American Family Mutual v. Jeris

Citation: Not availableDocket: 2-06-1227 Rel

Court: Appellate Court of Illinois; October 29, 2007; Illinois; State Appellate Court

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American Family Mutual Insurance Company filed a lawsuit against Glen Jeris, seeking a declaration that a policy issued to Jeris's parents did not provide uninsured motorist coverage for him after he was injured while a passenger in a car driven without the owner's permission. The trial court granted summary judgment to the plaintiff, concluding that Jeris was "using" the car at the time of the accident, thus excluding him from coverage under the policy. Jeris appealed, arguing that he was merely "occupying" the vehicle, a distinction that the policy's definitions support, as "use" implies a level of control not applicable to a passenger. The appellate court found merit in Jeris's argument, agreeing that the policy's definitions created ambiguity and should be interpreted against the insurer, who drafted the policy. The court reversed the trial court's decision.

The interpretation of "use" and "occupying" in an insurance policy is critical to determining coverage. Insurance policies are contracts, and their construction aims to reflect the parties' intentions. If the policy's language is clear, it must be given its plain meaning; if ambiguous, it should be interpreted against the insurer. Summary judgment is appropriate when there are no genuine issues of material fact, with de novo review of such orders. In this case, the defendant is deemed to be "occupying" the vehicle, not "using" it, based on the policy's definitions, which suggest distinct meanings. The definition of "use" involves some ownership or maintenance, which a passenger typically does not possess. The court emphasizes that contract interpretation should avoid rendering any term meaningless, as the plaintiff's interpretation would make "occupying" redundant. Previous Illinois cases have not definitively addressed whether a passenger is "using" or merely "occupying" a vehicle, with some older dicta suggesting that a passenger is using the vehicle, while more recent cases imply "use" entails operation or control. The dictionary definitions of "use" support both interpretations, indicating ambiguity, which favors the defendant's argument for broader coverage under the policy.

Defendant was claiming under his family's insurance policy, for which his parents paid premiums. Insurers for Byrnes and Maraccini had valid reasons to deny coverage, as Byrnes used the car without the owner's permission. However, from the plaintiff's viewpoint, Byrnes's lack of permission was incidental. It is reasonable to differentiate between drivers and passengers regarding permission to drive a vehicle. A driver is expected to know if they have permission, warranting denial of insurance if they do not. Conversely, a passenger cannot be reasonably expected to know the driver's authorization status, especially when offered a ride. Denying uninsured motorist coverage to a passenger based on the driver's lack of permission is unjust. The defendant, who suffered serious head injuries and had no memory of the accident, stated he would not have entered the car had he known the driver was unauthorized. Illinois law mandates that insurers provide uninsured motorist coverage in all auto policies (215 ILCS 5/143a), aiming to protect individuals injured by uninsured motorists. This legislative intent cannot be undermined by restrictive policy provisions. The requirement for uninsured motorist coverage is designed to maximize availability when no other insurance is present. Denying coverage based on the unauthorized status of the driver undermines this purpose. The circuit court's judgment was reversed.