APPEAL from the Circuit Court of Kendall County; the Hon. REX
MEILINGER, Judge, presiding.
MR. JUSTICE GUILD DELIVERED THE OPINION OF THE COURT:
Rehearing denied March 8, 1978.
This is a declaratory judgment action brought by General Casualty Company seeking a determination of coverage under a home owner's insurance policy issued to William A. and Judith A. Olsen, defendants. Carl A. Engel, a minor, also a party herein brought a separate action by Alex Engel, his father, against the Olsens for injuries sustained as will be explained hereinafter. The Olsens were defaulted and judgment confessed against them in this action. The trial court entered a declaratory judgment finding that the policy of insurance in question does not cover, apply to, or protect the Olsens and further that General Casualty was not required to defend the action or pay any judgment which might be entered against the Olsens. The defendant-appellant, Carl Engel, appeals.
The appellant presents two issues to this court. First, whether certain exclusions in the insurance policy are ambiguous and whether General Casualty sustained its burden of proving that the facts pertaining to the minor's injuries were such as to bring them within those exclusions. Secondly, whether the finding of the trial court is against the manifest weight of the evidence.
The facts of this case are important for the determination of the issues presented herein. General Casualty issued a homeowner's policy covering the "south side of North St 5th house W of Main St of Bristol, Kendall County." The Olsen property consists of two lots fronting to the north on North Street. The two lots are bisected by a dedicated but totally undeveloped street known as West Street. South of the two lots owned by the Olsens we find property owned by Commonwealth Edison Company. This property extends from the southerly boundary of the Olsen property 160 to 165 feet to the wire fence of the Burlington Northern Railway. The Commonwealth Edison property was apparently somewhat maintained by the Olsens. On the easterly Olsen lot we find an oblong oval dirt track used for the operation of mini-bikes. This oval track extends southerly over the Commonwealth Edison property to a point fairly close to the fence line of the Burlington Northern Railway. On the day in question the minor, Carl Engel, went to the Olsen property and was operating a mini-bike owned by the Olsens. He lost control of the mini-bike while going south on the track in question and ran into the fence separating the Commonwealth Edison property from that of the Burlington Northern Railway. The actual impact or accident occurred about 4 to 4 1/2 inches within the Burlington Northern property. The reason for the instant declaratory judgment action is to determine whether General Casualty is obligated under the terms of the homeowner's policy to defend the action of Engel against the Olsens.
1 We turn first to the contention which is raised by the plaintiff, General Casualty, that defendant Engel may not raise the question of the ambiguity of the policy herein inasmuch as he is not a party to the insurance contract. In support of this contention General Casualty has cited Larson v. McCormack (1936), 286 Ill. App. 206, 2 N.E.2d 974. We do not find that case controlling nor do we find it to be the law in Illinois. At the outset it is to be noted that Engel is made a party to these proceedings by General Casualty in the complaint before us. This issue has been squarely presented to the Supreme Court of Illinois in Williams v. Madison County Mutual Automobile Insurance Co. (1968), 40 Ill.2d 404, 407, 240 N.E.2d 602, 604, wherein the court specifically stated:
"Injured claimants are proper parties to such an action and have been held to have been necessary parties to such suit."
More recently, in M.F.A. Mutual Insurance Co. v. Cheek (1977), 66 Ill.2d 492, 363 N.E.2d 809, the supreme court was presented with a factual situation analogous to the instant case. In that proceeding Harold W. Miller and his wife brought suit against Cheek and Valleroy as a result of an automobile accident. The insurance company brought a declaratory judgment against Cheek, Valleroy and the Millers. The trial court entered default judgments against Cheek and Valleroy, the insureds, as in the case before us, and the insurer contended that the trial court could not render judgment on the merits against it in favor of the Millers. The supreme court held that:
"Mr. and Mrs. Miller, plaintiffs in the action against Cheek and Valleroy, were necessary parties defendant to this action by the insurers. [Citing Williams, supra.] They had a substantial right in the viability of the policy. This could not be defeated by the failure of Cheek and Valleroy to appear in these proceedings." (66 Ill.2d 492, 495, 363 N.E.2d 809, 811.)
This is the exact situation here and we find that since the defendant Engel is a necessary party to this proceeding and had a "substantial right" in the viability of the policy he can properly argue the alleged ambiguity of the policy exclusion.
We next consider whether the terms of the insurance policy are ambiguous. The trial court found that the mini-bike was a recreational vehicle and that the accident occurred "away from" the "residence premises." The issue presented herein is the proper interpretation of the words "away from" and the definition of "residence premises". The exclusion at issue provides that the policy does not apply to bodily injury or property damage arising out of the maintenance or use of any recreational motor vehicle if the bodily injury or property damage occurs "away from" the "residence premises." The "residence premises" are defined as:
"(1) a one or two family dwelling building, appurtenant structures, grounds and private approaches thereto * * * provided that such premises is used as a private residence by the Named Insured or his spouse but excluding any portion of the premises used for business purposes."
As to the alleged ambiguity, appellant Engel argues first that the accident which resulted in his injury took place as much on the Olsen property as not on it. The basis for this argument is that Engel started his ride on the mini-bike on the Olsen property and drove off of it to where the accident occurred. (Some 165 feet to the south.) The appellant points out that there is no legal description found in the policy. Appellant further argues that a common sense reading of the policy would show that while the injury did not occur on the legally owned property of the Olsens, it did not occur "away from" the residence premises. Finally, the appellant contends that only by restricting "injury" and "occurs" to the particular point of impact; and by restricting "away from" to a meaning of "not on"; and by restricting "residence premises" to "legally owned Olsen property" can the policy exclusion be made to apply. In sum, the appellant contends that each of these choices of alternate meanings constitute ambiguity, which the trial court erroneously resolved in favor of the insurance company, contrary to judicial precedent. In support of this contention appellant states that in determining the significance of ambiguity in an insurance contract the court should consider the purpose sought to be accomplished; the situation of the parties; the subject matter of the contract; and the circumstances surrounding the issuance of the policy. He concludes that ambiguous provisions should be construed strongly against the insurer who drafted the same. In support of his argument appellant has cited a case from United States District Court in Arkansas, St. Paul Fire & Marine Insurance Co. v. Coleman (W.D. Ark. 1962), 204 F. Supp. 713, aff'd (8th Cir. 1963), 316 F.2d 77. In that case the policy in question excluded injuries which occurred "away from the premises" of the insured. The plaintiff there filled the gas tank of his boat at the dock of the insured and as he drove or floated some 73 feet away from the dock, the boat caught on fire. The Federal court held that the word "premises" has many meanings and usages and rather blandly stated:
"* * * that the policy should apply to accidents, the cause of which originated at the fueling dock * * and culminated in damages before the boat departed from the premises used by the insured in the operation of ...