APPEAL from the Circuit Court of Cook County; the Hon. ABRAHAM
W. BRUSSELL, Judge, presiding.
MR. JUSTICE GEORGE J. MORAN DELIVERED THE OPINION OF THE COURT:
Rehearing denied June 2, 1971.
Plaintiff Fidelity General Insurance Company brought this action to recover from defendant Nelsen Steel and Wire Company an amount paid by plaintiff to an injured third party under a contract of insurance covering a motor vehicle rented by defendant from plaintiff's insured, Pearson's Car Service. On motions for summary judgments by both parties, the trial court entered judgment for plaintiff and defendant appeals.
Pearson's was engaged in the business of renting motor vehicles to be operated by its customers. While Robert Duffy, an employee of defendant, was driving a truck rented by defendant from Pearson's, admittedly on a personal errand with defendant's express consent and outside the scope of his employment and outside the usual course of defendant's business, he was involved in a collision with an automobile owned and operated by Sidney L. Peterson, Sr. Peterson sued Duffy to recover for personal injuries allegedly sustained in the accident. Pursuant to a written memorandum of agreement between plaintiff and defendant, plaintiff paid to Peterson $19,000.00 in settlement of his claim. Plaintiff had determined that notwithstanding any attempted limitation of its liability under the policy or rental contract, there was a substantial possibility that it could be liable to Peterson by reason of the statutory omnibus clauses of Ill. Rev. Stat. 1965, ch. 95 1/2, par. 8-114 and 8-118, requiring a motor vehicle liability policy for owners of for-rent motor vehicles to provide coverage for customers and any person operating the motor vehicle with the customer's express or implied consent. Such statutory omnibus clauses had been incorporated into liability policies in analogous cases. See Landis v. New Amsterdam Casualty Company, 347 Ill. 560.
In this action plaintiff seeks to recover from defendant the $19,000.00 plus interest paid to Peterson by virtue of a reimbursement provision contained in the vehicle rental agreement which provides in part:
"The insurance policy referred to below has adequate limits of liability and property damage in compliance with the law of the state of Illinois for all injuries and damages other than to the rented vehicle, resulting from one accident arising from the operation of the vehicle described hereon * * *.
The vehicle described hereon shall not be operated:
(i) Outside of the scope of the driver's employment in the usual course of the trade, business, profession or occupation of the renter * * *.
4. Renter being one of the assured under the insurance policy covering said vehicle agrees to comply with all the terms and conditions of said policy, which by reference thereto are incorporated herein and made a part hereof, and to comply with the terms and conditions thereon.
5. Renter further expressly agrees to indemnify the insurance company for any and all loss, damage, cost and expense paid or incurred by the insurance company because of injuries or damage sustained by occupants of said vehicle in states where the law makes Pearson's or its insurance carrier liable for injuries to occupants of said vehicle, or because of injuries or damages resulting from the operation of said vehicle in violation of any of the terms and conditions appearing above."
Defendant contends that the coverage requirements of Sections 8-114 and 8-118 of the Illinois Vehicle Law (Ill. Rev. Stat. 1965, ch. 95 1/2, par. 8-114 and par. 8-118) must be read into the insurance policy, and the reimbursement clause in the rental contract is contrary to public policy to the extent that it requires a renter to indemnify insurer for risks required by these sections.
"Owner of for-rent motor vehicle to give proof of financial responsibility. It is unlawful for the owner of any motor vehicle to engage in the business, or to hold himself out to the public generally as being engaged in the business of renting out such motor vehicle to be operated by the customer, unless the owner has given, and there is in full force and effect and on file with the Secretary of State, proof of financial responsibility as hereinafter provided."
"Insurance policy as proof requirements. A motor vehicle liability policy in a solvent and responsible company, authorized to do business in the State of Illinois, providing that the insurance carrier will pay any judgment within thirty days after it becomes final, recovered against the customer or against any person operating the motor vehicle with the customer's express or implied consent, for damage to property other than to the rented motor vehicles, or for an injury to, or for the death of any person, not an occupant of the rented motor vehicle, resulting from the operation of the motor vehicle, provided, however, every such policy provides insurance insuring the operator of the rented motor vehicle ...