


                         No. 3--98--0021







                              IN THE



                   APPELLATE COURT OF ILLINOIS



                          THIRD DISTRICT



                            A.D., 1998



THE FARMERS AUTOMOBILE             )  Appeal from the Circuit

INSURANCE ASSOCIATION and          )  Court for the Tenth

PEKIN INSURANCE COMPANY,           )  Judicial Circuit, Peoria

an Illinois corporation,           )  County

                                   )

          Plaintiffs-Appellants,   )

                                   )

     v.                            )  No. 97--MR--123

                                   )

JAY HUNT, JR., and EDWARD R.       )

SPARKS, Individually and d/b/a     )

MID-ILLINOIS CONTRACTORS,          )

                                   )  Honorable Richard E.

          Defendants-Appellees.    )  Grawey, Judge Presiding







     JUSTICE KOEHLER delivered the opinion of the court:    







     The plaintiff, Farmers Automobile Insurance Association, filed

suit for declaratory judgment in the circuit court of Peoria County

(735 ILCS 5/2--701 (West 1994)), asking the court to declare that

Farmers has no duty to defend or to indemnify the defendant, Edward

Sparks.  On cross-motions for summary judgment, the trial court

denied Farmers' motion and granted defendant Hunt's cross-motion. 

The principal question presented in this appeal is whether an

insurance company has a duty to defend and to indemnify an insured

who drives negligently while towing an uninsured trailer.  We

affirm in part and reverse in part.

                                 

                                I.

     On November 13, 1996, Jay Hunt filed a complaint in the

circuit court of Peoria County alleging that Edward Sparks

negligently operated a trailer unit causing severe injury to Hunt.

     Sparks, who was driving a Ford pickup truck towing a Cronkite

trailer, stopped for a traffic light at the corner of University

and West Columbia Terrace in Peoria.  At the intersection, he

noticed a man on a bicycle next to his truck.  The light changed

and Sparks drove away.  Hunt testified that he was also at the

corner of University and West Columbia Terrace, and after the light

changed, he rode his teal blue bike down Columbia Terrace.  After

the truck passed, Hunt felt a bang at the back of his bike, but he

did not know what hit him.

     Investigating police officer Greg Metz, found small chips of

teal blue paint on the metal mud guard that surrounds the rear

wheels of Sparks' Cronkite trailer.  The load capacity of the

Cronkite trailer is greater than 2,000 pounds.

      On April 2, 1997, Farmers, Sparks' insurer, filed a

declaratory judgment action asking the court to determine the

rights and liabilities of the parties with respect to the Farmers'

Auto Liability Policy. 

     The parties filed cross motions for summary judgment on the

coverage issue.  In granting the summary judgment for Hunt, the

court found: (1) the Ford pickup truck was covered under the

insurance policy; (2) the trailer was not a covered auto because

the load capacity exceeded 2,000 pounds; (3) although the trailer

was not a "covered auto", that fact does not extinguish coverage

for the Ford pickup; and (4) there is no provision in the policy

that excludes a covered auto if it is pulling a trailer that fails

to meet the definition of a covered auto.  This appeal followed.

                               II.

     Summary judgment is appropriate if there is no genuine issue

of material fact and the moving party is entitled to judgment as a

matter of law. (735 ILCS 5/2--1005(c)(West 1994)).  In appeals from

summary judgment rulings, the appellate court is to conduct a de

novo review.  Outboard Marine Corp. v. Liberty Mutual Insurance

Co., 154 Ill. 2d 90, 102, 607 N.E.2d 1204, 1209 (1992).  At issue

is whether the insurance company has a duty to defend and to

indemnify Sparks in the underlying suit. 

     The duty to defend arises if the underlying complaint alleges

facts within or potentially within the insured's policy coverage. 

Outboard Marine Corp., 154 Ill. 2d at 107-108, 607 N.E.2d at 1212. 

In determining whether an insurer has a duty to defend its insured,

the court must look at the allegations in the underlying complaint

and compare them with the relevant provisions of the insurance

policy.  Outboard Marine Corp., 154 Ill. 2d at 107-108, 607 N.E.2d

at 1212.

     A court's primary duty in construing the language of an

insurance policy is to ascertain and give effect to the intentions

of the parties as expressed within the policy.  Outboard Marine

Corp., 154 Ill. 2d at 107-108, 607 N.E.2d at 1212.  To ascertain

the meaning of the policy's words and the intent of the parties,

the court must construe the policy as a whole with due regard to

the risk undertaken, the subject matter that is insured and the

purposes of the entire contract.  Outboard Marine Corp., 154 Ill.

2d at 107-108, 607 N.E.2d at 1212.  If the words in the policy are

clear and unambiguous, a court must afford them their plain,

ordinary, and popular meaning, and the policy must be enforced as

the plain meaning dictates.  Outboard Marine Corp., 154 Ill. 2d at

107-108, 607 N.E.2d at 1212.  However, if the words in the policy

are susceptible to more than one reasonable interpretation, they

are ambiguous and will be construed liberally in favor of the

insured and against the insurer who drafted the policy.  Outboard

Marine Corp., 154 Ill. 2d at 108-109, 607 N.E.2d at 1212.

     The complaint alleged that Sparks was driving a Ford pickup

truck towing a trailer, and that the trailer and/or pickup truck

struck Hunt causing injury.  The relevant portion of the insurance

policy reads:

     We will pay all sums the 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.

     

     The question this court must decide is whether the underlying

action for compensatory relief potentially falls within the

coverage afforded by Farmers' policy for damages, thereby

triggering Farmers' duty to defend Sparks.

     Farmers argues that this is a "non-coverage" issue and not an

exclusion issue, meaning the policy does not specifically exclude

trailers over 2,000 pounds; rather, the trailer failed to meet

automatic inclusion of coverage and therefore no language within

the policy applies.  Conversely, Sparks argues that the operative

language within the policy is "resulting from the ownership,

maintenance, or use of a covered auto."

     The phrase at issue, "resulting from," is synonymous with the

phrases "arising out of," "connected with," "originating from,"

"growing out of," and "flowing from" that have been recognized

repeatedly as being broad as well as vague.  Sportmart, Inc. v.

Daisy Manufacturing Co., 268 Ill. App. 3d 974, 978, 645 N.E.2d 360,

363 (1994)(holding that coverage is required for all bodily injury

arising out of, growing out of or resulting from Daisy's product). 

In worker's compensation claims and insurance litigation, such

language is considered satisfied by a mere causal connection and

does not necessarily require proximate causation.  See Chmelik v.

Vana, 31 Ill. 2d 272, 277-78, 201 N.E.2d 434, 438 (1964)(holding

that words "arising out of" refer to the origin or cause of the

accident and pre-suppose a causal connection between employment and

the accidental injury); Maryland Casualty Co. v. Chicago & North

Western Transportation Co., 126 Ill. App. 3d 150, 155, 466 N.E.2d

1091, 1094 (1984)(holding that the duty to defend is required of

insurer when phrase "arising out of ownership, maintenance or use

of designated properties" is found broad and vague.  Thus, liberal

construction results in "but for" causation analysis).  Similarly,

the broad language at issue here must be construed strictly against

the drafter of the policy, Farmers, to require coverage for bodily

injury or property damage "resulting from the use of a covered

auto."  Since Hunt's injury would not have occurred but for Sparks'

use of the covered auto the underlying action falls potentially

within the coverage afforded by Farmers, thereby triggering its

duty to defend Sparks.  Sportmart, Inc., 268 Ill. App. 3d at 978,

645 N.E.2d at 363.

     A comparison of the allegations in the complaint with the

policy language shows:  (1) nothing in the policy states that if an

insured tows a trailer weighing over 2000 pounds that the coverage

is extinguished; (2) the complaint alleges that the covered Ford

pickup was towing a trailer, and the trailer and/or truck struck

Hunt.  In sum, absent an applicable statement in the insurance

policy showing an intent to exclude coverage, Farmers had a duty to

defend Sparks in what clearly constitutes a suit seeking damages. 

Outboard Marine Corp., 154 Ill. 2d at 112, 607 N.E.2d at 1214.

     The narrower duty of indemnification is ripe for consideration

only when the insured has incurred liability in the underlying

claim.  Outboard Marine Corp., 154 Ill. 2d at 127-28, 607 N.E.2d at

1221.  Nothing within the record indicates that Sparks has incurred

any liability.  Therefore, the circuit court erred when it acted

prematurely in its grant of summary judgment to Hunt on the issue

of indemnification.

                                    III.

     In sum, we affirm the circuit court's denial of Farmers'

motion for summary judgment, and the summary judgment entered on

behalf of Sparks and Hunt on the question of Farmer's duty to

defend where the (1) complaint alleges facts potentially within the

coverage of the policy, and (2) the insurance policy does not

contain an express exclusion statement.  We reverse the circuit

court's err where it prematurely granted summary judgment to Hunt

on the issue of Farmer's duty to indemnify.

     Affirmed in part, reversed in part and remanded.

     BRESLIN and SLATER, JJ., concurring

