State Farm Mut. Auto. Ins. Co. v. Murphy

• Decision Date: 29 March 2019
• Docket Number: Nos. 2-18-0154,2-18-0159,2-18-0861,2-18-0860,s. 2-18-0154
• Citation: 434 Ill.Dec. 460,2019 IL App (2d) 180154,136 N.E.3d 595
• Parties: STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Plaintiff-Appellee, v. Mary MURPHY, as Executor of the Estate of James Hollander, Deceased; Sandra Wendland; Cheyenne Flowers; Pamela Sheppard, as Guardian of the Estate and Person of Alyssa Guarino, a Disabled Person; Keith Keigher; and J-M Transports, Inc., Defendants (Mary Murphy, as Executor of the Estate of James Hollander, Deceased; Sandra Wendland; Cheyenne Flowers; Pamela Sheppard, as Guardian of the Estate and Person of Alyssa Guarino, a Disabled Person; Defendants-Appellants).
• Court: United States Appellate Court of Illinois

2019 IL App (2d) 180154

136 N.E.3d 595

434 Ill.Dec. 460

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Plaintiff-Appellee,

v. Mary MURPHY, as Executor of the Estate of James Hollander, Deceased; Sandra Wendland; Cheyenne Flowers; Pamela Sheppard, as Guardian of the Estate and Person of Alyssa Guarino, a Disabled Person; Keith Keigher; and J-M Transports, Inc., Defendants(Mary Murphy, as Executor of the Estate of James Hollander, Deceased; Sandra Wendland; Cheyenne Flowers; Pamela Sheppard, as Guardian of the Estate and Person of Alyssa Guarino, a Disabled Person; Defendants-Appellants).

Nos. 2-18-0154

2-18-0159

2-18-0860

2-18-0861

Appellate Court of Illinois, Second District.

Rule 23 order Filed January 7, 2019

Motion to publish granted March 29, 2019

Opinion filed March 29, 2019

Robert A. Clifford, Sean P. Driscoll, and Craig J. Squillace, of Clifford Law Offices, and Leslie J. Rosen, of Leslie J. Rosen Attorney at Law, P.C., of both of Chicago, for appellant Pamela Sheppard.

Joseph P. DiPino, of Beverly & Pause, of Chicago, and Adriane I. LaShure, of Schweickert & Ganassin, LLP, of Peru, for appellant Cheyenne Flowers.

Stephen M. Passen and Matthew A. Passen, of Passen Law Group, of Chicago, for appellant Sandra Wendland.

Ed Shapiro and Shawn Staples, of Much Shelist, LLP, of Chicago, for other appellant.

Ellen L. Green and Michael Resis, of SmithAmundsen LLC, of Chicago, for appellee.

JUSTICE McLAREN delivered the judgment of the court, with opinion.

¶ 1 Defendants, Mary Murphy, as executor of the estate of James Hollander, deceased; Sandra Wendland; Cheyenne Flowers; and Pamela Sheppard, as guardian of the estate and person of Alyssa Guarino, a disabled person, (collectively, defendants), appeal the trial court's grant of summary judgment in favor of plaintiff, State Farm Mutual Automobile Insurance Company. For the following reasons, we affirm.

¶ 2 I. BACKGROUND

¶ 3 On September 11, 2015, a multivehicle accident occurred at the intersection of Grove Road and U.S. Route 52 in Kendall County. At the intersection, Grove Road was controlled by a stop sign and Route 52 was a through-road without any traffic signals. When the accident occurred, Hollander was driving Wendland's 2015 Nissan Altima south on Grove Road. Wendland and Guarino were passengers, with Wendland in the front passenger seat and Guarino in the backseat, and they were en route to visit Wendland's daughters in Iowa. Meanwhile, Flowers was traveling east on Route 52 near Grove Road. Keith Keigher was driving a semitractor-trailer in the scope of his employment with J-M Transport, Inc. (J-M), traveling west on Route 52 near Grove Road. The accident occurred when the Nissan collided with the tractor-trailer, which then collided with Flowers's vehicle. Hollander died as a result of the collision.

¶ 4 A. The Underlying Complaints

¶ 5 Wendland, Sheppard, and Flowers each filed negligence actions against Hollander's estate, seeking to recover damages for injuries sustained in the accident. See Wendland v. Murphy, No. 16-L-41 (Cir. Ct. Kendall County); Sheppard v. Murphy, No. 16-L-39 (Cir. Ct. Kendall County); Flowers v. Murphy, No. 15-L-87 (Cir. Ct. Kendall County). Flowers also named as defendants Keigher and J-M. All of the underlying complaints alleged that the collision was caused by Hollander's negligent acts or omissions. None of the underlying complaints alleged that Hollander was vicariously liable for any acts or omissions by Wendland. None of the complaints alleged that Wendland was liable in any manner.

¶ 6 B. Complaint for Declaratory Judgment

¶ 7 On July 11, 2017, plaintiff filed a declaratory judgment action, stating that it was defending Hollander's estate in the underlying lawsuits, under Wendland's primary automobile policy. Plaintiff acknowledged that Hollander was a "permissive user" of the Nissan. However, plaintiff sought a declaration that it did not owe an obligation to defend or indemnify Hollander's estate under a $ 1 million umbrella policy it had issued to Wendland that was effective at the time of the accident.

¶ 8 Plaintiff alleged and argued the following. Plaintiff had no duty to defend or indemnify Hollander's estate under the umbrella policy "because [Hollander] does not qualify as an insured" under the umbrella policy. The policy provided in part:

"COVERAGE L—PERSONAL LIABILITY

If a claim is made or a suit is brought against an insured for damages because of a loss for which the insured is legally liable and to which this policy applies, we will pay on behalf of the insured, the damages that exceed the retained limit. The most we will pay for such loss is the Coverage L Limit of Liability, as shown on the declarations page, regardless of the number of insureds who may be liable, claims made, or persons injured.

* * *

DEFINITIONS

***

6. ‘insured’ means:

a. you and your relatives whose primary residence is your household;

b. any other human being under the age of 21 whose primary residence is your household and who is in the care of a person described in 6.a.;

c. any other person or organization to the extent they are liable for the use of an automobile, recreational motor vehicle or watercraft by a person included in 6.a. or 6.b.

* * *

12. ‘relative’ means any person related to you by blood, adoption, or marriage.

* * *

15. ‘you’ and ‘your’ mean the person or persons shown as ‘Named Insured’ on the declarations page. If a named insured shown on the declarations page is a human being then you and your includes the spouse of the first person listed as a named insured if the spouse resides primarily with that named insured."

¶ 9 C. Motion for Summary Judgment

¶ 10 On July 11, 2017, plaintiff filed a motion for summary judgment pursuant to section 2-1005 of the Code of Civil Procedure ( 735 ILCS 5/2-1005 (West 2016) ). Plaintiff alleged and argued, in part, that Hollander did not fall within paragraph 6.c. of the umbrella policy, because he was not liable or alleged to be liable for the use of a motor vehicle by a person described in paragraph 6.a. or 6.b. Specifically, "[t]here are no allegations in the Underlying Lawsuits that Hollander [was] alleged to be liable for anyone else's use of an automobile who would fall within Paragraphs 6.a. or 6.b." According to plaintiff, these undisputed material facts established that Hollander did not fall within the definition of an "insured" under the umbrella policy, and therefore plaintiff was entitled to judgment as a matter of law.

¶ 11 Defendants filed separate responses to plaintiff's motion. All defendants argued that Hollander was an insured under paragraph 6.c. of the umbrella policy. Murphy argued that paragraph 6.c. was ambiguous because "[r]ules of grammatical construction indicate that the limiting phrase only modifies the final word before the phrase (i.e. , watercraft) and not the word ‘automobile.’ " Therefore, Murphy concluded, paragraph 6.c. could be interpreted to include Hollander because he was "any other person or organization to the extent [that he was] liable for the use of an automobile."

¶ 12 Sheppard argued that Hollander qualified as an insured under paragraph 6.c. of the umbrella policy because the undisputed facts established that the "use" of the vehicle was by Wendland to visit her daughters, as Wendland testified in her deposition. Thus, Hollander was an " ‘other person *** liable for the use of an automobile *** by a person included in 6.a. [Wendland] ***.’ " To the extent that plaintiff asserted that there was some other interpretation of paragraph 6.c., the language should be deemed ambiguous, which required the trial court to construe the policy in favor of the insured and against plaintiff.

¶ 13 Wendland argued that Hollander qualified as "any other person" under paragraph 6.c. As for the remainder of paragraph 6.c., the underlying lawsuits sought to hold Hollander's estate "liable for use of an automobile *** by a person included in 6.a.," namely, Wendland. The umbrella policy did not limit the term "use" to "driving" or "operation." "Use" was not defined in the policy. Thus, Wendland concluded, a reasonable interpretation of the term "use" in the context of "use of an automobile" included drivers and passengers alike, and Hollander qualified as an insured under paragraph 6.c.

¶ 14 On November 8, 2017, the trial court denied plaintiff's motion for summary judgment, determining that "the definition of insured is sufficiently ambiguous as to whether Hollander is entitled to coverage under the Umbrella Policy."

¶ 15 Plaintiff filed a motion to reconsider, arguing that the trial court erred in its application of existing law in denying plaintiff's motion for summary judgment.

¶ 16 On January 30, 2018, after hearing argument on plaintiff's motion to reconsider, the trial court reversed its original ruling, stating, in its written order:

"The court finds that its previous interpretation of the insurance policy, and specifically the definition of the term ‘insured,’ was incorrect; and that under the language of the policy James Hollander does not qualify as an insured under the Umbrella Policy, nor does State Farm have a duty to defend or indemnify the Estate of James Hollander."

The trial court therefore entered summary judgment in favor of plaintiff.

¶ 17 Defendants timely filed separate notices of appeal.¹ This court consolidated these appeals.

¶ 18 II. ANALYSIS

¶ 19 A. Standard of Review

¶ 20 Defendants argue that the trial court erred by determining that, as a matter of law, Hollander was not an "insured" under the umbrella policy plaintiff issued to Wendland.

¶ 21 Our review of the trial court's grant of summary judgment is de novo . Home Insurance Co. v. Cincinnati Insurance Co. , 213 Ill. 2d 307, 315, 290 Ill.Dec. 218, 821 N.E.2d 269 (2004). "Summary judgment is proper where, when viewed in the light most favorable to the nonmoving party, the pleadings, depositions, admissions, and affidavits on file reveal that there is no genuine issue as to any material fact and that the moving par...