of the

four covered vehicles. The policy declarations page, reproduced below, lists each of the four covered vehicles separately

along with the separate underinsured motorist limit applicable

to each vehicle and the separate premium charged for each

vehicle.
No. 14-1913 3

COVERAGE AND LIMITS OF LIABILITY (In Dollars)

Coverage is provided where a premium or limit of liability

is shown for coverage.

PREMIUMS (In Dollars)

The Dugans made a demand on Nationwide for the

payment of $400,000, the aggregate limit of the four underinsured motorist coverage limits listed on the declarations

page. Nationwide denied payment on the ground that express

language in the Dugans’ policy limited their recovery to

$100,000, less the $100,000 payment that they received from

American Family.
4 No. 14-1913

In January 2013, Nationwide commenced this action,

seeking a declaratory judgment that it owed no underinsured

motorist coverage to the Dugans. The Dugans counterclaimed,

seeking a declaratory judgment as to Nationwide’s underinsured motorist coverage obligations. The parties stipulated

to the pertinent facts and filed cross-motions for summary

judgment.

Nationwide argued that anti-stacking language in the

policy, which we set forth in our discussion, unambiguously

limited the Dugans’ recovery to $100,000—the limit of liability

for a single vehicle. So, after setting off the $100,000 American

Family payment from this limit, Nationwide claimed that it did

not owe the Dugans underinsured motorist coverage. Nationwide also argued that, even if the policy permitted stacking,

Illinois precedent calls for the $100,000 American Family

payment to be setoff against each $100,000 limit of liability

prior to stacking, resulting in no underinsured motorist

coverage.

The Dugans contended that, because the policy’s antistacking language was ambiguous, they were entitled to

aggregate, or “stack,” the underinsured motorist limits

applicable to each of their four covered vehicles, for an

aggregate coverage limit of $400,000. The Dugans conceded

that the policy’s provisions and Illinois law permit Nationwide

to setoff the $100,000 American Family payment from its

underinsured motorist coverage obligation, but argued that

Nationwide was entitled to apply this setoff only a single time

against the policy’s aggregate limit, post-stacking. Accordingly, the Dugans claimed that Nationwide owed them
No. 14-1913 5

$300,000 inunderinsuredmotorist coverage—the aggregate, or

“stacked,” limit ($400,000) less the setoff amount ($100,000).

The district court determined it could dispose of the parties’

cross-motions without deciding whether the anti-stacking

language in the policy permits or prohibits stacking. The court

treated each of the four coverage limits listed on the policy

declarations page as a “separate, stackable policy,” and held

that, even if the policy permitted stacking, Illinois law entitles

Nationwide to apply its setoff—the $100,000 payment that the

Dugans received from American Family—four times, once

against each “separate, stackable policy” limit, thereby

exhausting Nationwide’s underinsured motorist coverage

obligation. Accordingly, the district court granted Nationwide’s motion for summary judgment and denied the Dugans’

cross-motion. This appeal followed.

II. DISCUSSION

We review a district court’s grant of summary judgment

de novo. As a federal court sitting in diversity jurisdiction, our

task is to predict how the Illinois Supreme Court would decide

the issues presented here. Knight v. Enbridge Pipelines (FSP) 1

L.L.C., 759 F.3d 675, 677 (7th Cir. 2014). Where the Illinois

Supreme Court has not ruled on an issue, decisions of the

Illinois Appellate Courts control, unless there are persuasive

indications that the Illinois Supreme Court would decide the

issue differently. Allen v. Transamerica Ins. Co., 128 F.3d 462, 466

(7th Cir. 1997).

 The parties agree that Illinois law governs this dispute. 1
6 No. 14-1913

On appeal, the Dugans contend that the district court erred

in interpreting Illinois law as permitting Nationwide to apply

its setoff four times, once against each coverage limit, as

opposed to a single time against the total policy limit. We

decline to decide that question of state law. Instead, we affirm

on the alternative ground that the policy unambiguously

prohibits stacking. See Grochocinski v. Mayer Brown Rowe &

Maw, LLP, 719 F.3d 785, 794 (7th Cir. 2013) (“We may affirm

thegrant of summary judgment on ‘any alternative basis found

in the record as long as that basis was adequately considered

by the district court and the nonmoving party had an opportunity to contest it.’”) (quoting Best v. City of Portland, 554 F.3d

698, 702 (7th Cir. 2009)). The parties acknowledge that this

issue—whether the policy prohibits or permits stacking—was

fully briefed in the parties’ cross-motions for summary

judgment below, and we believe it presents a more direct and

secure path to affirmance.

Whether an insurance policy prohibits or permits stacking

is a legal issue. Hobbs v. Hartford Ins. Co. of the Midwest, 823

N.E.2d 561, 564 (Ill. 2005). An insurance policy is a contract,

and the general rules governing the interpretation of other

types of contracts also govern the interpretation of insurance

policies. Id. “If the policy language is unambiguous, the policy

will be applied as written, unless it contravenes public policy.”

Hobbs, 823 N.E.2d at 564. The Illinois Supreme Court “has

determined that antistacking clauses in general do not contravene public policy,” id., and the Dugans do not contest the

anti-stacking provisions at issue in this case on public policy

grounds. Whether an ambiguity exists turns on whether the

policy language is susceptible to more than one reasonable
No. 14-1913 7

interpretation. Id. Although “creative possibilities” may be

suggested, only reasonable interpretations will be considered

and we will not strain to find an ambiguity where none exists.

Id. In determining whether an ambiguity exists, all the provisions of the contract should be read together and not in

isolation. Glidden v. Farmers Auto. Ins. Ass’n, 312 N.E.2d 247,

250 (Ill. 1974). If an ambiguity exists, it must be resolved in

favor of the insured and in favor of coverage. Hobbs, 823

N.E.2d at 564.

Nationwide identifies two provisions in the policy issued

to the Dugans which it argues unambiguously prohibit

stacking of underinsured motorist coverage. The first antistacking provision identified by Nationwide reads in relevant

part: 

LIMIT OF LIABILITY

A[.] The limit of liability shown in the [d]eclarations 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[.] ...

This is the most we will pay regardless of the number of[:]

1[.] Insureds[;]

2[.] Claims made[;]

3[.] Vehicles or premiums shown in the [d]eclarations[;] or

4[.] Vehicles involved in the accident.
8 No. 14-1913

As previously mentioned, the “[d]eclarations” referenced

in the “Limit of Liability” provision quoted above, lists each of

the Dugans four covered vehicles separately along with the

separate underinsured motorist limit applicable to each vehicle

and the separate premium charged for each vehicle.

The Dugans contend that, although the anti-stacking

provision may appear unambiguous when read in isolation,

the clause is rendered ambiguous when read in conjunction

with the declarations page. They insist that a long line of

Illinois authority dictates that, where the anti-stacking provision refers to the limit of liability listed on the declarations

page as the maximum the insurer will pay, and the declarations page lists separate underinsured motorist limits for each

of the covered vehicles, the anti-stacking provision is ambiguous, and stacking is permitted. We agree. Three cases in

particular, and the Illinois Appellate Courts’ subsequent

treatment of these three cases, convince us that the Illinois

Supreme Court would consider the “Limit of Liability”

provision to be ambiguous. 

The seminal case in the interpretation of anti-stacking

clauses is Bruder v. Country Mutual Ins. Co., 620 N.E.2d 355 (Ill.

1993). In what has now become known as the “Bruder dicta,”

the Illinois Supreme Court stated that “[i]t would not be

difficult to find an ambiguity” where an anti-stacking provision ties the limit of liability to the limit shown on the declarations page, and the declarations page lists multiple vehicles

along with the separate coverage limit applicable to each

vehicle and the separate premium charged for each vehicle. Id.

at 362. The court noted that, in such a case, it is “reasonable to

assume that the parties intended” that, in return for each
No. 14-1913 9

premium paid, the coverage limit corresponding to each

premium may be stacked, regardless of language indicating

otherwise in the policy. Id. Then, in Yates v. Farmers Auto. Ins.

Ass'n, 724 N.E.2d 1042 (Ill. App. Ct. 2000), the Illinois Appellate Courtfaced the situation contemplated by the Bruder dicta.

The Yates court held that the “Limit of Liability” provision,

which was nearly identical to the provision at issue here, was

rendered ambiguous when read in conjunction with the

declarations page, which listed multiple vehicles along with

separate coverage limits and separate premiums for each

vehicle. Id. at 1044–45. Five years later, in Hobbs, the Illinois

Supreme Court reaffirmed its commitment to Bruder’s reasoning and the Bruder dicta. See Hobbs, 823 N.E.2d at 566–69. The

court also approved the Illinois Appellate Court’s decision in

Yates, finding that, “[u]nder Bruder, the policy at issue in Yates

was ambiguous.” Id. at 569. In reaching this conclusion, the

court explained:

The declarations page in Yates ... listed the

underinsured-motorist limits twice– once for each of

the two covered vehicles. Although the appellate

court in the instant case [Hobbs] found this factual

distinction immaterial, we do not. As noted above in

our discussion of Bruder, where the antistacking

clause limits liability to the limit shown on the

declarationspage, and the declarationspage lists the

limit of liability twice, it would not be difficult to

find an ambiguity. Id.

Since Hobbs was decided, every Illinois Appellate district

that has faced the issue presented in the case at bar has held, in

line with Bruder’s dicta and Hobbs’ discussion of the Bruder
10 No. 14-1913

dicta, that an anti-stacking provision, containing language

similar to the provision at issue here, which refers to the limit

of liability shown on the policy declarations page, is rendered

ambiguous when the declarationspage lists multiple limits. See

Bowers v. General Cas. Ins. Co., 20 N.E.2d 843, 848 (Ill. App. Ct.

2014) (3d District); Progressive Premier Ins. Co. v. Kocher, 932

N.E.2d 1094, 1102 (Ill. App. Ct. 2010) (5th District); Johnson v.

Davis, 883 N.E.2d 521, 529 (Ill. App. Ct. 2007) (5th District);

McElmeel v. Safeco Ins. Co. of Am., 851 N.E.2d 99, 103 (Ill. App.

Ct. 2006) (1st District).

Nationwide argues that our decision in Grinnell Select Ins.

Co. v. Baker, 362 F.3d 1005 (7th Cir. 2004), requires that we

deviate from this mass of Illinois authority. Grinnell, however,

is distinguishable from the instant case in a way that the

Illinois Supreme Court in Bruder and Hobbs considered

material—the declarations page at issue in Grinnell listed the

underinsured motorist coverage limit only one time. See

Grinnell Select Ins. Co. v. Baker, No. 4:02-cv-04090, at *3 (S.D. Ill.

May 29, 2003) (setting out the declarations page at issue in

Grinnell); Hobbs, 823 N.E.2d at 566, 569; Bruder, 620 N.E.2d at

362; see also Johnson, 883 N.E.2d 608–609 (“The distinction

between listing the limits of liability once and listing them

more than once was crucial to our supreme court’s determination in Hobbs ... .”). Simply stated, the court in Grinnell did not

face the issue presented in this appeal. For this reason, we

reject Nationwide’s argument and, in accordance with our

duty as a federal court sitting in diversity, decline to deviate

from the Illinois Supreme Court’s dicta in Bruder, its reaffirmation of the Bruder dicta in Hobbs, and what the Illinois Appellate Courts have unanimously said on the issue post-Hobbs.
No. 14-1913 11

Accordingly, the “Limit of Liability” clause is of no help to

Nationwide.

The second provision that Nationwide points to as unambiguously prohibiting stacking reads, in relevant part, as

follows:

OTHER INSURANCE 

If there is other applicable underinsured motorists

coverage available under one or more policies or

provisions of coverage[:]

1[.] Any recovery for damages under all such policies or

provisions of coverage may equal[,] but not exceed[,]

the highest applicable limit for any one vehicle under

any insurance providing coverage on either a primary

or excess basis[.]

2[.] Any insurance we provide with respect to a vehicle

you do not own shall be excess over any collectible

insurance providing such coverageon a primary basis[.]

3[.] If the coverage under this policy is provided[:]

a[.] On a primary basis we will pay only our

share of the loss that must be paid under insurance providing coverage on a primary basis[.]...

b[.] On an excess basis we will pay only our

share of the loss that must be paid under insurance providing coverage on an excess basis[.] ... 

Nationwide argues that the introductory sentence and

clause 1,read in tandem, unambiguously limit coverage to “the

highest applicable limit for any one vehicle,”—here, $100,000.
12 No. 14-1913

We agree; the “OtherInsurance”provision, when read with the

policy as a whole, unambiguously bars stacking.

As an initial matter, we note that the “Other Insurance”

provision’s anti-stacking language resembles the language of

the section of the Illinois Insurance Code that expressly

authorizes anti-stacking provisions in motor vehicle insurance

policies. See 215 ILCS 5/143a–2(5). The Illinois Insurance Code

states:

Nothing herein shall prohibit an insurerfrom setting

forth policy terms and conditions which provide

that if the insured has coverage available under this

Section under more than one policy or provision of

coverage, any recovery or benefits may be equal to,

but may not exceed, the higher of the applicable

limits of the respective coverage, and the limits of

liability under this Section shall not be increased

because of multiple motor vehicles covered under

the same policy of insurance. Id. 

The “Other Insurance” provision, by mirroring the language used in this section of the Illinois Insurance Code,

admits a clear anti-stacking function. The provision applies

whenever there is “other applicable underinsured motorists

coverage available under one or more policies or provisions of

coverage.”And, when applicable, the provision operates to limit

recovery to “the highest applicable limit for any one vehicle

under any insurance providing coverage.” Here, the Dugans

seek to stack the underinsured motorist coverage limits

provided for each of their four covered vehicles. In other

words, the Dugans claim that they are entitled to recover not
No. 14-1913 13

only under the provision of coverage for the vehicle Toni

Dugan was driving at the time of the accident, but also under

the provisions of coverage for their three covered vehicles

which were not involved in the accident. The “Other Insurance” provision, however, unambiguously states that in such

a situation—where “there is other applicable underinsured

motorists coverage available under one or more ... provisions

of coverage”—the insured’s recovery “under all such ...

provisions of coverage may equal[,] but not exceed[,] the

highest applicable limit for any one vehicle.” Since the highest

applicable limit for any one vehicle in this case is $100,000, the

“OtherInsurance” provision limits theDugans recovery to that

amount.

This conclusion is also supported by the Illinois Appellate

Courts’ decisions in McElmeel and Willison v. Economy Fire &

Cas. Co., 690 N.E.2d 1073 (Ill. App. Ct. 1998) (4th District). In

McElmeel, the insured owned a policy with Safeco that covered

three vehicles and provided underinsured motorist coverage

for each of the three covered vehicles. 851 N.E.2d at 101. The

declarations pages listed each of the three covered vehicles

along with the separate underinsured motorist limit applicable

to each vehicle and the separate premium charged for each

vehicle. Id. The policy contained a “Limit of Liability” provision and an “Other Insurance” provision, both of which were

nearly identical to the “Limit of Liability” and “Other Insurance” provisions at issue in this appeal. Id. at 102. The court

first determined that the “Limit of Liability” provision did not

prohibit stacking because it tied the limit of liability to the limit

shown on the declarations pages that listed multiple coverage

limits, one corresponding to each covered vehicle. Id. at 103.
14 No. 14-1913

The court then determined that the “Other Insurance” provision was unambiguous and that it resolved “the ambiguity in

the declarations pages and the antistacking clauses that incorporate[d] them.” Id. at 104. Accordingly, the court held that the

“Other Insurance” provision, when read in conjunction with

the policy as a whole, barred stacking. Id.

In Willison, the Illinois Appellate Court considered the antistacking effect of an ”Other Insurance” provision that contained language virtually identical to the language of the

“OtherInsurance” provision at issue here. Willison, 690 N.E.2d

at 1074. The plaintiff in that case argued that the “OTHER

INSURANCE” provision did not prohibit stacking because it

applied only to policies issued by different carriers, not to

multiple policies issued by the same carrier. Id. The court

disagreed, stating that the provision’s language “clearly

applies to any type of stacking of [underinsured motorist]

coverages, whether multiple policy, multiple carrier, or

multiple policy, single carrier or multiple vehicle, single carrier.”

Id. at 1076 (emphasis added). The court went on to hold

that the “OTHER INSURANCE” provision unambiguously

prohibited the plaintiff from stacking underinsured motorist

coverages. Id. at 1076–77.

The Dugans first argue that the “Other Insurance” provision in their policy does not prohibit stacking because, as the

Illinois Supreme Court stated in Kaufmann v. Econ Fire & Cas.

Co., 389 N.E.2d 1150, 1153 (Ill. 1979), the purpose of such

provisions is to “make certain that one company does not pay

a disproportionate amount of a loss which is to be shared with

another company.” This argument is unavailing. A number of

Illinois cases, including Menke v. Country Mut. Ins. Co., 401
No. 14-1913 15

N.E.2d 539, 541 (Ill. 1980), have held that “Other Insurance”

provisions may simultaneously serve a proration function and

an anti-stacking function. See State Farm Mut. Auto. Ins. Co. v.

McFadden, 979 N.E.2d 551, 556 (Ill. App. Ct. 2012) (“the

proration clause at the end of the antistacking provision does

not introduce ambiguity”); Armstrong v. State Farm Mut. Auto.

Ins. Co., 595 N.E.2d 172, 176 (Ill. App. Ct. 1992) (“The presence

of a ‘proration clause’ at the end of the provision does not

introduce ambiguity into the clear language of the ‘antistacking’ provision.”). Here, the “OtherInsurance” provision’s

anti-stacking function is clear on its face; and it is further

evidenced by the resemblance between the provision’s language and the language used in Section 143a–2(5) of the Illinois

Insurance Code.

The Dugans next argue that the “Other Insurance” provision should not be given intra-policy effect. They acknowledge

the Illinois Appellate Court’s statement in Willison that the

“Other Insurance” provision at issue in that case, which was

virtually identical to the provision at issue in this case, should

be given effect in the “multiple vehicle, single carrier” context,

but argue that the Willison court may have intended the phrase

to mean a single carrier insuring multiple vehicles under

multiple policies. Again, we disagree. The Willison court

specifically included “multiple policy, single carrier” as one of

the contexts in which the “Other Insurance” provision should

be given effect. Willison, 690 N.E.2d at 1076. By also including

“multiple vehicle, single carrier,” we think that the Willison

court unequivocally intended that the provision be given effect

where, as here, a single policy insures multiple vehicles. Id.

Furthermore, the Dugans’ argument ignores the Illinois
16 No. 14-1913

Appellate Court’s holding in McElmeel, where the court gave

effect to an “Other Insurance” provision in the single policy,

multiple vehicle context. Lastly, the Dugans do not indicate

how the “Other Insurance” provision’s reference to “one or

more policies” or “provisions of coverage” can be read to apply

to multiple policies, yet not to a single policy with multiple

provisions of coverage.

The Dugans also argue that the “Other Insurance” provision does not resolve the ambiguity as to the policy’s limit of

liability. Even if the provision is given intra-policy effect, and

Nationwide’s obligation is reduced to the “highest applicable

limit for any one vehicle,” the Dugans argue that the provision

does not answer what the “limit of liability” for a vehicle under

the policy is. Not so. The declarations page plainly shows the

limit of liability for each of the covered vehicles, and the

“Other Insurance” provision reduces Nationwide’s underinsured motorist coverage obligation to the vehicle with the

highest applicable limit, which in this case is $100,000.

Finally, the Dugans argue that Nationwide’s interpretation

of the “OtherInsurance” provision robs the “Limit of Liability”

provision of any meaning. But, as previously explained, we

agree with the Dugans that the Illinois Supreme Court would

most likely consider the “Limit of Liability” provision to be

ambiguous. From a conceptual standpoint, it is hard to see

how an ambiguous clause can be robbed of meaning. At any

rate, the Dugans do not direct our attention to any Illinois case

in which one anti-stacking provision was rendered invalid by

virtue of the fact that the policy contained another antistacking provision. Perhaps it would be more apt to say, as the

Illinois Appellate Court said in McElmeel, that the “Other
No. 14-1913 17

Insurance” provision resolves any ambiguityoccasionedby the

interplay between the “Limit of Liability” provision and the

declarations page. See McElmeel, 851 N.E.2d at 104.

Because the “Other Insurance” provision unambiguously

limits the Dugans’ recovery to $100,000, we hold that Nationwide, after applying its setoff, does not owe the Dugans

underinsured motorist coverage under the policy.

III. CONCLUSION

For the foregoing reasons, the district court’s decision is

AFFIRMED.