Robert Wehrle v. Cincinnati Insurance Company
719 F.3d 840
7th Cir.2013Background
- In Dec. 2010 the Wehrles were severely injured by a drunk driver whose liability policy had $100,000 per-person limits; each recovered $100,000 from the tortfeasor’s insurer.
- The Wehrles’ injuries exceeded $1 million in the aggregate; their Cincinnati Insurance underinsured-motorist (UIM) policy had a $1 million per-accident UIM limit.
- Cincinnati paid $800,000, reducing the $1 million per-accident limit by the $200,000 received from the tortfeasor’s insurer pursuant to the policy’s provision that the Limit of Insurance “shall be reduced by all sums paid or payable…by or for anyone who is legally responsible.”
- The Wehrles sued, arguing the tortfeasor’s payments should be applied to each insured’s individual claim before imposing the $1 million per-accident cap, which would yield a full $1 million from Cincinnati rather than $800,000.
- The district court granted summary judgment for Cincinnati; the Seventh Circuit affirmed, holding the policy language unambiguous and consistent with Illinois law and the gap-filling purpose of UIM coverage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Interpretation of policy reduction clause | Wehrle: payments by the tortfeasor should reduce each insured’s individual recovery first, then apply the $1M per-accident cap (yielding $1M total). | Cincinnati: §D.1 sets a $1M per-accident cap which §D.2 then reduces by all sums paid by those legally responsible (yielding $800k). | Court: Agrees with Cincinnati; §D.2 unambiguously reduces the $1M Limit by the $200k. |
| Ambiguity and contra proferentem | Wehrle: the policy is ambiguous about sequencing; ambiguity should be construed against insurer. | Cincinnati: policy language is clear; no reasonable alternative reading. | Court: No ambiguity; will not strain to create one; contra proferentem not triggered. |
| Consistency with Illinois law/statute and purpose of UIM | Wehrle: relies on cases discussing per-person reductions (e.g., Cummins) to argue limits should be reduced only by amounts actually received by each insured. | Cincinnati: Illinois statute and cases allow reducing UIM limits by amounts recovered from tortfeasor; the statute contemplates subtracting amounts actually recovered from tortfeasor from the UIM limit. | Court: Cincinnati’s reading aligns with statute and precedent (gap-filling function); Cummins is distinguishable. |
Key Cases Cited
- Lees v. Carthage Coll., 714 F.3d 516 (7th Cir.) (summary judgment review de novo)
- Bellaver v. Quanex Corp., 200 F.3d 485 (7th Cir.) (summary-judgment fact-construction rules)
- Hobbs v. Hartford Ins. Co. of the Midwest, 823 N.E.2d 561 (Ill. 2005) (insurance policies interpreted like other contracts)
- Cent. Ill. Light Co. v. Home Ins. Co., 821 N.E.2d 206 (Ill. 2004) (give effect to every policy provision)
- U.S. Fire Ins. Co. v. Schnackenberg, 429 N.E.2d 1203 (Ill. 1981) (read all policy provisions together to determine ambiguity)
- Bruder v. Country Mut. Ins. Co., 620 N.E.2d 355 (Ill. 1993) (ambiguity exists only if more than one reasonable interpretation)
- McKinney v. Allstate Ins. Co., 722 N.E.2d 1125 (Ill. 1999) (courts will not strain to find ambiguity)
- Nicor, Inc. v. Associated Elec. & Gas Ins. Servs. Ltd., 860 N.E.2d 280 (Ill. 2006) (ambiguities construed against insurer)
- Rich v. Principal Life Ins. Co., 875 N.E.2d 1082 (Ill. 2007) (clear policy terms applied as written)
- Cummins v. Country Mut. Ins. Co., 687 N.E.2d 1021 (Ill. 1997) (UIM fills gap between liability recovery and UIM limits)
- Sulser v. Country Mut. Ins. Co., 591 N.E.2d 427 (Ill. 1992) (legislative purpose of UIM is gap-filling)
- Erie Ins. Exch. v. Triana, 923 N.E.2d 861 (Ill. App. Ct. 2010) (similar policy language: reduce per-accident UIM limit by amounts paid by tortfeasor)