Cherry v. Elephant Insurance Co.
94 N.E.3d 1265
Ill. App. Ct.2018Background
- On June 6, 2015 Austin Cherry (driver) and passenger Lesley Taylor were injured by an underinsured motorist; both settled with the tortfeasor’s insurer for $25,000.
- The vehicle Cherry drove was insured under a family policy issued to Richard Cherry by Elephant Insurance covering four vehicles, each listed with uninsured/underinsured motorist (UIM) limits shown as "$25,000/$50,000" and a separate premium for each vehicle.
- The policy contains a Part C antistacking clause: “There will be no stacking or combining of coverage afforded to more than one auto under this policy,” and a limits clause tying the maximum to “the limit of liability shown on the declarations page.”
- Plaintiffs sued for declaratory relief seeking aggregation (stacking) of the four vehicles’ UIM limits (arguing a combined $100,000/$200,000 or $200,000 per person depending on interpretation).
- The trial court granted Elephant’s summary judgment (no stacking; limits $25,000/$50,000). The appellate court reversed, finding the policy ambiguous and construing ambiguity against the insurer.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether UIM limits for multiple vehicles on the same policy may be stacked | Declarations list the UIM limits multiple times (one entry per vehicle) and separate premiums were charged; this creates an ambiguity that permits aggregation | Antistacking clause and declarations show limits are $25,000/$50,000 and expressly prohibit stacking; limits tied to declarations are unambiguous | Ambiguity exists when declarations list numerical limits multiple times; antistacking language does not unambiguously preclude aggregation, so limits aggregate in favor of insureds |
| Whether the listed "$25,000/$50,000" denotes per-person/per-accident or uninsured/underinsured amounts | The formatting (UIM row shows “Uninsured/Underinsured Motorist—Bodily Injury $25,000/$50,000”) permits a reasonable interpretation that $25,000 is uninsured and $50,000 is underinsured (or alternatively per-person/per-accident) | The standard reading is $25,000 per person / $50,000 per accident as shown elsewhere; defendants rely on application and policy language to clarify | The presentation is ambiguous as to the meaning of the two numbers; read in plaintiffs’ favor, the insureds could reasonably conclude $50,000 of UIM per vehicle, so aggregation yields $200,000 per plaintiff |
Key Cases Cited
- Crum & Forster Managers Corp. v. Resolution Trust Corp., 156 Ill. 2d 384 (Illinois 1993) (standard of review for summary judgment and contract interpretation).
- Bruder v. Country Mut. Ins. Co., 156 Ill. 2d 179 (Illinois 1993) (a declarations page that prints the limit for each vehicle can create an ambiguity supporting stacking).
- Hobbs v. Hartford Ins. Co. of the Midwest, 214 Ill. 2d 11 (Illinois 2005) (antistacking clauses read with declarations may be unambiguous but case-by-case analysis required).
- Grzeszczak v. Ill. Farmers Ins. Co., 168 Ill. 2d 216 (Illinois 1995) (antistacking clauses generally permissible).
- Murphy v. State Farm Mut. Auto. Ins. Co., 234 Ill. App. 3d 222 (Ill. App. Ct. 1992) (ambiguities in insurance policies construed against insurer).
- Johnson v. Davis, 377 Ill. App. 3d 602 (Ill. App. Ct. 2007) (aggregating limits where declarations listed identical limits multiple times and separate premiums appeared).
- Allen v. Transamerica Ins. Co., 128 F.3d 462 (7th Cir. 1997) (declarations listing multiple limits can render antistacking language ambiguous).
- Pekin Ins. Co. v. Estate of Goben, 303 Ill. App. 3d 639 (Ill. App. Ct. 1999) (similar rule permitting aggregation when declarations list limits per vehicle).
- Yates v. Farmers Auto. Ins’n, 311 Ill. App. 3d 797 (Ill. App. Ct. 2000) (same approach to declarations-format ambiguity).
- Lenkutis v. New York Life Ins. Co., 374 Ill. 136 (Illinois 1940) (insurer must draft exclusions clearly; ambiguities construed for the insured).