Appeal from the Circuit Court of Saline County; the Hon. Arlie
O. Boswell, Jr., Judge, presiding.
JUSTICE JONES DELIVERED THE OPINION OF THE COURT:
This appeal is taken from a judgment entered in an action for declaratory judgment brought by the named insured, Saline County Agricultural Association, against the insurer, Great American Insurance Company, and Jerry Risley, who had filed suit several years earlier against the named insured for personal injuries suffered while he was riding as a jockey in a horse race at a fair sponsored by the named insured. On the basis of an exclusion in the policy, the trial court found in favor of the defendant insurer and against the plaintiff and the defendant Jerry Risley. The plaintiff and the defendant Risley present the same two issues for review: (1) whether the exclusion is free and clear from doubt with regard to excluding a horse race from coverage under the policy of insurance and (2) whether the insurer should be estopped to deny coverage to the named insured because of its refusal to defend the named insured in the underlying action by Jerry Risley against the plaintiff association.
In its second amended complaint, the plaintiff association alleged that on July 23, 1974, while the policy was in effect the defendant Risley was injured and that on December 5, 1974, he brought a suit, which is still pending, against the plaintiff association. In the complaint in that suit, which is attached as Exhibit B to the second amended complaint in the instant suit for declaratory judgment, the plaintiff Risley alleged that on July 23, 1974, he was a jockey riding a horse entered in one of the races at the Saline County Fair "staged" by the Saline County Agricultural Association and that in front of the main grand-stand a portion of the railing of the fence on the inside of the track had been cut away and sawhorses had been "interspaced in place of the railing on the inside of the track." The complaint by Risley alleged that during the race his horse had run through an opening in the "improvised fence" and through the centerfield of the track, thereby causing him to be thrown from the horse and dragged on the ground with his foot caught in the stirrup. In the action for declaratory judgment the Association alleged further that it had tendered the defense of the suit by Risley to its insurer and that in a letter to the Association on September 20, 1974, attached to the second amended complaint as Exhibit C, the insurer had denied coverage of the claim because of an exclusion in the policy, attached to the second amended complaint as Exhibit A, which states as follows:
It is agreed that the insurance applies with respect to the operation of any fair out of doors subject to the following additional exclusions:
The insurance does not apply
1. to bodily injury or property damages arising out of
(a) mechanically operated amusement devices owned or operated by the named insured,
(b) automobile or motorcycle racing or stunting,
2. to bodily injury to any person while practicing for or participating in any contest or exhibition of an athletic or sports nature sponsored by the named insured."
According to the insurer in its correspondence with the Association, the applicable paragraph of the exclusion is paragraph two. In the action for declaratory judgment, the Association alleged that the policy did apply under the allegations in the suit brought by Risley against it and that the insurer had a duty to defend and to pay any judgment entered against the Association up to the limits of the policy. The Association alleged that on December 26, 1974, the insurer had returned the summons in the suit by Risley for the reason that the loss was excluded by the second paragraph of the exclusion concerning "Fairs" set forth above. The Association alleged that, by reason of the insurer's failure to defend the suit against it, by Risley, it had incurred and would incur further expenses for legal services and costs for which it should be reimbursed and that the insurer should be estopped to deny coverage under the policy.
The insurer moved, inter alia, that the second amended complaint be dismissed and that judgment be entered in its favor on the pleadings because there was no coverage under the policy as a result of the exclusion. ...