Summary
The Seventh Circuit affirmed summary judgment for Bankers Standard Insurance in the Saslows’ suit seeking additional medical-expense and uninsured/underinsured-motorist coverage payments, as well as damages for delayed payment. Applying Illinois law, the court held that the auto and umbrella policies unambiguously prohibited stacking coverage limits and rejected the plaintiffs’ additional coverage arguments. The court also upheld the denial of fees and penalties under 215 Ill. Comp. Stat. 5/155 because the insurer’s payment delay was not shown to be vexatious and unreasonable.
Topics
Practice areas
Questions Presented
- Whether the auto and umbrella policies' anti-stacking provisions unambiguously prohibited the Saslows from stacking medical-expense and UM/UIM coverage limits.
- Whether the use of a rental car and the existence of multiple alleged tortfeasors entitled the Saslows to additional UM/UIM recovery.
- Whether the Saslows were entitled to attorney fees and other costs under 215 Ill. Comp. Stat. 5/155 because Bankers Standard's payment delay was vexatious and unreasonable.
- Whether summary judgment was proper on the undisputed facts.
Holdings
- The policies unambiguously prohibited stacking. The Saslows could recover only up to the applicable coverage limits, regardless of the number of insured persons, vehicles, claims, or other specified factors.
- The rental-car argument failed because the other vehicle was not underinsured; it had insurance with a limit equal to or greater than the auto policy's coverage limit. The argument concerning multiple uninsured tortfeasors was waived because it was undeveloped and unsupported by record evidence.
- The Saslows were not entitled to section 155 fees or costs because the record did not show that Bankers Standard acted vexatiously and unreasonably. The district court did not abuse its discretion in finding that the delay resulted from repeated payment mistakes rather than willful misconduct.
Key quotations
“In short, putting together the definitions of coverage limit, medical expenses, UM/UIM coverage, and the other insurance clause, these policies prohibit stacking, including in the ways the Saslows want to stack here.” (7)
“The district court did not abuse its discretion in finding that the delay, standing on its own, was not vexatious and unreasonable.” (9)
Factual background
Ronald Saslow was injured in a car accident while covered, along with Ellen Saslow, by Bankers Standard auto and umbrella policies. The auto policy provided medical-expense and UM/UIM coverage, while the umbrella policy provided up to $1 million in UM/UIM coverage per occurrence. The Saslows received $879,832 from the other driver and Bankers Standard ultimately paid $100,000 for medical expenses and $1 million under the umbrella policy, but the Saslows sought to stack coverage limits and recover additional amounts. Bankers Standard also experienced payment delays while attempting to issue checks, and the district court found no evidence that the delay was vexatious or unreasonable.
Procedural history
The Saslows filed claims under their auto and umbrella insurance policies after Ronald was injured in a vehicle accident. They brought a federal diversity action seeking additional medical-expense and uninsured/underinsured-motorist payments, loss-of-consortium relief, and fees and penalties for delayed payment. The parties filed cross-motions for summary judgment, and the Northern District of Illinois granted Bankers Standard's motion. The Seventh Circuit affirmed.