Hess v. Klamm

• Decision Date: 24 January 2020
• Docket Number: Docket No. 124649
• Citation: 443 Ill.Dec. 59,2020 IL 124649,161 N.E.3d 183
• Parties: Loretta HESS et al., Appellees, v. The ESTATE OF TJay KLAMM, Deceased, et al. (State Auto Insurance Companies, Appellant).
• Court: Illinois Supreme Court

2020 IL 124649

161 N.E.3d 183

443 Ill.Dec. 59

Loretta HESS et al., Appellees,

v.The ESTATE OF TJay KLAMM, Deceased, et al. (State Auto Insurance Companies, Appellant).

Docket No. 124649

Supreme Court of Illinois.

Opinion filed January 24, 2020

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

Paul J. Schafer, of Winters, Brewster, Crosby and Schafer LLC, of Marion, for appellees.

CHIEF JUSTICE BURKE delivered the judgment of the court, with 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, 437 Ill.Dec. 201, 144 N.E.3d 1. 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:

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 is 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 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, 437 Ill.Dec. 201, 144 N.E.3d 1. 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, 407 Ill.Dec. 392, 63 N.E.3d 824 ; Seymour v. Collins , 2015 IL 118432, ¶ 42, 396 Ill.Dec. 135, 39 N.E.3d 961. The applicable standard of review for both types of motions is de novo . Hooker , 2016 IL 121077, ¶ 21, 407 Ill.Dec. 392, 63 N.E.3d 824. 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, 258 Ill.Dec. 792, 757 N.E.2d 481 (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, 291 Ill.Dec. 269, 823 N.E.2d 561 (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, 213 Ill.Dec. 606, 659 N.E.2d 952 (1995). Thus, an unambiguous antistacking clause will be given effect by a reviewing court. Hobbs , 214 Ill. 2d at 18, 291 Ill.Dec. 269, 823 N.E.2d 561. 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, 291 Ill.Dec. 269, 823 N.E.2d 561. Policy language is ambiguous if it is susceptible to more than one reasonable interpretation. Id. Only reasonable constructions of the language...