Court Opinion

ID: 4657619
Source: CourtListenerOpinion
Date Created: 2021-02-04 23:03:20.299906+00
Date Added: 2024-06-11T08:01:21.526644
License: Public Domain

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                                Supreme Court                               Date: 2021.02.03
                                                                            19:21:11 -06'00'

                      Hess v. Estate of Klamm, 2020 IL 124649

Caption in Supreme   LORETTA HESS et al., Appellees, v. THE ESTATE OF TJAY
Court:               KLAMM, Deceased, et al. (State Auto Insurance Companies,
                     Appellant).

Docket No.           124649

Filed                January 24, 2020

Decision Under       Appeal from the Appellate Court for the Fifth District; heard in that
Review               court on appeal from the Circuit Court of Franklin County, the Hon.
                     Erik J. Dirnbeck, Judge, presiding.

Judgment             Judgments reversed.
                     Cause remanded with directions.

Counsel on           Robert Marc Chemers and Jonathan L. Federman, of Pretzel &
Appeal               Stouffer, Chtrd., of Chicago, for appellant.

                     Paul J. Schafer, of Winters, Brewster, Crosby and Schafer LLC, of
                     Marion, for appellees.
     Justices                  CHIEF JUSTICE BURKE delivered the judgment of the court, with
                               opinion.
                               Justices Thomas, Kilbride, Garman, Karmeier, Theis, and Neville
                               concurred in the judgment and opinion.

                                               OPINION

¶1        At issue in this appeal is whether a multivehicle automobile insurance policy is ambiguous
      such that the liability limit for all covered vehicles may be aggregated or “stacked.” The circuit
      court of Franklin County held that the policy was ambiguous and must be construed in favor
      of the injured plaintiffs to permit stacking. The appellate court affirmed, with a modification.
      2019 IL App (5th) 180220. We now reverse the lower courts’ judgments.

¶2                                          BACKGROUND
¶3        On April 17, 2015, Richard Kiselewski was driving a 2001 Dodge Grand Caravan near
      Sesser, Illinois, with his two granddaughters, Meadow and Sierra Hess, in the backseat. A 2006
      Chevrolet Cobalt driven by TJay Klamm crossed the center line and struck Kiselewski’s
      vehicle near the intersection of Route 148 and North County Line Road. Kiselewski and Sierra
      were killed in the accident. Meadow survived but was severely injured. Klamm also died as a
      result of the accident.
¶4        At the time of the accident, Klamm was insured under an automobile liability policy issued
      to his mother, Dawn Keller, by State Auto Insurance Companies, doing business as Meridian
      Security Insurance Company (Meridian). The policy provides coverage for four vehicles. The
      liability coverage section of the policy requires the insurer to “pay damages for ‘bodily injury’
      or ‘property damage’ for which any ‘insured’ becomes legally responsible because of an auto
      accident.” An “insured” is defined, in part, as “[y]ou or any ‘family member’ for the ownership,
      maintenance, or use of any auto or ‘trailer,’ ” or, alternatively, “[a]ny person using ‘your
      covered auto.’ ”
¶5        The policy contains what courts commonly refer to as an “antistacking clause.” This clause
      states:
                   “LIMIT OF LIABILITY
                           A. The limit of liability shown in the Declarations for each person for
                       Bodily Injury Liability 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 auto accident. Subject to this
                       limit for each person, the limit of liability shown in the Declarations for each
                       accident for Bodily Injury Liability is our maximum limit of liability for all
                       damages for ‘bodily injury’ resulting from any one auto accident.
                           The limit of liability shown in the Declarations for each accident for
                       Property Damage Liability is our maximum limit of liability for all ‘property
                       damage’ resulting from any one auto accident.
                           This is the most we will pay regardless of the number of:

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                                1. ‘Insureds’;
                                2. Claims made;
                                3. Vehicles or premiums shown in the Declarations; or
                                4. Vehicles involved in the auto accident.”
¶6          The declarations in the policy comprise three physical pages. Only the first two pages are
       relevant to this appeal. The first declarations page lists three covered vehicles: a 2002 Ford F-
       150 (“AUTO 1”), a 2006 Chevrolet Cobalt (“AUTO 2”), and a 2000 Ford Mustang (“AUTO
       3”). Beneath the list of vehicles is the following statement: “COVERAGE IS PROVIDED
       WHERE A PREMIUM IS SHOWN FOR THE COVERAGE.” Beneath this statement is a
       description of the coverage arranged into columns. The first column lists the types of coverage
       provided in the policy, e.g., bodily injury liability, property damage liability, medical
       payments, auto damage, collision, transportation expenses, and towing and labor. The second
       column lists the limits of liability for each type of coverage. The third, fourth, and fifth columns
       list separate premiums for Autos 1, 2, and 3 for each type of coverage. The limits of liability
       for bodily injury liability coverage are listed as $100,000 per person and $300,000 per accident,
       next to and to the left of the premiums for Autos 1, 2, and 3. Thus, the first page of the
       declarations lists the bodily injury liability limit only once.
¶7          The second declarations page lists a fourth covered vehicle, a 2014 Kia Sportage (“AUTO
       4”). Beneath this is the statement: “COVERAGE IS PROVIDED WHERE A PREMIUM IS
       SHOWN FOR THE COVERAGE.” Beneath this statement are the same column categories as
       those on the first page. The columns list the types of coverage, the limits of liability, and the
       premiums for each type of coverage for Auto 4. The limits for bodily injury coverage are listed
       again as $100,000 per person and $300,000 per accident. Beneath these columns is a separate
       section listing a single premium in the amount of $88 for uninsured/underinsured motorists
       (UM/UIM) bodily injury coverage. This section provides that $100,000 per person and
       $300,000 per accident are the “TOTAL LIMIT [of UM/UIM coverage] FOR ALL VEHICLES
       COVERED UNDER THIS POLICY.”
¶8          The administrators of Kiselewski’s and Sierra Hess’s estates and the guardian of Meadow
       Hess’s estate filed a lawsuit against Klamm’s estate and Meridian. Plaintiffs sought, inter alia,
       a declaratory judgment that the policy is ambiguous as to the amount of bodily injury liability
       coverage. They alleged that this ambiguity should be construed in their favor by aggregating
       or “stacking” the coverage. Meridian (hereinafter defendant) filed an answer and counterclaim
       for declaratory judgment. Citing the antistacking clause in the policy, Meridian contended that
       the policy unambiguously sets forth a maximum limit of liability in the amount of $100,000
       per person and $300,000 per accident.
¶9          Defendant filed a motion for judgment on the pleadings pursuant to section 2-615(e) of the
       Code of Civil Procedure. 735 ILCS 5/2-615(e) (West 2014). Plaintiffs filed a response and a
       cross-motion for summary judgment. A hearing was held on the motions. On the same date,
       defendant tendered to plaintiffs three separate checks in the amount of $100,000, as those
       amounts of liability coverage were not in dispute.
¶ 10        The circuit court issued a written order in favor of plaintiffs, finding that the policy, taken
       as a whole, was ambiguous. Construing the ambiguity in favor of plaintiffs, the court declared
       that defendant had a duty under the policy to aggregate the bodily injury coverage limits for
       all four covered vehicles. The order stated that the liability coverage shall be stacked four

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       times, resulting in coverage in the amount of $400,000 per person and $1.2 million per
       accident. Upon defendant’s motion, the court entered an express written finding under Illinois
       Supreme Court Rule 304(a) (eff. Mar. 8, 2016) that there was no just reason to delay an appeal.
       Defendant then filed its appeal.
¶ 11       The appellate court affirmed, but it modified the circuit court’s judgment to order defendant
       to stack the coverage only two times. 2019 IL App (5th) 180220. The court reasoned that,
       “because the relevant bodily injury liability limits of $100,000 per person and $300,000 per
       accident are listed twice on the declarations pages, and the antistacking clause refers the reader
       to the declarations for the applicable liability limits, such limits are to be stacked twice, for
       total limits of $200,000 per person and $600,000 per accident.” Id. ¶ 20.
¶ 12       This court allowed defendant’s petition for leave to appeal. Ill. S. Ct. R. 315(a) (eff. July
       1, 2018). Plaintiffs request cross-relief, asking this court to modify the appellate court’s
       judgment and hold that coverage must be stacked four times.

¶ 13                                             ANALYSIS
¶ 14         The circuit court entered judgment in favor of plaintiffs on the parties’ cross-motions
       seeking a judgment on the pleadings and summary judgment. Either a judgment on the
       pleadings or summary judgment is proper when there are no genuine issues of material fact
       and the moving party is entitled to judgment as a matter of law. Hooker v. Illinois State Board
       of Elections, 2016 IL 121077, ¶ 21; Seymour v. Collins, 2015 IL 118432, ¶ 42. The applicable
       standard of review for both types of motions is de novo. Hooker, 2016 IL 121077, ¶ 21. In
       addition, the facts in this case are undisputed. The sole basis for the underlying judgment is the
       construction of an insurance policy. This is a legal question that is also subject to de novo
       review. Travelers Insurance Co. v. Eljer Manufacturing, Inc., 197 Ill. 2d 278, 292 (2001).
¶ 15         Under Illinois law, “the general rules governing the interpretation of other types of
       contracts also govern the interpretation of insurance policies.” Hobbs v. Hartford Insurance
       Co. of the Midwest, 214 Ill. 2d 11, 17 (2005). The “primary objective” in interpreting an
       insurance policy “is to ascertain and give effect to the intention of the parties, as expressed in
       the policy language.” Id. Unambiguous policy language is applied as written unless it conflicts
       with public policy. Id.
¶ 16         In general, antistacking provisions in insurance policies are not contrary to public policy.
       Grzeszczak v. Illinois Farmers Insurance Co., 168 Ill. 2d 216, 229-30 (1995). Thus, an
       unambiguous antistacking clause will be given effect by a reviewing court. Hobbs, 214 Ill. 2d
       at 18. If the clause is ambiguous, however, it will be construed liberally in favor of coverage
       and strictly against the insurer who drafted the policy. Id. at 17. Policy language is ambiguous
       if it is susceptible to more than one reasonable interpretation. Id. Only reasonable constructions
       of the language will be considered, not “creative possibilities” suggested by the parties. See
       Bruder v. Country Mutual Insurance Co., 156 Ill. 2d 179, 193 (1993) (“Reasonableness is the
       key.”). Moreover, we “ ‘will not strain to find ambiguity in an insurance policy where none
       exists.’ ” Travelers Insurance Co., 197 Ill. 2d at 293 (quoting McKinney v. Allstate Insurance
       Co., 188 Ill. 2d 493, 497 (1999)).
¶ 17         On appeal to this court, defendant argues that the policy unambiguously prohibits stacking
       of liability limits for the four covered vehicles. Alternatively, defendant argues that this court

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       should impose a per se rule barring stacking of automobile liability coverage as a matter of
       law. We first consider whether the policy is ambiguous.
¶ 18        This court’s decisions in Bruder and Hobbs guide our analysis in this case. Among the
       issues decided in Bruder was whether uninsured motorists coverage under a business vehicle
       policy should be stacked. Bruder, 156 Ill. 2d at 181. The policy at issue covered two pickup
       trucks used in the insured’s business. Id. at 182. The uninsured motorists coverage in the policy
       was limited to $100,000 per person and $300,000 per accident. Id. The policy also contained
       an antistacking clause, which provided, in part, as follows:
                     “ ‘The most we will pay for all damages resulting from bodily injury to any one
                 person caused by any one accident is the limit of Bodily injury shown in the
                 declarations for “Each Person.” ’ ” Id. at 189.
       The declarations page listed both pickup trucks and their separate premium amounts in
       columns. However, the limit of liability of $100,000 for bodily injury coverage for “ ‘each
       person’ ” was noted only once on the page, separate and apart from the column arrangement.
       Id. at 192-93.
¶ 19        Plaintiffs argued that the limit of liability in the business policy could reasonably be read
       as applying twice, once for each vehicle, resulting in $200,000 of coverage per person. Id. at
       193. This court disagreed. We held that the declarations page was subject to only one
       reasonable interpretation and, therefore, the antistacking clause unambiguously precluded
       stacking the coverages for the two vehicles. Id. at 194. We explained our holding as follows:
                     “Although two entries are found in the column ‘PART IV BODILY INJURY’ for
                 the premiums paid for each pickup truck, there is only one corresponding amount of
                 liability for bodily injury for each person appearing on the page. That is the $100,000
                 amount appearing outside and above that column. The only reasonable interpretation is
                 that the policy provides only $100,000 of liability for bodily injury occasioned to each
                 person insured no matter how many vehicles are listed in the column arrangement and
                 no matter how many premiums are paid. The representation of the limit of liability for
                 bodily injury for each person on the declarations page is consistent with the language
                 of the antistacking provision. It is also consistent with the language in the policy that
                 the antistacking provision would apply ‘regardless of the number of covered autos.’ ”
                 Id. at 193-94.
¶ 20        Thus, according to Bruder, if the liability limit is listed only once, it is reasonable to
       conclude that the policy provides only that amount of coverage per person, regardless of how
       many vehicles are listed and how many separate premiums are paid. Id. at 194. In dicta,
       however, this court hypothesized that “[i]t would not be difficult to find an ambiguity” if the
       policy listed individual liability limits for each covered vehicle. Id. at 192. We reasoned that,
       if there were a separate limit listed for each vehicle 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 vehicles. Id. Rather, “[i]t 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.
¶ 21        In Hobbs, this court addressed the issue of stacking in the context of underinsured motorists
       coverage in a multivehicle policy. Hobbs, 214 Ill. 2d at 14. The policy in that case contained
       an antistacking clause with similar language to the one in Bruder. Id. at 18. The declarations
       page listed the types of coverage, limits of liability, and the corresponding separate premiums

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       for the two covered vehicles. As in Bruder, the declarations page presented this information in
       a column arrangement. Id. The Hobbs court noted other similarities with Bruder. In both cases,
       (1) the antistacking clause tied the limit of liability to the limit shown in the declarations page,
       (2) the declarations page listed the premiums for the two vehicles separately, (3) the
       declarations page listed the limit of liability only once, and (4) the policy indicated that the
       antistacking clause applied regardless of the number of covered vehicles. Id. at 21. Based on
       these factors, we found that the policy was unambiguous and stacking was not allowed. Id.
¶ 22        This court reiterated that it would not be difficult to find an ambiguity arising from a
       declarations page that lists the liability limits separately for each covered vehicle. Id. (citing
       Bruder, 156 Ill. 2d at 192). Notably, however, we held this should not be construed as
       “establishing a per se rule that an insurance policy will be deemed ambiguous as to the limits
       of liability anytime the limits are noted more than once on the declarations.” Id. at 26 n.1.
       Rather, the question should be decided on a case-by-case basis. Id. Moreover, the declarations
       page should not be read in isolation but must be construed together with the other provisions
       in the policy. Id. at 23.
¶ 23        In this case, the antistacking clause in the policy provides, in relevant part:
                     “LIMIT OF LIABILITY
                             A. The limit of liability shown in the Declarations for each person for
                         Bodily Injury Liability 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 auto accident. Subject to this
                         limit for each person, the limit of liability shown in the Declarations for each
                         accident for Bodily Injury Liability is our maximum limit of liability for all
                         damages for ‘bodily injury’ resulting from any one auto 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 auto accident.”
¶ 24        This language is virtually identical to the antistacking clause in Hobbs. Id. at 18. As we
       have stated, the antistacking clause must be read in conjunction with the policy as a whole.
       The first sentence in the antistacking clause refers the reader to the declarations to find the
       limits of liability. The main difference between the declarations in this case and those in Bruder
       and Hobbs is that the limits of liability for bodily injury coverage are listed twice—once on
       each of the first two pages of the declarations. The first page lists the liability limits for Autos
       1, 2, and 3. The second page lists the liability limits for Auto 4. Although the liability limits
       are technically listed twice, we find this does not create an ambiguity with respect to stacking.
¶ 25        The policy in this case does not list liability limits separately for each covered vehicle. It
       lists the limits once on the first page of the declarations, to the left of Autos 1, 2, and 3, and
       once on the second page, to the left of Auto 4. We do not believe it is reasonable to read the
       policy as allowing stacking of the liability coverage either four times, as the circuit court found,
       or two times, as the appellate court found. The only reasonable explanation for restating the

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       liability limits on the second page is that the information for all four vehicles could not fit on
       one physical page. There simply was not enough space on the first page for an additional
       column listing the coverages and premiums for Auto 4. When read together with the
       declarations, we find that the antistacking clause unambiguously prohibits stacking of bodily
       injury liability coverage. We thus find that the policy provides bodily injury liability coverage
       in the amount of $100,000 per person and $300,000 per accident, regardless of the number of
       claims, insureds, covered vehicles, premiums, or vehicles involved in the accident.
¶ 26       The appellate court below incorrectly compared this case to Cherry v. Elephant Insurance
       Co., 2018 IL App (5th) 170072, and Johnson v. Davis, 377 Ill. App. 3d 602 (2007). Both cases
       allowed stacking of underinsured motorists coverage in a multivehicle policy. Cherry, 2018 IL
       App (5th) 170072, ¶¶ 20, 31; Johnson, 377 Ill. App. 3d at 609. In contrast to the policy in this
       case, however, the policies in Cherry and Johnson listed the liability limits separately for each
       covered vehicle. See Cherry, 2018 IL App (5th) 170072, ¶ 20; Johnson, 377 Ill. App. 3d at
       609. Based on this fact, the courts concluded that a reasonable person could believe that the
       policy provided coverage in an amount totaling the limits listed for all covered vehicles. See
       Cherry, 2018 IL App (5th) 170072, ¶ 31 (“we find that the plaintiffs could reasonably conclude
       that Richard Cherry had purchased $50,000 of underinsured benefits four times, resulting in
       $200,000 of underinsured motorist coverage for each plaintiff”); Johnson, 377 Ill. App. 3d at
       610 (“the circuit court’s decision granting Johnson $200,000 in underinsured-motorists
       coverage, a figure arrived at by aggregating the $50,000 limit for underinsured-motorists
       coverage on each of the four vehicles carrying that coverage in Johnson’s insurance policy,
       was correct”). As we have explained, in this case it is not reasonable to conclude from the
       policy provisions that the policy provided more than $100,000 in bodily injury coverage per
       person for any one auto accident.
¶ 27       Nevertheless, in their appellee brief, plaintiffs identify what they allege are three sources
       of ambiguity within the policy. First, plaintiffs argue that the mere fact that the liability limits
       are listed twice creates an ambiguity. In support, plaintiffs emphasize the following language
       in the Hobbs decision: “We noted, however, [in Bruder] that had the limit of liability for bodily
       injury been listed twice on the declarations page, ‘[i]t would not be difficult to find an
       ambiguity.’ ” (Emphasis added.) Hobbs, 214 Ill. 2d at 21 (quoting Bruder, 156 Ill. 2d at 192).
       This argument misreads Bruder and Hobbs. The word “twice” in the quotation simply refers
       to the two covered vehicles in the Bruder policy. When the quotation is read in context, it is
       clear that the deciding factor in both decisions was whether the liability limits were listed
       separately for each of the covered vehicles, not whether they were listed “twice.”
¶ 28       Plaintiffs next contend that the separate premiums listed for each of the four vehicles, along
       with the statement, “COVERAGE IS PROVIDED WHERE A PREMIUM IS SHOWN FOR
       THE COVERAGE,” on the declarations pages, create an ambiguity regarding the amount of
       coverage. This court rejected a similar argument in Hobbs. The plaintiff in that case argued
       that an ambiguity arose from the following statement on the declarations page: “ ‘COVERAGE
       IS PROVIDED ONLY WHERE A PREMIUM IS SHOWN FOR THE AUTO AND
       COVERAGE.’ ” Id. at 22. The plaintiff alleged that this statement, together with the notation
       “ ‘INCL,’ ” in the space for the underinsured motorist premium, could reasonably be read to
       allow stacking of the liability limits for the two vehicles. Id. This court disagreed. We held that
       the statement that coverage is provided where a premium is shown did not, under any
       reasonable reading, contradict the antistacking clause. Id. at 23. Rather, the statement simply

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       informed the policyholder which coverages were applicable to which auto. Even if the
       declarations page left open the question of stacking, we held that the antistacking clause
       eliminated any uncertainty by unambiguously prohibiting stacking. Id. at 23-24. For the same
       reasons set forth in Hobbs, we reject plaintiffs’ argument in the instant case.
¶ 29        Finally, plaintiffs argue that the bodily injury coverage set forth in the declarations is
       ambiguous when compared with the “clear and concise” statement of liability limits for the
       UM/UIM bodily injury coverage. The second page of the declarations provides that $100,000
       per person and $300,000 per accident for UM/UIM coverage is the “TOTAL LIMIT FOR ALL
       VEHICLES COVERED UNDER THIS POLICY.” Plaintiffs argue that the policy’s failure to
       include this statement in the liability portion of the policy indicates an intent to aggregate
       liability limits or, at least, creates an ambiguity as to the policy drafter’s intent. We disagree.
       It is clear from the policy that the named insured was charged a single premium for UM/UIM
       coverage and that this coverage applied to all four vehicles. It is equally clear that the insured
       was charged separate premiums for the other types of coverage in the policy. The fact that
       there are not also separate limits of liability attached to each vehicle shows that the intent was
       not to aggregate the coverage for all four vehicles.
¶ 30        Accordingly, we hold that, when the declarations are read together with the antistacking
       clause, there is no ambiguity as to the amount of bodily injury liability coverage in the policy.
       The coverage is limited to $100,000 per person and $300,000 per accident. Because we agree
       with defendant that the policy is not ambiguous, we decline to consider the per se rule
       suggested by defendant.

¶ 31                                        CONCLUSION
¶ 32       For the foregoing reasons, we reverse the judgments of the lower courts and direct the
       circuit court to enter judgment for defendant. We remand the cause to the circuit court for
       further proceedings.

¶ 33      Judgments reversed.
¶ 34      Cause remanded with directions.

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