The opinion of the court was delivered by: Robert D. Morgan, District Judge.
Defendant was the automobile liability insurer of Dr.
Richard Franck of Bushnell, Illinois. The automobile in
question, a 1965 Lincoln Continental, had been purchased from
Howe Motor Sales, Inc. of Macomb, Illinois, approximately one
year prior to the accident, through Howe salesman Gale
Bradford. On September 7, 1965, Dr. Franck drove his
automobile to Howe Motor Sales, requesting that his radio be
repaired. The car was left with Howe Motor Sales and Dr.
Franck was loaned another automobile. About noon on September
8, 1965, Dr. Franck returned to Howe Motor Sales to pick up
his car. Mr. Bradford informed him that the car's radio was
still not repaired, that it would be completed that afternoon,
and that he would drive the car to Dr. Franck's residence in
Bushnell when the repairs were completed. Later that
afternoon, while Bradford was driving the automobile to
deliver it and to pick up the loaned automobile, he was
involved in a collision in which the occupants of another
vehicle were injured.
Suits were thereafter filed by the injured parties in an
Illinois court against Howe Motor Sales and Gale Bradford.
Plaintiff, here, which had written liability insurance
covering Howe Motor Sales, made demand on defendant,
Northwestern, to defend such suits. Northwestern refused,
claiming that its policy with Dr. Franck contained an
exclusion which was applicable to the occurrence. The
defendant's policy states in pertinent part that:
"`automobile business' means the business or
occupation of selling, repairing, servicing,
storing or parking automobiles;
"Exclusions. This policy does not apply under
Part I: (Liability)
(g) to an owned automobile while used by any
person while such person is employed or
otherwise engaged in the automobile
business, * * *."
Plaintiff thereafter filed this suit seeking a declaration
that the policy issued by defendant provides primary coverage
for the occurrence and for its expenses. The defendant set out
the above exclusion as an affirmative defense to the action
alleging that there was no coverage under the terms of the
policy for the occurrence.
The sole issue raised, therefore, is whether defendant's
policy of insurance excludes coverage for the occurrence. If
it does not, the plaintiff is entitled to the relief sought;
if it does, then the defendant has a valid affirmative defense
to the relief sought.
Plaintiff argues that coverage exists under defendant's
policy which insures "any other person using such automobile
with the permission of the named insured," since the operation
of the vehicle by Gale Bradford was not a use of an automobile
"while such person is employed or otherwise engaged in the
automobile business." Primary reliance is placed on Universal
Underwriters Insurance Company v. Hartford Accident &
Indemnity Company, unpublished opinion (D.C.N.D.Ill. 1966);
State Farm Mutual Auto Insurance Company v. Mohan,
85 Ill. App.2d 10, 228 N.E.2d 283 (3d Dist. 1967); Walker v. State
Farm Mutual Automobile Insurance Company, 40 Ill.App.2d 463,
190 N.E.2d 121 (4th Dist. 1963); Allstate Insurance Company v.
Skawinski, 40 Ill.App.2d 136, 189 N.E.2d 365 (1st Dist. 1963).
This reliance, however, has been misplaced. The exclusionary
clause in each of the above cases provided for no coverage of
an owned automobile "while used in the automobile business."
Such an exclusion is aimed at a "use" and is clearly less
inclusive and distinguishable from the clause in defendant's
policy which excludes coverage to a group of persons engaged
in a particular occupation. The holdings of the cases cited
above, therefore, are in no way determinative of the issue
Illinois courts have not passed on the precise issue before
this court. The only cases cited to the court which involved
the form of exclusion here found reached diametrically
opposite conclusions. See, Northern Assurance Company of
America v. Truck Insurance Exchange, 439 P.2d 760(Mont. 1968),
and Dumas v. Hartford Accident & Indemnity Company,
181 So.2d 841 (La. 1965). It is incumbent upon this court, therefore, to
determine what position the courts of Illinois would take if
confronted with the precise facts as set out hereinabove.
Plaintiff argues that contracts of insurance are to be
construed most strongly against the insurer; therefore, by the
proper construction favoring the insured, this court should
hold the exclusion inapplicable. This rule of construction,
however, is founded upon the premise of existent ambiguity and
has no application when the language is clear, Colonial Coach
Manufacturing Corporation v. Home Insurance Company,
260 F.2d 532 (7th Cir. 1958); Ancateau v. Commercial Casualty Insurance
Company, 318 Ill.App. 553, 48 N.E.2d 440 (2d Dist. 1943).
Applying the law of Illinois, which is applicable here, the
rule of construction favoring the insured must yield to the
requirement of a reasonable construction. Thompson v. Fidelity
& Casualty Company, 16 Ill.App.2d 159, 148 N.E.2d 9 (2d Dist.
1958), cert. denied, 358 U.S. 837, 79 S.Ct. 62, 3 L.Ed.2d 74
(1958). A contract of insurance must be construed according to
the sense and meaning of the terms, and, if they are
unambiguous, the terms are to be taken in their plain,
ordinary, and popular sense. Walsh v. State Farm Mutual
Automobile Insurance Company, 91 Ill.App.2d 156,
234 N.E.2d 394 (1st Dist. 1968); Thompson v. Fidelity & Casualty Company,
The language in defendant's policy is quite clear: there is
to be no coverage while the automobile is being used by a
person while that person is "employed or otherwise engaged" in
the automobile business, such business being defined in the
policy as including the repairing or servicing of automobiles.
It can hardly be persuasively argued that Mr. Bradford was not
so engaged at the time of the collision here. The language of
an insurance policy cannot be distorted in order to create an
ambiguity where none exists. Smiley v. Estate of Toney,
100 Ill. App.2d 271, 241 N.E.2d 116 (2d Dist. 1968). There are no
grounds, therefore, ...