Appeal from the Circuit Court of the 13th Judicial Circuit LaSalle County, Illinois, No. 09-MR-113 The Honorable Joseph P. Hettel, Judge, Presiding.
The opinion of the court was delivered by: Justice McDADE
JUSTICE McDADE delivered the opinion of the court:
This appeal arises from a declaratory judgment action filed in the circuit court of LaSalle County to resolve insurance coverage issues. Plaintiff, Maxum Indemnity Company, appeals arguing that the court erred in determining that it owed a duty to defend defendant, Don & Betty Gillette, d/b/a Gillette Parade Products. We reverse and remand for further proceedings.
Defendant is engaged in the business of preparing, providing and transporting parade floats for compensation. Plaintiff issued a commercial liability policy (the policy) to defendant with an effective policy period from October 10, 2007, through October 1, 2008. The policy provides in pertinent part:
"a. We will pay those sums that the Insured becomes legally obligated to pay as 'damages' because of 'bodily injury' or 'property damage' to which this insurance applies. We will have the right and duty to defend the Insured against any 'suit' seeking those 'damages.' However, we will have no duty to defend the Insured against any 'suit' seeking 'damages' for 'bodily injury' or 'property damage' to which this insurance does not apply.
b. This insurance policy applies to 'bodily injury' and 'property damage' only if:
(1) The 'bodily injury' or 'property damage' is caused by an 'occurrence' that takes place in the 'coverage territory'; and (2) The 'bodily injury' or 'property damage' takes place during the policy period."
The policy contains an "Aircraft, Auto or Watercraft" exclusion (auto exclusion) which excludes coverage for:
" 'Bodily injury' or 'property damage' arising out of the ownership maintenance, use or entrustment to others of any aircraft, 'auto' or watercraft owned or operated by or rented or loaned to any Insured, including the supervision, hiring, employment, training or monitoring of, or failure to warn anyone in connection with, the ownership, maintenance, use or entrustment to others of any aircraft, 'auto' or watercraft. Use includes operation and 'loading or unloading.' "
The policy defines "auto" as:
"[A] land motor vehicle, trailer or semi-trailer designed for travel on public roads, including any attached machinery or equipment."
On August 3, 2008, Cecilia Kaler was a passenger on a parade float owned and operated by defendant. The parade float at issue was being pulled by defendant, by way of its agent driver, on a public road. While being pulled, Kaler was thrown from the float.
On April 24, 2009, Kaler filed a lawsuit against defendant alleging that defendant was guilty of one or more of ...