Appeal from Circuit Court of Champaign County No. 98CH73 Honorable John R. DeLaMar, Judge Presiding.
The opinion of the court was delivered by: Presiding Justice Knecht
In February 1998, CarolAnne Hager sued Linda C. Saylor for personal injuries resulting from an two-car accident. At the time of the accident, Saylor was test-driving a vehicle owned by Sullivan Chevrolet Company (Sullivan), an automobile dealership. Pekin Insurance Company (Pekin) insured Sullivan's vehicles, while State Farm Mutual Automobile Insurance Company (State Farm) provided Saylor's automobile insurance. In May 1998, Pekin filed a declaratory judgment action against Saylor, Hager, and State Farm. Pekin alleged it was not primarily obligated to defend Saylor because language in Sullivan's policy excluded her from coverage. Both State Farm and Pekin filed cross-motions for summary judgment. The trial court granted State Farm's motion, concluding Pekin was primarily obligated to defend Saylor. We affirm.
After Hager sued Saylor, State Farm tendered her defense to Pekin. Pekin accepted the defense but reserved the right to contest its obligation to provide such defense. In May 1998, Pekin filed this declaratory judgment action, arguing it was not primarily obligated to defend Saylor and seeking judgment from State Farm for the costs of Saylor's defense.
In June 1998, Pekin filed a motion for summary judgment. Pekin's motion relied on the following language from Sullivan's garage liability insurance policy:
"We will pay all sums an 'insured' legally must pay as damages because of 'bodily injury' or 'property damage' to which this insurance applies caused by an 'accident' and resulting from 'garage operations.'
We have the right and duty to defend any 'suit' asking for these damages. However, we have no duty to defend 'suits' for 'bodily injury' or 'property damage' not covered by this [c]overage [f]orm."
Sullivan's policy defined "insured" as:
"(2) Anyone *** using with your permission a covered 'auto' you own, hire or borrow except:
(d) Your customers, if your business isshown in the [d]eclarations as an 'auto' dealership. However, if acustomer of yours:
(i) Has no other available insurance (whether primary, excessor contingent), they are an'insured' but only up to the compulsory or financial responsibility law limits wherethe covered 'auto' is principally garaged.
(ii) Has other available insurance(whether primary, excess or contingent) less than the compulsory or financial responsibility law limits where thecovered 'auto' is principallygaraged, they are an 'insured'only for the amount by whichthe compulsory or financial responsibility law limits exceed the limit of their otherinsurance."
Pekin argued Saylor's automobile insurance satisfied the minimum requirements imposed by Illinois statute (see 625 ILCS 5/7-203 (West 1996)); thus, Saylor was excluded from coverage, thereby making State Farm primarily obligated to defend her.
State Farm also moved for summary judgment in June 1998. State Farm argued Pekin was primarily obligated to defend Saylor regardless of the language contained in Sullivan's policy. In reaching this Conclusion, State Farm relied on the recent supreme court decision in State Farm Mutual Automobile Insurance Co. v. Universal Underwriters Group, 182 Ill. 2d 240, 244, 695 N.E.2d 848, 850 (1998). In ...