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Home Indemnity Co. v. La Barbara

MAY 22, 1974.




APPEAL from the Circuit Court of Cook County; the Hon. F. EMMETT MORRISSEY, Judge, presiding.


This is an appeal from an action for declaratory judgment brought by the Home Indemnity Company against the Prestige Casualty Company in the Circuit Court of Cook County. Also named as defendants were Louis and Marie La Barbara, Monroe Estes, a minor by John Estes, his father and next friend, and John and Verna Estes, individually.

The court entered judgment for Home against Prestige; denied Prestige's motion for summary judgment; found that Prestige owed coverage for Monroe Estes; found that Prestige had a duty to defend Monroe Estes in a suit filed by the La Barbaras against him for personal injuries allegedly sustained as a result of an automobile accident of January 24, 1970; and held that the exclusionary endorsement was null and void. The other defendants to the declaratory suit were voluntarily dismissed out, and Prestige alone has appealed.

The issue for review is whether the exclusionary endorsement contained in the policy issued by the Prestige Casualty Company is valid.

On January 24, 1970, Monroe Estes, a minor, was driving a car owned by his parents when it was involved in an accident with an automobile driven by Louis La Barbara. Both he and his wife claimed personal injuries and filed a lawsuit against Monroe Estes, Verna Estes and John Estes.

Prior to the date of the accident, Prestige had issued an insurance policy to John and Verna Estes which was subsequently modified on December 4, 1969, by an endorsement which excluded coverage to "any male driver under the age of 25; or by any unmarried female driver under the age of 25; or by any person for use to or from work." Based on this endorsement signed by John and Verna Estes, Prestige Casualty Company denied liability and coverage under the policy for the accident of Monroe Estes.

Home Indemnity Company, the uninsured motorist carrier of the La Barbaras, filed this action alleging the endorsement was invalid because of prior disapproval of the Director of the Department of Insurance. The plaintiff filed a motion for summary judgment which was granted, and Prestige Casualty Company appeals from that order.

On March 10, 1966, the Director wrote a letter to Prestige requiring that it "cease and desist" in the use of a blank restrictive endorsement form which contained language denying coverage followed by a blank for typing in the circumstances under which coverage is denied. On April 13, 1986, Prestige replied to the letter of March 10, to explain the use of the endorsement and request that the Department file the endorsement. Enclosed in the letter was an example of an exclusionary endorsement of the type signed by John and Verna Estes. Both the letter of April 13 and the example were marked with the stamp of the Department of Insurance and contained the word "filed."

Prestige contends there was a lack of proof the March 10 letter referred to the endorsement involved in this case, and even assuming that the letter did refer to the endorsement in question, the Director approved it by marking it with a filing stamp. Section 143 of the Insurance Code (Ill. Rev. Stat., ch. 73, § 755) provides in part:

"The Director shall require the filing of all policy forms issued by any company transacting the kind or kinds of business enumerated in Classes 2 and 3 of section 4. He may require, in addition thereto, the filing of any generally used riders, endorsements, application blanks and other matter incorporated by reference in any such policy or contract of insurance."

Prestige argues that when the Director disapproves the use of an endorsement, he is inviting the submission of a new endorsement or an explanation of the use of the original endorsement. By not replying to the letter of April 13, Prestige contends the Director accepted the explanation tendered in that letter and thereby approved the endorsement.

The defendant also claimed at the hearing that a letter of June 3, 1971, from the rate examiner of the Department to Prestige was relevant as being a part of a continuing correspondence and constituted a clarification of the earlier letters. That letter stated as follows:

"To afford a permanent record regarding our understanding of this matter, we would like to reiterate our position.

1) An endorsement having the effect of excluding coverage for male drivers under 25 may be used if signed by the insured and if the endorsement is only applied to policy-holders which probably have such exposure. The endorsement is not to be attached to ...

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