Scottish & York Intern. Ins. Group/Guarantee Ins. Co. v. Comet Cas. Co., 1-88-3543

• Court: United States Appellate Court of Illinois
• Writing for the Court: MANNING
• Citation: 207 Ill.App.3d 881,566 N.E.2d 477,152 Ill.Dec. 790
• Decision Date: 24 December 1990
• Docket Number: No. 1-88-3543,1-88-3543
• Parties: , 152 Ill.Dec. 790 SCOTTISH & YORK INTERNATIONAL INSURANCE GROUP/GUARANTEE INSURANCE COMPANY, Plaintiff-Appellee, v. COMET CASUALTY COMPANY and Prestige Casualty Company, Defendants-Appellants.

Page 477

566 N.E.2d 477 207 Ill.App.3d 881, 152 Ill.Dec. 790 SCOTTISH & YORK INTERNATIONAL INSURANCE GROUP/GUARANTEE
INSURANCE COMPANY, Plaintiff-Appellee,
v.
COMET CASUALTY COMPANY and Prestige Casualty Company,
Defendants-Appellants. No. 1-88-3543. Appellate Court of Illinois,
First District, First Division. Dec. 24, 1990.

Page 478

[207 Ill.App.3d 882] [152 Ill.Dec. 791] Beerman, Swerdlove, Woloshin, Barezky & Berkson, Chicago (Alvin R. Becker, Howard A. London and Timothy M. Kelly, of counsel), for defendants-appellants.

Judge & Knight, Ltd., Park Ridge (Jay S. Judge and Martin D. Judge, of counsel), for plaintiff-appellee.

Justice MANNING delivered the opinion of the court:

Defendants, Comet Casualty Company and Prestige Casualty Company, (hereafter "Comet") appeal from the order of the circuit court of Cook County which granted judgment in the amount of $20,318.65 and summary judgment on the issues presented in the declaratory action in favor of plaintiffs, Scottish & York International Insurance Group/Guarantee Insurance Company, (hereafter "Guarantee"). The facts are as follows.

On February 5, 1983, Thomas J. Bock, (hereafter "Bock"), while operating a three and one-half ton truck owned by Buffalo Grove Rental, (hereafter "Buffalo"), a rental equipment dealer, was involved in an accident with a minor pedestrian, Howard Sussman. Buffalo had leased the truck to Tom Bailey pursuant to the terms of a written rental agreement and it is not disputed that Bailey gave permission to Bock to drive the truck.

The minor, by his parent and natural guardian filed suit (hereafter "the Sussman suit") against Buffalo and Bock, alleging that Bock negligently operated the vehicle as an agent or servant of Buffalo. [207 Ill.App.3d 883] Guarantee who had issued its business liability insurance policy to Buffalo to conform to the "Owners of For Rent Vehicles For-Hire Act" (Ill.Rev.Stat.1987, ch. 95 1/2, pars. 9-101 et seq.), provided a defense in the Sussman suit. Guarantee made repeated but unavailing requests upon Comet, whose family combination automobile policy provided liability coverage to Bock as the named insured, to share the cost of the Sussman action on a pro rata basis. However, Comet neither participated in the defense nor the settlement negotiations as it contended in letters addressed to Guarantee that the truck was not an "automobile" under the terms of its policy, and if it were, it would not be covered under the policy's exclusion that states: "[t]his policy does not apply under Part I: (k) to any automobile rented or leased by the insured where other valid or collectible insurance has been purchased by or furnished to the insured in connection with such rental or lease."

Subsequently, Guarantee settled the Sussman suit by paying out its policy limits of $50,000, and incurred $10,637.30 in defense costs. Thereafter, Guarantee filed an action for declaratory relief and motion

Page 479

[152 Ill.Dec. 792] for summary judgment asserting that the policies issued by both insurers contained similar excess clauses, Comet by breaching its duty to defend was precluded from asserting any policy defenses, and Comet was obligated to reimburse Guarantee for settlement and defense costs.

Comet countered by restating the position advanced in the letters to Guarantee and further maintained that assuming any coverage under the Comet policy, it neither had a duty to defend as Guarantee's policy provided primary coverage nor a duty to reimburse because Guarantee settled the Sussman suit for its policy limits.

On September 23, 1986, the trial court granted Guarantee's motion for summary judgment, finding Comet liable for a pro rata share of the settlement and reserved ruling on the question of pro rata sharing of the costs of defense. Thereafter, Guarantee filed its motion to enter pro rata judgment arguing that based upon the authority of Continental Casualty Co. v. Travelers Ins. Co. (1967), 84 Ill.App.2d 200, 228 N.E.2d 141, Comet was required to share the costs of settlement and defense on a 50/50 basis. Comet responded that sharing of the costs on an equal basis was improper as each insurer was responsible for only that proportion of the judgment that its policy limits represented.

On April 28, 1988, the trial court entered judgment in favor of Guarantee "in the amount of $20,318.65, said amount representing the $15,000 policy limit of defendant's (Comet's) policy and fifty percent[207 Ill.App.3d 884] of the total cost of defense of $10,637.30," and Comet now appeals from that order.

On appeal, Comet argues: (1) that it had no duty to defend because the truck was not a "non-owned automobile" within the meaning of its policy definition, (2) assuming the contrary, Comet, as the excess carrier, had no duty to defend because Guarantee's policy provided primary coverage, (3) that as the excess carrier Comet had no duty to reimburse until Guarantee's primary coverage limit was exhausted and it had paid sums in excess of that coverage, which did not occur here, and (4) that the trial court erred in its pro rata distribution of settlement and defense costs.

On appeal from a trial court's grant of summary judgment, a reviewing court's sole function is to determine whether the trial court properly concluded that there were no genuine issues of material fact, and if there were none, whether judgment was correct as a matter of law. (See Federal Ins. Co. v. Economy Fire & Casualty Co. (1989), 189 Ill.App.3d 732, 136 Ill.Dec. 1017, 545 N.E.2d 541; Coomer v. Chicago & Northwestern Transp. Co. (1980), 91 Ill.App.3d 17, 46 Ill.Dec. 812, 414 N.E.2d 865; see also Ill.Rev.Stat.1987, ch. 110, par. 2-1005.) Our courts have found that summary judgment is proper when the issue is determinable solely as a matter of law (Kroll v. Sugar Supply Corp. (1983), 116 Ill.App.3d 969, 72 Ill.Dec. 396, 452 N.E.2d 649; Smith v. Rengel (1981), 97 Ill.App.3d 204, 52 Ill.Dec. 937, 422 N.E.2d 1146, Martin v. American Legion Post # 784 (1978), 66 Ill.App.3d 116, 22 Ill.Dec. 864, 383 N.E.2d 672; Rivota v. Kaplan (1977), 49 Ill.App.3d 910, 7 Ill.Dec. 176, 364 N.E.2d 337), particularly where only construction and validity of a contract (Bates v. Select Lake City Theater Operating Co. (1979), 78 Ill.App.3d 153, 33 Ill.Dec. 742, 397 N.E.2d 75) or insurance policy...