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Metro Inter-insurance v. Anthony

SEPTEMBER 23, 1971.

METRO INTER-INSURANCE EXCHANGE, PLAINTIFF-APPELLANT,

v.

DOLTON ANTHONY ET AL., DEFENDANTS-APPELLEES.



APPEAL from the Circuit Court of Cook County; the Hon. EDWARD F. HEALY, Judge, presiding.

MR. JUSTICE MCGLOON DELIVERED THE OPINION OF THE COURT:

The record indicates the facts giving rise to this appeal. The defendant, sometime prior to May 29, 1967, contacted Mr. Frank Pesir, an insurance broker doing business under the name H.G. Bruekner Insurance Agency, and requested a meeting for the purpose of discussing liability insurance coverage for the defendant. Subsequently, Pesir visited the defendant at his home. There is some dispute as to what precisely occurred during this visit. The defendant testified that he told Pesir he wanted insurance to cover all the equipment in his landscape business, specifically a 1 1/2 ton truck and a trailer that was used therewith to carry tools et cetera. According to the defendant, he took Pesir outside to view the equipment. Pesir testified that the defendant at no time mentioned the trailer and that he did not see any of the equipment prior to placing the policy in question. Thereafter, Pesir contacted the All-Risk Insurance Agency seeking to place a liability policy, covering only the truck. All-Risk contacted the O.K. Insurance Agency who, in turn, contacted and placed the policy with Metro Inter-Insurance Exchange.

On May 29, 1967, Metro issued an automobile liability insurance policy covering only the defendant's truck and not the trailer. Further, the policy contained a definitional clause as to the word "automobile" as follows:

"* * * the word "automobile" means:

(2) Trailer — under coverages A, B and division 1 of coverage C (These were the Bodily Injury, Property Damage and Automobile Medical Payment clauses respectively), a trailer not described in this policy, if designed for use with a private passenger automobile, if not being used for business purposes with another type automobile, and under division 1 of coverage C if not a home, office, store, display or passenger trailer; * * *."

The policy also contained as part of its exclusion section a clause as follows:

"This policy does not apply:

(C) Under coverages A & B, while the automobile is used for the towing of any trailer owned or hired by the insured and not covered by like insurance in the company; or while any trailer covered by this policy is used with any automobile owned or hired by the insured and not covered by like insurance in the company."

Subsequently, an endorsement or rider was added to the policy which afforded coverage for Bodily Injury, Property Damage and Automobile Medical Payments only so long as the insured vehicle was used exclusively within a 50-mile radius of the city limits where such vehicle was principally garaged, except for occasional personal, pleasure or family use.

Thereafter, on June 21, 1967, the defendant while driving his truck with the trailer in tow was involved in an accident in which injury was caused to the occupant of another vehicle who brought suit against the defendant. The plaintiff filed an appearance on behalf of the defendant and then filed this declaratory judgment action seeking a determination that it is not bound to afford coverage to the defendant since he was pulling a trailer at the time of the accident and hence was excluded from coverage under the express provisions of the policy. The trial court held against the plaintiff and for the defendant.

On appeal the plaintiff raises two issues: first, that Pesir was not an agent of Metro under the facts of this case, and second, that the exclusionary provision contained in the policy of insurance is valid and binding and denies coverage under the facts of this case.

We reverse.

With regard to the plaintiff's first argument that Pesir was not the agent of Metro, the defendant argued that in fact Pesir was Metro's agent and, therefore, since Pesir allegedly knew about the trailer and the defendant had requested coverage for all his equipment the insurance company is responsible for the error of its agent in not providing coverage for the trailer. We must agree with the plaintiff.

• 1 In Vassel v. Underwood (1967), 85 Ill. App.2d 222, 229 N.E.2d 354, this court held that an insurance broker is the agent of the one who employs him. In France v. Citizens Casualty Co. of New York (1948), 400 Ill. 55, 79 N.E.2d 28, the Illinois Supreme Court supported this principle adding that the broker remained the agent of the one ...


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