Court Denies Auto Liability Stacking Despite Vehicle Listing

By Don R. Sampen, published, Chicago Daily Law Bulletin March 10, 2020

The Illinois Supreme Court, reversing two lower court decisions, recently held that the listing of bodily injury liability limits multiple times on the declarations pages of an automobile insurance policy covering several vehicles, did not permit the stacking of the limits, given an anti-stacking provision in the policy.

The case is Hess v. Estate of Estate of Klamm, 2020 IL 124649 (Jan. 24). The claimants, administrators of two decedents and the guardian of a third person, were represented by Winters, Brewster, Crosby & Schafer LLC of downstate Marion. Pretzel & Stouffer Chtd. represented the insurer, Meridian Security Insurance Co.

One of the decedents, Richard Kiselewski, driving two of his granddaughters, was hit in 2015 by TJay Klamm, the driver of a vehicle insured by Meridian. He and one of the granddaughters were killed in the accident, as was Klamm.

The policy covering Klamm’s vehicle provided coverage for a total of four vehicles listed on the policy. Three vehicles were listed on one page of the declarations pages, with information describing the type of coverage and premiums for each vehicle. The limits of bodily injury liability coverage were also listed once as applicable to all three vehicles, reflecting $100,000 per person and $300,000 per accident.

A second page of the declarations listed the fourth vehicle, again with information about the type of coverage and premium. That page also showed the limits for bodily injury coverage as $100,000 per person and $300,000 per accident.

The policy contained what the court referred to as an “anti-stacking clause” in the limit of liability section of the policy. That clause, among other things, indicated that the limit of liability was shown on the declarations pages.

A second sentence stated that the limit of liability shown in the declarations “for each accident … is our maximum limit of liability for all damages for bodily injury resulting from any one auto accident.”

The plaintiffs brought suit against the estate of Klamm and Meridian. They contended that the limits stated in the policy were ambiguous and that the ambiguity should be construed in their favor.

Upon cross-motions for summary judgment, the trial court agreed with the plaintiffs. It held that because the policy applied to four vehicles, the limits should be stacked four times, resulting in coverage of $400,000 per person and $1.2 million per accident.

On appeal, the 5th District Appellate Court partially agreed. It held that, since the $100,000 to $300,000 limits were stated twice on the declarations pages, and since the anti-stacking clause referred to the declarations pages, the limits were to be stacked twice, for total limits of $200,000 per person and $600,000 per accident.

Subsequently, the Supreme Court granted Meridian’s petition for leave to appeal.

Analysis

In an opinion by Justice Anne M. Burke, the Supreme Court reversed. She found guidance in two prior cases of the court, Hobbs v. Hartford Insurance Company of the Midwest, 214 Ill.2d 11 (2005), and Bruder v. Country Mutual Insurance Co., 156 Ill.2d 179 (1993). Both cases involved similar claims for stacking, and in both the court, relying on anti-stacking clauses in the policies, found against the limit stacking.

In Bruder dicta, however, the court hypothesized that “[i]t would not be difficult to find an ambiguity if the policy listed individual liability limits for each covered vehicle.” Notwithstanding that observation, Burke reasoned that it had no application here.

Examining the structure of the policy, she observed that it listed the limits once on one page of the declarations and once on another page because “[t]here simply was not enough space on the first page” to list all the vehicles and coverages. Thus, considering the policy as a whole, she found that the policy provided $100,000 to $300,000 coverage regardless of the number of claims, insureds and covered vehicles involved in an accident.

According to Burke, moreover, the quoted language from Bruder, read in context, did not mean that a mere listing of the limits “twice” allowed stacking. Rather, the deciding factor was “whether the liability limits were listed separately for each of the covered vehicles.” Because the limits were not so listed here, and reading the declarations together with the anti-stacking cause, no ambiguity existed in the policy.

The court therefore reversed in favor of Meridian and held that the applicable limits under the policy were $100,000 per person and $300,000 per accident.

Key point

A listing of liability limits in the declarations separately for each of several covered vehicles can give rise to an ambiguity regarding whether the limits are to be stacked.

Where, as here, however, the anti-stacking clause and listing of limits reflected that no stacking was intended, no ambiguity existed.