State Farm Mutual Automobile Insurance Co. v. Progressive Northern Insurance Co.
30 N.E.3d 440
Ill. App. Ct.2015Background
- Andrew Toig, an unmarried, unemancipated college student living in a campus apartment in Colorado, was injured in an auto accident; he sought UIM coverage under three State Farm auto policies held by his father and stepmother and one Progressive policy held by his mother.
- State Farm policies defined “Relative” in two sentences: (1) a person related by blood/marriage/adoption who "resides primarily with you," and (2) "It includes your unmarried and unemancipated child away at school."
- Parties filed cross-motions for summary judgment; facts were undisputed and the sole contested legal question was whether Andrew qualified as a “relative” under State Farm’s policies.
- Trial court held the two-sentence definition is disjunctive: the second sentence independently covers an unmarried, unemancipated child away at school, so Andrew was covered; total recoverable UIM was $500,000 minus $40,000 tortfeasor payment = $460,000, apportioned equally among the four policies ($115,000 each).
- State Farm raised additional arguments (stepchild exclusion, per-policy setoffs, pro rata allocation by limits) for the first time on rehearing; the trial court declined to reverse and the appellate court found those arguments forfeited.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether both sentences of "Relative" must be satisfied (i.e., conjunctive interpretation) | Both lines are required; Andrew did not "reside primarily" with the insureds, so no coverage | The second sentence is an independent, alternative definition covering a child away at school | Held for Progressive: sentences read disjunctively; a child away at school is covered without proving "primarily resides" |
| Whether Andrew qualified as an "unmarried and unemancipated child away at school" given voter registration and driver license in Colorado | Registration/license show intent not to return => not "away" from parents => no coverage | "Away" means absent from parents' home; voter registration/license do not negate "away at school" under the policy | Held for Progressive: Andrew was "away at school" and covered; voter registration/driver's license do not defeat coverage absent policy language |
| Whether State Farm waived/forfeited arguments raised first in motion for rehearing (stepchild exclusion; per-policy setoffs; prorata by limits) | These are meritorious late-raised arguments and the court should consider them | Progressive: issues were pleaded/argued earlier; State Farm forfeited by failing to raise them in original briefing | Held for Progressive: trial court did not abuse discretion denying reconsideration; late theories forfeited |
| Allocation / setoff of recovery among policies (whether $40,000 setoff applies to total or each policy; equal share vs prorata by limits) | (Partially raised late) Argues $40,000 should be subtracted from each policy and allocation should be prorated by limits | Progressive argued $40,000 is subtracted from the combined total and each policy shares equally (25%) | Held for Progressive: $40,000 subtracted from combined $500,000 (leaving $460,000) and each of four policies shares equally ($115,000 each) |
Key Cases Cited
- Outboard Marine Corp. v. Liberty Mut. Ins. Co., 154 Ill. 2d 90 (Ill. 1992) (standard of review for summary judgment and rules for construing insurance policies)
- Founders Ins. Co. v. Munoz, 237 Ill. 2d 424 (Ill. 2010) (give undefined policy terms their plain, ordinary meaning and avoid superfluity)
- Crump v. State Farm Mut. Auto. Ins. Co., 961 F.2d 725 (8th Cir. 1992) (treats the second sentence as an independent source of coverage for children away at school)
- State Farm Mut. Auto. Ins. Co. v. Taussig, 227 Ill. App. 3d 913 (Ill. App. Ct. 1992) (analyzes the two lines as alternate sources of coverage)
- Drake v. Snider, 608 S.E.2d 191 (W. Va. 2004) (interprets “school” broadly to include boarding/high school and supports coverage for children away at school)