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03/18/87 Economy Fire & Casualty v. State Farm Mutual

March 18, 1987





505 N.E.2d 1334, 153 Ill. App. 3d 378, 106 Ill. Dec. 543 1987.IL.331

Appeal from the Circuit Court of Winnebago County; the Hon. Alford Penniman, Judge, presiding.


Justice Reinhard delivered the opinion of the court. Dunn and Inglis, JJ., concur.


Plaintiff, Economy Fire & Casualty Company (Economy), instituted this declaratory judgment action naming as defendants: its insured, Kris Bushman; the driver of the insured's vehicle at the time of the occurrence, David A. Barton; the driver of the vehicle involved in the collision with the insured's vehicle, Mildred A. Lewis; and Lewis' insurer, State Farm Mutual Insurance Company (State Farm). State Farm appeals from the granting of Economy's motion for summary judgment on count II, which sought a declaration that Economy was not obligated to defend Barton in a separate action brought against him by Lewis based on an exclusion in the policy issued to Bushman.

Following the filing of the complaint for declaratory judgment, Economy and State Farm each moved for summary judgment. The undisputed facts as set forth in the pleadings and the depositions of Bushman and Barton attached to Economy's motion for summary judgment are briefly summarized as follows. On August 14, 1983, Barton was involved in an automobile collision with Mildred A. Lewis while he was driving a 1973 Pontiac Bonneville automobile. He was alone at the time. Subsequently, Lewis filed suit against Barton, Bushman, and others. This declaratory judgment action was brought by Economy to determine its obligation to defend Barton under a policy of insurance issued to Bushman which described the vehicle owned by Bushman as a 1973 Pontiac Bonneville.

The declaratory judgment was in two counts. Count I essentially alleged that Bushman had fraudulently obtained the policy through material misrepresentations of her driving record and requested the court to declare that Bushman and Barton were not insured thereunder. The trial court denied summary judgment on this count sought by Economy. This count is not relevant to this appeal and will not be further discussed. Count II alleged that the policy issued to Bushman provided liability insurance for her 1973 Pontiac Bonneville automobile and, in pertinent part, defined "covered person" as:

"1. You or any family member for the ownership, maintenance or use of any auto or trailer.

2. Any person using your covered auto."

An exclusion to the coverage provided that Economy did not provide liability coverage "[f]or any person using a vehicle without a reasonable belief that the person is entitled to do so." Economy alleged in count II that, at the time of the accident, Barton had obtained the keys to the vehicle without Bushman's permission and that Barton had taken the vehicle without her permission and without a reasonable belief that he was entitled to do so. Economy sought a declaration that Barton was not insured under the policy because of the aforementioned exclusion.

The depositions of Bushman and Barton reveal that Bushman and Barton had been living together prior to the accident. Barton had owned the Pontiac automobile, but, in the spring of 1983, his license was suspended after a DUI conviction, and he transferred title of the Pontiac to Bushman in July 1983. At about the same time the title was changed, Bushman obtained insurance coverage on the Pontiac from Economy which listed her as the owner. Barton accompanied Bushman to the insurance office and told the agent that he had transferred the title to her and that he would not be driving the car because of his license suspension. The title was transferred to her because the license plates were going to be taken off the car by the State because of his driver's license suspension and DUI conviction and because she, as titleholder, could obtain her own license plates and use the vehicle. Both were aware that Barton could not drive the vehicle and the purpose of transferring title was so Bushman could drive him in the car. Bushman did not have any other automobile and used the car for her own purposes as well as for transporting Barton. Both parties agree that Bushman did not pay Barton for the vehicle and both considered it to still be Barton's. She kept one set of keys for the vehicle, and the other set was in the kitchen drawer, but was never used. Bushman felt that she could not control whether Barton used the vehicle, but that he did not use it because of the suspension of his driver's license.

On the afternoon and evening of August 14, 1983, Bushman and Barton went to the Double K Bar and then to the Club 30, another bar. Bushman drove. Eventually, Barton became intoxicated and the two began arguing. Barton wanted to leave and Bushman was not ready to go. Barton looked through Bushman's purse for the keys. Not finding the keys, he pulled Bushman outside, struck her, and she fell to the ground. He then forcibly took the keys from her pocket. She and other persons told him not to take the car. He took the car without her permission. She didn't want him to take the car because he was angry and his driver's license was suspended. Later, Barton was in an accident with the vehicle owned by Mildred Lewis and insured by State Farm.

State Farm also filed a motion for summary judgment and, pertinent to the issue on appeal, stated that Barton owned the vehicle, that title was placed in Bushman's name merely to obtain license plates, and that Barton was driving the ...

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