Illinois Farmers Insurance Co. v. Hagenberg
167 A.3d 1218
| D.C. | 2017Background
- Plaintiff Robert Hagenberg was injured by an underinsured driver; driver’s insurer paid $25,000 but Hagenberg’s Illinois Farmers underinsured-motorist (UIM) policy had $500,000 limits.
- Hagenberg sought recovery up to $750,000 after an arbitrator awarded that amount; Illinois Farmers paid only $475,000 (policy limit minus driver payment).
- Hagenberg contended he could stack three Illinois Farmers UIM policies (his and his parents’) to reach $1,500,000; Illinois Farmers invoked anti-stacking clauses in each policy.
- Each policy contained an anti-stacking clause barring combination of limits with "any of the Farmers Insurance Group of Companies," a Notice listing member companies (including "Illinois Farmers Insurance Company") and a declarations page listing the issuer as "Illinois Farmers Insurance Company, Aurora, Illinois" with a Farmers Group logo and signature pages.
- Trial court, relying on an unpublished Illinois opinion (Boatright), held the anti-stacking clause ambiguous and unenforceable, awarded Hagenberg $750,000, and granted attorneys’ fees under D.C. Code § 16-4425(c).
- Appellate court reversed: held Boatright did not collaterally estop Illinois Farmers (logo difference), found the anti-stacking clause unambiguous under Illinois law (bars stacking), reversed summary judgment for Hagenberg, and vacated the fee award for reconsideration on remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether prior unpublished Boatright decision collaterally estops Illinois Farmers | Boatright decided identical clause ambiguity; trial court should apply collateral estoppel | Policies differ (declarations page logo present here) so prior unpublished Boatright is not binding | Collateral estoppel did not apply because policies were not identical in all relevant respects (logo difference legally significant) |
| Whether the anti-stacking clause is ambiguous under Illinois law | Hagenberg: clause ambiguous (e.g., "Illinois Farmers Insurance Company, Aurora, Illinois" could be different entity) so unenforceable | Illinois Farmers: clause unambiguous — declarations, signatures, and Farmers Group logo show issuer is a Group member, triggering anti-stacking | Clause is unambiguous and enforceable; it precludes stacking the three policies’ UIM limits |
| Whether Hagenberg was eligible/entitled to attorneys’ fees under D.C. Code § 16-4425(c) | Hagenberg: prevailing party in contested post-award proceeding; fees permissible | Illinois Farmers: fees improper because dispute was a coverage/declaratory action, not an award-contest; fees excessive | Eligibility exists because Illinois Farmers moved to modify/vacate the award, but entitlement is equitable and must be reassessed on remand given reversal of anti-stacking ruling |
| Proper scope/amount of fee award and use of Laffey matrix | Hagenberg: Laffey rates reasonable; fees reflect post-award litigation | Illinois Farmers: fees excessive; Laffey not appropriate given limited issue; many hours unrelated to contesting the award | Court did not abuse discretion applying Laffey; but remand required to limit fee recovery to work reasonably related to modifying/vacating/confirming the arbitration award and to reassess equities and hours |
Key Cases Cited
- Hobbs v. Hartford Ins. Co., 823 N.E.2d 561 (Ill. 2005) (anti-stacking clauses not contrary to public policy; ambiguous provisions construed against insurer)
- Outboard Marine Corp. v. Liberty Mut. Ins. Co., 607 N.E.2d 1204 (Ill. 1992) (ambiguous policy terms construed strictly against drafter, favoring coverage)
- Travelers Ins. Co. v. Eljer Mfg., Inc., 757 N.E.2d 481 (Ill. 2001) (primary objective of contract interpretation is to effect parties’ intent)
- Grzeszczak v. Ill. Farmers Ins. Co., 659 N.E.2d 952 (Ill. 1995) (statutory context and precedent upholding anti-stacking under Illinois law)
- Fraternal Order of Police v. District of Columbia, 52 A.3d 822 (D.C. 2012) (construction of permissive fee statutes requires assessment of eligibility and equitable entitlement)