APPEAL from the Circuit Court of Cook County; the Hon. JAMES
C. MURRAY, Judge, presiding.
JUSTICE RIZZI DELIVERED THE OPINION OF THE COURT:
Rehearing denied July 6, 1982.
Plaintiff, United States Fidelity & Guaranty Company, brought a declaratory judgment action against defendants to determine whether it owes a defense and coverage under an insurance policy it issued to defendant Happyland Day Care Center. The trial court granted USF&G's motion for summary judgment, ruling that there is no coverage under the policy. We reverse and remand.
The underlying complaint alleges a personal injury action brought on behalf of Corneshia Barron, a four-year-old minor, against Laura B. Hargis, individually and d/b/a Happyland Day Care Center, and Patricia Peterson. Hargis was the owner and operator of the Happyland Day Care Center, which Barron attended. Peterson was an employee of Happyland. On September 30, 1975, Peterson transported some children who attended Happyland to a dance class in an automobile owned by Happyland. Barron was injured when she "fell from, was thrown from, or otherwise exited" the automobile.
In count I of Barron's complaint, it is alleged that defendants were negligent in operating the day care center; in failing to provide sufficient personnel to adequately care for the children; in failing to retain sufficient control and discipline over the children; and in failing to provide adequate supervision for the children. In count II of the complaint, it is alleged that defendants negligently operated the automobile; failed to provide sufficient personnel; failed to retain sufficient control and discipline over the children; violated the Municipal Code of Chicago in that the automobile was not equipped with safety devices which would make it impossible for a passenger to open the vehicle from the inside; failed to operate the automobile properly and with sufficient regard for the care and safety of its passengers; and failed to provide adequate safety devices to prevent injury to plaintiff.
On the date of the occurrence, an insurance policy issued by State Farm Mutual Insurance Company on the subject automobile was in effect. State Farm tendered the defense of count I to USF&G, which had issued a special multi-peril insurance policy to Happyland Day Care Center. USF&G assumed the defense of count I under a reservation of rights.
USF&G then brought this declaratory judgment action, seeking a declaration that there is no coverage because of an exclusion in the policy. The policy provides:
"The Company will 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 and arising out of the ownership, maintenance or use of the insured premises and all operations necessary or incidental to the business of the named insured conducted at or from the insured premises."
The exclusion on which USF&G relies states:
"This insurance does not apply
(b) to bodily injury or property damage arising out of the ownership, maintenance, operation, use, loading or unloading of
(1) any automobile or aircraft owned or operated by or rented or loaned to any insured, or
(2) any other automobile or aircraft operated by any person in the course of his employment by any insured."
Defendants argue that USF&G has a duty to defend since the underlying complaint includes allegations which are not related to the operation or use of the automobile, such as negligent operation of the day care center and negligent supervision of the children. They contend that these allegations are within the coverage of the policy and that coverage should not be excluded merely because an automobile was the site of the occurrence. USF&G, on the other hand, argues that regardless of the allegations of negligence or proximate cause, there is no coverage for injuries ...