Bruder v. Country Mut. Ins. Co.

• Decision Date: 17 June 1993
• Docket Number: No. 74155,74155
• Citation: 156 Ill.2d 179,620 N.E.2d 355,189 Ill.Dec. 387
• Parties: , 189 Ill.Dec. 387 Ruth BRUDER et al., Appellees, v. COUNTRY MUTUAL INSURANCE COMPANY, Appellant.
• Court: Illinois Supreme Court

Page 355

620 N.E.2d 355

156 Ill.2d 179, 189 Ill.Dec. 387

Ruth BRUDER et al., Appellees, v. COUNTRY MUTUAL INSURANCE COMPANY, Appellant.

No. 74155.

Supreme Court of Illinois.

June 17, 1993.

Rehearing Denied Oct. 4, 1993.

Donald V. Ferrell, Jelliffe, Ferrell & Morris, Harrisburg, for appellant.

Gordon Lambert, Harris, Lambert, Howerton & Dorris, Marion, for appellees.

Justice FREEMAN delivered the opinion of the court:

This case involves the question of whether uninsured motorist coverage under two insurance policies issued by Country Mutual Insurance Company (Country Mutual) may be "stacked," or aggregated.

BACKGROUND

In May 1986, Ruth Bruder, then pregnant, was injured when the automobile she was driving was struck from the rear. Either or both of the drivers of the two other vehicles involved in the accident were at fault. Neither of those drivers was insured.

Bruder gave birth, prematurely, to a daughter, Halie, who suffers from cerebral palsy. It is a matter of dispute as to whether Halie's condition was caused by her premature birth and whether the premature nature of the birth was due to the accident.

Both Ruth and Halie were covered by the uninsured motorist protection afforded by two Country Mutual insurance policies. One of those policies was a "Personal Vehicle Insurance Policy" for the automobile which was involved in the accident. The other was a "Business Auto Policy" for two pickup trucks used in John Bruder's plumbing business. A premium was paid for each pickup truck under that policy.

Both John and Ruth, husband and wife, were named on the declarations page of the personal vehicle policy. However, only John Bruder's name appeared on the declarations page of the business auto policy.

The uninsured motorist coverage for bodily injury under each policy was limited to $100,000 for each person and to a total of $300,000 per accident. But because both policies provided uninsured motorist coverage, the Bruders asked Country Mutual to aggregate the coverage amounts.

Country Mutual declined, calling attention to "antistacking" provisions in both policies.

The Bruders, Ruth on behalf of herself and, together with John, on behalf of Halie, filed a declaratory judgment action (Ill.Rev.Stat.1987, ch. 110, par. 2-701) in the circuit court of Williamson County against Country Mutual. The action sought to establish that the policies afforded $300,000 worth of uninsured motorist coverage for Ruth and Halie each. The Bruders arrived at that figure by doubling the $100,000 limit under the business auto policy, reasoning that separate premiums for the pickup trucks entitled separate $100,000 amounts of coverage, and then adding the $100,000 limit under the personal vehicle policy.

Apart from the attempt to aggregate coverage, the Bruders objected to Country Mutual's selection of James Bleyer as one of three arbitrators to be named under the policies. Bleyer, an attorney, was regularly retained by Country Mutual to defend its insureds in litigation. Bleyer had so represented Country Mutual for many years and had several such cases pending when named as an arbitrator.

A bench trial on stipulated facts followed.

The trial judge ruled that coverage under the personal vehicle policy could be aggregated with coverage under the business auto policy. He concluded that the antistacking provision found in the personal vehicle policy was ambiguous, requiring a construction of the policies to favor stacking. Parenthetically, we note, although the written order mentioned only Ruth by name, the ruling applied to Halie as well for, as the order acknowledged, the disposition reached "both plaintiffs."

However, the trial judge concluded that the antistacking provision found in the business auto policy was unambiguous. He therefore ruled that aggregation of coverages associated with the separate premiums paid for the pickup trucks was precluded with respect to that policy alone.

A separate hearing was held regarding Country Mutual's selection of Bleyer. The trial judge ruled Bleyer could act as arbitrator.

The appellate court affirmed the decision to aggregate the coverages as between the two policies, adopting the trial judge's analysis. (232 Ill.App.3d 221, 224, 226, 173 Ill.Dec. 251, 596 N.E.2d 875.) The court reversed the trial judge's decision regarding the business auto policy and permitted the doubling of coverage associated with the separate premiums paid for the pickup trucks. (232 Ill.App.3d at 228, 173 Ill.Dec. 251, 596 N.E.2d 875.) The court affirmed the decision permitting Bleyer to arbitrate. (232 Ill.App.3d at 230, 173 Ill.Dec. 251, 596 N.E.2d 875.) This appeal followed. 134 Ill.2d R. 315.

DISCUSSION

Stacking of Uninsured Motorist Coverage

Insurance policy provisions intended to limit the aggregation of coverage--generally referred to as antistacking provisions--do not undermine the legislative purpose supporting the mandate of uninsured motorist protection (see Ill.Rev.Stat.1987, ch. 73, par. 755a(1)). (Glidden v. Farmers Automobile Insurance Association (1974), 57 Ill.2d 330, 335, 312 N.E.2d 247, citing Morelock v. Millers' Mutual Insurance Association (1971), 49 Ill.2d 234, 239, 274 N.E.2d 1.) Public policy considerations, therefore, are no bar to an insurer's right to enforce provisions designed to so limit coverage. Ill.Rev.Stat.1987, ch. 73, par 755a-2; Menke v. Country Mutual Insurance Co. (1980), 78 Ill.2d 420, 425, 36 Ill.Dec. 698, 401 N.E.2d 539; Glidden, 57 Ill.2d at 335, 312 N.E.2d 247.

Nor do antistacking provisions conflict, per se, with the so-called "premium rule." (See Stryker v. State Farm Mutual Automobile Insurance Co. (1978), 74 Ill.2d 507, 513, 24 Ill.Dec. 832, 386 N.E.2d 36.) That "rule" holds that it is unfair to permit an insurer to collect premiums, be it for coverage afforded under separate policies or for separate vehicles under one policy, and thereafter apply a provision limiting or absolving liability. See Greenholt v. Inland National Insurance Co. (1980), 87 Ill.App.3d 638, 641, 43 Ill.Dec. 150, 410 N.E.2d 150 (involving aggregation of coverage for two vehicles under one policy); Westchester Fire Insurance Co. v. Industrial Fire & Casualty Insurance Co. (1978), 58 Ill.App.3d 439, 444, 16 Ill.Dec. 4, 374 N.E.2d 779 (involving aggregation of coverages under separate policies); but see Monsalud v. State Farm Mutual Automobile Insurance Co. (1991), 210 Ill.App.3d 102, 106, 154 Ill.Dec. 748, 568 N.E.2d 969; Maid v. Illinois Farmers Insurance Co. (1981), 101 Ill.App.3d 1065, 57 Ill.Dec. 459, 428 N.E.2d 1139 (stating only that the "rule" applies when premiums have been paid under "separate policies").

As for any contract, resolution of questions about the parties' obligations under an insurance policy, including what is contemplated for the payment of multiple premiums, must begin with the agreement's express terms. (See Squire v. Economy Fire & Casualty Co. (1977), 69 Ill.2d 167, 175, 13 Ill.Dec. 17, 370 N.E.2d 1044.) That language stands as the singular representation of the parties' intentions. (See Menke, 78 Ill.2d at 425, 36 Ill.Dec. 698, 401 N.E.2d 539.) But ambiguities may be revealed in the terms used in view of the particular circumstances involved. Then it can no longer be said that the terms of the agreement conclusively show what the parties intended. The answer to what the insured expected to receive and the insurer provide must be determined through other means rooted in public policy. Those means entail adopting a construction of the agreement to benefit the insured over other possible constructions favoring the insurer. (See Menke, 78 Ill.2d at 423-24, 425, 36 Ill.Dec. 698, 401 N.E.2d 539; Glidden, 57 Ill.2d at 336, 312 N.E.2d 247.) The "Premium Rule" is but an "explication" of that general consideration. Greenholt, 87 Ill.App.3d at 641, 43 Ill.Dec. 150, 410 N.E.2d 150.

The issue of whether coverage of the policies here may be aggregated, arising as it does from stipulated facts, presents a question of law. (See Plenderleith v. Edwards (1927), 328 Ill. 431, 435, 159 N.E. 780; see also State Farm Fire & Casualty Co. v. Shelton (1988), 176 Ill.App.3d 858, 864, 126 Ill.Dec. 286, 531 N.E.2d 913.) That question involves the possibility of stacking as between the personal vehicle and business auto policies as well as under the business auto policy alone. For that reason, the possibilities must be independently considered. (See Squire, 69 Ill.2d at 175, 13 Ill.Dec. 17, 370 N.E.2d 1044 (acknowledging, in a case involving the stacking of coverage under separate policies, the court's prior consideration of an antistacking provision in relation to stacking of coverages under one policy in view of extra premiums paid); see also Greenholt, 87 Ill.App.3d at 639, 43 Ill.Dec. 150, 410 N.E.2d 150 (referring to "two-way" stacking).) As for each case, the critical point remains that an insurer is entitled to enforcement of unambiguous antistacking provisions to the extent that such provisions represent terms to which the parties have agreed to be bound.

Stacking of Coverage Afforded Under the Personal Vehicle

Policy With Coverage Afforded Under the Business Auto Policy

Whether stacking was proper as between the different policies here turns on the operation of an "other insurance" provision found in the "general policy conditions" of the personal vehicle policy. The provision reads:

"If this policy and any other vehicle insurance policy issued to you by this Company apply to the same accident, the maximum limit of our liability under all the policies will not exceed the highest applicable limit of liability under any one policy."

As we have indicated, stacking was permitted here based on the determination that the meaning of the provision was ambiguous given the facts presented. First, it was noted that the antistacking provision was found only in the personal vehicle policy. Moreover, only that policy had been issued to Ruth Bruder. Her name did not...