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State Farm Fire & Casualty Co. v. Moore

OPINION FILED DECEMBER 28, 1981.

STATE FARM FIRE & CASUALTY COMPANY, PLAINTIFF-APPELLEE,

v.

ARTHUR R. MOORE ET AL., DEFENDANTS-APPELLANTS.



APPEAL from the Circuit Court of Kane County; the Hon. JOHN A. KRAUSE, Judge, presiding.

JUSTICE LINDBERG DELIVERED THE OPINION OF THE COURT:

This action was brought by State Farm Fire and Casualty Company in the Circuit Court of Kane County seeking a declaration that a homeowner's policy of insurance did not extend coverage to an accident suffered by minor Marcus Hott at the home of Arthur and Rebecca Moore. The trial court rendered summary judgment in favor of the insurer and against its insured and the injured child.

On April 8, 1978, Marcus Hott, a minor, was injured while under the care of defendant, Rebecca Moore, pursuant to an agreement with Marcus' parents. Under the terms of this agreement, Moore, who had two children of her own, was paid $25 per week to care for Marcus five days a week, eight hours a day. Marcus was burned when he pulled a pan of boiling water on himself, based upon an agreed statement of facts, while Moore was fixing lunch for herself, one of her children, Marcus and another child.

At the time of the injury, Moore had a homeowner's insurance policy from plaintiff, State Farm Fire & Casualty Company. The policy insured against personal injuries of third parties that Moore was liable for, but provided:

"This policy does not apply * * * (d) to bodily injury or property damage arising out of business pursuits of any insured except activities therein which are ordinarily incident to nonbusiness pursuits."

State Farm filed a declaratory judgment action asserting that the exclusionary clause precluded coverage for Marcus' injuries. Moore's motion for summary judgment was denied; State Farm's cross-motion for summary judgment was granted.

EXCEPTION TO THE EXCLUSIONARY CLAUSE

Moore's care of Marcus is a business pursuit. Moore does not dispute this point. Moore was licensed by the Illinois Department of Children and Family Services as a child-care facility. She watched the same two children every day, and she was paid $25 per week for each child. She advertised her services. The policy defines a business as a trade, profession, or occupation and the use of residence premises for such purposes. A business pursuit is a continuous or regular activity, done for the purpose of earning a profit. (American Family Mutual Insurance Co. v. Bentley (1976), 170 Ind. App. 321, 352 N.E.2d 860; Annot., 48 A.L.R.3d 1096, 1099 (1973).) This is true even of part-time or supplemental income activities. (Krings v. Safeco Insurance Co. (1981), 6 Kan. App. 2d 391, 628 P.2d 1071.) Baby-sitting conducted in the home for compensation on a continuous basis, as opposed to the temporary or casual arrangement, is a business pursuit. (Annot., 48 A.L.R.3d 1096, 1099 (1973); Peterson v. Highlands Insurance Co. (Fla. App. 1976), 328 So.2d 49; Stanley v. American Fire & Casualty Co. (Ala. 1978), 361 So.2d 1030; Gulf Insurance Co. v. Tilley (N.D. Ind. 1967), 280 F. Supp. 60, aff'd (7th Cir. 1968), 393 F.2d 119.) Baby-sitting for pin-money by one who is not licensed, does not advertise, and is not always compensated is not a business. Nationwide Mutual Fire Insurance Co. v. Collins (1975), 136 Ga. App. 671, 222 S.E.2d 828.

• 1 The primary issue is whether, despite the business pursuit, the injury resulted from an activity ordinarily incident to nonbusiness pursuits. If so, this accident is covered under the exception to the exclusion. The accident occurred when Marcus pulled a pan of boiling water onto himself. At the time, Moore was boiling water for soup, tea, eggs and jello to be used for lunch for herself, her own child and the two children for whom she babysat. The soup and tea were for Moore and the children, the eggs and jello were for the children. She would have prepared lunch for herself and her child even if Marcus had not been there. Any leftovers would have been used by the Moore family. As part of her baby-sitting duties and included in her compensation, she provided lunch every day. Generally, she did not provide other meals. Marcus did not require any special diet. While Moore watched Marcus, she simultaneously cared for her own children.

Activities ordinarily incident to non-business pursuits are activities not related to or associated with the insured's business pursuits. (Annot., 48 A.L.R.3d 1096, 1099, 1107 (1973); North River Insurance Co. v. Poos (Mo. App. 1977), 553 S.W.2d 500.) Activities resulting from baby-sitting frequently fall within this exception. (Annot., 48 A.L.R.3d 1096, 1099-1100 (1973).) As maintenance of home heating for the insured's family is an activity ordinarily incident to nonbusiness pursuits, the exception applies where a child is injured from touching a furnace grill in the insured's home. (Nationwide Mutual Fire Insurance Company v. Collins (1975), 136 Ga. App. 671, 222 S.E.2d 828.) In Crane v. State Farm Fire & Casualty Co. (1971), 5 Cal.3d 112, 485 P.2d 1129, 95 Cal.Rptr. 513, a child for whom the insured was baby-sitting was burned in the insured's home while the insured was preparing lunch for herself, her children and the injured child. The way the injury occurred was not shown, but the exception applied, as the insured's activities were incident to her nonbusiness regimen of maintaining a household and supervising her own children. (5 Cal.3d 112, 117, 485 P.2d 1129, 1131, 95 Cal.Rptr. 513, 515.) In the Crane court's opinion, the exception would apply even if the injury occurred due to the insured's negligent supervision of the child. (5 Cal.3d 112, 116, 485 P.2d 1129, 1131, 95 Cal.Rptr. 513, 515.) Injury to a child who pulled a pot of hot coffee onto herself was covered by the policy where the coffee was intended for the insured and an adult guest, as the preparation of coffee is an activity not ordinarily associated with a babysitter's functions. (Gulf Insurance Co. v. Tilley (N.D. Ind. 1967), 280 F. Supp. 60, aff'd (7th Cir. 1968), 393 F.2d 119.) In Country Mutual Insurance Co. v. Watson (1971), 1 Ill. App.3d 667, 274 N.E.2d 136, the insured cared for children temporarily placed in his home by the Illinois Department of Children and Family Services. One child was injured while assisting the insured in feeding his cattle. The exception applied, as the feeding of cattle was ordinarily incident to the insured's nonbusiness pursuit of farming. 1 Ill. App.3d 667, 669, 274 N.E.2d 136, 138.

In other cases, injuries arising out of the insured's baby-sitting are excluded from coverage. The exception does not apply to a child drowned in the insured's pool while the insured was feeding her baby, as feeding and caring for children is associated with the insured's baby-sitting. (Peterson v. Highlands Insurance Co. (Fla. App. 1976), 328 So.2d 49, 50.) Injuries to a child resulting from falling into the insured's fireplace while the insured prepared lunch are not covered. (Stanley v. American Fire & Casualty Co. (Ala. 1978), 361 So.2d 1030.) Similarly, injuries of a child scalded while being bathed by the insured babysitter are not covered as the activity is not ordinarily incident to nonbusiness pursuits. See American Family Insurance Co. v. Dewald (8th Cir. 1979), 597 F.2d 1148.

To determine if a specific activity falls within the exception, the courts> look to several factors. If an activity is not done for the purpose of expediting the insured's business or in the course of the insured's business duties, such as a prank on business property or while at work, it is within the exception. (See State Farm Fire & Casualty Co. v. MacDonald (1967), 87 Ill. App.2d 15, 230 N.E.2d 513.) The fact that the injury occurred on business premises is not conclusive; the exception applies where the activity is not incident to a business purpose. (Reis v. Aetna Casualty & Surety Co. (1978), 69 Ill. App.3d 777, 387 N.E.2d 700; Michigan Mutual Liability Co. v. Ferguson (1968), 15 Mich. App. 298, 166 N.W.2d 525 (exception applied to the insured's negligence in throwing a shovel handle off the roof of his business).) Some courts> apply the exclusion to all the insured's activities while at work. (Maryland Casualty Co. v. Farmers Alliance Mutual Insurance Co. (Okla. App. 1977), 566 P.2d 168 (damage from explosion caused by the insured lighting a cigarette at a job site was excluded).) However, only injuries arising from activities in the course of the insured's business duties should be excluded. (69 Ill. App.3d 777, 387 N.E.2d 700; see Reliance Insurance Co. v. Fisher (1974), 164 Mont. 278, 521 P.2d 193 (no coverage for a teacher who hit another teacher at school, in a fight arising from the insured teacher's disciplining of a student).) Where the insured has a dual purpose, one business and one nonbusiness, the exception may not apply. (State Farm Fire & Casualty Co. v. Stinnett (1979), 71 Ill. App.3d 217, 389 N.E.2d 668.) The appropriate inquiry is not whether the insured was engaged in a business pursuit at the time of the accident, but whether the particular activity was nevertheless one ordinarily incident to nonbusiness pursuits. (New Jersey Property Liability Guaranty Association v. Brown (1980), 174 N.J. Super. 629, 417 A.2d 117.) The policy covers acts, which by their nature, are not associated with the insured's business pursuits, but which are causally related to the business activities. Gulf Insurance Co. v. Tilley (N.D. Ind. 1967), 280 F. Supp. 60, aff'd (7th Cir. 1968), 393 F.2d 119.

• 2 A test of "but for the business relationship, the child would not be present in the insured's home," is not appropriate. (280 F. Supp. 60, 65.) Instead, the court must examine the particular activity which proximately caused the injury and determine if that activity is one ordinarily associated with a babysitter's function. (280 F. Supp. 60, 65.) Crane v. State Farm Fire & Casualty Co. (1971), 5 Cal.3d 112, 485 P.2d 1129, 95 Cal.Rptr. 513, views almost any injury due to a babysitter's negligent supervision of a child as potentially within the exception. However, the better view is to examine the activity itself. Child care for compensation is not ordinarily incident to the conduct of a household, and contemplates the exercise of due care to protect the child from household activities and conditions. (Stanley v. American Fire & Casualty Co. (Ala. 1978), 361 So.2d 1030.) Injuries resulting from failure to properly supervise a child the insured is paid to care for therefore are not covered by the policy. 361 So.2d 1030.

• 3 Thus we must consider what activity caused Marcus' injury. Stanley held that a child's injury from falling in the fireplace while the insured was preparing lunch was due to the insured's negligent supervision of the child, not the insured's activity in preparing lunch. (361 So.2d 1030, 1033.) Marcus was burned by a pan of hot water which the insured was using to prepare lunch for herself, her child, and the two children for whom she sat. She would have prepared lunch regardless of Marcus' presence. The baby-sitting agreement included lunch for Marcus. Marcus apparently was injured as the result of Moore's activity in preparing lunch. Generally, preparation of lunch is ordinarily incident to a nonbusiness pursuit. (361 So.2d 1030, 1033.) As the lunch was for Moore and her ...


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