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06/03/94 BADGER MUTUAL INSURANCE COMPANY v. JERRY

June 3, 1994

BADGER MUTUAL INSURANCE COMPANY, PLAINTIFF-APPELLEE,
v.
JERRY OSTRY, DEFENDANT-APPELLANT, AND RICHARD KRAEMER, DEFENDANT.



Appeal from the Circuit Court of Cook County. Honorable Edwin M. Berman, Judge Presiding.

Released for Publication August 2, 1994. Petition for Leave to Appeal Denied October 6, 1994.

McNULTY, Gordon, Cousins

The opinion of the court was delivered by: Mcnulty

JUSTICE McNULTY delivered the opinion of the court:

This declaratory judgment action was brought by plaintiff Badger Mutual Insurance Company (Badger), in order to determine its obligation under its homeowner policy issued to the parents of defendant Richard Kraemer (Kraemer). Badger sought a declaration that it had no duty to defend or indemnify Kraemer in the action brought by Jerry Ostry, after Ostry sustained injuries while a passenger in a boat driven by Kraemer. Badger claimed that Kraemer was engaged in a business pursuit at the time of Ostry's injuries, and was therefore not covered by the policy which had a "business pursuit" exclusion clause. In granting summary judgment in Badger's favor and denying Ostry's cross-motion for summary judgment, the trial court held that Badger had no duty to defend or indemnify in the underlying action since Kraemer had been engaged in a business pursuit at the time of the accident. Ostry appeals and we affirm.

The relevant facts as set forth in the deposition transcripts attached to the summary judgment motion are as follows. Steven Miller testified that in 1989, he was a service manager for Grand Sport, and that his father was the president of that company. Grand Sport is in the business of selling and servicing fiberglass inboard boats. Kraemer was a mechanic under Miller's supervision, and was required to punch a timeclock.

It was not Grand Sport's practice to deliver boats, but Kraemer had informed Miller that if Grand Sport would not deliver a boat, then Kraemer would do so on his own time. When Kraemer delivered a boat on the side, he was compensated directly by the boat owner.

Miller stated that Ostry brought his boat to Grand Sport for service on May 1, 1989. After the work was completed in about three weeks, Miller informed Ostry that it was not Grand Sport's normal practice to deliver boats, but that Kraemer had delivered boats on his own time. Miller stated that Kraemer delivered the boat to Ostry using Kraemer's own truck, towing Ostry's trailer.

Ostry's boat was returned to Grand Sport on June 12, 1989, to have an engine coupler installed. On June 24, 1989, Ostry called and asked Grand Sport to deliver the boat to him. Miller responded that they could not provide the delivery service. Ostry then asked if Kraemer could deliver the boat. Miller informed Ostry that he would leave a note for Kraemer on the chalk board, but that he would not give Ostry Kraemer's home telephone number. Miller left a note, containing Ostry's telephone number, on the chalkboard.

Miller testified that the mechanics had keys to the Grand Sport building and with permission from Miller, his father or his uncle, the mechanics could enter the shop when it was closed in order to get their tools. Kraemer had, at times, done repairs and maintenance on his own boat in the shop, but Miller did not know if Kraemer ever came in on a Sunday to work on the boat. Miller claimed that Kraemer did not have Miller's authorization to enter the padlocked area where Ostry's boat was stored even though he did have a key to the area. Initially, Miller stated that he would have let Kraemer enter the area to deliver Ostry's boat on Sunday if he knew the bill had been paid, but later stated that he would not give Kraemer permission to enter the shop on Sunday even if the bill had been paid. Miller stated that when Kraemer entered the shop on Sunday, June 25, 1989, and took Ostry's boat, Kraemer did not ask for Miller's permission to enter the shop and the entry was unauthorized.

Kraemer stated during his deposition that he had worked as a mechanic for Grand Sport for approximately two years and earned between $10 and $11 an hour. Sometime in May 1989, Ostry brought his boat in for repairs but Kraemer did not work on the boat. Kraemer did not know when Ostry picked up his boat after it was repaired this first time since Kraemer may have been on vacation at that time. Kraemer stated that he was not sure whether he spoke with Ostry when the boat was returned on June 1, nor did he know why the boat had been returned or when the repairs had been completed. Kraemer stated that the boat was brought back a third time for a faulty drive coupler.

Kraemer stated that Grand Sport "sometimes" delivered boats to their owners after the boats had been repaired. Grand Sport would charge between $50 to $100 to deliver a boat. Kraemer stated thatsomewhere between 10 and 20 occasions, he delivered new boats while on company time, and received no additional compensation for doing so. In addition, Kraemer had on a few occasions entered into side deals where he got paid extra money by delivering a boat to an owner. However, Kraemer could only recall one specific delivery that he had made on his own time. Kraemer testified that when he delivers a new boat, he sometimes takes people out on the lake for a demonstration ride to teach them how to work the controls. This is usually done on company time.

According to Kraemer, he had his own key to Grand Sport and had authorization to be there on Sunday, June 25, for the purpose of waxing his own boat. While he was at Grand Sport that morning, Miller called and asked Kraemer if he would do him a favor and take Ostry's boat down to the lake. Kraemer thought it was his option to determine whether he wanted to deliver the boat. When asked if he was doing the delivery for Grand Sport, Kraemer replied "I was, but I wasn't. I wasn't on the clock, I was waxing my boat, and [Miller] asked me if I would do him a favor and deliver the boat."

Kraemer used his own trailer to deliver Ostry's boat. He was told by Miller to take Ostry's boat to Diversey Harbor where Ostry would meet him. It was Kraemer's understanding that Ostry would give Kraemer $75 at Diversey Harbor. Ostry never paid Kraemer the $75. It was Kraemer's understanding that he was going to receive the entire $75 and that no part of it was going to go to Grand Sport and that this was fine with Miller. At first, Kraemer did not remember whether the fee arrangement was mentioned in the conversation with Miller or subsequently while conversing with Ostry, but later recalled that Miller had told him that Ostry would pay him $75. Kraemer answered affirmatively when asked if he had considered this delivery an opportunity to make some extra money. When asked if he would have refused to drive the boat down to the lake if he had known that he would not get paid, he responded, "I ...


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