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Maretti v. Midland Nat. Ins. Co.

MAY 22, 1963.




Appeal from the Circuit Court of Cook County; the Hon. CHARLES S. DOUGHERTY, Judge, presiding. Judgment affirmed.


This is an appeal by defendant insurance company from a declaratory judgment finding that under the terms of its policy it is obligated to defend plaintiff (hereinafter called the "insured") in a suit for personal injuries brought against him by one Johnny Miller, a minor. The sole issue is whether the complaint in the personal injury suit stated a cause of action against the insured within the scope and coverage of the policy. No question of fact is involved. Determination of the issue rests on the allegations of that complaint and on the interpretation of the policy. Employers' Liability Assur. Corp. Ltd. v. Youghiogheny & Ohio Coal Co., 214 F.2d 418 (Minn 1954); Hardware Mutual Cas. Co. v. Schantz, 186 F.2d 868, 872 (Texas, 1951).

The insured is an itinerant exhibitor of fireworks. To protect himself against the hazards of his business, he took out a policy of insurance with defendant company. On August 4, 1957 he exhibited fireworks at premises near Taylor and Halsted streets, in Chicago. Sometime after the exhibition, the personal injury suit against him was commenced in the Circuit Court of Cook County. The complaint alleged that on August 4, 1957 the insured had negligently left live explosive bombs upon the grounds about the area where the display had been presented and that a child, not named, of tender years had picked up one of the live bombs and had playfully thrown it, whereupon it exploded and the minor Miller was seriously and permanently injured. The following grounds of negligence were charged:

Negligently handled said fireworks or explosives;

Failed to count the fireworks and explosives before and after the exhibition;

Selected incompetent and inexperienced agents to handle the same;

Left live fireworks and/or explosives about the area after the exhibition;

Failed to provide safety devices.

The trial court held that the complaint in the personal injury suit stated a case within the coverage of the policy, and that the insurance company was obligated to defend.

The policy is a standard form of "Owners, Landlords and Tenants Liability" policy. The insured obviousy does not come under any of those designations, but the form, while so designated, is adaptable to a large group of insurable risks. The policy consists of four pages, most of it in small print, and in addition there is a long typewritten rider attached to the first page. We estimate the total number of printed words in the policy itself to run approximately fifty-five hundred and the typewritten rider to contain 500 to 600 more. In construing the policy we must take a view of the entire document, since it is unlike any ordinary contract. It is designed to cover a multitude of risks and therefore is not only a long document, but one of extraordinary adaptability and complexity. The portions which are material to a particular risk are not isolated from the immaterial and can be ascertained only by reference, cross-reference and re-cross reference.

The first heading under the title is "Declarations," under which are four items. Item 1 states the name, address and business of the insured. Item 2 states the policy period. Item 3 provides that the "insurance afforded is only with respect to such and so many of the . . . coverages" as is indicated by the specific premium charge, and it sets out a tabulation of coverages, subdivided into A, B, C and D. For our purpose we need only be concerned with "A. Bodily Injury Liability" which fixes the limits of liability as to each person at $50,000 and as to each accident at $100,000. Under a section called "Divisions," there is a group of four items connected with bodily injuries. No. 1 shows "Premises-Operations — $350," and the figure "$350" is again shown in the column next to it, under the heading "Premiums." Item 4 of "Declarations" (which is on the first page of the printed form, but hidden by the typewritten rider) is headed: "Description of Hazards," and contains a tabulation of the various risks which can be insured against under the policy, as follows: 1. "Premises-Operations"; 2. "Elevators"; 3. "Structural Alterations, New Construction, Demolition"; 4. "Products-Completed Operations"; and 5. "Contractual-Specified Types of Agreements." Under Section 1 — "Premises-Operations" is typed: "Fireworks exhibitions — contractors risk only — 715 cs per $100 of gross receipts," and other figures indicating on what the premium was based, which is not relevant here, but it again shows the premium as $350." In each space reserved for risks 2 through 5 are typed the words "Not covered." The relevance of this, as argued by the insurance company, will be hereinafter discussed.

The rider, designated "Special Insuring Agreements Endorsement," undertook to adapt the form policy to the needs of a fireworks exhibitor. It curtailed coverage by requiring that the insured inform the insurance company of any proposed exhibition prior to the date thereof. It also stated the conditions under which coverage could be afforded to others who had contracted with the insured for the exhibition of fireworks.

Page 2 of the printed form constitutes the insuring agreements, under which are four divisions. Under Item 1 is

"Coverage A . . . pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury . . . sustained by any person, caused by accident ...

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