Founders Insurance Co. v. Sheikh

Citation: 2017 IL App (1st) 170176Docket: 1-17-0176

Court: Appellate Court of Illinois; December 17, 2017; Illinois; State Appellate Court

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In the case of Founders Insurance Co. v. Sheikh, Jasmin Kopic appeals a circuit court's granting of summary judgment in favor of Founders Insurance Company regarding a declaratory judgment. Kopic argues that a factual dispute exists about whether the driver, Sanan M. Sheikh, reasonably believed he was authorized to drive the vehicle during the accident. The appellate court reverses the summary judgment and remands for further proceedings.

The incident occurred on May 16, 2013, when 15-year-old Sanan, under a valid Illinois learner's permit, was asked by his father, Maqbool Sheikh, to move their family van for supervision of his parking skills. While attempting to parallel park, Sanan accidentally accelerated and hit another vehicle, causing Kopic, who was in front of the van, to be pinned between cars. Sanan had practiced parking several times and believed he could operate the vehicle under his father's supervision. Maqbool did not witness any wrongdoing by Sanan and maintained that he could supervise and guide his son verbally if needed. He was surprised by Kopic's reaction and reported no visible damage to the vehicles involved. 

The appellate court confirms jurisdiction over the appeal and finds that the summary judgment was improperly granted due to the existence of a factual question regarding Sanan's belief about his driving authorization.

Kopic filed a personal injury claim against Maqbool and Sanan, whose van was insured by Founders. Founders sought a declaratory judgment, asserting it had no obligation to defend or indemnify the Sheikhs due to a policy exclusion for injuries arising from the use of a vehicle by someone lacking a reasonable belief of entitlement. Under Illinois law, specifically the Licensing Law, a minor's driving permit is restricted to circumstances involving direct adult supervision. Founders contended that Sanan was driving without a licensed adult present, violating the law. The trial court granted Founders' motion for summary judgment, referencing the supreme court case Founders Insurance Co. v. Munoz, which established that Sanan could not reasonably believe he was entitled to operate the van without the required adult supervision. Consequently, Founders had no duty to defend or indemnify the Sheikhs in Kopic's lawsuit. Kopic’s motion to reconsider was denied, prompting this appeal. 

Summary judgment is appropriate when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. The insurer's duty to defend is more extensive than its duty to indemnify, and it cannot refuse to defend unless the underlying complaint clearly falls outside policy coverage. Exclusions must be unambiguous to apply. The trial court agreed with Founders that Sanan's lack of reasonable belief regarding his entitlement to drive negated Founders' duty to defend or indemnify, supported by the Munoz case concerning similar exclusionary provisions for unlicensed drivers.

The court determined its ruling based on the perspective of the "average, ordinary, normal, reasonable person" regarding the validity of driving without a license under Illinois law, which prohibits operating a vehicle without a valid license except in limited circumstances. It concluded that individuals without a valid license cannot reasonably believe they are entitled to drive, regardless of car ownership or possession of keys.

In the case of Sanan, although he did not hold a valid license at the time of attempting to park a van, he possessed a valid driving permit, which provides sufficient grounds for operating a vehicle under Illinois law. However, the permit mandates that a licensed adult, aged 21 or older, must sit beside the driver. Since no such adult was present, Founders argued Sanan violated this requirement, akin to the drivers in the precedent case Munoz, thus claiming he lacked a reasonable belief to drive.

The court disagreed with Founders' interpretation, citing that the Munoz ruling was narrowly defined and acknowledged limited exceptions to driving without a valid license. In this instance, Sanan's valid permit distinguishes his situation from those in Munoz.

The court further explored whether Sanan could reasonably believe he was entitled to drive, emphasizing that the interpretation of an insurance policy follows contract interpretation rules, focusing on the parties' intent as expressed in the policy language. Founders’ policy excludes coverage for incidents arising from the use of a vehicle without a reasonable belief of entitlement. Although Founders argued Sanan lacked this belief due to the absence of a licensed adult beside him, the policy does not define "reasonable belief," and there are no precedential cases linking mere violations of the Licensing Law to the exclusion of coverage. The determination of Sanan's reasonable belief is left open for factual evaluation.

The permit's purpose is to enable a qualified individual to practice driving under the direct supervision of a parent or adult before obtaining a license, as outlined in 625 ILCS 5/6-107.1(a)(1). In this case, both Sanan and his father, Maqbool, confirmed that Sanan parked the van while Maqbool supervised him, observing from outside the vehicle, and was able to provide verbal guidance if needed. They both believed this practice was permissible under the terms of the permit. The Illinois Supreme Court's standard, as referenced in Munoz, defines 'reasonable belief' based on what an average person would think regarding policy intent. A factfinder could conclude that Sanan, a valid permit-holder, had a reasonable belief that he could practice parallel parking under his father's supervision. The term 'reasonable belief' is deemed ambiguous, making its interpretation a factual question. Given the existence of genuine material fact issues, summary judgment is inappropriate, leading to the reversal of the trial court's judgment and remanding for further proceedings.