Appeal from the Circuit Court of Peoria County; the Hon.
Charles M. Wilson, Judge, presiding.
JUSTICE STOUDER DELIVERED THE OPINION OF THE COURT:
Plaintiff Occidental Fire and Casualty Company of North Carolina filed a complaint for declaratory judgment against defendants Duane M. Padgett, Ace Doran Hauling and Rigging Company, Guarantee Insurance Company, and others not party to this appeal, seeking a declaration that its insurance coverage did not extend to the situation at bar. After a hearing on the merits, the circuit court of Peoria County entered summary judgment in plaintiff's favor.
Padgett is an independent trucker who owns his own equipment. On March 4, 1977, he entered into a "permanent lease" with Ace Doran. Contrasted in the industry with a "trip lease," the arrangement continues at least on a monthly basis until it is terminated. Before the day of the accident from which the coverage question arose, Padgett had picked up a load to Ohio pursuant to his "permanent lease" and was notified by an Ace Doran terminal manager that the company had a load available for him in Galesburg. Padgett proceeded to Indiana, where he picked up a load for National Trailer Convey under a "trip lease," and continued on to Galesburg.
After arriving at the Ace Doran terminal in Galesburg, Padgett waited from morning until closing for his trailer to be loaded. The terminal manager finally told him it would not be possible to load the trailer that day, and that he should go home. Padgett left his trailer at the terminal to be loaded and proceeded home on Interstate 74. Ace Doran's name and Interstate Commerce Commission (hereafter ICC) permit number were on his tractor and were not concealed. While traveling through Peoria County, he struck a vehicle, giving rise to the underlying tort action.
• 1-3 The sole issue we need today decide is whether Padgett was "in the business" of Ace Doran. This issue arises from the following language contained in plaintiff's policy:
"It is agreed that such insurance as it is afforded by the policy * * * does not apply:
(b) while the automobile or any trailer attached thereto is used to carry property in any business;
(c) while the automobile is being used in the business of any person or organization to whom the automobile is rented."
Three decisions of our supreme court guide our determination.
In Schedler v. Rowley Interstate Transportation Co. (1977), 68 Ill.2d 7, 368 N.E.2d 1287, the tractor in question was leased to the defendant, a carrier engaged in interstate commerce under a certificate issued by the ICC. The lessor had transported a load for the defendant from Iowa to Connecticut, carried a load for another carrier from Connecticut to Chicago, and driven the tractor and empty trailer to his home in Savanna. The next day he drove to Iowa to drop off the trailer at the defendant's terminal. On his way home in the tractor, an accident occurred. After discussing other provisions of part II of the Interstate Commerce Act (49 U.S.C. § 301 et seq. (1976)), the court concluded:
"The rules also provide for identification of the leased equipment as that of the carrier-lessee (1057.4(d)) and that `The authorized carrier operating equipment under this part shall remove any legend, showing it as the operating carrier, displayed on such equipment, and shall remove any removable device showing it as the operating carrier, before relinquishing possession of the equipment' (1057.4(d)(1)). In American Trucking Association, Inc. v. United States, 344 U.S. 298, 97 L.Ed. 337, 73 S.Ct. 307, in which the rules and regulations were held valid, the Supreme Court reviewed the abuses which the Act and accompanying regulations were designed to prevent, among which was the difficulty of `fixing financial responsibility for * * * injuries to * * * members of the public.' Transamerican Freight Lines, Inc. v. Brada Miller Freight Systems, Inc., 423 U.S. 28, 37, 46 L.Ed.2d 169, 177, 96 S.Ct. 229, 234.
* * * We are of the opinion that it was the purpose of the regulatory scheme that the carrier-lessee be vicariously responsible to the public for the negligent operation of the leased vehicle without regard to whether at the time in question it was being used in the business of the lessee. (See Cosmopolitan Mutual Insurance Co. v. White (D. Del. 1972), 336 F. Supp. 92.) To hold otherwise would permit injecting into each case the issues of agency, scope of employment and purpose of the movement out of which the occurrence arose, thus defeating the declared purpose of the regulations to eliminate the problem of fixing responsibility for damages and injuries to members of the public. Absent proof of compliance with sections 1057.4(d) and 1057.4(d)(1), we hold that if Dixon is liable to plaintiff, defendant must be held vicariously liable." Schedler v. Rowley Interstate Transportation Co. (1977), 68 Ill.2d 7, 12-13, 368 N.E.2d 1287, 1289.
In St. Paul Fire & Marine Insurance Co. v. Frankart (1977), 69 Ill.2d 209, 370 N.E.2d 1058, the tractor in question was leased to Wilson Freight Company, again a carrier engaged in interstate commerce under a certificate issued by the ICC. The lessor-defendant had transported a load for Wilson from Pennsylvania to Oklahoma, drove to Wilson's Granite City terminal, where he took his name off an availability list, and departed with an empty trailer for his home in Ohio. As the truck was exiting Interstate 74 in East Peoria, an accident occurred. Plaintiff had issued the defendant an insurance policy which excluded coverage using the exact language of provisions (b) and (c) of the policy at bar. The court discussed these provisions:
"In the case at bar, we find that the disputed insurance policy is ambiguous to the limited extent that it does not define `in the business of' to necessarily be the equivalent of the carrier's liability under ICC regulations. Because the insurance company prepared the policy, such ambiguity will be strictly construed against the insurer. Canadian Radium & Uranium Corp. v. Indemnity Insurance Co. (1952), 411 Ill. ...