NO. 4-06-0258 Filed 1/19/07
IN THE APPELLATE COURT
OF ILLINOIS
FOURTH DISTRICT
AUTO-OWNERS INSURANCE COMPANY, ) Appeal from Plaintiff-Appellee, ) Circuit Court of v. ) Jersey County LORI STUBBAN and SHANNON UFER, ) No. 05MR21 Defendants-Appellants, ) and ) Honorable LOREN DALE and SHIRLEY DALE, ) Eric S. Pistorius, Defendants. ) Judge Presiding.
JUSTICE APPLETON delivered the opinion of the court:
Defendants Lori Stubban and Shannon Ufer appeal from
the trial court's order granting plaintiff Auto-Owners Insurance
Company's (Auto-Owners) motion for summary judgment. Auto-Owners
had filed an action seeking a declaratory judgment that it had no
duty to defend its insured, Loren Dale, in a personal-injury
action filed by Stubban and Ufer. Auto-Owners contested coverage
because Dale owned the vehicle involved in the accident--a
condition which, if true, eliminates Auto-Owners' duty to provide
coverage pursuant to the terms of the insurance policy. We
affirm.
I. BACKGROUND
On September 2, 2003, Stubban and Ufer were injured on
a four-wheeler (ATV) driven by Dale. They filed a personal-
injury action against Dale in Jersey County (Stubban v. Dale No.
03-L-33 (Cir. Ct. Jersey Co.)). Dale had in effect at the time
of the accident a homeowner's insurance policy issued by Auto-
Owners, and he requested that Auto-Owners defend against Stubban's and Ufer's claims. The policy set forth, in relevant
part, that Auto-Owners would "pay damages because of or arising
out of the maintenance, use, loading or unloading of only *** a
recreational vehicle which is not owned by any insured." Because
it was discovered after the accident that the ATV had been stolen
from its true owner, Stubban and Ufer claimed Dale did not
legally own the ATV and sought to trigger Auto-Owners' duty to
provide coverage.
On April 1, 2005, Auto-Owners filed the instant
declaratory-judgment action, claiming that its policy did not
cover the injuries allegedly sustained by Stubban and Ufer
because Dale, in fact, owned the ATV at the time of the accident.
In his discovery deposition in the personal-injury case, Dale
testified that he owned the ATV at the time of the accident. He
said he purchased it in 2000 for $1,500 from a man he did not
know, whom he had met in a bar. Dale asked the man for the
title, but the man said he had lost it. Dale stored the ATV at
his brother's farm in Calhoun County for his family's use. He said he had a suspicion when he purchased the ATV that it may
have been stolen due to the low asking price. He estimated the
fair-market value at approximately $5,000. Dale's suspicion was
confirmed a few months after the accident at the base of this
litigation when he was arrested for possession of stolen prop-
erty.
In the declaratory-judgment action, the parties filed
cross-motions for summary judgment. On October 27, 2005, the
- 2 - trial court granted Auto-Owners' motion and found Dale did own
the ATV within the meaning of the insurance policy because he was
using it "as if he owned it," and therefore, Auto-Owners was not
obligated to defend Dale in the Stubban and Ufer personal-injury
action. This appeal followed.
II. ANALYSIS
On appeal, Stubban and Ufer claim the trial court erred
in finding that Dale owned the ATV (within the meaning of the
insurance policy) at the time of the accident. They rely solely
on the fact that Dale did not have legal title to the vehicle.
"Summary judgment is appropriate when there is no
genuine issue of material fact and the moving party is entitled
to judgment as a matter of law. [Citation.] A circuit court's
entry of summary judgment is subject to de novo review [cita-
tion], and the construction of an insurance policy, which pres-
ents a question of law, is likewise reviewed de novo [citation]."
Valley Forge Insurance Co. v. Swiderski Electronics, Inc., 223
Ill. 2d 352, 360, ___ N.E.2d ___, ___ (2006).
"A court's primary objective in constru-
ing the language of an insurance policy is to
ascertain and give effect to the intentions
of the parties as expressed by the language
of the policy. [Citation.] Like any con-
tract, an insurance policy is to be construed
as a whole, giving effect to every provision,
if possible, because it must be assumed that
- 3 - every provision was intended to serve a pur-
pose. [Citation.]" Valley Forge, 223 Ill.
2d at 362-63, ___ N.E.2d at ___.
In their appeal, Stubban and Ufer claim the phrase "not
owned," as it appears in the policy, is ambiguous and, thus, the
policy "must be interpreted broadly in favor of coverage." The
trial court found the phrase, which was not defined in the
policy, unambiguous after examining the underlying purpose of the
policy provision.
Several Illinois courts have stated the purpose behind
similar exclusionary provisions. See Schall v. Country Mutual
Insurance Co., 60 Ill. App. 3d 738, 741, 377 N.E.2d 592, 595
(1978); Continental National American Group v. Vaicunas, 26 Ill.
App. 3d 835, 838, 325 N.E.2d 747, 750 (1975); MFA Mutual Insur-
ance Co. v. Harden, 26 Ill. App. 3d 360, 364, 325 N.E.2d 102, 105
(1975); Rodenkirk v. State Farm Mutual Automobile Insurance Co.,
325 Ill. App. 421, 433, 60 N.E.2d 269, 274 (1945). We quote from
the Rodenkirk decision, where the court best explained the
rationale of a similar provision:
"The exclusion from coverage of other
cars owned by the insured as well as cars
owned by the members of his household, and
the exclusion of cars furnished for regular
use to the insured or a member of his house-
hold would seem to indicate the intention of
the company to protect itself from a situa-
- 4 - tion where an insured could pay for one pol-
icy and be covered by the insurance in driv-
ing any car that he decided to use whether
owned by him or members of his family, or
cars that had been furnished for his regular
use; in other words, cars under his control
that he could use at will and might use of-
ten. Without some such exclusion it is obvi-
ous that the company might lose premiums and
also that the hazard under the insurance
would be increased. It is evident that the
purpose on the part of the company in extend-
ing the driver's regular insurance without
the payment of any additional premiums would
apply to the occasional driving of cars other
than his own, but would be inapplicable to an
automobile furnished to the insured for his
regular use." Rodenkirk, 325 Ill. App. at
433, 60 N.E.2d at 274.
Similarly, in the case sub judice, Dale chose not to insure the ATV under the policy at issue; therefore, Auto-Owners
did not receive the benefit of a premium paid. Consequently,
Free access — add to your briefcase to read the full text and ask questions with AI
NO. 4-06-0258 Filed 1/19/07
IN THE APPELLATE COURT
OF ILLINOIS
FOURTH DISTRICT
AUTO-OWNERS INSURANCE COMPANY, ) Appeal from Plaintiff-Appellee, ) Circuit Court of v. ) Jersey County LORI STUBBAN and SHANNON UFER, ) No. 05MR21 Defendants-Appellants, ) and ) Honorable LOREN DALE and SHIRLEY DALE, ) Eric S. Pistorius, Defendants. ) Judge Presiding.
JUSTICE APPLETON delivered the opinion of the court:
Defendants Lori Stubban and Shannon Ufer appeal from
the trial court's order granting plaintiff Auto-Owners Insurance
Company's (Auto-Owners) motion for summary judgment. Auto-Owners
had filed an action seeking a declaratory judgment that it had no
duty to defend its insured, Loren Dale, in a personal-injury
action filed by Stubban and Ufer. Auto-Owners contested coverage
because Dale owned the vehicle involved in the accident--a
condition which, if true, eliminates Auto-Owners' duty to provide
coverage pursuant to the terms of the insurance policy. We
affirm.
I. BACKGROUND
On September 2, 2003, Stubban and Ufer were injured on
a four-wheeler (ATV) driven by Dale. They filed a personal-
injury action against Dale in Jersey County (Stubban v. Dale No.
03-L-33 (Cir. Ct. Jersey Co.)). Dale had in effect at the time
of the accident a homeowner's insurance policy issued by Auto-
Owners, and he requested that Auto-Owners defend against Stubban's and Ufer's claims. The policy set forth, in relevant
part, that Auto-Owners would "pay damages because of or arising
out of the maintenance, use, loading or unloading of only *** a
recreational vehicle which is not owned by any insured." Because
it was discovered after the accident that the ATV had been stolen
from its true owner, Stubban and Ufer claimed Dale did not
legally own the ATV and sought to trigger Auto-Owners' duty to
provide coverage.
On April 1, 2005, Auto-Owners filed the instant
declaratory-judgment action, claiming that its policy did not
cover the injuries allegedly sustained by Stubban and Ufer
because Dale, in fact, owned the ATV at the time of the accident.
In his discovery deposition in the personal-injury case, Dale
testified that he owned the ATV at the time of the accident. He
said he purchased it in 2000 for $1,500 from a man he did not
know, whom he had met in a bar. Dale asked the man for the
title, but the man said he had lost it. Dale stored the ATV at
his brother's farm in Calhoun County for his family's use. He said he had a suspicion when he purchased the ATV that it may
have been stolen due to the low asking price. He estimated the
fair-market value at approximately $5,000. Dale's suspicion was
confirmed a few months after the accident at the base of this
litigation when he was arrested for possession of stolen prop-
erty.
In the declaratory-judgment action, the parties filed
cross-motions for summary judgment. On October 27, 2005, the
- 2 - trial court granted Auto-Owners' motion and found Dale did own
the ATV within the meaning of the insurance policy because he was
using it "as if he owned it," and therefore, Auto-Owners was not
obligated to defend Dale in the Stubban and Ufer personal-injury
action. This appeal followed.
II. ANALYSIS
On appeal, Stubban and Ufer claim the trial court erred
in finding that Dale owned the ATV (within the meaning of the
insurance policy) at the time of the accident. They rely solely
on the fact that Dale did not have legal title to the vehicle.
"Summary judgment is appropriate when there is no
genuine issue of material fact and the moving party is entitled
to judgment as a matter of law. [Citation.] A circuit court's
entry of summary judgment is subject to de novo review [cita-
tion], and the construction of an insurance policy, which pres-
ents a question of law, is likewise reviewed de novo [citation]."
Valley Forge Insurance Co. v. Swiderski Electronics, Inc., 223
Ill. 2d 352, 360, ___ N.E.2d ___, ___ (2006).
"A court's primary objective in constru-
ing the language of an insurance policy is to
ascertain and give effect to the intentions
of the parties as expressed by the language
of the policy. [Citation.] Like any con-
tract, an insurance policy is to be construed
as a whole, giving effect to every provision,
if possible, because it must be assumed that
- 3 - every provision was intended to serve a pur-
pose. [Citation.]" Valley Forge, 223 Ill.
2d at 362-63, ___ N.E.2d at ___.
In their appeal, Stubban and Ufer claim the phrase "not
owned," as it appears in the policy, is ambiguous and, thus, the
policy "must be interpreted broadly in favor of coverage." The
trial court found the phrase, which was not defined in the
policy, unambiguous after examining the underlying purpose of the
policy provision.
Several Illinois courts have stated the purpose behind
similar exclusionary provisions. See Schall v. Country Mutual
Insurance Co., 60 Ill. App. 3d 738, 741, 377 N.E.2d 592, 595
(1978); Continental National American Group v. Vaicunas, 26 Ill.
App. 3d 835, 838, 325 N.E.2d 747, 750 (1975); MFA Mutual Insur-
ance Co. v. Harden, 26 Ill. App. 3d 360, 364, 325 N.E.2d 102, 105
(1975); Rodenkirk v. State Farm Mutual Automobile Insurance Co.,
325 Ill. App. 421, 433, 60 N.E.2d 269, 274 (1945). We quote from
the Rodenkirk decision, where the court best explained the
rationale of a similar provision:
"The exclusion from coverage of other
cars owned by the insured as well as cars
owned by the members of his household, and
the exclusion of cars furnished for regular
use to the insured or a member of his house-
hold would seem to indicate the intention of
the company to protect itself from a situa-
- 4 - tion where an insured could pay for one pol-
icy and be covered by the insurance in driv-
ing any car that he decided to use whether
owned by him or members of his family, or
cars that had been furnished for his regular
use; in other words, cars under his control
that he could use at will and might use of-
ten. Without some such exclusion it is obvi-
ous that the company might lose premiums and
also that the hazard under the insurance
would be increased. It is evident that the
purpose on the part of the company in extend-
ing the driver's regular insurance without
the payment of any additional premiums would
apply to the occasional driving of cars other
than his own, but would be inapplicable to an
automobile furnished to the insured for his
regular use." Rodenkirk, 325 Ill. App. at
433, 60 N.E.2d at 274.
Similarly, in the case sub judice, Dale chose not to insure the ATV under the policy at issue; therefore, Auto-Owners
did not receive the benefit of a premium paid. Consequently,
Auto-Owners would not provide coverage for any ATV that Dale
would regularly use or have under his control on a regular basis
so as to protect itself from the hazards that would arise from
the regular use of an ATV. The purpose of extending coverage to
- 5 - Dale's use of an ATV applies then only to the occasional or
incidental operation of an ATV other than his own. From both
Dale's and Auto-Owners' perspective, the purpose of this provi-
sion is reasonable. Dale would not be afforded coverage on any
ATV that he used as his own without first paying a premium.
Likewise, Auto-Owners would not be obligated to provide coverage
(without receiving an additional premium) on any ATV unless it is
one that was operated on rare occasions.
At the time of the accident, Dale considered himself
the owner of the ATV and that ownership had not then been chal-
lenged. Dale had purchased it for valuable consideration approx-
imately three years prior to the accident. He and his family
used it on his brother's farm as if it were Dale's. As against
the world (except for the person who held the legal title), Dale
was the owner of the ATV. He had all of the incidents of owner-
ship except documented title. We agree with the trial court that
at the time of the accident, the ATV was "owned" by Dale and,
based on the policy terms, Auto-Owners was not obligated to provide coverage.
In sum, we find Dale owned the ATV at issue within the
meaning of the insurance policy in effect at the time of the
accident, thereby relieving Auto-Owners from the duty to defend
Dale in Stubban's and Ufer's personal injury lawsuit. We affirm
the trial court's order granting summary judgment.
III. CONCLUSION
For the foregoing reasons, we affirm the trial court's
- 6 - judgment.
Affirmed.
STEIGMANN, P.J., and McCULLOUGH, J., concur.
- 7 -