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Prudential Property & Casualty Insurance Co. v. Kelly

October 19, 2004

PRUDENTIAL PROPERTY & CASUALTY INSURANCE COMPANY, PLAINTIFF-APPELLEE,
v.
PATRICIA KELLY AND EDWARD KELLY, DEFENDANTS-APPELLANTS.



Appeal from the Circuit Court of the 12th Judicial Circuit, Will County, Illinois, No. 03-MR-225. Honorable Herman Haase, Judge, Presiding.

The opinion of the court was delivered by: Justice Slater

The plaintiff, Prudential Property & Casualty Insurance Company (Prudential), issued an automobile insurance policy to the defendants, Patricia and Edward Kelly (the Kellys). The policy provided underinsured-motorist (UIM) coverage for four vehicles. After Patricia Kelly suffered injuries in an accident, the Kellys claimed that the policy allowed them to aggregate or "stack" the UIM coverage for the four vehicles. Prudential filed a complaint for declaratory judgment, seeking a finding that the policy did not permit stacking of the coverage. The trial court granted Prudential's motion for summary judgment on the complaint. The Kellys appeal, contending that the declarations page of their policy creates an ambiguity as to whether stacking is permitted, and that ambiguity must be resolved in their favor. We affirm.

FACTS

A motor vehicle driven by Patricia Kelly collided with a vehicle driven by Richard Brown on August 22, 2001. Patricia Kelly and her husband, Edward Kelly, filed a lawsuit against Brown. The lawsuit was settled for the liability limits in Brown's insurance policy of $100,000. The Kellys then asserted a claim under the UIM coverage in their insurance policy. The Kellys claimed that their policy permitted stacking of the UIM coverage on their four vehicles.

The Prudential policy provides that UIM coverage is payable only when the bodily injury liability limits of the driver responsible for the accident are lower than the limits of the UIM coverage. In this case, Brown's bodily injury liability limits were $100,000, which was equal to the UIM limits on each car in the Prudential policy. Therefore, Prudential denied the Kellys' claim for UIM coverage. Prudential then filed a complaint for declaratory judgment, seeking a finding that the insurance policy did not provide for UIM coverage in these circumstances.

The Kellys filed a counter-complaint for declaratory judgment, asserting that the policy allows them to stack the UIM coverage on each of the four vehicles insured under the policy. Thus, the Kellys sought an order declaring that the available UIM coverage provided under the policy totaled $400,000. The parties filed cross motions for summary judgment. Following a hearing, the trial court found that the policy was not ambiguous, and it did not allow for stacking of the UIM coverage on the vehicles. Therefore, the court granted Prudential's motion for summary judgment and denied the Kellys' motion. The court subsequently dismissed the Kellys' counter-complaint.

DISCUSSION

On appeal, the Kellys contend that the trial court erred in granting Prudential's motion for summary judgment. Relying primarily on Hall v. General Casualty Company of Illinois, 328 Ill. App. 3d 655, 766 N.E.2d 680 (2002), the Kellys assert that the declarations page of the policy creates an ambiguity with regard to whether the UIM coverage limits on the four vehicles may be stacked. The Kellys assert that the ambiguous policy should be construed against Prudential as the drafter, thus providing for total UIM coverage of $400,000. Prudential contends that the language contained in the declarations page and the anti-stacking provision of the policy unambiguously prohibits stacking of the UIM coverage limits.

Summary judgment is appropriate when the pleadings, depositions and admissions on file, together with any affidavits, show that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. 735 ILCS 5/2--1005(c) (West 2002). The construction of an insurance policy and the coverage provided are questions of law that are appropriate subjects for summary judgment. Crum & Forster Managers Corp. v. Resolution Trust Corp., 156 Ill. 2d 384, 620 N.E.2d 1073 (1993).

In construing an insurance policy, a court must ascertain the intent of the parties as expressed by the language used in the policy. American States Insurance Co. v. Koloms, 177 Ill. 2d 473, 687 N.E.2d 72 (1997). If the policy is clear and unambiguous, a court will give the language its plain meaning. Koloms, 177 Ill. 2d 473, 687 N.E.2d 72. If the terms are ambiguous, they will be construed against the insurer as the drafter of the policy. Koloms, 177 Ill. 2d 473, 687 N.E.2d 72. The touchstone in determining whether an ambiguity exists is whether the relevant portion of the policy is subject to more than one reasonable interpretation, not whether creative possibilities can be suggested. Bruder v. Country Mutual Insurance Co., 156 Ill. 2d 179, 620 N.E.2d 355 (1993).

The declarations page of the Prudential policy states "[i]f a premium charge does not appear, that coverage is not provided." The UIM liability limits of $100,000 per person and $300,000 per accident are listed once on the declarations page. A separate premium is listed for each of the four vehicles for this coverage.

The Prudential policy also contains a "limit of coverage" clause that provides:

"If you or any other person insured under this policy is in an accident:

1. In a car that is insured by this policy--We will not pay more than the limit of coverages ...


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