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Allstate Ins. Co. v. Urban

NOVEMBER 22, 1957.

ALLSTATE INSURANCE COMPANY, PLAINTIFF-APPELLEE,

v.

STEPHAN URBAN, TONY DESANTO, AND ROBERT URBAN, D/B/A HIGHLAND BUMP SHOP, LOIS DAVIS, INDIVIDUALLY AND AS EXECUTOR OF ESTATE OF HAROLD W. DAVIS, DECEASED, DEFENDANTS, AND CENTURY INDEMNITY COMPANY, DEFENDANT-APPELLANT.



Appeal from the Circuit Court of Lake county; the Hon. BERNARD M. DECKER, Judge, presiding. Affirmed.

PRESIDING JUSTICE CROW DELIVERED THE OPINION OF THE COURT.

Rehearing denied December 31, 1957.

The plaintiff, The Allstate Insurance Company, filed a declaratory judgment action against the defendant Century Indemnity Company, the defendant Stephan Urban, the defendants Tony DeSanto and Robert Urban, d/b/a Highland Bump Shop, and the defendant Lois Davis, individually, and as Executor of the Estate of Harold W. Davis, deceased, for a judicial declaration that the plaintiff's liability under an automobile liability insurance policy issued by it to the defendant Stephan Urban on his 1950 Chevrolet is secondary and excess, and that the defendant Century Indemnity Company is primarily liable under a garage liability insurance policy issued by it to the defendants Tony DeSanto and Robert Urban, d/b/a Highland Bump Shop, for the alleged tortious act of the defendant Stephan Urban while driving a 1949 Mercury which resulted, August 22, 1954, in injuries to the defendant Lois Davis, individually, and in the alleged wrongful death of her decedent, Harold W. Davis. The action was tried without a jury. During the course of the suit the defendant Stephan Urban, and the defendants Tony DeSanto and Robert Urban, d/b/a Highland Bump Shop were dismissed. The defendant Century Indemnity Company answered, and, we gather, the defendant Lois Davis, etc. answered. In any event no questions are raised on the pleadings and the real controversy here is between the plaintiff insurer, The Allstate, and the defendant insurer, Century.

The court at first found the issues in favor of the defendant, Century Indemnity Company, and declared and adjudged it was not the primary insurer of Stephan Urban. A post trial motion of the plaintiff for judgment notwithstanding the finding was granted, however, and a final judgment was entered declaring that Stephan Urban was covered by the garage liability policy issued by the defendant Century to the Highland Bump Shop, and that such coverage was primary, and that the coverage of the plaintiff, The Allstate's, automobile liability insurance policy was excess or secondary. The court further found in its final order that at the time of the collision between the 1949 Mercury in charge of Robert Urban and Tony DeSanto, d/b/a Highland Bump Shop, and operated by Stephan Urban, and the motor vehicle operated by Harold W. Davis, Stephan Urban was using the 1949 Mercury with the permission of and as one of the customers of Robert Urban and Tony DeSanto, d/b/a Highland Bump Shop, and that its use by him was in direct connection with the business operation of the Highland Bump Shop, being in accordance with a common custom and usage of such business in building good will and maintaining satisfactory customer relationships and that such use was such as to create coverage of Stephan Urban by the defendant Century under its garage liability policy issued to Anthony DeSanto and Robert Urban, d/b/a Highland Bump Shop.

The defendant Century Indemnity Company appeals from that final judgment, urging that its garage liability policy issued to the Highland Bump Shop was a limited policy, which would have provided coverage for Stephan Urban only in the event that Stephan Urban had been using the borrowed automobile at the time of the accident for a business purpose connected with the repair shop operations of the named insured, Highland Bump Shop; that the uncontradicted evidence shows that Stephan Urban was on a pleasure mission of his own at the time of the accident, and, therefore, the trial court erred in finding that the Century Indemnity Company policy covered the liability of Stephan Urban.

The theory of the plaintiff The Allstate Insurance Company (and the defendant Lois Davis etc.) is that the 1949 Mercury operated by Stephan Urban was in the charge and possession of the Highland Bump Shop, was loaned to Stephan Urban as a substitute vehicle while his 1950 Chevrolet was undergoing repairs at the Highland Bump Shop, in accordance with the usual custom of the business, that both the 1949 Mercury and its operator Stephan Urban were thereby brought under the garage liability insurance policy of Century, and that the plaintiff The Allstate under its automobile liability insurance policy on Stephan Urban's 1950 Chevrolet thereby became an excess or secondary insurance carrier.

Stephan Urban owned a 1950 Chevrolet automobile, which at the material times in 1954 was insured with the plaintiff, The Allstate Insurance Company, under an automobile liability policy. That policy provided, inter alia, that:

". . . `Substitute automobile' means an automobile not owned by the named insured but temporarily used as the substitute for the owned automobile while withdrawn from normal use because of its breakdown, repair, servicing, loss or destruction." . . . "With respect to a substitute automobile . . . Coverages A and B shall be excess insurance over any other collectible liability insurance of any kind available to the insured, . . . ."

There is no dispute as to the 1949 Mercury being a "substitute automobile" under that policy and as to the liability of The Allstate thereunder, but its argument is that, under the circumstances, the insurance of the defendant Century under its garage liability policy is "other collectible liability insurance — available to the insured," Stephan Urban, and, hence, under the circumstances, the coverage under The Allstate policy is "excess insurance" over the coverage under the Century policy.

Robert Urban and Tony DeSanto were partners and proprietors of the Highland Bump Shop. They had had the 1950 Chevrolet at the shop, it apparently having been left there by the prior owner, in a wrecked or damaged condition. Stephan Urban, Robert's father, gave him some money to buy it; DeSanto acquired it and an endorsed certificate of title from the prior owner; he delivered that certificate to Stephan, who later obtained a certificate of title in his name; Stephan gave Robert some more money for certain parts, which he acquired; Robert was doing the repair work on it himself mostly in the late afternoons or Saturday afternoons, without charge for the labor; the money for the purchase of the car and parts went through the firm's books; DeSanto knew what Robert was doing.

While his Chevrolet automobile, so acquired, was undergoing such repairs August 22, 1954 and for a while before then at the Highland Bump Shop, at Highland Park, Stephan Urban drove, for a time, a 1949 Mercury automobile which had been loaned him by the Highland Bump Shop. The shop had previously let him use a truck belonging to it, and then one day when he had stopped to see if his Chevrolet was ready they told him about the 1949 Mercury, which they said he could use until his Chevrolet was ready, and the Mercury was turned over to him in place of the truck. He had used the Mercury for about a week before the accident in question, for his own purposes. The 1949 Mercury was not owned by the Highland Bump Shop, but had previously been left with the shop in May by a woman owner who lived in Highland Park, with the understanding that the shop would perform some body repairs and repainting on it while she was traveling in Europe, and that it would be ready for her when she returned in September. That owner of the 1949 Mercury had not given the Highland Bump Shop any authority to loan it to Stephan Urban or anyone else. It was not used as a regular "loaner" by the shop. Robert Urban said that once in a while the proprietors loaned their personal cars and had loaned out their truck a few times.

There was testimony offered by the plaintiff The Allstate Insurance Company to the effect that it is a common custom and usage in the garage or repair shop business, for the shop to loan another car to a customer while the customer's car is being repaired at the shop, although both of the witnesses on that score said the cars they so loaned were cars they, as proprietors of the shop, owned themselves. One said he would not loan another customer's car. The other said he had occasionally done so where the other customer had asked him to use the car so the battery would not go dead from being in storage awhile.

On the night of August 21-22, 1954, Stephan Urban, while driving that 1949 Mercury automobile, — his own 1950 Chevrolet being still at the Highland Bump Shop, — was involved in an accident with another car operated by Harold W. Davis, giving rise to suits for the alleged wrongful death of Harold W. Davis and for alleged personal injuries brought by the defendant Lois Davis, individually, and as Executor of her deceased husband's estate. Stephan Urban was on a social mission of his own at the particular time of the accident. The Allstate Insurance Company ultimately agreed to defend Stephan Urban in those suits under appropriate reservations of rights in which it claimed that it was not the primary insurer of Stephan Urban but was only an excess carrier and that Century Indemnity Company was the primary insurer. Century Indemnity Company was notified of the accident and requested to defend the suits, and it took the position that its garage liability policy issued to the Highland Bump Shop did not afford coverage to Stephan Urban, under the circumstances, and declined to defend the suits.

The defendant Century Indemnity Company's Garage Liability Policy issued to Anthony DeSanto, d/b/a Highland Bump Shop, 951 Elm Place, Highland Park, Illinois, in effect at the material times ...


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