Menard, Inc. v. Country Preferred Insurance Co.
2013 IL App (3d) 120340
Ill. App. Ct.2013Background
- Ruby Bohlen purchased bricks at a Menards store; while a Menards employee was loading bricks into her car, Bohlen tripped over debris/packing material and was injured.
- Bohlen sued Menard, Inc. (Menards) in a premises liability action alleging Menard negligently allowed debris to accumulate, causing her fall.
- Bohlen had an automobile liability policy with Country Preferred; the policy defines an “insured” as anyone using the insured vehicle with the named insured’s permission and expressly includes “loading and unloading” as part of the vehicle’s “use.”
- Menard requested defense/indemnity under Bohlen’s policy; Country Preferred denied coverage and declined defense.
- Menard filed a declaratory-judgment action; the trial court granted Menard partial summary judgment, holding Menard was an insured and Country Preferred had a duty to defend and that the policy provided primary (not excess) coverage.
- Country Preferred appealed; the appellate court affirmed the trial court’s ruling that Menard was an insured, Country Preferred had a duty to defend, and coverage was not limited to excess.
Issues
| Issue | Plaintiff's Argument (Menard) | Defendant's Argument (Country Preferred) | Held |
|---|---|---|---|
| Was Menard an “insured” under Bohlen’s auto policy (i.e., was Menard "using" the vehicle)? | Loading vehicle is a use; Menard’s employee was loading with Bohlen’s permission, so Menard is an insured. | “Use” means operating/driving; loading is not the vehicle’s use for purposes of coverage. | Held: “Use” includes loading/unloading per policy language and Illinois precedent; Menard was using the vehicle and thus an insured. |
| Does Country Preferred have a duty to defend Menard in Bohlen’s underlying suit? | Bohlen’s complaint alleges injuries that occurred during loading and may be causally connected to loading, so the claim is potentially covered and triggers a duty to defend. | The alleged negligence (premises maintenance) is independent of vehicle use and therefore not covered; no duty to defend. | Held: Duty to defend exists because the complaint potentially falls within coverage — injury occurred during loading and could be causally connected to the loading. |
| What test governs causal connection for loading/unloading coverage? | The reasonable-contemplation/complete-operations approach supports coverage where the injury is a foreseeable consequence of loading. | Argues causal connection lacking (premises-related, not vehicle-related). | Held: Applied complete-operations (loading includes preparatory acts) and reasonable-contemplation test; causal connection potentially satisfied. |
| Is Country Preferred’s coverage for Menard primary or excess? | The policy’s “excess” clause applies only to “you” (named insured); permissive users (like Menard) are not within the definition of “you,” so coverage is primary. | Because Menard does not own the vehicle, any coverage should be excess over other collectible insurance. | Held: The excess clause references “you” (named insured only); it does not apply to permissive users, so Country Preferred’s coverage is not limited to excess. |
Key Cases Cited
- Schultz v. Illinois Farmers Insurance Co., 237 Ill. 2d 391 (Ill. 2010) (use of vehicle not limited to driving; passenger can be permissive user)
- Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90 (Ill. 1992) (insurer’s duty to defend triggered if complaint potentially falls within policy)
- Toler v. Country Mutual Insurance Co., 123 Ill. App. 3d 386 (Ill. App. Ct. 1984) (loading/unloading coverage requires accident during loading/unloading and causal connection)
- Estes Co. v. Employers Mutual Casualty Co., 79 Ill. 2d 228 (Ill. 1980) (complete-operations doctrine applies to loading/unloading)
- Aryainejad v. Economy Fire & Casualty Co., 278 Ill. App. 3d 1049 (Ill. App. Ct. 1996) (adopting reasonable-contemplation test for causal connection)