FIRST DIVISION May 12, 2008
No. 1-07-0121
JOAN A. WOLFENSBERGER and PARESH ) Appeal from the SONANI, ) Circuit Court of ) Cook County. Plaintiffs-Appellants, ) ) v. ) ) DAVID EASTWOOD, and ILLINOIS ) NATIONAL INSURANCE COMPANY, an ) Illinois Corporation, ) ) Defendants-Appellees. ) ) ----------------------------------- ) ) ILLINOIS NATIONAL INSURANCE COMPANY, ) ) Counterclaimant/Cross-Appellant, ) ) v. ) ) JOAN A. WOLFENSBERGER and PARESH ) SONANI, ) Honorable ) James F. Henry, Counterdefendants/Cross-Appellees. ) Judge Presiding.
JUSTICE WOLFSON delivered the opinion of the court:
Joan Wolfensberger sued David Eastwood for injuries arising
out of a car accident that occurred in the early mornings hours
of March 8, 2002. Wolfensberger was a passenger in the car
driven by Eastwood. Wolfensberger filed a declaratory judgment
action against the liability insurance carrier for Eastwood’s
employer, seeking coverage for her injuries. Both sides filed
motions for summary judgment. 1-07-0121
The primary question presented to the trial court was
whether Eastwood was acting within the scope of his employment at
the time of the accident. The trial court denied Wolfensberger’s
motion and granted the insurance carrier’s motion. We affirm the
order denying Wolfensberger’s motion, but we reverse the order
granting the insurance carrier’s motion and remand this cause to
the trial court for the determination of the factual issues.
FACTS
In March 2002, Wolfensberger and Eastwood were employees of
Accenture, LLP (Accenture), a worldwide consulting business.
Accenture operated a training facility in St. Charles, Illinois,
for its employees. The facility contained sleeping rooms,
conference rooms, and a cafeteria. On the week of the accident,
Wolfensberger and Eastwood traveled from Philadelphia and Ohio,
respectively, to attend training programs at the facility.
Eastwood drove to the facility in his wife’s car. Wolfensberger
was teaching a training session. Eastwood was attending a
separate session.
On the evening of March 7, 2002, Wolfensberger, Eastwood,
and another Accenture employee, Per-Anders Wendin, met in the
social center at the St. Charles facility. They drank at the
social center until around midnight, when the center closed.
The three left the facility and went to a bar called
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Scotland Yard. Eastwood drove. Scotland Yard was closing as
they arrived. They then drove to a bar called the Cadillac
Ranch. They stayed until about 3:30 a.m. on March 8, 2002.
After leaving the Cadillac Ranch, Eastwood crossed the median and
began driving in the opposite lane of traffic. The car collided
with another vehicle. Wolfensberger was injured. Eastwood and
Wendin were unhurt.
Wolfensberger filed a personal injury action against
Eastwood. Eastwood tendered his defense to his personal
insurance carrier, Geico Insurance (Geico), and to Accenture’s
carrier, Illinois National Insurance Company (Illinois National).
Illinois National denied coverage and never filed an appearance
on behalf of Eastwood.
The parties entered into a settlement agreement for a total
of $5 million to Wolfensberger and $20,000 to Paresh Sonani, a
separate party who was injured in the accident.1 The circuit
court approved the settlement. The parties agreed Geico would
pay Wolfensberger $285,000 and Sonani $15,000, the total of the
$300,000 policy limit. The remainder of the settlement was to be
satisfied under Accenture’s primary and umbrella auto liability
policies issued by Illinois National "to the extent another court
finds such policies applicable to David Eastwood and/or the
1 Sonani did not file a brief in this appeal.
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alleged occurrence." The primary policy has a $1,000,000
liability limit. The umbrella policy pays on behalf of the
insured “those sums in excess of the Retained Limit that the
Insured becomes legally obligated to pay,” up to $50,000,000.
Eastwood assigned his rights against Illinois National to
Wolfensberger.
Wolfensberger filed a declaratory judgment action against
Illinois National. Illinois National filed a counterclaim for
declaratory judgment.
Both sides filed motions for summary judgment. The trial
court denied plaintiff’s motion and granted the defendant’s
motion.
The trial court found neither the umbrella policy nor the
primary policy provided coverage because Eastwood was not acting
within the scope of his employment at the time of the accident.
Wolfensberger appeals the court’s judgment. Illinois National
cross-appeals the trial court’s factual finding that Eastwood was
a "named insured" under the umbrella policy.
DECISION
Plaintiff contends the trial court erred in granting
Illinois National’s summary judgment motion. Specifically,
plaintiff contends the trial court erred in determining Eastwood
was not acting in the "business or personal affairs" of Accenture
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at the time of the accident, as required by the “Employees as
Insureds” endorsement in Accenture’s commercial auto liability
policy, the primary policy.
We review de novo a trial court’s grant of summary judgment.
Rich v. Principal Life Insurance Co., 226 Ill. 2d 359, 370, 875
N.E.2d 1082 (2007). The construction of an insurance policy is
also a question of law we review de novo. Rich, 226 Ill. 2d at
370-71.
Our primary objective in construing the language of an
insurance policy is to determine and give effect to the intention
of the parties as expressed by the words of the policy. Rich,
226 Ill. 2d at 371; Profitt v. One Beacon Insurance, 363 Ill.
App. 3d 959, 962, 845 N.E.2d 715 (2006). “If the words used in a
policy are clear and unambiguous, they must be given their plain,
ordinary, and popular meaning, and the policy will be applied as
written, unless it contravenes public policy.” Rich, 226 Ill. 2d
at 371; Profitt, 363 Ill. App. 3d at 962. A contract is not
ambiguous, however, simply because the parties disagree on a
provision’s meaning. Rich, 226 Ill. 2d at 371; Central Illinois
Light Co. v. Home Insurance Co., 213 Ill. 2d 141, 153, 821 N.E.2d
206 (2004).
We consider only reasonable interpretations of the policy
language, and we will not strain to find an ambiguity where none
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exists. Rich, 226 Ill. 2d at 371. “ ‘Although policy terms that
limit an insurer’s liability will be liberally construed in favor
of coverage, this rule of construction only comes into play when
the policy is ambiguous.’ ” Rich, 226 Ill. 2d at 371, quoting
Hobbs v. Hartford Insurance Co. of the Midwest, 214 Ill. 2d 11,
17, 823 N.E.2d 561 (2005).
I. Scope of Employment
At issue in this case is whether Eastwood was using a
covered automobile in Accenture’s “business or personal affairs”
when he was driving back from the Cadillac Ranch. The primary
policy includes an "Employees as Insureds" endorsement. It
provides: "Any employee of yours [Accenture’s] is an ‘insured’
while using a covered ‘auto’ you don’t own, hire or borrow in
your business or your personal affairs." A "covered auto"
includes a personal automobile owned by an employee or the
employee’s family.
The use of the term “personal affairs” in the “employees as
insureds” endorsement makes this case unique in this State.
Plaintiff contends the “personal affairs” language added coverage
to the policy for employee activities that might not be strictly
business related, such as after-hours social networking for the
benefit of Accenture. While Illinois has not considered the use
of the term “personal affairs” in an “Employees as Insured”
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endorsement, other jurisdictions have interpreted phrases such as
“in your business or your personal affairs” to protect “employees
while acting in the scope of their employment.” See Wausau
Underwriters Insurance Co. v. Baillie, 281 F. Supp. 2d 1307, 1316
(M.D. Fla. 2002). We agree with this interpretation and find the
relevant question here is whether Eastwood was acting in the
scope of his employment for some corporate purpose when the
accident occurred.
Although not raised by the parties, we first address the
question of whether summary judgment is appropriate in this case.
Summary judgment is appropriate only where “the pleadings,
depositions, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment
as a matter of law.” 735 ILCS 5/2-1005(c) (West 2006). The
purpose is not to try an issue of fact, but rather to determine
whether a triable issue of fact exists. Giannoble v. P & M
Heating and Air Conditioning, 233 Ill. App. 3d 1051, 1056, 599
N.E.2d 1183 (1992).
Illinois courts have not discussed the propriety of granting
summary judgment on a scope of employment issue within the
context of an “Employees as Insured” endorsement. However,
Respondeat superior cases, which both parties cite as relevant to
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this case, have uniformly held “[s]ummary judgment is generally
inappropriate when scope of employment is at issue.” Pyne v.
Witmer, 129 Ill. 2d 351, 359, 543 N.E.2d 1304 (1989); Giannoble,
233 Ill. App. 3d at 1056. “Only if no reasonable person could
conclude from the evidence that an employee was acting within the
course of employment should a court hold as a matter of law that
the employee was not so acting.” Pyne, 129 Ill. 2d at 359;
Giannoble, 233 Ill. App. 3d at 1056.
In this case, both sides submitted evidence on the issue of
whether Eastwood was using his car in Accenture’s "business or
personal affairs" at the time of the accident.
Plaintiff presented evidence that:
! It was the practice for Accenture managers to take
their teams out on a weekly basis for purposes of
networking, team-building, and morale-boosting. One
purpose of networking was for employees to become
staffed on future projects. Eastwood and Wendin
Depositions; Wendin Affidavit.
! Accenture encouraged traveling employees to socialize
and recreate with fellow employees and with clients on
a regular basis. This type of networking also occurred
during training. Employees "networked" with fellow
employees to exchange knowledge and experience.
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Eastwood and Wendin Depositions.
! Accenture managers and partners were entitled to
reimbursement for expenses incurred at such events,
including expenses for alcohol. Eastwood, Wendin, and
Wolfensberger were managers at Accenture. Eastwood and
Wendin Depositions.
! At the Cadillac Ranch on March 8, 2002, Eastwood was
engaging in general "networking within the Accenture
community." He was not looking to get staffed on a
project. Eastwood Deposition.
! It was a "common occurrence" and a "tradition" for
Accenture employees to go to the Cadillac Ranch on
Thursdays during training. Eastwood and Wendin
Depositions.
! Wendin had been to the Cadillac Ranch on other visits,
"when Accenture sponsored or encouraged the activity."
Wendin Affidavit.
! Eastwood had the discretion to submit his entertainment
expenses to Accenture for the events of March 7-8,
2002, but he chose not to. Eastwood Deposition.
Wendin had the discretion to submit his expenses, but
he did not remember if he did so. Wendin Affidavit.
! Wendin discussed work-related topics with Eastwood and
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Wolfensberger at the Accenture social center and at the
Cadillac Ranch. Wendin Affidavit and Deposition.
! An employee in Wendin’s training group arranged for
shuttle transportation to the Cadillac Ranch at 7 p.m.
on March 7, 2002. Wendin, Eastwood, and Wolfensberger
missed the shuttle because they had to work. When they
left the St. Charles facility, they were attempting to
catch up with other employees from the training
facility. They went to Scotland Yard first because
they knew the group would be at one of the two bars.
They saw and spoke with fellow employees at the
Cadillac Ranch. Eastwood and Wendin Depositions.
! In the opinions of Eastwood and Wendin, Accenture
"sponsored" the outing at Cadillac Ranch on March 7-8,
2002. "It’s just a cultural thing. It’s a thing that
Accenture people go and do around training." Eastwood
Deposition.
! "[T]hey scheduled the training in a way that we could
use the evening to go out. Executive--Accenture
managers invited the group to go out. The
transportation was paid for by Accenture, and *** more
than 90 percent, if not 100, of everything that was
consumed that evening was billed back to Accenture."
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Wendin Deposition.
! At the Cadillac Ranch, Wolfensberger heard Eastwood
discussing technical work-related matters with other
Accenture employees. Wolfensberger Deposition.
Defendant presented evidence that:
! Eastwood and Wendin admitted there was no formal
announcement about a gathering or event at the Cadillac
Ranch on March 7, 2002. They did not remember who
arranged for shuttle transportation for Accenture
employees to go to a bar outside the campus. Eastwood
and Wendin Depositions.
! Eastwood and Wendin were scheduled to attend a training
class at the St. Charles facility at 8 a.m. on Friday,
March 8, 2002. Wolfensberger was scheduled to attend a
breakfast meeting at 6:30 a.m. on March 8, 2002.
Eastwood and Wolfensberger Depositions; Wendin
Affidavit.
! No employee attending or teaching a training class at
the St. Charles facility was permitted a per diem
allowance. Affidavit of Mary Fulton, Accenture U.S.
Employee Relations & Policy Lead.
! Eastwood was not entitled to reimbursement for any
amounts incurred at the Cadillac Ranch, whether for
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"networking," "talking shop," or socializing with other
employees. Fulton Affidavit.
! In March 2002 and for five years prior, "Accenture did
not promote, endorse, encourage, sponsor, host,
announce, or advertise any events, affairs or
gatherings of Accenture employees, for any purpose, at
the Cadillac Ranch in Bartlett, Illinois." Fulton
! "Accenture *** understands that its employees will
socialize and ‘network’ with other employees while
either teaching or attending training programs and
while in residence at the training facility. *** There
was and is a Social Center within the training facility
for the use of Accenture employees to socialize and
network while in residence at the training facility."
Affidavit of Andrew White, Accenture Director of
Training Operations.
! "Since 1992, other than officially sponsored events,
Accenture has not required or encouraged its employees
to socialize and/or network at locations or
establishments outside of the training facility
particularly during early morning hours after the
Social Center had closed." White Affidavit.
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! "[A]s a matter of policy, Accenture directed the
training instructors not to organize social events
outside the training center where alcohol is served to
the attendees." White Affidavit.
! "To the best of my knowledge, Accenture has never
sponsored, required or encouraged any social or
networking event at the Cadillac Ranch tavern." White
! "Accenture’s expectations and intent for purchasing the
‘Employees as Insureds’ endorsement to the Policy were
that employees would be covered as additional
‘Insureds’ only while engaged in Accenture’s business
affairs." Affidavit of Amy L. Daniels, Accenture
Director of Global Risk Management & Insurance.
! "At no time did Accenture expect or intend that
employees attending training at its St. Charles,
Illinois facility who left the Accenture training
campus for recreational drinking or socializing would
be covered as acting in the ‘business or personal
affairs’ of Accenture." Daniels Affidavit.
! The "employees as insureds" endorsement "is a standard
insurance industry form" that "is not intended to
extend coverage to employees who are engaged in their
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own personal affairs or to employees who are acting
outside the course and scope of their employment."
Affidavit of Thomas Sheridan, underwriting consultant
with American International Group Companies (AIG), of
which Illinois National is a member.
! "The use of the language ‘personal affairs’ in the
endorsement was included because this standard
endorsement is used not only for corporations and
larger business entities, but also for policies issued
to individuals and sole proprietors." Sheridan
After reviewing the record, we find material questions of
fact and witness credibility exist on the question of whether
Eastwood was acting within the scope of his employment when
plaintiff was injured in the auto accident on March 8, 2002. See
Davila v. Yellow Cab Co., 333 Ill. App. 3d 592, 601, 776 N.E.2d
720 (2002).
Many of the facts presented by the parties stand in direct
contradiction to each other. For example, Mary Fulton,
Accenture’s U.S. Employee Relations & Policy Lead, said Eastwood
was not entitled to reimbursement for any amounts incurred at the
Cadillac Ranch, whether for “networking,” “talking shop,” or
socializing with other employees. Eastwood, however, said he had
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the discretion to submit his entertainment expenses to Accenture
for the event at the Cadillac Ranch, but chose not to do so after
the accident. Wendin said he also had the discretion to submit
his expenses, but he did not remember if he did so. Andrew
White, Accenture’s Director of Training Operations, said that,
“other than officially sponsored events, Accenture has not
required or encouraged its employees to socialize and/or network
at locations or establishments outside of the training facility
particularly during early morning hours after the Social Center
had closed.” Wendin, however, said: “[Accenture] scheduled the
training in a way that we could use the evening to go out.
Executive–-Accenture managers invited the group to go out. The
transportation was paid for by Accenture, and *** more than 90
percent, if not 100, of everything that was consumed that evening
was billed back to Accenture.” Eastwood said that in his
opinion, Accenture “sponsored” the outing at Cadillac Ranch,
noting: “It’s just a cultural thing. It’s a thing that Accenture
people go and do around training.”
Based on the totality of the evidence before us, we cannot
say that, as a matter of law, no reasonable person could conclude
Eastwood was acting within the scope of his employment when the
accident occurred. The conflicting facts presented by the
parties in support of their respective summary judgment motions
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required the trial court to make credibility determinations and
weigh the evidence in order to reach a decision, which is
inappropriate in summary judgment proceedings. See AYH Holdings,
Inc. v. Avreco, Inc., 357 Ill. App. 3d 17, 42, 826 N.E.2d 1111
(2005).
We reverse the trial court’s entry of summary judgment in
favor of Illinois National and remand for further proceedings
consistent with our opinion. See Pyne, 129 Ill. 2d at 359;
Davila, 333 Ill. App. 3d at 603.
While we are sending this case back for trial, we
acknowledge that other issues might have to be resolved,
depending on the outcome of the trial on the scope of employment
issue. We will attempt to offer some guidance.
II. Umbrella Policy--Definition of Named Insured
Illinois National cross-appeals the part of the trial
court’s order finding Eastwood was a "named insured" under
Endorsement #21 of the Umbrella Policy. Because Illinois
National was a successful party, we decline to provide it with a
right to cross-appeal the trial court’s judgment. Illinois
Central R.R. Co. v. Accident and Casualty Co. of Winterthur, 317
Ill. App. 3d 737, 744, 739 N.E.2d 1049 (2000) (“Even though a
successful party may not agree with the reasons, conclusions or
findings of the lower court, it is improper to provide that
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successful party with a forum in a reviewing court.”) However,
since the judgment is entirely in Illinois National’s favor, a
cross-appeal is not required in order for us to address specific
findings adverse to it. See Illinois Central R.R. Co., 317 Ill.
App. 3d at 744. We will address the issues presented by Illinois
National.
There are two provisions of the Umbrella Policy that could
apply to Eastwood--the "named insured" provision in Endorsement
#21, and section E.5 of the definitions section. Section E.5
defines an insured as:
"Any of your partners, executive officers,
directors, stockholders or employees but
only while acting within their duties.
However, the coverage granted by this
provision 5, does not apply to the ownership,
maintenance, use, loading or unloading of any
autos, aircraft, or watercraft unless such
coverage is included under the policies
listed in the Schedule of Underlying
Insurance and then for no broader coverage
than is provided under such underlying
policies." (Emphasis in original).
In other words, Accenture employees are covered by section E.5
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where they are using an auto "in the business or personal
affairs" of Accenture, or where they are acting “within their
duties.”
In the trial court, the plaintiff argued Eastwood also was
covered as a "Named Insured" under Endorsement #21 of the
Umbrella Policy, without regard for whether Eastwood was acting
within the scope of his employment. At the time of the accident,
Endorsement No. 21 ("Original Endorsement") defined the "named
insured" as:
"Accenture, L.L.P. and all partnerships,
firms, corporations, entities and
individuals, wherever located, which together
comprise ‘The Accenture Worldwide
Organization’ whether by virtue of their
member firm interfirm agreements with
Accenture Partners Societe Cooperative (or
any successor thereto acting to coordinated
[sic] the business of such entities) or by
vite [sic] of ownership, direct or indirect,
by such an entity or otherwise being under
the control of or under the common control,
directly or indirectly, with such an entity
and which are thereby deemed part of
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Accenture."
An amended version of Endorsement No. 21 ("Amended Endorsement")
was formally issued sometime after the accident. It provides:
"In consideration of the premium paid, it is
hereby understood and agreed that Effective
May 31, 2001 Item 1, on the Declarations
Page, Named Insured is amended as follows:
Accenture shall mean Accenture Ltd,
Accenture SCA and their affiliates.
An affiliate shall be defined as any
entity wholly-owned, directly or indirectly
by Accenture Ltd or which controls, is
controlled by or is under the common control
with Accenture or its successors or assigns.
Control shall mean the ability, directly or
indirectly to direct the affairs of another
whether by way of contract, ownership of
shares or otherwise."
Absent from the Amended Endorsement was any reference to
"individuals." The parties agree the Amended Endorsement was not
officially issued until April 2002 at the earliest, after the
accident.
The defendant contends the Amended Endorsement was
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inadvertently omitted from the policy and supercedes the Original
Endorsement, that there was a "meeting of the minds" before the
accident. Under the Amended Endorsement, Eastwood would not be
covered. The plaintiff, of course, disagrees, urging the
vitality of the Original Endorsement. Alternatively, defendant
contends the Original Endorsement excludes coverage for Eastwood
because the provision was not intended to cover employees, that
Section E.5 performs that task.
We agree with defendant’s alternative argument. The
Original Endorsement defines as a "named insured": "Accenture,
L.L.P. and all partnerships, firms, corporations, entities, and
individuals, wherever located, which together comprise ‘The
Accenture Worldwide Organization’." It further describes the
above entities as "by virtue of their member firm interfirm
agreements *** or by [virtue] of ownership, direct or indirect,
by such an entity or otherwise being under the control of or
under the common control, directly or indirectly, with such an
entity."
It is undisputed that Eastwood does not meet the
requirements in the latter part of the definition. We find
Eastwood is not covered under the language of the Original
Endorsement. The general rules governing interpretation of
contracts also govern interpretation of insurance policies.
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Illinois Farmers Insurance Co. v. Hall, 363 Ill. App. 3d 989,
993, 844 N.E.2d 973 (2006). Because the policy language is
unambiguous, we will take the policy as written. See, Hall, 363
Ill. App. 3d at 993.
We agree with defendant that to hold Eastwood is covered
under the Original Endorsement without regard for whether he was
acting within the scope of his employment would render section
E.5 superfluous and meaningless. A court will not interpret a
contract in a way that will render any provision meaningless.
Hall, 363 Ill. App. 3d at 996.
If the trial court finds Eastwood was not acting within the
scope of his employment at the time of the accident, he would not
be covered under section E.5 or any other section of the Umbrella
Policy, including either version of Endorsement #21. If the
court finds Eastwood was acting within the scope of his
employment, he would be covered under section E.5.
Whether the Original Endorsement #21 or the Amended
Endorsement #21 was in effect at the time of the accident does
not matter. Neither endorsement covers Eastwood’s actions as an
employee. When possible, courts should construe a contract so
that different provisions are harmonized, not conflicting with
one another. General Agents Insurance Co. of America, Inc. v.
Midwest Sporting Goods Co., 328 Ill. App. 3d 482, 487, 765 N.E.2d
21 1-07-0121
1152 (2002). Our reading of the policy harmonizes the
provisions.
CONCLUSION
We affirm the trial court’s order denying plaintiff’s motion
for summary judgment and reverse the order granting defendant’s
motion for summary judgment. We remand the cause for trial on
the issue of whether Eastwood was acting within the scope of his
employment at the time of the accident and for further
proceedings consistent with this opinion.
Affirmed in part, reversed in part, and remanded.
GARCIA, and R. GORDON, JJ., concur.