(State Farm Mutual Automobile Insurance Company, Appellant) V

Page 1

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY et al. (State Farm Mutual Automobile Insurance Company, Appellant) v. ILLINOIS FARMERS INSURANCE COMPANY et al., Appellees.

Docket No. 103816.

SUPREME COURT OF ILLINOIS

226 Ill. 2d 395; 875 N.E.2d 1096; 2007 Ill. LEXIS 1156; 314 Ill. Dec. 809

September 20, 2007, Opinion Filed

PRIOR HISTORY: Appeal from the Appellate Court step-down provisions in appellee's policies were contrary for the First District. to Illinois public policy and were void. The appellate State Farm Mut. Auto. Ins. Co. v. Ill. Farmers Ins. Co., court reversed that holding, finding the step-down 368 Ill. App. 3d 914, 858 N.E.2d 519, 2006 Ill. App. provisions were not contrary to Illinois public policy and LEXIS 995, 306 Ill. Dec. 722 (Ill. App. Ct. 1st Dist., were enforceable. The court, after implementing the 2006) various rules of statutory construction, held that nothing in the statutory pronouncements of the Illinois CASE SUMMARY: Legislature prohibited appellee's step-downs since appellee's policies provided coverage to the named insured and permissive users of the named insured's PROCEDURAL POSTURE: Appellant insurer was vehicle in the mandatory minimum amounts. granted leave to appeal the judgment of the appellate court (Illinois), which reversed a trial court order granting OUTCOME: The court affirmed, in part, the judgment it partial summary judgment and held that appellee of the appellate court upholding the validity of the insurer's step-down provisions were not contrary to step-down provisions contained in appellee's policies. public policy and were enforceable. Appellant had The court vacated, in part, the portion of the appellate brought suit seeking declaratory, injunctive, and court judgment addressing the ambiguity and direct monetary relief with respect to the step-down provisions action issues as those issues were not within the in appellee's automobile liability policies. jurisdiction of the appellate court to have been decided. The court remanded the case to the trial court for further OVERVIEW: The suit involved money appellant spent proceedings. covering losses after appellee invoked its step-down provisions in four separate and distinct situations. LexisNexis(R) Headnotes Appellee's step-down provisions reduced the policy limits to the minimum liability limits required under 625 Ill. Comp. Stat. Ann. 5/7-203 (2002) and 625 Ill. Comp. Stat. Ann. 5/7-317(b) (2002), when the insured's vehicle was being operated by a permissive user who was neither a Insurance Law > Motor Vehicle Insurance > Coverage family member residing in the insured's household or a > Compulsory Coverage > Proof of Financial listed driver. The trial court had determined that the Responsibility Page 2 226 Ill. 2d 395, *; 875 N.E.2d 1096, **; 2007 Ill. LEXIS 1156, ***; 314 Ill. Dec. 809

Insurance Law > Motor Vehicle Insurance > Coverage decisions. Terms of an insurance policy that conflict with > No-Fault Coverage > Personal Injury Protection > a statute are void. Terms of an insurance policy cannot General Overview circumvent the underlying purpose of a statute in force at Insurance Law > Motor Vehicle Insurance > Coverage the time of the policy's issuance. > No-Fault Coverage > Property Damage [HN1] 625 Ill. Comp. Stat. Ann. 5/7-203 (2002) and 625 Ill. Comp. Stat. Ann. 5/7-317(b)(3) (2002) require every Governments > Legislation > Interpretation automobile liability insurance policy issued to provide [HN6] The cardinal rule of statutory construction, and the coverage not less than $ 20,000 for the death or bodily one to which all other cannons and rules must yield, is to injury of any one person, $ 40,000 for the death or bodily ascertain and give effect to the true intent and meaning of injury of two or more persons, and $ 15,000 for property the legislature. The most reliable indicator of legislative damage occurring in any one motor vehicle accident. intent is found in the language of the statute. Statutory language is afforded its plain and ordinary meaning.

Civil Procedure > Summary Judgment > Standards > Genuine Disputes Insurance Law > Motor Vehicle Insurance > Coverage Civil Procedure > Summary Judgment > Standards > > Compulsory Coverage > General Overview Legal Entitlement [HN7] See 625 Ill. Comp. Stat. Ann. 5/7-601(a) (2002). [HN2] Summary judgment is proper where the pleadings, depositions, admissions, and affidavits on file, viewed in Insurance Law > Motor Vehicle Insurance > Coverage the light most favorable to the nonmoving party, reveal > Compulsory Coverage > General Overview that there is no genuine issue as to any material fact and [HN8] 625 Ill. Comp. Stat. Ann. 5/7-203 (2002) requires the moving party is entitled to a judgment as a matter of every liability insurance policy issued to provide law. coverage of not less than $ 20,000 for the death or bodily injury of any one person, $ 40,000 for the death or bodily Civil Procedure > Summary Judgment > Appellate injury of two or more persons, and $ 15,000 for property Review > Standards of Review damage occurring in any one motor vehicle accident. Civil Procedure > Appeals > Standards of Review > De Novo Review Insurance Law > Motor Vehicle Insurance > Coverage [HN3] Whether summary judgment was appropriate is a > Compulsory Coverage > Proof of Financial matter an appellate court reviews de novo. Responsibility Insurance Law > Motor Vehicle Insurance > Vehicle Civil Procedure > Appeals > Standards of Review > De Use > Permissive Users > Implied Permission Novo Review Insurance Law > Motor Vehicle Insurance > Vehicle Insurance Law > Claims & Contracts > Policy Use > Permissive Users > Omnibus Clauses Interpretation > Appellate Review [HN9] Liability insurance required by 625 Ill. Comp. Insurance Law > Claims & Contracts > Policy Stat. Ann. 5/7-601 (2002) must comply with the Interpretation > Questions of Law requirements of the Illinois Safety and Family Financial [HN4] The construction of provisions contained in an Responsibility Law, 625 Ill. Comp. Stat. Ann. insurance policy is a question of law reviewed de novo. 5/7-317(b)(2) (2002). Section 7-317(b)(2) requires an owner's policy of liability insurance to insure the person named therein and any other person using or responsible Contracts Law > Defenses > Public Policy Violations for the use of such motor vehicle or vehicles with the Insurance Law > Claims & Contracts > Policy express or implied permission of the insured. Provisions Interpretation > General Overview which extend liability coverage to permissive users are [HN5] The terms contained in an insurance policy will be referred to as omnibus clauses, and the Supreme Court of applied as written unless those terms are contrary to Illinois holds that such a clause must be read into every public policy. The public policy of the State of Illinois is liability insurance policy. Section 7-317(b)(3) requires reflected in its constitution, statutes, and judicial every owner's policy of liability insurance to insure every Page 3 226 Ill. 2d 395, *; 875 N.E.2d 1096, **; 2007 Ill. LEXIS 1156, ***; 314 Ill. Dec. 809 named insured and any other person using or responsible Civil Procedure > Trials > Jury Trials > Province of for the use of any motor vehicle owned by the named Court & Jury insured and used by such other person with the express or Governments > Legislation > Interpretation implied permission of the named insured to the extent Governments > State & Territorial Governments > and aggregate amount of $ 20,000 for bodily injury to or Legislatures death of one per son as a result of any one accident and, [HN13] The legislature is vested with the power to enact subject to such limit as to one person, the amount of $ the laws and if the legislation as enacted seems to operate 40,000 for bodily injury to or death of all persons as a in certain cases unjustly or inappropriately, the appeal result of any one accident and the amount of $ 15,000 for must be to the Illinois General Assembly, and not to a damage to property of others as a result of any one court. accident. Insurance Law > Motor Vehicle Insurance > Coverage Insurance Law > Motor Vehicle Insurance > Coverage > Compulsory Coverage > General Overview > Compulsory Coverage > Certificates of Insurance Insurance Law > Motor Vehicle Insurance > Vehicle [HN10] See 625 Ill. Comp. Stat. Ann. 5/5-101(b)(6) Use > Permissive Users > Omnibus Clauses (2002). [HN14] 215 Ill. Comp. Stat. Ann. 5/143.13a (2008) mandates that any policy of private passenger automobile insurance must provide the same limits of coverage to all Insurance Law > Motor Vehicle Insurance > Coverage persons insured under that policy, whether or not an > Compulsory Coverage > General Overview insured person is a named insured or permissive user Insurance Law > Motor Vehicle Insurance > Vehicle under the policy. Use > Permissive Users > Omnibus Clauses [HN11] The omnibus clause contained in the Illinois Safety and Family Financial Responsibility Law, 625 Ill. Civil Procedure > Appeals > Appellate Jurisdiction > Comp. Stat. Ann. 5/7-317 (2002), applies throughout the Final Judgment Rule Illinois Code and applies to the mandatory insurance Civil Procedure > Appeals > Appellate Jurisdiction > requirement set forth in 625 Ill. Comp. Stat. Ann. 5/7-601 State Court Review (2002). Pursuant to custom in the insurance industry, [HN15] The jurisdiction of appellate courts is limited to primary liability is generally placed on the insurer of the reviewing appeals from final judgments, subject to owner of an automobile rather than on the insurer of the statutory or supreme court rule exceptions. operator. Civil Procedure > Pleading & Practice > Defenses, Insurance Law > Motor Vehicle Insurance > Coverage Demurrers & Objections > Motions to Dismiss > Compulsory Coverage > General Overview Civil Procedure > Appeals > Appellate Jurisdiction > Insurance Law > Motor Vehicle Insurance > Vehicle Interlocutory Orders Use > Permissive Users > Omnibus Clauses [HN16] A trial court's denial of a motion to dismiss is an [HN12] A plain reading of the Illinois Safety and Family interlocutory order that is not final and appealable. Financial Responsibility Law, 625 Ill. Comp. Stat. Ann. 5/7-203 (2002), and 625 Ill. Comp. Stat. Ann. COUNSEL: For State Farm Mutual Automobile 5/5-101(b)(6) and 5-102(b)(4) (1994), reveals that the Insurance, APPELLANT: Mr. Edward R. Psenicka, Illinois Legislature intends that the amount of liability Momkus McCluskey Monroe Marsh & Spyratos, LLC, insurance which must be carried on a particular Downers Grove, IL. automobile is not determined by the operator of the automobile but, rather, the automobile itself. Therefore, For Illinois Farmers Insurance Company, Mid-Century the amount of liability insurance required by the Illinois Insurance Company, APPELLEES: Mr. Danny L. Code for an automobile should not change according to Worker, Lewis Brisbois Bisgaard & Smith, LLC, the identity of the person who is driving the automobile Chicago, IL; Ms. Lisa M. Taylor, Lewis Brisbois at the time an accident occurs. Bisgaard & Smith LLP, Chicago, IL. Page 4 226 Ill. 2d 395, *; 875 N.E.2d 1096, **; 2007 Ill. LEXIS 1156, ***; 314 Ill. Dec. 809

For Illinois Trial Lawyers Association, AMICUS Responsibility Law (625 ILCS 5/7-203, 7-317(b) (West CURIAE: Mr. Paul G. Krentz, Kinnally, Krentz, Loran, 2002)) when the insured's vehicle is [*399] being Hodge & Herman, P.C., Aurora, IL. operated by a permissive user who is neither a family member residing in the insured's household or a listed For Shelter General Insurance Company, AMICUS driver. Section 7-203 and section 7-317(b)(3) [HN1] CURIAE: Mr. Martin K. Morrissey, Reed, Armstrong, require every liability insurance policy issued to provide Gorman, Mudge & Morrissey, P.C., Edwardsville, IL. coverage not less than $ 20,000 for the death or bodily injury of any one person, $ 40,000 for the death or bodily JUDGES: [***1] JUSTICE KARMEIER delivered the injury of two or more persons, and $ 15,000 for property judgment of the court, with opinion. Chief Justice damage occurring in any one motor vehicle accident. 625 Thomas and Justices Freeman, Fitzgerald, Kilbride, ILCS 5/7-203, 7-317(b)(3) (West 2002). Garman, and Burke concurred in the judgment and opinion. [**1099] Farmers filed a motion to dismiss counts I through IV of State Farm's complaint, arguing [***3] OPINION BY: KARMEIER that the step-down provisions contained in its policies are clear and unambiguous and that the reimbursement OPINION sought by State Farm is an impermissible direct action. In response, State Farm filed a motion for partial summary [*398] [**1098] The issue in this case is whether judgment on counts I through IV, arguing that the the "step-down" provisions, which reduce the policy step-down provisions in Farmers' polices were contrary to limits for permissive users, of several automobile liability Illinois public policy and therefore void and policies issued by Illinois Farmers Insurance Company unenforceable. The trial court denied Farmers' motion to and one of it subsidiaries, Mid-Century Insurance dismiss, granted State Farm's motion for partial summary Company (Farmers), to Illinois policyholders are void judgment as to counts I through IV of the complaint on and unenforceable because they violate Illinois public the public policy issue only, made a written finding there policy. The circuit court of Cook County found the was no just reason to delay the enforcement or appeal or "step-down" provisions were contrary to public policy both of the order granting State Farm's motion for partial and, therefore, void and unenforceable. The appellate summary judgment pursuant to Supreme Court Rule court found the "step-down" provisions are not contrary 304(a) (210 Ill. 2d R. 304(a)), and stayed all proceedings to public policy and reversed the trial court on this issue. pending the resolution of the public policy issue on 368 Ill. App. 3d 914, 858 N.E.2d 519, 306 Ill. Dec. 722. appeal. We granted the petition for leave to appeal by State Farm Mutual Automobile Insurance Company. 210 Ill. 2d R. On appeal, in addition to briefing the public policy 315. For the reasons that follow, the judgment of the issue, Farmers briefed the ambiguity and direct action appellate court is affirmed in part and vacated in part, and issues raised in the trial court in its motion to dismiss. the matter is remanded to the trial court. State Farm moved to strike the ambiguity and direct action issues from Farmer's brief, arguing that the trial BACKGROUND court's Rule 304(a) finding was specifically [***4] limited to the public policy issue. The appellate court State Farm filed its second amended complaint denied State Farm's motion to strike holding that the seeking declaratory, injunctive and monetary [***2] ambiguity and direct action issues were properly before relief from Farmers with respect to the step-down that court. provisions contained in Farmers' automobile liability policies issued to Illinois policyholders. The first four [*400] After the appellate court found Farmers' counts deal with money State Farm spent covering losses step-down provisions are not contrary to Illinois public after Farmers invoked its step-down provisions in four policy and are enforceable, it reversed the trial court's separate and distinct situations, each of which is covered order granting the motion for partial summary judgment in one of the first four counts. Farmers' step-down and remanded the cause for further proceedings. 368 Ill. provisions reduce the policy limits to the minimum App. 3d at 927. Additionally, the appellate court found liability limits required under sections 7-203 and that State Farm's actions against Farmers were not 7-317(b) of the Illinois Safety and Family Financial Page 5 226 Ill. 2d 395, *400; 875 N.E.2d 1096, **1099; 2007 Ill. LEXIS 1156, ***4; 314 Ill. Dec. 809 impermissible direct actions under Illinois law and that Insurance Co. v. Smith, 197 Ill. 2d 369, 372, 757 N.E.2d Farmers' step-down provisions were clear and 881, 259 Ill. Dec. 18 (2001); Cisco, 178 Ill. 2d at 392. unambiguous as a matter of law. 368 Ill. App. 3d at Additionally, terms of an insurance policy cannot 921-22. We granted State Farm's petition for leave to circumvent the underlying purpose of a statute in force at appeal (210 Ill. 2d R. 315). In addition, we allowed the the time of the policy's issuance. State Farm Mutual Illinois Trial Lawyers Association to file an amicus Automobile Insurance Co. v. Smith, 197 Ill. 2d 369, 372, curiae brief in support of State Farm. 757 N.E.2d 881, 259 Ill. Dec. 18 (2001); Cummins v. Country Mutual Insurance Co., 178 Ill. 2d 474, 483, 687 ANALYSIS N.E.2d 1021, 227 Ill. Dec. 539 (1997).

Standard of Review We are guided by established principles of statutory construction in determining whether the legislative [HN2] Summary judgment is proper where the mandates of this state are violated by Farmers' step-down pleadings, depositions, admissions, and affidavits on file, provisions. [HN6] The cardinal rule of statutory viewed in the light most favorable to the nonmoving construction, and the one to which all other cannons and party, reveal that there is no genuine issue as to any rules must yield, is to ascertain and give effect to the true material fact and the moving party is entitled to a intent and meaning of the legislature. Progressive judgment as [***5] a matter of law. Progressive Universal Insurance Co. of Illinois v. Liberty Mutual Fire Universal Insurance Co. of Illinois v. Liberty Mutual Fire Insurance Co., 215 Ill. 2d 121, 134, 828 N.E.2d 1175, Insurance Co., 215 Ill. 2d 121, 127-28, 828 N.E.2d 1175, 293 Ill. Dec. 677 (2005), citing Country Mutual 293 Ill. Dec. 677 (2005). [HN3] Whether summary Insurance Co. v. Teachers Insurance Co., 195 Ill. 2d 322, judgment was appropriate is a matter we review de novo. 330, 746 N.E.2d 725, 253 Ill. Dec. 904 (2001). The most General Casualty Insurance Co. v. Lacey, 199 Ill. 2d 281, reliable indicator of legislative intent is found in the 284, 769 N.E.2d 18, 263 Ill. Dec. 816 (2002). In addition, language of the statute. Midstate Siding & Window Co. v. [HN4] the construction of provisions contained in an Rogers, 204 Ill. 2d 314, 320, 789 N.E.2d 1248, 273 Ill. insurance policy is a question of law reviewed de novo. Dec. 816 (2003), [***7] citing Michigan Avenue Travelers Insurance Co. v. Eljer Manufacturing, Inc., 197 National Bank v. County of Cook, 191 Ill. 2d 493, 504, Ill. 2d 278, 292, 757 N.E.2d 481, 258 Ill. Dec. 792 732 N.E.2d 528, 247 Ill. Dec. 473 (2000). Statutory (2001), citing American States Insurance Co. v. Koloms, language is afforded its plain and ordinary meaning. 177 Ill. 2d 473, 479-80, 687 N.E.2d 72, 227 Ill. Dec. 149 Midstate Siding & Window Co., 204 Ill. 2d at 320, citing (1997). Michigan Avenue National Bank, 191 Ill. 2d at 504.

Public Policy [*402] With these principles in mind, we now turn State Farm argues that the step-down provisions to the statutory pronouncements of our legislature. contained in Farmer's policies violate Illinois' public Section 7-601(a) of the Illinois Safety and Family policy and are therefore void and unenforceable. [HN5] Financial Responsibility Law, in pertinent part, provides: The [*401] terms contained in an insurance policy will [**1100] be applied as written unless those terms are "[HN7] No person shall operate, register contrary to public policy. Illinois Farmers Insurance Co. or maintain registration of, and no owner v. Cisco, 178 Ill. 2d 386, 392, 687 N.E.2d 807, 227 Ill. shall permit another person to operate, Dec. 325 (1997); Menke v. Country Mutual Insurance register, or maintain registration of, a Co., 78 Ill. 2d 420, 423, 401 N.E.2d 539, 36 Ill. Dec. 698 motor vehicle designed to be used on a (1980). The public policy of this state is reflected in its public highway unless the motor vehicle is constitution, statutes, and judicial decisions. O'Hara v. covered by a liability insurance policy. Ahlgren, Blumenfeld & Kempster, 127 Ill. 2d 333, 341, The insurance policy shall be issued 537 N.E.2d 730, 130 Ill. Dec. 401 (1989); McClure in amounts no less than the minimum Engineering Associates, Inc. v. Reuben H. Donnelley amounts set for bodily injury or death and Corp., 95 Ill. 2d 68, 72, 447 N.E.2d 400, 69 Ill. Dec. 183 for destruction of property under Section (1983). [***6] Terms of an insurance policy that conflict 7-203 of this Code, and shall be issued in with a statute are void. State Farm Mutual Automobile Page 6 226 Ill. 2d 395, *402; 875 N.E.2d 1096, **1100; 2007 Ill. LEXIS 1156, ***7; 314 Ill. Dec. 809

accordance with the requirements of section 7-203 must provide the same level of coverage to Sections 143a and 143a-2 of the Illinois permissive users. Contrast this with section 143a-2(4) of Insurance Code, as amended." 625 ILCS the Illinois Insurance Code, incorporated into section 5/7-601(a) (West 2002). 7-601(a) of the Illinois Safety and Family Financial Responsibility Law by reference, which prohibits the Section 7-203 [HN8] requires every liability insurance issuance of a liability insurance policy issued on or after policy issued to provide coverage of not less than $ July 1, 1983, "unless [***10] underinsured motorist 20,000 for the death [***8] or bodily injury of any one coverage is included in such policy in an amount equal to person, $ 40,000 for the death or bodily injury of two or the total amount of uninsured motorist coverage in that more persons, and $ 15,000 for property damage policy where such uninsured motorist coverage exceeds occurring in any one motor vehicle accident. 625 ILCS the limits set forth in Section 7-203 of the Illinois Vehicle 5/7-203 (West 2002). Code." 215 ILCS 5/143a-2(4) (West 2002). The language contained in section 143a-2(4) of the Illinois Insurance In addition, [HN9] liability insurance required by Code shows that when the legislature intends different section 7-601 must comply with the requirements of types of coverage in excess of the minimum statutory section 7-317(b)(2) of [**1101] the Illinois Safety and requirements mandated by section 7-203 of the Illinois Family Financial Responsibility Law (625 ILCS Safety and Family Financial Responsibility Law to be the 5/7-317(b)(2) (West 2002)). Section 7-317(b)(2) requires same, it chooses plain, unambiguous language to indicate an owner's policy of liability insurance to insure the its intent. person named therein and any other person using or responsible for the use of such motor vehicle or vehicles [*404] Previously, this court has held that the with the express or implied permission of the insured. principal purpose behind Illinois' mandatory liability 625 ILCS 5/7-317(b)(2) (West 2002). Provisions which insurance requirement and its omnibus provision "is to extend liability coverage to permissive users are referred protect the public by securing payment of their damages." to as "omnibus clauses" (Progressive Universal Progressive Universal Insurance Co. of Illinois v. Liberty Insurance Co. of Illinois, 215 Ill. 2d at 128), and our Mutual Fire Insurance Co., 215 Ill. 2d 121, 129, 828 court has held that such a clause must be read into every N.E.2d 1175, 293 Ill. Dec. 677 (2005); State Farm liability insurance policy (State Farm Mutual Automobile Mutual Automobile Insurance Co. v. Smith, 197 Ill. 2d Insurance Co. v. Universal Underwriters Group, 182 Ill. 369, 376, 757 N.E.2d 881, 259 Ill. Dec. 18 (2001). 2d 240, 243-44, 695 N.E.2d 848, 231 Ill. Dec. 75 (1998)). Sections 7-203 and 7-317(b)(3) of the Illinois Safety and Family Financial Responsibility Law mandate that [*403] Section 7-317(b)(3) of the Illinois Safety and liability insurance policies provide [***11] $ 20,000/$ Family Financial Responsibility Law requires every 40,000/$ 15,000 coverage for the named insured and owner's policy of liability [***9] insurance to "insure permissive users of the named insured's vehicle. By every named insured and any other person using or setting the minimum coverage limits at $ 20,000/$ responsible for the use of any motor vehicle owned by the 40,000/$ 15,000, we assume that the legislature has named insured and used by such other person with the decided that this amount of coverage is sufficient to express or implied permission of the named insured *** protect members of the public and secure [**1102] to the extent and aggregate amount of $ 20,000 for bodily payment for damages they may sustain. injury to or death of one per son as a result of any one accident and, subject to such limit as to one person, the Because we find nothing in the statutory amount of $ 40,000 for bodily injury to or death of all pronouncements of our legislature prohibiting Farmers' persons as a result of any one accident and the amount of step-downs and because Farmers' policies provide $ 15,000 for damage to property of others as a result of coverage to the named insured and permissive users of any one accident. 625 ILCS 5/7-317(b)(3) (West 2002). the named insured's vehicle in an amount determined by the legislature to be sufficient to accomplish the principal We find nothing in the foregoing statutory language purpose behind Illinois' mandatory liability insurance to support State Farm's contention that a liability requirements and its omnibus provisions, we cannot say insurance policy providing the named insured with that the policies issued by Farmers in this case are coverage in excess of the statutory minimum required by contrary to the statutory pronouncements of our Page 7 226 Ill. 2d 395, *404; 875 N.E.2d 1096, **1102; 2007 Ill. LEXIS 1156, ***11; 314 Ill. Dec. 809 legislature or the underlying purpose of the Illinois Safety expressed in section 7-317(b)(2) because "a provision and Family Financial Responsibility Law. written into an insurance policy that excludes coverage for persons [*406] engaged in an automobile business State Farm argues, nevertheless, that the public necessarily excludes coverage for persons who are using policy considerations underlying Illinois' mandatory an insured's vehicle with the insured's express or implied insurance laws as construed in our decisions in State permission." Smith, 197 Ill. 2d at 374. Farm Mutual Insurance Co. v. Smith, 197 Ill. 2d 369, 757 N.E.2d 881, 259 Ill. Dec. 18 (2001), Progressive In Progressive, Shirley Abbinante owned a vehicle Universal Insurance Co. of Illinois v. Liberty Mutual Fire insured under a policy [**1103] issued by Progressive. Insurance Co., 215 Ill. 2d 121, 828 N.E.2d 1175, 293 Ill. Abbinante allowed her son, Ronald, to use the insured Dec. 677 (2005), [***12] and State Farm Mutual vehicle to deliver pizzas for his employer. Ronald was Automobile Insurance Co. v. [*405] Universal compensated by [***14] a flat fee for each pizza he Underwriters Group, 182 Ill. 2d 240, 695 N.E.2d 848, delivered. During one of his deliveries, Ronald struck a 231 Ill. Dec. 75 (1998), along with the appellate court pedestrian, Lavit, who sustained severe injuries as a result decisions in John Deere Insurance Co. v. Allstate of the accident. Progressive, 215 Ill. 2d at 124. Insurance Co., 298 Ill. App. 3d 371, 698 N.E.2d 635, 232 Progressive's policy contained a "food delivery Ill. Dec. 544 (1998), Fuller v. Snyder, 323 Ill. App. 3d exclusion." The exclusion stated that coverage under the 303, 752 N.E.2d 1212, 257 Ill. Dec. 32 (2001), and policy did not apply to bodily injury or property damage Browning v. Plumlee, 316 Ill. App. 3d 738, 737 N.E.2d while an insured vehicle was "'being used to carry 320, 249 Ill. Dec. 930 (2000), prohibit Farmers' persons or property for compensation or a fee, including, step-down provisions. We disagree. but not limited to, delivery of *** food, or any other products.'" Progressive, 215 Ill. 2d at 125. In Smith and Progressive this court was called upon to determine whether complete exclusions from liability We upheld the "food delivery exclusion" against insurance policies violated Illinois public policy. In attack that it violated public policy (Progressive, 215 Ill. Smith, Maurice Barnes, accompanied by Smith, drove to 2d at 134) and stated: "Because the requirement to Harrah's Casino, where he allowed Harrah's valet service maintain liability insurance is statutory in origin, any to park his vehicle. When Barnes and Smith left Harrah's, restrictions on the insurance required to comply with the Fisher, a valet driver employed by Harrah's, retrieved law must also emanate from our statutes." Progressive, Barnes' vehicle. As Smith entered the passenger door, 215 Ill. 2d at 136. We said that the legislature could Barnes' vehicle rolled backwards, striking Smith, which easily have prohibited insurers from excluding certain knocked her to the ground causing her injury. Smith, 197 risks in liability insurance policies but it chose not to do Ill. 2d at 371. At the time of the accident, Barnes' vehicle so. Progressive, 215 Ill. 2d at 138. Smith was was insured under a policy issued by State Farm. State distinguished because the exclusion at issue in Smith only Farm's policy contained a "car business exclusion excluded permissive users [***15] while engaged in a clause." The exclusion read: "'THERE IS NO car business but the named insured was free to engage in COVERAGE: 1. WHILE ANY VEHICLE INSURED a car business without compromising his liability UNDER THIS SECTION [***13] IS: *** b. BEING coverage. Progressive, 215 Ill. 2d at 133. We believe REPAIRED, SERVICED OR USED BY ANY PERSON Smith and Progressive are inapplicable to the facts in this EMPLOYED OR ENGAGED IN ANY WAY IN A CAR case. Those cases dealt with equal treatment with regard BUSINESS.'" (Emphasis in original.) Smith, 197 Ill. 2d to coverage for owners [*407] and permissive drivers, at 372-73. State Farm defined car business as "'a business not liability limits. Here the disputed issue is whether the or job where the purpose is to sell, lease, repair, service, limits of coverage provided to a permissive user must be transport, store or park land motor vehicles or trailers.' the same as the limits of coverage provided to the owner "Smith, 197 Ill. 2d at 373. We held that when a vehicle's of the vehicle. "owner gives his vehicle to a person engaged in an automobile business ***, the owner is giving that person The remaining cases cited by State Farm involve express or implied permission to use the vehicle." Smith, interpretations of the car dealer licensing provisions of 197 Ill. 2d at 374. We went on to say that State Farm's the Motor Vehicle Code (625 ILCS 5/5-100 et seq. (West car business exclusion violated Illinois public policy as 2002)). Section 5-101(b)(6) of the Code provides: Page 8 226 Ill. 2d 395, *407; 875 N.E.2d 1096, **1103; 2007 Ill. LEXIS 1156, ***15; 314 Ill. Dec. 809

requirement set forth in section 7-601. State Farm, 182 "[HN10] A Certificate of Insurance *** Ill. 2d at 244-45. Therefore Luckhart, a permissive user, shall be included with each application was required by law to be an insured under Universal's ***. The policy must provide liability policy. State Farm, 182 Ill. 2d at 245. Universal also coverage in the minimum amounts of $ argued that to the extent that its policy covered Luckhart, 100,000 for bodily injury to, or death of, the policy only provided excess coverage after other any person, $ 300,000 for bodily injury to, insurance covering Luckhart was exhausted. We stated or death of, two or more persons in any that "pursuant to custom in the insurance industry, one accident, and $ 50,000 for damage to primary liability is generally placed on the insurer of the property." 625 ILCS 5/5-101(b)(6) (West owner of an automobile rather than on the insurer of the 2002). operator." State Farm, 182 Ill. 2d at 246.

Section 5-102(b)(4) provides an identical licensing In State Farm we were not called upon to determine requirement for dealers of used automobiles. [***16] what level of omnibus coverage [***18] was required to 625 ILCS 5/5-102(b)(4) (West 2002). be provided to permissive users of a car dealer's automobile. The damages in that case totaled $ 9,092.15. In State Farm Mutual Automobile Insurance Co. v. Therefore, whether the permissive user of a car dealer's Universal Underwriters Group, 182 Ill. 2d 240, 695 automobile was required to be insured at $ 20,000/$ N.E.2d 848, 231 Ill. Dec. 75 (1998), the question before 40,000/$ 15,000 under the Illinois Safety and Family this court was "whether a car dealer's garage policy Financial Responsibility Law or $ 100,000/$ 300,000/$ covers the liability of a separately insured customer who 50,000 under the car dealer licensing provisions of the is involved in an accident while test-driving one of the Code, the car dealer's insurer was primarily liable for the dealer's vehicles." State Farm, 182 Ill. 2d at 241. Joyce entire amount of damages. State Farm argues that this Pontiac, a car dealer, allowed Luckhart to test-drive one question, left unresolved in State Farm, was answered in of its vehicles. During this test-drive, Luckhart the appellate [*409] court decisions of John Deere negligently collided with another vehicle owned by Insurance Co. v. Allstate Insurance Co., 298 Ill. App. 3d Carter and operated by Calinee, both of whom sustained 371, 698 N.E.2d 635, 232 Ill. Dec. 544 (1998), Browning personal injury as a result of the collision. Joyce Pontiac v. Plumlee, 316 Ill. App. 3d 738, 737 N.E.2d 320, 249 Ill. was insured under a garage policy issued by Universal. Dec. 930 (2000), and Fuller v. Snyder, 323 Ill. App. 3d Luckhart was insured under a policy issued by State 303, 752 N.E.2d 1212, 257 Ill. Dec. 32 (2001). Farm, which paid a total of $ 9,092.15 to Carter and Additionally, State Farm contends that John Deere, Calinee for personal [**1104] injuries and property Browning, and Fuller all rejected attempts made by damage they sustained in the collision. State Farm, 182 insurers to step-down coverage in car-dealership cases Ill. 2d at 241. Thereafter, State Farm sought and that Farmers' attempt to step-down coverage should reimbursement from Universal, alleging that Universal's therefore be rejected here. policy afforded primary coverage to Luckhart while test-driving [*408] Joyce Pontiac's vehicle. Under the In John Deere, Rock River Ford (Rock River) terms of the garage policy issued to Joyce, Universal allowed Thomas to test-drive one of its vehicles. During agreed to provide coverage to [***17] any person the test drive, Thomas struck and injured a pedestrian "'required by law to be an INSURED'" while using a named Gossett. John Deere, 298 Ill. App. 3d at 373. covered automobile within the scope of Joyce's [***19] Thomas was insured under a liability insurance permission. State Farm, 182 Ill. 2d at 242. Universal policy issued by Allstate, which provided excess argued that a test-driver was only "required by law" to be coverage in the amount of $ 50,000 per person and $ insured if the test-driver did not have a liability insurance 100,000 per occurrence when a nonowned vehicle was policy. State Farm, 182 Ill. 2d at 243. being operated by one of its insured. John Deere, 298 Ill. App. 3d at 374. Rock River was insured under a garage We held that [HN11] the omnibus clause contained policy issued by John Deere in the amount of $ 500,000. in section 7-317 of the Illinois Safety and Family John Deere, 298 Ill. App. 3d at 373. Under the terms of Financial Responsibility Law applies throughout the its policy, John Deere attempted to exclude liability Code and thus applies to the mandatory insurance coverage afforded to [**1105] Rock River's customers Page 9 226 Ill. 2d 395, *409; 875 N.E.2d 1096, **1105; 2007 Ill. LEXIS 1156, ***19; 314 Ill. Dec. 809 unless (1) the customer had no other available insurance enactment of the New and Used Car (whether primary, excess, or contingent), in which case Dealers Licensing Acts ***, because such the customer would be insured but only up to the a holding would illogically mandate a compulsory or financial responsibility law limits where higher limit of liability coverage when an the covered "auto" is principally garaged, or (2) the automobile dealership's employee is customer had other available insurance (whether primary, driving the insured automobile as an agent excess, or contingent) in an amount less than the of the dealership, yet would not apply to compulsory or financial responsibility law limits where the customer of the dealership the covered "auto" is principally garaged, in which case permissively test driving the same the customer would be insured only up to the amount by automobile." (Emphases in original.) John which the compulsory or financial responsibility law Deere, 298 Ill. App. 3d at 377-78. limits exceeded the limits of their other insurance. John Deere, 298 Ill. App. 3d at 373-74. [***20] John Deere The appellate court held that John Deere's liability under supplied the Illinois Secretary of State with a certificate the garage policy issued to Rock River was at least $ of insurance on behalf of Rock River, which [*410] 100,000/$ 300,000/$ 50,000. However, the court indicated that Rock River's policy limits were set at $ determined [*411] that John Deere could not limit its 500,000. John Deere, 298 Ill. App. 3d at 373. On appeal, liability to this amount because it had specifically John Deere conceded that our decision in State Farm represented in its certificate of insurance filed with the required it to provide primary liability insurance to Secretary of State that it insured Rock River under a permissive users, such as Thomas, under the garage garage policy which provided $ 500,000 [***22] in policy issued to Rock River. Therefore, the appellate coverage and therefore John Deere was bound by its $ court was called upon only to decide what amount of 500,000 policy limits as certified to the Secretary of coverage was required by the Code. John Deere, 298 Ill. State. John Deere, 298 Ill. App. 3d at 379. App. 3d at 375. In Browning, Weeks Pontiac-Chevrolet (Weeks) The appellate court cited section 7-203 of the Illinois allowed a customer named Plumlee to test-drive one of Safety and Family Financial Responsibility Law, which its vehicles. During the test-drive Plumlee collided with a requires minimum limits of liability insurance for an vehicle driven by Browning. Plumlee was insured under a automobile in the amount of $ 20,000/$ 40,000/$ 15,000 policy issued by State [**1106] Farm. Weeks was (625 ILCS 5/7-203 (West 1994)) and sections 5-101(b)(6) insured under a garage policy issued by Universal and 5-102(b)(4) (625 ILCS 5/5-101(b)(6), 5-102(b)(4) Underwriters (Universal) in the amount of $ 500,000. (West 1994)) from the Code which requires minimum Browning, 316 Ill. App. 3d at 739. Under the terms of the limits of liability insurance of $ 100,000/$ 300,000/$ garage policy issued to Weeks, Universal attempted to 50,000. The court then stated: reduce the liability limits available to permissive users to the "limit needed to comply with the minimum limits "[HN12] A plain reading of these Code provision law." Additionally, Universal attempted to sections reveals that the legislature provide only excess coverage in the event that a intended that the amount of liability permissive user was insured under another insurance insurance which must be carried on a policy. Browning, 316 Ill. App. 3d at 741. particular automobile is not determined [***21] by the operator of the automobile The appellate court first held that our decision in but, rather, the automobile itself. State Farm and its decision in Madison Mutual Insurance Therefore, the amount of liability Co. v. Universal Underwriters Group, 251 Ill. App. 3d insurance required by the Code for an 13, 621 N.E.2d 270, 190 Ill. Dec. 401 (1993), required automobile should not change according Universal to provide primary coverage to permissive to the identity of the person who is driving users under the policy issued to Weeks. [***23] the automobile at the time an accident Browning, 316 Ill. App. 3d at 743. Next, the court occurs. [Citations.] To hold otherwise determined that Universal was required to provide would defeat the public policy permissive users under the garage policy issued to Weeks considerations that motivated the with coverage in the amount of $ 500,000 (Browning, Page 10 226 Ill. 2d 395, *411; 875 N.E.2d 1096, **1106; 2007 Ill. LEXIS 1156, ***23; 314 Ill. Dec. 809

316 Ill. App. 3d at 745) and stated that it was relying on that the car dealer provisions involved in John Deere, the reasoning supplied by the court in John Deere, 298 Browning and Fuller are irrelevant. In our discussion of Ill. App. 3d 371, 698 N.E.2d 635, 232 Ill. Dec. 544, to John Deere earlier in this opinion, we quoted at length resolve the issue of what level of omnibus coverage is from that opinion and mention here only this quote: "To required (Browning, 316 Ill. App. 3d at 744-45). hold otherwise would defeat the public policy considerations that motivated the enactment of the New [*412] In Fuller, Hurley Dodge (Hurley) was and Used Car Dealers Licensing Acts ***, because such a repairing a vehicle owned by a customer named Snyder. holding would illogically mandate a higher limit of Snyder was using Hurley's loaner vehicle when he liability coverage when an automobile dealership's collided with a vehicle being driven by Fuller. Snyder employee is driving the insured automobile as an agent of was insured under a liability policy issued by Allstate the dealership, yet would not apply to the customer of the with coverage in the amount of $ 100,000/$ 300,000/$ dealership permissively test driving the same 50,000. Hurley was insured under a garage policy issued automobile." (Emphases in original.) John Deere, 298 Ill. by Universal Underwriters (Universal) in the amount of $ App. 3d at 377-78. The Fuller court stated: "Sections 500,000. Fuller, 323 Ill. App. 3d at 305. Under the terms 5-101(b)(6) and 5-102(b)(4) should control the issue of of the garage policy issued to Hurley, Universal minimum policy limits because those sections are more attempted to reduce the liability limits available to specifically applicable to car dealerships [***26] than permissive users to the "'limit needed to comply with the section 7-601." Fuller, 323 Ill. App. 3d at 308-09. minimum limits provision law.'" (Emphasis omitted.) Contrary to State Farms' contention, we believe that John Fuller, 323 Ill. App. 3d at 305-06. Additionally, Deere, Browning and Fuller are all based in large part on Universal attempted [***24] to provide only excess the car dealer provisions, which are not involved in this coverage in the event that a permissive user was insured case. under another insurance policy. Fuller, 323 Ill. App. 3d at 306. The appellate court, relying on our decision in For the foregoing reason, we hold that neither the Smith, held that Universal's attempt to provide only statutory pronouncements of our legislature nor the excess liability insurance to permissive users insured Illinois decisions relied upon by State Farm prohibit the under another insurance policy was contrary to public step-down provisions in Farmers' policies. State Farm policy and therefore unenforceable. Fuller, 323 Ill. App. also argues, however, that Farmers' step-downs adversely 3d at 307. Next, the appellate court held that Universal affect the overwhelming majority of Illinois residents and was required to provide Snyder with omnibus coverage in are contrary to public policy. [HN13] The legislature is the amount of $ 100,000/$ 300,000/$ 50,000 relying on vested with the power to enact the laws and if the John Deere, 298 Ill. App. 3d at 377-378. The court also legislation as enacted "seems to operate in certain cases found that sections 5-101(b)(6) and 5-102(b)(4) of the unjustly or [*414] inappropriately, the appeal must be to Code were specifically applicable to car dealerships and the General Assembly, and not to the court." People v. should control the issue of minimum policy limits. Garner, 147 Ill. 2d 467, 476, 590 N.E.2d 470, 168 Ill. Fuller, 323 Ill. App. 3d at 308-09. The dissent pointed Dec. 833 (1992). We note that the General Assembly out that the Code did not contain an omnibus provision recently passed Senate Bill 1208, which deals with the and that the omnibus provision contained in section insurance issue involved in this case. The Governor 7-317, which applies throughout the Code, only requires signed the bill into law as Public Act 95-395, with an coverage to be provided in the amount of $ 20,000/$ effective date of January 1, 2008. This Act, which creates 40,000/$ 15,000. Fuller, 323 Ill. App. 3d at 309 (Cook, J., new [HN14] section 143.13a of the Illinois Insurance dissenting). Code (215 ILCS 5/143.13a), now [***27] mandates that "any policy of private passenger automobile insurance State Farm argues that it was not the car dealer must provide the same limits of *** coverage to all [*413] provisions that [***25] persuaded the appellate persons insured under that policy, whether or not an court in John Deere to hold that the insurer of the car insured person is a named insured or permissive user dealer was obligated [**1107] to provide the full policy under the policy." As we observed earlier in this opinion, limits to permissive users. It argues that the primary when the legislature intends different types of coverage in holding of John Deere is that liability limits follow the excess of the minimum statutory requirements mandated vehicle and cannot be changed based on the operator and by section 7-203 of the Illinois Safety and Family Page 11 226 Ill. 2d 395, *414; 875 N.E.2d 1096, **1107; 2007 Ill. LEXIS 1156, ***27; 314 Ill. Dec. 809

Financial Responsibility Law to be the same, it chooses which were briefed and argued "on summary judgment." plain, unambiguous language to indicate its intent. It has It is well established that [HN15] the jurisdiction of now done so, effective January 1, 2008. appellate courts is limited to reviewing appeals from final judgments, subject to statutory or supreme court rule Ambiguity and Direct Action exceptions (In re Marriage of Verdung, 126 Ill. 2d 542, 553, 535 N.E.2d 818, 129 Ill. Dec. 53 (1989)), none of As noted earlier, Farmers filed a motion to dismiss which are present in this case. It is also well settled in this State Farm's complaint, arguing that the step-down state that [HN16] a trial court's denial of a motion to provisions contained in its policies are clear and dismiss is an interlocutory order that is not final and unambiguous and that the reimbursement sought by State appealable. Chicago Housing Authority v. Abrams, 409 Farm is an impermissible direct action. The trial court Ill. 226, 229, 99 N.E.2d 129 (1951). Because the denied Farmers' motion to dismiss. On appeal, State Farm appellate court lacked jurisdiction to review the moved to strike the ambiguity and direct action issues ambiguity and direct action issues, those potion's of the from Farmers' brief. The appellate court denied State appellate court's decision are vacated. Farm's motion to strike, holding that the ambiguity and direct action issues were properly before that court and it CONCLUSION decided these issues. For the reasons set forth above, the judgment of the [**1108] State [***28] Farm argues that the trial appellate court is affirmed in part and vacated in part, and court's Rule 304(a) (210 Ill. 2d R. 304(a)) finding in its the matter is remanded [***29] to trial court for order granting State Farm's motion for partial summary proceedings consistent with this opinion. judgment was limited to the public policy issue and therefore the appellate [*415] court lacked jurisdiction Affirmed in part and vacated in part; cause to rule on the ambiguity and direct action issues. Farmers remanded. argues that this court should not disregard these issues,