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FIFTH DIVISION
AUGUST 25, 2000

1-99-3396

JUSTICE HARTMAN delivered the opinion of the court:

Ruby Smith (Smith) allegedly sustained injuries while enteringMaurice Barnes' (Barnes) vehicle following its return from thevalet parking service at Harrah's Casino Illinois (Harrah's). Smith filed suit against Barnes, Jeremy Fisher (Fisher), the valetdriver employed by Harrah's, and Harrah's. Fisher and Harrah'stendered their defense to Barnes' automobile insurance carrier,State Farm Mutual Automobile Insurance Company (State Farm).

State Farm later sought a declaratory judgment that it had noduty to defend or indemnify Fisher or Harrah's because there was nocoverage under the "automobile business" exclusion clause(sometimes "exclusion clause") in Barnes' insurance policy. Thecircuit court granted State Farm's motion for summary judgment,finding that the policy exclusion clause applied. Fisher andHarrah's allege State Farm's exclusion clause violates publicpolicy, was ambiguous, and does not apply by its own terms becauseFisher was acting as Barnes' agent. They seek reversal of thecourt's judgment, entry of summary judgment in their favor, andsanctions against State Farm.

On September 21, 1995, Barnes and Smith visited Harrah's inJoliet, Illinois. Upon arrival, Barnes, driving his 1985 MercuryCougar, gave his vehicle to an employee of Harrah's valet service. When finished with their visit, Fisher retrieved Barnes' vehicleand returned it to the front of the casino. As Smith entered thepassenger side, the vehicle rolled backward, causing her to beknocked to the ground. At the time of the accident, Barnes'vehicle was insured through State Farm.

In August 1997, Smith filed suit against Fisher, Harrah's, andBarnes, alleging that defendants negligently managed and operatedthe vehicle, failed to keep the vehicle under proper control,failed to apply the emergency brake upon returning the vehicle, andnegligently left the motor running on an inclined driveway. Subsequently, Fisher and Harrah's tendered their defense to StateFarm, which State Farm denied, alleging that it had no duty todefend Fisher and Harrah's under Barnes' insurance policy, basedupon the exclusion clause in Barnes' policy that provided, inpertinent part:

"THERE IS NO COVERAGE:

1. WHILE ANY VEHICLE INSURED UNDER THISSECTION IS:

b. BEING REPAIRED, SERVICED OR USED BYANY PERSON EMPLOYED OR ENGAGED IN ANY WAY IN ACAR BUSINESS. This does not apply to:

(1) you or your spouse

(4) any agent, employee or partnerof you, your spouse, any relative or suchresident." (Emphasis in original.)

The policy defined a "car business" as "a business or job where thepurpose is to sell, lease, repair, service, transport, store orpark land motor vehicles or trailers."

In July 1998, State Farm sought a declaratory judgment that ithad no duty to defend Fisher and Harrah's because of the excludedcoverage. In September 1998, Fisher and Harrah's filed an answerand affirmative defense to State Farm's declaratory judgmentcomplaint, arguing that the exception did not apply because Fisherand Harrah's were acting as Barnes' agent when the injury occurred. In March 1999, State Farm moved for summary judgment. InApril 1999, Fisher and Harrah's responded to State Farm's motionfor summary judgment and filed a cross-motion for summary judgment,asserting that they were Barnes' agents and therefore were exemptfrom the exclusion clause; the clause language was ambiguous; andthe exclusion violated public policy.

In May 1999, the circuit court granted State Farm's summaryjudgment motion and denied Fisher and Harrah's cross-motion,finding that "Fisher, while working as a valet for Harrah's was inthe 'car business' [because] his job was to 'store or park landmotor vehicles.'" In addition, Fisher and Harrah's were not exemptfrom the exclusion clause because Fisher was a bailee, not Barnes'agent, when he parked Barnes' vehicle. Last, the exclusion clausewas not ambiguous and State Farm appropriately relied upon theprovision when it denied the claim.

In August 1999, Fisher and Harrah's moved to reconsider thegrant of summary judgment, arguing that Fisher could be bothBarnes' bailee and agent and asked the circuit court to follow afactually similar case from New Jersey, Scott v. Salerno, 688 A.2d614, 297 N.J. Super. 437 (1997). The circuit court denied themotion, finding that Fisher was acting as a bailee, not Barnes'agent, and the court was not bound to follow rulings of otherstates' courts. This appeal followed.

Fisher and Harrah's initially assert that entry of summaryjudgment in State Farm's favor was in error because it should nothave been permitted to rely on the "car business" exclusion of thepolicy.

The construction of an insurance policy is a question of lawsubject to de novo review. State Farm Mutual Automobile InsuranceCo. v. Villicana, 181 Ill. 2d 436, 441, 692 N.E.2d 1196 (1998);Zimmerman v. State Farm Mutual Automobile Insurance Co., 312 Ill.App. 3d 1065, 1068, 729 N.E.2d 70 (2000), appeal denied, ___ N.E.2d___ (2000).

The primary objective in construing the language of a policyis to ascertain and give effect to the intentions of the parties asexpressed in their agreement. McKinney v. Allstate Insurance Co.,188 Ill. 2d 493, 497, 722 N.E.2d 1125, 1127 (1999). Language in apolicy will not be enforced, however, if it contradicts publicpolicy as mandated by the Illinois legislature. See State FarmMutual Automobile Insurance Co. v. Universal Underwriters Group,182 Ill. 2d 240, 246, 695 N.E.2d 848, 850 (1998) (UniversalUnderwriters); Pekin Insurance Co. v. State Farm Mutual AutomobileInsurance Co., 305 Ill. App. 3d 417, 420, 711 N.E.2d 1227, 1230(1999) (Pekin).

Insurance is based upon the theory of spreading risk amongmany policy holders. Group Life & Health Insurance v. Royal DrugCo., 440 U.S. 205, 211, 59 L. Ed. 2d 261, 268, 99 S. Ct. 1067, 1073(1979). The purpose of mandatory automobile liability insurance isnot only to protect the owner against liability or some otherinsurance company; rather, its' principal purpose is to protect thepublic by securing payment of their damages. See ContinentalCasualty Co. v. Travelers Insurance Co., 84 Ill. App. 2d 200, 206,228 N.E.2d 141, 144 (1967); Insurance Car Rentals, Inc. v. StateFarm Mutual Automobile Insurance Co., 152 Ill. App. 3d 225, 232,504 N.E.2d 256 (1987); Marcus v. Hanover Insurance Co., 740 So. 2d603, 605 (1999) (Marcus); 7 Couch on Insurance Law