State Farm Mutual Automobile Insurance Company v. McFadden
979 N.E.2d 551
Ill. App. Ct.2012Background
- McFadden plaintiffs sought underinsured motorist (UIM) coverage from State Farm after a May 2009 crash; Nies’ insurer paid $250,000, but damages exceeded that amount.
- State Farm issued five separate policies to the McFaddens, each with $100,000 UIM coverage and its own declarations sheet.
- McFaddens argued they could stack all five $100,000 limits for a total of $500,000 UIM coverage against the tortfeasor’s $250,000 liability limit.
- State Farm filed a declaratory judgment action arguing antistacking language in each policy bars stacking beyond the highest single policy’s limit.
- Trial court accepted State Farm’s second theory (offset-first, stack-second) and did not decide the first, but the appellate court addressed both issues.
- Trial court and appellate court ultimately affirmed denial of coverage, holding antistacking language to be controlling and not ambiguous despite declarations sheets.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can UIM coverage be stacked across policies? | McFadden argues declarations imply stacking; antistacking language ambiguous with five declarations. | State Farm argues antistacking language expressly prohibits stacking beyond the highest policy. | Antistacking language defeats stacking; no aggregation beyond $100,000. |
| What method governs computing any available UIM after antistacking? | Jones/Kapinus framework should apply to stack after offset. | Antistacking makes methodology advisory; total capped at $100,000. | Because antistacking governs, stacking method is advisory; cap remains $100,000. |
Key Cases Cited
- Hobbs v. Hartford Insurance Co. of the Midwest, 214 Ill. 2d 11 (2005) ((antistacking provision disambiguates stacking and caps at highest limit))
- Grzeszczak v. Illinois Farmers Insurance Co., 168 Ill. 2d 216 (1995) ((declarat ions sheets with antistacking language control stacking))
- Armstrong v. State Farm Mutual Automobile Insurance Co., 229 Ill. App. 3d 971 (1992) ((proration clause does not create ambiguity; antistacking limits to highest single policy))
- Jones v. State Farm Mutual Automobile Insurance Co., 289 Ill. App. 3d 903 (1997) ((antistacking language deemed too difficult to understand in isolation in some contexts; distinguish from present case))
- Kapinus v. State Farm Mutual Automobile Insurance Co., 317 Ill. App. 3d 185 (2000) ((discussion of stacking methodology under statutory scheme))
- Bruder v. Country Mutual Insurance Co., 156 Ill. 2d 179 (1993) ((hypothetical Bruder scenario; clarifies when declarations sheets could imply ambiguity))
- State Farm Mut. Auto. Ins. Co. v. Yapejian, 152 Ill. 2d 533 (1992) ((appellate decisions binding on trial courts in Illinois))