ILLINOIS OFFICIAL REPORTS
Appellate Court
State Farm Mutual Automobile Insurance Co. v. Rodriguez, 2013 IL App (1st) 121388
Appellate Court STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY,
Caption Plaintiff-Appellee, v. HERIBERTO RODRIGUEZ, Defendant-
Appellant.–STATE FARM MUTUAL AUTOMOBILE INSURANCE
COMPANY, Plaintiff-Appellee, v. RAUL DIAZ, RAMIRO
VICTORIANO, JOSEFINA ALVAREZ, and LEONEL ALVAREZ,
Defendants-Appellants.
District & No. First District, Fourth Division
Docket No. 1-12-1388, 1-12-1390 cons.
Filed March 28, 2013
Held Although defendants were good-faith purchasers of the automobiles they
(Note: This syllabus insured with plaintiff and they had insurable interests in those vehicles,
constitutes no part of they did not suffer a “loss” when the cars were seized by law enforcement
the opinion of the court authorities as stolen vehicles, since the seizures did not constitute
but has been prepared “damage to” the vehicles that amounted to a “loss” under the
by the Reporter of comprehensive coverage provisions of the policies, and the fact that
Decisions for the rental coverage was provided and extended to one insured while his claim
convenience of the was being investigated did not waive the insurer’s right to deny coverage.
reader.)
Decision Under Appeal from the Circuit Court of Cook County, Nos. 11-CH-20209, 10-
Review CH-30718; the Hon. Mary L. Mikva and the Hon. Peter Flynn, Judges,
presiding.
Judgment No. 1-12-1388, Affirmed.
No. 1-12-1390, Affirmed.
Counsel on Joseph A. Bosco and Andrew D. Bell, both of LaRose & Bosco, Ltd., of
Appeal Chicago, for appellants.
Kristin L. Ward and Frank C. Stevens, both of Taylor Miller, LLC, of
Chicago, for appellee.
Panel JUSTICE EPSTEIN delivered the judgment of the court, with opinion.
Justice Fitzgerald Smith concurred in the judgment and opinion.
Justice Pucinski specially concurred, with opinion.
OPINION
¶1 State Farm Mutual Automobile Insurance Company (State Farm) issued automobile
insurance policies to the defendants. During the term of the insurance policies, the
defendants’ automobiles were seized by law enforcement authorities as stolen vehicles. The
trial courts in two separate declaratory judgment actions granted summary judgment in favor
of State Farm, ruling that its policy provides no comprehensive coverage for the seized
vehicles.
¶2 In this consolidated appeal, the defendants contend that the trial courts erred in granting
summary judgment to State Farm. For the reasons stated herein, we affirm.
¶3 BACKGROUND
¶4 State Farm issued automobile insurance policies to each of the defendants: Heriberto
Rodriguez; Raul Diaz; Ramiro Victoriano; and Leonel and Josefina Alvarez. Although the
facts pertinent to each defendant differ slightly, certain facts are common to all of the
defendants. First, there is no dispute that the defendants’ State Farm policies were in force
at the time of the events in question. Second, each defendant purchased an automobile from
a private individual. Third, following such purchases, all of the automobiles were seized by
law enforcement on the grounds that they previously had been stolen. Fourth, the defendants
did not steal the automobiles and were not aware that the vehicles were stolen at the time
they were purchased.
¶5 Following the seizure of their automobiles, each of the defendants made claims for
comprehensive coverage on their State Farm policies. With respect to Diaz only, State Farm
provided rental car coverage, which was extended twice, while his claim was being
investigated. State Farm ultimately denied Diaz’s claim, as well as the claims of the other
defendants. After the denials, State Farm filed two declaratory judgment actions in the circuit
court of Cook County, seeking declaration that there was no comprehensive coverage
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available to the defendants.1
¶6 The parties filed cross-motions for summary judgment. Judge Peter Flynn heard the
motions concerning defendants Diaz, Victoriano, and Josefina and Leonal Alvarez. The court
granted State Farm’s summary judgment motion and denied the defendants’ summary
judgment motion. In its order ruling on the summary judgment motions, the court “declare[d]
that the seizure of the insured vehicles by law enforcement authorities on the ground that they
were stolen is not a ‘loss’ as defined in the comprehensive coverage” of the defendants’
policies. Judge Mary Mikva granted State Farm’s summary judgment motion and denied
defendant Rodriguez’s summary judgment motion.
¶7 The defendants appealed their respective orders; the appeals are consolidated herein.
¶8 ANALYSIS
2
¶9 The policy provides in pertinent part as follows:
“PHYSICAL DAMAGE COVERAGES
***
Insuring Agreements
1. Comprehensive Coverage
We will pay:
a. for loss, except loss caused by collision, to a covered vehicle[.]” (Emphasis
in original.)
The policy defines “loss,” in relevant part, as follows:
“Loss means:
1. direct, sudden, and accidental damage to; or
2. total or partial theft of
a covered vehicle.” (Emphasis in original.)
¶ 10 Defendants raise a number of arguments on appeal. The defendants contend that they
have an insurable interest in the vehicles, given that they were good-faith purchasers. The
defendants then argue that because the term “damage” is undefined in the policy, the court
must look to its dictionary definition. The defendants urged the trial courts to use the Black’s
Law Dictionary definitions of “damage”–“loss or injury to person or property”–and “loss”:
“the disappearance or diminution of value, usually in an unexpected or relatively
unpredictable way.” Noting that State Farm presented no “counter-definition” at the trial
1
Another defendant, Valerie Jimenez, was dismissed from the complaint because Jimenez
withdrew her insurance claim against State Farm.
2
Although other aspects of the policy–i.e., the declarations page–differ for the defendants,
the “State Farm Car Policy Booklet” (Policy Form 9813B) included in each policy is the same. For
purposes of our analysis, we will sometimes refer to a single “policy,” meaning the policy booklet
common to all of the defendants’ policies.
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court level, the defendants contend that State Farm’s primary argument–that only damage to
the vehicle, rather than damage to the defendants, may be considered “damage” under the
policy–is, at best, a second “reasonable interpretation[ ]” of the policy language. Given that
“all ambiguities in an insurance contract will be construed against the insurance company,”
the defendants argue that the trial court erred in finding in State Farm’s favor. Finally, the
defendants contend that State Farm’s extension of rental coverage to one of the defendants
is “further evidence that the policy language is ambiguous.”
¶ 11 State Farm and the defendants agree regarding the applicable standard of review. Because
the parties filed cross-motions for summary judgment, they conceded the absence of a
genuine issue of material fact and invited the court to decide the question presented as a
matter of law. Steadfast Insurance Co. v. Caremark Rx, Inc., 359 Ill. App. 3d 749, 755
(2005). In appeals from summary judgment rulings, we conduct a de novo review. Outboard
Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 102 (1992).
¶ 12 Insurable Interest
¶ 13 The defendants contend that, based on the holding in Reznick v. Home Insurance Co., 45
Ill. App. 3d 1058, 1060 (1977), the good-faith purchaser of an automobile that later was
determined to be a stolen vehicle has an insurable interest in the vehicle. The court in Reznick
stated that “ ‘[g]enerally speaking, a person has an insurable interest in property whenever
he would profit by or gain some advantage by its continued existence and suffer some loss
or disadvantage by its destruction.’ ” Reznick, 45 Ill. App. 3d at 1061 (quoting 3 Ronald A.
Anderson, Couch Cyclopedia of Insurance Law § 24:13 (2d ed. 1960)). Because they each
were “financially and practically disadvantaged by the loss of the vehicle,” the defendants
assert that they satisfy the Reznick definition of insurable interest, as long as they were “good
faith purchasers.” See Reznick, 45 Ill. App. 3d at 1061.
¶ 14 State Farm concedes that the defendants were good-faith purchasers of their vehicles and
have insurable interests. However, State Farm argues–and we agree–that this concession is
irrelevant to the issue of whether its policy provided coverage for the seizure of the vehicles.
The Reznick court held that it first needed to determine whether a good-faith purchaser of a
stolen vehicle had an insurable interest in the vehicle because it could decide “whether this
type of loss”–i.e., seizure by law enforcement–“was covered by the comprehensive coverage
provisions of the insurance agreement.” Id. at 1062. Therefore, we turn our focus to the issue
of whether defendants sustained a “loss” according to the terms of State Farm’s policy.
¶ 15 “Loss” Under the Policy
¶ 16 The policy provides physical damage coverage for “loss *** to a covered vehicle.” The
policy defines “loss” as “direct, sudden, and accidental damage to” or “total or partial theft
of” a “covered vehicle.” The parties agree that seizure of the vehicles by law enforcement
authorities does not constitute “total or partial theft of” the vehicles. The critical question is
whether the seizure constitutes “direct, sudden, and accidental damage to *** a covered
vehicle.”
¶ 17 “An insurance policy is a contract, and the general rules governing the interpretation of
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other types of contracts also govern the interpretation of insurance policies.” Hobbs v.
Hartford Insurance Co. of the Midwest, 214 Ill. 2d 11, 17 (2005). Our primary objective is
to “ascertain and give effect to the intention of the parties as expressed in the agreement.”
Nicor, Inc. v. Associated Electric & Gas Insurance Services Ltd., 223 Ill. 2d 407, 416 (2006).
¶ 18 If the insurance policy language is unambiguous, the policy will be applied as written,
unless it contravenes public policy. Hobbs, 214 Ill. 2d at 17. Whether an ambiguity exists
“turns on whether the policy language is subject to more than one reasonable interpretation.”
Id. “That a term is not defined by the policy does not render it ambiguous, nor is a policy
term considered ambiguous merely because the parties can suggest creative possibilities for
its meaning.” Nicor, 223 Ill. 2d at 417.
¶ 19 Where a term in an insurance policy is not defined, “we afford that term its plain,
ordinary and popular meaning, i.e., we look to its dictionary definition.” Founders Insurance
Co. v. Munoz, 237 Ill. 2d 424, 436 (2010). See also Valley Forge Insurance Co. v. Swiderski
Electronics, Inc., 223 Ill. 2d 352, 366 (2006) (noting that courts have looked to their
dictionary definitions to afford terms their “plain, ordinary, and popular meanings”); Gillen
v. State Farm Mutual Automobile Insurance Co., 215 Ill. 2d 381, 393 (2005) (stating that
undefined terms will be given their “plain, ordinary and popular meaning, i.e., they will be
construed with reference to the average, ordinary, normal, reasonable person”); Czapski v.
Maher, 2011 IL App (1st) 100948, ¶ 29 (“Illinois courts have generally utilized dictionaries
to determine the meaning of undefined terms in many contexts.”).
¶ 20 The defendants note that the policy does not include a definition of “damage.” They look
to the Black’s Law Dictionary definition of “damage”: “[l]oss or injury to person or
property.” Black’s Law Dictionary 445 (9th ed. 2009). “Loss” being undefined within the
Black’s definition of “damage,” the defendants use the dictionary’s definition of “loss”: “the
disappearance or diminution of value, usu. in an unexpected or relatively unpredictable way,”
or injury to person or property. Black’s Law Dictionary 1029 (9th ed. 2009). Defendants
argue that because the vehicles “disappeared without warning and in an unexpected or
relatively unpredictable way,” the seizure of each vehicle qualifies as “damage” under the
policy. Furthermore, according to the defendants, the reduction of the value of the vehicles
to zero–as defendants no longer may use, sell or derive any other value from the
vehicles–constitutes “damage” under the policy.
¶ 21 We agree with State Farm that a policy term is not ambiguous simply “because the term
is not defined within the policy or because the parties can suggest creative possibilities for
its meaning.” Lapham-Hickey Steel Corp. v. Protection Mutual Insurance Co., 166 Ill. 2d
520, 529 (1995). The policy provides that there is a “loss” if there was “direct, sudden and
accidental damage to *** a covered vehicle.” (Emphasis added.) According to the
defendants, inserting the Black’s Law Dictionary definition of “damage” into the policy’s
definition of loss results in the following definition of “loss”:
“Loss means:
1. direct, sudden, and accidental disappearance or diminution of value, usually in an
unexpected or relatively unpredictable way [(emphasis added)] to; or
2. total or partial theft of
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a covered vehicle.” (Emphasis in original.)
We do not view the foregoing language as a reasonable interpretation of the policy terms.
First, we note that the defendants’ proposed definition is essentially the insertion of the
Black’s definition of “loss” into the Black’s definition of “damage” into the policy definition
of “loss.” Even if the definition suggested by the defendants was not unduly strained, we
believe that the “disappearance or diminution in value *** to” a vehicle–as opposed to
“disappearance or diminution in value *** of” a vehicle–is an “absurd result” we are
compelled to avoid. See Bond County Community School District No. 2 v. Indiana Insurance
Co., 269 Ill. App. 3d 488, 499 (1995). We share the view of the trial courts that although the
seizure of the vehicles does constitute damage to the defendants, it does not constitute
damage “to” the covered vehicles. The defendants have not claimed that the seizure resulted
in physical damage to the vehicles. The defendants have failed to suggest any reasonable
interpretation of the term “damage” under which their vehicles, as opposed to the defendants
themselves, have been damaged.
¶ 22 The defendants dismiss State Farm’s reliance on the word “to” in the policy definition
of “loss” as a “hyper-technical grammatical argument” that represents a “ridiculous attempt
to elevate form over substance.” We disagree. An insurance policy must not be interpreted
in a manner that renders contract provisions meaningless. Continental Casualty Co. v.
Donald T. Bertucci, Ltd., 399 Ill. App. 3d 775, 789 (2010). Although we acknowledge the
harsh result of the seizures on the innocent purchaser defendants herein, we cannot ignore
or modify the preposition “to” in the “loss” definition and transfer their burdens to parties
that did not contract to insure this risk. As noted by Judge Mikva below,” it is completely
unfair and completely unfortunate that the difference in preposition should make *** a multi
thousand dollar difference to your client.” Judge Flynn similarly observed that “[t]his entire
case turns *** on the lack of a preposition.”
¶ 23 The trial courts each discussed two cases addressing situations similar to these cases:
Reznick v. Home Insurance Co., 45 Ill. App. 3d 1058 (1977), and Cueto v. Allstate Insurance
Co., 544 A.2d 906 (N.J. Super. Ct. Law Div. 1987). In Reznick, this court addressed whether
the comprehensive coverage provision of the plaintiff’s automobile insurance policy covered
loss of a vehicle caused by confiscation due to the fact that the vehicle had been stolen when
the insured was a good-faith purchaser. Reznick, 45 Ill. App. 3d at 1059. After determining
that there was an “insurable interest” in the vehicle, the court considered the definition of
“loss” in the policy: “ ‘direct and accidental loss of or damage to *** the automobile.’ ”
(Emphasis added.) Id. at 1062. The court concluded that this language covered the police
confiscation of the vehicle. Id. at 1062-63. In Cueto, a New Jersey court found that the police
confiscation of a stolen vehicle was not a “risk” within the expectation of the vehicle
purchaser and therefore the purchaser was not entitled to recover under his comprehensive
coverage policy for loss of the vehicle. Cueto, 544 A.2d at 909. The court also analyzed the
following automobile insurance policy language: “ ‘We will pay for direct and accidental loss
to your covered auto ***.’ ” (Emphasis added.) Cueto, 544 A.2d at 908. Distinguishing the
Reznick policy language about loss of or damage to a vehicle, the Cueto court concluded that
there was no “loss to” the covered vehicle. Id. at 909.
¶ 24 At the hearing on the summary judgment motions, Judge Mikva stated that Illinois law
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“clearly recognizes” that defendant Rodriguez had an insurable interest and that she was “not
that persuaded” by Cueto in light of “well-settled” Illinois law that “a differently worded
comprehensive coverage would cover this kind of *** seizure of a car by law enforcement.”
The court then noted that “I just do not believe that there is any way to view the policy
language as ambiguous on this point.” Judge Flynn similarly noted that “[i]f the policy had
referred to loss ‘of’ the vehicle, like the Resnick policy, then we have Resnick as authority
*** for policy coverage *** [b]ut the ‘of’ isn’t in there.”
¶ 25 For the first time in their reply brief, the defendants argue that Cueto is “not the only out
of circuit case on point,” citing a Texas court of appeals decision, State Farm Mutual
Automobile Insurance Co. v. Kelly, 945 S.W.2d 905 (Tex. Ct. App. 1997), abrogated on
other grounds by Don’s Building Supply, Inc. v. OneBeacon Insurance Co., 267 S.W.3d 20
(Tex. 2008). The defendants argue that Kelly “supports a finding that the applicable policy
language is ambiguous.” “It is axiomatic that arguments raised for the first time in a reply
brief are waived.” Salerno v. Innovative Surveillance Technology, Inc., 402 Ill. App. 3d 490,
502 (2010). However, even if we were to consider the defendants’ argument, we do not share
their view regarding the significance of Kelly. The Kelly court addressed whether the
confiscation of a stolen vehicle by state authorities constituted an “ ‘accidental loss’ ” under
the applicable insurance policy. Kelly, 945 S.W.2d at 906. After concluding that there was
an insurable loss, the court considered the policy language. According to the court, State
Farm had agreed to “ ‘pay for direct and accidental loss’ to the insured’s ‘covered auto.’ ”
(Emphasis omitted.) Id. at 907. Analyzing whether the confiscation was an “accidental loss,”
the court concluded that “confiscation is not the natural and probable result of the good faith
purchase of an automobile” and, “[o]n this record,” the confiscation constituted an accidental
loss under the terms of the policy. Id. at 909-10.
¶ 26 We disagree with the defendants’ contention that the Kelly decision supports a finding
that the applicable policy language is ambiguous. First, the fact that a State Farm policy is
at issue both in Kelly and the instant cases is not relevant. Even if issued by the same insurer,
they are different policies issued in different jurisdictions more than 15 years apart. Second,
the language at issue in Kelly is distinguishable from the challenged language in these cases.
The Kelly court stated that “[u]nder Mr. Kelly’s insurance policy, State Farm agrees to ‘pay
for direct and accidental loss’ to the insured’s ‘covered auto.’ ” (Emphasis in original). Id.
at 907. Even assuming arguendo that the policy actually used the word “to,”3 the Kelly court
did not analyze whether there was “damage to” a vehicle. As discussed above, we do not
believe that the seizure of the defendants’ vehicles can constitute “damage” to the vehicles.
Third, we note that the Kelly court focused primarily on the meaning of “covered auto” and
“accidental loss” under the policy; there is no substantive discussion addressing the
significance of the word “to.”
¶ 27 The defendants further contend that if we “give merit to State Farm’s unsupported
assertion that damage to the owner of a vehicle does not constitute damage to the vehicle,
then this court has been presented with two reasonable interpretations of the applicable
3
The word “to” is not included with the policy language directly quoted by the Kelly court.
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policy language.” (Emphases in original.) We again disagree because we do not view the
defendants’ interpretation as reasonable. We do not see any ambiguity in the policy merely
because there is a disagreement between State Farm and the defendants regarding its
meaning. See Central Illinois Light Co. v. Home Insurance Co., 213 Ill. 2d 141, 153 (2004)
(noting that a contract is not rendered ambiguous merely because the parties disagree about
its meaning).
¶ 28 If there is an ambiguity in an insurance policy, we will construe it in favor of the insured.
Hobbs, 214 Ill. 2d at 30-31. Because we conclude that the challenged language is not
ambiguous, we need not consider the defendants’ argument that the term should be construed
in their favor and against State Farm, the insurer that drafted the policy.
¶ 29 Finally, the defendants raise a public policy argument for the first time in their reply
brief, contending that “denying these families the insurance coverage they paid for, for the
vehicles they possessed and utilized for years would be an inequitable result” and is against
the principles of the “court of equity in which the instant matters were initially decided.” We
again note that arguments raised for the first time in a reply brief are waived. Salerno, 402
Ill. App. 3d at 502. However, even if we consider the defendants’ public policy argument,
we cannot agree with their position. While we acknowledge that the result in the trial courts
is unfortunate for the defendants, we do not deem it inequitable. Indeed, if, as we have found,
State Farm did not contract to cover this type of claim it would be inequitable to place loss
on it because of sympathy for the victimized innocent purchasers of stolen vehicles. “If
insurance policy terms are clear and unambiguous, they must be enforced as written unless
doing so would violate public policy.” Schultz v. Illinois Farmers Insurance Co., 237 Ill. 2d
391, 400 (2010). The public policy of Illinois is “reflected in its constitution, statutes, and
judicial decisions.” Id. The defendants have not cited–and we are not aware of–any
constitutional, statutory or judicial basis under Illinois law for not enforcing this policy in
accordance with its clear and unambiguous terms.
¶ 30 In summary, we conclude that under the unambiguous language of the policy, the seizure
of each defendant’s vehicle did not constitute damage to the vehicle and thus the defendants
did not sustain an insurable “loss” under the policy. Although we are sympathetic to the
defendants’ position, we will not “ ‘torture ordinary words until they confess to ambiguity.’ ”
Hobbs, 214 Ill. 2d at 31 (quoting Western States Insurance Co. v. Wisconsin Wholesale Tire,
Inc., 184 F.3d 699, 702 (7th Cir. 1999).
¶ 31 Rental Car Coverage for Diaz
¶ 32 The Du Page County Auto Theft Task Force seized defendant Raul Diaz’s vehicle on
May 17, 2010. After the seizure, Diaz made a claim under his State Farm policy. While the
claim was being investigated, State Farm provided rental coverage to Diaz on May 26, 2010
and extended it on June 4, 2010 and June 11, 2010. State Farm issued a rental coverage letter
on May 26, 2010, which, according to the defendants, “may only be offered when a covered
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vehicle is unavailable as the result of a ‘loss’ under the policy.”4 State Farm ultimately denied
Diaz’s claim and filed the declaratory judgment action being appealed herein.
¶ 33 According to the defendants, the State Farm’s agent’s treatment of Diaz’s claim after the
seizure of his vehicle “supports a finding that the policies are ambiguous.” The defendants
contend that State Farm’s filing of its declaratory judgment action after the provision and
extension of rental car coverage–“a benefit on Mr. Diaz that could only be had if the seizure
should be deemed a loss under the policy”–evidences a “clear inconsistency.” Given that
ambiguities in an insurance policy are construed against the insurer, the defendants argue that
the “policy language is ambiguous and should be interpreted in favor of the defendants being
compensated under the policy for their loss.”
¶ 34 State Farm responds that because the policy is a fully integrated document–i.e., it
constitutes the entire agreement between the parties–the “four corners” or parol evidence rule
“generally prohibits the use of extrinsic evidence to contradict or vary the terms of a written
contract.” The insurer contends that “[b]ecause extrinsic evidence cannot be used to interpret
the policy, it cannot be used to manufacture an ambiguity.” Conceding that the State Farm
claims representative “simply made a mistake when deciding to pay car rental benefits to
Diaz,” State Farm argues that the “mistake sheds no light on the meaning of the policy, or
whether it is ambiguous.”
¶ 35 Our supreme court in Air Safety, Inc. v. Teachers Realty Corp., 185 Ill. 2d 457 (1999),
addressed the question of whether extrinsic evidence may be “provisionally admitted to show
that an explicitly integrated, facially clear, and complete written contract is actually
ambiguous.” Id. at 459. The court first observed that if the contract language is facially
unambiguous, then the contract is interpreted by the trial court as a matter of law without the
use of parol evidence. Id. at 462. However, under the “provisional admission approach,”
applied by the Illinois Appellate Court in a variety of cases, “although the language of a
contract is facially unambiguous, a party may still proffer parol evidence to the trial judge
for the purpose of showing that an ambiguity exists which can be found only by looking
beyond the clear language of the contract.” Id. at 463. The supreme court declined to adopt
the provisional admission approach because the contract at issue contained an express
integration clause. Id. at 464. The court noted that “where parties formally include an
integration clause in their contract, they are explicitly manifesting their intention to protect
themselves against misinterpretations which might arise from extrinsic evidence.” Id.
¶ 36 The State Farm policy at issue provides, in part:
“2. This policy contains all of the agreements between all named insureds who are
shown on the Declarations Page and all applicants and:
a. us; and
b. any of our agents.” (Emphasis in original.)
4
We note that the final line of the letter is underlined and states as follows: “This letter
provides you with only a general explanation of available benefits and does not grant any insurance
coverage. Please refer to your State Farm Car Policy for the terms and conditions of coverage.”
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We have determined that the policy terms are facially unambiguous, and we choose not
effectively nullify the foregoing integration clause in an attempt to find a latent ambiguity
in the policy terms. “[E]xtrinsic evidence is admissible to explain the meaning of words in
a contract only when there is an ambiguity or the words are suspectible of different
interpretations.” Lee v. Allstate Life Insurance Co., 361 Ill. App. 3d 970, 979 (2005). See
also Lease Management Equipment Corp. v. DFO Partnership, 392 Ill. App. 3d 678, 686
(2009) (concluding that “trial courts erred in allowing the presentation of parol evidence
prior to finding that the contract language was ambiguous”).
¶ 37 State Farm also contends that partial payment under a policy does not waive an insurer’s
right to later deny a claim. Specifically, the State Farm claims representative explained to
Diaz, through his English-speaking daughter, that although rental coverage was being
extended, it was done so provisionally, as State Farm’s investigation of the claim was
pending. State Farm argues that, as evidenced by this conversation, the insurer “expressly did
not relinquish its right to refuse the claim, but instead expressly invoked its right of denial.”
The defendants counter that the rental car coverage was not offered as evidence of waiver but
“rather as evidence that a reasonable interpretation of the insurance policy language supports
defendants’ claim; even State Farm’s own employee read the State Farm policy as providing
Mr. Diaz with relief.”
¶ 38 Judge Flynn specifically addressed this argument during the hearing on the summary
judgment motions:
“I don’t particularly care whether the claims agent says this is covered or not covered, so
long as we’re not talking about a bad-faith claim, because the claims agent can’t tell me
what the law is. That’s my job. And if the claims agent came into court and said, I really
think this claim is covered, my response would be, So what?
You can’t use the claims agent then to create an ambiguity in something which
otherwise is not ambiguous any more than the fact that a particular contracting party has
a really quirky reading of the contract term that would warrant a Court in concluding that
the contract term is ambiguous, even though everybody except that particular contracting
party would read it one way.”
We agree that the claims agent’s extension of rental car coverage to Diaz–regardless of
whether such coverage was presented as “provisional”–does not evidence an ambiguity in
the policy, and we will not interpret the claims agent’s actions to create an ambiguity where
it does not otherwise exist.
¶ 39 CONCLUSION
¶ 40 The trial courts correctly concluded that the seizure of the defendants’ stolen vehicles did
not constitute “damage to” the vehicles and therefore was not a “loss” for purposes of
comprehensive coverage under their State Farm automobile insurance policies. The extension
of rental car coverage to defendant Diaz does not affect such conclusion. The trial courts did
not err in granting State Farm’s motions for summary judgment in its declaratory judgment
actions and denying the summary judgment motions of the defendants.
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¶ 41 No. 1-12-1388, Affirmed.
¶ 42 No. 1-12-1390, Affirmed.
¶ 43 JUSTICE PUCINSKI, specially concurring.
¶ 44 I agree with my colleagues in their decision to affirm the judgment of the trial court,
however, I would point to one additional clause in the “Diaz” insurance policy, under
“Physical Damage Coverage” (pages 27 to 33 of the policy) and further under “Exclusions”
(page 31 of the policy) the policy specifically states:
“Exclusions
THERE IS NO COVERAGE FOR:
***
9. LOSS TO ANY COVERED VEHICLE THAT RESULTS FROM THE TAKING
OF OR SEIZURE OF THAT COVERED VEHICLE BY ANY GOVERNMENTAL
AUTHORITY.”
In the case of Diaz, the policy is clear. The vehicle was a covered vehicle, it was seized by
a governmental authority, and coverage is excluded.
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