Janes v. WESTERN STATES INS. CO.
| Decision Date | 31 August 2001 |
| Docket Number | No. 5-99-0763.,5-99-0763. |
| Parties | Linda JANES, Individually and as Administrator of the Estate of Phillip Ernest Janes, Deceased, Plaintiff-Appellant and Cross-Appellee, v. WESTERN STATES INSURANCE COMPANY, Lee Hooker, Executor of the Estate of Charles R. Church, Deceased, and Lee Hooker, Executor of the Estate of Connie H. Church, Deceased, Defendants (Russell Harris, Administrator of the Estate of Jerry G. Harris, Deceased, Russell Harris, Administrator of the Estate of Cleo Harris, Deceased, Defendant-Appellee, and Transamerica Indemnity Company, a/k/a TIG Insurance Company, Defendant-Appellee and Cross-Appellant). |
| Court | United States Appellate Court of Illinois |
Robert H. Howerton, Harris, Lambert, Howerton & Dorris, Marion, for Linda Janes.
Brad K. Bleyer, Marion, for Russell Harris, Adm. of the Estates of Jerry G. Harris, Deceased, and Cleo Harris, Deceased.
Michael J. Bedesky, Reed, Armstrong, Gorman, Mudge & Morrissey, P.C., Edwardsville, for Transamerica Indemnity Co. n/k/a TIG Insurance Co.
Edward J. Fisher, Nehrt, Sachtleben, Fisher & Kerkhover, Chester, for Lee Hooker, Executor of the Estates of Charles R. Church, Deceased, and Connie H. Church Deceased.
James B. Bleyer, Bleyer & Bleyer, Marion, for Western States Insurance Company.
Linda Janes (plaintiff), individually and as the administrator of the estate of Phillip Ernest Janes, filed a declaratory judgment action in the circuit court of Williamson County regarding her underinsured-motorist coverage through Transamerica Indemnity Company, also known as TIG Insurance Group (defendant). On cross-motions for summary judgment, the court entered judgment in part for plaintiff and in part for defendant. Plaintiff appeals and defendant cross-appeals. The appeal raises numerous issues.
Plaintiff and her husband, Phillip Ernest Janes, were policyholders of an insurance policy on a Nissan van. On October 1, 1993, Phillip was driving the van and plaintiff was a passenger. There were four other occupants: Cleo Harris and her husband, Jerry Harris, and Connie Church and her husband, Charles Church. A vehicle driven by Alice Phelps crossed the center line and collided with the van. Plaintiff suffered serious injuries. Plaintiff claims that she was in intensive care until October 21, 1993, and that her medical bills total $162,226.43. All the other occupants of the van died. Defendant concedes that the damages exceed all alleged policy limits. Phelps's liability insurance provider tendered her policy limits of $50,000.
Plaintiff and her husband were the named insureds on two separate insurance policies. One policy was issued by Western States Insurance Company (Western States), the other by defendant.
The insuring-agreement section for the underinsured-motorist coverage of the policy issued by defendant provided, "We will pay under this coverage only after the limits of liability under any applicable bodily injury bonds or policies have been exhausted by payment of judgment or settlements."
Defendant issued a document entitled "Split Underinsured Motorists Limits" instructing plaintiff that the first paragraph of the limit of liability in the original endorsement was replaced by the following:
The schedule did not list the limit of liability.
The declarations page has a section entitled "Coverages & Limits," which lists horizontally across the top a Nissan GXE van, a Dodge Shadow, and a Dodge pickup. Listed in the first column are the coverages provided: bodily injury liability, property damage, medical payments, uninsured/underinsured motorists, property damage/uninsured motorists, other than collision, and collision. In this column, after the listing of bodily injury liability and after the listing of uninsured/underinsured motorists, there is an asterisk (*). In the left margin, alongside the first column, is this legend: "* PER PERSON/PER ACCIDENT OR OCCURRENCE PER POLICY PROVISION; 000 OMITTED." The remaining columns list dollar amounts for the limits of coverage and for premiums.
For each vehicle there are two columns, one listing the limits of coverage and the other listing the premium. For example, on the line for uninsured/underinsured motorists, the columns read $50/100 and $14 (under Nissan GXE van), $50/100 and $13 (under Dodge Shadow), and $50/100 and $13 (under Dodge pickup). At the bottom of the columns listing the premiums, the premiums for each vehicle are subtotaled. These subtotals are referred to as "PREMIUM PER CAR" (e.g., $178 under Nissan GXE van). Under this section, on the right side of the page, there is a box listing the "TOTAL SEMI[ ]ANNUAL PREMIUM" at $513.
On September 29, 1995, plaintiff filed a 16 count complaint for declaratory judgment against Western States and defendant. Plaintiff asked that the coverage given by defendant be stacked, for a total of $300,000 in coverage. Plaintiff asked, in the alternative, that if defendant's coverage were deemed to be $100,000, it still be stacked with the coverage from Western States. Western States tendered its policy limits of $50,000 after the declaratory judgment action was filed.
On July 17, 1998, defendant filed a petition for leave to deposit proceeds, seeking to deposit $50,000 with the circuit clerk. Plaintiff filed an objection, conceding that defendant could deposit the funds but objecting to a deposit that would relieve defendant of any liability beyond the deposit. In a docket entry, the court ordered as follows:
There is no indication in the record that a proposed order was submitted or a deposit made.
Plaintiff filed a motion for summary judgment, and defendant filed a cross-motion. On April 8, 1999, the court entered an order finding that the policy issued by defendant "stacked," making the total coverage from defendant $300,000. The court also found that defendant's policy should be aggregated with Western States' coverage of $50,000, for a total of $350,000. The issues regarding applicable setoffs were reserved pending further hearing. Plaintiff then filed a motion asking for sanctions for vexatious and unreasonable failure to pay. See 215 ILCS 5/155 (West 1998); 735 ILCS 5/2-1005(a) (West 1998).
On October 19, 1999, the court entered an order denying all claims against defendant for bad faith. The court also granted defendant a setoff for the total amount of $50,000 paid by Phelps's insurer. The court ruled that all the insurance proceeds should be divided equally among the six claimants (one for each occupant of the Janes vehicle). The court awarded each of the six claimants $8,333.33 from the deposit previously made by Western States and $41,666.66 from defendant.
Plaintiff appeals. Defendant cross-appeals.
Plaintiff contends that defendant's delay in payment is vexatious and unreasonable as case law clearly establishes that the policy allows coverages to be stacked. Defendant contends that the policy was unambiguous and that the trial court, therefore, erred in stacking the coverage. We find that case law has directly addressed the arrangement of this policy format such that there is no bona fide dispute that stacking is permissible.
In Allen v. Transamerica Insurance Co., 128 F.3d 462 (7th Cir.1997), the Seventh Circuit allowed the plaintiff to stack underinsured-motorist coverages. In Allen, the plaintiff had two vehicles, each having an underinsured-motorist liability limit of $50,000 per person and $100,000 per incident. Allen, 128 F.3d at 464. The policy also contained a limit-of-liability provision identical to the one in this case. As in the case at hand, the schedule was left blank, and the declarations page was the only place that set forth the limits of the policy.
As a federal court having jurisdiction through diversity, the Allen court interpreted Illinois law. The court found that "the precise factual scenario" before it had been addressed in Bruder v. Country Mutual Insurance Co., 156 Ill.2d 179, 189 Ill.Dec. 387, 620 N.E.2d 355 (1993). Allen, 128 F.3d at 467. In Bruder, the plaintiff attempted to stack the underinsured-motorist coverage for two pickup trucks. The Bruder court held that the antistacking clause, when read together with the declarations page, was unambiguous because the limit of underinsured-motorist coverage was listed only once above the columns in the middle of the page and was not repeated in the columns. The Bruder court analyzed the columnar arrangement of the declarations page and made clear that its decision hinged on the limits not being repeated in the columns. The Allen court quoted Bruder:
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