Grinnell Select Insurance Company v. Martha Baker

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 03-2730
G RINNELL S ELECT I NSURANCE C OMPANY ,
Plaintiff-Appellant,
v.
M ARTHA B AKER , et al.,
Defendants-Appellees.
____________
Appeal from the United States District Court
for the Southern District of Illinois.
No. 02-4090-JLF—James L. Foreman, Judge.
____________
A RGUED F EBRUARY 18, 2004—D ECIDED A PRIL 5, 2004
____________
Before COFFEY , EASTERBROOK , and EVANS , Circuit Judges.
E ASTERBROOK , Circuit Judge. Martha Baker sued Sheena
George in Illinois court following an automobile accident;
Baker contends that George was at fault. Sheena is insured
under a policy issued to her parents Timothy and Rebecca
George. The policy, underwritten by Grinnell Select Insur-
ance Co., covered two of the Georges’ cars. The declarations
page of the policy sets $100,000 as the per- person,
per-accident maximum coverage. Grinnell has tendered
$100,000 to Baker as the policy limit. Baker and the three

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2 No. 03-2730
Georges contend that Grinnell’s exposure is $200,000, not
$100,000, because each of the Georges’ two cars contributed
its own limit, which they say may be stacked for double
coverage. To resolve the dispute, Grinnell initiated this
action in federal court under the diversity jurisdiction,
seeking a declaratory judgment that its payment of
$100,000 exhausts all coverage. The district court entered
summary judgment in favor of Baker and the Georges.
Grinnell relies on two anti-stacking clauses in the policy.
One is implicit, the other explicit. The first is labeled “Limit
of Liability” and reads:
The limit of liability shown in the Declarations for
each person for Bodily Injury Liability is our max-
imum limit of liability for all damages, including
damages for care, loss of services or death, arising
out of “bodily injury” sustained by any one person
in any one auto accident. Subject to this limit for
each person, the limit of liability shown in the
Declarations for each accident for Bodily Injury
Liability is our maximum limit of liability for all
damages for “bodily injury” resulting from one auto
accident.
In other words, one injured person is matched against “the”
limit of liability shown in the declarations (for this policy,
$100,000) rather than against multiple limits. The explicit
anti-stacking clause immediately following this text
reinforces the point:
This is the most we will pay regardless of the num-
ber of:
1. “Insureds”;
2. Claims made;
3. Vehicles or premiums shown in the Declara-
tions; or
4. Vehicles involved in the auto accident.

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No. 03-2730 3
It is hard to imagine clearer language. But it is not enough
for one state appellate court. The Appellate Court of
Illinois, Fifth District, has held in two decisions that, when
the declarations page of a policy contains the language
“insurance is provided where a premium is shown”, the
policy is ambiguous notwithstanding an explicit anti-
stacking clause, because an insured might read the lan-
guage “insurance is provided” to permit stacking. See Hall
v. General Casualty Co., 328 Ill. App. 3d 655, 766
N.E.2d 680 (5th Dist. 2002); Yates v. Farmers Automobile
Insurance Ass’n, 311 Ill. App. 3d 797, 724 N.E.2d 1042 (5th
Dist. 2000). Two other districts of the state’s appellate
court, by contrast, have held that a clause identical to the
one at issue in Hall forbids stacking. See Domin v. Shelby
Insurance Co., 326 Ill. App. 3d 688, 761 N.E.2d 746 (1st
Dist. 2001); Pekin Insurance Co. v. Estate of Ritter, 322 Ill.
App. 3d 1004, 750 N.E.2d 1285 (4th Dist. 2001). Both
Domin and Pekin rejected the holding of Yates; then Hall
rejected the holding of Domin (it did not mention Pekin). In
our case the district judge followed Hall and thus held that
the policy allows stacking.
Illinois enforces clear anti-stacking clauses. See, e.g.,
Grzeszczak v. Illinois Farmers Insurance Co., 168 Ill. 2d
216, 659 N.E.2d 952 (1995); Bruder v. Country Mutual
Insurance Co., 156 Ill. 2d 179, 620 N.E.2d 355 (1993). Hall
conceded that the clause in that policy (materially identical
to the clause in Grinnell’s) was unambiguous. 328 Ill. App.
3d at 658. What more is there to say? Put an unambiguous
anti-stacking clause together with the holdings of
Grzeszczak and Bruder, and you get the outcome of Domin
and Pekin, not that of Hall or Yates.
Our task in a diversity action is to anticipate, as best we
can, what the state’s highest court will do. Usually deci-
sions of intermediate state courts are good evidence about
the meaning of local law, but when the state’s appellate

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4 No. 03-2730
courts are divided they offer little useful guidance. We must
decide independently. Given Grzeszczak and Bruder it is
unlikely that the Supreme Court of Illinois would follow
Hall or Yates.
As far as we can tell, the Fifth District stands alone
among the 50 state judicial systems. The policy Grinnell
issued—with a declarations page listing multiple cars,
premiums, and coverages separately, and then a clause
stating that the limit for one car and one accident is the
total available no matter how many vehicles or premiums
are shown in the declarations—is the standard auto-
liability form devised by the Insurance Services Office and
is in use across the nation. Defendants did not cite, and we
could not find, any decision outside the Fifth District
allowing stacking. Plenty of decisions in other states hold
that this or similar language forecloses stacking. See, e.g.,
Rodriguez v. General Accident Insurance Co., 808 S.W.2d
379 (Mo. 1991); Saccucci v. State Farm Mutual Automobile
Insurance Co., 32 Ohio St. 3d 273, 512 N.E.2d 1160 (1987);
Antanovich v. Allstate Insurance Co., 507 Pa. 68, 488 A.2d
571 (1985); Upshaw v. Trinity Cos., 842 S.W.2d 631 (Texas
1992); Folkman v. Quamme, 264 Wis. 2d 617, 665 N.W.2d
857 (2003). We expect the Supreme Court of Illinois to
follow them.
Even a mound of decisions would not deflect a powerful
argument, but Hall and Yates do not offer one. What they
say is that the language of the declarations page stating
that “insurance is provided where a premium is shown”
could be understood by a reasonable insured to mean that
all listed coverages may be combined. The court then con-
strues ambiguity in favor of the insureds. Let us assume
that the declarations page is ambiguous (though we think
it is not, for a reason to be explained); still, how does this
justify stacking, unless the no-stacking clause is read out of
the policy? Its function is to say that even if some other
clause suggests the possibility of stacking, that is not what

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No. 03-2730 5
† Our example does not depend on exact doubling. If the addition
of a second car means that each drives fewer miles annually than
one car would, then the total premium for two cars will be less
than twice the premium for one. And the premium for a $200,000
limit is less than double the premium for a $100,000 limit,
because many accidents do not cause even $100,000 of loss, so the
higher tier of coverage does not come into play. The point would
be the same if we were to use 1.5 times the cost and 2.5 times the
coverage, instead of double and quadruple.
the policy means. It is a disambiguator. To see ambiguity in
the policy is to learn why the anti-stacking clause was
included; it is not remotely to justify overriding the anti-
stacking clause. Anyway, the declarations page is straight-
forward. A policy that covers two vehicles, with a premium
and limit attached separately, says that even if each vehicle
has an accident, the limit for each remains available. A
policy covering two cars and multiple drivers is twice as
likely to be called on as a policy covering one car and one
driver; the separate premium compensates the insurer for
this marginal risk. On the holding of Hall and Yates,
however, a policy covering two cars (each at the same
premium as one car) quadruples rather than doubles the
insurer’s exposure, because it doubles the number of cars
and doubles the limit for each. † Reasonable insureds would
not expect quadruple the coverage for double the premium.
Cf. Great Lakes Dredge & Dock Co. v. Chicago, 260 F.3d 789
(7th Cir. 2001); Sybron Transition Corp. v. Security Insur-
ance of Hartford, 258 F.3d 595 (7th Cir. 2001). The
anti-stacking clause makes clear that adding a car to the
policy increases the number of vehicles covered, but not the
limits for any one car or accident.
R EVERSED

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6 No. 03-2730
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—4-5-04

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