FIRST DIV ISION SEPTEMBER 30, 2008

Nos. 1-07-2137, 1-07-2207, and 1-07-2266 (Cons.) MARK CZAPSKI and ANNA CZ APSKI-FL OREK, ) Appeal from the Co-Special Administrators of the Estate of Roger ) Circuit Court of Czapski, Deceased, ) Co ok Co un ty. ) Plaintiff s-Appell ants, )

) v. ) ) CHRISTOPHER MAHER, PROGRESSIVE ) UNI VERSAL INSU RANCE COMPA

NY f/k/a ) PROGRESSIVE UNIV

ERSALE IN SURANCE ) COMPANY OF IL

LI NOIS, a Corporation, ) PROGRESSIVE PREMIER I NSURANCE COMPANY ) OF IL LI NOIS, a Corporation, NATIONAL CASUALTY ) COMPANY, a

Corpora tion, and F EDERAL

INSU RANCE ) COMPANY, a Corporation, ) ) Defend ants-App ellees. )

)

-------------- -------------- -------------- -------------- -------------- ) Nos. 06 CH 9408, ) 06 CH 18422 PA UL J AS INSK I and THO MAS GUA RNIE RI, ) (Cons.) ) Plaintiff s-Appell ants, )

) v. ) ) CHRISTOPHER MAHER, SCOTTSDALE I NDEMNITY ) COMPANY, a Corporation, NATIONAL CASUALTY ) COMPANY, a Corporation, FEDERAL I NSURANCE ) COMPANY, a Corporation, and PROGRESSIVE ) UNIVERSAL

INSURANCE COMPANY, f/k/a )Nos. 1-07-2137, 1-07-2207, and 1-07-2266 (Cons.)

2 Progressive Universal I

nsurance Company ) Of Illinois, a Corporation, ) ) Honorab le Defend ants-App ellees. ) Mary Anne Mason, ) Judge Presi ding.

-------------- -------------- -------------- -------------- -------------- ) ) NATIONAL

CASUALTY COMPANY, ) ) Cross-Plaintiff, ) Third-Party Plaintiff, ) Appellee, ) ) v. ) ) CHRIST OPHER MAHE

R, ) ) Cross-De fendant , ) Appellan t, )

) and SARAH FERRIS, MARK CZAPSKI and ANNA ) CZAPSKI-FLOREK, Co-Special Administrators of the ) Estate of ROGER CZAPSKI, Dec eased, ) ) Third-Pa rty Defend ants, ) Appellan ts. ) PRESID ING

JUSTICE

ROBERT E. GORDON d elivere d the opini on of the c ourt: This consolidated appeal arises from a trial court’s finding of no coverage under two insurance policies issued to an automobile dealership. The major issue prese nted before the trial court wa s whethe

r a test- driver o f a motor vehicle owned by an automo

bile dea lership was a “custome r” of tha t dealership for p

urposes o f an exclu sionary clause, excluding

“custome

rs” from coverage, under a

n automobile liability insurance policy . The trial court found in favor of National Casualty Company

(Nationa l) and Fe deral I

nsuranc e Company

(Fede ral) on theirNos. 1-07-2137, 1-07-2207, and 1-07-2266 (Cons.)

3 respective section 2-619.1 (735 I LCS 5/2-619.1 (West 2000)) combined motions to dismiss and for summary judg

ment pursuant to sections 2-615 and 2-1005 of the Code of Civil Procedure (Code) (735 ILCS 5/2-615, 2-1005 (West 2000)). However, the trial court made no determination whether declarations reg arding National’s and Feder al’s duty to indemnify

in the underly ing matte r were p rematur e, since no deter mination of

liability in the unde

rly ing law suits had bee n made at the time of

this appe al. The p arties di d not brie f befor e this cou rt or arg ue this issue before the trial court. We find that this appeal is not ripe for adjudication and va cate the trial cou rt’s gr anting o f defen

dants’ mo tions for d

ismissal a nd summar

y ju dgment. I. BACKGROUND On August 4, 2004, motor vehicles driven by Sarah Ferris and Christopher Maher collided . The fa

cts surro unding the collision are as follows. M aher wa s test-dr iving a B MW automobile owned by Motor Werks of B arrington, Inc . (Motor Werks). Its employ ee Roger Czapski wa s seated

in the BMW’ s front pa ssenge r seat. Pa ul Jasinski a

nd Thomas

Guarnie ri, friends of Maher, were s eated in the BMW’s

rear pa ssenge

r seats. Maher was driving the BMW motor vehicle in an ea sterly direction on Algonquin Road, approaching the intersection of Willow Creek Drive. Sar ah Ferris, driving a 2002 Saturn motor vehicle, was traveling in a westerly direction on Algonquin, with the intention of making a left turn onto Willow Creek Drive. The collision occurred between the B MW and the Saturn as Ferris made a le ft turn fr

om Algon

quin Road onto Willow Cr eek Drive. The B MW ultimatel y struck a utility/light pole adjac ent to the roadway . Czapski was killed and Jasinski and Guarnieri were seriously

injured as a result of the collision.Nos. 1-07-2137, 1-07-2207, and 1-07-2266 (Cons.)

4 A. The Un

derly ing Compla

ints Mark Czapski and Anna Czapski-Florek, co-special administrators of the estate of Roger Czapski (Cza

pski plain tiffs), f iled wron gful de ath and su

rvival a ctions pursuant to the Ill inois Wrongful Death Act (740 I LCS 180/0.01 et seq . (West 2000)) and the Illinois Survival Act (755 IL CS 5/27-6 (West 2000)), against Maher and Ferris in the law division of the circuit court of Cook County on August 9, 2004. Count I of the complaint is directed against Maher and a lleged that he was negligent, while count I I is directed ag ainst Ferris and alleged that she wa s negligent. Motor Werks was not named as a defenda nt in that la

wsuit. Jasinski and Guarnieri also filed a negligence action against Maher, Ferr is, and Motor Werks in the law division of the circuit court of Cook County on Aug ust 9, 2005. That

com pl ain t co nsi st ed o f si x c oun ts . C oun ts I and II are di rec ted aga in st Fer ris , co unt s III an d IV are dir ected a gainst M aher, a

nd counts V

and VI are dir ected a gainst M otor Werks. The underlying

actions were later consolidated. At the time of this appeal, no determination of liability in the underly ing lawsuits had been made. B. The Declaratory

Judgment Actions The Czapski plaintiffs filed a complaint for declaratory judgment on May 1, 2006. Jasinski and

Guarnie ri filed a complain t for dec larator

y ju dgment on Septembe

r 6, 2006. Both complaints for declaratory judgment sought declarations of covera ge available to Maher under certain insuranc e policie s issued to Motor Werks and cer

tain insur ance po licies iss

ued to Ke vin Maher, Christopher Maher’s father.Nos. 1-07-2137, 1-07-2207, and 1-07-2266 (Cons.)

1 As will be e

xplained shortly , this cas e does no t involve the duty to defen d. This ca se involves only the question of whether the insurers under certain excess insurance policies issued to Motor Wer

ks have a duty to indemnif

y Ma her in the event tha t the $1 mill ion of liab ility coverage provided by

the Scottsdale garage policy is exhausted by settlement, verdict, or judgment.

5 1. Insurance Policies Held by Motor W erks At the time

of the motor accid

ent, Motor

Werks had

three lia bility insuranc e policie s in effect. The effective policy period for each of the three insuranc e policies held by Motor Werks was May 1, 2004, to May 1, 2005. The first of these

policies, garage policy

No. RBI0000025, f

rom defe ndant Sco ttsdale Indemnity

Company (Scottsdale), provided $1 million of automobile liability coverage for ea

ch

occurr ence. I t is undispu

ted that Ma

her is an insured u nder the Scottsdal e policy . It is

also undisputed that Scottsdale is providing a defense for Maher a nd Motor Werks in the underlying lawsu its t o thes e decla rator y actions . Scot tsdal e has p rovid ed thi s defen se wit hout assert ing a

reservation of r

ights. 1 Motor Werks also had a commercial umbrella policy in force, policy

No. UM00030211, from def endant N ational Ca sualty Company

(Nationa l), which provided liability covera ge in

ex ce ss of ce rt ai n u nd er lyi ng in su ra nc e p ol ic ie s, ex pr es sl y in cl ud in g t he Sc ot ts da le ga ra ge po li cy, policy No. RBI0000025, subject to a $5 million limit for each occurrence and in the aggregate. National has denied that coverage is available to Maher under its policy , relying on anNos. 1-07-2137, 1-07-2207, and 1-07-2266 (Cons.)

6 exclusionary clause, whic h states that Motor Werks’ “customers” are not “insureds” unde r the po li cy. Motor Werks also had a commercial excess liability policy in force , policy No. 7983-85- 63, from d

efenda nt Fede ral I nsuranc e Company

(Fede ral) tha t provide d commer

cial liab ility coverage subject to a $10 million limit (per occurre nce and in the aggre gate) in excess of “the underlying

limits of insurance.” Federal has also denied that cove rage is available to Maher under its policy contendi ng that p olicy

No. 7983- 85-63 if a

“follow- form” po licy

which ru ns in excess to policy No. UM00030211 issued by National to Motor Werks. Policy No. UM00030211 is the policy issued by National; however, Scottsdale Insura nce was named instead of National in the policy, which the trial court found was a transcriptional error, whic h is further explained in this opinion. Federal contends that since Maher is excluded from covera ge under the National policy by

the “customer” exclusion, he is also excl

uded from covera

ge unde r its po li cy. The Czapski plaintiffs, Jasinski, and Guarnieri counter that Maher was not excluded from coverage by

the “customer” exclusion contained in the National policy . They explain that Maher was not a “custome

r” of Mot or Werks w

ithin the me aning o f that wor d. In support of

their conte ntio n, th ey cite th e defin itio n of “cu stom er” con taine d in W ebste r’s New Worl d Col lege Di ct io na ry. Th at di ct io na ry d ef in es “c us to me r” as : “ on e w ho bu ys, es p[ ec ia ll y] o ne wh o b uys from, or patronizes, an establishment regularly .” Webster’s New World College Dictionary, 341 3d ed. 1997. They a

rgue that since Maher, a test-drive r of an automobile owned by an automobile dealership, was not a “customer” of Motor Werks, he should be de emed an “insured”Nos. 1-07-2137, 1-07-2207, and 1-07-2266 (Cons.)

7 under the National policy . They furthe r argue that, in the event this court finds that Maher was not an “insured” under the National policy, he should be deemed an “insured” under the F ederal policy. They

argue that the Federa

l policy followed the form of the Scottsdale policy and not the Na ti on al po li cy. 2. Insurance Policies Held by Kevin Maher The Czapski plaintiffs, Jasinski, and Guarnieri also initially sought a dec laration of coverage available to Mahe r under two insurance policies issued by defendant Progressive Universal Insurance

Company of I

llinois (Progressive) to Kevin Maher, Christopher Maher’s father. On August 4, 2004, Kevin Maher had two a utomobile insurance policies issued by Progre ssive. Pro gressi

ve policy No. 43265 386-1 provided insu rance c overag e subject to a limit of $250,000 per person and $500,000 per occurre nce. Progressive policy

No. 4326592-1 provided insurance coverag e subject to a limit of $500,000 per occurrence. Kevin Ma her was not named as a defendant in either the Czapski or Jasinski/Guarnieri complaints for declar atory judgmen t. Progressive counterclaimed seeking a declaration of coverag e available to Maher under the National and Federal policies, and soug ht a declaration that coverage under the two insurance policies issued by it to Kevin Maher was secondary to coverage provided by

the National and Federal policies. The cases against Progressive were voluntarily dismissed; however, Progressive’s countercomplaint was not dismissed and remains par t of this appeal. The declaratory

judgment actions filed by the Czapski plaintiffs, Jasinski and Guarnieri were consolidated on November 13, 2006.Nos. 1-07-2137, 1-07-2207, and 1-07-2266 (Cons.)

8 3. The Trial Court’s Ruling On July 10, 2007, as noted, the trial court found in favor of National and Federal. The trial cou rt gra nted Nati onal and F ederal ’s respe ctive se ction 2-6 19.1 (735 IL CS 5/2-619. 1 (West 2000)) combined motions to dismiss and for summary judg ment pursuant to sections 2-615 and 2-1005 of the Code (735 ILCS 5/2-615, 2-1005 (West 2000)). In the transcript from the he aring on the motions, the trial court found that Maher was a “customer” of Motor Werks, within the common meaning of that word, and thus excluded from covera ge under the National policy . The trial court also found that Maher was not an insured under the F ederal policy , since the Federal policy was controlled by

the National policy. The tr ial court denied the Czapski, Jasinski and Guarnieri, and Progressive responses to Na tional and Federal’s respective sec tion 2-619.1 (735 IL CS 5/2-619.1 (West 2000)) combined motions, and denied their respective motions for summary judgme

nt pursuant to section 2-1005 of the Code (735 IL CS 5/2-1005 (West 2000)). This appeal followed. II. AN ALYS IS As noted, Scottsdale is providing a defense for Maher and Motor Werks in the underlying lawsuits. Accordingly , this case does not involve National’s or Federal’s duty to defend. The trial court ruled on only the que stion of whether National or Federal had a duty to indemnify Maher i n the e vent t hat th e $1 mi llio n of li abili ty coverage provi ded by the Scot tsdal e garage policy was exhausted by

settlement, verdict, or judgment. In a persona l injury action wi th sever e injurie s and dea

th, norma lly a ll sides de sire toNos. 1-07-2137, 1-07-2207, and 1-07-2266 (Cons.)

9 know what coverage is available in the underlying

action. However, before revie wing the trial court’s ruling in the instant matter, we must determine whether a ny determination re garding National’s and Federal’s duty to indemnify Maher in the unde rlying matter

is premature, since no determination of liability in the underly ing lawsuits had been made at the time of this appeal. Generally , “a declaratory

judgment action to determine an insurer’s duty to indemnify its insured should not be decided prior to the adjudication of the underly ing action where the issues to be decided in both actions are substantially similar.” Allianz Insurance Co. v. Guidant Corp. , 355 Ill. App . 3d 72 1, 731 (2005 ), cit ing Murphy v . Urso , 88 I ll. 2d 444, 4 55 (1981) ; Burnett v. Safeco Insuranc e Co. of Ill

inois , 227 Ill. App. 3d 167, 174 (1992). “The ra tionale for this rule is ‘ “that an untimely determination in the dec laratory judg ment action could subsequently pre judice a party in the under

lying ac tion through application of collateral estoppel.” ’ ” Allianz Insurance Co. 355 Ill. App. 3 d at 73 1, quo ting Brotherho od Mutual I nsurance Co. v. Rose th , 177 Ill. App. 3d 443 , 451 ( 1988) , quot ing Maryland Casualty Co. v. Chicago & North W estern Transportation Co. , 126 Ill. App. 3d 150, 157 (1984). “A decl arator

y ju dgment a ction is no t intende d to permit moot or hy

pothetic al case s, or to enable p arties to

secure advisory opinions or

legal a dvice fr om the cou

rt with re spect to anticipated future difficulties.” Weber v. St. Paul Fire & Marine Insurance Co. , 251 Ill. App. 3d 371, 373 (1993). An actual controversy capable of resolution by

a judicial decision must exist. Weber , 251 Ill. App. 3d at 372. Where the issue is an insurer’s duty to indemnify, the controversy doe s not arise until the insured becomes legally obligated to pay

damages in the underlying

action. Weber , 251 Ill. App. 3d at 373. That has not y et happened here.Nos. 1-07-2137, 1-07-2207, and 1-07-2266 (Cons.)

10 In Murphy v

. Urso , 88 Ill. 2d 444 (1981), our Illinois Supreme Court carved out an exception to the general principle where the issues in the de claratory judgment action are separable from the issues raised in the underly ing actions. However, Murphy did not involve issues of ripeness, the duty to indemnify , or excess insurers. A judgment for liability there was obtained before the insurer was made pa rt of the action. Murphy , 88 Ill. 2d at 448-49. At issue was wh ether, in hi ndsi ght, t he ins urer sh ould have d eterm ined i ts du ty to defe nd by brin ging a separate declaratory

judgment action. Murphy , 88 Ill. 2d at 455. The court held a dec laratory judgment action would have been premature because the issues determinative of covera ge were also determinative of the insureds’ liability

. Murphy , 88 Ill. 2d at 455. The court was conc erned with the preclusive effect a determination in the dec laratory judg ment action would have had on the underlying

action. Murphy , 88 Ill. 2d at 455. I t was in this context that the exception that an insurer may br

ing a declaratory

judgment action to determine its duty to defend where the issues in the underlying

suit and the declaratory

judgment action are separable was created. Murphy , 88 Ill. 2d at 455-56. This appe al conce

rns only the duty to indemnif

y. “ [W]hether the insure

r has a du ty to indemnify the insured for a particular liability is only ripe for consideration if the insured has already incurred liability in the underly ing claim against it.” Outboard M arine Corp . v. Libert

y Mutual Insurance Co. , 154 I ll. 2d 90, 12 7 (1992). There has been n o determ ination of liability in the under lyin g suits he re. A de cision by

us on whet

her the e xcess polic ies would b e trigg ered in the event of a future judgment is premature and would serve merely

as an advisory opinion, which this court lacks the authority to issue. See Howlett v. Scott , 69 Ill. 2d 135, 143 (1977)Nos. 1-07-2137, 1-07-2207, and 1-07-2266 (Cons.)

11 (Illinois judges have no authority to issue advisory opinions). III. CONCL

USION The trial court here did not consider the ripeness of the de claratory judgment actions. Inste ad the co

urt ruled on the mer

its and en tered a n order on July

10, 2007, f

rom which

this appeal was taken. That order prema turely deter

mined the rights and obligations of the parties. The trial court: (1) granted summary judgment to National and Federal based on its interpre tation of the insurance policies; (2) dismissed the declaratory judgment complaints apparently based on affirmative matter defeating plaintiffs' claim for coverage; and ( 3) denied plaintiffs' and Progressive's cross-motions for summary judgment. We now vacate the trial court’s rulings on the parties' cross-motions for summary judgment. We affirm the trial court's ruling dismissing the complaints on the ground that those complaints were not y et ripe for adjudication. See Beckman v. Freeman United Coal Mining Co. , 123 Ill. 2d 281, 286, 527 N.E.2d 303 (1988) (a court of review may

affirm the dismissal of a complaint on any ground appearing in the re cord, regardless of whether the tria l court relied on that ground). Affirme d in part a

nd vaca ted in par t. CAHIL L and GARCI

A, JJ., concur.REPORTER OF DECISIONS - ILLINOIS APPELLATE COURT (Front Sheet to b e attac hed to eac h Opinion) Please use the ] foll owin g for m: ]

] ] ] SEE REVERSE SIDE FOR CAPTION. ] ] ] ] Complete ] TITLE ] of Case. ] Docket No. ] Nos. 1-07-2137, 1-07-2207, and 1-07-2266 (Cons.)

] Appellate Court of Ill

inois COURT ] First District, First Division

] ] SEPTEMBER 30, 2008 Opinion File d ] ( Month, Day and Year )

] JUSTICES ] PRESIDING JUSTICE ROBERT E. GORDON delivered the

] opinion of the court . ] ] CAHILL, and GARCIA, JJ., concur. ] ] APPEA L from the ] Lower Co urt and Tria l Judge(s)in form indi cated Circuit Court ] in mar gin: of Cook County; ] Appeal from the Circuit Court of Cook County. the Hon:______ ] Judge Pr esiding ] Honorable M ary Anne M ason, Judge P residing .

] For AP PELLANTS ]Indicate if attorney represents APPELLANTS or John Doe of ]APPELLEES and include attorneys of counsel. Chicago. ]Indicate the word NONE if not represented. For AP PELLEES, ]------------- --------------

------- --------------

--------------

----------------------

---------- - Smith and ] Smith, of ] Chicago. ] Brown, ] PLEASE SEE PAGE 3 FOR ATTORNEYS OF RECORD. of Counsel. ]

] Also add atty. ] for third party ] appellants ] or appelle es. ]

] ] ] ___________________(USE REVERSE SIDE IF NEEDED_________________________Nos. 1-07-2137, 1-07-2207, and 1-07-2266 (Cons.)

13 CAPTION :

M AR K C ZAP SK I and AN NA CZA PS KI -FL OR EK , Co-Special Administ rators of the Est ate of Roger Czapski , Deceas ed, Plaintiffs-A ppellan ts,

v. CHRISTOPHER MA HER, PROGRESSIVE UN IVE RS AL INS UR AN CE CO M PA NY f/k/a PROGR ESSIVE UNIVERSALE INSURANCE CO M PA NY OF ILL INO IS, a C orp ora tion, PROGRESS IVE PREMIER I NSURANCE COMPANY OF ILLINOIS, a Corpor ati on, NATIONAL CA SUALTY COMPANY, a Co rpo rat io n, and FEDERAL INS URANCE COM PANY , a Corporat ion, Defe ndan ts-App ellees.

--------- --------- --------- --------- --------- --------- --------- ------- PA UL JAS INSK I and T HO M AS G UA RN IER I, Plaintiffs-A ppellan ts,

v. CHRISTOPHER MA HER, SCOTTSDALE INDEM NITY COM PANY, a Corpor ati on, NATIONAL CA SUALTY COM PANY, a Corpor ati on, FEDERAL INSURANC E COMPANY, a Co rpo rat io n, and PROGRESS IVE UNIVER SAL INSURA NCE C OM PANY , f/k/a Progress ive Uni versal Insur ance Company Of Ill inoi s, a Corporati on, Defe ndan ts-App ellees.

--------- --------- --------- --------- --------- --------- --------- ------- NA TIO NA L C AS UA LT Y C OM PA NY , Cross-Plaintiff, Third-Par ty Plaintiff, Appellee, v. CHRIS TOPHER MAHER, Cross-De fendant, Appellant, and SARAH FERRI S, MARK CZAPSKI and ANNA CZAPSK I-FLOR EK, Co-Special Administrators of the Estate of ROGER CZAPSKI, Deceased , Third -Par ty De fenda nts, App ellants.Nos. 1-07-2137, 1-07-2207, and 1-07-2266 (Cons.)

14 ATTORNEYS OF RECORD

Connelly, R

oberts &McGivne

y, LLC Chicago, Illinois 60603 Attorneys for Appellants, Czapski and Czapski-Florek Attn: Thom as R. Rakowski OF COUN SEL Lloyd & Cavanagh Chicago, Illinois 60606 Attorneys for Appellants, Czapski and Czapski and Florek Attn: Tim othy J. Cav anagh and Mat thew M. Rundi o OF COUN SEL Leyhane & A ssociate s, Ltd. Chicago, Illinois 60606 Attorneys for Appellants, Jasinki and Guarnieri Attn: F rancis J. L eyhane III OF COUN SEL James J. Roche & Associates Chicago, Illinois 60610 Attorneys for Appellants, Jasinki and Guarnieri Attn: James J. Roche and LeeAnn M. Crow OF COUN SEL

---------------------------------------------------------------------------- Meagh er & Geer, PLLP (Pro Hac Vice ) Scottsdale, Arizona 85258 Co-Counsel for Appelle e, Natio nal Casualt y Company Attn: Thom as H. Crouc h, Esq. and Kur t M. Zit zer, Esq. OF COUN SEL Tressler, Sodestr om, Maloney & P riess, LLP Chicago, Illinois 60606 Co-Counsel for Appelle e, Natio nal Casualt y Company Attn: Ja mes R.Murray, Esq. Of COUNSEL