*1 FELLHAUER, BRADLEY J. Plaintiff-Appellant, ALHORN, v. NICOLE J. (Enterprise Defendant Company-Midwest, Rent-A-Car Garnishee-Appellee).
Fourth District No. 4 — 05—0220 Argued August Opinion filed October 2005. 2005. MYERSCOUGH,J., dissenting.
Gary (argued), P.C., L. Cline Rammelkamp Bradney, Springfield, for appellant. Wuller, Jr., (argued), Robert G. Neville, Matthew C. Zittel both of Wuller, L.L.C., Belleville,
Richards & appellee. JUSTICE opinion APPLETON delivered the of the court: Plaintiff, Fellhauer, Bradley J. injuries suffered being after struck motorcycle by on his a vehicle by garnishee, owned Enterprise Rent-A- Company-Midwest Car (Enterprise), defendant, and driven by Nicole J. Alhorn. Fellhauer sued Alhorn for his personal injuries and was awarded a judgment default against her in $450,000. the amount of garnishment Fellhauer initiated proceedings against Enterprise to col- lect the judgment. In response, Enterprise filed a motion to quash the garnishment summons and discharge garnishee. it as The trial court denied the motion quash but limited Enterprise’s liability to $50,000. Fellhauer appeals the decision, court’s claiming Enterprise liable for the entire judgment amount. We affirm.
I. BACKGROUND According to complaint, Fellhauer’s on June he was operating his motorcycle on Morton in Jacksonville, Avenue Illinois. Alhorn, operating a vehicle owned by Enterprise, was proceeding on Morton Avenue in opposite direction and turned left onto Church Street in the path of motorcycle, Fellhauer’s causing injuries. him
On February 2004, Fellhauer complaint against Alhorn, filed a alleging she negligently operated Enterprise’s in way such a to proximately injuries cause to Fellhauer. Alhorn failed to answer or appear, May 24, 2004, and on Fellhauer obtained a judgment default against her in $450,000. the amount of Alhorn was not insured and had declined coverage with Enterprise at the time she leased the vehicle. August 5, 2004,
On garnishment Fellhauer initiated proceedings against Enterprise. Fellhauer relied on chapter 9 of the Illinois Vehicle (Vehicle Code) (625 Code 2002)) through ILCS 9—110 5/9—101 vehicle, li- was Enterprise, as lessor support his claim that Alhorn, the lessee. injuries his caused able for quash 3, 2004, Enterprise filed a motion September On proper summons, claiming garnishment was not garnishment In the judgment Enterprise. trying to collect procedure benefit alternative, it held for Fellhauer’s Enterprise claimed Responsibility Illinois’ Minimum Financial to the “State of pursuant $50,000. limited to claimed its Enterprise laws.” a memorandum of law Fellhauer filed September On arguing garnishment was quash, motion to response Enterprise’s and, because judgment on the collecting method for proper self-insured, beyond the minimum extended Enterprise was it carry had it have been $50,000 policy limits would 9—105 Citing section to cover its losses. purchased an (West 2002)), argued Fellhauer Code ILCS of the Vehicle company’s suggested that a nothing in the statute limits. to the amount of the was limited meant it Fellhauer, choice to be self-insured Enterprise’s According to lessees. damages risk of caused all of the assumed motion supplement to its Enterprise filed a On November supplemental purchase Alhorn’s decision not to claiming quash, damages in nullified Fellhauer’s Enterprise effectively insurance from *3 to motion $50,000. Enterprise supplemental attached to its excess agreement. car-rental of Alhorn’s quash copy a decision, finding the its 4, 2005, the trial court issued On March a rental that owners of the of this State “evidences Code Vehicle in one of three liability carry amount a their contract with “by self-insured and chose to be ways.” Enterprise according to the minimum amount renter[,] the limited the Enterprise’s motion court denied legislature.” The by the established $50,000. The to liability was limited Enterprise’s but found quash to This Enterprise. $50,000 judgment against conditional entered a court appeal followed.
II. ANALYSIS for-rent statutory governing sections found the The trial court (West 2002)), read (625 when through 9—110 ILCS vehicles 5/9—101 financial to limit the intended the indicated together, $50,000 to vehicles owners of for-rent of self-insured responsibility li- no limits on statutes set claims the Fellhauer injured parties. third owners. ability for self-insured to the precedent legal and apply called
are We Blair, 215 v. Therefore, People is de novo. our review facts. undisputed (2005) review a courts (appellate 614 novo). 831 N.E.2d Ill. 2d issue de interpretation statutory duty here is Our $450,000 damages. awarded Fellhauer was (as $50,000 the liability is confined Enterprise’s whether
determine ruled) exposure unlimited Enterprise or whether trial court determination, must consider we this To make damages. Fellhauer’s general entirety based in its 9 of the Vehicle Code chapter clearly articulate 9 does not chapter objective. Because purpose and here, we presented to the issue regard intent with legislature’s intent as it legislative determine the the statute to interpret must so, doing In self-insurers. responsibility of and relates statutory construction. by the rules of guided we are construction, all other to which “The rule of cardinal effect to the subordinate, give and is to ascertain canons are rules and Director Corrections ex rel. legislature.” People true intent of Reviewing Booth, 215 Ill. 2d in rela whole and as a provisions the statute’s courts should evaluate given must be statutory language sections. The to other relevant tion Booth, 215 Ill. meaning. popularly understood plain, ordinary, 573. 2d at 830 N.E.2d at The Statutes
A. chapter important 9 is statutory language Because statutory sections of the individual disposition, summary á brief this (625 Code Section 9—101 of Vehicle within 9 follows. 2002)) vehicles, (West of for-rent requires the owner ILCS 5/9—101 the Illinois responsibility with proof to file of financial Enterprise, like may (Secretary). Proof of Secretary of State or bond, policy, an insurance of three forms: come in one the Illinois Director of issued certificate of self-insurance 2002). (West 625 ILCS Department of Insurance. 5/9—102 2002)) (West sets forth 9—103 ILCS Section 5/9—103 shall be conditioned the owner’s bond requirements final” it becomes days after pay any judgment within owner “will The bond the rented vehicle. injury result of caused entered as a by an authorized executed sum of penal shall be in the 2002). surety company. or See 625 ILCS individual surety’s withdrawal of a governs procedures Section 9—104 *4 file another withdrawal, shall the owner Upon bond. provisions compliance in policy” or insurance “bond 2002). 9. 625 ILCS chapter See 5/9—104 insur- for an requirements 105, which sets forth Section 9— policy to secure for-rent vehicles the owners of policy,requires ance insuring the operator of the rented motor against liability bodily injury in the minimum amount of per person and $100,000 per occurrence. The provide must that “the insurance carrier pay any judgment will days within 30 after it becomes final” entered as injury a result of caused the rented vehicle. 625 ILCS (West 2002). 5/9—105 requires
Section 9—108 any person desiring engage in the renting business of out motor vehicles present Secretary must application approval the “insurance or bond” he or she has obtained required by as section 9—102. Upon approval, the Secretary shall issue a certificate of compliance to the applicant. See (West 2002). 625 ILCS 5/9—108
Section 9—109 Secretary authorizes the to cancel the certificate of compliance when the policy” owner’s “bond or inoperative has become (West 2002). for any reason. See 625 ILCS Section 9—110 sets forth the penalties for violations of 9. See 625 ILCS 5/9— (West 2002).
B. Self-Insurance Defined “The term ‘self-insurance’ has precise legal meaning.” no 1A (1995). 10:1, Couch on Insurance 3d at 10—2 concept led legislatures courts and struggle with questions par of how to treat acting and, ties as their particular, own insurer whether self- insurers should be considered the of an insurer. 1A See (1995). Couch on Insurance §3d 10:2 An explanation purpose and characteristics of helpful self-insurance will be here.
As one Jersey appellate New court found:
“[S]o-called self-insurance is not insurance at all. It is the antithesis of insurance. The essence an insurance contract shifting of the risk of loss from the insured to the insurer. The es- self-insurance, sence of a term colloquialcurrency rather than of precise legal meaning, is the retention of the risk of loss the one directly imposed by whom it is law or contract.” American Hospital, Nurses Ass’n Passaic General Super. N.J. 471 A.2d Jersey recognized
This New
court
general,
that “within the
imprecise[,]
amorphous
concept
type
of self-insurance there is one
of self-insurance which does have a legally-recognized identity and a
clearly
is,
consequence”
designated
defined
those
as self-insurers
—that
compulsory liability
within the context of
Nurses,
Super,
mandates. American
Fellhauer claims liable the 9 does damages. argues plain He that financial- as a The other two Enterprise’s exposure limit self-insurer. (a are policy) bond and a traditional insurance responsibility options Fell- set forth limits. governed by specifically (a section hauer claims that since section 7—502 of the Vehicle Code financial-responsibility provisions) that addresses miscellaneous the requires pay “any judgment against any person,” a self-insurer to legislature (Empha- intended for for self-insurers. exposure unlimited added.) (West 2002). ses 625 ILCS 5/7—502 legitimately Enterprise’s
If Fellhauer believed Alhorn’s, Enterprise he or have sued as a would should Instead, Enterprise codefendant and allowed to defend the action. he garnishment, proceeding garnishee chose the holds a fund where $50,000) (namely party. for the benefit of the liable Fellhauer’s chosen legal speaks argument appeal. maneuver louder than his on argument
Fellhauer’s in the proposition results invalid Enterprise responsibility bears the same to Fellhauer as Alhorn. Car- agencies rental negligent egos guarantors. are not lessees’ alter or The only nexus between Fellhauer and Enterprise is the financial- statute, responsibility purpose protecting which was enacted for the public negligent the Fogel drivers of rented vehicles. See Enterprise Leasing App. Co. 353 Ill. 3d Chicago, (2004). some, provide N.E.2d It was enacted to not neces total, Rentals, sarily protection. See Insurance Car Inc. v. State Farm Co., App. Mutual Automobile Insurance 152 Ill. 3d (1987). purpose protecting public This the does not reflect proposition company effectively the that a rental-car into the steps negligent shoes of its driver the driver’s rental of one of its vehicles.
D. Applicable Law claim, law, In analyzing applicable Fellhauer’s we look to the including statutory language, to determine whether self-insurers intended, meaning were within the of the state’s financial- law, differently to be treated than bonded or insured companies. party providing a self-insured is considered to be
“Whether (1) analysis, large part purpose ‘insurance’ depends (2) is, arrangement described as self-insurance in real- whether by merely or
ity, party an effort to assume insurable risks (3) ‘deductible,’ entity made a amounts to a and whether the conscious, calculated decisionto estimate its risk and set aside suf- losses, off- expected simply ficient funds to cover or somewhat handedly purchasing to save the cost of decided merely 1A on Insurance hoping that no losses would occur.” Couch (1995). 10:2, § at 10—2 3d 1A analysis wording is driven of the relevant statutes. 9, the Throughout chapter on Insurance 3d 10:3
Couch bond,” reference to “policy specific referred to a or without self-insurers, referring to the “certificate” held when (625 of an insurance procedures after a cancellation ILCS 5/9— (West 2002)), is “not suf- a determination that 2002)), for the procedures ficient” ILCS 5/9—107 *6 compliance upon proof Secretary’s issuance of a certificate (625 (West 2002)), the and ILCS 5/9—108 compliance for the cancellation of the certificate of procedures (West 2002)). ILCS 5/9—109 not to unlikely legislature that the intended for self-insurers
It is any statutory of the above-cited sections. governed by be included or example, company’s policy if a rental-car insurance or bond For reason, that any Secretary require for the would inoperative became (see “policy or bond” 625 ILCS company to secure another 2002)). to exclude as unlikely legislature It is that the intended find requirements the of a self-insurer. We option compliance with an legislature did not intend to treat self- sense dictates that common unlimited when their differently expose them to insurers policy, insurance to be covered a traditional counterparts, who chose presumes self-insured exposure. The choice to be only have of such a analyzed the risks and rewards company the rental that forecast, and, chose the upon based its own financial decision comply financial-responsibility to with the option certificate as its best this state. laws of liability of a self- the extent of
Illinois courts have addressed therefore, jurisdictions we looked to other company; insured position. Boatright our See support and found for guidance (self- 897, 507, 509-10, 898-99 2d 570 N.W2d 214 Wis. Spiewak, only to the amount injured plaintiff to Enterprise was liable insured company required for a rental statutory policy limits equivalent to the ELRAC, Ward, 96 N.Y.2d Inc. v. by policy); covered chose to be which (2001) (state financial-responsibility 1, 692 58, N.E.2d 724 N.Y.S.2d 748 a self- in terms of between not make distinction did statutes outside company purchased which company and a rental insured rental
799 Leasing v. Burdette’s insurance); Insurance Co. Home Southern (a self- 870, 472, 478, 234 872 Service, Inc., 268 S.E.2d S.C. statutory li public that a protection same provides insurer Car, Inc., A 940 F.2d Rent Agency Kiernan v. provides); ability policy (4th 1991) every that insurance 917, mandates (Virginia law 920 Cir. self-insurers, provide the same including “written” policy, those Corp., P.2d Hertz liability coverage); McSorley v. level of 1994) (“self-insurer (Okla. compulsory comply to allowed by agreeing pay equivalency laws insurance registered in all of vehicles amount be carried owners 2005) (self- (Utah Oklahoma”); App. Zhang, Li v. P.3d an amount pay injured party must company insured rental limits); Millers minimum insurance Milwaukee, City 184 Wis. 2d National Insurance Co. v. (1994) (the self-insurer, city, responsible N.W.2d covering third-party would attach to insurers same liabilities that risk). the same directly by including states addressed issue
Several have speci- that respective financial-responsibility in their pay judgments fies “will and in the that self-insurer the same obligated pay that insurer would been under same amounts an have liability policy an motor vehicle if it had issued such a owner’s 303.160(1)(4) (West 2003); § said self-insurer.” Mo. Ann. Stat. see 344.30(4) (West 2005); Ann. Transp. § also Stat. Tex. Code Ann. Wis. (Vernon 1999). 601.124(c) persuasive authority analysis Based the above our statutory language, purposes we find for the 9 of the self- Vehicle Code intended no distinction between companies and those purchased insurers outside *7 injured of policy companies’ liability parties. in terms third in regard decision is not affected the authorities relied Our this Myerscough presented in her The in upon by Justice dissent. issue Garrott, App. (1992), 219 v. 238 Ill. 3d N.E.2d Corp. Hertz under self- was the extent of Hertz had its certificate, car-rental rather whether a breach of the insurance but Likewise, liability. interpreting all contract entitled Hertz to avoid statutory requirement of Jersey’s similar financial New Nationwide, Inc. companies, the court in v. Ryder/P.I.E. car-rental (1990), Inc., A.2d Bay Corp., Harbor said, quoted case the dissent: portion in addition that “Moreover, coverage it obligations, is respect scope of this to consider a self-insurance policy the well-settled state We [Citation.] of insurance. policy certificate find no reason to make a distinction between the two forms of insurance coverage and a —self —based N.J.S.A. coverage.” with respect to the extent of statutorily-required 39:6B— agreeWe and have no reason to draw such a distinction in Illinois.
III. CONCLUSION For the foregoing reasons, we affirm the trial judgment. court’s Affirmed.
KNECHT, J., concurs. MYERSCOUGH, JUSTICE dissenting: I respectfully dissent. The majority correctly recognizes that statu- tory language given must be plain, ordinary, popularly understood meaning. The majority correctly also sets forth the statu- tory provisions governing bonds and insurance policies for rental-car companies. However, provisions none of these limits a rental-car company’s Lability to the minimum amounts of mandatory insurance. These only set forth the minimum insurance that must be ($50,000 $100,000) available and the minimum bond required ($600,000). No in the statutes limits the rental-car owner’s liability to those mínimums but requires rather it the rental-car company pay “any judgment days within 30 it becomes final.” after (West 2002). fact, ILCS In timely pay failure to judg- ment shall result in cancellation of the certificate of self-insurance. majority upon relies its own “common sense” to limit the self-insurer’s liability to the statutory $50,000. minimum of This is incorrect, as noted in Corp. Garrott, Hertz 238 Ill. App. 3d (1992): addition,
“In we find no merit to Hertz’s contention finding that the exculpatory void, clause obligation indemnify third parties is limited to the amounts required statute agency for the to demonstrate its responsibility. financial Chapter 9 provides Vehicle Code owners for-rent vehicles, in operate order to their Illinois, business in the State of must demonstrate responsibility by bond, posting obtaining insurance, or obtaining a certificate of self insurance. (Ill. 95x/2,par. Rev.Stat. ch. seq.) 9—101 et At the time of the accident, if posted, a bond was amount of the bond $50,000, was obtained, if a of insurance was the amount of liability[-]insurance coverage necessary $50,000. Nevertheless, merely we find that the statute prescribes the minimum amounts *8 by a rental to business in the State.” agency needed conduct added.) (Emphasis court not its This should rewrite statutes with own “common sense.” public policy statutory language supports Neither nor the treatment of pay hefty premiums self-insureds in the same manner as who to those by injured assure available insurance to those the rental car. The correctly recognized preference a for insured vehicles. go recognize the Hertz does to the rental-car Admittedly court company’s right scope obligation limit contractual to the limits, mandatory liability just minimum the trial did court here. However, the court found exculpatory excluding Hertz also an clause liability driving for drunken public policy. invalid as violative of Similarly here, limit permitting Enterprise contractually liability in the face requiring payment “any of statutes of judgment” would violate those statutes and public policy
New Jersey recognizes liability the unlimited nature of of the self- companies insured rental-car as set forth in Jersey’s New self-insured statutes, which parallel Illinois’s provisions: self-insurance,
“Weare that the nature aware of the advantage for sought, which it is that it company carry is a allows its own risk payment of loss and avoid of premiums for insurance coverage through private company. a [Citations.] liability however,
Unlike
policy,
purchased
a
is
which
amounts
equal
greater
to or
than the mandatory
required by law,
1,
N.J.SA.
carry
self-insurer
risk
does
of loss
a
39:6B—
specified
Rather,
a
dollar amount.
explicit
there
no
limitation on
a
liability.” Ryder/P.I.E. Nationwide,
self-insurer’s
Inc. v. Harbor
Bay
412,
Corp.,
575 A.2d
421-22
The majority
my
references
use of this
out of context. The
Jersey
New
court
merely
statement,
statement
reflects on its latter
“Moreover,
respect
scope
coverage
it is
obligations,
well-settled
this
state
consider
self-insurance certificate
as the
of a policy
(Ryder,
of insurance”
The majority relies upon
“common sense” and
a series of
guidance.
Illinois
distinguishable
jurisdictions
cases from other
have not addressed
extent
a self-insured
courts
therefore,
jurisdictions
I
to the other
cited
company;
looked
distinguishable
majority
and found
referenced cases
*9
519,
214
at
N.W.2d at
Boatright,
the case before us. See
Wis. 2d
570
344.30(4) (1993) (self-insurance
902,
statute
Stat.
quoting Wis.
“
pay ‘the same amounts
specifically provided self-insurer will
obligated
pay
a motor vehicle li-
insurer would have been
under
”);
such self-insurer’
ability policy if it had issued such a
(self-
Co.,
872