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Economy Fire & Casualty v. Second Nat'l Bk.

OPINION FILED NOVEMBER 18, 1980.

ECONOMY FIRE AND CASUALTY COMPANY, PLAINTIFF-APPELLEE,

v.

SECOND NATIONAL BANK OF DANVILLE, TRUSTEE, ET AL., DEFENDANTS-APPELLANTS. — (FIRST NATIONAL BANK OF DANVILLE, EX'R OF THE WILL OF RICHARD I. NICHOLES, DECEASED, ET AL., DEFENDANTS.) — ECONOMY FIRE AND CASUALTY COMPANY, PLAINTIFF-APPELLEE,

v.

SECOND NATIONAL BANK OF DANVILLE, TRUSTEE, ET AL., DEFENDANTS. — (JOHN E. SEBAT ET AL., DEFENDANTS-APPELLANTS.)



APPEAL from the Circuit Court of Vermilion County; the Hon. RALPH S. PEARMAN, Judge, presiding.

MR. JUSTICE WEBBER DELIVERED THE OPINION OF THE COURT:

These consolidated appeals lie from an order of the circuit court of Vermilion County declaring the rights of the parties (Ill. Rev. Stat. 1979, ch. 110, par. 57.1) under a certain insurance policy commonly known as a Homeowners Policy. The trial court declared that exclusions applied to the factual situation presented and defendants have appealed.

The policy is in the usual form and contains an almost impenetrable maze of verbiage — conditions, definitions, exceptions, additional conditions, supplementary coverages — such as to baffle even a Byzantine theologian. While the final order of the trial court does not specify which exclusion it relied upon in reaching its determination, the record indicates that three exclusions were argued extensively, and it is on these three that the ultimate conclusion will depend.

The factual basis for the proceeding was presented by stipulation and affidavit. These documents revealed that the policy, which was admitted to be true and accurate and in force at the time of the occurrence, was issued to and covered Richard I. Nicholes. Section I of the policy (not involved here) had to do with his dwelling and personal property. Section II, which is the source of controversy here, covered personal liability. Mr. Nicholes was an attorney and leased a suite of offices in the Adams Building in Danville from another attorney on a month-to-month basis. The Adams Building was held in trust by the Second National Bank of Danville, defendant herein, for the benefit of Paul and Eva Sudlow, also defendants. On February 13, 1975, Mr. Nicholes was in his office and lit some matches. This caused a fire which spread to other parts of the building and caused considerable damage. Subsequently Mr. Nicholes died, and the First National Bank of Danville, as his executor, was made a party-defendant to these proceedings together with others who suffered property damage in the fire.

The operative portions of the policy insofar as they pertain to this litigation read as follows:

"SECTION II COVERAGES

COVERAGE E — PERSONAL LIABILITY

This Company agrees to pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of bodily injury or property damage, to which this insurance applies, caused by an occurrence. * * *

EXCLUSIONS

THIS POLICY DOES NOT APPLY:

1. Under Coverage E — Personal Liability

d. to bodily injury or property damage arising out of business pursuits of any insured except activities therein which are ordinarily incident to non-business pursuits;

e. to bodily injury or property damage arising out of any premises, other than an insured premises, owned, rented or ...


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