Founders Insurance Company v. Sheikh
2017 IL App (1st) 170176
| Ill. App. Ct. | 2017Background
- On May 16, 2013, 15-year-old Sanan Sheikh, a valid Illinois permit holder, was practicing parallel parking the family van while his father, Maqbool, observed from across the street.
- Sanan accidentally struck a parked car, injuring Jasmin Kopic, who was standing in front of that car; Kopic sued Sanan and Maqbool for personal injuries.
- The van was insured by Founders Insurance, which sought a declaratory judgment that it had no duty to defend or indemnify due to a policy exclusion for use of a vehicle "without a reasonable belief" of entitlement to do so.
- Founders argued Sanan lacked a reasonable belief because the Licensing Law required a licensed adult to occupy the seat beside a permit-holder; Maqbool was not seated beside Sanan.
- The trial court granted Founders’ summary judgment relying on Founders Ins. Co. v. Munoz, holding as a matter of law that Sanan could not reasonably believe he was entitled to drive; Kopic appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether insurer has duty to defend/indemnify under exclusion for use without a "reasonable belief" of entitlement | Founders: Permit-holder violated statutory restriction (no licensed adult seated beside driver), so no reasonable belief; exclusion applies | Kopic: Sanan had a valid permit and was under his father's direct supervision (observing and able to give verbal directions), so a reasonable belief could exist | Reversed: question whether "reasonable belief" existed is factual and ambiguous here; summary judgment improper |
| Whether Munoz controls to bar coverage as a matter of law | Founders: Munoz held unlicensed drivers cannot reasonably believe they are entitled to drive, so similar result applies | Kopic: Munoz addressed drivers with no valid license, not licensed permit-holders; its holding is narrow | Court: Munoz is distinguishable because Sanan had a valid permit; Munoz’s narrow holding does not resolve this factual scenario |
| Whether "reasonable belief" in the policy is unambiguous | Founders: Court below treated statutory violation as rendering belief unreasonable as a matter of law | Kopic: Term is undefined and susceptible to differing interpretations given permit + parental supervision | Held: Term is ambiguous; its construction is a question of fact for a factfinder |
| Appropriateness of summary judgment | Founders: No genuine issue of material fact; entitlement decided as a matter of law | Kopic: Material factual dispute exists about nature of supervision and reasonable belief | Held: Summary judgment reversed; genuine issue of material fact exists and case remanded |
Key Cases Cited
- Founders Ins. Co. v. Munoz, 237 Ill. 2d 424 (Ill. 2010) (drivers without a valid license cannot reasonably believe they are entitled to drive)
- Outboard Marine Corp. v. Liberty Mut. Ins. Co., 154 Ill. 2d 90 (contract/summary judgment review standards)
- Nicor, Inc. v. Associated Elec. & Gas Ins. Servs. Ltd., 223 Ill. 2d 407 (insurance-policy interpretation follows contract rules)
- Hobbs v. Hartford Ins. Co. of the Midwest, 214 Ill. 2d 11 (unambiguous policy applied as written; court’s role is to give effect to parties’ intent)
- Northbrook Prop. & Cas. Co. v. Transp. Joint Agreement, 194 Ill. 2d 96 (insurer’s duty to defend is broader than duty to indemnify)
- Int’l Minerals & Chem. Corp. v. Liberty Mut. Ins. Co., 168 Ill. App. 3d 361 (exclusion clauses construed narrowly; applicability must be clear)
- Dash Messenger Serv., Inc. v. Hartford Ins. Co. of Illinois, 221 Ill. App. 3d 1007 (ambiguity in policy terms makes interpretation a question of fact)