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FIRST DIVISION
March 8, 2004

JUSTICE McNULTY delivered the opinion of the court:

The parties to the instant appeal contest the interpretationand application of an automobile insurance policy's "automaticinsurance" provision, which offers coverage for newly acquiredvehicles for a limited period. The trial court found that theprovision provided coverage. We affirm.

The day after his purchase of a second car, and whiledriving to the office of the insurer of his first car, defendantCorey Smith was involved in an auto accident which resulted inthe total loss of the vehicle and injuries to himself and hispassenger. Five days later, Smith made a claim under theuninsured motorist provision of the policy he had obtained forhis first car. The insurer, plaintiff American Freedom InsuranceCompany (AFIC), filed a declaratory judgment action against Smithand his passenger, Mark Whittington, in pursuit of adetermination that Smith's accident was not covered by theexisting policy. On cross-motions for summary judgment, theparties disputed whether the policy had required Smith to providenotice of the acquisition of the Caprice, and whether such noticewas given. The trial court found the accident to be covered underthe policy.

BACKGROUND

Smith's policy had been obtained for a 1995 Chevrolet MonteCarlo he purchased early in 1999. The policy offered coveragefor an "insured automobile" and its passengers for lossesincurred as a result of accidents with uninsured motorists, andincluded in its definition of "insured automobile" two provisionspertinent to the instant litigation. The first relevantprovision covered an automobile "acquired by the named insuredduring the policy period, provided it replaces an insuredautomobile." The second provision focused upon by the partiesapplied if AFIC insured all vehicles owned by the insured on thedate of his acquisition and if "the named insured notifies theCompany in writing within 30 days after the date of suchacquisition of his election to make the Liability and UninsuredMotorist Coverages under this and no other policy issued by theCompany applicable to such automobile."

According to his discovery deposition, Smith purchased a1986 Chevrolet Caprice on October 12, 1999, and was involved inan accident in the vehicle the following day. Smith testifiedthat as of the day of the accident, he had not notified AFIC ofthe purchase of the Caprice, that the Monte Carlo was stillworking, and that he was "supposed to sell" the Monte Carlo laterthat week.

Smith apparently made a claim under the Monte Carlo policyon October 18, 1999, although the record before us does notreveal the form or other particulars of that claim. AFIC thenfiled the action underlying the instant appeal: a complaintalleging that Smith "never submitted any application forinsurance coverage" for the Caprice; seeking a declaratoryjudgment that Smith materially breached his insurance contract"by failing to apply for insurance coverage" for the Caprice; andseeking a judgment that AFIC owed no coverage under the policy toSmith or his passenger, Whittington. The answer filed jointly bySmith and Whittington (who have acted jointly through therepresentation of the same attorney throughout the trial courtproceedings and in the instant appeal) denied that Smith hadfailed to make any application for insurance for the Caprice,affirmatively alleged that Smith "made a verbal application forinsurance coverage" for the Caprice, and admitted that he made aclaim for personal injury and property damage. In its assertionof affirmative defenses, the Smith-Whittington answer allegedthat Smith "could not apply for insurance" for the Capricebecause "the automobile was destroyed and became a total loss"and that he "made every effort possible to apply for insurancecoverage" for the Caprice and "was on his way to the insuranceagent's office, to apply for coverage when an accident occurred."

AFIC moved for summary judgment, asserting that Smith "hadnever applied for coverage" for the Caprice. As support for thisproposition, AFIC's motion cited testimony from Smith's discoverydeposition, in which the subject of Smith's communications withAFIC was addressed:

"Q. Now, on October 13th of '99, youowned both the '95 Monte Carlo and the '86Chevy Caprice?

A. Yes.

Q. Had you notified anybody at American Freedom Insurance Company of the purchase of the '86 Caprice?

A. No, no.

Q. Okay. Do you remember how many mileswere on that '95 Monte Carlo, approximately,if you can remember?

A. 83,000 or something like that.

* * *

Q. That car was on the American Freedompolicy, correct?

A. Yes.

Q. Do you remember giving a statement toAmerican Freedom?

A. About the car accident?

Q. Yes. Well, about your policy?

A. Yes.

Q. And about the car accident?

A. No, I do not remember.

Q. I will show it to you. That is astatement.

A. When I called them and explained tothem about the accident.

Q. I do not know when you made it. Isthat your signature at the bottom of thepage?

A. Yes, it is."

The attorney representing AFIC at the deposition asked thatthe document Smith signed be marked as an exhibit, but no copy ofthat document has been made a part of the record presented tothis court. Upon additional examination, Smith confirmed thatboth the Monte Carlo and the Caprice were owned by him andoperational at the time of the accident. AFIC's summary judgmentmotion attached its complaint, Smith's policy and declarationspage, and the title certificate reflecting Smith's purchase ofthe Caprice, but was not further supported by any additionaladmissions, testimony, or other evidence.

Smith and Whittington also moved for summary judgment,asserting that "Defendants are covered by American FreedomInsurance Company's policy because, at the time of the accident,less than 30 days had passed from the date of purchase and CoreySmith still had time to notify the insurance company and insurethe car in question;" and that "Smith should be excused from notgetting insurance coverage on that car subsequently because itwas total [sic] loss and there was nothing to insure." Themotion attached Smith's affidavit, which averred that the Capricehad been a total loss as a result of the accident, but did notaddress the issue of Smith's notification to AFIC. Smith andWhittington included with their motion a supporting memorandum,which contended that "Smith did not notify the insurance companyof the purchase of the 1986 Chevy Caprice prior to the accident,but he notified that afterwards, when reporting the accident,within the 30 day limit." The parties' replies to the summaryjudgment motions did not shed further light on the notice issue.

In their oral arguments on the summary judgment motions, theparties initially focused on the interpretation of the"replacement" provision of the policy's uninsured motoristcoverage. AFIC asserted that because Smith still owned his firstcar, the Monte Carlo, the subsequently purchased Caprice couldnot be a replacement car under the policy. Smith and Whittingtonresponded that the policy had not explicitly required disposal ofthe first car before the second car could be categorized as areplacement, and that this lack of specificity, at a minimum,created an ambiguity which should have been construed againstAFIC, the policy's drafter.

Smith and Whittington also argued that the Caprice, as anadditional, newly acquired automobile, was an insured vehicle forpurposes of the uninsured motorist provision, and that Smith hadinvoked the policy's newly acquired vehicle coverage by notifyingAFIC of the accident. AFIC's counsel responded, "The problemwith the notification is it came after the vehicle was a totalloss." AFIC's counsel then cited Smith's deposition admissionthat he had not notified the company about the purchase of theCaprice. Counsel for Smith and Whittington pointed out that thecited question and answer followed a question which was directedto October 13, 1999, the date of the accident, and argued thatSmith's acknowledged failure to notify AFIC referred only to thesituation at the time of the accident.

The trial court found that the Caprice was an insuredautomobile as defined by either the replacement vehicle provisionor the additional vehicle provision. In interpreting thereplacement provision, the court noted Smith's uncontradicteddeposition testimony that he had planned to sell the Monte Carlowithin days of the purchase of the Caprice, and found nothing inthe policy language which defined "replacement" to include arequirement that the first auto be disposed of before coveragecould be applied to the later-purchased car. Turning to theadditional vehicle provision, the court observed that if theCaprice had not been a total loss, Smith's notice to AFIC "wouldhave resulted in it being scheduled on the policy, and it wouldhave been covered as an auto policy." Having concluded that theCaprice was an insured automobile under the policy, the courtdenied the AFIC summary judgment motion and granted the opposingSmith-Whittington motion. This appeal followed.

DISCUSSION

Where the underlying facts are undisputed, the constructionof an insurance policy is a question of law which is particularlyappropriate for resolution by summary judgment; we conduct denovo review of the trial court's judgment in such instances. Mijes v. Primerica Life Insurance Co., 317 Ill. App. 3d 1097,1100 (2000).

The facts relating to the trial court's finding of coveragefor the Caprice under the "replacement" provision of the policyare undisputed: although he was planning to sell it in theimmediate future, Smith still owned his first car at the time ofthe purchase of the Caprice, and the first car was stilloperable. As the trial court noted, the policy language did notspecifically define "replacement" or limit the term to thosevehicles acquired following the disposal or disability of thefirst car. In United Farm Bureau Mutual Insurance Co. v. Elder,86 Ill. 2d 339 (1981), our supreme court reviewed similarunderlying facts: an insured who intended to dispose of his firstvehicle but had not done so at the time of an accident involvinga subsequently acquired vehicle, and a policy which did notdefine the "replacement" term. The court provided guidelines forinterpretation of such provisions in the absence of explicitterms, and its guidelines do not permit application of a"replacement" clause if the first insured vehicle remainsoperable and owned by the insured. "A vehicle cannot be a'replacement' vehicle under a policy of automobile insurance ifthe insured retains ownership of the 'replaced' vehicle and if itremains operable. Although the insured may have intended toreplace his insured vehicle here, he had not done so by the timeof the accident. The second vehicle was therefore an'additional' vehicle within the meaning of the policy." UnitedFarm Bureau Mutual Insurance Co. v. Elder, 86 Ill. 2d 339, 340-41(1981). In light of this definitive statement of Illinois law,we conclude that Smith's newly acquired Caprice could not becovered under his insurance policy as a replacement vehicle.

The trial court also found coverage for Smith's Capriceunder the policy's additional vehicle provision; AFIC contendsthat this provision is also inapplicable because "[a]t no timedid Mr. Smith submit notice, written or otherwise, to AmericanFreedom requesting addition of the newly purchased Caprice to thePolicy." The presumption underlying this contention is thatSmith could not receive coverage for the Caprice as an additionalvehicle if he failed to provide notice of his desire for coverageunder the policy. We disagree with this presumption.

Insurance policy provisions providing coverage for newlyacquired vehicles on the condition that the insured providenotice within a specified period after the acquisition haveprovoked extensive analysis by courts and commentators; generallyreferred to as "automatic insurance" clauses, they have commonlybeen given interpretations contrary to that advocated by AFIC inthe instant case. "Regardless of the issue of notice, theautomatic insurance clause is construed as providing a 30-dayinterim protection in any event. An accident occurring beforelapse of such notice period has therefore been held covered,whether or not notice has been given." 6B R. Buckley & J.Appleman, Insurance Law & Practice