Hanson v. Lumley Trucking

SUPREME COURT CASES

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State: Illinois

Court: 5th District Appellate

Docket No: 5-09-0389 Rel

Case Date: 07/29/2010

Preview:Rule 23 order filed July 14, 2010; Motion to publish granted July 29, 2010.

NO. 5-09-0389 IN THE APPELLATE COURT OF ILLINOIS

FIFTH DISTRICT ________________________________________________________________________ LESLIE HANSON, as the Administrator of the ) Appeal from the Estate of Brian R. Waters, Deceased, ) Circuit Court of ) Madison County. Plaintiff-Appellant, ) ) v. ) No. 08-MR-658 ) LUMLEY TRUCKING, LLC, and ) GENERAL CASUALTY COMPANY OF ) ILLINOIS, ) Honorable ) Clarence W. Harrison II, Defendants-Appellees. ) Judge, presiding. ________________________________________________________________________ JUSTICE STEWART delivered the opinion of the court: Leslie Hanson, as the administrator of the estate of Brian R. W aters, deceased (the estate), appeals from the entry of a judgment on the pleadings in favor of the defendant insurance company, General Casualty Company of Illinois (General Casualty). The trial court determined that the insurance policy issued to the defendant, Lumley Trucking, LLC (Lumley), unambiguously barred the stacking or aggregation of underinsured-motorist (UIM) coverage because the declarations page of the insurance policy listed the UIM coverage only once. On appeal, Hanson argues that the trial court erred in ruling that the policy prohibits the stacking of the UIM coverage. We affirm. BACKGROUND In December 2007, Brian W aters, while employed by Lumley, was involved in a motor vehicle accident with Dale Phillips. Waters died as a result of injuries sustained in the accident. Phillips's vehicle was insured by Progressive Insurance Company (Progressive) with liability limits of $50,000 per person and $100,000 per accident. After the accident, 1

Progressive paid the estate its policy limit of $50,000 to settle the estate's claim against Phillips. On November 19, 2008, the estate filed a complaint for declaratory relief, alleging that the insurance policy that General Casualty had issued to Lumley, which covered the vehicle Waters was driving at the time of the accident, allowed the estate to recover up to $1 million. The estate argued that the policy provided a $40,000 limit of liability for its UIM coverage for each of the 25 vehicles covered by the policy but did not prohibit the stacking or aggregation of that coverage. Hence, the estate argued that the policy provided UIM coverage in the amount of $40,000 times 25 vehicles for a total of $1 million. The

defendants filed an answer and a counterclaim, seeking an adjudication that the policy did not allow its UIM coverage to be stacked. Additionally, the defendants alleged that no UIM coverage applied because the estate had already been paid $50,000, which was $10,000 more than the limit of UIM coverage under the General Casualty policy for the vehicle involved in the accident. On March 6, 2009, General Casualty filed a motion for a judgment on the pleadings in its favor. The estate filed a response to that motion and requested a judgment on the pleadings in its favor. On June 23, 2009, the trial court entered an order finding that the case was "readily subject to" a judgment on the pleadings since neither party had identified any disputed fact. The court found that the "determinative issue" was whether the UIM coverage for the 25 vehicles in the General Casualty policy could stack in order to provide the estate with $1 million in UIM coverage. The court ruled as follows: "The General Casualty policy contains a single line on its declaration page setting forth a shorthand identification of '46' (which cross-references a set of 25 vehicles). While this declaration may be 'tantamount' to many things (as plaintiff

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argues), it is facially a single line with a single identification of a single amount of UIM coverage. Simply because plaintiff can suggest creative possibilities for its meaning does not render this policy ambiguous." (Emphasis in original.) The trial court ruled that the declarations page was not ambiguous and created no conflict with other provisions of the policy. The court found that the UIM endorsement specifically incorporated the unambiguous declarations sheet and specifically prohibited stacking. Accordingly, the court granted General Casualty's motion for a judgment on the pleadings and denied the estate's motion for a judgment on the pleadings. This appeal followed. ANALYSIS The parties do not raise any issues of fact but argue only about how to interpret the insurance policy. The only issue is whether the policy, properly construed, allows the stacking of the UIM coverage, a question of law for which our review is de novo . Hobbs v. Hartford Insurance Co. of the Midwest , 214 Ill. 2d 11, 17 (2005). The general rules that govern the interpretation of other types of contracts also govern the interpretation of insurance contracts. Hobbs , 214 Ill. 2d at 17. When we interpret an insurance policy, our primary goal is to ascertain and give effect to the parties' intention as expressed in the language of the policy. Hobbs , 214 Ill. 2d at 17. The terms of the policy are to be applied as written unless the policy language is ambiguous or contravenes public policy. Hobbs , 214 Ill. 2d at 17. "Whether an ambiguity exists turns on whether the policy language is subject to more than one reasonable interpretation. Although 'creative possibilities' may be suggested, only reasonable interpretations will be considered. Bruder v. Country Mutual

Insurance Co. , 156 Ill. 2d 179, 193 (1993). Thus, we will not strain to find an ambiguity where none exists." Hobbs , 214 Ill. 2d at 17. Policy terms that limit an insurer's liability are to be liberally construed in favor of the

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insured, but this rule of construction comes into play only if the policy language is ambiguous. Hobbs , 214 Ill. 2d at 17. The estate acknowledges that most cases in which the court has found that an insurance policy allows stacking have done so on the basis that the language of the policy was ambiguous because the declaration sheet listed more than one vehicle with separate coverages and separate premiums. E.g., Johnson v. Davis , 377 Ill. App. 3d 602, 608-09 (2007) (where the declaration sheet listed the limits of liability separately for each vehicle covered under the policy, there was a conflict with other provisions in the policy, which created an ambiguity that was resolved in favor of the insured, allowing the greater coverage provided by stacking). Although the interpretation of an insurance policy must be conducted on a case-by-case basis, the manner in which the insurance company lists the coverage on its declaration sheet provides important information that is specific to the policyholder. See Johnson, 377 Ill. App. 3d at 609. In Johnson, this court found that stacking was allowed under the policy because the limits of the UIM coverage were listed four separate times, "once for each vehicle covered," and four separate premiums for the UIM coverage were also listed on the declarations sheet. Johnson, 377 Ill. App. 3d at 609. The pertinent provisions of the General Casualty policy at issue in this case are as follows: Under "ITEM TWO

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