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Allen v. Transamerica Insurance Co.

June 11, 1997

ELLA M. ALLEN, PLAINTIFF-APPELLEE,

v.

TRANSAMERICA INSURANCE COMPANY, DEFENDANT-APPELLANT.



Appeal from the United States District Court for the Southern District of Illinois. No. 95 C 4117 J. Phil Gilbert, Chief Judge.

Before BAUER, RIPPLE, and MANION, Circuit Judges.

BAUER, Circuit Judge.

ARGUED NOVEMBER 4, 1996

DECIDED JUNE 11, 1997

This diversity action requires us to interpret the underinsured motorists' provision of an insurance policy. The insured, Ella M. Allen, was in a car accident on May 2, 1994. She alleged that she sustained at least $150,000 in damages. She later filed a personal injury action against Candice Houston, the driver of the other car, and recovered $50,000 (the limit under Houston's policy) from Houston's insurer. Allen sought additional recovery from her own insurer, Transamerica Insurance Company, under the underinsured motorists' provision of her motor vehicle liability insurance policy. Allen filed a declaratory judgment action against Transamerica in state court, seeking a declaration that she was entitled to $100,000 in underinsured motorists' coverage. The action was later removed to federal court. The district court granted summary judgment in favor of Allen, declaring that Allen was entitled to $100,000 in coverage. Transamerica appeals. We affirm.

1. Jurisdiction

Allen originally filed this action in the Circuit Court for the First Judicial Circuit, Williamson County, Illinois, on April 7, 1995. Transamerica removed the action to federal court pursuant to 28 U.S.C. sec. 1446. The district court granted summary judgment in favor of Allen and against Transamerica on March 7, 1996 and issued a Memorandum and Order and a Judgment in a Civil Case. Transamerica filed its Notice of Appeal in this Court on April 5, 1996, and contended that we have jurisdiction over the final judgment of the district court pursuant to 28 U.S.C. sec. 1291. On April 17, 1996, we ordered Transamerica to show cause why the appeal should not be dismissed for lack of jurisdiction. We indicated that the appeal might be premature because the district court's judgment did not award any relief to Allen; it merely granted Allen's motion for summary judgment. See American Inter-Fidelity Exchange v. American Re-Insurance Co., 17 F.3d 1018, 1020 (7th Cir. 1994) ("[W]hen the prevailing party is entitled to a declaratory judgment, the district court must draft and enter such a judgment rather than assume that the opinion serves the purpose"); see also Camp v. Gregory, 67 F.3d 1286, 1290 (7th Cir. 1995), cert. denied, 116 S. Ct. 2498 (1996). Subsequent to our April 17 order, and in response to a motion by Transamerica, the district court entered an Amended Judgment in a Civil Case on May 6, 1996. It was appropriate for us to retain jurisdiction over this appeal until the district court entered a proper declaratory judgment because once the proper judgment was entered, the original Notice of Appeal was sufficient to confer jurisdiction. See American Inter-Fidelity Exchange, 17 F.3d at 1020; see also Metropolitan Life Ins. Co. v. Estate of Cammon, 929 F.2d 1220, 1222 (7th Cir. 1991). We now proceed to the merits.

2. The Policy

The policy in issue, TRA 1348 85 89, was in effect from January 16, 1994 to July 16, 1994. Allen's husband, Alfred, was the named insured on the policy. The policy insured two cars belonging to Allen and her husband: a Chevrolet Cavalier and a Pontiac LeMans. The policy charged separate premiums for each vehicle. Allen was covered under the policy because she was Alfred's family member and because she was driving the Cavalier, a covered automobile, at the time of the accident.

A reproduction of the Declarations page of the policy is appended to this opinion for convenience. The Declarations page contains two columns for the Cavalier and two columns for the LeMans. For each car, the first column lists the type and limit of coverage, and the second column lists the premium paid for each type of coverage. Each car under the policy carries coverage of $50,000 per person and $100,000 per accident or occurrence for bodily injuries. The underinsured motorists' coverage also sets limits of $50,000 per person and $100,000 per accident or occurrence on each car. The policy provides that:

[Transamerica] will pay compensatory damages which an "insured" is legally entitled to recover from the owner or operator of an "underinsured motor vehicle" because of "bodily injury:" 1. Sustained by an "insured;" or

2. Caused by an accident.

The policy defines an "underinsured motor vehicle" as "a land motor vehicle . . . to which a bodily injury liability bond or policy applies at the time of the accident but its limit for bodily injury is less than the limit of liability for this coverage."

The provision of the policy that is most relevant to this case is the "anti-stacking" provision, which is found in the "Split Underinsured Motorists Limits" ...


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