Stacking Limits Not Permissible Just Because of Policy Repetition

By Don R. Sampen, published, Chicago Daily Law Bulletin, June 25, 2024

The Illinois Supreme Court recently held that $1 million liability limits for each of seven covered vehicles in a single multi-vehicle insurance policy could not be “stacked” for a total of $7 million in coverage for one accident.

The case is Kuhn v. Owners Insurance Co., 2024 IL 129895 (May 23). Several claimants, including the named plaintiff Mark Kuhn, were represented by the Sumner Law Group of St. Louis. Dinsmore & Shohl LLP of Chicago represented the insurer, Owners.

Kuhn was a driver of a school bus carrying a Normal, Illinois, girls basketball team when the bus was struck by a semi-truck and trailer in 2018. Two people were killed and several others were injured. Kuhn subsequently brought suit against the estate of the semi-truck’s driver and entities related to Farrell Trucking, to which Owners had issued a commercial vehicle insurance policy.

Kuhn subsequently filed this declaratory judgment action against Owners, naming other victims of the accident as defendants in order to bind all to the terms of the judgment in this suit. Kuhn contended that the $1 million liability limits in the policy covering the semi-truck and six other vehicles — three semi-trucks and four trailers in total — could be stacked for a combined $7 million in liability coverage.

On cross-motions for summary judgment, the trial court agreed and ruled that stacking of the liability limits was appropriate. The 4th District Appellate Court reversed, and the Supreme Court granted leave to appeal.

Analysis

In an opinion by Justice Elizabeth Rochford, the Supreme Court affirmed the appellate court ruling. She observed generally that anti-stacking clauses in insurance policies do not violate public policy and will be given effect. If, however, the policy language is ambiguous, the court will construe it liberally in favor of coverage and against the insurer which drafted the policy.

In this case the Owners policy declarations pages contained listings of the vehicles covered and types of coverages. One portion of the declarations provided a separate entry for each of the seven vehicles, including the premium for each vehicle and the “combined liability” of $1 million for each accident. Rochford construed “combined liability” as meaning both bodily injury and property damage limits.

A separate section of the policy also contained anti-stacking language to the effect that the limit of insurance “may not be added to the limits for the same or similar coverage applying to other autos … to determine the amount of coverage available for any one accident.”

Notwithstanding that language, Kuhn and other claimants argued that the multiple listing of liability limits and premiums for each vehicle rendered the anti-stacking clause in the Owners policy ambiguous. In support, they relied on ambiguous dicta in a prior Supreme Court decision, Bruder v. Country Mutual Insurance Co., 156 Ill. 2d 179 (1993). That dicta arguably suggested that if premiums and limits were repeatedly stated for separate vehicles, the limits could be added together.

Rochford acknowledged that the Bruder dicta gave rise to confusion. Nonetheless, she wrote that the Supreme Court had “repeatedly emphasized” there was no per se rule that a policy would be deemed ambiguous just because the limits of liability are noted more than once in the declarations.

She further stated that variances in policy language required case-by-case review. Taking a “wide-angled view of the declarations pages” here, the only logical and reasonable interpretation was that the purpose of the separate entries showing premiums and coverages for each vehicle was to summarize and clarify the information provided.

The declarations pages, moreover, had to be construed in light of the anti-stacking provision, thereby making clear that the limits could not be aggregated.

The Supreme Court therefore affirmed the decision of the appellate court in favor of Owners.

Key Point

The listing of policy limits multiple times in a policy’s declarations pages does not in itself give rise to an ambiguity regarding the stacking of limits. Whether stacking is allowed turns on the policy language read as a whole.