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Kerouac v. Kerouac

OPINION FILED AUGUST 21, 1981.

DALE KEROUAC, A MINOR, BY VERNON KEROUAC, HIS FATHER AND NEXT FRIEND, ET AL., PLAINTIFFS-APPELLANTS,

v.

THOMAS VERNON KEROUAC ET AL., DEFENDANTS-APPELLEES. — (COUNTRY MUTUAL INSURANCE COMPANY, COUNTERPLAINTIFF-APPELLEE,

v.

DALE KEROUAC ET AL., COUNTERDEFENDANTS-APPELLANTS.)



APPEAL from the Circuit Court of Kankakee County; the Hon. JOHN F. MICHELA, Judge, presiding.

MR. JUSTICE ALLOY DELIVERED THE OPINION OF THE COURT:

Plaintiffs, Dale Kerouac, a minor, by his father Vernon Kerouac, and Vernon Kerouac, individually, appeal from the judgment of the circuit court in their declaratory action against Country Mutual Insurance Company. The plaintiffs Kerouac had sought a declaratory judgment that a policy of insurance, issued by Country Mutual to Vernon Kerouac, afforded uninsured motorist coverage to plaintiffs with respect to an April 1969 auto accident in which they were involved. They also sought a judicial declaration that Country Mutual was estopped from denying the negligence of the allegedly uninsured driver, Thomas Kerouac, by virtue of the doctrine of collateral estoppel. The relief requested was that the court ordered Country Mutual to proceed to arbitration on the plaintiffs' uninsured motorist claim. The circuit court entered judgment for Country Mutual on its counterclaim, holding that the policy did not provide coverage to the plaintiffs under its uninsured motorist provisions.

The plaintiffs Kerouac appeal and argue: (1) that the policy provided uninsured motorist coverage with respect to the defendant Thomas Kerouac; (2) that their claims are not time-barred; and (3) that collateral estoppel operates to prevent Country Mutual from denying the negligence of Thomas Kerouac. They seek a remandment with directions that Country Mutual proceed to arbitration on the claim.

The facts are not in dispute. On April 18, 1969, Dale Kerouac, a minor, and his father, Vernon Kerouac, were riding in an automobile driven by Thomas Kerouac, son of Vernon and brother of Dale. The auto being driven was owned by Vernon Kerouac, the father, and it was covered by a Country Mutual family auto liability insurance policy. The Kerouac vehicle collided at an uncontrolled intersection with another auto, that being driven by Cortland Powell. As a result of the accident all three of the Kerouacs brought suit against Powell, alleging his negligence in the accident. In that 1970 suit, which is not before us on this appeal, the jury verdict was in favor of the defendant Powell as against all three plaintiffs. There was a trial court ruling, during the course of the trial, that Dale Kerouac, the minor, was not guilty of contributory negligence in the accident.

Subsequent to the unsuccessful 1970 suit against Powell, another suit was brought by the Kerouacs arising from the 1969 accident. In that second suit, filed in 1974, Dale Kerouac, the minor, and his father, Vernon Kerouac, brought a negligence action against Thomas Kerouac, the driver-brother, and they also appended a declaratory judgment action against Country Mutual, insurer of the Kerouac auto under a family auto policy issued to Vernon Kerouac. Under the express, exclusionary provisions of that policy, liability coverage was not provided for bodily injuries sustained by the insured or by his relatives. Such exclusion from coverage under the basic liability provisions was alleged by the plaintiffs and admitted by Country Mutual. The two plaintiffs Kerouac, however, also alleged that Country Mutual was liable under the uninsured motorist coverage that was also provided in the policy. Their argument, in essence, is that since they could not recover for their injuries as against Thomas Kerouac, by virtue of the exclusion as to family members under the policy terms, therefore he was an uninsured motorist, as to them, and the uninsured motorist provisions of the Country Mutual policy applied.

Country Mutual answered, alleging two affirmative defenses. The first was that the Kerouacs' suit was time-barred, given the two-year limitation period for suits or claims that was set forth in the insurance contract. The second defense was that the vehicle was not an "uninsured vehicle" under the uninsured motorist provisions of the policy, which provisions stated:

"`Uninsured Vehicle' means:

(1) a vehicle with respect to ownership, maintenance or use of which there is no bodily injury liability bond or bodily injury liability insurance policy applicable at the time of the accident with respect to any person or organization legally responsible for the use of such vehicle, * * *."

Another defense asserted by Country Mutual in the trial court was that section 143a of the Illinois Insurance Code (Ill. Rev. Stat. 1979, ch. 73, par. 755a) violated the Illinois constitutional ban against special legislation (Ill. Const. 1970, art. IV, § 13) and the constitutional guarantee of equal protection (Ill. Const. 1970, art. I, § 2). Section 143a requires that all auto liability insurance policies renewed, delivered or issued in Illinois contain provisions for uninsured motorist liability coverage with specified limits. Country Mutual's counterclaim in the suit requested a declaratory judgment on the affirmative defenses raised.

In 1977, the trial court issued a memorandum order concluding that the two-year limitations period specified in the policy was void as against public policy, insofar as it applied to suit by the minor plaintiff, Dale Kerouac. Then, in 1981, the court entered its order in the declaratory judgment action, finding that neither the liability provisions nor the uninsured motorist provisions of the Country Mutual policy applied to or protected Dale Kerouac, with respect to the injuries arising out of the 1969 auto accident. The court concluded that Country Mutual was not required to arbitrate the claim or pay any claim arising out of the accident. Also entered the day of the final judgment, was an order of voluntary dismissal in the action brought by Dale and Vernon against Thomas. Dale Kerouac, by his father, appeals from the court's declaratory judgment against Dale and in favor of Country Mutual.

The first issue raised is whether coverage was provided to plaintiff Dale Kerouac under the uninsured motorist provisions of the Country Mutual policy issued to Vernon Kerouac. The uninsured motorist provisions of the policy provided that the company would pay all sums which the insured would be legally entitled to recover as damages from the owner or operator of an uninsured automobile because of bodily injury sustained by the insured, caused by accident and arising out of the ownership, maintenance, or use of such uninsured automobile. An "uninsured automobile" was defined in the policy as an automobile in which there is "no bodily injury bond or bodily injury liability insurance policy applicable * * * for the use of such vehicle." An express provision in the policy prescribed that the term "uninsured vehicle" shall not include a "vehicle owned by the named insured or by any resident of his household."

• 1 The plaintiffs argue that since the basic liability provisions excluded their recovery for injuries as against Thomas Kerouac, by reason of his relation to the policy owner, therefore, Thomas Kerouac was an uninsured motorist, as to them, and thereby the uninsured motorist provisions of the Country Mutual policy issued to Vernon Kerouac were brought into effect. They argue that the policy's express exclusion of the insured automobile from coverage under the uninsured motorist provisions is too restrictive and violates the public policy of the State of Illinois as expressed in the Insurance Code. The controlling precedent on these issues is found in the supreme court decision in Barnes v. Powell (1971), 49 Ill.2d 449, 275 N.E.2d 377.

In the Barnes v. Powell case, plaintiff Agatha Barnes was a co-owner of the automobile in which she was riding. The auto was being driven by another with her permission, when the accident occurred. Under the exclusionary provisions of the policy, plaintiff Barnes was not entitled to recover under the liability portion of the policy. So, Barnes sued the driver of her auto, alleging insurance coverage under the uninsured motorist provisions of her insurance contract. Her insurer filed an intervening complaint for declaratory judgment, to have it declared that her policy did not cover the accident, arguing that the alleged tortfeasor-driver was not an "uninsured motorist" with the uninsured motorist provisions of her insurance policy. The policy was basically similar to the policy before us, in its pertinent parts. It too specifically excluded from uninsured motorist coverage the owner's insured automobile. In reaching its decision that coverage was provided, the Illinois Supreme Court examined the applicable legislation requiring insurers to include uninsured motorist coverage in auto liability policies in Illinois (Ill. Rev. Stat. 1969, ch. 73, par. 755a), and it stated:

"In Ullman v. Wolverine Insurance Co., 48 Ill.2d 1, this court stated: `It would appear that the purpose of the provision in our Insurance Code requiring that every automobile liability policy shall contain uninsured motorist vehicle coverage in an amount not less than the limits described in the Financial Responsibility Law (Ill. Rev. Stat. 1969, ch. 95 1/2, par. 7A-101 et seq.) was intended to place the policyholder in substantially the same position he would occupy, so far as his being injured or killed is concerned, if the wrongful driver had had the minimum liability insurance required by the Financial Responsibility Act. * * *' (48 Ill.2d at 4.) And in Putnam v. New Amsterdam Casualty Co., 48 Ill.2d 71, this court commented: `* * * we believe the reasonable purpose of the statutory uninsured motorist provisions is to assure that compensation will be available to ...


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