requirement is that there is no genuine issue of material fact.
As to materiality the substantive law will identify which facts are
material. Only disputes over facts that might affect the outcome of the
suit under the governing law will properly preclude the entry of summary
judgment. Factual disputes that are irrelevant or unnecessary will not be
As to genuine issue, summary judgment will not lie if the dispute about
a material fact is "genuine," that is, if the evidence is such that a
reasonable jury could return a verdict for the non-moving party. Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202
(1986); Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91
L.Ed.2d 265 (1986); Matsushita Electric Industrial Co. v. Zenith Radio
Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). As stated in
Anderson, "at the summary judgment stage the judge's function is not
himself to weigh the evidence and determine the truth of the matter but
to determine whether there is a genuine issue for trial." Anderson, 477
U.S. at 249, 106 S.Ct. at 2510. When a properly supported motion for
summary judgment is made, the adverse party must set forth specific facts
showing that there is a genuine issue for trial. There is no issue for
trial unless there is sufficient evidence favoring the non-moving party
for a jury to return a verdict for that party. If the evidence is merely
colorable, or is not significantly probative, or is no more than a
scintilla, a summary judgment may be granted.
In its memorandum supporting its motion for summary judgment, the
United States asserts that it is an insured entitled to coverage under
Patricia Dittmer's automobile insurance policy.*fn2 Furthermore, the
United States asserts that the relevant exclusionary clause in the policy
"is void because it is vague and ambiguous as a matter of law, too
comprehensive in scope and violative of public policy." The exclusion at
issue provides, "[w]e do not provide coverage under Section 1 for: . . .
any obligation for which the United States may be held liable under the
Federal Tort Claims Act." Country Mutual contends that this provision is
valid and enforceable.
"Under Illinois law, `[t]he construction of [an] insurance polic[y]
presents [a] question of law to be decided by the court.'" Transamerica
Ins. Co. v. South, 975 F.2d 321, 327 (7th Cir. 1992) (quoting Community
State Bank v. Hartford Ins. Co., 187 Ill. App.3d 110, 134 Ill.Dec. 810,
812, 542 N.E.2d 1317, 1319 (1989)). An exclusionary clause will be
applied to exclude coverage under the insurance policy if "its
applicability [is] clear and free from doubt." Id. If the exclusion is
ambiguous, it "should be construed most favorable to the insured." Id. An
exclusionary clause is ambiguous "if it is subject to more than one
reasonable interpretation." Id. A court, however, "will not create an
ambiguity where none exists; if a provision is clear and unambiguous
there is no need for construction and the provisions will be applied as
written." Id. Furthermore, to "determin[e] whether an ambiguity exists,
the provision in question must be read in its factual context, not in
isolation." Id. The insurer has the burden of showing that a policy does
not apply because the claim falls within an exclusion. Id. However, an
insurer has no duty to defend if "it is clear from the face of the
underlying complaint that the allegations fail to state facts which
bring the case within, or potentially within, the policy's coverage. . . ."
Travelers Ins. Companies v. Penda Corp., 974 F.2d 823, 827 (7th Cir.
1992) (quoting United States Fidelity & Guar. Co. v. Wilkin Insulation
Co., 144 Ill.2d 64,
161 Ill.Dec. 280, 284-85, 578 N.E.2d 926, 930-31 (1991).
The United States asserts that the exclusion is ambiguous as applied to
an employee or to a third party.*fn3 The United States claims that if
the exclusion is ambiguous in any context, it is, as a result, invalid as
to the United States. The United States relies on Ogima v. Rodriguez,
799 F. Supp. 626 (M.D.La. 1992), to support this proposition. The United
States' reliance on this case for such a proposition, however, is without
merit. In Ogima, the exclusion at issue provided, "WHEN COVERAGE DOES NOT
APPLY . . . For damages for which the United States might be liable for
the insured's use of any vehicle." Id. at 629. The court found that this
language "does not identify which insureds it intends to exclude, is
overly comprehensive and of uncertain import." Id. at 630. In Ogima, the
court never stated that if an exclusion is invalid as to one insured it
will be invalid as to all other insureds. The court in Ogima actually
determined that because the clause failed to specifically identify which
insureds were covered, it was, obviously, invalid as to any insured. In
this case, however, the Court finds that the exclusion clearly identifies
the United States as an insured subject to this exclusion.*fn4
Consequently, the United States' contention that Ogima is dispositive of
this case is without merit.
In addition, the Court finds that it may not consider any set of facts
to determine whether Country Mutual has a duty to defend but may only
consider the facts as stated in Plaintiff's Complaint to make this
determination.*fn5 Travelers, 974 F.2d at 827. As a result, the Court
may only consider the facts as alleged within the Complaint to determine
whether the exclusion is ambiguous. In this case, the Complaint indicates
that Plaintiff is only suing the United States for damages under the
Federal Tort Claims Act. [Doc. # 1]. Therefore, the United States'
contention — i.e., an exclusion is invalid because it is ambiguous
in a situation which is not at issue in the case presented, as evidenced
by the complaint — is contrary to Illinois law.
Under the facts of this case, the Court must confine its decision to
whether the exclusion in Dittmer's policy is ambiguous
as applied to the United States. The Court finds that the language
of the exclusion is free and clear from doubt in its applicability
to the United States. The plain language of this exclusion explicitly
provides that the United States will be excluded from coverage under
Dittmer's policy if it is sued under the FTCA. Consequently, the Court
finds that the only reasonable interpretation of this exclusion, as
applied to the United States, is that the United States was intended
to be excluded from coverage on any claims brought against the United
States under the FTCA.*fn6 Because the Court finds that the
exclusion is clear and unambiguous, there is no need for construction.
Therefore, the exclusion will be applied as written to exclude the
United States, as an insured, from coverage on a claim brought under
Next, the United States asserts that the exclusion is invalid because
it is overly comprehensive and violates the reasonable expectations of
coverage under the policy. The United States relies on Standard Mutual
Ins. Co. v. General Casualty Companies, 171 Ill. App.3d 758, 121
Ill.Dec. 658, 525 N.E.2d 965 (1988). In Standard Mutual, the defendant
provided insurance under a car rental agreement. The rental agreement
provided "that if a customer does not purchase insurance, he assumes full
responsibility for liability and collision damage." Standard Mutual, 121
Ill.Dec. at 661, 525 N.E.2d at 968. On the reverse side of this
agreement, however, the defendant set forth in small print conditions
precedent to coverage.*fn7 Id. These conditions, the court found,
effectively "denied coverage in those situations most likely to occur."
Standard Mutual, 121 Ill.Dec. at 662, 525 N.E.2d at 969. The court held
that "because of the contradiction between [the renter's] expectation of
coverage and the actual coverage, an ambiguity was created which . . .
must be construed against the insurer." Id. In other words, the exclusion
in Standard Mutual was so broad that the purposes of the policy and the
reasonable expectations of the insured were frustrated.
This case is distinguishable from Standard Mutual. The exclusion at
issue in this case is not overly comprehensive. Under this exclusion, the
United States is only excluded from coverage as an insured in the context
of a claim under the FTCA. Therefore, the concerns in Standard Mutual are
not present in this case. Furthermore, the Court notes that under
Illinois law "insurance contracts [are to] be construed and enforced to
accord with the objectively reasonable expectations of the insured."
Posing v. Merit Ins. Co., 258 Ill. App.3d 827, 196 Ill.Dec. 335, 339,
629 N.E.2d 1179, 1183 (1994). The Court finds that the United States or
the employee, as the insureds, could not, on an objective basis,
reasonably expect coverage under the policy in the context of a claim
brought against the United States under the FTCA.
In addition, the United States asserts that the exclusion violates
public policy because Illinois law requires all drivers to have liability
insurance. S.H.A. 625 ILCS 5/7-601. The Court finds this contention to be
without merit because any relief a plaintiff is entitled to under the
FTCA satisfies the purpose of the Illinois law. But see Reeves v.
Miller, 418 So.2d 1050 (Fla.App.Ct. 1982). Furthermore, if the United
States' employee was not negligent, the plaintiff would not be entitled
to recover under the FTCA or under
Illinois law.*fn8 In addition, because the United States
is the insured at issue under these facts, the possibility that an
employee would be without coverage under this policy, because the FTCA
would not apply, does not establish that the exclusion violates public
Finally, the United States asserts that Country Mutual should have used
an exclusion which other courts have stated are clear and unambiguous.
See Ogima, 799 F. Supp. at 630-31; Southern Farm Bureau Casualty Ins.
Co. v. United States, 395 F.2d 176, 177 n. 2, 180 (8th Cir. 1968);
Government Employees Ins. Co. v. United States, 400 F.2d 172, 175 n. 11
(10th Cir. 1968). The Court finds this argument to be irrelevant because
the exclusion, in this case, clearly precludes the United States from
coverage under the policy. Because the exclusion is effective, Country
Mutual has no duty to defend or indemnify the United States on the facts
of this case.
IT IS THEREFORE ORDERED that the United States' Motion for Summary
Judgment [Doc. # 15] is DENIED, and Country Mutual's Motion for Summary
Judgment [Doc. # 21] is GRANTED. The Court finds, pursuant to Rule 54(b)
of the Federal Rules of Civil Procedure, that there is no just reason for
delay and enters a final judgment on behalf of Third-Party Defendant,
Country Mutual. The case is terminated as to the third-party claim. The
parties are responsible for their own costs.