Maxum Indemnity Company v. Gillette

405 Ill.App.3d 881, 940 N.E.2d 78, 346 Ill. Dec. 78 (3rd dist. 2010)

Words & Phrases

Exclusions: Motor Vehicle

Trial Judge

Joseph P. Hettel

Appellate Judge

Justice McDade. Carter and Schmidt concur.

Holding

Insurer had no duty to defend accident involving a parade float because policy’s auto exclusion applied.

Fact Summary

Celia Kaler took a ride on a parade float owned and operated by Gillette. While the parade float was driven along a public road, Kaler fell from the float. She filed a lawsuit against Gillette. Maxum Indemnity Company insured Gillette under a commercial general liability policy that contained an aircraft, auto or watercraft exclusion, which excluded coverage for “bodily injury… arising out of…use…of any auto…owned or operated by or rented or loaned to any Insured…” The policy defined auto as “a land motor vehicle, trailer or semi-trailer designed for travel on public roads, including any attached machinery or equipment.”

The insurer filed a declaratory judgment action seeking a determination that it was not required to defend and/or indemnify Gillette in the Kaler lawsuit. Gillette did not answer the complaint, and instead filed a motion for judgment on the pleadings. The circuit court granted the motion in part, finding that the insurer owed insured a duty to defend the Kaler lawsuit because a parade float did not qualify as an automobile.

On appeal, the court held that a parade float did constitute an automobile under the policy, and that the parade float’s incident came under the exclusion. The court relied on policy language, which contained the word “trailer” as a type of automobile excluded in the policy. The plain meaning of trailer (“ a vehicle designed to be hauled by road to transport something”) helped the court determine that the parade float was designed for travel on roads as contemplated in the policy. See State Farm v. Perez, 899 N.E.2d 1231 (Ill.App. 2008). The court articulated the principle that if the underlying complaint includes multiple theories of recovery, then the duty to defend arises even if only one theory is within the potential policy coverage. Among Kaler’s claims were defective condition claims from injuries sustained while the float was used in its customary manner. The appellate court held that the insurer owed no duty to defend Kaler’s defective condition claims because the injury arose “out of the ownership, maintenance, use or entrustment to others of the float.” There was enough of a causal connection between Kaler's injuries and use of the float "as an auto" to justify application of the exclusion. The appellate court reversed the circuit court and remanded.

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