Brile v. Estate of Brile

No. 3--97--0585

_________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT
__________________________________________________________________

MARION D. BRILE, as Surviving ) Appeal from the Circuit Court
Spouse and Administrator ) of Du Page County.
for Her Next of Kin, )
Christopher Brile, Deceased, )
)
)
Plaintiff and Third-party )
Plaintiff-Appellant )
v. ) No. 94--L--619
)
THE ESTATE OF MATTHEW BRILE, )
Deceased, and MATTHEW BRILE, )
Personally, )
)
Defendants )
)
(Daniel Minter, as Special )
Administrator for the Estate of )
Matthew Brile, Deceased, Third- )
party Plaintiff-Appellant; and )
Federal Insurance Company, )
Incorrectly Named as The CHUBB ) Honorable
Group of Insurance Companies, ) Edward R. Duncan, Jr.,
Third-party Defendant-Appellee).) Judge, Presiding.
_________________________________________________________________

JUSTICE THOMAS delivered the opinion of the court:

The plaintiff, Marion D. Brile, as surviving spouse and as
administrator for her next of kin, Christopher Brile, deceased,
filed a wrongful death action against her son, Matthew Brile,
deceased, arising from a vehicular accident that occurred while
Matthew was driving and Christopher was riding with him as a
passenger. Thereafter, Marion, as administrator of Christopher s
estate, and Daniel Minter, as special administrator of Matthew s
estate, filed this declaratory judgment action against the third-
party defendant, Federal Insurance Company (Federal), seeking a
declaration that a certain policy of insurance issued by Federal to
Christopher s employer, Photocomm, Inc. (Photocomm), afforded
coverage to Matthew. The parties filed cross-motions for summary
judgment in the declaratory judgment action. The trial court
granted summary judgment for Federal. The third-party plaintiffs
(the plaintiffs) appeal from that ruling.
FACTS
The parties do not contest the facts presented to the trial
court. The record reveals that Christopher began working for
Photocomm at its Downers Grove, Illinois, office in January 1991,
as a marketing representative. He worked in that office with one
other employee. The office contained sales and promotional
literature, marketing props, demonstration models, and customer
files.
In 1992, Myron Anduri, Photocomm s vice-president of sales,
decided to close the Downers Grove office. As part of that
decision, Anduri offered Christopher a promotion that involved a
relocation from Chicago to Denver. Anduri decided to offer
Christopher the relocation for two reasons. First, Photocomm had
a much greater need in Denver than Chicago for someone of
Christopher s talent, and, second, Photocomm viewed him as a very
promising employee.
In June 1992, Christopher accepted the offer to transfer from
Chicago to Denver. Anduri and Christopher agreed on a plan that
required Christopher to vacate and close the Downers Grove office
in September 1992 and begin working in Denver at that time. Under
the plan, the Brile family would remain in Chicago until February
1993 and then move to Denver. After some delays, Christopher
vacated the Downers Grove office as of September 25, 1992. He was
scheduled to begin work in Denver on Monday, September 28, 1992.
As part of the transfer, Anduri prepared a relocation package
for Christopher, which provided that Photocomm would pay for
Christopher s direct and indirect moving expenses. Photocomm asked
Christopher to close the Downers Grove office and to pack and ship
the contents of the office to Denver, including the inventory,
marketing materials, equipment and customer files. The shipment of
the customer files was the most important concern for Photocomm
since it considered them to be important assets. Normally,
Photocomm would package and ship the contents of the office by
common carrier. However, shipping by common carrier was expensive
and difficult. So Photocomm decided that Christopher would rent a
truck and move the contents of the office, along with enough
personal items to allow him to begin working in the Colorado
office. Anduri agreed to reimburse Christopher for the truck
rental for this dual purpose. Anduri did not consider the cost
of the rental truck as one of Christopher s moving expenses, but,
rather, he considered it a company expense to move a company
product.
Christopher was responsible for choosing the rental company
and reserving and renting the truck. On the morning of September
24, 1992, Marion dropped off Christopher at the rental dealer.
Christopher entered into a rental agreement using his own name and
address. He paid for the rental truck by using his personal credit
card. Photocomm s name did not appear on the rental agreement.
After renting the truck, Christopher took the empty truck to
Photocomm s office where he loaded everything remaining in the
office. From there, Christopher went to a family storage unit
where he loaded some personal items on the truck. At this point,
the truck was one-quarter to one-third full. Christopher then went
to his home and loaded some more personal items onto the truck.
Anduri knew that Christopher was to leave Chicago on Saturday,
arrive in Denver on Sunday evening, and then begin work on Monday
morning. Since Christopher was a salaried employee, Photocomm did
not intend to pay him any additional money for his time in
traveling. It considered Christopher s relocation travel to be
part of his responsibilities for which he was being compensated
through his salary. Photocomm considered Christopher to be within
the scope of his employment with Photocomm while on the drive from
Chicago to Denver.
Christopher left for Denver at 7 p.m. on Saturday, September
26, 1992. He decided to drive all night and take his son Matthew
along to help with the driving. About 8 a.m., on September 27,
1992, Matthew was driving when their vehicle was involved in a one-
car accident, killing both Christopher and Matthew. Christopher
had not informed Photocomm that Matthew would accompany him or
drive on the trip.
Following the accident, Anduri was informed that the contents
of the truck had been strewn along the highway and then placed in
a warehouse in Nebraska. Anduri was tremendously concerned about
the customer files that had been on the truck. He sent Chris
Pinelli, a Photocomm employee, to salvage Photocomm items that had
been on the truck, especially the customer files. Pinelli
eventually traveled to Nebraska, loaded the salvageable Photocomm
property, and returned it to Photocomm. Photocomm reimbursed
Marion for her husband's expenses for August and September 1992.
FEDERAL S INSURANCE POLICY LANGUAGE
Section II of the policy, the liability coverage section,
provides in relevant part:
We will pay all sums an 'insured' legally must pay as damages
because of 'bodily injury' or property damage to which this
insurance applies, caused by an 'accident' and resulting from
the ownership, maintenance or use of a covered 'auto'.
At the beginning of the policy it states [t]hroughout this policy
the words you and your refer to the Named Insured shown in the
Declarations *** Other words and phrases that appear in quotation
marks have special meaning.
The definitions section of the policy defines Insured as
any person or organization qualifying as an insured in the Who Is
An Insured provision of the applicable coverage. The WHO IS AN
INSURED provision states:
The following are 'insureds':
a. You for any covered 'auto'
b. Anyone else while using with your permission a covered
'auto' you own, hire or borrow ***.
The EXCLUSIONS provision of the policy provides in relevant part:
This insurance does not apply to any of the following:
***
4. EMPLOYEE INDEMNIFICATION AND EMPLOYERS LIABILITY
'Bodily injury' to:
a. An employee of the 'insured' arising out of and in the
course of employment by the 'insured' ***.
ISSUES AND ANALYSIS
The following issues are presented by this appeal: (1) whether
Matthew was an insured within the meaning of the WHO IS AN
INSURED provision of the policy; and (2) if so, whether the
exclusion provision quoted above should be construed to bar
coverage of Matthew. With respect to the second issue, the trial
court found that the term the insured referred to Photocomm, the
policyholder, and not Matthew, even though he was the person
against whom liability was asserted and for whom insurance coverage
was sought.
Summary judgment is proper when the pleadings, depositions,
and affidavits demonstrate that no genuine issue of material fact
exists and that the moving party is entitled to judgment as a
matter of law. 735 ILCS 5/2--1005(c) (West 1996). All evidence is
construed in the light most favorable to the nonmoving party and
strictly against the moving party. Lestos v. Century 21-New West
Realty, 285 Ill. App. 3d 1056, 1062 (1996).
The construction of an insurance policy is a question of law
subject to de novo review. American States Insurance Co. v.
Koloms, 177 Ill. 2d 473, 479-80 (1997). In construing the language
of an insurance policy, a court must ascertain and give effect to
the intention of the parties as expressed in their agreement.
Koloms, 177 Ill. 2d at 479. To that end, terms utilized in the
policy are accorded their plain and ordinary meaning (Outboard
Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 108
(1992)) unless specifically defined in the policy, in which case
they will be given the meaning as defined in the policy. In
addition, a court must read the policy as a whole and consider the
type of insurance purchased, the nature of the risks involved, and
the overall purpose of the contract. Koloms, 177 Ill. 2d at 479.
Provisions that limit or exclude coverage are to be construed
liberally in favor of the insured and most strongly against the
insurer. Koloms, 177 Ill. 2d at 479; National Union Fire Insurance
Co. v. Glenview Park District, 158 Ill. 2d 116, 122 (1994).
Moreover, all doubts and ambiguities in the policy language must be
construed in favor of the insured. United States Fidelity &
Guaranty Co. v. Wilkin Insulation Co., 144 Ill. 2d 64, 74 (1991).
Turning to the question of whether Matthew was an insured
under the Photocomm policy, we note that the WHO IS AN INSURED
provision of the policy provides that anyone is an insured who uses
with Photocomm s permission a covered auto owned, hired, or
borrowed by Photocomm. Federal argues that Matthew was not using
the vehicle at the time of the accident with Photocomm s permission
and therefore coverage is precluded on that basis. We disagree.
It has been held that 'where an insurer elects to include in
its policy a broad provision extending liability coverage to
persons operating or using a car with the permission of the owner,
a further grant of permission from the initial permittee need not
be shown in order to invoke the coverage.' Western States Mutual
Insurance Co. v. Verucchi, 66 Ill. 2d 527, 531 (1977), quoting
United States Fidelity & Guaranty Co. v. McManus, 64 Ill. 2d 239,
243 (1976). Here, Christopher had the permission of Photocomm to
rent the vehicle in order to move the contents of its office to
Denver. We find that the permission given by Photocomm to
Christopher extended to Matthew.
Federal further argues that Photocomm did not own, hire or
borrow the vehicle that Matthew was driving at the time of the
accident.
Black s Law Dictionary defines borrow as [t]o solicit and
receive from another any article of property, money or thing of
value with the intention and promise to repay or return it or its
equivalent. Black s Law Dictionary 185 (6th ed. 1990). In the
instant case, Photocomm received a thing of value in that it
obtained the means to transport its office items and customer files
across country in a cheaper and more convenient manner. Photocom
also intended and promised to repay Christopher for placing payment
for the vehicle on his credit card. Thus, we find that Photocomm
borrowed the vehicle within the meaning of the Federal policy.
Accordingly, we find that Matthew fits the definition of an
insured under the policy in that he used with Photocomm s
permission a covered auto that Photocomm borrowed.
We next consider whether the exclusion provision is applicable
here, which bars coverage in instances of '[b]odily injury' to
*** [a]n employee of the 'insured' arising out of and in the course
of employment by the 'insured' ***. Federal argues and the trial
court found that Photocomm is the insured for purposes of this
provision. The plaintiffs, on the other hand, argue that Matthew
is the insured referred to in that provision because he is the
person against whom liability is asserted and for whom insurance
coverage is sought.
Initially, we note that the use of the phrase an insured in
an exclusionary clause unambiguously means any insured, (Allstate
Insurance Co. v. Smiley, 276 Ill. App. 3d 971, 979 (1995)) while
the use of the term the insured in an exclusionary clause is
meant to refer to a definite, specific insured (Smiley, 276 Ill.
App. 3d at 980 (1995)). Thus, the term the insured cannot refer
to both Matthew and Photocomm. If the term the insured refers to
Matthew rather than Photocomm, coverage would exist in this case
since Christopher was not an employee of Matthew, and Christopher s
bodily injury did not arise out of and in the course of any
employment by Matthew.
In Smiley, the Smileys procured homeowners insurance from
Allstate. Later, Helene Smiley purchased a personal umbrella
policy from Allstate. During the course of Helene's operation of a
small day-care business, a small child drowned on the property. The
child s estate sued Helene and her husband, David. Allstate
brought a declaratory judgment to construe the policies, including
the personal umbrella policy that excluded coverage for bodily
injury arising out of the past or present business activities of
an insured person. (Emphasis added.) Smiley, 276 Ill. App. 3d at
974. First, the court found that the child s injuries arose out of
Helene s business activities and were not covered by the policy.
The court then found that the language in the exclusion also barred
coverage for David s alleged negligence. This was because, even
though the injury did not arise out of his business activities, the
phrase an insured is construed to mean any insured, and the
injury arose out of the business activities of Helene, who was also
an insured. Smiley, 276 Ill. App. 3d at 979-80. The court
continued by noting that, if the policy had excluded coverage only
for the business activities of the insured, it would likely have
held that coverage would exist for David s alleged negligence
because the exclusions only referred to the specific insured who
engaged in the business activities. Smiley, 276 Ill. App. 3d at
980.
Applying Smiley to the present case, we find that the phrase
the insured in the Federal policy refers to the insured against
whom liability is asserted and for whom coverage is sought. If
Federal is correct in its contention that the insured always
means the named policyholders, the Smiley court would have applied
the exclusion with respect to David regardless of whether the
policy read an insured or the insured.
Furthermore, Federal does not offer any explanation for the
fact that its policy specifically states that the words you and
your refer to Photocomm, the named insured shown in the
declarations, whereas other words and phrases that appear in
quotation marks such as insured have special meaning, referring
the reader to the definitions section of the policy. Our
conclusion is further supported by the fact that Federal could have
resolved any ambiguity with respect to the exclusion s application
in its favor by simply inserting the words your and you in
place of the insured. We also note that there are numerous other
instances throughout the policy where the term the insured
appears that could not be reasonably interpreted to mean the
policyholder. In contrast, it is reasonable to interpret the
insured throughout the policy as the person or organization for
whom coverage is sought, provided that the person or organization
fits the definition set forth in the WHO IS AN INSURED provision.
Federal cites Unigard Insurance Co. v. Whitso Inc., 195 Ill.
App. 3d 740 (1990), Midland Insurance Co. v. Bell Fuels, Inc., 159
Ill. App. 3d 780 (1987), and Aetna Casualty & Surety Co. v.
Beautiful Signs, Inc., 146 Ill. App. 3d 434 (1986), for the
proposition that Illinois courts have applied similar employment
exclusions to preclude coverage for injuries arising in the course
of employment. We find, however, that Federal s reliance on those
cases is misplaced. In each of those cases, there was no issue as
to the entity referred to as the insured, since in each case
liability was asserted against the employer/policyholder (either
directly or by way of a third-party action for indemnification or
contribution). Thus, in each case the employer/policyholder was
the party for whom coverage was sought. The courts noted that the
exclusion in question was designed to preclude coverage in those
areas normally covered by workers' compensation insurance; there is
no reason to secure double coverage. See Beautiful Signs, Inc.,
146 Ill. App. 3d at 436.
In the instant case, the policyholder named in the
declarations is not seeking coverage under the policy. Nor is
there a chance of double recovery as suggested by Federal. Section
5(b) of the Workers Compensation Act provides that an employer
may have or claim a lien upon any award, judgment or fund out of
which an employee might be compensated from a third party for
injuries in a case such as the present one. 820 ILCS 305/5(b)
(West 1996). In the event Christopher s estate obtained an award
in a workers compensation action against Photocomm, Photocomm
would have a claim or lien on any amount recovered by Christopher s
estate in the lawsuit against Matthew s estate.
For the foregoing reasons, we find that as a matter of law
Matthew was an insured under the Federal insurance policy and
that the exclusion discussed above did not operate to bar coverage
for Matthew s alleged negligence. Accordingly, we reverse the
judgment of the circuit court of Du Page County and remand the
cause for further proceedings consistent with this opinion.
Reversed and remanded.
GEIGER, P.J., and McLAREN, J., concur.