APPEAL from the Circuit Court of Cook County; the Hon. ARTHUR
L. DUNNE, Judge, presiding.
MR. JUSTICE JOHNSON DELIVERED THE OPINION OF THE COURT:
Safeway Insurance Company (hereinafter Safeway), plaintiff-appellee, commenced this action seeking a declaratory judgment regarding its obligation to pay or defend on behalf of Frank Duran or Dennis Duran under an automobile liability policy. The action pertained to a collision involving Dennis Duran wherein the Illinois Department of Transportation sustained property damage of $17,123.40. Safeway named the Illinois Department of Transportation, defendant-appellant, a third-party beneficiary of the policy proceeds, as a defendant.
A declaratory judgment was entered for Safeway and the trial court found that the failure to disclose Dennis Duran's co-ownership of the vehicle was a material nondisclosure as a matter of law affecting the risk to be insured. The court further declared the insurance policy void and found that Safeway had no duty to pay or defend on behalf of the Durans as a result of the occurrence of May 21, 1976. The Illinois Department of Transportation alone appeals from this order inasmuch as the Durans did not join in this appeal. We affirm.
On September 30, 1975, Frank Duran and his son, Dennis Duran, purchased a 1976 Ford LTD (hereinafter Ford). Frank and Dennis were listed as owners on the sales slips for the car, and the title was registered to both Durans. The State of Illinois license registration was also issued in the names of Frank Duran and Dennis Duran.
At the time the car was purchased, Dennis was 20 years old and resided with his parents at 1941 West 21st Street, Chicago, Illinois. He owned another car for the purpose of traveling to and from work. According to the Durans, Dennis' name was furnished as an owner only to give him a credit reference. It was understood between Dennis and his father that the son would use the car occasionally with his father's permission, if he procured liability insurance. It is disputed whether Dennis had his own keys to the Ford.
Frank Duran purchased the automobile liability insurance in question from Scott Insurance Agency in May 1976. The policy, issued by Safeway, was in effect at the time of the collision. Frank Duran was listed as the sole applicant and sole owner of the car, while he and his wife were listed as the only persons who would customarily operate the vehicle. Further, Frank and his wife were to do 100 percent of the driving.
Dennis drove the car 25 to 50 times from the time of its purchase in September 1975 until May 21, 1976, the date of the collision. During the period from April 20, 1976, until the day of the incident in question, he drove the car on at least four occasions. A disagreement took place between Dennis and his father regarding Dennis' failure to procure liability insurance and, as a result, Dennis allegedly moved from his parents' home sometime in May 1976.
On May 21, 1976, at approximately 5:30 a.m., while driving the Ford westbound on the Kennedy Expressway at Ontario and Orleans, Dennis struck a lightpole, two roadway gates and a guardrail, incurring $17,123.40 in damages to Illinois State property.
At the time of the accident, Dennis told the investigating police officer that he resided at 1941 West 21st Street. The summons in this case was served upon Dennis at 1941 West 21st Street. His parents' address appeared on his driver's license, issued August 15, 1977. Both Frank and Dennis Duran were listed as owners of the Ford on the claim form submitted to Safeway.
On August 20, 1976, Safeway brought this action for declaratory judgment against Frank Duran, Dennis Duran, and the Illinois Department of Transportation. The insurance company sought a declaration that it was not liable under the liability policy because Frank Duran made a material misrepresentation by failing to list Dennis as a principal driver.
Safeway filed a motion for summary judgment. In response, the Illinois Department of Transportation argued that no material misrepresentation or nondisclosure existed. Thereafter, the trial court granted Safeway's motion for summary judgment.
The single issue for review is whether the trial court erred in awarding summary judgment for the insurance company on the ground that failure to disclose a legal co-owner of an automobile was a material nondisclosure affecting the insurer's risk.
1 Appellant argues the trial court erred in awarding summary judgment in that no misrepresentation was made by Frank Duran regarding ownership, because the insurance company ...