June 28, 2001

_______________________________________________________________________________________________

JUSTICE MYERSCOUGH delivered the opinion of the court:

In July 1998, Francis Fuller sued Dale Snyder forpersonal injuries resulting from a two-car accident. Snyder wasdriving a loaner vehicle owned by Hurley Dodge (Hurley), anautomotive dealership. Universal Underwriters Insurance Company(Universal) insured Hurley's vehicles. Allstate InsuranceCompany (Allstate) provided Snyder's automobile insurance. InFebruary 1999, Allstate filed a declaratory judgment actionagainst Universal, seeking a declaration that Universal's garageliability insurance policy provided sole primary coverage. InNovember 1999, Universal filed a counterclaim for declaratoryjudgment, seeking reimbursement for Allstate's prorated share ofthe personal injury settlement. Both Allstate and Universalfiled motions for summary judgment. In January 2000, the trialcourt granted Allstate's motion, concluding that Universal wasprimarily obligated to defend Snyder and that the limits of theUniversal policy were $500,000. We allowed Universal's motion tofile a late notice of appeal. We affirm.

On appeal, the following facts are undisputed. InSeptember 1997, Snyder was a permissive user of a vehicle ownedby Hurley when it collided with a truck being driven by FrancisFuller and containing a passenger, Charles Fuller. The collisioncaused property damage and personal injuries to the Fullers. Universal initially refused Allstate's tender of Snyder's defense. Allstate settled the property damage claim for $1,600. Universal settled the personal injury claims for $50,000. Allstate incurred $11,034.50 in defending Snyder.

However, Universal's brief states that Snyder was test-driving Hurley's truck while Allstate's brief notes that Hurleywas repairing Snyder's own vehicle. Universal's brief cites anagreed statement of facts, which states, "Snyder, with permission, took possession as a loaner vehicle a 1992 Dodge Dakotatruck owned by Hurley Dodge." Nothing in the record on appealindicates that Snyder was test-driving. Accordingly, we considerSnyder's vehicle to have been a loaner from Hurley.

Snyder's insurance with Allstate had policy limits of$300,000 for bodily injury per person, $500,000 for bodily injuryper occurrence, and $100,000 for property damage per occurrence. Allstate's policy had an "other insurance" clause that providedthat its insurance would be excess over other collectible insurance.

Hurley was a named insured in Universal's $500,000garage liability policy, which stated:

"WE will pay all sums the INSURED legallymust pay as DAMAGES *** because of INJURY towhich this insurance applies caused by anOCCURRENCE arising out of GARAGE OPERATIONSor AUTO HAZARD."Universal's policy included the following in "who is an insured"under the auto hazard:

"(4) any other person or organization required by law to be an INSURED while using anAUTO covered by this [c]overage [p]art withinthe scope of YOUR permission."

However, the policy provided the following limitation:

"With respect to the AUTO HAZARD part (4) ofWHO IS AN INSURED, the most WE will pay isthat portion of such limit needed to complywith the minimum limits provision law in thejurisdiction where the OCCURRENCE took place. When there is other insurance applicable, WEwill pay only the amount needed to complywith such minimum limits after such otherinsurance has been exhausted." (Emphasisadded.)Finally, the Universal policy had an "other insurance" clause,which provided as follows:

"The insurance afforded by this [c]overage[p]art is primary, except it is excess:

***

(2) for any person or organization underpart (3) or (4) of WHO IS AN INSURED withrespect to the AUTO HAZARD."

In February 1999, Allstate filed this declaratoryjudgment action, arguing that it was not primarily obligated todefend Snyder and seeking judgment from Universal for the costsof Snyder's defense. In October 1999, Allstate filed a motionfor summary judgment. Universal also moved for summary judgmentin October 1999. In November 1999, Universal filed a counterclaim against Allstate, seeking reimbursement for Allstate'sprorated share of a $50,000 personal injury settlement betweenUniversal and the Fullers. Universal also filed a motion forsummary judgment on the counterclaim. In January 2000, the trialcourt denied both of Universal's motions for summary judgment andgranted Allstate's motion. Universal appealed.

The interpretation of an insurance policy is a questionof law. Outboard Marine Corp. v. Liberty Mutual Insurance Co.,154 Ill. 2d 90, 108, 607 N.E.2d 1204, 1212 (1992). As a questionof law, our review of the trial court's granting of summaryjudgment is de novo. Outboard Marine, 154 Ill. 2d at 102, 607N.E.2d at 1209. In construing the terms of an insurance policy,a court must afford the policy language its plain and ordinarymeaning if the words are unambiguous. Lincoln Logan MutualInsurance Co. v. Fornshell, 309 Ill. App. 3d 479, 483, 722 N.E.2d239, 242 (1999). We will apply unambiguous terms as writtenunless they contravene public policy. State Farm Mutual Automobile Insurance Co. v. Villicana, 181 Ill. 2d 436, 442, 692 N.E.2d1196, 1199 (1998).

Universal acknowledges that it was primarily obligatedto defend Snyder under the supreme court's recent holding inState Farm Mutual Automobile Insurance Co. v. Universal Underwriters Group, 182 Ill. 2d 240, 695 N.E.2d 848 (1998), and ourrecent decision in Pekin Insurance Co. v. State Farm MutualAutomobile Insurance Co., 305 Ill. App. 3d 417, 711 N.E.2d 1227(1999). However, Universal claims that those cases did notaddress the issue whether Allstate also has primary coverage as aresult of mutually repugnant "other insurance" clauses in thepolicies.

Universal relies on the First District's opinion inUniversal Underwriters Insurance Group v. Griffin, 287 Ill. App.3d 61, 677 N.E.2d 1321 (1997), which predated State Farm. Theapproach in Griffin examined the "other insurance" clauses ineach policy. Griffin, 287 Ill. App. 3d at 74, 677 N.E.2d at1330. Universal's "excess-escape" clause restricted its liability to the extent that its own limits exceeded the limits ofother available insurance, and the court found it to be enforceable. Griffin, 287 Ill. App. 3d at 75, 677 N.E.2d at 1331. Then, the court prorated liability based on policy limits. Griffin, 287 Ill. App. 3d at 75, 677 N.E.2d at 1331.

However, State Farm is controlling on this issue. InState Farm, Universal also asserted the "excess-escape" clause ina case that involved a permissive user of an automobile owned bya dealership. State Farm, 182 Ill. 2d at 246, 695 N.E.2d at 851. However, Universal's excess-escape clause was unenforceable inviolation of public policy in that circumstance. Universal hadto provide coverage because section 7-317 of the Illinois VehicleCode (625 ILCS 5/7-317 (West 1998)) required its policy tocontain an omnibus clause insuring those who use a vehicle withthe owner's permission, and as the owner's insurer, its insurancehad to be primary. State Farm, 182 Ill. 2d at 246, 695 N.E.2d at851.

Snyder was a permissive user of a loaner vehicle ownedby Hurley and insured by Universal's garage liability policy. Asin State Farm, Universal is required to provide primary coverage,and its excess-escape clause would not be enforceable. TheAllstate policy that covered Snyder contained an enforceable"other insurance" clause that rendered its coverage excess. Thus, no incompatible enforceable "other insurance" clausesexisted between the two policies, and the trial court was correctto determine that Universal's policy provided sole primarycoverage.

Universal contends that the trial court erred infinding that its policy provided $500,000 in coverage in thiscase. Universal asserts that the phrase in its policy, "minimumlimits provision law," unambiguously refers to the mandatoryinsurance provision of section 7-601 of the Illinois Vehicle Code(Code) (625 ILCS 5/7-601 (West 1998)), which references thefollowing limits in section 7-203 of the Code (625 ILCS 5/7-203(West 1998)): $20,000 per person, $40,000 per accident, and$15,000 for destruction of property.

We disagree because sections 5-102(b)(4) of the Code(625 ILCS 5/5-102(b)(4) (West 1998)) and 5-101(b)(6) of the Code(625 ILCS 5/5-101(b)(6) (West 1998)) require a licensed cardealer to insure a permissive user with minimum limits of$100,000/$300,000/$50,000.

Section 5-101(b)(6) states:"A Certificate of Insurance *** shall beincluded with each application ***. Thepolicy must provide liability coverage in theminimum amounts of $100,000 for bodily injuryto, or death of, any person, $300,000 forbodily injury to, or death of, two or morepersons in any one accident, and $50,000 fordamage to property." (Emphasis added.) 625ILCS 5/5-101(b)(6) (West 1998).

Section 5-102(b)(4) provides an identical licensing requirementfor dealers of used automobiles.

Under the plain meaning of the Code, the liabilityinsurance mandated by sections 5-101(b)(6) and 5-102(b)(4) of theCode encompasses auto hazard and would be a "motor vehicleliability policy," as defined in section 7-317(a) of the Code(625 ILCS 5/7-317(a) (West 1998)). This definition appliesthroughout the Code. State Farm, 182 Ill. 2d at 245, 695 N.E.2dat 850. Therefore, the omnibus clause requirement in section 7-317(b)(2) (625 ILCS 5/7-317(b)(2) (West 1998)) applies to motorvehicle liability insurance policies required of licensed cardealers. As a result, Hurley's liability policy was required bylaw to insure permissive users with minimum limits of $100,000/$300,000.

We are also persuaded by the reasoning in John DeereInsurance Co. v. Allstate Insurance Co., 298 Ill. App. 3d 371,377-78, 698 N.E.2d 635, 639-40 (1998), and find it equallyapplicable to a licensed car dealer that loans a vehicle incidentto a repair business. The John Deere court found legislativeintent to determine the amount of insurance needed based on theon the vehicle itself, not the identity of operator at the timeof the accident. John Deere, 298 Ill. App. 3d at 377, 698 N.E.2dat 639. The court also relied on the public policy behindlicensing car dealers. John Deere, 298 Ill. App. 3d at 377, 698N.E.2d at 639. The legislature intended the $100,000/$300,000limits to extend to permissive users who test-drive, exposing thepublic to risks and promoting the commercial success of thedealership. John Deere, 298 Ill. App. 3d at 378, 698 N.E.2d at640.

Finally, we note that the phrase in Universal's policy,"minimum limits provision law," may refer to sections 5-101(b)(6)and 5-102(b)(4) as well as section 7-601. Sections 5-101(b)(6)and 5-102(b)(4) should control the issue of minimum policy limitsbecause those sections are more specifically applicable to cardealerships than section 7-601. See Country Mutual Insurance Co.v. Universal Underwriters Insurance Co., 316 Ill. App. 3d 161,164, 735 N.E.2d 1032, 1035 (2000). We conclude that the legislature intended to require permissive users such as Snyder to becovered under a licensed car dealer's insurance policy withminimum limits of at least $100,000/$300,000.

Because we hold that Snyder was required to be insuredunder section 5-101(b)(6) and/or section 5-102(b)(4), the termsof Universal's policy provided coverage limits in this case of$100,000/$300,000. As the total settlement and costs in defending claims here were below the $100,000/$300,000 limits of soleprimary coverage under Universal's policy, the trial courtcorrectly granted summary judgment in favor of Allstate.

For the reasons stated, we affirm the trial court'sjudgment.

Affirmed.

STEIGMANN, P.J., concurs.

COOK, J., dissents.

JUSTICE COOK, dissenting:

I respectfully dissent. I would affirm the decision ofthe trial court insofar as it held that Universal's garageliability policy provided coverage for Snyder, who was test-driving the vehicle, and that the garage policy was primary andSnyder's Allstate policy was excess. I would reverse the decision that the policy limits were $500,000, and hold instead thatthe limits were $20,000 per person, $40,000 per accident, and$15,000 property damage, as required by the mandatory insurancelaw, section 7-601(a) of the Code. 625 ILCS 5/7-601(a) (West1998).

The general rule, where one person operates the vehicleof another, is that the automobile liability policy issued to theowner is primary, and the policy issued to the driver is excess. State Farm, 182 Ill. 2d at 246, 695 N.E.2d at 851. The questionbecomes more complicated when a customer is involved in anaccident while test-driving a vehicle offered for sale by a cardealer. The garage liability insurers who insure the car dealershave consistently argued that their policies should at most beexcess, and they have regularly changed their policies to try toachieve that result. The supreme court, however, has not beensympathetic. See Steinberg v. Universal Underwriters InsuranceCo., 272 Ill. App. 3d 79, 84-85, 650 N.E.2d 14, 18 (1995) (Cook,J., dissenting). Garage liability insurers recognize the possibility they may be ordered to afford coverage. The policy hereprovides that, if the insurer is required to afford coverage topermissive users, "the most WE will pay is that portion of suchlimits needed to comply with the minimum limits provision law inthe jurisdiction where the OCCURRENCE took place."

State Farm recently reaffirmed the position that thereis coverage and the garage liability policy is primary where acar is test-driven, relying on the statutory requirement that "noowner shall permit another person to operate *** a motor vehicle*** unless the motor vehicle is covered by a liability insurancepolicy" (625 ILCS 5/7-601(a) (West 1996)) and the statutoryrequirement that an "owner's policy" insure the person namedtherein "'and any other person using or responsible for the useof such motor vehicle or vehicles with the express or impliedpermission of the insured.'" State Farm, 182 Ill. 2d at 244, 695N.E.2d at 850, quoting 625 ILCS 5/7-317(b)(2) (West 1996). Thequoted sections are found in chapter 7, the Illinois Safety andFamily Financial Responsibility Law. Section 7-601 is found inarticle VI, "Mandatory Insurance." Section 7-317 is found inarticle III, "Proof of Financial Responsibility for the Future."

Section 7-601(a) provides that the insurance policy itrefers to, the owner's policy, "shall be issued in amounts noless than the minimum amounts set *** under [s]ection 7-203." 625 ILCS 5/7-601(a) (West 1998). Section 7-203 requires limitsof $20,000/$40,000 and $15,000. 625 ILCS 5/7-203 (West 1998). Section 7-203 is found along with sections 7-601(a) and 7-203 inchapter 7, under article II, "Security Following Accident."

The majority argues that the policy limits for thisstatutorily required coverage are at least $100,000/$300,000 and$50,000, the limits required by section 5-101(b)(6) of the Code(625 ILCS 5/5-101(b)(6) (West 1998)). Section 5-101 is found inchapter 5, "Dealers, Transporters, Wreckers[,] and Rebuilders,"in article I, "Dealers." These statutory provisions dealing withnew and used car dealers, however, do not require the coverage ofpermissive users. The supreme court in State Farm relied on themandatory insurance provisions of the Illinois Safety and FamilyFinancial Responsibility Law to find omnibus coverage, becauseneither the "New Car Dealers Act" (625 ILCS 5/5-101 (West 1998))nor the "Used Car Dealers Act" (625 ILCS 5/5-102 (West 1998))requires the furnishing of omnibus coverage. In fact, theinsurer in State Farm argued that it was only required to complywith the dealers acts, which did not require omnibus coverage. State Farm, 182 Ill. 2d at 245, 695 N.E.2d at 851 (exemptionwhere insured complied with other laws, "applies only when theinsurance required by law provides the type of coverage requiredunder the mandatory insurance statute"). It is inconsistent torely on one statute to impose coverage, but then ignore thelimits required by that statute, and look to the limits ofanother statute which would not require coverage at all.

The majority relies on the First District's decision inDeere, which based its decision on its view of public policy. The First District saw no reason why, when a dealership's employee was driving the insured automobile, the limits should behigher than when a customer of the dealership was driving thesame automobile. Deere, 298 Ill. App. 3d at 377-78, 698 N.E.2dat 639-40. I respectfully disagree with Deere. A court must notrewrite statutes to make them consistent with the court's idea oforderliness and public policy (Henrich v. Libertyville HighSchool, 186 Ill. 2d 381, 394-95, 712 N.E.2d 298, 305 (1998)), norshould a court rewrite insurance policies (Oak Park Trust &Savings Bank v. Intercounty Title Co., 287 Ill. App. 3d 647, 651,678 N.E.2d 723, 725 (1997)). If it were our task to achieveconsistency, why should the customer have higher mandatory limitswhile he is test-driving the car under the dealer's policy thanhe does under his own policy after he has purchased the vehicleand is driving it home? Insurance is generally designed toprotect the insured who paid for it, not the public at large. Interference with freedom of contract between the insurer and theinsured is an exceptional thing and should be limited, if it isengaged in at all. The legislature is much better equipped toanalyze these questions than are we, and we should respect thelegislature's decision.

Deere also argued that the dealership in that case hadfiled a certificate of insurance with the Secretary of State, asrequired by section 5-101(b), stating that it had procured apolicy which included garage liability limits of $500,000 peraccident, limits in excess of those required by statute. Deereargued that because the dealership had "obligated itself to a$500,000 limit in its certificate of insurance," it "cannot nowbe heard to deny the coverage amount it contracted for to limitthe same to either $20,000 or $100,000." Deere, 298 Ill. App. 3dat 379, 698 N.E.2d at 640. It is not surprising that the certificate of insurance did not attempt to limit the coverage forpermissive users to $20,000. The insurance policy in questionpurported not to cover permissive users at all, as allowed bysection 5-101(b). Furthermore, a certificate that states thereare limits of $500,000 per accident is not inconsistent with apolicy that imposes a lower limit per person. Finally, the ideathat policy provisions not set out in a certificate of insurancecannot stand makes no sense. A certificate of insurance simplyprovides a brief statement that coverage exists. Deere willrequire, in the future, that the policy itself be filed as thecertificate of insurance.