*1 (No. 98329 . COM INSURANCE UNIVERSAL
PROGRESSIVE LIBERTY v. ILLINOIS, Appellant, OF PANY COMPANY, Appel FIRE INSURANCE MUTUAL lee. April 2005.
Opinion filed *2 J., KILBRIDE, dissenting. Chicago Montgomery John, Ltd., of
Williams & (Alyssa Campbell, Barry Hodyl Kroll, Richard M. L. counsel), Lloyd appellant. Williams, Jr., E.
Joseph Spahr, Postel, Meachum, Cozzi, E Postel & Chicago, appellee. Zenz, of for opinion of the JUSTICE KARMEIER delivered the court: pizzas Pizza,
Ronald Abbinante delivered for Casale delivery, using to make a Inc. While his mother’s minivan injured pedestrian. a The issue Abbinante struck Progressive this case is Universal Insurance whether Company (Progressive), issued the mo- of Illinois which tor on Abbinante’s vehicle indemnify duty van, him in had a to defend and mother’s injury subsequently injured personal a action filed declaratory pedestrian pedestrian’s In a and the wife. by Progressive, judgment court of action filed the circuit Page Du County held that because of a provision policy excluding coverage for bodily injury property damage arising out of the use of the carry vehicle to persons or property for compensation fee, or a including food delivery, the company owed no such duty. appel reversed, late court finding exclusion to be void and unenforceable under this state’s law mandating liability coverage for permissive users aof vehicle. 347 Ill. App. 3d 411. granted Progressive’s We petition for leave to ap peal. 177 Ill. 2d R. 315. follow, For the reasons that we now reverse the judgment of the appellate court.
The facts are undisputed. Shirley Abbinante owned a minivan which she insured through Progressive. On August 25, 2000, Mrs. Abbinante allowed her son Ronald to use the van to deliver pizzas Pizza, for Casale Inc. The company gave Ronald money gas for him paid $1.25 for each pizza he delivered. driving While his mother’s van in the delivering course of a pizza for the company, Ronald pedestrian struck a named Mikhail Lavit. Lavit and his wife sued Ronald and Casale Pizza to obtain dam- ages personal injuries, including brain and spinal injuries, cord sustained as a result of the accident. Progressive began defending Ronald in the personal injury action under a rights. reservation of While that action was underway, sought the Lavits and obtained a $100,000 payment of from insurer, their own Liberty Mutual). Mutual Fire Company (Liberty Insurance That payment represented the limits of the uninsured-motorist coverage provided by their Mutual motor vehicle paying
After the policy Lavits, Liberty limits to the Mutual demanded reimbursement of that sum from Progressive. Progressive responded by bringing this ac- Page tion the circuit court of Du Cоunty obtain declaratory judgment no duty had to defend or *4 indemnify injury Ronald the Lavits’ action. personal against Liberty Mutual, turn, asserted a counterclaim Progressive seeking of the sums it had reimbursement provi- paid to the under the uninsured-motorist Lavits sions of their summary judgment pursuant
Progressive moved for (735 the Code of Civil Procedure to section 2—1005 of (West 2000)) arguing that it owed no ILCS 5/2—1005 duty indemnify because his conduct to defend or Ronald forth in the fell within the terms of an exclusion set policyit issued to Ronald’s mother. That exclusionstated policy, including Progressive’s under the duty bodily injury apply property defend, did not to or damage arising out of maintenance, ownership,
“the or use of a vehicle while be- carry ing persons property compensation used to or for or *** fee, to, including, delivery food, a but not limited or any products.” other
Liberty Mutual countered with a cross-motion for sum- mary judgment, Progressive arguing that could not avoid obligations its contractual on this based only ambiguous, because the exclusion was but contrary public policy.
Following hearing, granted the circuit court summary judgment by Progressive motion for filed summary judgment denied the cross-motion for filed view, Mutual. In the court’s the food unambiguous exclusion in the was both valid. Progressive duty, law, therefore had no as a matter of indemnify duty, Liberty defend or Ronald. Absent such a obtaining Mutual had no basis for reimbursement from Progressive. summary judgment
The circuit con court’s order express finding pursuant Supreme tained an written 304(a) (155 304(a)) Court Rule Ill. R. there was just delaying appeal no or reason enforcement *5 Liberty
both.1 Mutual appealed. Ronald, mоther, his Pizza, Lavits, Casale and the who were also named as case, defendants in the did not contest circuit court’s judgment and are no longer involved in proceed these ings.
In appeal, Liberty its argued, Mutual as it had court, circuit that the food delivery exclusion in issued to Ronald’s mother ambiguous was and contrary to public policy. appellate agreed court with the circuit court that the claim ambiguity was meritless. Viewing the exclusion with reference to the particular case, facts of this the appellate court held that the exclu sion completely was unambiguous and that Ronald’s squarely conduct fell within its terms. The policy excluded where the vehicle was being used to deliver food for a fee compensation, and, or the appellаte observed, precisely that was what Ronald was do ing at the time he hit Mr. He using Lavit. was the van to food, namely, pizza, deliver being was paid compensa fee, tion or a per delivery plus gas money, $1.25 to do so. App. 347 Ill. 3d at 415. appellate
While the
court found
ambiguity
no
in the
policy’s food delivery
case,
exclusion as applied to this
agreed
Liberty
Mutual’s additional claim that
public
exclusion violated
policy. Relying on this court’s
recent decision in State Farm Mutual Automobile Insur
Smith,
ance Co. v.
(2001),
“[s]hall insure the of such motor using responsible or for the use person express implied permission vehicle or vehicles with the insured[.]” of the his mother’s using Ronald was the vehicle with
Because injured at the time hе struck and express permission 317(b)(2) Lavit, required the court held that section 7— Ronald in the Progressive indemnify to defend and *6 injury by action him the Lavits. personal brought against view, In giving court’s effect to the food appellate delivery policy exclusion in the mother’s would conflict statutory requirement goal with this and contravene the liability of Illinois’ motor vehicle insurance law. Accordingly, appellate court reversed the circuit court’s of entry summary judgment Progres favor of summary judgment Liberty sive and entered in favor of by Mutual. 347 Ill. 3d at 416-18. This App. appeal Progressive followed.
In proceedings court, before our no issue is raised clarity as to the of the food exclusion in the mother’s insurance It is conceded to be unambigu- ous. The sole for our is question presented review appellate holding whether the erred in summary judgment Mutual was entitled to on the grounds that the exclusion was void and unenforce- able.
The standards to this are applicable inquiry well where, Summary judgment proper established. is when light in the nonmoving viewed most favorable to the admissions, party, and af- pleadings, depositions, genuine fidavits on file reveal that there is no issue as to any moving party material fact and that the is entitled to
128 judgment as a matter of entry law. Whether the of sum mary judgment was is a appropriate matter we review de novo. General Casualty Insurance Co. v. 2d Lacey, Ill. (2002). 281, De novo review is also appropriate because resolution appeal of this turns on questions of statutory interpretation. Midstate & Siding Window Co.
v. Ill. Rogers, 204 2d 601(a) Section of the Illinois Safety Family 7— (625 601(a) Financial Responsibility Law ILCS 5/7 — (West 2000)) liability mandates insurance designed automobiles and other motor vehicles to be used on public highway. statute, Under the person no is permitted operate, register registration or maintain of such a motor vehicle unless vehicle is covered a li ability insurance policy. State Farm Mutual Automobile Smith, Insurance Co. v. types Ill. at 373. Certain are exempt vehicles from this requirement. See 625 601(b) (West 2000). ILCS exemptions, None of those 5/7 — however, applicable here. 601(a)
The liability insurance mandated section 7— must meet certain requirements. require- One of those 317(b)(2) ments is set forth in section of the Illinois 7— (625 Safety and Family Responsibility Financial Law (West 317(b)(2) 2000)). ILCS As indicated earlier in 5/7 — 317(b)(2) opinion, section that a motor provides vehicle owner’s *7 person any
“[s]hаll insure the
named therein and
other
person using
responsible
or
for the use of such motor
express
implied permission
vehicle or vehicles with the
317(b)(2)(West2000).
insured[.]”
of the
625 ILCS 5/7—
this,
liability coverage
Provisions such as
which extend
who use the named insured’s vehicle
his
persons
commonly
or her
are
referred to as “omnibus
permission,
Where,
Illinois,
clauses.”
as in
an
is
omnibus clause
statute
in motor
li-
required by
included
vehicle
ability
our court has held that such a clause
policies,
every
must be read into
such
State Farm Mutual
Automobile Insurance Co. v. Universal Underwriters
(1998).
240,
2d
Group,
Ill.
243-44
principal purpose
of this state’s
li
ability requirement
protect
public by
is
of their
securing payment
damages. State Farm Mutual
Smith,
Automobile Insurance Co. v.
In evaluating whether statutory provisions override terms, contractual courts must remain mindful of principles of freedom of contract. The freedom of parties to make their agreements, own on hand, the one their obligation to honor statutory requirements, on the other, may sometimes values, however, conflict. These are not antithetical. Both serve the interests of the public. Just as public policy demands adherence to statu tory requirements, it is in the public’s interest persons not be unnecessarily restricted in their freedom to make their own power contracts. The to declare a private contract void as against public policy is therefore sparingly. exercised First National Bank Springfield v. Research, Malpractice Inc., 179 Ill. 2d An agreement will not be invalidated on public policy grounds unless it is clearly contrary to what the constitu tion, the statutes or the decisions of the courts have *8 public policy manifestly
declared to be the
or unless it is
injurious
public
agreement
to the
welfare. Whether an
contrary
public policy depends
particular
to
on the
facts
and circumstances of the case. H&M Commercial Driver
Leasing,
ValleyContainers, Inc.,
Inc. v. Fox
209 Ill. 2d
(2004).
challenge
public policy
Mutual’s
to the food
primarily
in
exclusion at issue
this case relies
on
our decision in State Farm Mutual AutomobileInsurance
Smith,
case,
In
Co. v.
197 Ill.
a man
compan
named Maurice Barnes drove to a casino with a
Ruby
by
ion,
Smith, in a car owned Barnes and insured
subject
State Farm. Barnes left the
vehicle
awith
parking
employed
valet
the casino
he and Smith
while
gamble.
ready
leave,
went in to
When the two were
attempted
the valet retrieved the vehicle. As Smith
passenger’s side,
enter the car on the
the
rolled
vehicle
striking
knocking
ground.
backwards,
her and
her to the
subsequently
negligence
against
filed a
Smith
action
parking
Barnes,
valet, and
the casino. The valet and
tendered their defense to State
casino
Farm. State
brought
Farm
refused
tender and
an action to obtain
declaratory judgment
duty
defend
owed no
grounds
indemnify As
for its
valet and
casino.
claim,
State Farm relied on an exclusion
the vehicle’s
specified
which
that no
would
“
subject
provided
vehicle was
‘BEING
when
REPAIRED,
BY ANY
SERVICED OR USED
PERSON
A
EMPLOYED
IN ANY WAYIN CAR
OR ENGAGED
” (Emphases
original.)
Farm
BUSINESS.’
State
Smith,
Mutual AutomobileInsurance Co. v.
On cross-motions for against Farm and the valet court ruled favor of State ap- holding casino, that the exclusion was and plicable duty had no and that State Farm therefore provide appellate a defense or indemnification. The concluding reversed, that State Farm could not avail obligations itself of the car business exclusion to avoid its *9 policy. under the State Farm Mutual Automobile Insur App. Fisher, ance Co. v. 315 Ill. 3d 1159 We granted petition appeal State Farm’s for leave to and af appellate firmed the court. appellate grounds court advanced two basic
support of First, its decision. it held that the exclusion was unenforceable because it conflicted with the manda tory language provision of the omnibus clause set forth 317(b)(2) Safety Family in section of the Illinois and 7— (625 317(b)(2) Responsibility Financial Law ILCS 5/7 — (West 2000)) and the of this state’s legislation. automobile insurance State Farm Mutual App. Automobile Fisher, Insurance Co. v. 315 Ill. 3d at inap Second, 1163-65. it ruled that the exclusion was plicable parking because the valet service furnished the casino did not constitute a “car business” within the meaning of the State Farm Mutual Automobile App. Fisher, Insurance Co. v. 315 Ill. 3d at 1166. opinion affirming appellate judgment
Our court’s only grounds. relied on the first of these We noted that gives person when a vehicle owner his vehicle to a engaged business, a car
“the owner giving is also person that express implied or permission Therefore, to use the vehicle. provision writ ten into an that coverage excludes for persons engaged in an necessarily automobile business excludes persons for using who are an insured’s vehicle with the express implied insured’s permission.” State Farm Mutual Smith, Automobile Insurance Co. v. Ill. 2d at 374. Citing opinion our in State Farm Mutual Automobile Group, Insurance Co. v. Universal Underwriters 182 Ill. (1998), language 2d 240 and the clear of section 317(b)(2) Safety Family of the Illinois Financial Responsibility mandates Law, that the statute we wrote liability coverage permissive motor vehicles. users of appellate had, concluded, as the We therefore coverage persons policy excluded from the because the permission, using with the insured’s the vehicle 317(b)(2) result, As a and was void. violated section 7— upon by relied State Farm could not be the exclusion deny request by defend the valet and the casino to indemnify State Farm Mutual Automobile them. Smith, 197 Ill. at 374. Insurance Co. v. arguing opposed conclusion, if
State Farm
virtually every
unenforceable,
here were
the exclusion
might
possible
include
that an insurer
other
prohibited.
liability poliсy
Without
would likewise be
a
addressing
argument,
held
Farm’s
we
the merits of State
particular
simply
limited to the
that our decision was
permissibility of other
in the case. “The
exclusion at issue
*10
today,”
possible policy
before us
we
exclusions is not
any
opinion
express
exclu
to
other
wrote,
no
as
“and we
Co. v.
Automobile Insurance
Farm Mutual
sion.” State
Smith,
Although
expressly
of our deci
limited the reach
we
v.
Insurance Co.
Mutual Automobile
sion in State Farm
(2001),
argued
Liberty
Mutual
Smith,
The court’s respects, many the similar, in is That case standable. suggested in earlier As us here. matter before opinion, agreement however, whether a contractual against public policy ultimately depends void as on particular circumstances facts of each Our and case. significant examination of Smith discloses a factual issue distinction between car business exclusion at in there and the food exclusion Ronald’s mother’s only applied car in
The business exclusion Smith permissive case, users. Unlike the exclusion in this it was inapplicable spouse, any named to the insured or his or agent, employee partner spouse insured, his spouse, The insured, certain others. named his exempted expressly the others were from exclusion. Admittedly, specifically we did discuss that fact opinion. just our indicated, however, As we have we took opinion particular provision care to limit our to the is at (State sue in the case Farm Mutual Automobile Insur 379), exemption Smith, ance Co. v. 197 Ill. 2d at and the clearly appellate from the was described (see opinion court’s State Farm Mutual AutomobileInsur (2000)). App. ance v. Fisher, Co. Ill. exemption from the exclusion in Smith meant that conduct which would covered if undertaken the insured would not be if covered undertaken using someone who was the vehicle with the insured’s permission. engage Barnes, insured, was free compromising liability “car business” without cover- his age. only It was others to whom Barnes entrusted the vehicle who were not covered “car business” activi- disparity plainly ties. This was inconsistent with section (2)’s 317(b) requirement poli- *11 “any only person cies cover not but the insured also other using responsible or of the use such motor vehicle or express implied permission vehicles with the or of the 317(b)(2)(West2000). insured.” 625 ILCS 5/7 — disparity present No similar is in the issued 134 in the case.
Progressive present to Ronald’s mother policy, the and terms of that unambiguous Under clear The exempt no one is from the food exclusion. mother, equal with force to applies Ronald’s insured, anyone using is the her van who named and her if mother used permission. Accordingly, Ronald’s right have more pizzas, the van to deliver she would no and her than Progressivе indemnify to insist that defend no coverage. Ronald would provide has. does Progressive’s policy exclusion in Because the using insured and those not differentiate between the is no permission, vehicle insured’s there with the Smith, insurance liability there was that possibility, as also not be extended coverage afforded insured would 317(b)(2)’s Section users of vehicle. permissive 7— not policies cover requirement person using or “any but also other only the insured of or vehicles for the use such motor vehicle responsible of insured” implied permission with the or express 2000)) 317(b)(2) (West (625 not ILCS is therefore 5/7 — does result, delivery exclusion As a the food imperiled. said to with the statute and cannot be conflict against as public void basic of statu
This is rules supported conclusion statutory The cardinal rule of tory interpretation. construction, one all other canons and the to which subordinate, effect give are to ascertain and rules Country legislature. meaning the true intent Co., Insurance Ill. Co. v. Teachers Mutual Insurance (2001). 322, undertaking responsibility, In 2d legislature enacted presume must that when the we absurd, did inconvenient law, produce not intend Comm’n, Ill. Choi Industrial results. Sun v. unjust be an results, however, would Such of section interpretation consequence inevitable 317(b)(2) case. by Liberty Mutual urged *12 317(b)(2) If operated to section invalidate the food delivery respect exclusion with permissive to users such does, Ronald, Liberty as argues Progressive as Mutual it obliged be and indemnify permissive would to defend us- clearly ers for conduct be if would not covered by undertaken the actual named insurеd. Recognizing obligation, named readily insureds could evade the policy’s merely by lending restrictions their vehicles to one making temporary another. After the in- swap, sureds would be mere permissive users of one another’s and, such, vehicles as enjoy liability coverage would conduct lie if coverage where no would the insureds drove their own vehicles.
Insurance companies underwriting make decisions and policy premiums calculate on the based characteris- of a policyholder, tics the risks policyholder presents, and the contractual terms and by limitations which the policyholder agrees to be bound. If policyholders were al- lowed to avoid the policies limitations in their obligate companies the insurance pay damages by to swapping vehicles they engage whenever wanted to conduct that would otherwise be from coverage, excluded the criteria employed by insurance companies issuing policies would be fundamentally Through eroded. simple of loaning others, act his her vehicle to policyholder subject could an insurer to risks insur- company ance had no toway foresee and which the par- ties the insurance expressly agreed contract had The exclude. company would denied the benefit of its bargain, and the insured would receive a coverage windfall the form of it did pay. for which Liberty Mutual responds problems to the that would disparate from application flow of the exclu food law, by sion arguing that under the the exclusion is not users, оnly permissive void and as unenforceable void also as to the insured. unenforceable named
Indeed, Liberty contends that Illinois’ Mutual virtually requirement any nullifies liability insurance providing exclusion that would allow an insurer avoid required than the minimum less exclusions, view, in valid Mutual’s only law.2 legislature. are those authorized law find this contention untenable. Illinois We registering from or main- prohibits persons operating, *13 designed of a to be taining registration motor vehicle a vehicle is covered highway used on unless the public 601(a) (West liability a insurance 625 ILCS 5/7 — 2000). terms, runs the By opera- its to prohibition vehicles, not insurance and owners of motor their tors or Merely persons cannot own operate carriers. because not mean required insurance does vehicles without cover, required carriers are to without that exclusion, every and sustain. operators loss owners liability insur- requirement
Because the maintain statutory origin, any in restrictions on insur- ance is must also emanate required comply ance with law specify here pertinent our statutes from statutes. (625 coverage minimum amounts ILCS 5/7 — (West 317(b)(3) 2000)) 601(a), impose various 7— 7— a including requirement a that requirements, other in coverage to losses that occur policy’s liability apply limits the United well as the continental of Canada as 317(b)(3) (West 2000). Nowhere, ILCS States. 625 5/7 — however, expressly to an insur- parties does the law forbid liability risks from excluding from certain ance contract coverage. Liberty theory, law
2Under Mutual’s respect viability no on the of exclusions with has effect (1) required by liability coverage in excess оf the minimum losses (2) liability coverage. any or form of other than statute matters, dispute Liberty does not that the food to those Mutual As fully opera Progressive’s policy would remain tive. view,
Contrary Mutual’s section 317(b)(2) Safety Family of Illinois Financial 7— Responsibility prohibition. Law contains no such As discussed earlier in this a opinion, simply requires liability policy only motor vehicle insure not the person therein, “any person using named but also other or responsible for the use of such motor or vehicle vehicles permission with the express implied the insured.” 2000). 317(b)(2) (West 625 ILCS 5/7 — permissive That users must be covered along way the named insured no compels the conclusion that exclusions permissible. are never Inclusion of permissive goes users to the issue of who must It says nothing covered. of what must risks be cоvered. To hold that requiring coverage for permissive users means that insurers excluding are forbidden from certain of risks types from coverage requires leap reasoning a language neither the nor statute the rules of statutory construction will support. It is non sequitur.
A more interpretation reasonable of section 317(b)(2), and the one adopt, legislature we is that the *14 merely intended to insure that the common and often unavoidable of practice entrusting one’s vehicle to someone else does not an injured foreclose from party obtaining payment for otherwise resulting covered losses operation from of the vehicle. The of scope coverage is by unaffected the law. The statute simply eliminates from coverage determinations the that a happenstance vehicle operated by was a permissive user rather than the actual a by owner. If loss is policy, covered the the fact that the vehicle operated permissive was user will not excuse the insurer from obligation pay. its will The loss continue to be covered. Conversely, if a loss is excluded coverage by from policy, the fact that the vehicle was operated by a permissive trigger obliga- user will not an to pay tion that would not have existed had the vehicle
138 will operated by been its actual owner. loss continue excluded. Assembly Had the wished to bar insurers General from motor excluding from certain risks vehicle pertinent provided so in the policies, easily could have contrary, statutes. It did not dо so. To the the Illinois Family Responsibility clearly Financial Law Safety may policies that exclusions be included in contemplates why That upheld. and that those exclusions will be (West (625 ILCS section 7—602 of the statute 5/7 —602 2000)) requires insurance cards to contain a disclaimer “[ejxamine exclu- admonishing policyholders carefully.” sions us view that section urging adopt
In 317(b)(2) food delivery exclusions such as the forbids case, Liberty Mutual involved in this directs exclusion foreign jurisdic from our attention to decisions various Classic Insur tions, including Progressive Salamon v. case, In Co., 301, Md. 841 A.2d ance held that the same Appeals Maryland the Court of In holding, so at issue here was unenforceable. exclusion has invalid “consistently that it declared the court noted exclusions that excuse or reduce insurance statutory minimum parties’ coverage insured below explicitly by level exclusions are authorized where Salamon, at 379 Md. Assembly.” the General nul its long history A.2d 865. The court chronicled at provisions in cases where the provisions lifying Salamon, Md. at authorized statute. were not Maryland 311-16, 865-68. Because the 841 A.2d at implicitly nor Assembly explicitly had neither General an exclusion such as insurers to add authorized contracts, court held exclusion” to insurance “pizza rendered the insurance law Maryland’s compulsory against public policy. void and *15 by the law today governed is litigation The before us courts, Illinois, Maryland not Unlike our Maryland. exclusions he required court has never if have not autho deemed invalid those exclusions been Rather, explicitly by Assembly. rized our General our is to exclusions not еxplicitly provided enforce interpretation. on by principles law based of contract difference, persuaded by Due this we are not unper rationale utilized Salamon. We are likewise (La. by Shelton, suaded v. App. So. Stanfel 1990), Co., Paul Mid-Century St. v. 18 P.2d Insurance (Colo. 2001). decisions, App. Those which cites, Mutual also fail to dichotomy, explained address the opinion, between based exclusions on the acts involved and those based on persons status of the who performed the acts.
In further its support view that section 317(b)(2) prohibits insurers from excluding risks from liability coverage, Liberty allowing Mutual contends that such exclusions would be inherently inconsistent with the public policy of protecting public by securing the of its payment damages. This argument must also fail. Although exclusions, where applicable, will shield the particular company which issued the policy from financial responsibility, that does mean not that no insurer will be liable.
Under the mandatory insurance law by enacted our Assembly, General the effects of policy exclusions are substantially offset requirement of uninsured- 601(a) (West coverage. 2000); motorist See 625 ILCS 5/7 — (West 2000). 5/143a, 215 ILCS If 143a—2 a driver causes an accident bodily which inflicts on injury someone else injury not covered the driver’s motor vehicle liability policy because of an policy, driver will be not be considered an insured motorist and his automobile will an regarded as insured vehicle. injured party therefore will not be able to avail *16 will, however, He liability coverage.
himself of the driver’s seek under the uninsured- payment be entitled of provisions motorist his own motor vehicle See 127, (1969); v. Ill. 2d 130-31 Smiley Toney, Estate of Powell, v. 49 Ill. 2d That is Barnes precisely purposes occurred in this case. For the of what Lavits, policy Liberty the motor vehicle it issued to the Progressive’s decision to disclaim Mutual conceded in liability delivery under the food exclusion Ronald’s made Ronald an uninsured motorist. policy mother’s motorist, turn, status as an uninsured Ronald’s the Lavits to obtain under the payment entitled of provisions policy uninsured-motorist their way, by In of goal public Mutual. this the the protecting fully the securing damages of its was achieved.3 payment reasons, foregoing delivery For the the food exclusion Progressive to Ronald’s mother policy by in the issued under this manda- was not void and unenforceable state’s summary entry insurance law. The circuit court’s of tory against Liberty of Progressive in favor judgment have was correct and should not been Mutual therefore appellate Accordingly, judg- court. the disturbed judgment ment of the court reversed appellate of court is affirmed. the circuit reversed; judgment
Appellate judgment circuit court affirmed. pos present scheme does not eliminate 3Illinois’ sibility will to the without insur that drivers take road injured ance, guarantee parties will have their nor does it result, from, Mr. did. As a there policies own to draw as Lavits parties injured will left may under which be circumstances coverage any “gaps” in kind. such without Whether so, and, they if should legislature how be addressed should remedied, questions public policy. Such important present he tribunal, however, Assembly, questions, for the General not are to consider. KILBRIDE, dissenting:
JUSTICE
majority
(“pizza”)
cоncludes the food
Progressive’s
and does
was
void
mandatory liability
not violate this state’s
insurance law.
Accordingly, Progressive may
pertinent part: “No person operate shall a motor vehicle designed public highway be used on a unless the vehicle by liability motor is covered a insurance added.) The policy.” (Emphasis provides: statute further “The insurance shall be issued in no amounts less than the minimum bodily injury amounts set for death and for property destruction of under Section 7—203 of 601(a) (Wеst 2000). this Code ***.” 625 ILCS 5/7 — majority The our acknowledges holding in State Farm Mutual Smith, Automobile Insurance Co. v. Ill. 2d (2001), that the “principal purpose of this state’s requirement is to protect public the by securing payment of their dam ages.” 215 Ill. 2d majority’s at 129. Yet the holding this purpose by subverts allowing mandatory minimum coverage be by defeated a contractual exclusion not explicitly by legislature. authorized the Although section 7—601 exempts categories certain of vehicles such as government vehicles and implements husbandry from application, its no statutory language any authorizes contractual exclusion from coverage, including the so- called “pizza exclusion.” The the Il majority contends linois Safety Family and Responsibility Financial Law clearly contemplates policiеs may contain enforceable (625 of the
exclusions because section 7—602 statute (West 2000)) requires insurance cards to ILCS 5/7—602 admonishing policy holders contain disclaimer “[ejxamine carefully.” 2d at exclusions 215 Ill. may disputed coverage be 138. It is not exclusions required statutorily limits. minimum enforced above the warning appropriate Hence, in and the section 7—602 express requirement that all is not conflict with injury bodily property vehicles shall be covered for damage in minimum amounts. majority
The
reached
increases
result
go
tortiously
accidents will
likelihood
caused vehicular
uncompensated
coverage will be
because no insurance
Although
majority
the tortfeasor.
available from
recognizes
possibility, holds this result is offset
statutory requirement
cover
of uninsured-motorist
possibility
age.
Other statutes render insurance concluded required of to the extent exclusions unenforceable public In minimum matter Salamon limits as a of Progressive 301, Co., 841 379 Md. Classic Insurance v.
143 (2004), that Appeals Maryland, A.2d the Court of of 858 tribunal, a com- state’s considered whether highest in the exclusion, mercial identical to the exclusion use us, coverage. to defeat case before could be applied arguing the summary judgment, moved for Progressive it from and policy unambiguously excused both Progressive’s the defend. countered that duty to Salamon and, Maryland public policy exclusion contravenes as a result, Salamon, and 379 at is invalid unenforceable. Md. 305, at granted Progres- 841 A.2d 861. The trial court motion, reviewing sive’s Salamon and appealed, court Maryland reversed. The court noted As- General “ that, sembly among had enacted law ‘comprehensive other things, inaugurated compulsory insurance or other security, required Maryland [the established Automobile resort, prohibited Fund] Insurance as an of last insurer arbitrary cancellation and of motor non-renewal vehicle policies, required policies contain and [personal injury protection] collision cover- ” Salamon, age.’ 310, 864, 841 quot- Md. at A.2d at ing Maryland Automobile Insurance Fund Perry, v. (1999). 668, 674, Md. 1114, 741 A.2d Thus, Maryland scheme, statutory while not identical, is to our substantially similar own. As State Farm, Maryland Maryland’s court had earlier held statute was intended to certain those “make who own and operate motor in this are vehicles State finan- cially responsible.” Pennsylvania National Mutual Gartelman, 151, Casualty 154, Insurance Co. v. 288 Md. 734, 416 A.2d Thе Gartelman further “[t]his noted that legislative policy has the overall purpose protecting public remedial by assuring operators owners motor are finan- vehicles cially pay able to compensation damages resulting from Gartelman, motor vehicle 288 Md. at accidents.” at 416 A.2d 736. The court reviewed a Salamon
144
consistently declar-
30-year period
of cases over a
series
or
excusing
exclusions
reduc-
ing
invalid insurance
minimum
statutory
below the
ing
the insured’s
not
authorized
explicitly
when such exclusions were
311-14,
Salamon, 379 Md. at
Assembly.
the General
“pizza
exclu-
A.2d at 864-67. The court concluded
legislature
authorized
expressly
sion” was not
Salamon,
316-17, 841
therefore,
379 Md. at
was,
invalid.
rejected Progressive’s argument,
The court
A.2d at 868.
us,
should
that a distinction
also made in the case before
“
‘pertaining
exclusions
be drawn between
insureds,
pertaining
as
to exclusions
opposed
classes of
”
original.)
(Emphases
individual
insureds.’
to acts of
314,
Salamon,
at
New
Insurance Co. v.
Liberty
in Matter
Mutual
conclusion
536,
57, 623 N.E.2d
603 N.Y.S.2d
Hogan, 82 N.Y.2d
case,
to enforce its
Liberty
sought
Mutual
In that
endorse-
in an uninsured-motorist
“livery exclusion”
The exclu-
liability policy.
automobile
personal
ment to
carry
used to
if the insured vehicle was
applied
sion
in the insured’s
Passengers
for a fee.
property
persons
arbitration,
Liberty
petitioned
Mutual
demanded
car
and the
stay,
The trial court denied
stay.
for a
Ap-
The Court of
affirmed.
appellate
intermediate
affirmed,
mandatory uninsured-
noting New York’s
peals
The court
did
for exclusions.
рrovide
motorist statute
inconsistent
“[t]he
reasoned that
that innocent
ensuring
of this State
public policy
sound
compensated
accidents are
of motor vehicle
victims
Mutual,
at
82 N.Y.2d
and losses.”
injuries
their
412. Intermediate
539,
at
603 N.Y.S.2d
623 N.E.2d at
have also
and Colorado
in Louisiana
courts
appellate
Shelton, 563 So.
v.
See
similar results.
reached
Stanfel
(La.
Marine Insurance
1990);
Paul Fire &
St.
App.
(Colo. App.
Co.,
including
Maryland
Salamon,
court in
have found
*20
coverage exclusions
incompatible
minimum
laws. The
declines to
on
majority
rely
reasoning
litigation
“[t]he
those cases because
today
governed by
Illinois,
before us
the law of
Maryland.”
law,