Polzin v. Phoenix of Hartford Ins. Companies

Decision Date18 April 1972
Docket NumberNo. 55244,55244
Citation5 Ill.App.3d 84,283 N.E.2d 324
PartiesBurnell A. POLZIN, Plaintiff-Appellant, v. The PHOENIX OF HARTFORD INSURANCE COMPANIES, Defendant-Appellee.
CourtUnited States Appellate Court of Illinois

Alan E. Morrill, Charles J. Murphy, Robert J. Sprecher, Chicago, for plaintiff-appellant; Morrill, Koutsky, Klomann & Chuhak, Crowley, Sprecher, Barrett & Karaba, Chicago, of counsel.

William D. Maddux, John M. O'Connor, Jr., Chicago, for defendant-appellee; Kirkland, Ellis, Hodson, Chaffetz & Masters, Chicago, of counsel.

LEIGHTON, Justice.

This appeal requires us to construe an endorsement to an automobile liability insurance policy. The essential facts are not in dispute.

Appellate Burnell A. Polzin, at the time in question, was the president of A.B.C. Lithoplate and Graining Service, Inc. of Chicago. He was the corporation's chief executive officer and owner of 50% Of its stock. The company owned two automobiles, both insured by appellee The Phoenix of Hartford Insurance Companies. One was a 1967 Cadillac originally purchased by Polzin who for tax reasons transferred title to the corporation. Polzin was Lithoplate's only outside salesman. Therefore, he more than anyone else, drove the Cadillac. The automobile insurance was obtained by Polzin who left the coverage details to an employee of the agency with which he did insurance business. Lithoplate was the only named insured on the Phoenix policy. The policy had a 'Family Protection Coverage' endorsement which provided 'uninsured or hit-and-run motor vehicle coverage' required by Illinois law. By the insuring agreements of the endorsement, Phoenix was obligated to pay all sums to which 'the insured or his legal representative' should be entitled from the owner or operator of any uninsured automobile that caused bodily injury to the insured. The term 'insured' in the endorsement meant:

(1) the named insured as stated in the policy (herein also referred to as the 'principal named insured') and any person designated as named insured in the schedule and, while residents of the same household, the spouse of any such named insured and relatives of either;

(2) any other person while occupying an insured automobile; and

(3) any person, with respect to damages he is entitled to recover because of bodily injury to which this endorsement applies sustained by an insured under (1) or (2) above.

On June 15, 1968, at about 4:00 P.M., Polzin was standing on the northeast corner of Jackson and Ashland Boulevards in Chicago. As the result of a collision, an uninsured motor vehicle owned by Robert E. Nalls careened and struck Polzin, seriously injuring him. Later, Polzin served Phoenix with notice, claiming that he was covered by the uninsured motorist endorsement on the policy issued to Lithoplate. Phoenix denied the claim. Then, relying on a clause of the endorsement that provided for arbitration, Polzin demanded submission of his claim to a member of the American Arbitration Association. Phoenix resisted submission on the ground that Polzin had no coverage rights under the policy to Lithoplate. Phoenix contended that because a question of coverage was involved, the American Arbitration Association, whose auspices Polzin sought to invoke, was without jurisdiction to hear his claim. On the day of the arbitration hearing, Phoenix appeared and objected to commencement of arbitration. The objection was overruled and arbitration proceeded.

Polzin was the only witness. He testified that he bought the 1967 Cadillac, put the title in the corporation, and drove it most of the time; that he arranged for the insurance policy but never read it to see if it covered him; that the corporation owned the insured automobiles. Then, Polzin and Phoenix stipulated that the automobile which injured Polzin was uninsured; that its driver's negligence caused the injuries; and that Polzin's loss exceeded the policy limit of $10,000. Thereafter, Polzin, through his counsel, argued that though he was not a named insured in the policy, he had rights under the uninsured motorist endorsement because the 'Family Protection Coverage' afforded recovery for bodily injury, a thing which Lithoplate, a corporation, could not incur. Therefore, the endorsement would be a nullity unless he, Polzin, the corporation's chief executive officer and the person who was the principal operator of one of the insured automobiles, had coverage for the injuries he sustained as a pedestrian.

Phoenix, by its counsel, argued that the policy to Lithoplate did furnish coverage for bodily injury. However, it was bodily injury suffered by a person who, with Lithoplate's consent, was occupying one of the insured automobiles. Phoenix insisted that since Polzin was neither named in the policy as an insured nor an occupant of one of the insured automobile, he had no coverage under the endorsement. After taking the submission under advisement, the arbitrator awarded Polzin $10,000, the full amount of the policy.

Thereafter, invoking the Uniform Arbitration Act, 1 Phoenix filed a petition to vacate the award. Polzin answered. After hearing the parties, the trial judge vacated the award, finding that '(r)espondent (Polzin) was not an insured entitled to the uninsured motorist protection under the policy in question and the occurrence as described in the petition and answer.' Judgment was entered in favor of Phoenix '(o)n all questions relating to * * * coverage for the occurrence in question.' The issue presented is whether Polzin, not a named insured, and a pedestrian injured by an uninsured motorist, had coverage rights within the terms of the uninsured motorist endorsement to the policy which Phoenix issued to Lithoplate.

In the law of insurance, there cannot be recovery on a policy without proof that the loss claimed falls within the terms of the coverage provided. Sell v. Country Mutual Insurance Company, 23 Ill.App.2d 497, 163 N.E.2d 547. The general rules which govern proof of actions on insurance contracts place on a claimant the burden of proving his right to sue on the policy. 46 C.J.S. Insurance § 1316(1); Couch on Insurance 2d § 79:344. Consistent with these rules, we have held that one who sues on a policy of insurance must prove that he comes within its terms. See Milkes v. U.S. Fidelity & Guaranty Co., 257 Ill.App. 65. And in Krmicek v. Federal Life Ins. Co., 252 Ill.App. 232, we held that where no claim is made...

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