Title: Northbrook Property & Casualty Co. v. Transportation Joint Agreement
Citation: N/A
Docket Number: 88900
State: Illinois
Issuer: Illinois Supreme Court
Date: December 1, 2000

Docket No. 88900-Agenda 23-September 2000.
NORTHBROOK PROPERTY AND CASUALTY COMPANY, 
Appellant, v. TRANSPORTATION JOINT AGREEMENT et al.,
Appellees.
Opinion filed December 1, 2000.
	JUSTICE HEIPLE delivered the opinion of the court:
	In this action for declaratory judgment, plaintiff Northbrook
Property and Casualty Company (Northbrook) appeals the
appellate court's determination that Northbrook has a duty to
defend the Transportation Joint Agreement of School Districts 47
and 155 (school districts) in numerous lawsuits arising from the
collision of a train with a school bus. We reverse.
	On October 25, 1995, a METRA train collided with a school
bus operated jointly by the school districts. Several students were
killed and many others were injured, resulting in numerous
lawsuits against the school districts.
	At the time of the accident, one of the insurance policies
which the school districts had in force was a commercial general
liability policy issued by Northbrook. That policy states:
			"We will pay those sums that the insured becomes
legally obligated to pay as damages because of 'bodily
injury' or 'property damage' to which this insurance
applies."
The policy also states that the following losses are not covered:
			" 'Bodily injury' or 'property damage' arising out of the
ownership, maintenance, use or entrustment to others of
any aircraft, 'auto' or watercraft owned or operated or
rented or loaned to any insured. Use includes operation
and 'loading or unloading.' *** 'Auto' means a land
motor vehicle, trailer or semitrailer designed for travel on
public roads, including any attached machinery or
equipment."
	Northbrook filed this action in the circuit court of McHenry
County seeking a declaration that it had no duty to defend the
school districts against the students' lawsuits because the injuries
arose out of the use or operation of a bus. The trial court granted
summary judgment for Northbrook. The appellate court reversed,
holding that the students' lawsuits against the school districts
adequately alleged that the injuries could have arisen from causes
other than use or operation of the bus, such as failure of the school
districts to adequately plan and inspect bus routes and warn bus
drivers of potential hazards. 309 Ill. App. 3d 261.
	To determine an insurer's duty to defend its insured, a court
must look to the allegations of the underlying complaints. If the
underlying complaints allege facts within or potentially within
policy coverage, the insurer is obliged to defend its insured even
if the allegations are groundless, false, or fraudulent. United States
Fidelity &amp; Guaranty Co. v. Wilkin Insulation Co., 144 Ill. 2d 64,
73 (1991). An insurer may not justifiably refuse to defend an
action against its insured unless it is clear from the face of the
underlying complaints that the allegations fail to state facts which
bring the case within, or potentially within, the policy's coverage.
Wilkin, 144 Ill. 2d  at 73.
	Here, the allegations of the underlying complaints utterly fail
to state facts which either actually or potentially bring the cases
within the policy's coverage. The policy excludes injuries arising
from the school districts' use or operation of a motor vehicle.
Allegations that the school districts inadequately planned and
inspected bus routes or failed to warn bus drivers of potential
hazards along the routes are nothing more than rephrasings of the
fact that the students' injuries arose from the school districts' use
or operation of a motor vehicle. Contrary to the appellate court's
holding, the students' complaints failed to allege that the injuries
arose from events "wholly independent of any negligent operation
of the bus." 309 Ill. App. 3d at 266. Northbrook therefore has no
duty to defend the school districts in the underlying lawsuits.
	The appellate court judgment is reversed, and the circuit court
judgment is affirmed.
Appellate court judgment reversed;
circuit court judgment affirmed.