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Hobbs v. Hartford Insurance Co. of the Midwest

January 21, 2005


The opinion of the court was delivered by: Justice Fitzgerald


Docket Nos. 97481, 98309 cons.-Agenda 15-November 2004.

At issue in these consolidated appeals is whether an insured may "stack," i.e., aggregate, the limits of liability for underinsured-motorist coverage where multiple vehicles are covered under one policy. The lower courts determined that the policies at issue were ambiguous and must be construed in favor of the insureds to permit stacking. We reverse.


No. 97481-Hobbs v. Hartford Insurance Company

In June 2000, plaintiff Lula Hobbs was involved in a motor vehicle accident, allegedly sustaining injuries and damages in excess of $200,000. Hobbs settled claims against the driver of the other vehicle for the driver's policy limits of $50,000. At the time of the accident, Hobbs carried underinsured-motorist coverage for two vehicles under a single policy issued by Hartford Insurance Company of the Midwest (Hartford), in the amount of $100,000 per person, $300,000 per occurrence. Pursuant to the underinsured-motorist coverage, Hartford tendered to Hobbs a check in the amount of $50,000. This amount represented the difference between the $100,000 per person underinsured-motorist coverage afforded under Hobbs' policy and the $50,000 Hobbs received from the other driver's insurer. Hobbs maintained, however, that she was entitled to an additional sum from Hartford and, in February 2002, filed a declaratory judgment action in the circuit court of Madison County. In her subsequent motion for summary judgment, Hobbs argued that the Hartford policy was ambiguous as to the limits of underinsured-motorist coverage and that she should be allowed to stack the underinsured-motorist coverage for the two vehicles, thus producing a per-person limit of $200,000. In its cross-motion for summary judgment, Hartford countered that the policy contained unambiguous antistacking language and that the underinsured-motorist bodily injury limit was $100,000 per person. The trial court found that the declarations page of the Hartford policy contained language inconsistent with and contradictory to the antistacking provisions, creating an ambiguity that must be construed in favor of Hobbs to permit stacking. Thus, the trial court declared that the underinsured-motorist bodily injury limit was $200,000 per person. The appellate court affirmed. Hobbs, No. 5-02-0429 (unpublished order under Supreme Court Rule 23). We allowed Hartford's petition for leave to appeal. See 177 Ill. 2d R. 315.

No. 98309-Anheuser v. Prudential Property & Casualty Insurance

In September 1999, Lee Ann Anheuser was involved in a motor vehicle accident. The car she was driving was owned by her or her parents, Richard and Shirley Anheuser. The Anheusers filed a personal injury and property damage suit in the circuit court of Franklin County against the other driver, Dana Sample, which was eventually settled for Sample's policy limits of $100,000. The Anheusers then sought underinsured-motorist coverage under an auto policy issued by Prudential Property and Casualty Insurance Company (Prudential) to Richard Anheuser. The Prudential policy covered three vehicles, including the one involved in the accident. A dispute arose as to the amount of underinsured-motorist coverage and, on motion of the Anheusers, their complaint was amended to name Prudential as a defendant. Sample was later dismissed with prejudice, and the case proceeded against Prudential. The parties filed cross-motions for summary judgment.

Prudential maintained that the bodily injury limits under Sample's policy were equal to the underinsured-motorist benefits under the Anheusers' policy: $100,000 per person. Therefore, according to Prudential, Sample was not an "underinsured" motorist and underinsured-motorist benefits were not available to the Anheusers. Prudential also maintained that the policy prohibited stacking of underinsured-motorist coverage. The Anheusers argued that the Prudential policy was ambiguous as to the limits of underinsured-motorist coverage and that stacking should be permitted to determine whether Sample was underinsured. The trial court ruled that the declarations page of the policy contained language creating an ambiguity that the antistacking clause in the policy could not cure. The trial court ruled in favor of the Anheusers and declared that the underinsured-motorist bodily injury limits were $300,000 per person. We allowed Prudential's motion for a direct appeal to this court (see 134 Ill. 2d R. 302(b)), and consolidated this case with the Hobbs appeal for review.


The salient facts in each case are not in dispute. The Hartford and the Prudential policies each provide some measure of underinsured-motorist coverage. The only issue is whether these policies, properly construed, prohibit or permit stacking of underinsured-motorist coverage. On this legal issue our review proceeds de novo. See American States Insurance Co. v. Koloms, 177 Ill. 2d 473, 479-80 (1997); Grzeszczak v. Illinois Farmers Insurance Co., 168 Ill. 2d 216, 223 (1995).

An insurance policy is a contract, and the general rules governing the interpretation of other types of contracts also govern the interpretation of insurance policies. Dempsey v. National Life & Accident Insurance Co., 404 Ill. 423, 426 (1949); see also Maremont Corp. v. Continental Casualty Co., 326 Ill. App. 3d 272, 276 (2001); Pekin Insurance Co. v. Willett, 301 Ill. App. 3d 1034, 1037 (1998). Accordingly, our primary objective is to ascertain and give effect to the intention of the parties, as expressed in the policy language. American States Insurance Co., 177 Ill. 2d at 479. If the policy language is unambiguous, the policy will be applied as written, unless it contravenes public policy. Menke v. Country Mutual Insurance Co., 78 Ill. 2d 420, 423 (1980). 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. McKinney v. Allstate Insurance Co., 188 Ill. 2d 493, 497 (1999). Although policy terms that limit an insurer's liability will be liberally construed in favor of coverage, this rule of construction only comes into play when the policy is ambiguous. Menke, 78 Ill. 2d at 424.

This court has determined that antistacking clauses in general do not contravene public policy. Grzeszczak, 168 Ill. 2d at 229. Moreover, the Illinois Insurance Code expressly authorizes the use of antistacking provisions in motor vehicle insurance policies. 215 ILCS 5/143a-2(5) (West 2002). Thus, if the antistacking clauses at issue in these cases are unambiguous, they will be given effect. See Grzeszczak, 168 Ill. 2d at 230.

Because the Hartford and Prudential policies do not contain identical antistacking language, we examine each policy separately.

Hartford Policy

Hartford identifies three provisions in the policy issued to Hobbs which it argues unambiguously prohibit stacking of underinsured-motorist coverage. We agree with Hobbs that two of the provisions are inapplicable to the present dispute and we need not review them here. We turn our attention to the remaining antistacking provision identified by Hartford, which reads in relevant part:


The limit of liability shown in the Declarations for each person for Underinsured Motorists Coverage is our maximum limit of liability for all damages, including damages for care, loss of services or death, arising out of bodily injury sustained by any one person in any one accident. *** This is the most we will pay regardless of the number of:

1. Insureds;

2. Claims ...

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