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St. Paul Fire and Marine Insurance Co. v. Guthrie

July 16, 2002


Appeal from the Circuit Court of the 14th Judicial Circuit, Rock Island County, Illinois, No. 00-MR-295 Honorable Alan G. Blackwood, Judge, Presiding.

The opinion of the court was delivered by: Justice Slater

Plaintiff St. Paul Fire and Marine Insurance Company filed a declaratory judgment action to determine whether defendant Adam Guthrie is insured under an automobile liability policy issued by plaintiff to Guthrie's parents. The trial court found that Guthrie was covered under the policy and it entered summary judgment in favor of Guthrie and the other defendants, Quentin (also referred to in the record as "Quinlan") DeMay and Rebecca Vershaw. We affirm.


Defendant DeMay rented a car from Enterprise car rental in Moline, Illinois, on December 27, 1999. Defendant Vershaw was listed as an additional driver on the rental agreement, which provided that other drivers were not permitted without Enterprise's approval. The defendants intended to use the rental car to travel to Florida. On December 30, 1999, an accident occurred during the trip in which Vershaw and DeMay were allegedly injured. Vershaw filed a claim with plaintiff, asserting that Guthrie had been driving the rental car at the time of the accident. After plaintiff filed its motion for declaratory judgment, Liberty Mutual Fire Insurance Company (Liberty) was given leave to intervene. Liberty insured DeMay's parents, providing potential uninsured motorist coverage to DeMay if Guthrie was found to be uninsured.

In its complaint for declaratory judgment, plaintiff acknowledged that the insurance policy issued to Guthrie's parents provided coverage for "any family member," which included Adam Guthrie. Plaintiff claimed, however, that the following exclusion contained in the policy negated any potential coverage:


A. We do not provide Bodily Injury Liability or Property Damage Liability Coverage for any person:

8. using or occupying your covered auto without your permission or using or occupying any vehicle other than your covered auto without the permission of the owner."

Plaintiff asserted that because Guthrie did not have permission from Enterprise, the owner of the rental car, to drive or "use" the car, no coverage was provided. The defendants argued that the policy exclusion was not applicable because Guthrie had permission from DeMay and Vershaw to operate the vehicle, bringing him within the "initial permission rule" established in Maryland Casualty Co. v. Iowa National Mutual Insurance Co., 54 Ill. 2d 333, 297 N.E.2d 163 (1973). The trial court ruled that the initial permission rule supported a finding of coverage in this case. Accordingly, summary judgment was entered in favor of the defendants.


In construing the language of an insurance policy, the primary objective is to ascertain and give effect to the intent of the parties; the policy must be construed as a whole, taking into account the type of insurance, the nature of the risks involved and the overall purpose fo the contract. Traveler's Insurance Co. v. Eljer Manufacturing, Inc., 197 Ill. 2d 278, 757 N.E.2d 481 (2001). Construction of the provisions of an insurance policy is a question of law subject to de novo review. Traveler's Insurance, 197 Ill. 2d 278, 757 N.E.2d 481.

The plaintiff maintains that the initial permission rule only applies to "owner's coverage," which is insurance for a covered auto of the named insured. The policy at issue here involves "driver's coverage," which extends protection to an insured in the use of other vehicles. The defendants concede that the initial permission rule has, to date, only been applied to owner's coverage, but they contend that the principles underlying the rule apply with equal force to non-owned vehicles, or "driver's coverage." We agree.

The initial permission rule provides that once the named insured of an insurance policy containing an omnibus clause (an omnibus clause extends liability coverage to persons who use the named insured's vehicle with the insured's permission (State Farm Mutual Automobile Insurance Co. v. Universal Underwriters Group, 182 Ill. 2d 240, 695 N.E.2d 848 (1998)) has given permission to another to use the car, any person subsequently given permission to drive the car by that first permittee is covered under the policy. American Country Insurance Co. v. Wilcoxon, 127 Ill. 2d 230, 537 N.E.2d 284 (1989). In other words, "'once the initial permission has been given by the named insured, coverage is fixed, barring theft or the like.'" Maryland Casualty, 54 Ill. 2d at 341, 297 N.E.2d at 167, quoting Odolecki v. Hartford Accident & Indemnity Co., 55 N.J. 542, 550, 264 A.2d 38, 42 (1970). The rule is based on the theory that the insurance policy is as much for the benefit of the public as for the insured, and that it is undesirable to permit litigation concerning the details of the permission and use. Maryland Casualty, 54 Ill. 2d at 342, 297 N.E.2d at 168. The rule applies notwithstanding the first permittee's deviation from the authority given to him by the insured, and also "even where it cannot be established that the initial permittee granted permission to the third person driving the vehicle." Harry W. Kuhn, Inc. v. State Farm Mutual Automobile Insurance Co., 201 Ill. App. 3d 395, 401, 559 N.E.2d 45, 49 (1990).

Application of the initial permission rule results in insurance coverage for a subsequent permittee in the event of an accident. The public policy supporting this rule is ensuring that all drivers are insured against injury to others. We believe that the same public policy ...

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