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Western States Mut. Ins. v. Standard Mut. Ins.

JUNE 9, 1960.

WESTERN STATES MUTUAL INSURANCE CO., A CORPORATION, PLAINTIFF-APPELLEE,

v.

STANDARD MUTUAL INSURANCE COMPANY, A CORPORATION, AND DAVID J. GLAWE, DEFENDANTS-APPELLANTS, AND ROBERT GLOVER, DEFENDANT.



Appeal from the Circuit Court of Winnebago county; the Hon. WILLIAM R. DUSHER, Judge, presiding. Affirmed.

SPIVEY, J.

Plaintiff-Appellee, Western States Mutual Insurance Company, brought suit on April 17, 1959, for declaratory judgment to have declared its rights and liabilities under a certain policy of automobile insurance issued by Western to Robert Glover, one of the defendants herein.

In addition to Glover, Standard Mutual Insurance Company and David J. Glawe were made parties defendant. Standard had issued a similar policy of automobile insurance to Glawe.

On December 22, 1956, Glover was given permission by Glawe to use and operate his, Glawe's automobile insured by Standard. While operating the Glawe automobile Glover was involved in a collision with a tree causing damage to the Glawe automobile in the amount of $649.23.

Thereafter, Glover paid Glawe $50 as his deductible portion of said damage under Standard's policy and Standard paid to Glawe the sum of $599.23 under the collision coverage of its policy being Coverage E.

Subsequently Glawe brought suit against Glover for $599.23 to enforce the subrogation rights of Standard resulting from the damage caused while Glover was driving Glawe's automobile. This suit resulted in a judgment in favor of Glawe and against Glover in the amount of $599.23. No appeal was taken from this judgment entered on April 14, 1959, and the judgment is now final.

The relief prayed in Western's declaratory judgment suit was that the Court: decree, declare, and determine that Western, by the terms, conditions, and exclusions of its policy issued to Glover is under no legal duty to pay the judgment against Glover and in favor of Glawe for the use of Standard in the sum of $599.23; and decree, declare and determine that the insurance afforded by Standard was the primary insurance covering Glawe's automobile and while being operated by Glover, and that Western's policy afforded no coverage to Glover and was excess to that of Standard.

After a hearing the Court entered its order, finding among other things previously recited herein, that at the time of the occurrence Glover was a permissive user of Glawe's automobile and as such became an additional insured under Paragraph III (a) of Standard's policy; that Western's policy by its terms was excess coverage over other valid and collectible insurance with respect to temporary substitute automobiles operated by Glover and that at the time of the occurrence Glawe's automobile was not being used by Glover as a temporary substitute automobile within the terms of said policy, and that by reason thereof Western is not liable under its policy to afford protection or indemnification or coverage of any kind to Glover; that the Financial Responsibility Act of Illinois requires Standard's policy to insure each person using said automobile with the express or implied permission of the named insured; that Standard is liable under its policy to pay any judgment against Glover and particularly Glawe's judgment against Glover; and that Exclusion (f) of the Standard policy is inapplicable or ineffective to relieve Standard from liability under its policy to protect and afford coverage to Glover.

The court then ordered, adjudged, and decreed: (1) Western owes no duty under its policy to Glover in connection with any claims arising out of the occurrence in question; (2) Glover was a permissive user of Glawe's automobile and as such was an additional insured under Standard's policy with Glawe, and Standard has a duty under its policy to protect and indemnify Glover; (3) Standard's payment to Glawe of $599.23 under its collision coverage constitutes payment and satisfaction of the judgment in favor of Glawe against Glover, and (4) Glawe as subrogee for Standard cannot recover the sum of $599.23 from Glover and that Glover be released from Glawe's judgment against him.

Standard appeals and contends that paragraphs 2, 3, and 4 of the judgment order are in error and so limit their appeal by their notice of appeal.

Standard, for reversal, says (1) that although Glover's permissive use constituted him an additional insured under the property damage liability coverage B of Standard's policy, yet by the insuring agreement, the company was not liable to Glover for property damage because of Exclusion (f) of the policy and particularly because the property damage was found by a jury to be proximately caused by the negligence of the permissive user; (2) that Paragraph 17 of Conditions provides that no payment under the collision feature of the policy shall provide benefit, directly or indirectly, to a bailee liable for damages, and so, Standard's recovery against the permissive user is not precluded by the collision payment; (3) that the Financial Responsibility Act does not negative Exclusion (f) or Paragraph 17 of the policy; and (4) that Glawe's judgment against Glover is enforceable against Glover.

No briefs were filed on behalf of Western or Glover.

The pertinent provisions of Standard's policy issued on Glawe's automobile provide:

INSURING AGREEMENTS

I. Coverage A — Bodily Injury ...


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