No. 3--05--0524 _________________________________________________________________ Filed August 15, 2006. IN THE
APPELLATE COURT OF ILLINOIS
THIRD DISTRICT
A.D., 2006 _________________________________________________________________
STANDARD MUTUAL INSURANCE ) Appeal from the Circuit Court of the 13th COMPANY, ) Judicial Circuit, Grundy County, Illinois, ) Plaintiff-Appellee, ) ) v. ) ) No. 03--CH--89 JOHN D. MARX, ) ) Defendant, ) ) and ) ) M&S RENTALS, INC., and ) SPRINGFIELD FIRE & CASUALTY ) Honorable COMPANY, ) Lance Judge,R. Peterson, Presiding. ) Defendants-Appellants. ) _________________________________________________________________
JUSTICE SLATER delivered the opinion of the court: _________________________________________________________________
After a fire occurred in a storage unit rented by defendant John Marx,
plaintiff Standard Mutual Insurance Company filed a declaratory judgment action to
determine its obligations to Marx under a homeowner's insurance policy. Also named
as defendants were M&S Rentals, Inc. (M&S), the owner of the storage facility, and its
insurer, Springfield Fire and Casualty Insurance Company (Springfield), which sought to
recover from Marx for damage caused to the storage facility. The trial court granted summary judgment in favor of plaintiff, finding that the motorcycle which caused the fire
was excluded from coverage under the policy. On appeal, M&S and Springfield
(hereinafter "defendants" 1) contend that the trial court erred in finding that Marx's
motorcycle was not in "dead storage." We affirm.
Facts
Marx rented two bays in a storage facility owned by M&S in Morris, Illinois.
Among the items stored in the bays were four motorcycles which Marx considered to be
collector's items: a 1976 Honda Goldwing; a 1980 Honda Goldwing; and two 1979
Yamaha 750 cc motorcycles. Only the 1980 Honda was licensed and insured. Marx
would occasionally operate the three unlicensed motorcycles in the parking lot of the
storage facility. On September 1, 2003, Marx went to the storage facility and tried to
start one of the 1979 Yamahas. He had last ridden it a month earlier. Marx used the
foot pedal to prime the cycle and pushed the electric start button. There was an
explosion and Marx was thrown from the motorcycle. After unsuccessfully trying to put
out the ensuing fire with a towel, Marx called 911. The fire damaged both Marx's
belongings and the storage facility. M&S, through its insurer, Springfield, subsequently
made a claim against Marx for damages caused by the fire in excess of $177,000.
Marx sought a defense and coverage under his homeowner's policy issued by plaintiff,
which responded with a reservation of rights and a declaratory judgment action. The
trial court granted summary judgment in favor of plaintiff, finding that the
1 Defendant Marx did not file a notice of appeal. His motion for leave to adopt the brief and argument of M&S and Springfield was denied by this court.
2 motorcycle was excluded from coverage and that an exception to the exclusion for
vehicles in "dead storage" did not apply. This appeal followed.
Analysis
In construing the language of an insurance policy, the primary objective is to
ascertain and give effect to the intent of the parties; the policy must be construed as a
whole, taking into account the type of insurance, the nature of the risks involved and the
overall purpose of the contract. Travelers Insurance Co. v. Eljer Manufacturing, Inc.,
197 Ill. 2d 278, 757 N.E.2d 481 (2001). Construction of the provisions of an insurance
policy is a question of law subject to de novo review. Eljer, 197 Ill. 2d 278, 757 N.E.2d
481.
The homeowner's policy issued to Marx by plaintiff excluded liability and medical
payments coverage for injury or property damage arising out of:
"The ownership, maintenance, use, loading or unloading of motor vehicles
or all other motorized land conveyances, including trailers, owned or
operated by or rented or loaned to an 'insured'[.]"
The policy further provided, however, that the exclusion did not apply to:
"A vehicle or conveyance not subject to motor vehicle registration which is:
***
(c) In dead storage on an 'insured location'[.]"
Defendants maintain that the trial court erroneously found
that the motorcycle was not in dead storage. As there are no
reported cases in Illinois construing that phrase, defendants rely
on several cases from other jurisdictions for the proposition
3 that a vehicle can be in dead storage even when it is being
started or is undergoing maintenance. See Allstate Insurance Co.
v. Burns, 837 N.E.2d 645 (Ind. Ct. App. 2005) (unlicensed car
which had been inoperable for over a month was in dead storage
notwithstanding that fire occurred while insured was attempting
to start car); Allstate Insurance Co. v. Geiwitz, 86 Md. App.
704, 587 A.2d 1185 (1991) (car kept by insured as collectible
rather than for transportation was in dead storage despite fact
that car was occasionally driven on property where it was stored
and accident occurred while repairing gas gauge); Nationwide
Mutual Fire Insurance Co. v. Allen, 68 N.C. App. 184, 314 S.E. 2d
552 (1984) (motorcycle which had been inoperable for six months
prior to fire caused when insured was "inspecting" cycle in his
living room was in dead storage); Sharpe v. State Farm Fire &
Casualty Co., 558 F. Supp. 10 (E.D. Tenn. 1982) (old, unlicensed
vehicles that were not driven on highway but were occasionally
driven on insured's property were in dead storage).
Plaintiff, on the other hand, relies on cases holding that a
vehicle which is undergoing maintenance or is being started is
not in dead storage. See, e.g., Nationwide Mutual Insurance Co.
v. McMahon, 365 F. Supp. 2d 671 (E.D. N.C. 2005) (car undergoing
maintenance by priming carburetor in attempt to start it was not
in dead storage); David v. Tanksley, 218 F. 3d 928 (8th Cir.
2000) (same); North Star Mutual Insurance Co. v. Carlson, 442 N.W. 2d 848 (Minn. Ct. App. 1989) (same); Holliman v. MFA Mutual
4 Insurance Co., 289 Ark. 276, 711 S.W. 2d 159 (1986) (same);
Broadway v. Great American Insurance Co., 465 So. 2d 1124 (Ala.
1985) (same); see generally, Annotation, Liability Insurance:
When is Vehicle in "Dead Storage", 48 A.L.R. 4th 591 (1986). Our
review of these authorities leads us to the same conclusion
reached by the trial court: a vehicle is not in dead storage when
a person is attempting to start it. As the Minnesota Court of
Appeals explained in Carlson:
"We believe this determination appropriately highlights
the distinction between homeowners and automobile
insurance policies. Motor vehicles are inherently
dangerous instrumentalities and homeowners policies
generally do not contemplate coverage of injuries when
the vehicle is maintained or used in one of its
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No. 3--05--0524 _________________________________________________________________ Filed August 15, 2006. IN THE
APPELLATE COURT OF ILLINOIS
THIRD DISTRICT
A.D., 2006 _________________________________________________________________
STANDARD MUTUAL INSURANCE ) Appeal from the Circuit Court of the 13th COMPANY, ) Judicial Circuit, Grundy County, Illinois, ) Plaintiff-Appellee, ) ) v. ) ) No. 03--CH--89 JOHN D. MARX, ) ) Defendant, ) ) and ) ) M&S RENTALS, INC., and ) SPRINGFIELD FIRE & CASUALTY ) Honorable COMPANY, ) Lance Judge,R. Peterson, Presiding. ) Defendants-Appellants. ) _________________________________________________________________
JUSTICE SLATER delivered the opinion of the court: _________________________________________________________________
After a fire occurred in a storage unit rented by defendant John Marx,
plaintiff Standard Mutual Insurance Company filed a declaratory judgment action to
determine its obligations to Marx under a homeowner's insurance policy. Also named
as defendants were M&S Rentals, Inc. (M&S), the owner of the storage facility, and its
insurer, Springfield Fire and Casualty Insurance Company (Springfield), which sought to
recover from Marx for damage caused to the storage facility. The trial court granted summary judgment in favor of plaintiff, finding that the motorcycle which caused the fire
was excluded from coverage under the policy. On appeal, M&S and Springfield
(hereinafter "defendants" 1) contend that the trial court erred in finding that Marx's
motorcycle was not in "dead storage." We affirm.
Facts
Marx rented two bays in a storage facility owned by M&S in Morris, Illinois.
Among the items stored in the bays were four motorcycles which Marx considered to be
collector's items: a 1976 Honda Goldwing; a 1980 Honda Goldwing; and two 1979
Yamaha 750 cc motorcycles. Only the 1980 Honda was licensed and insured. Marx
would occasionally operate the three unlicensed motorcycles in the parking lot of the
storage facility. On September 1, 2003, Marx went to the storage facility and tried to
start one of the 1979 Yamahas. He had last ridden it a month earlier. Marx used the
foot pedal to prime the cycle and pushed the electric start button. There was an
explosion and Marx was thrown from the motorcycle. After unsuccessfully trying to put
out the ensuing fire with a towel, Marx called 911. The fire damaged both Marx's
belongings and the storage facility. M&S, through its insurer, Springfield, subsequently
made a claim against Marx for damages caused by the fire in excess of $177,000.
Marx sought a defense and coverage under his homeowner's policy issued by plaintiff,
which responded with a reservation of rights and a declaratory judgment action. The
trial court granted summary judgment in favor of plaintiff, finding that the
1 Defendant Marx did not file a notice of appeal. His motion for leave to adopt the brief and argument of M&S and Springfield was denied by this court.
2 motorcycle was excluded from coverage and that an exception to the exclusion for
vehicles in "dead storage" did not apply. This appeal followed.
Analysis
In construing the language of an insurance policy, the primary objective is to
ascertain and give effect to the intent of the parties; the policy must be construed as a
whole, taking into account the type of insurance, the nature of the risks involved and the
overall purpose of the contract. Travelers Insurance Co. v. Eljer Manufacturing, Inc.,
197 Ill. 2d 278, 757 N.E.2d 481 (2001). Construction of the provisions of an insurance
policy is a question of law subject to de novo review. Eljer, 197 Ill. 2d 278, 757 N.E.2d
481.
The homeowner's policy issued to Marx by plaintiff excluded liability and medical
payments coverage for injury or property damage arising out of:
"The ownership, maintenance, use, loading or unloading of motor vehicles
or all other motorized land conveyances, including trailers, owned or
operated by or rented or loaned to an 'insured'[.]"
The policy further provided, however, that the exclusion did not apply to:
"A vehicle or conveyance not subject to motor vehicle registration which is:
***
(c) In dead storage on an 'insured location'[.]"
Defendants maintain that the trial court erroneously found
that the motorcycle was not in dead storage. As there are no
reported cases in Illinois construing that phrase, defendants rely
on several cases from other jurisdictions for the proposition
3 that a vehicle can be in dead storage even when it is being
started or is undergoing maintenance. See Allstate Insurance Co.
v. Burns, 837 N.E.2d 645 (Ind. Ct. App. 2005) (unlicensed car
which had been inoperable for over a month was in dead storage
notwithstanding that fire occurred while insured was attempting
to start car); Allstate Insurance Co. v. Geiwitz, 86 Md. App.
704, 587 A.2d 1185 (1991) (car kept by insured as collectible
rather than for transportation was in dead storage despite fact
that car was occasionally driven on property where it was stored
and accident occurred while repairing gas gauge); Nationwide
Mutual Fire Insurance Co. v. Allen, 68 N.C. App. 184, 314 S.E. 2d
552 (1984) (motorcycle which had been inoperable for six months
prior to fire caused when insured was "inspecting" cycle in his
living room was in dead storage); Sharpe v. State Farm Fire &
Casualty Co., 558 F. Supp. 10 (E.D. Tenn. 1982) (old, unlicensed
vehicles that were not driven on highway but were occasionally
driven on insured's property were in dead storage).
Plaintiff, on the other hand, relies on cases holding that a
vehicle which is undergoing maintenance or is being started is
not in dead storage. See, e.g., Nationwide Mutual Insurance Co.
v. McMahon, 365 F. Supp. 2d 671 (E.D. N.C. 2005) (car undergoing
maintenance by priming carburetor in attempt to start it was not
in dead storage); David v. Tanksley, 218 F. 3d 928 (8th Cir.
2000) (same); North Star Mutual Insurance Co. v. Carlson, 442 N.W. 2d 848 (Minn. Ct. App. 1989) (same); Holliman v. MFA Mutual
4 Insurance Co., 289 Ark. 276, 711 S.W. 2d 159 (1986) (same);
Broadway v. Great American Insurance Co., 465 So. 2d 1124 (Ala.
1985) (same); see generally, Annotation, Liability Insurance:
When is Vehicle in "Dead Storage", 48 A.L.R. 4th 591 (1986). Our
review of these authorities leads us to the same conclusion
reached by the trial court: a vehicle is not in dead storage when
a person is attempting to start it. As the Minnesota Court of
Appeals explained in Carlson:
"We believe this determination appropriately highlights
the distinction between homeowners and automobile
insurance policies. Motor vehicles are inherently
dangerous instrumentalities and homeowners policies
generally do not contemplate coverage of injuries when
the vehicle is maintained or used in one of its
inherently dangerous capacities. One inherently
dangerous aspect is a motor vehicle's use of highly
volatile materials (gasoline) around ignition sources
(spark plugs). This was precisely the cause of the
accident in this case. Accidents caused by maintenance
or use of a vehicle in such an inherently dangerous
capacity are not appropriately covered in a homeowners
policy, but rather in an automobile policy which
requires consequently higher premiums for the increased
risk of injury." Carlson, 442 N.W. 2d at 855. We believe that this analysis properly focuses on the
vehicle's status at the time the accident occurred. For example,
5 if the fire at the rental facility had been caused by spontaneous
combustion of oily rags while Marx was absent, the Yamaha might
very well have been considered to be in dead storage. The same
cannot be said for a vehicle which is being started. "The 'dead'
in 'dead storage' suggests, at the least, that the engine would
not be running." American Family Mutual Insurance Co. v. Van
Gerpen, 151 F. 3d 886, 888 (8th Cir. 1998).
Defendants insist, however, that the term "dead storage" is ambiguous, and
therefore it must be construed against the plaintiff. If the language of an
insurance policy is susceptible to more than one reasonable
meaning, it is considered ambiguous and will be construed against
the insurer. Gillen v. State Farm Mutual Automobile Insurance
Co., 215 Ill. 2d 381, 830 N.E.2d 575 (2005). Conversely, if the words of a policy are
clear and unambiguous, they must be afforded their plain, ordinary and common
meaning. Eljer, 197 Ill. 2d 278, 757 N.E.2d 481. Ambiguity is not created merely
because the parties disagree (RBC Mortgage Co. v. National Union Fire Insurance Co.,
349 Ill. App. 3d 706, 812 N.E.2d 728 (2004)), and a court will not strain to find
ambiguity in an insurance policy where none exists (Eljer, 197 Ill. 2d 278, 757 N.E.2d
481).
Contrary to defendants' argument, the phrase "dead storage" is not rendered
ambiguous merely because the courts in various jurisdictions have not interpreted it
uniformly. In determining whether an ambiguity exists, a court must consider the
disputed language in its factual context. American Family Mutual Insurance Co. v.
Martin, 312 Ill. App. 3d 829, 728 N.E.2d 115 (2000). A vehicle which is periodically
6 driven by its owner, even briefly on private property, is not in dead storage, and an
accident caused by an attempt to start that vehicle is not the type of risk contemplated
by the parties to a homeowner's policy. We find no ambiguity under these
circumstances.
Moreover, even if we were to accept defendant's argument concerning the
phrase "dead storage," that policy exception also requires the vehicle to be in storage
on an "insured location." As defined in the policy, an insured location includes
"premises occasionally rented to an 'insured' for other than 'business' use." (Emphasis
added.) In State Farm Fire and Casualty Co. v. Wonnell, 178 Ill. App. 3d 823, 825, 533
N.E.2d 1131, 1132 (1989), a homeowner's policy excluded liability and medical
coverage for any injury arising out of the rental of the insured premises unless the rental
was "on an occasional basis." The insured put her house up for sale and rented it to a
tenant on a month to month basis for a seven month period, during which time the
tenant was injured. This court held that the rental had not been occasional, defining the
term as occurring or appearing at irregular or infrequent intervals. Wonnell, 178 Ill. App.
3d at 825, 533 N.E.2d at 1133, quoting Webster's New Collegiate Dictionary 787 (1981).
We noted that the tenancy had not been irregular or infrequent, but had continued for
seven months without interruption, an arrangement that "constituted a full- fledged
rental of the subject premises." Wonnell, 178 Ill. App. 3d at 825, 533 N.E.2d at 1133.
Similarly in this case, the storage units where the fire occurred cannot be said to
have been rented to Marx on an irregular or infrequent basis. According to Marx's
deposition testimony and his answers to plaintiff's request to admit facts, Marx had
rented the same two storage bays for a period of three years prior to the fire. Such
7 extended and continuous use cannot be characterized as "occasional" and therefore,
even if the motorcycle was considered to be in dead storage, it was not in an "insured
location" within the terms of the policy. Accordingly, we affirm the trial court's order
granting summary judgment to the plaintiff.
For the reasons stated above, the judgment of the circuit
court is affirmed.
Affirmed.
O'BRIEN and HOLDRIDGE, J.J., concur.