Court Opinion

ID: 2996544
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:29:39.522644+00
Date Added: 2024-06-11T09:19:15.529390
License: Public Domain

In the
 United States Court of Appeals
               For the Seventh Circuit
                          ____________

No. 03-1708
GREAT WEST CASUALTY COMPANY,
                                                    Plaintiff-Appellee,
                                  v.

CRYSTAL MAYORGA,
                                                Defendant-Appellant.
                          ____________
             Appeal from the United States District Court
        for the Northern District of Illinois, Western Division.
             No. 02-C-50261—Philip G. Reinhard, Judge.
                          ____________
    ARGUED AUGUST 6, 2003—DECIDED SEPTEMBER 8, 2003
                          ____________

 Before BAUER, POSNER, and KANNE, Circuit Judges.
  POSNER, Circuit Judge. The district court granted sum-
mary judgment for the insurer in this diversity lawsuit,
which pivots on the coverage of the policy. It had been
issued to a truck company, and covered liability arising
from the company’s ownership, maintenance, or use of
vehicles, excluding however a private passenger vehicle
or a pickup truck with a load capacity under three-quarters
of a ton. Jeffrey Bushman, the grandson of the truck com-
pany’s owner, was driving such a pickup truck, owned
by the company, to school when he collided with a car
driven by Crystal Mayorga. She was injured and sued both
the truck company and Bushman; we do not know the
2                                                No. 03-1708

status of that suit. The insurer brought the present suit
against its insured (the truck company) and Mayorga,
seeking a declaration of noncoverage. Under Illinois law,
the tort claimant is a necessary party to a suit to deter-
mine coverage. Zurich Ins. Co. v. Baxter Int’l, Inc., 670
N.E.2d 664, 668-69 (Ill. 1996); Thoele v. Aetna Casualty
& Surety, 39 F.3d 724, 726 (7th Cir. 1994). The truck com-
pany has not appealed, but Mayorga has; her practical
interest in the truck company’s insurance status gives her
standing to do so. Bankers Trust Co. v. Old Republic Ins.
Co., 959 F.2d 677, 681-82 (7th Cir. 1992).
  Mayorga’s only argument on appeal is that two endorse-
ments added to the insurance policy after it was issued
but before the accident occurred expanded the policy’s
coverage to pickup trucks of any load capacity. For reasons
the record does not reveal, a building contractor and
the State of Pennsylvania were added as additional in-
sureds by the endorsements. Each endorsement provides
that “coverage provided by this endorsement applies to
‘auto(s)’ described in the SCHEDULE on this endorse-
ment,” and the schedule offers the following “Description
of Covered ‘Auto(s)’: Applies to all trucks, tractors & trail-
ers owned, leased, hired, rented, or borrowed which
are used by the name insured.” There is no exception for
pickup trucks of limited load capacity, and Mayorga ar-
gues therefore that the endorsements broadened the cov-
erage of the original policy.
  It is true that the endorsements modified the policy; and
the insurer’s lawyer concedes, though perhaps impru-
dently, that the insureds added by the endorsements
obtained by virtue of the language that we have quoted
broader coverage than the original insured had. No reason
is suggested why the additional insureds would want
broader coverage (narrower would be more likely, as in
No. 03-1708                                                   3

Nat’l Union Fire Ins. Co. v. Glenview Park District, 632 N.E.2d
1039, 1042 (Ill. 1994), and United States Fire Ins. Co. v. Aetna
Life & Casualty, 684 N.E.2d 956, 1000-02 (Ill. App. 1997));
the lawyers could not even tell us what connection the
endorsees had with the truck company. But the insurer
insists that the endorsements did not broaden that com-
pany’s—the original insured’s—coverage.
  That is surely correct. The truck company would have
had to pay an additional premium for additional coverage.
And it is apparent that the purpose of the endorsements
was to add insureds rather than to alter the contract with
the original insured. Each endorsement is captioned “Addi-
tional Insured Endorsement” and states that “who is an
insured is changed to include as an ‘insured’ the person
or organization shown in the SCHEDULE on this endorse-
ment only if they are liable for the conduct of an ‘insured’
shown in the Who is an insured provisions [i.e., the truck
company] and only to the extent of that liability” (emphasis
added). This language is the reason for our suggesting
that the insurer’s lawyer may have been imprudent to
concede that the endorsements gave the endorsees broader
coverage than the original insured had.
  Mayorga does not so much deny the unreasonableness
of her interpretation as insist that reasonableness plays no
role in the interpretation of an insurance contract. She
is wrong. What is right is that insurance contracts are
interpreted in doubtful cases in favor of the insured, e.g.,
Nat’l Union Fire Ins. Co. v. Glenview Park District, supra,
632 N.E.2d at 1042; United States Fire Ins. Co. v. Aetna Life
& Casualty Co., supra, 684 N.E.2d at 997, because they are
drafted by the insurers, because their typical wording
even when clear to experts is often opaque to insureds
(especially when the insured is an individual, rather than
a company as in this case), and because insureds want
4                                               No. 03-1708

insurance against the vagaries of interpretation. The ap-
plication of the principle may seem doubtful in this
case, since the insured (besides being a company rather
than a hapless individual) is not a party to the appeal; but
it was a party in the district court and so would be bound
by the interpretation that we adopt. Williams v. Madison
County Mutual Automobile Ins. Co., 240 N.E.2d 602, 604
(Ill. 1968). In any event an interpretation of an insurance
policy is not rendered doubtful, bringing the interpretive
principle that Mayorga invokes into play, just because a
snippet of contractual language taken out of context pro-
vides literal support to the insured’s position. That way
madness lies. Suppose you order a Cosmopolitan in a
bar, and the bartender gives you a copy of the woman’s
magazine and insists that you pay for it; can he appeal
to literal meaning to defeat your contention that it is not
what you agreed to? Mayorga cites no cases in support
of her interpretation, and, not surprisingly, we can find
none ourselves.
                                                 AFFIRMED.

A true Copy:
       Teste:

                          _____________________________
                          Clerk of the United States Court of
                            Appeals for the Seventh Circuit

                    USCA-02-C-0072—9-8-03