{ "id": 8498639, "name": "STATE FARM FIRE AND CASUALTY COMPANY, Plaintiff-Appellee, v. PEGGY KLECKNER, as Special Adm'r of the Estate of Alex Kleckner, Deceased, and as Mother and Next Friend of Suzanne Kleckner, a Minor, Defendant-Appellant (Melvin Harms et al., Defendants)", "name_abbreviation": "State Farm Fire & Casualty Co. v. Kleckner", "decision_date": "1990-02-20", "docket_number": "No. 2\u201489\u20140579", "first_page": "371", "last_page": "380", "citations": [ { "type": "official", "cite": "194 Ill. App. 3d 371" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "20 Ill. App. 3d 483", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 5344120 ], "pin_cites": [ { "page": "487" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/20/0483-01" ] }, { "cite": "183 Ill. App. 3d 13", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2630256 ], "pin_cites": [ { "page": "15" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/183/0013-01" ] }, { "cite": "81 Ill. App. 3d 208", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3229345 ], "pin_cites": [ { "page": "210" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/81/0208-01" ] }, { "cite": "152 Ill. App. 3d 759", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3574811 ], "pin_cites": [ { "page": "760" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/152/0759-01" ] }, { "cite": "178 Ill. App. 3d 809", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2431860 ], "year": 1987, "pin_cites": [ { "page": "812" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/178/0809-01" ] }, { "cite": "189 Ill. App. 3d 179", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2681820 ], "weight": 2, "pin_cites": [ { "page": "181-82" }, { "page": "182" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/189/0179-01" ] }, { "cite": "190 Ill. App. 3d 833", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2517850 ], "weight": 2, "year": 1989, "pin_cites": [ { "page": "842" }, { "page": "842-43" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/190/0833-01" ] } ], "analysis": { "cardinality": 733, "char_count": 19618, "ocr_confidence": 0.732, "pagerank": { "raw": 7.503459360989951e-08, "percentile": 0.4466100147151436 }, "sha256": "8e8a9fe2cf731267a0bf6ac26ff10f9aba9ea0246cea9ae945e7b10e93ba6636", "simhash": "1:a9ddadd8246076d2", "word_count": 3094 }, "last_updated": "2023-07-14T21:36:32.853539+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "McLAREN and REINHARD, JJ., concur." ], "parties": [ "STATE FARM FIRE AND CASUALTY COMPANY, Plaintiff-Appellee, v. PEGGY KLECKNER, as Special Adm\u2019r of the Estate of Alex Kleckner, Deceased, and as Mother and Next Friend of Suzanne Kleckner, a Minor, Defendant-Appellant (Melvin Harms et al., Defendants)." ], "opinions": [ { "text": "PRESIDING JUSTICE UNVERZAGT\ndelivered the opinion of the court:\nDefendant, Peggy Kleckner, appeals from an order in this declaratory judgment action in which the trial court found that none of four insurance policies issued by plaintiff, State Farm Fire and Casualty Company (State Farm), to Melvin and Evelyn Harms extended coverage for defendant\u2019s losses. Defendant contends that each policy applies because the policies\u2019 provisions do not limit their coverage. Alternatively, defendant asserts that State Farm waived its rights to deny coverage. We affirm.\nThe record on appeal reveals the following facts. On September 3, 1984, defendant\u2019s eight-year-old son, Alex Kleckner, and five-year-old daughter, Suzanne Kleckner, were riding a mini dirt bike at the Ma-plehurst Cycle Park located on Wilmot Road, Spring Grove, Illinois. Alex was piloting the vehicle when he apparently left the \u201cbunny\u201d track and accidentally entered the \u201cexpert\u201d track going the wrong way. He and his sister were hit by another motorcyclist. Alex died as a result of the collision, and Suzanne sustained serious injuries. Defendant, as special administrator for Alex\u2019s estate, and as mother and next friend of Suzanne, commenced a personal injury action against Maplehurst Cycle Park; Harms Realty Investment Corporation, which leased the property on which the park was located; Robert Banasack, the president and a shareholder in Harms Realty; and Melvin and Evelyn Harms, who owned the property. Defendant\u2019s second amended complaint, filed March 6, 1987, alleged that Maplehurst and Banasack operated and managed the motorcycle park which was known as Turtle Track Race Course; defendant further alleged that the Harmses and Harms Realty Investment Corporation owned and controlled the premises and motorcycle track on Wilmot Road. Defendant\u2019s personal injury complaint alleged negligence on the part of all the named defendants and sought damages for Alex\u2019s death and Suzanne\u2019s injuries.\nState Farm, which had issued several insurance policies to Melvin and Evelyn Harms, filed a complaint for declaratory judgment on August 17, 1988, in which it requested a court order declaring that defendant was not entitled to the benefit, protection or coverage of any of the Harmses\u2019 policies. These policies include: (1) a homeowners policy which specified the insured premises as 327 Burnett, Lake Villa, Illinois (the Harmses\u2019 residence); (2) a rental dwelling policy which specified the \u201clocation of premises\u201d as 41061 North Second Street, Antioch, Illinois; (3) a business liability policy which designated as the covered premises the site of Melvin Harms\u2019 former refrigeration sales and service business at 100-102 South Milwaukee Avenue, Lake Villa; and (4) an \u201cumbrella\u201d personal liability policy providing excess liability coverage for losses covered by the underlying policies listed on its declaration page.\nAfter defendant and other named parties had filed answers, State Farm moved for judgment on the pleadings pursuant to section 2\u2014 615(e) of the Code of Civil Procedure (Code) (Ill. Rev. Stat. 1987, ch. 110, par. 2 \u2014 615(e)) with respect to the homeowners and rental dwelling policies. Shortly thereafter, State Farm requested summary judgment pursuant to section 2 \u2014 1005 of the Code (Ill. Rev. Stat. 1987, ch. 110, par. 2 \u2014 1005) with respect to the business liability and umbrella policies. In a written memorandum order, the trial court analyzed definitional and exclusion language contained in each of the policies and concluded that none extended coverage to the losses sustained by defendant\u2019s decedent and minor child. Thus, the trial court granted summary judgment on counts I and II (the business liability and umbrella policies counts) and judgment on the pleadings on counts III and IV (the homeowners and rental dwelling policies) for State Farm. The trial court concluded that State Farm was not obligated to defend or indemnify Melvin and Evelyn Harms in defendant\u2019s personal injury action against them. Defendant\u2019s timely appeal ensued. The sole issue presented on appeal is whether any or all of the four insurance policies furnished by State Farm to Melvin and Evelyn Harms provide coverage for the losses sustained by defendant\u2019s decedent and minor child.\nAt the outset, we note that a motion for judgment on the pleadings is similar to a motion for summary judgment since both require the trial court to examine the pleadings in order to determine the existence or absence of a genuine issue of material fact and, in the absence of such an issue, whether the movant is entitled to judgment as a matter of law. (Hagy v. McHenry County Conservation District (1989), 190 Ill. App. 3d 833, 842; Mitchell v. Waddell (1989), 189 Ill. App. 3d 179, 181-82.) A motion for judgment on the pleadings differs from a summary judgment motion in that the former asserts that the movant is entitled to judgment solely on the basis of the pleadings, while the latter may include affidavits, deposition transcripts and other evidentiary documents in order to establish the absence of a factual issue. (Mitchell, 189 Ill. App. 3d at 182.) Both motions are properly granted when the pleadings (and in the case of a motion for summary judgment, the affidavits, depositions and other documents) establish the absence of a genuine issue of material fact and the moving party\u2019s entitlement to judgment as a matter of law. (Allstate Insurance Co. v. Tucker (1989), 178 Ill. App. 3d 809, 812; Pfeil v. Weerde (1987), 152 Ill. App. 3d 759, 760.) The standard of review for the granting of both orders is similar: the reviewing court must determine whether the trial court properly ruled on the absence of a genuine issue of material fact and, if so, whether judgment was proper, that is, whether the prevailing party was entitled to judgment as a matter of law. Hagy, 190 Ill. App. 3d at 842-43; Upper Avenue National Bank v. First Arlington National Bank (1980), 81 Ill. App. 3d 208, 210.\nThe trial court properly determined that the issue presented to it, i.e., the applicability of Melvin and Evelyn Harms\u2019 four insurance policies to defendant\u2019s losses, is grounded solely on the construction of the language contained in the four insurance policies. The rules of contract construction apply to a court\u2019s interpretation of insurance policy language. (Nationwide Mutual Insurance Co. v. Hecker (1989), 183 Ill. App. 3d 13, 15.) Such matters present questions of law only; thus, the trial court properly proceeded to examine the policies\u2019 provisions and construe their language. (Kravis v. Smith-Marine, Inc. (1974), 20 Ill. App. 3d 483, 487.) We will consider each of the four policies in turn.\nThe homeowners policy contained a declaration page on which the location of the premises specified the Harmses\u2019 home address, 320 Burnett, Lake Villa, Illinois. By its terms, the policy provided coverage to \u201cthe dwelling on the residence premises shown in the declarations used principally as a private residence, including structures attached to the dwelling.\u201d (Emphasis in original.) The policy defined \u201cresidence premises\u201d as the dwelling and other structures and grounds in which the named insured resides and which is stated on the declarations page. In addition to the residence premises as defined, the policy included under the term \u201cinsured location,\u201d inter alia, \u201c500 acres or less of farm land (without buildings) rented to others.\u201d This policy specifically excluded property coverage on structures used partially or wholly for business purposes. Liability coverage contained in the policy specified that coverage for medical payments applied only to persons injured on the insured location or to persons off the insured location, \u201cif the bodily injury. (1) arises out of a condition in the insured location; (2) is caused by the activities of any insured.\u201d (Emphasis in original.) The exclusions portion of the policy exclusively stated that liability and medical coverages were not applicable to bodily injuries arising out of any insured\u2019s business pursuits or out of the rental or holding for rental of any premises by any insured. The exclusion provisions further stated that such coverages were not applicable to \u201cbodily injury *** arising out of any premises owned [by] or rented to any insured which is not an insured location.\u201d (Emphasis in original.)\nA straightforward reading of the provisions noted above resolves any doubt concerning the policy\u2019s coverage and supports State Farm\u2019s position. It is clear that defendant\u2019s losses, viz., Alex\u2019s death and Suzanne\u2019s injuries, did not occur on an \u201cinsured location\u201d but on other property owned by the insured and not included on the policy. It is obvious that the Wilmot Road address in Spring Grove, McHenry County, was not the Harmses\u2019 residence, which was located in Lake Villa, Lake County. Defendant contends that the 500-acre farm definition of \u201cinsured location\u201d is applicable here, as the Spring Grove property was characterized as a farm in the Harmses\u2019 lease with Harms Realty Investment Corporation. The plain language of the policy, however, specifies \u201c500 acres or less of farm land (without buildings) rented to others.\u201d (Emphasis added.) The record establishes that the 60 acres located on Wilmot Road contain not one but six buildings. We think it immaterial that defendant\u2019s losses did not arise from conditions in or around these buildings. Nevertheless, even if we were to accept defendant\u2019s tortured interpretation of the definition of \u201cinsured location,\u201d the fact that the Harmses held the property for rental purposes plainly excludes the defendant\u2019s injuries from coverage. The trial court correctly concluded that the homeowners policy did not extend coverage to defendant\u2019s losses.\nThe rental dwelling policy specified the premises as 41061 North Second Street, Antioch (Lake County) Illinois. The policy defined \u201cinsured premises\u201d as the \u201cresidence premises,\u201d which in turn was defined as \u201cthe one or two family dwelling, other structures and grounds shown in the declarations.\u201d An additional definition of \u201cinsured premises\u201d is stated as \u201cone or two family dwelling premises alienated by any insured if possession has been given to others.\u201d (Emphasis in original.) Because the Harmses\u2019 daughter and son-in-law resided in a house located on the Spring Grove property, defendant contends that the location falls under this heading. As State Farm points out, however, there is no indication in the record whatsoever that the Harmses ever rented or otherwise alienated this property. Finally, the policy specifically excludes liability and medical coverages for injuries arising \u201cout of premises other than the insured premises.\u201d (Emphasis in original.)\nThe trial court correctly concluded that defendant\u2019s losses did not occur on \u201cinsured premises,\u201d and we note that the exclusion provision expressly precludes coverage of losses arising elsewhere. The record establishes that the race course was not located at the residence premises in Antioch; similarly, the record fails to establish that the Harmses rented or otherwise alienated (as that word is used in the policy) the Spring Grove property. In conclusion, neither the homeowner nor the rental dwelling policies furnished by State Farm to Melvin and Evelyn Harms provided coverage for defendant\u2019s losses. Thus, the trial court correctly determined that State Farm was entitled to judgment on the pleadings as a matter of law with respect to these two policies.\nAccompanying its motion for summary judgment with respect to the business liability and umbrella policies, State Farm submitted, inter alia, Melvin Harms\u2019 discovery deposition and numerous corporate records for Harms Realty Investment Corporation. In his deposition, Harms testified that he owned the property at Wilmot Road in Spring Grove but did not hold an insurance policy for it. He stated that he leased the property to Harms Realty Investment Corporation, a closely held corporation in which his daughter and son-in-law were the sole shareholders. Harms admitted that he was a corporate officer and had assisted in the incorporation of the business entity; however, he testified that he neither invested in nor performed services for the corporation. Additionally, he stated he received no benefits from the corporation other than rental payments for the Spring Grove property. Although Harms testified that he held 33 or 36 shares of Harms Realty, the corporate records reveal that out of the 100 shares issued, 67 were held by his son-in-law, Robert J. Banasack, and the remaining 33 were held by his daughter, Lynette Banasack. Harms stated that he leased the entire 60 acres on Wilmot Road to Harms Realty but was unaware of any sublease between Harms Realty and Maple-hurst Cycle Park. He stated that two corporations, Maplehurst Trails and Maplehurst Snow Tubing, of which his daughter and son-in-law were the shareholders, conducted dirt-biking and snow-tubing operations on the property. Harms stated that he did not perform any services for and did not receive any remuneration or compensation for the operation of either business. He further stated that he did not supervise, oversee or take part in the operation of these two businesses.\nHarms further testified that he had held insurance on the Wilmot Road property at one time but did no longer. He stated that State Farm had indicated it was uninterested in insuring this property. He testified that he believed at one time his son-in-law had held a policy from Lloyds of London but was unsure of any additional information.\nWith regard to his own business pursuits, Harms testified that he had been in the refrigeration sales and service business until February 1, 1984, at which time he retired. His business was located at 100-102 South Milwaukee Avenue, Lake Villa, Illinois, where he had constructed the business building in 1956. He testified that he had sold the business but continued to own the building and maintained a business liability policy on it. He also testified that he held an \u201cexcess\u201d policy which he obtained upon the recommendation of his insurance agent. He understood this policy to provide excess coverage in addition to that provided by his business policy, his rental policy and automobile policies.\nWe turn now to a consideration of the business liability policy. The policy\u2019s declaration page specifies the Lake Villa location noted above as the \u201clocation of covered premises.\u201d The declarations further designate the named insured as Harms and state that he is an individual. The policy, by its own express terms, provides liability coverage to the person or persons named on the declarations page as an individual, \u201conly with respect to the conduct of business of which [he is] the sole proprietor.\u201d Defendant claims that Harms\u2019 rental of the Spring Grove property to Harms Realty Investment Corporation constituted a business of which Harms was the sole proprietor. Nevertheless, we think it clear that Harms\u2019 act of renting the property had no bearing on or connection to defendant\u2019s losses, which occurred while her children were customers of Maplehurst Cycle Park, a corporate entity not designated anywhere as a named insured on Harms\u2019 business policy. As defendant notes in her reply brief, the coverage issue of the business policy is whether Melvin Harms\u2019 activities at the motorcycle course on the Spring Grove property are business activities not otherwise excluded by the business policy. It is clear that his activity as a landlord is excluded. Harms neither owned nor operated the motorcycle park and had no financial interest in or business connection to the entity which did operate it. Further, although defendant\u2019s children sustained injuries on property owned by Harms, the children were neither guests nor customers of Harms; Harms did not provide them with any goods or service and had no business relationship with them of any kind. In short, the tragic injuries sustained by defendant\u2019s minor children did not arise out of the conduct of a business of which Harms was the sole proprietor; thus the business liability policy issued to him by State Farm did not extend coverage for these losses.\nLastly, we examine the umbrella policy. Its declaration page lists a number of underlying insurance policies, including auto liability, recreational vehicle liability, comprehensive personal liability and water craft liability. The policy excludes coverage for losses caused by the insured\u2019s business operations unless underlying insurance listed on the declaration page provides coverage for such loss. In other words, this umbrella policy only provided insurance coverage in excess of other policies held by the insured and specifically listed on the policy\u2019s declaration page. We think it is clear that the umbrella policy would provide such excess coverage for losses caused by Harms\u2019 business operations only if Harms held an underlying policy which would cover the losses. Even if Harms\u2019 \u201cbusiness\u201d was renting the Spring Grove property to Harms Realty Investment Corporation, the umbrella policy fails to provide coverage for the rental because Harms had no underlying insurance policy for the rental. Further, even if we were to conclude that Harms\u2019 other policies (specifically, his business liability or rental dwelling policy) did provide coverage to this rental property, defendant\u2019s losses were not caused by the rental of such property. As noted above, defendant\u2019s minor children incurred their injuries while they were customers of Maplehurst Cycle Park, a corporate entity unrelated to Harms.\nIn view of the facts discussed above, we conclude that the trial court properly granted summary judgment for State Farm with regard to the business and umbrella policies.\nWe now consider defendant\u2019s contention that State Farm waived its rights to deny coverage under the homeowner and rental dwelling policies. The trial court found, and we agree, that defendant\u2019s losses did not occur on an insured location, within the meaning of either policy. Further, the losses arose out of a business activity entirely unrelated to the insured. We note, as did the trial court, that State Farm provided Melvin Harms with a reservation of rights letter on November 14, 1986, in which it denied coverage under the homeowners policy because: (1) the losses involved a business pursuit, and (2) the losses did not occur on an insured location.\nFurther, although the reservation of rights letter did not specifically deny coverage under the rental dwelling policy, this omission does not operate to waive State Farm\u2019s rights as to this policy. As State Farm observes in its appellate brief, insurance coverage cannot be \u201cwaived\u201d into existence. The rental dwelling policy simply does not provide insurance coverage for the Spring Grove property, and State Farm\u2019s alleged waiver does not alter the policy\u2019s definition of \u201cinsured premises.\u201d We hold that State Farm did not waive any rights under either policy.\nAccordingly, the judgment of the trial court of McHenry County is affirmed.\nAffirmed.\nMcLAREN and REINHARD, JJ., concur.", "type": "majority", "author": "PRESIDING JUSTICE UNVERZAGT" } ], "attorneys": [ "Robert J. Cooney, Jr., and James E. Ocasek, both of Cooney & Conway, of Chicago, for appellant.", "Victor J. Piekarski, of Querry & Harrow, Ltd., of Chicago, for appellee." ], "corrections": "", "head_matter": "STATE FARM FIRE AND CASUALTY COMPANY, Plaintiff-Appellee, v. PEGGY KLECKNER, as Special Adm\u2019r of the Estate of Alex Kleckner, Deceased, and as Mother and Next Friend of Suzanne Kleckner, a Minor, Defendant-Appellant (Melvin Harms et al., Defendants).\nSecond District\nNo. 2\u201489\u20140579\nOpinion filed February 20, 1990.\nRobert J. Cooney, Jr., and James E. Ocasek, both of Cooney & Conway, of Chicago, for appellant.\nVictor J. Piekarski, of Querry & Harrow, Ltd., of Chicago, for appellee." }, "file_name": "0371-01", "first_page_order": 393, "last_page_order": 402 }