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Mark Czapski and Anna Czapski-Florek v. Christopher Maher

June 10, 2011

MARK CZAPSKI AND ANNA CZAPSKI-FLOREK,
CO-SPECIAL ADMINSTRATORS OF THE ESTATE OF ROGER CZAPSKI, DECEASED,
PLAINTIFFS-APPELLEES,
v.
CHRISTOPHER MAHER, MOTOR WERKS OF BARRINGTON, INC.,
NATIONAL CASUALTY COMPANY, A CORPORATION,
FEDERAL INSURANCE COMPANY, A CORPORATION, DEFENDANTS-APPELLANTS
NATIONAL CASUALTY COMPANY, DEFENDANT AND COUNTERPLAINTIFF-APPELLANT; CHRISTOPHER MAHER, INDIVIDUALLY; MARK CZAPSKI AND
ANNA CZAPSKI-FLOREK, CO-SPECIAL ADMINISTRATORS OF THE ESTATE OF ROGER CZAPSKI, DECEASED,
COUNTERDEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County No. 09 CH 16166 Honorable William O. Maki, Judge Presiding.

The opinion of the court was delivered by: Justice Robert E. Gordon

JUSTICE ROBERT E. GORDON delivered the judgment of the court, with opinion. Presiding Justice Garcia and Justice Cahill concurred in the judgment and opinion.

OPINION

The key issue in this appeal is whether a person who test-drives a motor vehicle is a "customer" within the meaning of an auto dealership's umbrella and excess insurance policies.

BACKGROUND

This is a declaratory judgment action regarding coverage under an auto dealership's umbrella and excess insurance policies. The key issue in this appeal is whether a person who test-drives a motor vehicle is a "customer" within the meaning of two insurance polices which are the subject of the coverage question before us. For the reasons discussed below, we find that a test-driver is a "customer" in the context of the insurance policies that are the subject matter of this appeal.

I. Parties

Defendant Christopher Maher was test-driving a BMW automobile owned by defendant Motor Werks of Barrington, Inc. (Motor Werks), accompanied by Motor Werks' salesperson Roger Czapski, who was seated in the BMW's front passenger seat. Czapski was killed when the BMW collided with another vehicle.*fn1 The collision resulted in wrongful death and personal injury claims against Maher. The underlying wrongful death claim went to trial, resulting in a $13.72 million judgment against defendant Maher.

Prior to trial, plaintiffs, as well as the other passengers, filed a declaratory judgment action seeking declarations of coverage available to Maher under both: (1) certain insurance policies issued to Motor Werks, and (2) certain insurance policies issued to Kevin Maher, Christopher Maher's father. The dealership, Motor Werks, had purchased a $5 million umbrella policy from defendant National Casualty Company (National) and a $10 million excess policy from defendant Federal Insurance Company (Federal). These policies were purchased to protect defendant Motor Werks from liability in excess of its $1 million primary policy. Defendant Motor Werks was a party in the declaratory judgment action, but not in the underlying wrongful death litigation.

II. Policies

The policies state that the term "insured" does not include the dealership's "customers." In particular, National's policy states under the heading "Auto Dealership Limitation Endorsement": "Your customers are not 'named insureds' or 'insureds' as defined in this policy."*fn2 Thus, the umbrella and excess policies insure the risk that the dealership itself would be liable for sums in excess of the primary policy, but do not insure the risk of a customer's liability.

The term "customer" also appears in an endorsement in National's policy entitled "Auto Dealership Limitation Endorsement." In relevant part, it states:

"THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

4. Your customers are not 'named insureds' or 'insureds' as defined in this policy."

III. Procedural History

In the first declaratory action, National and Federal asserted that, as a test-driver, Maher was Motor Werks' "customer" and, therefore, not covered under Motor Werks' umbrella and excess policies. The trial court agreed, finding that Maher was not an insured and not covered under the policies. The trial ...


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