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Protective Insurance Co. v. Coleman

OPINION FILED JUNE 24, 1986.

PROTECTIVE INSURANCE COMPANY, PLAINTIFF-APPELLANT,

v.

EARL COLEMAN, INDIV. AND D/B/A EARL'S AGENCY, ET AL., DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Kane County; the Hon. James Quetsch, Judge, presiding.

JUSTICE HOPF DELIVERED THE OPINION OF THE COURT:

Plaintiff, Protective Insurance Company, filed a complaint for declaratory judgment, requesting the trial court to determine whether an endorsement to an insurance policy issued by plaintiff to defendant Earl Coleman, d/b/a Earl's Agency, prevented coverage to defendant for a claim arising out of an alleged accident involving a truck owned by defendant and a pedestrian, Homer F. Hancock, on October 13, 1981. Defendants Coleman and Hancock filed motions for summary judgment, claiming that the endorsement was unenforceable as a matter of law. Subsequent to a hearing, the trial court granted the motion. Plaintiff filed a motion for reconsideration which was denied.

Plaintiff appeals, contending that the trial court erred in granting the defendants' motions for summary judgment, as genuine issues of material fact existed. Additionally, plaintiff contends that the trial court erred as a matter of law because: (1) the endorsement to Coleman's insurance policy is legal and enforceable; (2) adequate consideration was given for the endorsement; and (3) the insurance policy and endorsement are not in conflict and must be construed together.

Plaintiff, through its agent Anton C. Hrubes, issued an insurance policy effective from February 16, 1981, to November 26, 1981, to defendant Earl Coleman, d/b/a Earl's Agency. Prior to the issuance of the policy, defendant had completed a "Truckmen's Insurance Application," indicating the vehicle to be insured for his cartage business and the type of coverage desired. Additionally, defendant designated one individual, Gerald Smith, as driver of the truck and indicated Smith had 22 years of truck-driving experience.

In a letter dated April 17, 1981, plaintiff's agent, Hrubes, informed defendant's insurance agent, William Afryl, that plaintiff had determined that defendant's 20-year-old son, James Coleman, was also driving the vehicle covered by the policy. Hrubes informed Afryl that James Coleman's age did not meet the plaintiff's underwriting requirements and that, therefore, plaintiff was requiring defendant to accept a policy endorsement expressly excluding coverage to any driver of scheduled vehicles under the age of 21 years. The specific endorsement prepared by Hrubes stated:

"It is hereby agreed and understood by all parties concerned that coverage for the insured and/or any operator under the age of 21 years shall not apply if any driver operating any vehicle scheduled has not achieved his 21st birthday.

All other terms and conditions of this policy remain the same."

In his affidavit, Hrubes stated that on April 17, 1981, he also informed Afryl that unless defendant executed the endorsement, defendant's policy would be cancelled. Afryl's affidavit made no mention of this fact.

On or about May 1, 1981, Afryl received the endorsement and subsequently telephoned defendant, advising defendant that plaintiff would not cover any driver of defendant's commercial vehicle who was under 21 years old, and that plaintiff was requiring defendant to sign an endorsement to that effect. Afryl forwarded the endorsement to defendant on May 11, 1981, and asked defendant to sign and return it. Defendant signed the endorsement on May 15 and returned it to Afryl, who forwarded it to plaintiff's office. On May 21, Hrubes, as plaintiff's authorized representative, executed the endorsement.

On October 13, 1981, Homer Hancock, a pedestrian, was allegedly injured when struck by a truck owned by defendant and operated by Tony G. Spina. On February 25, 1982, Hancock brought an action against Earl Coleman and Tony G. Spina, seeking damages for his injuries. Spina, in answer to Hancock's complaint and in answers to interrogatories, denied any involvement in the accident.

On March 28, 1983, plaintiff, in its complaint for declaratory judgment, contended that defendant's son, James Coleman, was operating the motor vehicle involved in the occurrence alleged in Hancock's complaint, that James Coleman was under the age of 21 at the time of the occurrence, and that, therefore, the endorsement to the insurance policy issued by plaintiff did not afford Earl Coleman any coverage for any claim arising out of the October 13, 1981, occurrence. James Coleman failed to appear and file an answer to plaintiff's complaint; an order of default was entered against him on August 30, 1984. In January 1985, Earl Coleman and Homer Hancock filed motions for summary judgment, claiming that the policy endorsement was invalid and unenforceable.

Defendant Coleman filed his own affidavit and that of William Afryl. Plaintiff filed the affidavits of Anton C. Hrubes and Frank Weaver, a supervising insurance analyst for the Department of Insurance. In his affidavit Weaver opined that, based on his eight-year experience in annually reviewing or supervising reviews of 10,000 to 11,000 insurance-policy forms, including endorsements, to determine if they comply with insurance statutes, department regulations, and official department positions, plaintiff was not required to file its endorsement to be valid. Also submitted to the court was the insurance policy and endorsement in question, Anton Hrubes' April 17, 1981, letter to William Afryl, William Afryl's May 11, 1981, speed letter to Earl Coleman, and plaintiff's memorandum in opposition to the motions for summary judgment.

At a hearing conducted on February 15, 1985, the court heard arguments in support of and in opposition to defendants' motions for summary judgment. The court took the matter under advisement, issuing its written order on February 25, 1985. In that order the court granted defendants' motions for summary judgment, concluding that plaintiff's endorsement was illegal as a matter of law, because plaintiff failed to have it approved by the Director of Insurance before issuing it; that inadequate consideration had been given by plaintiff to defendant when plaintiff issued the endorsement; and that the policy and the endorsement were in conflict and therefore had to be construed strictly against plaintiff, the maker. Additionally, the court held that plaintiff's insurance policy provided coverage for defendant, Earl Coleman, and that plaintiff had a duty to legally defend Coleman in the action brought against him by Homer Hancock.

On March 21, 1985, plaintiff filed a motion for reconsideration, which was subsequently denied. This appeal ensued.

• 1-4 We first consider whether the trial court erred in granting summary judgment. On a summary judgment motion the trial court is to determine the existence or absence of a genuine issue as to any material fact from affidavits, depositions, admissions, exhibits, and pleadings in the case. (William v. Alfred N. Koplin & Co. (1983), 114 Ill. App.3d 482, 485, 448 N.E.2d 1042.) Summary judgment is to be awarded with caution so as not to preempt a right to a trial by jury or the right to fully present a factual basis for a case where a material dispute may exist. (W.H. Lyman Construction Co. v. Village of Gurnee (1985), 131 Ill. App.3d 87, 92, 475 N.E.2d 273.) Although a summary judgment is a drastic remedy, its use is to be encouraged in the proper case (Continental Casualty Co. v. Polk Brothers, Inc. (1983), 120 Ill. App.3d 395, 403, 457 N.E.2d 1271) to avoid the unnecessary expense of trial (Audition Division, Ltd. v. Better Business Bureau of Metropolitan Chicago, Inc. (1983), 120 Ill. App.3d 254, 256, 458 N.E.2d 115). Since the construction of an insurance policy is a matter of law, summary judgment would appear to be an appropriate disposition when such construction is at issue, as in the instant case. Maryland Casualty Co. v. Chicago & North Western Transportation Co. (1984), 126 Ill. App.3d 150, 155, 466 N.E.2d 1091.

Plaintiff contends, however, that summary judgment was inappropriate in the case at bar as a genuine issue of material fact, i.e., who was operating the truck at the time of the accident, existed. Plaintiff claims that defendant's 20-year-old son, James Coleman, was driving the truck; defendant denies this fact. In his complaint, Homer Hancock, the party allegedly injured by defendant's truck, named Tony Spina as the driver involved. However, Spina denied operating the vehicle at the time of the accident. Also, plaintiff contended at the summary ...


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