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Browning v. Plumlee
State: Illinois
Court: 5th District Appellate
Docket No: 5-99-0379 Rel
Case Date: 10/03/2000

 

NOTICE
Decision filed 10/03-00.  The text of
this decision may be changed or 
corrected prior to the filing of a
Petition for Rehearing or the
disposition of the same.

NO. 5-99-0379

IN THE

APPELLATE COURT OF ILLINOIS

FIFTH DISTRICT

________________________________________________________________________


ROBERT E. BROWNING and NORA BROWNING,

          Plaintiffs-Appellees,

v.

ROBERT L. PLUMLEE, UNIVERSAL
UNDERWRITERS INSURANCE COMPANY,
STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY, STOTLAR-HERRIN
LUMBER CO., and GREG WEEKS PONTIAC
CHEVROLET-GEO, a Missouri corporation,

          Defendants

(Universal Underwriters Insurance Company,
Counterplaintiff-Appellant, and State Farm Mutual
Automobile Insurance Company, Counterdefendant-
Appellee).

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Appeal from the
Circuit Court of
Franklin County.

 

No. 95-L-134, consolidated with
        No. 95-MR-10

 

 

 


Honorable
Thomas H. Sutton,
Judge, presiding.

 

________________________________________________________________________

JUSTICE HOPKINS delivered the opinion of the court:

The plaintiffs, Robert E. Browning and Nora Browning, filed a multicount complaintarising out of a traffic accident that occurred as defendant Robert L. Plumlee was test-driving a truck owned by defendant Greg Weeks Pontiac Chevrolet-Geo (Weeks). Theparties sought a declaratory judgment to determine whether the insurance policy issued tothe test driver by State Farm Mutual Automobile Insurance Company (State Farm) providedcoverage for the accident or if, instead, the insurance policy issued by UniversalUnderwriters Insurance Company (Universal) to Weeks, the owner of the vehicle, providedcoverage. The trial court determined that Universal, as the insurer of the vehicle's owner,was primarily responsible to provide coverage for the accident and to provide a defense toPlumlee, the test driver.

On appeal, Universal contends that the trial court should have ruled that both StateFarm and Universal should provide coverage for the accident and that the amount that eachcompany must pay for the accident should be prorated based upon the respective coveragelimits of each policy. Universal also argues that the trial court erred in finding that Universalshould reimburse State Farm for its costs of defending Plumlee. We affirm the trial courton both issues.

FACTS

On April 14, 1995, Plumlee was test-driving a pickup truck owned by Weeks. Weeksknew that Plumlee was test-driving the vehicle and gave him permission to do so. Duringthe test drive, Plumlee collided with a vehicle driven by plaintiff Robert Browning. As aresult of that collision, Robert sued for his injuries, and his wife, Nora, sued for loss ofconsortium.

The pickup truck that Plumlee was driving was insured under a garage policy issuedto Weeks by Universal. Plumlee was covered under a personal-vehicle policy issued byState Farm. Plumlee's policy also covered him when driving a nonowned car, such as thetruck he was test-driving. A dispute arose between the insurance companies as to whichcoverage was primary, which was excess, and how much coverage was available under eachpolicy. The Brownings, Universal, and State Farm each filed a claim for declaratoryjudgment and a motion for summary judgment.

On March 4, 1999, the trial court granted summary judgment in favor of theBrownings and State Farm and against Universal. On May 6, 1999, the trial court deniedUniversal's motion to reconsider its March 4 ruling. The trial court found that Universal'sgarage-liability policy afforded the sole primary coverage for the accident, held that StateFarm's policy was excess, and entered judgment against Universal and in favor of State Farmin the amount of $7,350.41 to reimburse State Farm for its attorney fees in defending thelawsuit. The court further ruled that the limits of Universal's policy were set at themaximum available, $500,000. This timely appeal followed.

ANALYSIS

1. Standard of review

Our review of an order granting or denying a motion for summary judgment is denovo. See Ragan v. Columbia Mutual Insurance Co., 183 Ill. 2d 342 (1998). Summaryjudgment is proper where the pleadings, depositions, and admissions on file reveal that thereis no genuine issue as to any material fact and that the moving party is entitled to a judgmentas a matter of law. See 735 ILCS 5/2-1005(c) (West 1996); Ragan, 183 Ill. 2d 342.

2. Primary insurance coverage of garage insurance policy

Universal claims that the trial court incorrectly determined that it provides the soleprimary coverage for the accident. Universal points out that Plumlee had an active personal-vehicle insurance policy which extended to his use of the truck he was test-driving and that,at most, the two policies contain clauses that are mutually repugnant and require thatcoverage be prorated between the parties. State Farm counters that Illinois Supreme Courtlaw mandates that garage policies covering car dealerships, such as the one issued byUniversal herein, must provide the sole primary coverage for the dealership's test drivers. See State Farm Mutual Automobile Insurance Co. v. Universal Underwriters Group, 182Ill. 2d 240 (1998) (State Farm).

The relevant provisions in Plumlee's State Farm policy extend coverage to Plumlee for the use of a nonowned car, such as the truck he was test-driving. When Plumlee wastest-driving the nonowned car with other coverage, State Farm's policy provided excesscoverage. The garage-liability policy issued to Weeks includes similar provisions. TheUniversal policy provides insurance to any person using an auto covered under the policyif the use of the vehicle is within the scope of the insured's permission. Additionally,Universal's policy provides:

"[T]he most WE will pay is that portion of such limit needed to comply with theminimum limits provision law in the jurisdiction where the OCCURRENCE tookplace. When there is other insurance applicable, WE will pay only the amountneeded to comply with such minimum limits after such other insurance has beenexhausted."

Finally, the Universal policy provides that its coverage "is primary, except it is excess" forpersons using the covered vehicle with the permission of the insured, such as those test-driving the owner's vehicles.

In the State Farm case, the supreme court considered "whether a car dealer's garageinsurance policy covers the liability of a separately insured customer who is involved in anaccident while test-driving one of the dealer's vehicles." State Farm, 182 Ill. 2d at 241. Universal admits that the policy issued to the car dealership in State Farm "contained thesame language" as found in Universal's policy in the case at bar. However, Universalattempts to distinguish the State Farm case on the basis that the court was not asked todecide whether State Farm's policy provided coprimary coverage, which Universal claimsis the issue before this court. After a thorough review of State Farm, we can easily eliminatethis argument.

In State Farm, the insurance carrier for the dealership (which was Universal, the samecompany that insures the dealership in the case at bar) argued that although a dealership isrequired to provide insurance coverage for those who test-drive their cars, that coverage isnecessary only when the test driver has no other insurance of his own. See State Farm, 182Ill. 2d at 243. The test driver, who was insured by State Farm (who also insures the driverin the instant case), collided with another vehicle. State Farm submitted a claim to Universalfor the amounts it paid to the passenger and driver of the other vehicle. See State Farm, 182Ill. 2d at 241-42. State Farm argued that because the test driver was legally required to haveminimal insurance coverage, he fell within Universal's definition of an insured even thoughhe had other insurance coverage. The supreme court agreed with State Farm and found thatunder the Illinois Vehicle Code (the Code) (625 ILCS 5/7-317 (West 1998)), a car dealer'sliability policy must provide coverage for test drivers even if those test drivers have theirown insurance that covers them when they drive nonowned vehicles. State Farm, 182 Ill.2d at 245.

Finally, the court considered Universal's argument that "to the extent its policycovered [the test driver's] liability, the policy only provided excess coverage after otherinsurance covering [the test driver] was exhausted." State Farm, 182 Ill. 2d at 246. Thecourt rejected the argument:

"We note that pursuant to custom in the insurance industry, primary liability isgenerally placed on the insurer of the owner of an automobile rather than on theinsurer of the operator. [Citation.] Even assuming, arguendo, that Universal iscorrect in its interpretation of the language of its garage policy, to give effect to thatlanguage would violate the public policy of this state, as defined by the GeneralAssembly in the Code. *** [T]he Code mandates that the insurance policy issuedby Universal provide omnibus coverage. In the absence of any statutory languagequalifying that mandate, the statute must be construed to require primary coverage." State Farm, 182 Ill. 2d at 246.

Universal seeks to avoid the application of the State Farm case to the instant case byarguing that the supreme court in State Farm did not determine whether State Farm offeredcoprimary insurance. First, it does not matter that the supreme court did not address theissue in the words used by Universal. The rule is the same: where a car dealership allowsits customers to test-drive its vehicles, the car dealership is required by law to provideprimary insurance coverage to the test driver, regardless of whether the test driver also hascoverage. The supreme court's finding that the dealerships by law must provide primarycoverage necessarily excludes a finding that the test driver's insurance might also becoprimary.

Second, the outcome of the decision in State Farm excludes any possibility ofcoprimary insurance. In State Farm, the supreme court affirmed the trial and appellatecourts' rulings awarding 100% of the amount State Farm, the insurer of the driver, paid tothe injured party, as a judgment against Universal, the insurer of the owner. State Farm, 182Ill. 2d at 242, 246. If there had been any possibility of coprimary coverage with proratedliability between the two insurance companies, the supreme court could not have affirmedthe judgment against Universal for 100% of the amount paid by State Farm to the partiesinjured by the test driver.

Universal attempts to divert our attention away from the plain language of the StateFarm decision by claiming that it "is unimaginable to think that the Supreme Court wouldoverrule a substantial body of Illinois law [citations], without even the slightest indicationthat it was doing so." Universal is incorrect. The main case upon which Universal relies tosupport this argument is Universal Underwriters Insurance Group v. Griffin, 287 Ill. App.3d 61 (1997). In Griffin, the court based its decision to prorate the coverage between a cardealership's insurance company and the insurance company of a driver of a loaner vehiclein part upon the authority of Padilla v. Norwegian -American Hospital, Inc., 266 Ill. App.3d 829 (1994), an insurance dispute based upon an underlying medical malpractice action.

The supreme court in State Farm, however, instructed that even if the language of thepolicies can be read to require prorating, when the insurance issue deals with theresponsibility for coverage between garage-insurance policies issued to car dealerships andindividual-insurance policies issued to the car dealership's permissive drivers, public policyrequires the garage-insurance policy to be solely primarily responsible for covering thepermissive driver. State Farm, 182 Ill. 2d at 246. In other words, public policyconsiderations for garage-insurance policies are different than those for other types ofinsurance, and the rules that apply to other types of insurance do not necessarily apply togarage-insurance policies.

Additionally, the court in Griffin rejected the public policy argument adopted by theappellate court and affirmed by the supreme court in State Farm. Griffin, 287 Ill. App. 3dat 74. Therefore, since the supreme court has ruled explicitly to the contrary, Griffin issimply wrong in stating that prorating under these circumstances is allowed.

The ruling of State Farm is clear; the garage-insurance policy of a car dealership issolely primarily responsible for covering the dealership's test drivers, regardless of coverageprovided to the test drivers by their own, personal-automobile insurance policies. Thus, thecases that Universal cites, cases finding that insurance may be prorated between the cardealership's insurer and the test driver's insurer, no longer provide an accurate statement ofthe law in Illinois.

Finally, the rule that garage-insurance policies provide the sole primary coverage forthose permissively driving cars owned by car dealerships has been settled in this districtsince 1993, when this court decided Madison Mutual Insurance Co. v. UniversalUnderwriters Group, 251 Ill. App. 3d 13 (1993) (Madison Mutual). In Madison Mutual,we held that the garage-insurance policy issued by Universal provided the primary insurancecoverage for the permissive driver of a car dealership's automobile. Madison Mutual, 251Ill. App. 3d at 17. We agree with State Farm: the law in Illinois on this subject is perfectlyclear. Insurance follows the vehicle rather than the driver; a garage-insurance policy willbe construed to contain an omnibus clause insuring permissive users regardless of policylanguage to the contrary; and a garage-insurance policy provides primary coverage for thecars permissively driven by the car dealership's customers. See State Farm, 182 Ill. 2d at246.

3. Coverage limits of Universal's policy as it applies to permissive drivers

Universal next argues that the limit of its coverage is controlled by the minimumcoverage limits required by section 7-317 of the Code (625 ILCS 5/7-317 (West 1998)),specifically, $20,000 per person, $40,000 per accident, and $15,000 for property damage,even though the policy listed coverage as $500,000 per occurrence. State Farm counters thatthe trial court correctly ruled that Universal's policy limit is $500,000, pursuant to the FirstDistrict Appellate Court's decision in John Deere Insurance Co. v. Allstate Insurance Co.,298 Ill. App. 3d 371 (1998) (John Deere). We agree with State Farm.

The question of policy limits under a garage-insurance policy that provides primarycoverage for a test driver is a question of first impression in this district. Additionally, thecourt in State Farm did not have to reach this question, because the total liability was only$9,092.15, well below the minimum limits set by section 7-317. The John Deere case hasbeen the only case in Illinois to address this issue. We follow the ruling in John Deere,because the facts are indistinguishable from the case at bar and because the reasoning of thedecision is sound.

In John Deere, the court considered a situation in which a car dealership allowed itscustomer to test-drive one of its vehicles. The customer struck a third party while test-driving the vehicle. The limit of the dealership's garage-insurance policy, as listed in itspolicy of insurance, was $300,000; the customer was covered under a separate policy withlimits of $50,000 per person and $100,000 per accident; and the dealership argued that itsliability should be limited to the amounts required as the minimum under Illinois law:$20,000 per person and $40,000 per accident. See John Deere, 298 Ill. App. 3d at 375-76;625 ILCS 5/7-203 (West 1998).

The court rejected the argument of the insurance company for the dealership:

"A plain reading of these Code sections reveals that the legislature intendedthat the amount of liability insurance that must be carried on a particular automobileis not determined by the operator of the automobile but, rather, [by] the automobileitself. Therefore, the amount of liability insurance required by the Code for anautomobile should not change according to the identity of the person who is drivingthe automobile at the time an accident occurs. [Citation.]" John Deere, 298 Ill. App.3d at 377.

In reaching this decision, the court in John Deere followed our supreme court in StateFarm. See John Deere, 298 Ill. App. 3d at 379. The John Deere court held, "[T]he Codewas intended to apply to customers/permissive users *** who expose the public to a riskwhen they test[-]drive vehicles[] while at the same time perform acts that serve to increasethe commercial success of the dealership." John Deere, 298 Ill. App. 3d at 378. The courtalso rejected the attempt of the insurer of the dealership to limit its liability for test driversto the minimum level of coverage required by law, when others covered under the garagepolicy received coverage of $300,000. See John Deere, 298 Ill. App. 3d at 379.

We follow the ruling in John Deere and affirm the trial court's finding thatUniversal's policy limit is the amount stated in its policy of insurance, $500,000. Just as thecourt found in John Deere, we find that because Universal obligated itself to a limit of$500,000 in its policy of insurance, it cannot now escape that level of coverage by arguingthat the legal minimum level of insurance applies. John Deere, 298 Ill. App. 3d at 379.

CONCLUSION

We affirm the trial court's entry of summary judgment in favor of the Brownings andState Farm and against Universal.



Affirmed.



KUEHN and MAAG, JJ., concur.

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