Founders Ins. Co. v. Munoz
| Citation | 329 Ill.Dec. 64,905 N.E.2d 902 |
| Decision Date | 27 March 2009 |
| Docket Number | No. 1-08-0208.,No. 1-08-2042.,No. 1-08-2283.,No. 1-08-0415.,No. 1-08-2059.,No. 1-07-0792.,1-07-0792.,1-08-0208.,1-08-0415.,1-08-2042.,1-08-2059.,1-08-2283. |
| Parties | FOUNDERS INSURANCE COMPANY, Plaintiff-Appellee, v. Albert L. MUÑOZ, Paulina Flores, Ewa R. Johnson and Allstate Insurance Company, a/s/o Ewa Johnson, Defendants-Appellants. Founders Insurance Company, Plaintiff-Appellee, v. Daniel Vallarta, Florencio Vallarta, Allstate Insurance Company, a/s/o Demetra Soter, and USAA Casualty Insurance Company a/s/o Patricia Saifuddin, Defendants-Appellants. Founders Insurance Company, Plaintiff-Appellee, v. Yaroslav Honchar, Allstate Insurance Company a/s/o Shirley Brown, Bernard Riley, Edward Magraff, Barbara Magraff, and State Farm Mutual Insurance Company, Defendants-Appellants. Safeway Insurance Company, Plaintiff-Appellee, v. Flavio Fernandez, Sergio Ramirez, Pedro Almaraz, Rolando Almaraz, Sandra Flores and Allstate Insurance Company, Defendants-Appellants. Founders Insurance Company, Plaintiff-Appellee, v. Laura Levan, Special Administrator of the Estate of Christine L. Seekamp, Deceased, David Schlesinger and Allstate Property & Casualty Insurance Company, Defendants-Appellants. Founders Insurance Company, Plaintiff-Appellee, v. Rafael Tecpanecatl, Vicente T. Chapa, Lourdes Class, Allstate Insurance Company a/s/o Mike M. Marusic, Mike M. Marusic, Individually, Kara C. Campos, Allstate Insurance Company a/s/o Vickie L. Ritter, Vickie L. Ritter, Individually, and Heather M. Burns, Defendants-Appellants. |
| Court | United States Appellate Court of Illinois |
Shari Shelmadine, The Law Office of Shari Shelmadine, Michael O'Halloran & Keely Hillison, Parrillo, Weiss & O'Halloran, Chicago, IL, for Plaintiff-Appellee Founders Insurance, et al.
Peter C. Morse & Cynthia Ramirez, Morse & Bolduc, Steven A. Drizin, Alison R. Flaum, Center on Wrongful Convictions, Chicago, IL, for Defendants-Appellants Albert L. Muñoz et al.
This consolidated appeal arises from declaratory judgment actions to enforce the provisions of automobile insurance policies which excluded coverage for the named insured and permissive drivers who did not have a reasonable belief they were entitled to use a motor vehicle. The complaints sought a declaration that plaintiffs had no duty to defend or indemnify defendants in six subrogation cases pending in the circuit court. Summary judgment was granted in favor of plaintiffs and defendants appeal asserting that the exclusion: (1) is ambiguous; (2) violates public policy created by the Illinois mandatory insurance law; and (3) usurps the legislative prerogative by contractually excluding liability coverage to drivers for violations of traffic laws. Additionally, in case No. 1-07-0792, defendants contend that the Founders' named driver exclusion cannot be enforced where the insurance card issued by Founders failed to contain the statutory warning that Alberto Muñoz was an excluded driver. For the following reasons, we affirm the judgment in No. 1-07-0792 and reverse and remand the remaining judgments for further proceedings consistent with this opinion.
The following facts appear from plaintiffs' complaints and attachments, as well as from materials submitted by the parties in their cross-motions for summary judgment.
As noted, the common thread linking these consolidated appeals is found in the entitlement exclusion of Founders' and Safeway's automobile policies. The relevant language provides:
"Part I — LIABILITY
Exclusions. This policy does not apply under Part I:
[T]o bodily injury or property damage arising out of the use by any person of a vehicle without a reasonable belief that the person is entitled to do so[.]"
In the proceedings below, the drivers involved in the various accidents giving rise to various third-party claims did not have valid driver's licenses. As to each matter, the record provided the following basic information.
Founders Insurance Company (Founders) insured a 1992 Buick Park Avenue under an automobile policy issued to Paulina Flores from September 19, 2004, to March 19, 2005. In the application signed by Flores on September 18, 2004, she listed "Alberto Muñuz" as a household member, but stated that he had never been licensed to drive. Accordingly, the policy excluded from coverage any "claim or suit which occurs as a result of any auto being operated by `Alberto Muñuz.'" However, the insurance card issued to Ms. Flores did not contain a warning that Muñuz was excluded from coverage. A policy amendment on March 24, 2005, added "Alberto Muñoz" as a second driver, reflecting a current driver's license.1
On or about March 11, 2005, Alberto L. Muñoz was involved in an accident with Ewa R. Johnson in Des Plaines, Illinois. In turn, Allstate Insurance Company filed a subrogation lawsuit in the circuit court of Cook County entitled Allstate Insurance v. Muñoz, No. 05 M2 002135, for property damage to the Johnson vehicle and medical payments for her injuries in the amount of $9,373.87.
Founders also insured a 1988 Pontiac Bonneville under a policy issued to Florencio Vallarta from November 27, 2004, to November 27, 2005. The policy contained the identical entitlement exclusion common to Founders automobile policies.
On or about December 13, 2004, Daniel Vallarta, the resident son of Florencio Vallarta, was operating the insured vehicle when he was involved in an accident with parked vehicles owned by Demetra Soter and Patricia Saifuddin in Chicago, Illinois. Daniel was unlicensed at the time of the accident.2 Ms. Soter's insurance carrier, Allstate Insurance Company, filed a subrogation lawsuit in the circuit court of Cook County entitled Allstate Insurance v. Vallarta, No. 06 M1 21949, for property damage to the Soter vehicle in the amount of $3,612.55.
Founders likewise insured a 2000 Ford Windstar under an automobile policy issued to Mariya Poruchnyk and Yaroslav Honchar, from October 6, 2005, to April 6, 2006. The policy also contained the previously noted entitlement exclusion.
On or about November 25, 2005, Mr. Honchar was operating the insured vehicle in Chicago, Illinois, when he became involved in an accident with Bernard Riley. At the time of the accident, Honchar's license was suspended. Mr. Riley was operating a vehicle owned by Shirley Brown and insured under an automobile insurance policy issued by Allstate Insurance Company. In turn, Allstate sought subrogation in an action brought in the circuit court of Will County entitled Allstate Insurance Co. v. Honchar, No. 06 SC 6246, for the property damages sustained by the Brown vehicle in the amount of $9,902.07.
Safeway Insurance Company (Safeway) insured a 1996 GMC Sierra 1500 under a policy issued to Sergio Ramirez from November 9, 2006, to May 9, 2007. Safeway's policy included an entitlement exclusion identical to those contained in the Founders policies.
On or about November 13, 2006, while Flavio Fernandez was operating the insured vehicle, he was involved in an accident with Rolando Almaraz and Sandra Flores in Chicago, Illinois. Fernandez did not have a valid Illinois driver's license at the time. Rolando Almaraz was operating a vehicle owned by Pedro Almaraz and insured under an automobile insurance policy issued by Allstate Insurance Company. Flores was a passenger in the Almaraz vehicle when the accident occurred. Thereafter, Allstate filed a subrogation lawsuit in the circuit court of Cook County entitled Allstate Insurance Co. v. Fernandez, No. 07 M1 16142, for property damage and personal injuries sustained in the accident in the amount of $15,752.10.
Founders also insured a 1991 Chevrolet Geo Metro under an insurance policy issued to Christine L. Seekamp from March 1, 2004, to March 1, 2005. The policy contained the same entitlement exclusion common to Founders' automobile policies. On or about January 29, 2005, Ms. Seekamp was involved in an automobile accident with David Schlesinger in Chicago, Illinois. She was cited for driving on a suspended driver's license at the time of the accident. Schlesinger was operating his own vehicle, which was insured by Allstate Property & Casualty Insurance Company. Allstate subsequently filed a subrogation lawsuit in the circuit court of Cook County entitled Allstate Insurance Co. v. Seekamp, No. 06 M1 13868, for property damages and personal injuries sustained in the January 29, 2005 accident.3
Founders likewise insured a 1999 Ford Explorer under an automobile policy issued to Rafael Tecpanecatl from May 18, 2006, to November 18, 2006. The policy contained the identical entitlement exclusion common to the other Founders' automobile policies.
On or about October 27, 2006, Mr. Tecpanecatl was operating the insured vehicle when he was involved in an automobile accident with Mike M. Marusic, Heather M. Burns and Kara Campos in Elmhurst, Illinois. Tecpanecatl had never been licensed to drive. Mr. Marusic was operating a vehicle insured under an automobile liability policy issued by Allstate Insurance Company. Ms. Burns was a passenger in the Marusic vehicle. Ms. Campos was operating another vehicle owned by Vickie Ritter and also insured under an automobile liability policy issued by Allstate Insurance Company. Allstate filed a subrogation lawsuit in the circuit court of Cook County entitled Allstate Insurance Co. v. Tecpanecatl 07 L 4498, for the property damage and personal injuries arising from the October 27, 2006 accident.
Instead of providing a defense in the various cases, Founders and Safeway commenced the underlying actions seeking declarations that t...
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