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State Farm Mutual Automobile Insurance Company v. Heriberto Rodriguez

March 28, 2013

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, PLAINTIFF-APPELLEE,
v.
HERIBERTO RODRIGUEZ,
DEFENDANT-APPELLANT. STATE FARM MUTUAL AUTOMOBILE ) INSURANCE COMPANY, PLAINTIFF-APPELLEE,
v.
RAUL DIAZ, RAMIRO VICTORIANO, JOSEFINA ALVAREZ, AND LEONEL ALVAREZ, DEFENDANTS-APPELLANTS.



Appeals from the Circuit Court of ) Cook County No. 11 CH 20209 Honorable Mary L. Mikva,Judge Presiding No. 10 CH 30718 Honorable Peter Flynn, Judge Presiding

The opinion of the court was delivered by: Justice Epstein

JUSTICE EPSTEIN delivered the judgment of the court, with opinion. Justice Fitzgerald Smith concurred in the judgment and opinion. Justice Pucinski specially concurred, with opinion.

OPINION

¶ 1 State Farm Mutual Automobile Insurance Company (State Farm) issued automobile insurance policies to the defendants. During the term of the insurance policies, the defendants' automobiles were seized by law enforcement authorities as stolen vehicles. The trial courts in two separate declaratory judgment actions granted summary judgment in favor of State Farm, ruling that its policy provides no comprehensive coverage for the seized vehicles.

¶ 2 In this consolidated appeal, the defendants contend that the trial courts erred in granting summary judgment to State Farm. For the reasons stated herein, we affirm.

¶ 3 BACKGROUND

¶ 4 State Farm issued automobile insurance policies to each of the defendants: Heriberto Rodriguez; Raul Diaz; Ramiro Victoriano; and Leonel and Josefina Alvarez. Although the facts pertinent to each defendant differ slightly, certain facts are common to all of the defendants. First, there is no dispute that the defendants' State Farm policies were in force at the time of the events in question. Second, each defendant purchased an automobile from a private individual. Third, following such purchases, all of the automobiles were seized by law enforcement on the grounds that they previously had been stolen. Fourth, the defendants did not steal the automobiles and were not aware that the vehicles were stolen at the time they were purchased.

¶ 5 Following the seizure of their automobiles, each of the defendants made claims for comprehensive coverage on their State Farm policies. With respect to Diaz only, State Farm provided rental car coverage, which was extended twice, while his claim was being investigated. State Farm ultimately denied Diaz's claim, as well as the claims of the other defendants. After the denials, State Farm filed two declaratory judgment actions in the circuit court of Cook County, seeking declaration that there was no comprehensive coverage available to the defendants.*fn1

¶ 6 The parties filed cross-motions for summary judgment. Judge Peter Flynn heard the motions concerning defendants Diaz, Victoriano, and Josefina and Leonal Alvarez. The court granted State Farm's summary judgment motion and denied the defendants' summary judgment motion. In its order ruling on the summary judgment motions, the court "declare[d] that the seizure of the insured vehicles by law enforcement authorities on the ground that they were stolen is not a 'loss' as defined in the comprehensive coverage" of the defendants' policies. Judge Mary Mikva granted State Farm's summary judgment motion and denied defendant Rodriguez's summary judgment motion.

¶ 7 The defendants appealed their respective orders; the appeals are consolidated herein.

¶ 8 ANALYSIS

¶ 9 The policy*fn2 provides in pertinent part as follows:

"PHYSICAL DAMAGE COVERAGES

Insuring Agreements

1. Comprehensive Coverage

Wewill pay:

a. for loss, except loss caused by collision, to a covered vehicle;

The policy defines "loss," in relevant part, as follows:

"Lossmeans:

1. direct, sudden, and accidental damage to; or

2. total or partial theft of a covered vehicle." (Emphasis in original.)

ΒΆ 10 Defendants raise a number of arguments on appeal. The defendants contend that they have an insurable interest in the vehicles, given that they were good-faith purchasers. The defendants then argue that because the term "damage" is undefined in the policy, the court must look to its dictionary definition. The defendants urged the trial courts to use the Black's Law Dictionary definitions of "damage" -- "loss or injury to person or property" -- and "loss": "the disappearance or diminution of value, usually in an unexpected or relatively unpredictable way." Noting that State Farm presented no "counter-definition" at the trial court level, the defendants contend that State Farm's primary argument -- that only damage to the vehicle, rather than damage to the defendants, may be considered "damage" under the policy -- is, at best, a second "reasonable interpretation[]" of the policy language. Given that "all ambiguities in an insurance contract will be construed against the insurance ...

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