Appeal from the Circuit Court of Lake County, Nineteenth
Judicial District; the Hon. LLOYD VAN DEUSEN, Judge, presiding.
MR. JUSTICE ABRAHAMSON DELIVERED THE OPINION OF THE COURT.
State Farm Mutual Automobile Insurance Company issued a policy of automobile insurance covering liability insurance for personal injury and property damage to Dr. A.N. Berke as Named Insured, and his wife, Esther Berke, as Additional Insured, for a 1964 Pontiac automobile owned by Dr. Berke. The provided coverage was extended to the use of a non-owned automobile by "(a) the first person named in the declaration or, (b) if residents of the same household, his spouse or the relatives of either, and (c) Any other person or organization legally responsible for the use by such named insured, spouse or relative of an automobile not owned or hired by such other person."
A non-owned automobile was defined in the policy as follows:
"NonOwned Automobile means an automobile or trailer not
"(ii) registered in the name of, or
"(iii) furnished or available for the frequent or regular use of the named insured, his spouse, or any relative of either residing in the same household, other than a temporary substitute automobile."
On September 7, 1966, Esther Berke was involved in an accident while driving a 1966 Oldsmobile in which a pedestrian and a motorcyclist were seriously injured. State Farm brought a declaratory judgment action that sought a determination of its obligations under the policy for the accident. The trial court found that the 1966 Oldsmobile was not a non-owned automobile as defined by the policy and that State Farm had no liability thereunder. The Berkes and John Teresi Chevrolet-Oldsmobile, Inc. appeal.
The record discloses that Dr. Berke had been ill and his medical practice was temporarily interrupted. However, in July, 1966, he regained his health and resumed his practice. At that time, he owned the 1964 Pontiac and needed a second car for use in his profession. In early July, Dr. Berke contacted John Teresi, the president of John Teresi Chevrolet-Oldsmobile, Inc., an automobile dealership, in regard to a rental of an additional automobile. Teresi informed him that rental services were available, and on July 11 or 12, Dr. Berke visited the dealer and was referred to a Mr. St. Pierre.
Dr. Berke signed a rental agreement with Lakes Leasing, a separate corporation but located at the same address as the dealership and apparently owned by the same parties, for a 1967 Oldsmobile "98." St. Pierre computed the monthly rental which, at the specific request of Dr. Berke, was to include insurance coverage, in the amounts of $100,000/$300,000 for personal injuries, at $165. Since 1967 models were not available, it was agreed that Dr. Berke would use a 1966 Oldsmobile demonstrator until the new automobiles were delivered. Dr. Berke took the car and used it continuously until the date of the accident.
At the end of July, Dr. Berke received a statement from Lakes Leasing for $330 for the first and last months' rental which he paid on August 6. Both John Teresi and St. Pierre were insurance brokers and agreed that the rental contract was to include insurance coverage. Although Dr. Berke explained that he needed the automobile for his medical practice, no restrictions on the use were made or even discussed. Berke also made a September payment and on November 1 was furnished a new automobile which he continued to rent until the lease was cancelled in September, 1968.
On September 7, 1966, Dr. Berke drove the 1966 Oldsmobile from his home in Antioch to a hospital in Waukegan. His wife accompanied him and took the car from the hospital for a shopping trip in Waukegan after which she was to return to the hospital to pick up her husband. While on the trip, Mrs. Berke had the accident that gave rise to a multiplicity of lawsuits. It developed that the insurance carried by Lakes Leasing for rented automobiles was not applicable since the 1966 Oldsmobile was not owned by that corporation but was a demonstrator consigned to John Teresi Chevrolet. The garage policy that covered the latter corporation was likewise not involved since that policy specifically excluded rented automobiles.
The trial court concluded that the State Farm policy did not extend coverage since the 1966 Oldsmobile was furnished for the regular use of Dr. Berke and was available for the frequent and regular use of Esther Berke and was not, therefore, a non-owned automobile. The court further ordered that John Teresi Chevrolet-Oldsmobile, Inc. indemnify and hold harmless the Berkes against all claims arising from the accident and to assume the defense of those claims within the limits discussed by St. Pierre and the doctor.
The appellants contend that State Farm failed to establish by a preponderance of the evidence that the 1966 Oldsmobile was not a non-owned automobile as defined by the policy and that the finding of the trial court that it was "available for the frequent and regular use" of Esther Berke was against the manifest weight of the evidence.
Dr. Berke could not recall any specific occasion prior to September 7 that his wife used the Oldsmobile but he did testify that "she might have driven it." Esther Berke testified that the car was used principally by her husband in his practice but that she did drive it on two or three occasions prior to the accident. Since Dr. Berke conducted his practice from his home and there was no evidence of any restrictions placed on the use of the Oldsmobile by Esther Berke, the conclusion of ...