Illinois Farmers Insurance Co. v. Kure

No. 3-05-0262 ______________________________________________________________________ ____ filed April 3, 2006 IN THE APPELLATE COURT OF ILLINOIS THIRD DISTRICT A.D., 2006 ILLINOIS FARMERS INSURANCE ) Appeal from the Circuit Court COMPANY, ) for the Twelfth Judicial Circuit, ) Will County, Illinois Plaintiff-Appellant, ) ) v. ) No. 04-MR-118 ) THOMAS KURE AND CINDY KURE, ) The Honorable ) Herman S. Haase, Defendants-Appellees. ) Judge, Presiding. _________________________________________________________________ ____________ JUSTICE McDADE delivered the opinion of the court: _________________________________________________________________ _____________ Plaintiff-appellant, Illinois Farmers Insurance Company (Farmers) filed a complaint seeking declaratory judgment that it has no duty to defend or indemnify defendants-appellees, Matthew Kure and his parents, Thomas and Cindy Kure, against a negligence lawsuit against Matthew. Defendants filed a counterclaim seeking declaratory judgment that Farmers does have a duty to defend and indemnify. The parties filed motions for summary judgment. Following a hearing, the circuit court of Will County granted Farmers= motion as to Matthew, denied its motion as to Thomas and Cindy, denied defendants= motion for summary judgment as to Matthew and granted defendants= motion as to Thomas and Cindy. For the reasons that follow, we affirm. BACKGROUND Farmers insures Matthew Kure and his parents Thomas and Cindy under a homeowner=s liability policy. Kyle Signorelli and his parents filed a complaint against Matthew, Thomas, and Cindy Kure seeking damages for injuries he sustained as the result of an altercation between Kyle and Matthew. The complaint alleged that Matthew started an altercation with Kyle and that during the course of the altercation Matthew executed a "pile-driver" type of maneuver by lifting Kyle from the ground then driving Kyle=s head into the ground with the weight of his body. As a result Kyle is paralyzed from the neck down. Count I of the Signorelli complaint alleged that Matthew negligently injured Kyle. Count II alleged Thomas and Cindy Kure were negligent for providing Matthew with the vehicle he used to travel to Kyle=s house and for failing to control their son. Count IV alleged willful conduct and battery against Matthew. The remaining counts of the Signorelli complaint are not at issue in this appeal. Thomas and Cindy sought coverage for defense of the complaint and indemnity from Farmers. Farmers filed an action for declaratory judgment that it has no duty to defend or indemnify Matthew, Thomas, or Cindy because (1) the Kures= policy covered occurrences, (2) the policy defined an "occurrence" as an accident, and (3) the injury did not result from an accident. Farmers also alleged it has no duty to defend or indemnify based on the policy=s intentional conduct exclusion. Farmers argued that Thomas and Cindy did not have coverage for their allegedly "negligent" conduct because Matthew=s conduct was intentional. Thomas and Cindy responded that the allegations against them were based on negligence, not intentional conduct, and therefore the exclusion did not apply. Following argument the trial court found that Farmers has a duty to defend Thomas and Cindy. The court found that Farmers did not have a duty to defend or indemnify Matthew. The court granted Farmers= motion for summary judgment as to Matthew, denied Farmers= motion as to Thomas and Cindy, denied Matthew=s motion for summary judgment, and granted Thomas and Cindy=s motion for summary judgment. Finally, the court entered an order that no just reason existed to delay appeal of its order. Farmers appeals the court=s order granting Thomas and Cindy=s motion for summary judgment on its action seeking a declaratory judgment that Farmers has a duty to defend the complaint against Thomas and Cindy. Matthew did not file a cross- appeal of the court=s order denying his motion for summary judgment. ANALYSIS Summary judgment is proper where, when viewed in the light most favorable to the nonmoving party, the pleadings, depositions, admissions, and affidavits on file reveal that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. 735 ILCS 5/2-1005(c) (West 2000). "The standard of review for the entry of summary judgment is de novo." General Casualty Insurance Co. v. Lacey, 199 Ill. 2d 281, 284, 769 N.E.2d 18, 20 (2002). "It is the general rule that the duty of the insurer is determined by the allegations of the underlying complaint. [Citation.] A duty to defend arises -3- if the complaint's allegations fall within or potentially within the coverage provisions of the policy. *** The threshold requirements for the complaint's allegations are low. [Citation.] In a court's determination of the duty to defend, the underlying complaint is to be liberally construed in favor of the insured, and doubts and ambiguities are to be construed in favor of the insured. [Citation.] A determination regarding an exclusionary clause is subject to the same liberal standard. *** s injuries were not accidental when it found Farmers has no duty to defend Matthew. Farmers argues that because "there is no separate bodily injury being claimed by [Kyle] which result[ed] from the alleged negligent conduct of Thomas and Cindy Kure," Kyle=s injuries were not the result of an Aoccurrence@ and the policy does not apply. In support of its second argument, Farmers cites, inter alia, Northbrook Property & Casualty Co. v. Transportation Joint Agreement, 194 Ill. 2d 96, 741 N.E.2d 253 (2000). That case arose from an accident where "a METRA train collided with a school bus operated jointly by the school districts. Several students were killed and many others were injured, resulting in numerous lawsuits against the school districts." Transportation Joint Agreement, 194 Ill. 2d at 97, 741 N.E.2d at 254. Northbrook insured the school districts under a commercial general liability policy. That policy contained the following exclusion: -5- "<"Bodily injury" or "property damage" arising out of the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft owned or operated or rented or loaned to any insured. Use includes operation and "loading or unloading." *** "Auto" means a land motor vehicle, trailer or semitrailer designed for travel on public roads, including any attached machinery or equipment.=" Transportation Joint Agreement, 194 Ill. 2d at 98, 741 N.E.2d at 254. The trial court held that Northbrook "had no duty to defend the school districts against the students' lawsuits because the injuries arose out of the use or operation of a bus." The appellate court reversed, finding that "the students' lawsuits against the school districts adequately alleged that the injuries could have arisen from causes other than use or operation of the bus, such as failure of the school districts to adequately plan and inspect bus routes and warn bus drivers of potential hazards." Transportation Joint Agreement, 194 Ill. 2d at 98, 741 N.E.2d at 254. The supreme court reversed the appellate court, reasoning as follows: "The policy excludes injuries arising from the school districts' use or operation of a motor vehicle. Allegations that the school districts inadequately planned and inspected bus routes or failed to warn bus drivers of potential hazards along the routes are nothing more than rephrasings of the fact that the students' injuries arose from the school districts' use or operation of a motor vehicle. Contrary to the appellate court's holding, the students' complaints failed to allege that the injuries -6- arose from events an insured= in an exclusionary clause unambiguously means >any insured= (Allstate Insurance Co. v. Freeman (1989), 432 Mich. 656, 698-99, 443 N.W.2d 734, 753-54). In the present case, therefore, employing the words >an= and >any= broadened the exclusions to include injuries triggered by one insured in connection with the business activities of another insured." Smiley, 276 Ill. App. 3d at 979, 659 N.E.2d at 1352. Thomas and Cindy respond Smiley is inapposite to the case at bar because, there, the court concluded that "the injuries allegedly caused by David Smiley's negligence were connected to his wife's business activities" in that the duty arose because of the business. Smiley, 276 Ill. App. 3d at 980, 659 N.E.2d at 1352. On the contrary, in the present case, Thomas and Cindy played no role in Matthew=s conduct. -9- With that background in mind, we turn to the issues Farmers raises in support of its appeal. A. Whether Matthew=s Act Constitutes an "Occurrence" for Purposes of Thomas and Cindy=s Insurance Coverage In Illinois, as in Texas, whether an occurrence has occurred is determined from the insured=s standpoint. See Country Cos. v. Bourbon, 122 Ill. App. 3d 1061, 1067, 462 N.E.2d 526, 530 (1984) ("we think the better rule to be that which considers the injury from the standpoint of the [insured], rather than that which centers upon a characterization of the actions *** as intentional or accidental. *** Thus, when viewing the incident we have related from the standpoint of the [insured], there can be no doubt that insofar as he was concerned it was indeed an accident, despite the fact that the injuries he received were the result of an intentional and criminal act"); Dyer v. American Family Insurance Co., 159 Ill. App. 3d 766, 772, 512 N.E.2d 1071, 1074 (1987) (each construing uninsured motorist insurance coverage). We find Lyons v. State Farm Fire & Casualty Co., 349 Ill. App. 3d 404, 811 N.E.2d 718 (2004), instructive in this case. There, the insurer argued that the insured=s act of building levees that allegedly damaged another=s property "was intentional and therefore was not an expected or intended= the injury." Williams, 359 Ill. App. 3d at 139-40, 833 N.E.2d at 980. The trial court found that Matthew=s acts were intentional. However, Thomas and Cindy did not commit an intentional act and did not participate in Matthew=s conduct. "[T]he duty of the insurer is determined by the allegations of the underlying complaint." Lyons, 349 Ill. App. 3d at 406, 811 N.E.2d at 721-22. Again, the complaint against Thomas and Cindy contains no allegation that Thomas and Cindy intended or even expected that as a result of their alleged negligence Matthew would injure Kyle. Nor does the complaint allege that such a result was reasonably foreseeable from Thomas and Cindy=s allegedly negligent acts. Accordingly, we hold the intentional act exclusion does not apply to Farmers= coverage of Thomas and Cindy. -13- CONCLUSION For all of the foregoing reasons, the circuit court=s order granting Thomas and Cindy=s motion for summary judgment on its action seeking a declaratory judgment that Farmers has a duty to defend the complaint against them is affirmed. Affirmed. BARRY and O=BRIEN, J.J., concur. -14-