In an insurance coverage matter, the Illinois Supreme Court considered whether the liability limits for each of the seven covered vehicles in a single multi-vehicle insurance policy could be aggregated or “stacked” for liability coverage of a single accident despite the presence of anti-stacking language in the applicable policy.
Background:
In December 2018, appellant Mark Kuhn was driving a school bus occupied by passengers. Traveling in the opposite direction, Ryan Hute was driving a semitruck, insured by Owners Insurance Company. Hute crossed over the center median of the highway and struck the school bus in a head-on collision. The motor vehicle incident caused two fatalities and multiple injuries.
Kuhn filed suit seeking a declaration that the $1 million liability limits in the insurance 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. In their amended complaint, Kuhn added as defendants the other bus passengers who were potential claimants in the underlying action (potential claimants), in order to bind them to the terms of the judgment in this suit.
Shortly before trial, the trial court granted Kuhn’s motion for summary judgment. In said order, it ruled that the insurance policy was ambiguous and therefore should be construed against Owners, such that stacking of the liability limits was appropriate.
However, the appellate court later reversed the trial court’s decision. Holding that the policy’s antitracking clause was unambiguous on its face and, when read together with the declarations and other policy provisions, that the anti-stacking clause should be enforced as written.
Analysis:
The Illinois Supreme Court found that the insurance policy, when read as a whole, unambiguously provided a $1 million per accident liability limit and prohibited stacking the liability limits of each insured vehicle. The court rejected Kuhns’ argument that the policy was ambiguous due to the separate listing of liability limits for each vehicle insured. The court held that the policy’s anti-stacking provision, in conjunction with the declarations pages, clearly indicated that the limits could not be aggregated.
In its ruling, the Illinois Supreme Court relied in part on Hess v. Estate of Klamm, 2020 IL 124649, where the Illinois Supreme Court addressed an anti-stacking provision in an auto policy, and found it was not ambiguous and held for the insurer. In the process, the court held that anti-stacking provisions are not contrary to public policy.
Thus, the Illinois Supreme Court found it necessary for Owners Insurance to have used a multiple-page declarations section for the policy because the policy provided different coverage for seven different vehicles. Stating that the “combined liability” language used in one of the schedules and the $1 million limit listed for each vehicle in the second schedule conveyed the same information in different ways, thus limiting coverage to $1 million per accident per vehicle.