Industrial Indem. Co. v. Vukmarkovic, 1-89-2706

• Decision Date: 18 October 1990
• Docket Number: No. 1-89-2706,1-89-2706
• Citation: 205 Ill.App.3d 176,562 N.E.2d 1073
• Parties: , 150 Ill.Dec. 270 INDUSTRIAL INDEMNITY COMPANY, Plaintiff-Counter-Defendant-Appellant and Cross-Appellee, v. Peter VUKMARKOVIC, Alberto Ruiz Corral and the Northern Trust Company, Co-guardians of the Estate of Taide R. Corral, a Disabled Person, Defendants-Counter-Plaintiffs- Appellees and Cross-Appellants.
• Court: United States Appellate Court of Illinois

Page 1073

562 N.E.2d 1073

205 Ill.App.3d 176, 150 Ill.Dec. 270

INDUSTRIAL INDEMNITY COMPANY Plaintiff-Counter-Defendant-Appellant and Cross-Appellee, v. Peter VUKMARKOVIC, Alberto Ruiz Corral and the Northern Trust Company, Co-guardians of the Estate of Taide R. Corral, a Disabled Person Defendants-Counter-Plaintiffs- Appellees and Cross-Appellants.

No. 1-89-2706.

Appellate Court of Illinois First District, Fourth Division.

Oct. 18, 1990.

Hinshaw, Culbertson, Moelmann, Hoban & Fuller, Chicago (Thomas M. Crisham, Stephen R. Swofford and Janet R. Davis, of counsel), for plaintiff-counter-defendant-appellant and cross-appellee Indus. Indem. Co.

Corboy & Demetrio, P.C., Chicago (Thomas A. Demetrio and Philip H. Corboy, Jr., of counsel), Baker & McKenzie, Chicago (Francis D. Morrissey, Edward J. Zulkey, of counsel), for defendants-counter-plaintiffs-appellees and cross-appellants.

Justice LINN delivered the opinion of the court:

Plaintiff, Industrial Indemnity Company, filed this declaratory judgment action to determine the existence of coverage under a comprehensive business insurance policy that Industrial had issued to the owner of a limousine that collided with a pedestrian. The pertinent provisions of the policy are found within the "personal umbrella liability extension," which in essence provides coverage for the personal activities of the individual insureds. This personal umbrella extension does not cover "any 'business' activities of any individual Named Insured" and specifically excludes from coverage "any business or business pursuits of an Insured or to property on which a business is conducted by an Insured."

Defendants are Peter Vukmarkovic, the driver of the limousine at the time of the occurrence, and the injured party, Taide Corral, by his co-guardians, Alberto Ruiz Corral and the Northern Trust Company (collectively referred to as "Corral"). In the underlying personal injury suit, Corral had sued Vukmarkovic, obtaining a jury verdict in an amount in excess of $16 million dollars. Corral collected a portion of his judgment from another insurance company, which had provided Vukmarkovic with a defense in the personal injury lawsuit. Thereafter, Corral instituted a garnishment action against Industrial for payment under its personal umbrella extension. Industrial, which had declined to tender a defense to Vukmarkovic for the personal injury lawsuit, filed the pending action for a declaration of non-coverage under its policy. Vukmarkovic and Corral counterclaimed, seeking a declaration that the Industrial policy covered Vukmarkovic and his activities, on the grounds that Vukmarkovic used the limousine with the permission of Latimer, an individual named insured, and therefore was himself an additional insured under Industrial's policy.

The parties filed cross motions for summary judgment. The trial court held that the policy did provide coverage for the occurrence and therefore entered judgment in favor of Corral and Vukmarkovic on the issue of coverage. The trial court further entered a money judgment of $5 million dollars, the policy limits, plus prejudgment interest.

On appeal, Industrial challenges the trial court's construction of the policy as well as its calculation of the time period for which prejudgment interest should be awarded. Corral and Vukmarkovic cross-appeal from the calculation of interest, contending that the trial court improperly denied their request for the higher, post-judgment rate of interest, which they classify as representing their proper "consequential damages."

We affirm.

BACKGROUND

Industrial issued an automobile dealers' insurance policy to certain named insureds, including Woodfield Ford Sales, Inc., Charles Latimer, and Ray Martin. Latimer and Martin together owned Woodfield Ford. The policy also provided coverage under a personal umbrella liability extension, which provides:

"Coverage. If properly noted in the General Declarations, and in consideration of the premium paid, it is agreed that, except as respects such coverage as is afforded by this Section, this policy does not cover any 'business' activities of any individual Named Insured. It is further agreed that the word 'business' includes trade, profession, or occupation."

Paragraph 3(c) of the umbrella extension, section B, defines "Individual Named Insured" as meaning:

"the individual named in the General Declarations and also includes the spouse thereof if a resident of the same household. The unqualified word 'insured' includes the individual Named Insured and also:

(2) any person while using an automobile or watercraft owned by * * * the individual Named Insured * * * with the individual Named Insured's permission."

Paragraph 4 of section B provides:

"4. Exclusions. This Coverage Part V, Section B shall not apply:

* * * * * *

g. to any business or business pursuits of an Insured or to property on which a business is conducted by an Insured * * *."

Charles Latimer, one of the individual named insureds on the Industrial policy, purchased a Mercedes limousine in 1984 as a business investment. He entered into an agreement with Lisle Livery, Inc., under which he relinquished complete control and maintenance of the vehicle to Lisle. In exchange, Latimer was to receive 30 percent of the proceeds from Lisle's use of the limousine in its livery service. Lisle's sole shareholder added the limousine to its "Business Auto Policy" that was issued by National Union Fire Insurance.

Peter Vukmarkovic was assigned Latimer's limousine to drive. He was responsible for the automobile's maintenance and On Saturday, April 27, 1985, Vukmarkovic took passengers to O'Hare airport for his first job. After another trip to the airport he went home for awhile. Later he took some people to a wedding in the afternoon. In the evening, he picked up some passengers from the airport and took them to Naperville, dropping them off between 11:30 and 11:45 p.m. He went to dinner at 1:00 am with some friends at a restaurant/night club. When the establishment closed at about 4:30 am, he left in the limousine to return to his house. While driving along Ashland Avenue in Chicago, he struck and severely injured Taide Corral, who was standing in a safety zone on the street.

[150 Ill.Dec. 273] care and he parked it at his home, because Lisle had no garage facilities. He was permitted to use the car for his own errands when he was not working as a driver for Lisle.

In the ensuing personal injury lawsuit, Corral named as defendants Vukmarkovic, Lisle, and Latimer. Before trial, however, he dismissed the complaint as against Lisle and Latimer, leaving Vukmarkovic as sole defendant. National Union Fire Insurance, Lisle's insurer, defended the lawsuit. That company later paid the limits of its policy toward the judgment that was entered upon the jury's verdict. Corral then attempted to collect on his judgment against Vukmarkovic, instituting a garnishment action to recover proceeds from the Industrial policy. His theory for recovery was based on Vukmarkovic's status as an insured under the personal umbrella liability extension coverage.

Industrial then filed the instant declaratory judgment action seeking a judicial determination that no coverage applied. Corral and Vukmarkovic counterclaimed, seeking the opposite determination. As part of their counterclaim, Corral and Vukmarkovic sought damages in excess of the policy limits of $5 million, based on Industrial's alleged bad faith in failing to acknowledge coverage and pay the claim. That portion of the lawsuit is not before this court on this appeal, which is brought pursuant to Supreme Court Rule 304(a).

After a hearing on the parties' cross-motions for summary judgment on the coverage issues, the court determined that the personal umbrella extension did provide coverage and, to the extent the language was ambiguous, such ambiguity would be construed against Industrial. Accordingly, the trial court entered summary judgment in favor of the insured, Vukmarkovic, and the injured party, Corral, holding that Industrial must pay the $5 million limits of its policy toward the personal injury award. In addition, the court resolved an issue concerning prejudgment interest, awarding 5% interest beginning on the date the insurance claim was considered "due and payable" under the terms of the policy. The court found the date of judgment in the underlying personal injury lawsuit, November 23, 1988, as the date the "loss payable" under the policy could be declared with certainty, and in conformance with the requisites of other policy language, found that "prejudgment interest" in the amount of 5% would accrue beginning thirty days thereafter, or December 23, 1988. The judgment in the pending declaratory action was entered on September 27, 1989, and accordingly the trial court calculated the amount of accrued interest due from December 23, 1988, through September 27, 1989.

OPINION

I.

Industrial's challenge to the trial court's construction of its policy is two-fold. First, Industrial argues that because Latimer, the named insured, was engaged in a business activity with respect to his leasing the limousine to Lisle for use in its livery service, the general coverage provisions of the personal umbrella liability extension never were triggered. Second, even assuming that Latimer's leasing of the automobile was not considered a business activity, Vukmarkovic's conduct on the night of the accident was part of Vukmarkovic's "business pursuits" and therefore, the express exclusion under section 4g of the policy applied to preclude any recovery of insurance proceeds. A.

Industrial relies heavily on Insurance Co. of Illinois v. Markogiannakis (1989), 188 Ill.App.3d 643, 136 Ill.Dec. 307, 544 N.E.2d 1082, a case in which the court construed a "business pursuits" exclusion as applicable in the context of a business-related altercation that occurred between the insured and another, who was...