{ "id": 894478, "name": "ST. PAUL FIRE AND MARINE INSURANCE COMPANY, Plaintiff-Appellant, v. ALLEN SMITH et al., Defendants-Appellees (Valor Insurance Company, Defendant-Counterplaintiff)", "name_abbreviation": "St. Paul Fire & Marine Insurance v. Smith", "decision_date": "2003-03-20", "docket_number": "No. 1-02-0436", "first_page": "1054", "last_page": "1062", "citations": [ { "type": "official", "cite": "337 Ill. App. 3d 1054" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "882 P.2d 1143", "category": "reporters:state_regional", "reporter": "P.2d", "case_ids": [ 10353921 ], "year": 1994, "pin_cites": [ { "page": "1146", "parenthetical": "the rationale of the exclusion \"is to enable households that include a family member who has a poor driving record to obtain insurance at a reasonable cost by excluding the poor driver\"" } ], "opinion_index": 0, "case_paths": [ "/p2d/882/1143-01" ] }, { "cite": "641 A.2d 449", "category": "reporters:state_regional", "reporter": "A.2d", "case_ids": [ 11292389 ], "year": 1994, "pin_cites": [ { "page": "451-52", "parenthetical": "named driver exclusions \"ensure continued coverage of an automobile where the driving record of a household member warrants non-issuance or cancellation\"" } ], "opinion_index": 0, "case_paths": [ "/a2d/641/0449-01" ] }, { "cite": "901 P.2d 819", "category": "reporters:state_regional", "reporter": "P.2d", "case_ids": [ 10344106 ], "year": 1995, "pin_cites": [ { "page": "823", "parenthetical": "\"[o]ur legislature realized that premiums might be too costly in some circumstances, and chose to allow the contracting parties to exclude specifically named individuals,\" allowing families to obtain affordable insurance" } ], "opinion_index": 0, "case_paths": [ "/p2d/901/0819-01" ] }, { "cite": "930 S.W2d 739", "category": "reporters:state_regional", "reporter": "S.W.2d", "case_ids": [ 10022121 ], "year": 1996, "pin_cites": [ { "page": "741" } ], "opinion_index": 0, "case_paths": [ "/sw2d/930/0739-01" ] }, { "cite": "776 N.E.2d 315", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 2002, "pin_cites": [ { "page": "322-23" } ], "opinion_index": 0 }, { "cite": "333 Ill. App. 3d 463", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 486290 ], "year": 2002, "pin_cites": [ { "page": "472" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/333/0463-01" ] }, { "cite": "735 N.E.2d 747", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 2000, "pin_cites": [ { "page": "751" } ], "opinion_index": 0 }, { "cite": "315 Ill. App. 3d 1159", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 980622 ], "year": 2000, "pin_cites": [ { "page": "1163" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/315/1159-01" ] }, { "cite": "695 N.E.2d 848", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1998, "pin_cites": [ { "page": "850" } ], "opinion_index": 0 }, { "cite": "182 Ill. 2d 240", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 864529 ], "year": 1998, "pin_cites": [ { "page": "244" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/182/0240-01" ] }, { "cite": "757 N.E.2d 881", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 9, "year": 2001, "pin_cites": [ { "page": "883" }, { "page": "883" }, { "page": "883" }, { "page": "883" }, { "page": "883" }, { "page": "885" }, { "page": "883" }, { "page": "884" }, { "page": "886" } ], "opinion_index": 0 }, { "cite": "197 Ill. 2d 369", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 259034 ], "weight": 9, "year": 2001, "pin_cites": [ { "page": "372" }, { "page": "372" }, { "page": "372" }, { "page": "373" }, { "page": "373" }, { "page": "376" }, { "page": "373" }, { "page": "374" }, { "page": "379" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/197/0369-01" ] }, { "cite": "781 N.E.2d 249", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 4, "year": 2002, "pin_cites": [ { "page": "254" }, { "page": "254" }, { "page": "254" }, { "page": "255" } ], "opinion_index": 0 }, { "cite": "202 Ill. 2d 414", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 1442052 ], "weight": 4, "year": 2002, "pin_cites": [ { "page": "421" }, { "page": "421" }, { "page": "422" }, { "page": "422" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/202/0414-01" ] }, { "cite": "780 N.E.2d 660", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 3, "year": 2001, "pin_cites": [ { "page": "662" }, { "page": "662" }, { "page": "664" } ], "opinion_index": 0 }, { "cite": "202 Ill. 2d 304", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 1442060 ], "weight": 3, "year": 2001, "pin_cites": [ { "page": "308" }, { "page": "308" }, { "page": "311-12" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/202/0304-01" ] } ], "analysis": { "cardinality": 783, "char_count": 17957, "ocr_confidence": 0.762, "pagerank": { "raw": 1.0423174391451611e-07, "percentile": 0.5512058811150766 }, "sha256": "624e1206fc221775c696e7190abc3e849838b50ea743539cca295cd6f47e2297", "simhash": "1:e3f435b246fc84ad", "word_count": 2855 }, "last_updated": "2023-07-14T14:38:38.563173+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "ST. PAUL FIRE AND MARINE INSURANCE COMPANY, Plaintiff-Appellant, v. ALLEN SMITH et al., Defendants-Appellees (Valor Insurance Company, Defendant-Counterplaintiff)." ], "opinions": [ { "text": "PRESIDING JUSTICE THEIS\ndelivered the opinion of the court:\nPlaintiff St. Paul Fire & Marine Insurance Company (St. Paul) appeals an order of the trial court granting the motion of defendants Allen Smith, Marjorie Ocasek, as special administrator of the estate of William Smith, deceased, Elizabeth Ing, as special administrator of the estate of Audrey Hardwidge, deceased, and independent administrator of the estate of William Hardwidge, deceased (collectively, defendants), for summary judgment declaring that the named driver exclusion contained in St. Paul\u2019s automobile liability insurance policy was void as against public policy. On appeal, St. Paul contends that the named driver exclusion does not violate the mandatory insurance laws of the Illinois Vehicle Code (the Code) (625 ILCS 5/1 \u2014 100 et seq. (West 1996)). St. Paul also argues that the named driver exclusion applies to bar coverage for the underlying wrongful death lawsuit because the exclusion was part of the St. Paul policy and was not ambiguous, and contends that the negligent entrustment claim against Allen Smith falls within the scope of the exclusion.\nThe main issue before this court is one of first impression in Illinois, whether a named driver exclusion in an automobile liability insurance policy violates Illinois public policy. We find that it does not and reverse and remand for further proceedings.\nOn June 3, 1996, William Smith (William), while driving a vehicle owned by his father, Allen, collided with an automobile carrying William and Audrey Hardwidge. All three individuals died as a result of their injuries. At the time of the accident, William had an automobile liability insurance policy issued by Valor Insurance Company (Valor). The car was insured by St. Paul, under a personal insurance package policy including homeowners and automobile liability insurance procured by William\u2019s parents, Allen and June Smith. The St. Paul policy initially listed Allen and June as insureds and drivers covered under the policy. On January 2, 1996, William was added as a covered driver to Allen and June\u2019s policy. St. Paul then received William\u2019s driving record, which revealed that his license had previously been suspended and revoked because he had been convicted of driving under the influence of alcohol twice and driving with a revoked license. St. Paul removed William as a covered driver from Allen and June\u2019s policy on January 22, 1996, and required Allen and June to sign a named driver exclusion, which excluded liability for any accidents or losses incurred while the car was driven by William.\nIn July 1997, the administrators of the estates of Wilham and Audrey Hardwidge filed a lawsuit against the estate of William Smith and Allen (the underlying suit). The complaint included several wrongful death counts against William\u2019s estate and a negligent entrustment count against Allen, alleging that Allen allowed William to use his car even though he knew that William had been abusing alcohol for a substantial period of time, William had previously been convicted of driving under the influence of alcohol and Wilham was not covered by Allen\u2019s automobile insurance policy. Both Allen and William\u2019s estate tendered their defenses to Valor, which provided their defenses. Neither Allen nor William\u2019s estate tendered their defenses to St. Paul. In January 2000, a verdict of $5 million was entered against Allen and William\u2019s estate. Valor then paid its policy limits of $20,000 to each of the Hardwidge estates.\nIn April 1998, St. Paul filed a complaint for declaratory judgment, seeking a declaration that it did not owe a duty to defend and/or indemnify Allen or William\u2019s estate in the underlying suit because the named driver exclusion in Allen\u2019s insurance policy barred coverage for any accident involving a vehicle driven by William. Several months after paying its policy limits in the underlying suit, Valor was granted leave to intervene in St. Paul\u2019s declaratory judgment action and filed a counterclaim for declaratory judgment. St. Paul filed a motion for summary judgment, arguing that the named driver exclusion operated to bar any coverage obligation to Allen and William\u2019s estate. Valor and defendants filed cross-motions for summary judgment, contending that the named driver exclusion violated Illinois public policy as contained in the mandatory insurance requirements of the Code. Defendants also argued that the exclusion was ambiguous, was not attached to the insurance policy and did not apply to bar claims of negligent entrustment.\nThe trial court granted Valor\u2019s and defendants\u2019 summary judgment motions and denied St. Paul\u2019s motion on July 27, 2001. On December 12, 2001, the trial court clarified that order and held that the sole basis of its ruling was that the named driver exclusion was void because it violated public policy. On January 7, 2001, the trial court made an express written finding pursuant to Supreme Court Rule 304(a) (155 Ill. 2d R. 304(a)), that there was no just reason to delay enforcement or appeal of the July 27, 2001, and December 12, 2001, orders. St. Paul then filed this timely appeal.\nSummary judgment is appropriate only where the pleadings, depositions, admissions and affidavits show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Ferguson v. McKenzie, 202 Ill. 2d 304, 308, 780 N.E.2d 660, 662 (2001), citing 735 ILCS 5/2 \u2014 1005(c) (West 1998). We review an appeal from the grant of summary judgment de novo. Ferguson, 202 Ill. 2d at 308, 780 N.E.2d at 662. This case involves a question of statutory interpretation, which we also review de novo. Land v. Board of Education of the City of Chicago, 202 Ill. 2d 414, 421, 781 N.E.2d 249, 254 (2002). In interpreting a statute, the court must ascertain the legislature\u2019s intent, which is found in the plain and ordinary meaning of the language used in the statute. Land, 202 Ill. 2d at 421, 781 N.E.2d at 254.\nCourts apply terms in an insurance policy as written unless those terms contravene public policy. State Farm Mutual Automobile Insurance Co. v. Smith, 197 Ill. 2d 369, 372, 757 N.E.2d 881, 883 (2001). Statutes are an expression of public policy. Smith, 197 Ill. 2d at 372, 757 N.E.2d at 883. \u201cStatutes in force at the time an insurance - policy was issued are controlling, and a statute\u2019s underlying purpose cannot be circumvented by a restriction or exclusion written into an insurance policy. [Citation.] Accordingly, insurance policy provisions that conflict with a statute are void.\u201d Smith, 197 Ill. 2d at 372, 757 N.E.2d at 883.\nIn this case, the named driver exclusion in Allen\u2019s St. Paul automobile liability insurance policy provided:\n\u201cDriver Exclusion Policy Number: PK01200772\nNamed Insured: Smith, Allen & June This endorsement changes the policy.\nPlease read it carefully.\nWe will not be liable for any accidents or losses while any auto or motorhome is driven by: William R. Smith.\u201d\nThe exclusion was signed by Allen, June and William in January 1996.\nSection 7 \u2014 601(a) of the mandatory insurance provision in the Code requires that all vehicles be insured through a liability insurance policy. 625 ILCS 5/7 \u2014 601(a) (West 1996); Smith, 197 Ill. 2d at 373, 757 N.E.2d at 883. Section 7 \u2014 317(b)(2) of the Code\u2019s safety responsibility law requires that a motor vehicle liability policy \u201cinsure the person named therein and any other person using or responsible for the use of such motor vehicle or vehicles with the express or implied permission of the insured.\u201d 625 ILCS 5/7 \u2014 317(b)(2) (West 1996). Construing these provisions together, our supreme court interpreted these statutes to mandate that \u201c \u2018a liability insurance policy issued to the owner of a vehicle must cover the named insured and any other person using the vehicle with the named insured\u2019s permission.\u2019 \u201d Smith, 197 Ill. 2d at 373, 757 N.E.2d at 883, quoting State Farm Mutual Automobile Insurance Co. v. Universal Underwriters Group, 182 Ill. 2d 240, 244, 695 N.E.2d 848, 850 (1998). In affirming the appellate court, our supreme court in Smith noted that \u201c \u2018[t]he purpose of mandatory automobile liability insurance is not only to protect the owner against liability or some other insurance company; rather, its principal purpose is to protect the public by securing payment of their damages.\u2019 \u201d Smith, 197 Ill. 2d at 376, 757 N.E.2d at 885, quoting State Farm Mutual Automobile Insurance Co. v. Fisher, 315 Ill. App. 3d 1159, 1163, 735 N.E.2d 747, 751 (2000).\nDefendants maintain that the trial court was correct in holding that the named driver exclusion in St. Paul\u2019s liability insurance policy violates Illinois public policy because it conflicts with the language of the Code. The Code requires that every insurance policy cover the named insured and \u201cany other person\u201d using the vehicle with the insured\u2019s express or implied permission. 625 ILCS 5/7 \u2014 317(b)(2) (West 1996). However, the named driver exclusion allows the insurer to exclude certain individuals from coverage. Defendants contend that the definition of the term \u201cany other person\u201d necessarily includes the driver who was purportedly excluded from coverage by the named driver exclusion, assuming he had the insured\u2019s permission to operate the vehicle. Thus, defendants argue, the exclusion conflicts with the statute and is void.\nIn response, St. Paul argues that the named driver exclusion does not violate public policy. Citing section 7 \u2014 602 of the Code, St. Paul contends that this section clearly creates a limited exception for named driver exclusions to the mandatory insurance laws. 625 ILCS 5/7 \u2014 602 (West 1996). We agree.\nSection 7 \u2014 602 of the Code discusses the requirements for insurance cards and provides in relevant part:\n\u201cIf the insurance policy represented by the insurance card does not cover any driver operating the motor vehicle with the owner\u2019s permission, or the owner when operating a motor vehicle other than the vehicle for which the policy is issued, the insurance card shall contain a warning of such limitations in the coverage provided by the policy.\u201d 625 ILCS 5/7 \u2014 602 (West 1996).\nThe plain language of this statute appears to recognize that insurance policies may exclude named drivers from coverage and conflicts with the mandatory insurance requirements of sections 7 \u2014 601 and 7 \u2014 317(b)(2).\nWhen there is an alleged conflict between two statutes, a court interprets those statutes to avoid inconsistency and give effect to both statutes where such an interpretation is reasonably possible. Ferguson, 202 Ill. 2d at 311-12, 780 N.E.2d at 664. Sections of the same statute should be considered in pari materia and each section should be construed with every other part or section of the statute to produce a harmonious whole. Land, 202 Ill. 2d at 422, 781 N.E.2d at 254. We presume that when enacting the statute, the legislature did not intend absurdity, inconvenience or injustice. Land, 202 Ill. 2d at 422, 781 N.E.2d at 255.\nIn interpreting section 7 \u2014 602, we note that this section is located in Article VI, entitled \u201cMandatory Insurance,\u201d of the Illinois Safety and Family Financial Responsibility Law of the Code. Further, section 7 \u2014 602 is situated directly after section 7 \u2014 601, which requires vehicles to be covered by a liability insurance policy. Section 7 \u2014 602 was added to the Code by the same public act that created section 7 \u2014 601, and the mandatory insurance article and both sections share the same effective date. Although section 7 \u2014 602 has been amended several times since its enactment in 1989, the legislature has never removed or changed this language concerning policy limitations. Thus, after construing section 7 \u2014 602 with section 7 \u2014 601, we hold that by enacting section 7 \u2014 602, the legislature intended to create a limited exception for named driver exclusions to the mandatory insurance laws.\nWe find additional support for our holding from the administrative regulations promulgated by the Secretary of State. Section 7 \u2014 602 specifically authorizes the Secretary of State to prescribe rules and regulations concerning the form, content and manner of issuance of insurance cards. 625 ILCS 5/7 \u2014 602 (West 1996). Properly promulgated administrative regulations have the force and effect of law. Chandler v. Illinois Central R.R. Co., 333 Ill. App. 3d 463, 472, 776 N.E.2d 315, 322-23 (2002). The regulation concerning insurance card requirements provides that: \u201cd) The insurance card shall contain the following insurance information: *** 7) a warning of excluded drivers or vehicles, when applicable.\u201d 50 Ill. Adm. Code \u00a7 8010.20(d)(7) (1996). Therefore, this administrative regulation is further evidence that the legislature intended to carve out a narrow exception for the named driver exclusion. Accordingly, we find that the named driver exclusion in St. Paul\u2019s insurance policy is valid and does not violate public policy.\nAlthough defendants rely on Smith to support their argument that named driver exclusions violate public policy, we find that case distinguishable. In Smith, State Farm invoked its automobile business exclusion to bar coverage for an accident occurring while the insured vehicle was operated by a valet driver. That exclusion purported to deny liability coverage while any insured vehicle was being repaired, serviced or used by any person employed in a car business. Smith, 197 Ill. 2d at 373, 757 N.E.2d at 883. In explaining Illinois\u2019s public policy, our supreme court reiterated that a motor vehicle liability policy must cover the named insured and any other person using the vehicle with the insured\u2019s permission. Because when a vehicle owner gives his vehicle to a person engaged in an automobile business, he is also giving that person permission to operate the vehicle, the court found that the automobile business exclusion violated section 7 \u2014 317(b)(2). Smith, 197 Ill. 2d at 374, 757 N.E.2d at 884.\nHowever, unlike the present case, there was no additional statutory language in Smith implying that the legislature intended to create such an exception. Further, Smith concerned a broad exclusion that barred liability for accidents caused by an entire class of people, those involved in any automobile business. In contrast, the present case involves a more limited exclusion, only precluding coverage for certain individuals. Additionally, Smith specifically limited its decision to the validity of the automobile business exclusion only, stating that \u201c[t]he permissibility of other possible policy exclusions is not before us today, and we express no opinion as to any other exclusion.\u201d Smith, 197 Ill. 2d at 379, 757 N.E.2d at 886. Thus, we find Smith distinguishable.\nAdditionally, we note that other states upholding the validity of named driver exclusions have delineated several public policy reasons supporting the exclusions. A Texas appeals court found that named driver exclusions furthered Texas\u2019s public policy of protecting all potential claimants from damages resulting from automobile accidents by enabling drivers with family members having poor driving records to procure affordable insurance, rather than obtaining coverage from an assigned risk pool at a greater cost or not securing insurance at all. Further, these exclusions deterred insured drivers from entrusting their vehicles to unsafe excluded drivers, which kept those unfit drivers off the road. Zamora v. Dairyland County Mutual Insurance Co., 930 S.W2d 739, 741 (Tex. Ct. App. 1996). See also Pierce v. Oklahoma Property & Casualty Insurance Co., 901 P.2d 819, 823 (Okla. 1995) (\u201c[o]ur legislature realized that premiums might be too costly in some circumstances, and chose to allow the contracting parties to exclude specifically named individuals,\u201d allowing families to obtain affordable insurance); State Farm Mutual Automobile Insurance Co. v. Washington, 641 A.2d 449, 451-52 (Del. 1994) (named driver exclusions \u201censure continued coverage of an automobile where the driving record of a household member warrants non-issuance or cancellation\u201d); Dairyland Insurance Co. v. State Farm Mutual Automobile Insurance Co., 882 P.2d 1143, 1146 (Utah 1994) (the rationale of the exclusion \u201cis to enable households that include a family member who has a poor driving record to obtain insurance at a reasonable cost by excluding the poor driver\u201d). We agree that these policy reasons are sound and further support our holding.\nTherefore, we hold that the named driver exclusion in St. Paul\u2019s automobile insurance liability policy does not contravene Illinois public policy because the legislature created a limited exception to the mandatory insurance laws for this exclusion. We note that our decision in this case concerns only the named driver exclusion and we express no opinion as to any other exclusions. Accordingly, we reverse the trial court\u2019s grant of summary judgment to defendants. While the parties raise several other factual issues concerning the application of this named driver exclusion to the underlying suit, we note that the trial court never considered these issues and we decline to address them. Rather, we remand this cause to the trial court for further proceedings.\nFor the foregoing reasons, the judgment of the circuit court of Cook County is reversed and the cause remanded for further proceedings.\nReversed and remanded.\nHARTMAN and GREIMAN, JJ., concur.\nWalor is not a party to this appeal. Additionally, Valor\u2019s cross-appeal was dismissed by this court on Valor\u2019s motion in March 2002.", "type": "majority", "author": "PRESIDING JUSTICE THEIS" } ], "attorneys": [ "Robert L. Keisler and Patti M. Deuel, both of Kiesler & Berman, of Chicago, for appellant.", "James E. Ocasek, of Cooney & Conway, of Chicago, for appellees." ], "corrections": "", "head_matter": "ST. PAUL FIRE AND MARINE INSURANCE COMPANY, Plaintiff-Appellant, v. ALLEN SMITH et al., Defendants-Appellees (Valor Insurance Company, Defendant-Counterplaintiff).\nFirst District (4th Division)\nNo. 1\u201402\u20140436\nOpinion filed March 20, 2003.\nRobert L. Keisler and Patti M. Deuel, both of Kiesler & Berman, of Chicago, for appellant.\nJames E. Ocasek, of Cooney & Conway, of Chicago, for appellees." }, "file_name": "1054-01", "first_page_order": 1072, "last_page_order": 1080 }