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Sears, Roebuck and Co. v. Acceptance Insurance Co.

June 30, 2003

SEARS, ROEBUCK AND COMPANY, A NEW YORK CORPORATION, AND ALFREDO E. JIJON, THIRD-PARTY PLAINTIFFS-APPELLANTS,
v.
ACCEPTANCE INSURANCE COMPANY, TRAVELERS CASUALTY AND SURETY COMPANY, F/K/A AETNA CASUALTY AND SURETY COMPANY, AND ROSA L. KRESIN, THIRD-PARTY DEFENDANTS-APPELLEES (CHARWIL ASSOCIATES L.P., DEFENDANT; ACCEPTANCE INSURANCE COMPANY: COUNTERPLAINTIFF; CHARWIL ASSOCIATES L.P., ACCEPTANCE INSURANCE COMPANY, TRAVELERS CASUALTY AND SURETY COMPANY, F/K/A AETNA CASUALTY AND SURETY COMPANY, AND ROSA L. KRESIN, COUNTERDEFENDANTS).



Appeal from the Circuit Court of Cook County. Honorable Thomas Durkin and Patrick McGann, Judges Presiding.

The opinion of the court was delivered by: Justice Quinn

UNPUBLISHED

Third-party plaintiffs Sears, Roebuck and Company (Sears) and Alfredo Jijon (collectively plaintiffs) appeal the trial court's grant of summary judgment (735 ILCS 5/2-1005 (West 2000)) in favor of third-party defendants Acceptance Insurance Company (Acceptance) and Travelers Casualty and Surety Company (Travelers). This ruling had the effect of denying Sears and Jijon indemnification for a nearly $15.7 million judgment they had entered against them stemming from a June 1, 1996, accident where Rosa Kresin was injured when she was struck by a van driven by Jijon while it was being backed out of a Sears Automotive Center at Charlestowne Mall in St. Charles, Illinois. *fn1 On appeal, plaintiffs contend that the trial court erred in granting summary judgment because it failed to consider the "parking exception" contained in the policy. For the reasons set forth, we affirm the judgment of the trial court.

BACKGROUND

In January 2000, while the Kresin case was on appeal, plaintiffs filed their fourth amended third-party complaint containing five counts. Counts I and II were directed against Charwil Associates, L.P. (Charwil), Sears' landlord, which managed the Charlestowne Mall on behalf of an affiliated entity, Jamesport Associates (Jamesport). According to the terms of a lease between Charwil and Sears, Charwil was required to obtain and maintain liability insurance naming Sears as an insured for the common areas of the mall. In compliance with the lease, Jamesport purchased insurance from Acceptance and Travelers. In count I of their complaint, plaintiffs alleged that Charwil had breached the indemnification clause contained in its lease with Sears based upon Charwil's failure to defend Sears in the Kresin litigation. In count II, plaintiffs alleged breach of contract in that Charwil had failed to obtain and maintain adequate insurance as required by the lease. The counts against Charwil are not at issue in this appeal.

Counts III through V were directed against Acceptance and Travelers. In count III, plaintiffs alleged breach of contract against Acceptance because it had refused to defend Sears in the Kresin lawsuit. In count IV, plaintiffs sought a declaration that Acceptance had a duty to defend and indemnify Sears in the Kresin lawsuit. In count V, plaintiffs sought a declaration that Travelers, as its excess insurance carrier, had a duty to indemnify Sears. In response, Acceptance filed a counterclaim wherein it sought a declaration that it did not have a duty to defend any party involved in the Kresin lawsuit.

Acceptance subsequently filed a motion for summary judgment, wherein it asserted that it did not have a duty to defend or indemnify Sears. Acceptance argued that the language contained in its policy with Sears did not require it to defend Sears. Acceptance further argued that because the accident causing Kresin's injuries fell within the "automobile exclusion" of the policy, it had no duty to defend or indemnify.

Travelers also moved for summary judgment. In its motion, Travelers adopted Acceptance's argument that indemnification was barred based upon the automobile exclusion. Travelers argued that because it was an excess insurer, it had no duty to indemnify because Acceptance was not obligated to defend or indemnify.

In a written order dated February 16, 2001, the trial court found that Acceptance had a duty to defend based upon the language contained in the policy's "Endorsements." However, after reviewing the language contained in the automobile exclusion and the allegations contained in Kresin's complaint, the trial court ruled that Acceptance was justified in its refusal to defend Sears in the Kresin lawsuit. This conclusion was based upon its determination that the primary business of the automobile center was maintenance and use of vehicles, which was expressly covered in the automobile exclusion. In its ruling, the trial court recognized that Sears had asserted that a liberal construction of the allegations contained in the Kresin complaint established that the allegations could have potentially fallen within the parking exception to the automobile exclusion within the policy.

Citing case law for the proposition that where no duty to defend exists, there is no duty to indemnify, the trial court ruled that Acceptance was entitled to judgment as a matter of law on counts II and III of the amended third-party complaint. Regarding Traveler's motion for summary judgment, the trial court granted the motion, finding that because Acceptance had no duty to indemnify, Travelers, as an excess carrier, could not have a duty to indemnify broader than Acceptance's duty.

In an order dated October 30, 2001, the trial court found that there was no just cause to delay enforcement or appeal of its February 16, 2001, order. Plaintiffs now appeal.

ANALYSIS

On appeal, plaintiffs contend that the trial court erred in granting summary judgment in favor of its insurance carriers. They argue that because Jijon was "unparking" the van when Kresin was struck, the parking exception ...


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