Economy Fire & Cas. Co. v. Kubik By and Through Kubik

• Decision Date: 10 April 1986
• Docket Number: 85-1748,Nos. 85-989,s. 85-989
• Citation: 492 N.E.2d 504,142 Ill.App.3d 906,97 Ill.Dec. 68
• Court: United States Appellate Court of Illinois
• Parties: , 97 Ill.Dec. 68 ECONOMY FIRE & CASUALTY COMPANY, Plaintiff-Appellant, v. Paula KUBIK, By and Through Edward KUBIK, her guardian ad litem, Defendant-Appellee, and Kenneth Meyer, Olivia Meyer and the Estate of Danny K. Meyer, Deceased, Defendants. ECONOMY FIRE & CASUALTY COMPANY, Plaintiff-Appellant, v. Paula KUBIK, By and Through Edward KUBIK, her guardian ad litem, Kenneth Meyer, Olivia Meyer and the Estate of Danny K. Meyer, Deceased, Defendants-Appellees.

Page 504

492 N.E.2d 504

142 Ill.App.3d 906, 97 Ill.Dec. 68

ECONOMY FIRE & CASUALTY COMPANY, Plaintiff-Appellant, v. Paula KUBIK, By and Through Edward KUBIK, her guardian ad

litem, Defendant-Appellee,

and

Kenneth Meyer, Olivia Meyer and the Estate of Danny K.

Meyer, Deceased, Defendants.

ECONOMY FIRE & CASUALTY COMPANY, Plaintiff-Appellant, v. Paula KUBIK, By and Through Edward KUBIK, her guardian ad

litem, Kenneth Meyer, Olivia Meyer and the Estate

of Danny K. Meyer, Deceased, Defendants-Appellees.

Nos. 85-989, 85-1748.

Appellate Court of Illinois First District, Fourth Division.

April 10, 1986.

Orner, Wasserman and Moore, Ltd., Chicago (Norton Wasserman and Esther Joy Schwartz, of counsel), for plaintiff-appellant.

Schoen & Smith, Ltd., Chicago (David M. Smith, of counsel), for defendant-appellee Paula Kubik.

Patrick Mahoney & Associates, P.C., Chicago (Thomas A. Goldrick, of counsel), for defendants-appellees Kenneth Meyer, Olivia Meyer and the Estate of Danny K. Meyer, deceased.

Presiding Justice LINN delivered the opinion of the court:

Plaintiff Economy Fire & Casualty Company (Economy), instituted this declaratory judgment action seeking an order by the trial court that Economy is not obligated to defend Paula Kubik, the daughter of Edward Kubik, for claims arising from an accident Paula was involved in on September 3, 1984. Edward Kubik had previously purchased from Economy an automobile liability policy covering himself and each person constituting a "family member". Economy claims that although Paula is a "family member" under the terms of Edward's policy, nevertheless, Economy is not obligated to defend or indemnify Paula for claims arising from this particular accident because of an exclusion in the policy (exclusion # 11), that bars coverage "for any person using a vehicle without a reasonable belief that the person is entitled to do so."

Soon after Economy filed its complaint, Paula moved for summary judgment contending that the aforementioned exclusion is ambiguous and should be drawn against Economy and in her favor. The trial court agreed with Paula and found that Economy was obligated to defend and/or indemnify Paula for any claims arising from the September 3, 1984 accident.

Economy now brings this appeal.

Economy asserts on appeal that the trial court erred in its construction of the policy, and in particular exclusion # 11. It is Economy's position that: (1) the language of exclusion # 11 is clear and unambiguous and requires no interpretation; (2) if the drafters of exclusion # 11 wanted to draw an exception for a "family member", they would have so stated; and (3) the intent of the drafters of exclusion # 11 was, through the use of the terms "any person", to encompass every circumstance where an individual used an automobile "without permission".

We affirm the ruling of the trial court.

BACKGROUND:

The facts are not in dispute. On August 21, 1984, Economy issued to Edward Kubik an automobile insurance policy (policy # PR 12-038506) covering a 1977 Buick Skylark owned by him. The policy provided liability coverage for personal injury and property damage caused by Edward or any member of his family while they were operating Edward's Buick Skylark. The policy was effective from August 20, 1984 to February 20, 1985. The key provisions pertinent to this appeal state:

"We do not provide liability coverage for:

11. For any person using a vehicle without a reasonable belief that the person is entitled to do so."

On September 3, 1984, Edward Kubik's fourteen year old daughter, Paula, was involved in an auto accident in which Danny K. Meyer was killed. At the time of the accident, Paula was driving her father's 1977 Buick Skylark.

On October 24, 1984, Economy filed this declaratory judgment action. On June 12, 1985, the trial court granted Paula's motion for summary judgment prompting Economy to bring this appeal.

OPINION:

We initially note that the instant case is before us as a result of the trial court's decision to grant Paula summary judgment. A motion for summary judgment should be granted if the record discloses that there is no genuine issue of material fact and that the moving party is therefore entitled to judgment as a matter of law. (State Farm Mutual Insurance Company v. Schmitt (1981), 94 Ill.App.3d 1062, 50 Ill.Dec. 493, 419 N.E.2d 601.) Since construction of an insurance policy presents only a question of law (Voss v. Associated Life Insurance Company (1976), 36 Ill.App.3d 105, 343 N.E.2d 174), it is an appropriate issue for determination by means of summary judgment. Rivota v. Kaplan (1977), 49 Ill.App.3d 910, 7 Ill.Dec. 176, 364 N.E.2d 337.

The rules governing the interpretation of insurance policies require the court to effectuate the intent of the parties. (State Farm Mutual Insurance Company v. Schmitt (1981), 94 Ill.App.3d 1062, 50 Ill.Dec. 493, 419 N.E.2d 601.) Where the terms of a policy are clear and unambiguous, its plain meaning will be given effect. (Zipf v. Allstate Insurance Company (1977), 54 Ill.App.3d 103, 11 Ill.Dec. 798, 369 N.E.2d 252.) Where, however, a provision in an insurance policy is subject to more than one reasonable interpretation, it is ambiguous and should be construed against the insurer and in favor of the insured. (Kirk v. Financial Security Life Company (1978), 75 Ill.2d 367, 27 Ill.Dec. 332, 389 N.E.2d 144.) Ambiguous provisions in which an insurer seeks to limit its liability are construed most strongly against the insurer with the insurer having the obligation to show that the claim falls clearly within the exclusion. (State Farm Mutual Insurance Company v. Schmitt (1981), 94 Ill.App.3d 1062, 50 Ill.Dec. 493 419 N.E.2d 601.) Thus, exclusionary provisions are applied only where the terms are clear, definite, and explicit. 94 Ill.App.3d 1062, 1064, 50 Ill.Dec. 493, 494, 419 N.E.2d 601, 602.

There are basically two reasons underlying the rules set forth above: (1) the insured's intent in purchasing an insurance policy is to obtain coverage and therefore any ambiguity jeopardizing such coverage should be construed consistent with the insured's intent, (State Farm Mutual Insurance Company v. Schmitt (1981), 94 Ill.App.3d 1062, 50 Ill.Dec. 493, 419 N.E.2d 601); and (2) the insurer is the drafter of the policy and could have drafted the ambiguous provision clearly and specifically. Reis v. Aetna Casualty & Surety Company (1978), 69 Ill.App.3d 777, 25 Ill.Dec. 824, 387 N.E.2d 700.

In the case at bar, we believe that exclusion # 11 is subject to more than one reasonable interpretation and is, therefore, ambiguous. Our decision is based on the vagueness created by the manner in which Economy uses the term "family member" and "any person" interchangeably throughout the policy's exclusions.

We first note that throughout its policy, Economy refers to two different and distinct classes of individuals: those who constitute a "family member" and those within the group comprising "any person". Taken by themselves, the terms "family member" and "any person" have a clear meaning--"family member" (as defined in the policy itself) includes any "person related to you (the insured) by blood, marriage or adoption who is a resident of your (the insured's) household,...