APPEAL from the Circuit Court of Du Page County; the Hon.
WILLIAM C. ATTEN, Judge, presiding.
MR. JUSTICE ABRAHAMSON DELIVERED THE OPINION OF THE COURT:
Rehearing denied August 31, 1971.
This appeal is from a declaratory judgment action, filed in the Circuit Court of Du Page County, by Western States Mutual Insurance Company, hereinafter referred to as Western States, insurer of the driver of a non-owned vehicle, against Hardward Mutual Casualty Company, hereinafter referred to as Hardware. The trial court found that Hardware, insurer of the vehicle involved, owed the duty to defend and indemnify the operator of the vehicle, under the owner policy. Western States' policy contained a standard "excess" clause for non-owned automobiles. Hardware's policy contained an "escape" or "no liability" clause. Hardware has appealed from the judgment in favor of Western States.
The issues are: (1) Did the trial court properly find, based upon depositions, that the driver had the implied permission of the owner at the time of the occurrence; (2) Which insurer owed the duty to defend and indemnify the driver where the owner's policy contained an "escape" clause and the driver's policy contained an "excess" clause.
The Complaint for Declaratory Judgment filed on March 25, 1969, by Western States alleged that it issued its insurance policy to George D. Hull; that the defendant, Hardware, issued its policy to Al Piemonte Ford, hereinafter referred to as the Ford agency; that defendant, Continental Casualty Company issued its policy to Crawford and Company and/or Harry Crawford, Sr., d/b/a Crawford and Company. The complaint further alleged that about April 12, 1968, George A. Hull, the son of George D. Hull, was operating an automobile owned by the Ford agency and leased or billed to Harry Crawford, Jr., and was doing so with the permission, consent and knowledge of Harry Crawford, Sr.; that the purpose of the trip was to take Mark Crawford (a son) home; that Diane Taylor was a passenger on a motorcycle, driven by John Murphy, when an accident occurred with the vehicle driven by George A. Hull, and that thereafter a lawsuit was filed by John Murphy, a minor, by his father, against George A. Hull, Harry Crawford, Sr., Mark Crawford and Al Piemonte Ford. Further allegations are that a conflict has arisen between the plaintiff, as the alleged insurer of George D. Hull, and Continental Casualty Company, alleged insurer of the Crawfords, and Hardware, alleged insurer of the Ford agency; and that the plaintiff has tendered the defense of George A. Hull, driver of the vehicle in question, to Hardware and Continental Casualty, and the tender was refused.
Hardware filed its answer, admitted that the car involved was owned by the Ford agency and that it was the agency's insurer. Defendant Hardware denied that permission was granted to Harry Crawford, Sr., or anyone acting in his behalf, to use the automobile involved. Hardware also set out an affirmative defense alleging that the policy of insurance issued by Hardware to the Ford agency provides that:
"Any person while using, with the permission of the named insured, any automobile to which the insurance applies under the automobile Hazard, provided in his actual operation or (if he is not operating) his other actual use thereof, is within the scope of such permission * * *."
and that none of the Crawfords had permission of the named insured (the Ford agency) to use the subject automobile. The affirmative defense further states:
"That the policy of insurance in question issued by Hardware to the insured Al Piemonte Ford, contains an endorsement A.G. 8 entitled Limited Coverage for Certain Insureds which provides:
`In consideration of the reduced rate of premium made applicable to the Garage Liability Insurance, it is agreed that the garage customers are not insureds with respect to the automobile hazard except in accordance with the following additional provisions.
(1) If there is other valid and collectible insurance, whether primary, excess or contingent, available to the garage customer and the limits of such insurance are sufficient to pay damages up to the amount of the applicable financial responsibility limit, no damages are collectible under this policy.
(2) If there is other valid and collectible insurance available to the garage customer, whether primary, excess or contingent, and the limits of such insurance are insufficient to pay damages up to the amount of the applicable financial responsibility limit, then this insurance shall apply to the excess of damages up to such limit.
(3) If there is no other valid and collectible insurance, whether primary, excess or contingent, available to the garage customer, this insurance shall apply but the amount of damages payable under this policy shall ...