ILLINOIS OFFICIAL REPORTS

Appellate Court

Progressive Premier Insurance Co. of Illinois v. Emiljanowicz, 2013 IL App (1st) 113664

Appellate Court

Caption

PROGRESSIVE PREMIER INSURANCE COMPANY of ILLINOIS,

Plaintiff-Appellee, v. KRZYSZTOF EMILJANOWICZ, BARBARA

KARAWACKI-HOROWITZ, DAVIDHOROWITZ,GEICOa/k/aGeico

General Insurance Company, and OCCIDENTAL FIRE AND

CASUALTY COMPANY, Defendants (Occidental Fire and Casualty

Company, Appellant and Counterplaintiff; v. Progressive Premier

Insurance Company of Illinois, Krzysztof Emiljanowicz, Barbara

Karawacki-Horowitz, David Horowitz and Geico, a/k/a Geico General

Insurance Company, Counterdefendants)

 District & No. First District, Second Division

Docket No. 1-11-3664

Filed May 28, 2013

Held

(Note: This syllabus

constitutes no part of

the opinion of the court

but has been prepared

by the Reporter of

Decisions for the

convenience of the

reader.)

In an action arising from an accident involving a truck the owner had just

leased to a freight company for the transportation of freight pursuant to

the company’s operating rights, the trial court properly entered summary

judgment for the owner’s insurance company in its action seeking a

declaratory judgment that the freight company’s insurance provided

coverage, since the freight company had possession and control of the

truck at the time of the accident, the truck was being driven to a mechanic

at the freight company’s directions for an inspection prior to transporting

freight, and the truck was a covered “auto” pursuant to the company’s

policy.

Decision Under 

Review

Appeal from the Circuit Court of Cook County, No. 04-CH-08266; the

Hon. Sophia Hall, Judge, presiding.
Judgment Affirmed.

Counsel on

Appeal

Feiereisel & Kasbohm, LLC, of Chicago (GaryM. Feiereisel, of counsel),

for appellant.

Magnani & Buck, Ltd., of Chicago (Thomas L. Buck, of counsel), for

appellee.

Panel PRESIDING JUSTICE HARRIS delivered the judgment of the court,

with opinion.

Justices Quinn and Connors concurred in the judgment and opinion.

OPINION

¶ 1 Appellant Occidental Fire & Casualty Company (Occidental) appeals the order of the

circuit court granting plaintiff-appellee Progressive Premier Insurance Company’s

(Progressive) motion for summary judgment on Progressive’s declaratory judgment action.

On appeal, Occidental contends (1) genuine issues of material fact exist precluding summary

judgment; and (2) if both Occidental’s and Progressive’s policies apply to the underlying

accident, Progressive’s policy is primary pursuant to the “other insurance” provisions of the

relevant policies. We affirm.

¶ 2 JURISDICTION

¶ 3 The circuit court granted summary judgment in favor of Progressive. On November 14,

2011, the court entered a judgment in the amount of $480,231.24 in favor of Progressive and

against Occidental. Occidental filed a notice of appeal on December 12, 2011. Accordingly,

this court has jurisdiction pursuant to Illinois Supreme Court Rules 301 and 303 governing

appeals from final judgments entered below. Ill. S. Ct. R. 301 (eff. Feb. 1, 1994); R. 303 (eff.

May 30, 2008).

¶ 4 BACKGROUND

¶ 5 Defendant Krzysztof Emiljanowicz (Emiljanowicz) owned a 1995 Freightliner truck. On

April 21, 2004, Emiljanowicz executed an application of employment with SSTS, Inc.

(SSTS), a corporation in the business of transporting freight both interstate and intrastate.

SSTS operates under a certificate of public convenience and necessityissued bythe Interstate

Commerce Commission, and possesses operating rights issued by the state of Illinois. SSTS

leases equipment for hauling freight from contractors such as Emiljanowicz.

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¶ 6 On May 12, 2004, at 10 a.m., SSTS and Emiljanowicz executed a contractor operating

agreement in which Emiljanowicz agreed to lease his freightliner to SSTS for the purpose

of hauling freight. In his deposition, the president of SSTS, Alex Sandrzyk, stated that

pursuant to the agreement Emiljanowicz would furnish the freightliner “for the exclusive

possession, Control and use of” SSTS and “shall transport only freight of” SSTS. As proof

SSTS received the freightliner from Emiljanowicz, SSTS issued a signed “Receipt for

Possession of the Equipment.” The contractor, however, assumed “complete responsibility

for the operation of equipment for the duration of this agreement.” Sandrzyk stated that it

was SSTS policy to require its contractors to have their equipment inspected and serviced

by a mechanic before transporting freight for the company. Chris Sandrzyk, Alex’s son,

signed the agreement on behalf of SSTS. At that time, he instructed Emiljanowicz to have

his freightliner inspected by a mechanic.

¶ 7 After execution of the agreement at 10 a.m., SSTS issued decals to Emiljanowicz for

placement on his freightliner. The decals indicate the authority to operate the freightliner

pursuant to Department of Transportation regulations and contain identification numbers.

Sandrzyk stated that it is the responsibility of the drivers to place the decals on their vehicles.

¶ 8 Later that same day, Emiljanowicz drove the truck to pick up a friend and take the truck

to a mechanic. In his deposition, Emiljanowicz stated that the truck did not have problems

but he needed to “[c]heck everything out” because he was “start[ing] a new job.” He

purchased the freightliner so he could go into business as an independent operator.

Emiljanowicz stated that he had called his friend earlier and asked him “to come with [him]

so [he] can drop it off to [the] mechanic.” Around 1:45 p.m. on May 12, 2004, on his way

to pick up his friend, Emiljanowicz collided with a vehicle driven by defendant Barbara

Karawacki-Horowitz.

¶ 9 Officer Kenneth King responded to the call of an accident. In his deposition, Officer King

acknowledged that his report did not contain information identifyingEmiljanowicz’s vehicle

as a commercial carrier. He stated that he could not recall whether the truck had decals or

placards identifying it as a commercial carrier, but if the truck had such information Officer

King would have indicated so in his report. Officer King further stated that Emiljanowicz

never told him that he was working for SSTS at the time of the accident. Officer King

obtained insurance information from Emiljanowicz.

¶ 10 At the time of the accident, Emiljanowicz was covered by an insurance policy issued by

Progressive. The Progressive policy contains the following “Contingent Liability

Endorsement”:

“We agree with you that the provisions of the Policy relating to insurance for Personal

Injury Protection, Bodily Injury Liability, and Property Damage Liability are

subject to the following limitations:

1. These coverages apply only to an insured named in the Policy declarations.

2. These coverages do not apply at any time when an insured under this endorsement

is operating, maintaining, or using the insured auto or any other auto for or on behalf

of anyone else or any organization whether or not the insured is being compensated for

such use.

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3. These coverages do not apply when an insured under this endorsement is acting

as an agent or employee of anyone else or any organization.”

¶ 11 Occidental issued a liability insurance policy to SSTS for coverage of all vehicles in

service for SSTS, whether owned or leased by SSTS. The policy provides coverage for “all

sums an ‘insured’ must legally 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 policy also contains the following:

“1. Who Is An Insured

The following are ‘insureds’:

a. You for any covered ‘auto’.

* * *

d. The owner or anyone else from whom you hire or borrow a covered ‘auto’ that

is not a ‘trailer’ while the covered ‘auto’:

(1) Is being used exclusively in your business as a ‘trucker’; and

(2) Is being used pursuant to operating rights granted to you by a public

authority.”

The policy defines “trucker” as “any person or organization engaged in the business of

transporting property by ‘auto’ for hire.”

¶ 12 Within the Occidental policy is a “SCHEDULE OF COVERED AUTOS YOU OWN”

in which SSTS listed both its owned and nonowned vehicles. The policy also contains a

provision detailing liability coverage for owned vehicles acquired bySSTS after the effective

date of the policy:

“B. Owned Autos You Acquire After The Policy Begins

1. If Symbols 41, 42, 43, 44 or 45 are entered next to a coverage in Item Two of

the Declarations, then you have coverage for ‘autos’ that you acquire of the type

described for the remainder of the policy period.

2. But, if Symbol 46 is entered next to a coverage in Item Two of the

Declarations, an ‘auto’ you acquire will be a covered ‘auto’ for that coverage only if:

a. We already cover all ‘autos’ that you own for that coverage or it replaces

an ‘auto’ you previously owned that had that coverage; and

b. You tell us within 30 days after you acquire it that you want us to cover it

for that coverage.”

¶ 13 Symbol 46 refers to the “autos” specifically described in the “SCHEDULE OF

COVERED AUTOS YOU OWN.” Symbol 47 applies to “those ‘autos’ you lease, hire, rent

or borrow.” Both parties agree that Emiljanowicz’s freightliner falls within the definition of

symbol 47. As is apparent from the above provision, Occidental’s policy does not specify

coverage for leased vehicles obtained after the policy begins. SSTS, however, did add

Emiljanowicz’s freightliner to the list of specifically described nonowned vehicles on June

8, 2004.

¶ 14 Ms. Karawacki-Horowitz filed a bodily injury claim against Emiljanowicz to recover

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damages as a result of the accident. Her husband, David Horowitz, filed a claim for loss of

consortium. Progressive defended the claims under a reservation of rights, and the claims

were subsequentlydismissed pursuant to a settlement in the amount of $400,000. Progressive

filed a declaratory judgment action seeking a declaration of coverage under the Occidental

policy in lieu of the Progressive policy. It sought reimbursement for the defense and

settlement of the Horowitz claims. Occidental filed a counterclaim alleging no coverage was

provided under its policy, as well as other defenses.

¶ 15 Progressive filed a motion for summary judgment and Occidental filed a response and

a cross-motion for summary judgment. On April 15, 2011, the trial court granted

Progressive’s motion and denied Occidental’s motion, ruling that the underlying action

triggered Occidental’s duty to defend. The court ruled that Emiljanowicz and his freightliner

were covered by Occidental’s policy and “[i]t is undisputed that at the time of the accident

Emiljanowicz was in the process of taking his tractor to a mechanic to get his tractor

examined.” The trial court reserved the question of the application of the “other insurance”

provisions of the policies pending further briefing on the application of Progressive’s policy.

Progressive then filed a supplemental motion for summary judgment, and Occidental filed

a response. The trial court granted Progressive’s motion on August 11, 2011, and on

November 14, 2011, it entered judgment in favor of Progressive and against Occidental.

Occidental filed this timely appeal.

¶ 16 ANALYSIS

¶ 17 On appeal, Occidental contends the trial court erred in granting Progressive’s motion for

summary judgment, finding that Occidental’s policy provided coverage for the underlying

Horowitz claims, and denying Occidental’s cross-motion for summary judgment. “The

construction of an insurance policy and a determination of the rights and obligations

thereunder are questions of law for the court and appropriate subjects for disposition by

summary judgment.” Konami (America), Inc. v. Hartford Insurance Co. of Illinois, 326 Ill.

App. 3d 874, 877 (2002). If parties file cross-motions for summary judgment, they

acknowledge that no material questions of fact exist and the only issue is one of law

regarding the construction of an insurance policy. American Family Mutual Insurance Co.

v. Fisher Development, Inc., 391 Ill. App. 3d 521, 525 (2009). We review the trial court’s

determinations on motions for summary judgment de novo. Virginia Surety Co. v. Northern

Insurance Co. of New York, 224 Ill. 2d 550, 556 (2007).

¶ 18 In order for Occidental’s policy to apply here, we must find that Emiljanowicz is an

insured under the policy and that his freightliner is a covered “auto.” According to the terms

of Occidental’s policy, Emiljanowicz qualifies as an insured if his vehicle is being used

exclusively in SSTS’s business of “transporting property by ‘auto’ for hire.” Occidental

contends Emiljanowicz is not an insured under the policy because he was driving his vehicle

to pick up a friend and was not engaged in the business of transporting property on behalf

of SSTS at the time of the accident. Occidental’s arguments on this issue, in both its main

brief and its reply brief, make no supporting citations to authority. Occidental’s argument

without support violates Illinois Supreme Court Rule 341(h)(7) (eff. July 1, 2008), which

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provides that arguments “shall contain the contentions of the appellant and the reasons

therefor, with citation of the authorities and the pages of the record relied on.” Therefore, it

has waived this argument on review. However, even on the merits we are not persuaded by

Occidental’s contentions.

¶ 19 The undisputed facts show that SSTS is a corporation in the business of transporting

freight both interstate and intrastate. SSTS operates under a certificate of public convenience

and necessity issued bythe Interstate Commerce Commission, and possesses operating rights

issued by the State of Illinois. Pursuant to a contractor operating agreement, SSTS leased

Emiljanowicz’s freightliner for transporting property. The agreement granted SSTS

“exclusive possession, Control and use of” the freightliner for its business. Emiljanowicz

agreed to transport only freight from SSTS. The agreement also provided that the

“[c]ontractor shall follow the directions of [SSTS] exclusively in the performance of its

duties under this Agreement.” Furthermore, it was SSTS’s policy to direct contractors to

have their equipment inspected and serviced by a mechanic before beginning work with the

company. SSTS gave Emiljanowicz identification decals to place on his vehicle.

¶ 20 After the parties signed the agreement, Chris Sandrzyk instructed Emiljanowicz to have

his vehicle inspected by a mechanic. Emiljanowicz stated that the truck did not have

problems but he needed to “[c]heck everything out” because he was “start[ing] a new job.”

Emiljanowicz wanted to take a friend along so that he could drop off the truck with the

mechanic. On his way to pick up his friend, Emiljanowicz was involved in the collision that

resulted in the underlying Horowitz claims.

¶ 21 Where the contractor agreement provides that the insured corporation has exclusive

possession, control and use of a leased vehicle, and at the time of the accident the vehicle

was operating on directions from the corporation, the vehicle is being used in the business

of the corporation. Occidental Fire & Casualty Co. of North Carolina v. Padgett, 113 Ill.

App. 3d 215, 219-20 (1983). Therefore, Emiljanowicz was engaged in the business of SSTS

at the time of the accident.

¶ 22 Occidental, however, argues that Emiljanowicz was not engaged in the business of SSTS

because his vehicle did not have a trailer attached and did not display placards or decals

identifying it as under lease by SSTS. Occidental also argues that its policy does not cover

Emiljanowicz because he was not employed by SSTS at the time of the accident to transport

property but, rather, was on his way to pick up a friend. As discussed above, Occidental

provides no cases in support of its arguments. Nevertheless, as long as the hiring corporation

had exclusive possession and control of the vehicle, and the vehicle was being operated on

directions from the corporation, it is engaged in the business of the corporation even if it was

not in the process of transporting property and did not have a trailer attached. See Occidental,

113 Ill. App. 3d at 220 (covered accident occurred after corporation told driver to leave his

trailer and go home because anotherload would not be ready for transport until the following

day). See also St. Paul Fire & Marine Insurance Co. v. Frankart, 69 Ill. 2d 209 (1977)

(accident that occurred when the driver was returning home pulling an empty trailer on

directions of company was in the course of the company’s business).

¶ 23 The undisputed testimony also reveals that Emiljanowicz was given the decals after he

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signed the agreement with SSTS and he possessed the decals at the time of the accident.

Sandrzyk stated that it is the responsibility of the contractor to display the decals on the

vehicle. Occidental provides no cases in support of its argument that the failure to display

the decals precludes a finding that Emiljanowicz was operating his freightliner in the

business of SSTS at the time of the accident. In fact, the decals are part of an Interstate

Commerce Commission regulatory scheme that, although informative, is not controlling on

this issue. Occidental, 113 Ill. App. 3d at 220.

¶ 24 The determinative factor remains whether SSTS had exclusive possession, control,

responsibility and use of the freightliner at the time of the accident. The parties signed the

agreement at 10 a.m. on May12, 2004. At that time, Chris Sandryzk instructed Emiljanowicz

to get his freightliner inspected and serviced by a mechanic pursuant to SSTS policy.

Approximately three hours later, Emiljanowicz was on his way to pick up a friend so that he

could drop off his vehicle with the mechanic and complete the inspection demanded by

SSTS. The accident occurred as Emiljanowicz drove to get his friend. In his deposition,

Emiljanowicz explicitly stated that he had called his friend earlier and asked him “to come

with [him]so [he] can drop it off to [the] mechanic.” Emiljanowicz provided no other reason

for driving the freightliner to his friend’s house, and no testimony contradicted him on this

issue. We hold that under the terms of Occidental’s policy, Emiljanowicz is a covered

insured.1

¶ 25 Next we determine whether Emiljanowicz’s freightliner was a covered “auto” at the time

of the accident. The trial court found that the freightliner, as a specifically described auto

within Occidental’s policy, was covered by symbol 46 in the provision for autos acquired

after the policy begins. Since the policy covers all such “autos” leased by SSTS, and SSTS

added the freightliner on June 8, 2004, within 30 days of acquiring it by signing the

contractor agreement with Emiljanowicz, the trial court determined that the freightliner was

a covered “auto” under Occidental’s policy. Occidental disagrees, arguing that the

freightliner falls under symbol 47, not 46, and as such must be listed on the policy for

coverage to apply. Occidental, however, provides no citations to support its argument.

¶ 26 It is true that Occidental’s policy contains no specific provision for coverage of leased

autos acquired after the policy begins. However, although Emiljanowicz’s freightliner is a

leased “auto” within the definition of symbol 47, Occidental’s policy also lists the

freightliner as a specifically described auto in the “SCHEDULE OF COVERED AUTOS

YOU OWN” section of the declarations. It appears that SSTS listed all of its leased trucks

as specifically described autos. Specifically described autos are designated by symbol 46 in

the policy. Occidental’s policy is ambiguous insofar as it does not specify whether leased

vehicles listed as a specificallydescribed auto can be designated bysymbol 46 in determining

The parties also discuss Freed v. The Travelers, 300 F.2d 395 (7th Cir. 1962), in which the 1

driver of a leased vehicle had a collision after dropping off a load and while taking his vehicle to a

garage for service and maintenance. The Freed court found that although the driver had a duty to

maintain the truck, this duty did not effectively remove performance of maintenance fromthe sphere

of the corporation’s business activities. Id. at 398. Although informative, federal case law is not

controlling here. Prior Plumbing & Heating Co. v. Hagins, 258 Ill. App. 3d 683, 688 (1994).

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coverage for those acquired after the policy begins. Courts will construe such ambiguities

against the insurer who drafted the policy. Outboard Marine Corp. v. Liberty Mutual

InsuranceCo., 154 Ill. 2d 90, 108 (1992). Therefore,we find that Emiljanowicz’s freightliner

falls within the definition of symbol 46 for determining coverage of autos acquired after the

policy begins. The parties do not dispute that Occidental’s policy covers all of the trucks

SSTS leases to transport property. SSTS also added the freightliner within 30 days of signing

the contractor agreement with Emiljanowicz. According to the terms of Occidental’s policy,

the freightliner is a covered “auto” under Occidental’s policy.

¶ 27 Occidental also contends that the trial court erred in finding that Progressive’s policy

issued to Emiljanowicz did not apply and denying Occidental’s motion for summary

judgment. Generally, the denial of a summary judgment motion is not a final judgment and

is therefore not appealable. Chavda v. Wolak, 188 Ill. 2d 394, 403 (1999). However, review

of a denial for summary judgment is proper where the trial court’s order also granted a crossmotion for summary judgment on the same claim. Id.

¶ 28 At issue is the following contingent liability endorsement provision contained in

Progressive’s policy:

“2. These coverages do not apply at any time when an insured under this

endorsement is operating, maintaining, or using the insured auto or any other auto for

or on behalf of anyone else or any organization whether or not the insured is being

compensated for such use.”

¶ 29 Occidental argues that this provision does not applyhere because “[a]lthough Progressive

argued below that Emiljanowicz was in the process of taking his truck to a mechanic to have

it checked out to make sure it was in proper operating condition so he could start his job with

SSTS, another equally likely inference is that Emiljanowicz was picking up a friend and, in

addition, was going to a mechanic to make sure the truck, which he just purchased, was

operating properly in order that he could use it for any reason.” Occidental concludes that a

genuine issue of material fact exists precluding the grant of summary judgment in favor of

Progressive. However, Progressive filed a motion for summary judgment and Occidental

filed a cross-motion for summary judgment. In filing cross-motions for summary judgment,

the parties acknowledge that no material questions of fact exist and the only issue is one of

law regarding the construction of an insurance policy. American Family Mutual Insurance

Co., 391 Ill. App. 3d at 525.

¶ 30 Nevertheless, the evidence in the record does not support Occidental’s claim. As

discussed above, it was SSTS policy to require its contractors to have their equipment

inspected and serviced by a mechanic before transporting freight for the company. Chris

Sandrzyk, after signing the agreement on behalf of SSTS, told Emiljanowicz to have his

freightliner inspected by a mechanic. In his deposition, Emiljanowicz stated that he had

called a friend earlier and asked him “to come with [him] so [he] can drop it off to [the]

mechanic.” This undisputed testimony shows that Emiljanowicz went to pick up his friend

so that he could drop off his freightliner at the mechanic for the inspection ordered by SSTS.

When the accident occurred, a mere three hours after he signed the contractor agreement and

received SSTS’s identifying decals, Emiljanowicz was in the process of taking his vehicle

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to the mechanic. Therefore, Emiljanowicz was operating or maintaining his freightliner on

behalf of SSTS at the time of the accident and Progressive’s contingent liability endorsement

applies to exclude coverage. See Occidental, 113 Ill. App. 3d at 219-20. The trial court did

not err in granting summary judgment in favor of Progressive and denying Occidental’s

cross-motion for summary judgment.

¶ 31 Occidental also argues that Progressive’s policy should apply because “in Illinois the

general rule is that the insurance follows the car.” It cites to State Farm Mutual Automobile

Insurance Co. v. Universal Underwriters Group, 182 Ill. 2d 240 (1998). State Farm,

however, involves a test driver at a dealership who got into an accident while test driving the

dealer’s car. State Farm is not applicable here.

¶ 32 Sincewe find that Progressive’s policydoes not apply, we need not consider Occidental’s

remaining contention that Progressive’s policy is primary and Occidental’s policy is excess

pursuant to their “other policies” provisions.

¶ 33 For the foregoing reasons, the judgment of the circuit court is affirmed.

¶ 34 Affirmed.

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