American Service Insurance Company v. Arive
978 N.E.2d 242
Ill. App. Ct.2012Background
- American Service issued a liability policy to Marenda Schultz covering a Chevrolet Astro van, with Kayla Schultz named as an excluded driver.
- In October 2008 Kayla drove the van and collided with Denise Arive’s bus, leading Arive to sue Kayla and Marenda.
- American Service filed a declaratory judgment action arguing it had no duty to defend or indemnify due to Kayla’s exclusion.
- Arive argued the named-driver exclusion was unenforceable because Kayla’s name was not listed on the insurance card.
- The circuit court granted summary judgment for American Service, concluding Kayla was excluded; the appellate issue was whether listing excluded drivers on the insurance card is required to enforce the exclusion.
- Court affirms, holding the exclusion is enforceable irrespective of the insurance card listing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether listing excluded drivers on the insurance card is required to enforce the exclusion. | Arive contends 7-602 voids exclusion without card listing. | Arive argues card is required; Schultz’s policy excludes Kayla. | Exclusion enforceable despite card listing. |
| Public policy impact of named-driver exclusion and card requirements. | Arive asserts policy voids exclusion. | Insurer argues policy valid under existing public policy. | Card requirements do not void valid named-driver exclusion. |
Key Cases Cited
- St. Paul Fire & Marine Insurance Co. v. Smith, 337 Ill. App. 3d 1054 (2003) (recognizes exclusion may be consistent with public policy; 7-602 not read to void exclusions)
- Founders Insurance Co. v. Muñoz, 389 Ill. App. 3d 744 (2009) (held named-driver exclusion enforceable; supreme court affirmed in part, reversed in part)
- State Farm Mutual Automobile Insurance Co. v. Smith, 197 Ill. 2d 369 (2001) (public policy limits on exclusions; context for exclusions generally)
- Progressive Universal Insurance Co. of Illinois v. Liberty Mutual Fire Insurance Co., 215 Ill. 2d 121 (2005) (public policy considerations; inference of policy limits)
- Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90 (1992) (summary judgment standards; standard of review)