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Bituminous Casualty v. North River Ins.





APPEAL from the Circuit Court of Cook County; the Hon. ARTHUR L. DUNNE, Judge, presiding.


Rehearing denied April 7, 1977.

Bituminous Casualty Corporation (Bituminous), plaintiff and counterdefendant, filed a complaint against North River Insurance Company (North River), defendant and counterplaintiff, and North River filed a counterclaim against Bituminous. Each sought a declaratory judgment of rights under their respective insurance policies and for reimbursement of $25,000 paid by each to effect a $50,000 settlement of a lawsuit filed by Elizabeth Cullen and Daniel J. Cullen for personal injuries sustained in an accident with a tractor-trailer unit operated by Tom O'Malley. The cause was tried upon a written stipulation of facts. The trial court entered an order in favor of North River and against Bituminous for a judgment of $25,000 and denying the relief prayed by Bituminous in its complaint. Bituminous appeals from the order for judgment and the denial of relief. The sole issue is which party's policy provides coverage for the accident in the instant case. We reverse and enter judgment here in favor of Bituminous.

The accident between the Cullens and O'Malley occurred on July 19, 1967. The Cullens filed suit against W.W. Young & Sons, Inc. (W.W. Young), Chicago Medinah Temple (Medinah), International Harvester Company (Harvester), and Tom O'Malley. Bituminous had issued a policy of liability insurance to W.W. Young. North River had issued a similar policy to Medinah. Medinah owned a Chanter's trailer which it used in parades and was in the custom of borrowing tractors to pull it. On July 3, 1967, Harvester loaned Medinah the tractor later involved in the accident under a loan agreement, addressed to Harvester, which stated in part that "[w]e acknowledge that ownership of this vehicle is and remains in you * * *. We agree that the vehicle will be operated only by our authorized representatives." The agreement was signed by Leslie Young on behalf of Medinah. The tractor was delivered for the use of Medinah to the premises of W.W. Young.

Leslie Young was president of W.W. Young and also a member of the Medinah's Chanters Group. As a Shriner, he drove the tractor and trailer in all parades with the permission of Medinah. Between parades the equipment was stored on the premises of W.W. Young, the trailer having been stored there for approximately 15 years prior to the accident. The tractor and trailer were used in three parades in the summer of 1967 and otherwise were not removed from the premises of W.W. Young. A week prior to the accident the tractor and trailer were shipped to Washington, D.C., for a parade and were then returned by railroad. Leslie Young drove Tom O'Malley to the railroad terminal and directed him to return the tractor and trailer to the premises of W.W. Young. O'Malley was regularly employed by W.W. Young. In the course of returning the equipment, the accident occurred.

The Cullens' claim was settled for $50,000 pursuant to an agreement of Bituminous and North River that each would pay $25,000 toward the settlement and would then litigate the insurance coverage question involved therein.

Carl W. Lutz was the recorder for Medinah, similar to the position of secretary and business manager. To his knowledge the trailer was gratuitously stored by Leslie Young when not in use in parades. Leslie Young was the regular driver for Medinah in parades and saw to it that the unit reached the parade and was thereafter returned to storage.

Harvester proposed that W.W. Young purchase the tractor at cost after the Medinah parade agenda had been completed that summer. A letter confirming the agreement was sent to Harvester on June 20, 1967, and in fact the tractor was purchased later that year. The tractor received only minor damage in the accident and was repaired by employees of W.W. Young. W.W. Young was a cartage company and was not in the business of storing vehicles other than their own.


• 1 The general principles governing the interpretation and construction of insurance contracts do not differ from those controlling in other contracts. (Whaley v. American National Insurance Co. (1975), 30 Ill. App.3d 32, 331 N.E.2d 571; Jensen v. New Amsterdam Insurance Co. (1965), 65 Ill. App.2d 407, 213 N.E.2d 141.) Thus, in construing insurance contracts the court's primary purpose is to give effect to the intention of the parties as expressed therein. (Goetze v. Franklin Life Insurance Co. (1975), 26 Ill. App.3d 104, 324 N.E.2d 437; Dawe's Laboratories, N.V. v. Commercial Insurance Co. of Newark (1974), 19 Ill. App.3d 1039, 313 N.E.2d 218.) In the absence of ambiguity words in the insurance policy are to be given their plain, ordinary and popular meaning. (Weiss v. Bituminous Casualty Corp. (1974), 59 Ill.2d 165, 319 N.E.2d 491; Goetze v. Franklin Life Insurance Co.) No such ambiguities are presented in the contractual provisions here.

The two insurance policies in the instant case contain essentially identical provisions. However, on June 15, 1967, a general purpose endorsement was added to the North River policy which states:

"It is agreed that W.W. Young & Sons, Inc. are added as an additional insured as respects to their interest in the vehicles loaned to insured in parades. It is further agreed that our policy is excess over any other similar insurance."

North River concedes that both W.W. Young and Tom O'Malley became its insureds under this clause but argues that the excess coverage is not called into effect since Bituminous is primarily liable for the accident. However, the case at bar does not present a dispute as to excess coverage. Rather, the ...

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