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State Farm Mutual Auto. Co. v. Childers

OPINION FILED JULY 7, 1977.

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, PLAINTIFF-APPELLANT,

v.

LARRY J. CHILDERS ET AL., DEFENDANTS-APPELLEES.



APPEAL from the Circuit Court of Jackson County; the Hon. PEYTON H. KUNCE, Judge, presiding.

MR. JUSTICE JONES DELIVERED THE OPINION OF THE COURT:

Plaintiff-appellant, State Farm Mutual Automobile Insurance Company (hereinafter State Farm), appeals from a declaratory judgment rendered against it in the circuit court of Jackson County finding that with respect to a motorcycle-automobile accident described herein defendant Laurie Larsen was covered by a policy of automobile liability insurance issued by State Farm to Laurie and George Larsen.

A default had been entered against all of the named defendants except for Larry Joe Childers and Universal Underwriters Insurance Company prior to the entry of the instant judgment. Defendant Childers is the only defendant involved in this appeal.

The issue presented to this court is whether the term "non-owned automobile" as defined in the instant liability insurance policy should be construed to include a motorcycle. The trial court, in a letter memorandum in support of its opinion, indicated that such an interpretation was proper because: (1) the "loose language" of the policy, although not amounting to conflicting clauses, could lead an insured to believe that his policy covered him while driving any kind of licensed motor vehicle; and (2) a literal application of the terms of coverage would be inconsistent with the intent of the legislature with respect to the Illinois Financial Responsibility Law.

State Farm contends that the terms of the policy should be given their plain and ordinary meaning because the policy clearly and unambiguously did not afford coverage while an insured was driving an unowned motorcycle and because nothing in the Illinois Safety Responsibility Law (Ill. Rev. Stat. 1971, ch. 95 1/2, par. 7-101 et seq.) requires any such construction of the policy. For reasons which we shall set forth presently, we agree with plaintiff and consequently reverse the judgment of the trial court.

A stipulated statement of facts was attached to and made part of the judgment of the court. The following account of the factual situation leading up to this declaratory judgment action is derived from that stipulation.

On June 18, 1971, defendant Laurie Larsen, with the permission of defendant Larry Joe Childers, was driving a 1970, 750-cubic-centimeter Honda motorcycle owned by Childers. Defendant Childers was a passenger on the motorcycle. At approximately 6:25 p.m., a collision occurred on Old Illinois Route 13 between this motorcycle and a car driven by defendant Mary Kay Nash Weiss. Defendant Childers thereafter brought suit in Jackson County against Laurie Larsen. In that suit, defendant Childers alleged that Laurie Larsen was negligent in the operation of the motorcycle, and that as a proximate result of such negligence, he sustained serious personal injuries. These injuries were alleged to have caused him to lose a great amount of wages and incur large medical bills. At the time of the accident, Laurie Larsen, as well as her father George Larsen, was a named insured on a standard form policy of vehicular liability insurance issued by State Farm. At the same time, defendant Childers had a liability policy on his motorcycle with Universal Underwriters Insurance Company.

Defendant Childers concedes that his injuries and losses are clearly not covered under the provisions of Laurie Larsen's policy relating to the accident which occurred while she was operating an "owned motor vehicle." He argues, however, that the trial court was correct in finding that under, the circumstances of this accident, damages for his injuries and losses are recoverable under the coverage provision relating to an insured's operation of an "non-owned automobile."

The policy in question defines all terms printed in italics under a separate "definitions" provision. The term "non-owned automobile" is an italicized term. Its definition, in turn, contains other italicized words. The relevant policy definitions are set out in pertinent part below.

"Non-owned automobile — means an automobile, trailer, or detachable living quarters unit, not

(1) owned by,

(2) registered in the name of, or

(3) furnished or available for the frequent or regular use of the named insured, * * *."

"Automobile — means a four wheel land motor vehicle designed for use principally ...


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