                               Illinois Official Reports

                                      Appellate Court



                  Schuster v. Occidental Fire & Casualty Co. of North America,
                                    2015 IL App (1st) 140718



Appellate Court          IRINA SCHUSTER, as Special Administrator of the Estate of Oleh
Caption                  Baranovsky, Deceased, Plaintiff-Appellant, v. OCCIDENTAL FIRE
                         AND CASUALTY COMPANY OF NORTH AMERICA,
                         Defendant-Appellee.




District & No.           First District, Fifth Division
                         Docket No. 1-14-0718



Filed                    March 27, 2015




Decision Under           Appeal from the Circuit Court of Cook County, No. 11-L-14105; the
Review                   Hon. Raymond W. Mitchell, Judge, presiding.



Judgment                 Affirmed.




Counsel on               Michael W. Rathsack, Alexander Gruzmark, and Andrew J. Long, all
Appeal                   of Chicago, for appellant.

                         Wendy N. Enerson, of Cozen O’Connor, of Chicago, for appellee.
     Panel                    JUSTICE McBRIDE delivered the judgment of the court, with
                              opinion.
                              Presiding Justice Palmer and Justice Reyes concurred in the judgment
                              and opinion.


                                               OPINION

¶1         The plaintiff, Irina Schuster, as special administrator of the estate of Oleh Baranovsky,
       deceased, appeals from the entry of summary judgment for the defendant insurer, Occidental
       Fire & Casualty Company (Occidental),1 in this insurance coverage action. The main dispute
       is whether the insurance policy covers both owned and leased vehicles. The trial court granted
       summary judgment to the insurer after finding that its commercial automobile liability policy
       covered owned vehicles, not the leased truck that was involved in Baranovsky’s fatal accident,
       and that leasing the truck did not trigger an “automatic insurance provision” for newly
       acquired vehicles. The court also rejected the plaintiff’s contention that the insurer was
       estopped from raising policy defenses. On appeal, the plaintiff contends the findings were
       contrary to precedent and the facts. For the reasons below, we disagree with the estate and we
       affirm the court’s ruling.
¶2         Baranovsky’s accident occurred on September 8, 2005, at 12:50 p.m. when the 23-year-old
       Chicagoan was driving a 1997 Isuzu freight truck in Tennessee. He was southbound on
       Interstate 65, near mile marker 100 and the exit ramp for the community of Millersville. There,
       the highway curves to the east, but the freight truck crossed west over the highway median,
       overturned onto the driver’s side, and slid into the northbound traffic lanes, where it struck a
       Toyota Corolla and caused the car to roll several times. The 31-year-old oil refinery worker
       who was driving the Toyota was only bruised and was released from the emergency room that
       same day. Baranovsky’s injuries were more severe. He was flown from the accident scene and
       died in the hospital a week later.
¶3         In 2007, Baranovsky’s estate brought an action for damages against two interstate trucking
       companies based in Illinois, Diamond Transportation, Inc. (Diamond), and DA Fast Express,
       Inc. (DA Fast); and the president of DA Fast, Dariusz Benesiewicz. The negligence allegations
       against Diamond are pertinent here. The estate alternatively alleged that Diamond failed to
       provide worker’s compensation coverage to its employee driver or to properly maintain its
       truck. More specifically, at the time of the accident, Baranovsky was alleged to be “an
       employee and/or agent of, and driver for Defendant [Diamond]” who was “acting within the
       scope of said employment and/or agency [with Diamond]” and “operating a [1997 Isuzu]
       vehicle owned and/or leased by Defendant [Diamond].” Diamond was alleged to owe “the
       duty to exercise due care at all times to avoid placing its employees and/or agents in danger,”
       but in breach of that duty it had required its employee and/or agent to “drive unreasonably
       extended hours in excess of his ordinary physical limitations” or it failed to inspect, maintain,
             1
          It is unclear why the insurer has been referred to alternatively as Occidental Fire & Casualty
       Company, Occidental Fire & Casualty Company of North America, and Occidental Fire & Casualty
       Company of North Carolina. We use the version that appears on the printed policy.

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     or repair its vehicle. The estate has abandoned the allegations regarding worker’s
     compensation insurance and focuses its appeal on the allegations of common law negligence.
¶4       When Diamond received the negligence complaint, it requested claim coverage from
     Occidental under the “Truckers Coverage” commercial automobile policy that Diamond had
     purchased from Occidental for the one-year period beginning September 23, 2004. Diamond’s
     policy provided up to $1 million liability coverage and obligated Occidental to “pay all sums
     an ‘insured’ legally must pay as damages because of ‘bodily injury’ or ‘property damage’ to
     which this insurance applies, caused by an ‘accident’ and resulting from the ownership,
     maintenance or use of a covered auto.”
¶5       The policy’s section I, “Item Three–Schedule of Covered Autos You Own,” contains a list
     of 14 insured trucks and cars, identified by their unique vehicle identification numbers, and
     their model year, trade name, and body type (e.g., “straight truck” or “van”). The Isuzu truck
     that Baranovsky was driving does not appear on this original policy schedule. However, a
     commercial policy change request form in the record on appeal shows that Diamond asked for
     the Isuzu truck to be added to its Occidental policy after the accident occurred based on a lease
     that was dated one day before the accident occurred. Diamond’s insurance agent faxed the
     request to Occidental’s agent on September 8, 2005, at 4:28 p.m. and the written lease dated
     September 7, 2005, indicated DA Fast was leasing the Isuzu to Diamond for a year. We
     emphasize that it is undisputed that DA Fast owned the Isuzu truck when the accident occurred
     and that Diamond has never owned that vehicle.
¶6       Diamond’s “ ‘covered autos’ ” were defined by symbol 46 in a chart of coverage numbers
     that was included in section I of the policy. Coverage symbol 46 is labeled, “Specifically
     Described ‘Autos,’ ” and defined as “Only those ‘autos’ described in Item Three of the
     Declarations for which a premium charge is shown.” Diamond contracted only for coverage
     symbol 46 and did not contract for other coverage symbols. For instance, Diamond did not
     contract for coverage symbol 41, which is labeled “Any ‘Autos’ ”; or for coverage symbol 47,
     which is labeled, “Hired ‘Autos’ Only,” and defined as “Only those ‘autos’ you lease, hire, rent
     or borrow.”
¶7       Section I of the policy also contains what the parties refer to as the “automatic insurance
     provision.” It states:
                 “B. Owned Autos You Acquire After the Policy Begins
                     1. If Symbols 41, 42, 43, 44 or 45 are entered next to the coverage in Item Two
                 of the Declarations, then you have coverage for ‘autos’ that you acquire of the type
                 described for the remainder of the policy period.
                     2. But, if Symbol 46 is entered next to a coverage in Item Two of the
                 Declarations, an ‘auto’ you acquire will be a covered ‘auto’ for that coverage only
                 if:
                          a. We already cover all ‘autos’ that you own for that coverage or it replaces
                     an ‘auto’ you previously owned that had that coverage; and
                          b. You tell us within 30 days after you acquire it that you want us to cover it
                     for that coverage.”
¶8       Section II of the policy contains exclusions for employee injuries:
                 “B. Exclusions
                     This insurance does not apply to any of the following:

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                                                    ***
                           3. Workers’ Compensation
                           Any obligation for which the ‘insured’ or the ‘insured’s’ insurer may be
                       held liable under any workers compensation, disability benefits or
                       unemployment compensation, disability benefits or unemployment
                       compensation law or any similar law.
                           4. [Bodily injury to an employee of the insured arising out of and in the
                       course of employment. This exclusion applies whether the insured may be
                       liable as an employer or in any other capacity.]”
¶9         When Diamond requested claim coverage under this policy, Occidental responded that
       based on the facts alleged in the estate’s complaint, there was no coverage. Occidental quoted
       the policy’s express exclusions for workers’ compensation liability and bodily injuries to
       employees and then generally stated, “By naming the specific grounds for this disclaimer of
       coverage, we do not waive any of our rights or any of the other provisions or conditions of the
       policy of insurance and specifically reserve all of our rights and remedies under this policy and
       under the statutes and common law.”
¶ 10       Diamond then answered the complaint but did not otherwise defend against the estate’s
       allegations. A default judgment was entered against Diamond and the estate proved up
       damages totaling $4.4 million. Shortly after that, Diamond and the estate agreed that the estate
       would settle for an assignment of Diamond’s insurance rights and the estate, as assignee,
       commenced this declaratory judgment action against Occidental.
¶ 11       Discovery ensued in the coverage case and indicated that DA Fast, an Illinois company,
       contracted to haul freight exclusively for Diamond, that Diamond was DA Fast’s sole source of
       income, and that the relationship began in 1998 and continued for about a year after
       Baranovsky’s accident. Benesiewicz (the president of DA Fast) testified that he bought the
       1997 Isuzu truck at issue in April 2005. DA Fast’s drivers’ manifest logs showed that
       Benesiewicz drove the 1997 Isuzu as early as August 4, 2005. Another log sheet showed that
       Baranovsky drove the truck as early as August 5, 2005, which is when he first began driving
       for DA Fast, ostensibly as an independent contractor. The logs showed that the only truck
       Baranovsky drove for DA Fast during his six weeks with DA Fast was the 1997 Isuzu.
       Benesiewicz testified that he insured the Isuzu through Great West Casualty Company and that
       the policy was in effect when the accident occurred.
¶ 12       On cross-motions for summary judgment, the trial court found there was a question of fact
       as to whether Baranovsky was Diamond’s employee, but that regardless of his employment
       status, Occidental was entitled to summary judgment. As we summarized earlier, the court
       found that summary judgment was warranted because the Occidental policy covered only
       vehicles that were owned by Diamond, the policy did not cover the leased truck that
       Baranovsky was driving, and the lease of the truck from DA Fast to Diamond did not trigger an
       “automatic insurance provision” for newly acquired vehicles. The court rejected the estate’s
       contention that Diamond’s insurer was estopped from raising defenses to coverage.
¶ 13       The estate now argues the summary judgment ruling should be reversed because Diamond
       timely fulfilled the requirements for automatic coverage of the newly acquired Isuzu when it
       submitted the change request form on September 8, within 30 days of Diamond’s lease of the
       vehicle from DA Fast on September 7. The estate contends this sort of automatic insurance


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       clause is commonly used to prevent a gap in coverage between the time an insured acquires a
       vehicle and is able to complete the paperwork necessary to expressly add the vehicle to its
       policy. The estate cites Smith for the proposition that the Occidental clause provided interim
       coverage even though Diamond notified the insurer after the vehicle was involved in an
       accident. American Freedom Insurance Co. v. Smith, 347 Ill. App. 3d 1, 6-7, 806 N.E.2d 1136,
       1140 (2004). Continuing, the estate argues that the court’s conclusion that the clause applied
       only to owned vehicles is contrary to Emiljanowicz, which involved a freight truck that was
       leased to a trucking company and an insurance clause that was similar, if not identical, to the
       clause at issue here. Progressive Premier Insurance Co. of Illinois v. Emiljanowicz, 2013 IL
       App (1st) 113664, 991 N.E.2d 352.
¶ 14       Occidental responds that the trial court’s ruling was well reasoned and should be affirmed.
       Occidental contends that adding the Isuzu to the policy after the accident was ineffective and
       that according to Mank, unless the vehicle appeared on the policy’s “Schedule of Covered
       Autos” on the day of the accident, it was not covered on the day of the accident. Mank v. West
       American Insurance Co., 249 Ill. App. 3d 827, 620 N.E.2d 6 (1993). Occidental also contends
       that the reason there was coverage for a leased truck in Emiljanowicz was because the insured
       purchased coverage for all of its leased (and owned) vehicles, unlike Diamond, which
       purchased coverage only for its owned vehicles.
¶ 15       On appeal we consider the allegations of the underlying complaint and construe the
       Occidental insurance contract in order to determine whether summary judgment was proper.
       The interpretation of an insurance contract and the entry of summary judgment present
       questions of law that are reviewed de novo without any deference to the trial court’s
       determinations. Continental Casualty Co. v. McDowell & Colantoni, Ltd., 282 Ill. App. 3d
       236, 241, 668 N.E.2d 59, 62 (1996).
¶ 16       The entry of summary judgment is a drastic but expeditious means of disposing of a lawsuit
       in which the right of the moving party is free from doubt and clear. Outboard Marine, 154 Ill.
       2d at 102, 607 N.E.2d at 1209. Summary judgment is to be granted “without delay if the
       pleadings, depositions, and admissions on file, together with the affidavits, if any, show that
       there is no genuine issue as to any material fact and that the moving party is entitled to a
       judgment as a matter of law.” 735 ILCS 5/2-1005 (West 2010); Outboard Marine, 154 Ill. 2d
       at 102, 607 N.E.2d at 1209. In other words, at the summary judgment stage, the court does not
       decide disputed issues of fact, but does decide whether they exist and that the matter should
       instead proceed to trial. A court is cautious in awarding summary judgment in order to avoid
       preempting a litigant’s right to a trial in which the litigant may fully present the factual basis of
       his or her case. Lamkin v. Towner, 246 Ill. App. 3d 201, 204, 615 N.E.2d 1208, 1210 (1993);
       Outboard Marine, 154 Ill. 2d at 102, 607 N.E.2d at 1209 (summary judgment is to be denied
       where there are undisputed facts from which reasonable persons could draw divergent
       inferences). A genuine issue of material fact is said to exist when the evidence is sufficient to
       cause a reasonable jury to return a verdict for the party opposing the entry of summary
       judgment. McDonald v. Northeast Illinois Regional, 249 F. Supp. 2d 1051, 1053 (N.D. Ill.
       2003).
¶ 17       A plain and unambiguous insurance policy is applied as written. Crum & Forster
       Managers Corp. v. Resolution Trust Corp., 156 Ill. 2d 384, 620 N.E.2d 1073 (1993). A court
       will not search for ambiguity where none exists. Crum & Forster, 156 Ill. 2d at 391, 620
       N.E.2d at 1078. However, a policy that is susceptible to more than one reasonable

                                                     -5-
       interpretation is ambiguous and subject to rules of interpretation, such as the rule that
       ambiguities are construed against the drafter of the policy and in favor of coverage. Outboard
       Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 119, 607 N.E.2d 1204, 1217
       (1992). Accordingly, a court must initially look to the language of the policy alone. Gallagher
       v. Lenart, 226 Ill. 2d 208, 233, 874 N.E.2d 43, 58 (2007). A single, isolated clause or provision
       in a contract is not indicative of the parties’ intent at the time of contracting. Gallagher, 226 Ill.
       2d at 233, 874 N.E.2d at 58. “[B]ecause words derive their meaning from the context in which
       they are used, a contract must be construed as a whole, viewing each part in light of the others.”
       Gallagher, 226 Ill. 2d at 233, 874 N.E.2d at 58.
¶ 18       We consider the fact that the Isuzu was leased and not owned by Diamond to be dispositive
       of this appeal. When the contract is read as a whole, it is clear that the only vehicles that were
       covered by this liability policy were vehicles that Diamond owned. According to the contract,
       the only type of coverage that Diamond purchased was symbol 46 coverage, symbol 46
       coverage is for “Specifically Described Autos” which are “described on Item Three of the
       Declarations,” and “Item Three of the Declarations” is entitled “Schedule of Covered Autos
       You Own.”
¶ 19       The estate is unable to point to any language in this plain and unambiguous contract which
       arguably extends policy coverage to leased vehicles. Instead of contract language or other
       competent facts, the estate cites “circumstantial evidence” that this policy encompassed leased
       trucks. The estate contends:
               “[T]he policy on first glance might appear to cover only owned trucks because the
               insured trucks are listed under Item Three[, which is entitled] Schedule of Covered
               Autos You Own. However, a witness testified that Diamond leased its trucks rather than
               owning them. [This testimony was corroborated by] the fact that Item Three has a line
               for the original cost of the truck but not one of those lines is filled in. There was
               presumably no cost listed because Diamond never bought them.” (Emphasis in
               original.)
¶ 20       The witness testimony that the estate is relying upon is a statement that the president of DA
       Fast made during his deposition to the effect that Diamond did not own trucks but rather leased
       trucks to haul its freight. Benesiewicz’s opinion or misstatement about the details of someone
       else’s company is not competent evidence. His unsupported assumption or misstatement about
       Diamond’s business operations or assets is not a statement of fact that could be considered at
       the summary judgment stage. Witness testimony properly considered by a court in a summary
       judgment proceeding is testimony that meets the same standard as an affidavit and consists of a
       statement or statements of fact, not mere conclusions, opinions, or belief not based on personal
       knowledge of facts. Patterson v. Stern, 88 Ill. App. 2d 399, 404, 232 N.E.2d 7, 9 (1967); Davis
       v. Times Mirror Magazines, Inc., 297 Ill. App. 3d 488, 495-96, 697 N.E.2d 380, 386 (1998)
       (rejecting appeal from summary judgment ruling in part because the plaintiff’s “purported
       evidence of retaliatory discharge was based on unsupported assertions, opinions, and
       conclusory statements that he made in his deposition testimony” and statements of this nature
       “are not admissible evidence upon review of a summary judgment motion” (internal quotation
       marks omitted)); Seefeldt v. Millikin National Bank of Decatur, 154 Ill. App. 3d 715, 718, 506
       N.E.2d 1052, 1055 (1987) (indicating that when determining whether a genuine issue of
       material fact exists in a summary judgment proceeding, “a court should ignore personal
       conclusions, opinions, and self-serving statements and consider only facts admissible in

                                                     -6-
       evidence under the rules of evidence”); Harris Bank Hinsdale, N.A. v. Caliendo, 235 Ill. App.
       3d 1013, 1025, 601 N.E.2d 1330, 1138 (1992) (evidence that would be inadmissible at trial is
       not to be considered in a summary judgment proceeding). Put another way, if this case went to
       trial, the president of DA Fast would not be permitted to opine from the witness stand about
       Diamond’s assets or business operations and so the estate’s citation to the deposition transcript
       does not raise a question of material fact to defeat Occidental’s motion for summary judgment.
       Moreover, although we granted the estate’s motion to cite additional authority in support of its
       appeal, the case the estate relies upon, Hajicek, does not persuade us to give serious
       consideration to Benesiewicz’s deposition testimony that Diamond leased rather than owned
       vehicles. Hajicek v. Nauvoo Restoration, Inc., 2014 IL App (3d) 121013, ¶ 13, 7 N.E.3d 911.
       The case is properly cited for the well-established proposition that an appellee may not
       effectively raise an evidentiary objection for the first time on appeal. The case does not
       indicate that speculation, opinion, unfounded conclusion or mere assumption should be treated
       as competent evidence to defeat a motion for summary judgment.
¶ 21        Furthermore, the estate’s proposed presumption as to why the purchase price of the
       covered vehicles was left blank on the Occidental policy page is not a reasonable inference. It
       is speculation which is not grounded in any fact. Even in combination, the assumption and the
       speculation are not enough to refute the definite indications in the contract that coverage was
       limited to vehicles which Diamond owned.
¶ 22        Nevertheless, presuming, for the purposes of argument, that Occidental or Diamond
       intentionally put leased vehicles on the policy’s “Schedule of Covered Autos You Own,” we
       would still conclude there is no coverage for the leased Isuzu. This is because the automatic
       insurance provision which the estate is relying upon provides coverage only to “Owned Autos
       You Acquire After the Policy Begins” and specifies that coverage is extended to after-acquired
       vehicles “only if” Occidental “already cover[s] all ‘autos’ that [Diamond] own[s] for that
       coverage or it [the newly acquired vehicle] replaces an ‘auto’ you previously owned that had
       that coverage.” (Emphases added.) We cannot reasonably construe this clear policy language
       about vehicles which are owned to encompass vehicles which are leased.
¶ 23        The record on appeal establishes that Diamond leased the Isuzu from DA Fast instead of
       purchasing it from DA Fast. Thus, the policy did not cover the vehicle that Baranovsky was
       driving when he had his unfortunate accident.
¶ 24        We are not dissuaded from this conclusion by the estate’s citation to Emiljanowicz, which
       was an insurance coverage action concerning a leased freight truck that was involved in an
       accident before the driver hauled his first load for the trucking company. Emiljanowicz, 2013
       IL App (1st) 113664, ¶ 8, 991 N.E.2d 352. That case is not on point. Specifically there, the
       trucking company paid Occidental to insure all of its vehicles, whether they were leased or
       owned. Emiljanowicz, 2013 IL App (1st) 113664, ¶ 11, 991 N.E.2d 352. The policy included
       the same automatic insurance coverage that is at issue here and the court found that under the
       facts presented, the Occidental policy was ambiguous as to whether there was automatic
       coverage for the leased freight truck. Emiljanowicz, 2013 IL App (1st) 113664, ¶ 26, 991
       N.E.2d 352. The court then applied the principle that ambiguities are construed against the
       insurer and found that the newly leased freight truck was covered under the Occidental policy.
       Emiljanowicz, 2013 IL App (1st) 113664, ¶ 26, 991 N.E.2d 352. However, in the current case,
       there is no competent evidence that Diamond contracted with Occidental to cover any leased


                                                   -7-
       vehicles and, thus, no ambiguity as to whether there was coverage of the leased Isuzu.
       Accordingly, Emiljanowicz’s reasoning is not relevant here.
¶ 25       Based on this analysis, we conclude that the clear and unambiguous contract did not
       provide coverage for the leased Isuzu.
¶ 26       Given our conclusion that coverage was limited to owned vehicles, we do not need to
       resolve the parties’ dispute as to whether adding the leased Isuzu to the policy after the
       accident provided coverage on the day of the accident.
¶ 27       It is also unnecessary for us to reach Occidental’s alternative argument that insurance
       coverage is provided only for risks and that because Diamond already knew or had reason to
       know of the Isuzu accident and the likelihood of claims when it sought to add the Isuzu to the
       Occidental policy, then the known-loss doctrine bars coverage for the Isuzu accident. See
       Viking Construction Management, Inc. v. Liberty Mutual Insurance Co., 358 Ill. App. 3d 34,
       42, 831 N.E.2d 1, 7 (2005) (indicating that implicit in every liability contract is the requirement
       that the loss be a fortuitous loss); Outboard Marine, 154 Ill. 2d at 103, 607 N.E.2d at 1210
       (indicating that insurance is for a risk not a certainty and that the known-loss doctrine relieves
       an insurer of the duty to defend or indemnify).
¶ 28       This brings us to the estate’s second main contention on appeal: estoppel. The estate
       contends that the insurer had no right to unilaterally declare there was no coverage (on grounds
       that the policy expressly excludes coverage for employee injuries) and that the insurer was
       obligated to either defend Diamond under a reservation of rights or to file a declaratory
       judgment so that a court could determine the insurer’s responsibilities. The estate is relying on
       the equitable principle that “an insurer’s duty to defend under a liability insurance policy is so
       fundamental an obligation that a breach of that duty constitutes a repudiation of the contract.”
       Employers Insurance of Wausau v. Ehlco Liquidating Trust, 186 Ill. 2d 127, 151, 708 N.E.2d
       1122, 1135 (1999); Clemmons v. Travelers Insurance Co., 88 Ill. 2d 469, 479, 430 N.E.2d
       1104, 1109 (1981) (indicating the estoppel doctrine is a rule of equity).
¶ 29       If the insurer owes and breaches a duty to defend, the estoppel doctrine bars the insurer
       from later enforcing another clause of the contract that contains a defense to coverage, even if
       that defense would have been successful. Ehlco, 186 Ill. 2d at 151-52, 708 N.E.2d at 1135;
       Clemmons, 88 Ill. 2d at 479, 430 N.E.2d at 1109. Thus, in appropriate circumstances, the
       equitable principle of estoppel will be used to preclude an insurer from relying on a condition
       in which the insured has forfeited coverage, such as by filing a false statement, vacating a
       building after the issuance of a fire policy, and failing to obtain the insurer’s consent before
       settling a case. Richardson v. Guardian Life Insurance Co. of America, 984 P.2d 917, 924 (Or.
       Ct. App. 1999). In other words, the insured may use estoppel as a defense in order to preserve
       contractual rights to coverage. Nationwide Mutual Insurance Co. v. Filos, 285 Ill. App. 3d 528,
       533, 673 N.E.2d 1099, 1103 (1996). Estoppel, however, generally cannot be used to create
       coverage where none otherwise exists. Filos, 285 Ill. App. 3d at 534, 673 N.E.2d at 1103
       (“Illinois courts have followed the general rule that the doctrine of estoppel cannot be used to
       create primary liability or to increase coverage provided under an insurance policy.”);
       ABCD…VISION, Inc. v. Fireman’s Fund Insurance Cos., 744 P.2d 998, 1000 (Or. 1987)
       (estoppel cannot expand coverage beyond the limits of the original policy); Schaffer v. Mill
       Owners Mutual Insurance Co., 407 P.2d 614, 617 (Or. 1965) (estoppel or waiver is not a basis
       for creating a contract for coverage where no such contract previously existed); Alan Corp. v.
       International Surplus Lines Insurance Co., 22 F.3d 339, 343 (1st Cir. 1994) (“As a general

                                                    -8-
       matter, estoppel, like waiver, does not extend, broaden or enlarge coverage so as to include
       risks not covered within the terms of the policy.”). Estoppel is not used to create coverage for a
       risk the insurer did not agree to cover and the insurer should not be made to pay for a loss for
       which it did not collect a premium. Filos, 285 Ill. App. 3d at 534, 673 N.E.2d at 1103.
¶ 30        A court will not enforce the insurer’s protections under the policy where the insurer failed
       to act equitably toward its insured, that is, the insurer did not take one of two options: (1) to
       defend the suit under a reservation of rights or (2) to seek a declaratory judgment that there is
       no coverage under the policy. Clemmons, 88 Ill. 2d at 479, 430 N.E.2d at 1109; Ehlco, 186 Ill.
       2d at 150-51, 708 N.E.2d at 1134-35. If the insurer fails to take either step and is later found to
       have wrongfully denied coverage, then the estoppel doctrine may be applied. Ehlco, 186 Ill. 2d
       at 150-51, 708 N.E.2d at 1135.
¶ 31        The estoppel doctrine was not triggered in this case. The trial court concluded there was no
       coverage under the Occidental policy and we agree with that conclusion. The policy clearly
       covered only owned automobiles and it was undisputed that the Isuzu was leased and not
       owned by Diamond. Therefore, Occidental’s denial was proper and is not grounds for invoking
       the estoppel doctrine.
¶ 32        Finally, the estate argues that Occidental is estopped from denying coverage because its
       claim denial letter did not refer to the known loss doctrine which Occidental has argued in the
       trial and appellate courts. Occidental responds that this argument is incorrect, but in any event,
       we should not address it because the estate is presenting it for the first time on appeal and
       issues not raised in the circuit court cannot be argued for the first time on appeal. Robidoux v.
       Oliphant, 201 Ill. 2d 324, 344, 775 N.E.2d 987, 998-99 (2002). The estate contends that it
       made this estoppel argument in one sentence in its 12-page cross-motion for summary
       judgment. Having read the motion, however, we disagree with the estate. We find that the
       argument is being made for the first time on appeal and has been waived. Waiver aside, it is
       irrelevant whether the claim denial letter cited the known-loss doctrine, because this doctrine
       did not enter into the trial judge’s ruling or this court’s analysis and the claim was properly
       rejected on other grounds. In any event, this policy did not cover leased vehicles and estoppel
       is not a basis for creating coverage for which Diamond neither contracted nor paid a premium.
¶ 33        We conclude that the trial court’s findings were correct and that summary judgment was
       properly entered. Therefore, we affirm the judgment order from which the estate appealed.

¶ 34      Affirmed.




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