Farmers Automobile Insurance Co. v. Hunt
Annotate this Case
No. 3--98--0021
IN THE
APPELLATE COURT OF ILLINOIS
THIRD DISTRICT
A.D., 1998
THE FARMERS AUTOMOBILE ) Appeal from the Circuit
INSURANCE ASSOCIATION and ) Court for the Tenth
PEKIN INSURANCE COMPANY, ) Judicial Circuit, Peoria
an Illinois corporation, ) County
)
Plaintiffs-Appellants, )
)
v. ) No. 97--MR--123
)
JAY HUNT, JR., and EDWARD R. )
SPARKS, Individually and d/b/a )
MID-ILLINOIS CONTRACTORS, )
) Honorable Richard E.
Defendants-Appellees. ) Grawey, Judge Presiding
JUSTICE KOEHLER delivered the opinion of the court:
The plaintiff, Farmers Automobile Insurance Association, filed
suit for declaratory judgment in the circuit court of Peoria County
(735 ILCS 5/2--701 (West 1994)), asking the court to declare that
Farmers has no duty to defend or to indemnify the defendant, Edward
Sparks. On cross-motions for summary judgment, the trial court
denied Farmers' motion and granted defendant Hunt's cross-motion.
The principal question presented in this appeal is whether an
insurance company has a duty to defend and to indemnify an insured
who drives negligently while towing an uninsured trailer. We
affirm in part and reverse in part.
I.
On November 13, 1996, Jay Hunt filed a complaint in the
circuit court of Peoria County alleging that Edward Sparks
negligently operated a trailer unit causing severe injury to Hunt.
Sparks, who was driving a Ford pickup truck towing a Cronkite
trailer, stopped for a traffic light at the corner of University
and West Columbia Terrace in Peoria. At the intersection, he
noticed a man on a bicycle next to his truck. The light changed
and Sparks drove away. Hunt testified that he was also at the
corner of University and West Columbia Terrace, and after the light
changed, he rode his teal blue bike down Columbia Terrace. After
the truck passed, Hunt felt a bang at the back of his bike, but he
did not know what hit him.
Investigating police officer Greg Metz, found small chips of
teal blue paint on the metal mud guard that surrounds the rear
wheels of Sparks' Cronkite trailer. The load capacity of the
Cronkite trailer is greater than 2,000 pounds.
On April 2, 1997, Farmers, Sparks' insurer, filed a
declaratory judgment action asking the court to determine the
rights and liabilities of the parties with respect to the Farmers'
Auto Liability Policy.
The parties filed cross motions for summary judgment on the
coverage issue. In granting the summary judgment for Hunt, the
court found: (1) the Ford pickup truck was covered under the
insurance policy; (2) the trailer was not a covered auto because
the load capacity exceeded 2,000 pounds; (3) although the trailer
was not a "covered auto", that fact does not extinguish coverage
for the Ford pickup; and (4) there is no provision in the policy
that excludes a covered auto if it is pulling a trailer that fails
to meet the definition of a covered auto. This appeal followed.
II.
Summary judgment is appropriate if there is no genuine issue
of material fact and the moving party is entitled to judgment as a
matter of law. (735 ILCS 5/2--1005(c)(West 1994)). In appeals from
summary judgment rulings, the appellate court is to conduct a de
novo review. Outboard Marine Corp. v. Liberty Mutual Insurance
Co., 154 Ill. 2d 90, 102, 607 N.E.2d 1204, 1209 (1992). At issue
is whether the insurance company has a duty to defend and to
indemnify Sparks in the underlying suit.
The duty to defend arises if the underlying complaint alleges
facts within or potentially within the insured's policy coverage.
Outboard Marine Corp., 154 Ill. 2d at 107-108, 607 N.E.2d at 1212.
In determining whether an insurer has a duty to defend its insured,
the court must look at the allegations in the underlying complaint
and compare them with the relevant provisions of the insurance
policy. Outboard Marine Corp., 154 Ill. 2d at 107-108, 607 N.E.2d
at 1212.
A court's primary duty in construing the language of an
insurance policy is to ascertain and give effect to the intentions
of the parties as expressed within the policy. Outboard Marine
Corp., 154 Ill. 2d at 107-108, 607 N.E.2d at 1212. To ascertain
the meaning of the policy's words and the intent of the parties,
the court must construe the policy as a whole with due regard to
the risk undertaken, the subject matter that is insured and the
purposes of the entire contract. Outboard Marine Corp., 154 Ill. 2d at 107-108, 607 N.E.2d at 1212. If the words in the policy are
clear and unambiguous, a court must afford them their plain,
ordinary, and popular meaning, and the policy must be enforced as
the plain meaning dictates. Outboard Marine Corp., 154 Ill. 2d at
107-108, 607 N.E.2d at 1212. However, if the words in the policy
are susceptible to more than one reasonable interpretation, they
are ambiguous and will be construed liberally in favor of the
insured and against the insurer who drafted the policy. Outboard
Marine Corp., 154 Ill. 2d at 108-109, 607 N.E.2d at 1212.
The complaint alleged that Sparks was driving a Ford pickup
truck towing a trailer, and that the trailer and/or pickup truck
struck Hunt causing injury. The relevant portion of the insurance
policy reads:
We will pay all sums the 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.
The question this court must decide is whether the underlying
action for compensatory relief potentially falls within the
coverage afforded by Farmers' policy for damages, thereby
triggering Farmers' duty to defend Sparks.
Farmers argues that this is a "non-coverage" issue and not an
exclusion issue, meaning the policy does not specifically exclude
trailers over 2,000 pounds; rather, the trailer failed to meet
automatic inclusion of coverage and therefore no language within
the policy applies. Conversely, Sparks argues that the operative
language within the policy is "resulting from the ownership,
maintenance, or use of a covered auto."
The phrase at issue, "resulting from," is synonymous with the
phrases "arising out of," "connected with," "originating from,"
"growing out of," and "flowing from" that have been recognized
repeatedly as being broad as well as vague. Sportmart, Inc. v.
Daisy Manufacturing Co., 268 Ill. App. 3d 974, 978, 645 N.E.2d 360,
363 (1994)(holding that coverage is required for all bodily injury
arising out of, growing out of or resulting from Daisy's product).
In worker's compensation claims and insurance litigation, such
language is considered satisfied by a mere causal connection and
does not necessarily require proximate causation. See Chmelik v.
Vana, 31 Ill. 2d 272, 277-78, 201 N.E.2d 434, 438 (1964)(holding
that words "arising out of" refer to the origin or cause of the
accident and pre-suppose a causal connection between employment and
the accidental injury); Maryland Casualty Co. v. Chicago & North
Western Transportation Co., 126 Ill. App. 3d 150, 155, 466 N.E.2d 1091, 1094 (1984)(holding that the duty to defend is required of
insurer when phrase "arising out of ownership, maintenance or use
of designated properties" is found broad and vague. Thus, liberal
construction results in "but for" causation analysis). Similarly,
the broad language at issue here must be construed strictly against
the drafter of the policy, Farmers, to require coverage for bodily
injury or property damage "resulting from the use of a covered
auto." Since Hunt's injury would not have occurred but for Sparks'
use of the covered auto the underlying action falls potentially
within the coverage afforded by Farmers, thereby triggering its
duty to defend Sparks. Sportmart, Inc., 268 Ill. App. 3d at 978,
645 N.E.2d at 363.
A comparison of the allegations in the complaint with the
policy language shows: (1) nothing in the policy states that if an
insured tows a trailer weighing over 2000 pounds that the coverage
is extinguished; (2) the complaint alleges that the covered Ford
pickup was towing a trailer, and the trailer and/or truck struck
Hunt. In sum, absent an applicable statement in the insurance
policy showing an intent to exclude coverage, Farmers had a duty to
defend Sparks in what clearly constitutes a suit seeking damages.
Outboard Marine Corp., 154 Ill. 2d at 112, 607 N.E.2d at 1214.
The narrower duty of indemnification is ripe for consideration
only when the insured has incurred liability in the underlying
claim. Outboard Marine Corp., 154 Ill. 2d at 127-28, 607 N.E.2d at
1221. Nothing within the record indicates that Sparks has incurred
any liability. Therefore, the circuit court erred when it acted
prematurely in its grant of summary judgment to Hunt on the issue
of indemnification.
III.
In sum, we affirm the circuit court's denial of Farmers'
motion for summary judgment, and the summary judgment entered on
behalf of Sparks and Hunt on the question of Farmer's duty to
defend where the (1) complaint alleges facts potentially within the
coverage of the policy, and (2) the insurance policy does not
contain an express exclusion statement. We reverse the circuit
court's err where it prematurely granted summary judgment to Hunt
on the issue of Farmer's duty to indemnify.
Affirmed in part, reversed in part and remanded.
BRESLIN and SLATER, JJ., concurring
IN THE
APPELLATE COURT OF ILLINOIS
THIRD DISTRICT
A.D., 1998
THE FARMERS AUTOMOBILE ) Appeal from the Circuit
INSURANCE ASSOCIATION and ) Court for the Tenth
PEKIN INSURANCE COMPANY, ) Judicial Circuit, Peoria
an Illinois corporation, ) County
)
Plaintiffs-Appellants, )
)
v. ) No. 97--MR--123
)
JAY HUNT, JR., and EDWARD R. )
SPARKS, Individually and d/b/a )
MID-ILLINOIS CONTRACTORS, )
) Honorable Richard E.
Defendants-Appellees. ) Grawey, Judge Presiding
JUSTICE KOEHLER delivered the opinion of the court:
The plaintiff, Farmers Automobile Insurance Association, filed
suit for declaratory judgment in the circuit court of Peoria County
(735 ILCS 5/2--701 (West 1994)), asking the court to declare that
Farmers has no duty to defend or to indemnify the defendant, Edward
Sparks. On cross-motions for summary judgment, the trial court
denied Farmers' motion and granted defendant Hunt's cross-motion.
The principal question presented in this appeal is whether an
insurance company has a duty to defend and to indemnify an insured
who drives negligently while towing an uninsured trailer. We
affirm in part and reverse in part.
I.
On November 13, 1996, Jay Hunt filed a complaint in the
circuit court of Peoria County alleging that Edward Sparks
negligently operated a trailer unit causing severe injury to Hunt.
Sparks, who was driving a Ford pickup truck towing a Cronkite
trailer, stopped for a traffic light at the corner of University
and West Columbia Terrace in Peoria. At the intersection, he
noticed a man on a bicycle next to his truck. The light changed
and Sparks drove away. Hunt testified that he was also at the
corner of University and West Columbia Terrace, and after the light
changed, he rode his teal blue bike down Columbia Terrace. After
the truck passed, Hunt felt a bang at the back of his bike, but he
did not know what hit him.
Investigating police officer Greg Metz, found small chips of
teal blue paint on the metal mud guard that surrounds the rear
wheels of Sparks' Cronkite trailer. The load capacity of the
Cronkite trailer is greater than 2,000 pounds.
On April 2, 1997, Farmers, Sparks' insurer, filed a
declaratory judgment action asking the court to determine the
rights and liabilities of the parties with respect to the Farmers'
Auto Liability Policy.
The parties filed cross motions for summary judgment on the
coverage issue. In granting the summary judgment for Hunt, the
court found: (1) the Ford pickup truck was covered under the
insurance policy; (2) the trailer was not a covered auto because
the load capacity exceeded 2,000 pounds; (3) although the trailer
was not a "covered auto", that fact does not extinguish coverage
for the Ford pickup; and (4) there is no provision in the policy
that excludes a covered auto if it is pulling a trailer that fails
to meet the definition of a covered auto. This appeal followed.
II.
Summary judgment is appropriate if there is no genuine issue
of material fact and the moving party is entitled to judgment as a
matter of law. (735 ILCS 5/2--1005(c)(West 1994)). In appeals from
summary judgment rulings, the appellate court is to conduct a de
novo review. Outboard Marine Corp. v. Liberty Mutual Insurance
Co., 154 Ill. 2d 90, 102, 607 N.E.2d 1204, 1209 (1992). At issue
is whether the insurance company has a duty to defend and to
indemnify Sparks in the underlying suit.
The duty to defend arises if the underlying complaint alleges
facts within or potentially within the insured's policy coverage.
Outboard Marine Corp., 154 Ill. 2d at 107-108, 607 N.E.2d at 1212.
In determining whether an insurer has a duty to defend its insured,
the court must look at the allegations in the underlying complaint
and compare them with the relevant provisions of the insurance
policy. Outboard Marine Corp., 154 Ill. 2d at 107-108, 607 N.E.2d
at 1212.
A court's primary duty in construing the language of an
insurance policy is to ascertain and give effect to the intentions
of the parties as expressed within the policy. Outboard Marine
Corp., 154 Ill. 2d at 107-108, 607 N.E.2d at 1212. To ascertain
the meaning of the policy's words and the intent of the parties,
the court must construe the policy as a whole with due regard to
the risk undertaken, the subject matter that is insured and the
purposes of the entire contract. Outboard Marine Corp., 154 Ill. 2d at 107-108, 607 N.E.2d at 1212. If the words in the policy are
clear and unambiguous, a court must afford them their plain,
ordinary, and popular meaning, and the policy must be enforced as
the plain meaning dictates. Outboard Marine Corp., 154 Ill. 2d at
107-108, 607 N.E.2d at 1212. However, if the words in the policy
are susceptible to more than one reasonable interpretation, they
are ambiguous and will be construed liberally in favor of the
insured and against the insurer who drafted the policy. Outboard
Marine Corp., 154 Ill. 2d at 108-109, 607 N.E.2d at 1212.
The complaint alleged that Sparks was driving a Ford pickup
truck towing a trailer, and that the trailer and/or pickup truck
struck Hunt causing injury. The relevant portion of the insurance
policy reads:
We will pay all sums the 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.
The question this court must decide is whether the underlying
action for compensatory relief potentially falls within the
coverage afforded by Farmers' policy for damages, thereby
triggering Farmers' duty to defend Sparks.
Farmers argues that this is a "non-coverage" issue and not an
exclusion issue, meaning the policy does not specifically exclude
trailers over 2,000 pounds; rather, the trailer failed to meet
automatic inclusion of coverage and therefore no language within
the policy applies. Conversely, Sparks argues that the operative
language within the policy is "resulting from the ownership,
maintenance, or use of a covered auto."
The phrase at issue, "resulting from," is synonymous with the
phrases "arising out of," "connected with," "originating from,"
"growing out of," and "flowing from" that have been recognized
repeatedly as being broad as well as vague. Sportmart, Inc. v.
Daisy Manufacturing Co., 268 Ill. App. 3d 974, 978, 645 N.E.2d 360,
363 (1994)(holding that coverage is required for all bodily injury
arising out of, growing out of or resulting from Daisy's product).
In worker's compensation claims and insurance litigation, such
language is considered satisfied by a mere causal connection and
does not necessarily require proximate causation. See Chmelik v.
Vana, 31 Ill. 2d 272, 277-78, 201 N.E.2d 434, 438 (1964)(holding
that words "arising out of" refer to the origin or cause of the
accident and pre-suppose a causal connection between employment and
the accidental injury); Maryland Casualty Co. v. Chicago & North
Western Transportation Co., 126 Ill. App. 3d 150, 155, 466 N.E.2d 1091, 1094 (1984)(holding that the duty to defend is required of
insurer when phrase "arising out of ownership, maintenance or use
of designated properties" is found broad and vague. Thus, liberal
construction results in "but for" causation analysis). Similarly,
the broad language at issue here must be construed strictly against
the drafter of the policy, Farmers, to require coverage for bodily
injury or property damage "resulting from the use of a covered
auto." Since Hunt's injury would not have occurred but for Sparks'
use of the covered auto the underlying action falls potentially
within the coverage afforded by Farmers, thereby triggering its
duty to defend Sparks. Sportmart, Inc., 268 Ill. App. 3d at 978,
645 N.E.2d at 363.
A comparison of the allegations in the complaint with the
policy language shows: (1) nothing in the policy states that if an
insured tows a trailer weighing over 2000 pounds that the coverage
is extinguished; (2) the complaint alleges that the covered Ford
pickup was towing a trailer, and the trailer and/or truck struck
Hunt. In sum, absent an applicable statement in the insurance
policy showing an intent to exclude coverage, Farmers had a duty to
defend Sparks in what clearly constitutes a suit seeking damages.
Outboard Marine Corp., 154 Ill. 2d at 112, 607 N.E.2d at 1214.
The narrower duty of indemnification is ripe for consideration
only when the insured has incurred liability in the underlying
claim. Outboard Marine Corp., 154 Ill. 2d at 127-28, 607 N.E.2d at
1221. Nothing within the record indicates that Sparks has incurred
any liability. Therefore, the circuit court erred when it acted
prematurely in its grant of summary judgment to Hunt on the issue
of indemnification.
III.
In sum, we affirm the circuit court's denial of Farmers'
motion for summary judgment, and the summary judgment entered on
behalf of Sparks and Hunt on the question of Farmer's duty to
defend where the (1) complaint alleges facts potentially within the
coverage of the policy, and (2) the insurance policy does not
contain an express exclusion statement. We reverse the circuit
court's err where it prematurely granted summary judgment to Hunt
on the issue of Farmer's duty to indemnify.
Affirmed in part, reversed in part and remanded.
BRESLIN and SLATER, JJ., concurring
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