American Access Casualty Company v. Reyes
982 N.E.2d 261
Ill. App. Ct.2012Background
- American Access issued a September 2007 auto policy to Ana Reyes, listing Reyes as named insured and vehicle owner; declarations identified the vehicle as a 1999 Chrysler 300M.
- In the policy's operators section, Reyes is listed as EXCLUDED and Jose M. Cazarez is listed with an international license.
- Reyes executed an endorsement excluding coverage for any claim arising from Reyes operating any vehicle, and the policy contained a provision excluding bodily injury and property-damage liability for any car in the control of an excluded operator.
- On October 30, 2007, Reyes drove the insured vehicle, injuring Rocio Jasso and causing Sergio Jasso’s death; the Ja s sos sued Reyes for negligence.
- American Access filed a declaratory-judgment action seeking a ruling that the policy provides no coverage or defense due to Reyes driving; State Farm counterclaimed estoppel against exclusion.
- The circuit court granted summary judgment for American Access; on appeal, the court reversed and remanded to determine whether the policy, apart from the exclusion, provides coverage for the accident.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Reyes' blanket exclusion from liability coverage violate public policy? | Exclusion complies with 7-317(b)(2) but attempts to limit coverage contrary to statute. | Exclusion is valid under policy terms and public policy. | Exclusion invalid; public policy requires coverage for named insured. |
| Does the policy otherwise provide liability coverage for the accident aside from the exclusion? | Exclusion controls; no liability coverage exists for Reyes. | Coverage may exist apart from the exclusion; unresolved by record. | Remand to determine whether coverage exists apart from the exclusion. |
| Does section 7-602 create a limited exception for named-driver exclusions to apply to named insureds? | 7-602 allows named-driver exclusions for permissive drivers only; not for named insureds. | 7-602 could permit exclusions in some circumstances. | 7-602 does not authorize named-insured exclusions; distinguished from permissive-driver exclusions. |
Key Cases Cited
- Founders Insurance Co. v. Munoz, 237 Ill. 2d 424 (2010) (public policy limits on private contract; statutory compliance governs)
- Progressive Corp. v. Liberty Mutual Fire Insurance Co., 215 Ill. 2d 121 (2005) (exclusionary provisions may limit coverage but not violate 7-317(b)(2))
- Smith, 337 Ill. App. 3d 1056 (2007) (named-driver exclusions generally do not violate public policy when applied to permissive drivers)
- Dungey v. Haines & Britton, Ltd., 155 Ill. 2d 329 (1993) (named-driver exclusions upheld where not sole named insured)
- Arive v. American Service Insurance Co., 2012 IL App (1st) 111885 (2012) (public policy considerations on exclusions and liability coverage)