Rohe ex rel. Rohe v. CNA Ins. Co.

• Decision Date: 08 February 2000
• Docket Number: No. 1-99-1350.,1-99-1350.
• Citation: 244 Ill.Dec. 442,726 N.E.2d 38,312 Ill. App.3d 123
• Parties: Timothy ROHE, a Minor, By His Mother and Next Friend, Marybeth ROHE, Plaintiff-Appellant, v. CNA INSURANCE COMPANY, a Corporation, Defendant-Appellee.
• Court: United States Appellate Court of Illinois

726 N.E.2d 38

312 Ill. App.3d 123

244 Ill.Dec. 442

Timothy ROHE, a Minor, By His Mother and Next Friend, Marybeth ROHE, Plaintiff-Appellant, v. CNA INSURANCE COMPANY, a Corporation, Defendant-Appellee.

No. 1-99-1350.

Appellate Court of Illinois, First District, Second Division.

February 8, 2000.

Mark C. Murnane, Anesi, Ozmon, Rodin, Novak & Kohen, Ltd., Chicago, for Appellant.

Cassiday, Schade & Gloor, Chicago (John D. Hackett, Donald F. Ivansek and Brian A. Schroeder, of counsel), for Appellee.

Presiding Justice COUSINS delivered the opinion of the court:

Plaintiff, Timothy Rohe, a minor, filed a declaratory judgment action in the circuit court of Cook County seeking a determination of his right to insurance coverage under a business automobile policy provided by defendant, CNA Insurance Company, and issued to a corporation owned by plaintiff's father. Plaintiff specifically sought to recover the proceeds of an uninsured motorist endorsement found within the policy following an accident that occurred between plaintiff, a pedestrian, and an uninsured motorist. The circuit court granted defendant's motion for judgment on the pleadings, finding the language of the insurance policy to be unambiguous and, thus, inapplicable to plaintiff. On appeal, plaintiff contends that the lower court erred in granting defendant's motion where the insurance policy was ambiguous as to who was covered thereunder and where public policy supports the extension of coverage to family members.

We affirm.

BACKGROUND

Plaintiff's father owns a corporation named Graphic Papers of Joliet, Inc. (Graphic Papers), located at 701 Scott Street, Joliet, Illinois. On August 7, 1996, defendant issued a business automobile insurance policy to Graphic Papers for the policy period of August 12, 1996, to August 12, 1997, insuring thereunder five automobiles and listing Graphic Papers as the only "named insured" in the policy declaration. The policy was covered by American Casualty Company of Reading, Pennsylvania, and stated that, "[t]hroughout this policy, the words `you' and `your' refer to the Named Insured shown in the Declarations." The policy further included an "Illinois Uninsured Motorists Coverage" endorsement that defined an "insured" as follows:

"1. You.

2. If you are an individual, any `family member'.

3. Anyone else `occupying' a covered `auto' or a temporary substitute for a covered `auto'. The covered `auto' must be out of service because of its breakdown, repair, servicing, loss or destruction.

4. Anyone for damages he or she is entitled to recover because of `bodily injury' sustained by another `insured'."

On December 1, 1996, plaintiff, a minor, was skateboarding on a public street in Joliet, Illinois, when an uninsured automobile struck him. As a result thereof, plaintiff allegedly sustained fractures to his right fibula, left and right tibia, and distal right humerus, as well as other scratches and contusions.

In March 1998, plaintiff demanded that defendant tender to him the full $500,000 limit of the uninsured motorist endorsement found within Graphic Papers' insurance policy. However, on April 16, 1998, defendant refused plaintiff's demand, stating:

"Upon review, we have found that at the time of the loss, no coverage was afforded Timothy Rohe, minor; for uninsured/underinsured motorist coverage. Therefore[,] we regret to inform you we can not consider this claim for injury as a result of the above accident."

On July 29, 1998, plaintiff filed a complaint for declaratory judgment against defendant, alleging, inter alia, that he was entitled to uninsured motorist coverage under Graphic Papers' insurance policy because the "family language" within the policy was a deliberate intent by defendant (1) to apply coverage not only to Graphic Papers, but also to individuals assigned by Graphic Papers to operate its vehicles, and (2) to provide coverage to the family members of said individuals. Plaintiff further asserted that any other interpretation of the "family member" language in a policy wherein the "named insured" was a corporation would render the policy ambiguous, as corporations cannot have families. As such, plaintiff urged the court to construe the term "family members" as including plaintiff, since his parents were assigned to one of the insured vehicles during the time of his injury.

On October 9, 1998, defendant filed a motion for judgment on the pleadings, alleging, inter alia, that plaintiff was not an insured under Graphic Papers' policy and, as such, defendant did not have any obligation to pay uninsured motorist benefits to him in connection with his alleged injuries and accident. In its "Memorandum of Law in Support of its Motion for Judgment on the Pleadings," filed October 26, 1998, defendant further posited that notice of the accident and claim were untimely and constituted a breach of a condition precedent to coverage.

On March 22, 1999, following a hearing on the matter, the lower court granted defendant's motion, finding the policy language to be unambiguous, as it applied only to a corporation and not to an individual. As such, the court found that plaintiff had no rights to coverage thereunder. See Economy Preferred Insurance Co. v. Jersey County Construction, Inc., 246 Ill.App.3d 387, 390, 186 Ill.Dec. 233, 615 N.E.2d 1290, 1292 (1993). This appeal then ensued.

ANALYSIS

This is an action for declaratory relief (see 735 ILCS 5/2-701 (West 1998)), wherein the circuit court granted defendant's motion for judgment on the pleadings (see 735 ILCS 5/2-615(e) (West 1998)). A motion for judgment on the pleadings is like a motion for summary judgment limited to the pleadings. Employers Insurance v. Ehlco Liquidating Trust, 186 Ill.2d 127, 138, 237 Ill.Dec. 82, 708 N.E.2d 1122, 1129 (1999). As such, judgment on the pleadings is proper "`[i]f the admissions in the pleadings disclose that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law.'" Employers Insurance, 186 Ill.2d at 138, 237 Ill.Dec. 82, 708 N.E.2d at 1129, quoting 3 R. Michael, Illinois Practice § 27.2, at 494 (1989). As the construction of an insurance policy and its provisions is a question of law, we review the case under a de novo standard. Lapham-Hickey Steel Corp. v. Protection Mutual Insurance Co., 166 Ill.2d 520, 529, 211 Ill.Dec. 459, 655 N.E.2d 842, 846 (1995); Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill.2d 90, 108, 180 Ill.Dec. 691, 607 N.E.2d 1204, 1212 (1992).

Plaintiff initially contends that the lower court erred, as a matter of law, in granting defendant's motion where the insurance policy in question was ambiguous as to who was covered thereunder. Specifically, plaintiff asserts that he is entitled to benefits under the uninsured motorist endorsement found within Graphic Papers' policy because the word "you" in the policy is ambiguous in the manner used throughout the policy. We disagree.

In construing insurance policies, the court's primary purpose is to determine and give effect to the intention of the parties, as expressed in the agreement. Outboard Marine, 154 Ill.2d at 108, 180 Ill.Dec. 691, 607 N.E.2d at 1212. To do so, a court must "construe the policy as a whole, taking into account the type of insurance for which the parties have contracted, the risks undertaken and purchased, the subject matter that is insured and the purposes of the entire contract." Crum & Forster Managers Corp. v. Resolution Trust Corp., 156 Ill.2d 384, 391, 189 Ill.Dec. 756, 620 N.E.2d 1073, 1078 (1993). If the words in the policy are clear and unambiguous, there is no need for construction and the court will enforce the policy according to its terms as written, unless it contravenes public policy. Menke v. Country Mutual Insurance Co., 78 Ill.2d 420, 423-24, 36 Ill.Dec. 698, 401 N.E.2d 539, 541 (1980); see also United States Fire Insurance Co. v. Schnackenberg, 88 Ill.2d 1, 4-5, 57 Ill.Dec. 840, 429 N.E.2d 1203, 1205 (1981). However, a policy term is not ambiguous because the term is not defined within the policy or because the parties can suggest creative possibilities for its meaning. Lapham-Hickey, 166 Ill.2d at 529,211 Ill.Dec. 459,655 N.E.2d at 846. And, a court cannot read an ambiguity into a policy just to find in favor of the insured. Lapham-Hickey, 166 Ill.2d at 530,211 Ill.Dec. 459,655 N.E.2d at 846. Rather, a policy provision is ambiguous only if it is subject to more than one reasonable interpretation. United States Fidelity & Guaranty Co. v. Wilkin Insulation Co., 144 Ill.2d 64, 74, 161 Ill.Dec. 280, 578 N.E.2d 926, 930 (1991). Where competing reasonable interpretations of a policy exist, the court must construe the policy in favor of the insured and against the insurer that drafted the policy. American States Insurance Co. v. Koloms, 177 Ill.2d 473, 479, 227 Ill.Dec. 149, 687 N.E.2d 72, 74 (1997).

In the case at bar, plaintiff's argument is premised upon the assumption that his father falls within the definition of the word "you" as used in the uninsured motorist endorsement's definition of "insured." From this, plaintiff argues that he is a "family member" of his father and, as such, is entitled to uninsured motorist benefits under Graphic Papers' policy. However, the policy specifically defined the term "you" as referring only to the "named insured," which is the corporation Graphic Papers. It is clear under the law that a corporation is a legal entity separate and distinct from its shareholders, directors and officers. In re Rehabilitation of Centaur Insurance Co., 158 Ill.2d 166, 172, 198 Ill.Dec. 404, 632 N.E.2d 1015, 1017 (1994). Therefore, as Graphic Papers has an existence wholly separate from that of its owner, plaintiff's father, the insurance policy, on its face, is unambiguous as to who is covered thereunder. See Outboard Marine, 154 Ill.2d at 108, 180 Ill. Dec. 691, 607 N.E.2d at 1212.

Regardless, plaintiff urges this court to find...