EDWARD LUCERO, JR., and ELAINE LUCERO, Plaintiffs-Respondents, v. NORTHLAND INSURANCE COMPANY, Defendant-Petitioner.

 

NO. 34,607

 

SUPREME COURT OF NEW MEXICO

 

2015 N.M. LEXIS 100

 

 

March 26, 2015, Filed

 

 

NOTICE:

THIS SLIP OPINION IS SUBJECT TO FORMAL REVISION UPON RELEASE OF THE FINAL VERSION.

 

PRIOR HISTORY:     [*1] ORIGINAL PROCEEDING ON CERTIORARI. Louis E. Depauli, Jr., District Judge.

 

COUNSEL: Montgomery & Andrews, P.A., Kevin M. Sexton, Andrew S. Montgomery, Santa Fe, NM, for Petitioner.

 

O’Connell Law, L.L.C., Erin B. O’Connell, Albuquerque, NM; Law Offices of Geoffrey R. Romero, Geoffrey R. Romero, Albuquerque, NM; The Vargas Law Firm, L.L.C., Ray M. Vargas, II, Albuquerque, NM, for Respondents.

 

Butt, Thornton & Baehr, P.C., Paul Trafton Yarbrough, Jane A. Laflin, Albuquerque, NM; Rodey, Dickason, Sloan, Akin & Robb, P.A., Thomas A. Outler, Seth L. Sparks, Albuquerque, NM; Civerolo, Gralow, Hill & Curtis, P.A., Lance Dean Richards, Albuquerque, NM, for Amici Curiae American Trucking Associations, Inc., Trucking Industry Defense Association and New Mexico Trucking Association.

 

JUDGES: BOSSON, Justice. WE CONCUR: BARBARA J. VIGIL, Chief Justice, PETRA JIMENEZ MAES, Justice, EDWARD L. CHÁVEZ, Justice, JERRY H. RITTER, Judge.

 

OPINION BY: RICHARD C. BOSSON

 

OPINION

BOSSON, Justice.

A trucking company purchased a liability insurance policy covering each of its several tractors and trailers. The policy stipulated that liability coverage would be limited to “$1,000,000 each ‘accident.'” A tractor-trailer rig insured under the policy was involved [*2]  in a single accident. The question before us is whether $1,000,000 is the limit per accident for both vehicles (the tractor and the trailer) or whether each vehicle has liability coverage in the amount of $1,000,000. The district court interpreted the policy to limit its coverage to $1,000,000; our Court of Appeals disagreed and reversed. Because this dispute affects not only the parties to this lawsuit but arguably New Mexico’s place among the many jurisdictions that have grappled with similar policy language, we granted certiorari and now reverse the Court of Appeals.

 

BACKGROUND

The facts in this case are undisputed. The Luceros were severely injured when their vehicle was hit by a tractor-trailer negligently driven by an employee of H & J Hamilton Trucking Company, insured by Defendant Northland Insurance Company. Northland defended Hamilton in the ensuing lawsuit. Eventually, Northland stipulated to liability, and the Luceros agreed to dismiss all claims against Northland and its insured in exchange for a settlement in the amount of policy limits.

The parties disagreed, however, as to the policy limits. Before the district court, the parties filed cross-motions for summary judgment [*3]  seeking to answer this question. Northland maintained that its insurance policy limits liability to $1,000,000 for each accident, an amount it tendered to the Luceros. The Luceros, on the other hand, interpreted the policy as providing $1,000,000 for each covered auto. Hamilton’s tractor and trailer are both covered autos under the policy, so the Luceros sought $1,000,000 for each, or $2,000,000 for both. The district court agreed with Northland’s reading of the insurance policy and granted summary judgment for $1,000,000. The Court of Appeals reversed, agreeing with the Luceros. See Lucero v. Northland Ins. Co., 2014-NMCA-055, ¶¶ 1, 27, 326 P.3d 42.

 

DISCUSSION

Because the insurance policy before us involves liability coverage, we interpret the policy “in accordance with the same principles which govern the interpretation of all contracts.” Ponder v. State Farm Mut. Auto. Ins. Co., 2000-NMSC-033, ¶ 11, 129 N.M. 698, 12 P.3d 960 (internal quotation marks and citation omitted). Our primary goal is to determine “the intentions of the contracting parties . . . at the time they executed the [policy].” Id. “When discerning the purpose, meaning, and intent of the parties to a contract, the court’s duty is confined to interpreting the contract that the parties made for themselves, and absent any ambiguity, the court may not alter or fabricate [*4]  a new agreement for the parties.” CC Hous. Corp. v. Ryder Truck Rental, Inc., 1987-NMSC-117, ¶ 6, 106 N.M. 577, 746 P.2d 1109. “Thus, when the policy language is clear and unambiguous, we must give effect to the contract and enforce it as written.” Ponder, 2000-NMSC-033, ¶11.

 

The Insurance Policy

Three sections of the policy before us are particularly relevant in resolving this case: Declarations Item Two, “Schedule of Coverages and Covered Autos,” Section II(A), “Liability Coverage,” and Section II(C), “Limit of Insurance.” We look first to the Declarations page, Item Two, entitled “Schedule of Coverages and Covered Autos,” which we insert from the original.

 

We note particularly the language stating: “This policy provides only those coverages where a charge is shown in the premium column below. Each of these coverages will apply only to those ‘autos’ shown as Covered ‘Autos.'” As noted above, the Declarations page then provides, and sets forth separate premiums for, various kinds of coverages including the liability coverage for bodily injury and property damage at issue in this lawsuit. “Covered Auto” is a defined term in the policy that refers in a separate page to Hamilton’s five tractors and six trailers, including both the tractor and the trailer involved in this accident. Accordingly, Northland [*5]  is clearly liable for the negligence of its insured up to any limits of liability the policy declares. As is evident from the quoted portion of the Declarations page, the policy limits liability coverage to a maximum of “$1,000,000 each ‘accident.'”

Moving beyond the Declarations page to the main body of the policy, the next significant provision, Section II(A) “Liability Coverage,” reads as follows:

 

We will pay all sums an “insured” legally must 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”.

We will also pay all sums an “insured” legally must pay as a “covered pollution cost or expense” to which this insurance applies, caused by an “accident” and resulting from the ownership, maintenance or use of covered “autos” However, we will only pay for the “covered pollution cost or expense” if there is either “bodily injury” or “property damage” to which this insurance applies that is caused by the same “accident”.

We have the right and duty to defend any “insured” against a “suit” asking for such damages or a “covered pollution cost or expense”. However, [*6]  we have no duty to defend any “insured” against a “suit” seeking damages for “bodily injury” or “property damage” or a “covered pollution cost or expense” to which this insurance does not apply. We may investigate and settle any claim or “suit” as we consider appropriate. Our duty to defend or settle ends when the Liability Coverage Limit of Insurance has been exhausted by payment of judgments or settlements.

 

 

The third relevant policy provision, Section II(C) entitled “Limit of Insurance,” then proceeds to define the limit on liability coverage:

 

Regardless of the number of covered “autos”, “insureds”, premiums paid, claims made or vehicles involved in the “accident”, the most we will pay for the total of all damages and “covered pollution cost or expense” combined, resulting from any one “accident” is the Limit of Insurance for Liability Coverage shown in the Declarations.

 

 

Reading the three provisions together, we see that Northland’s promise in Section II (A) to “pay all sums an ‘insured’ legally must pay as damages . . . caused by an ‘accident’ and resulting from the . . . use of a covered ‘auto’,” is limited by Section II(C), “the most we will pay for . . . all damages . . . resulting [*7]  from any one ‘accident.'” That limit is “$1,000,000 each ‘accident'” as stated on the Declarations page.

The Luceros read the policy as promising something different. They argue that the policy provides $1,000,000 in liability coverage for each “covered auto” involved in any one accident. Because two “covered autos” were involved in this accident (the tractor and the trailer) and because each “covered auto” carries $1,000,000 in liability coverage, the Luceros contend that the policy limits in this case are $2,000,000, not $1,000,000. The Court of Appeals agreed with the Luceros’ position. See Lucero, 2014-NMCA-055, ¶ 13 (“Defendant is obligated to provide $1 million in coverage for the tractor involved in the accident and $1 million in coverage for the trailer involved in the same accident, for a total of $2 million in coverage.”).

As authority for their conclusion, the Luceros look first to the Declarations page Schedule of Coverages, previously quoted, which states in part that “[e]ach of these coverages will apply only to those ‘autos’ shown as Covered ‘Autos.'” The Luceros read this as a grant of coverage up to the policy limits of $1,000,000 for each covered auto involved in any accident, including this situation [*8]  involving two covered autos in one accident. We question whether the policy really grants such expansive coverage.

First, the policy simply does not say that it grants coverage in the amount of policy limits for each covered auto, each accident. The language does not read, “each of these coverages will apply to [each of] those autos shown . . . .” The language states instead that “[e]ach of these coverages will apply only to those ‘autos’ shown . . . .” It is as if the Luceros would read the word “only” out of the sentence. Textually, the provision is phrased not as a grant but as a limitation: “only” those autos shown on the list of covered autos are eligible for $1,000,000 of liability coverage. There is a critical distinction between a grant of coverage and “the amount of such coverage.” See Vigil v. California Cas. Ins. Co., 1991-NMSC-050, ¶¶ 7-8, 112 N.M. 67, 811 P.2d 565 (emphasis added). Plainly, the Declarations page makes liability coverage available for each of the covered autos, but it does not grant policy limits for each covered auto.

The Declarations page then stipulates that its limit of liability is “$1,000,000 each ‘accident.'” Clearly then, liability coverage is not boundless; the policy does not say “$1,000,000 each covered auto each accident.” The limitation [*9]  on the Declarations page apparently applies as an outside limit per “accident” without regard to the number of covered autos involved.

Even, however, if there were reasonable grounds for disagreement over the terms of the Declarations page, language in the body of the policy settles the matter. Section II(A) of the policy, previously quoted, states: “Our duty to defend or settle ends when the Liability Coverage Limit of Insurance has been exhausted by payment of judgments or settlements.” As previously discussed, the Declarations page provides that this limit is $1,000,000 each accident. Section II(C) of the policy then says the same thing in terms of a “per accident” outside limit on what Northland will pay. It states: “Regardless of the number of covered ‘autos’ . . . or vehicles involved in the ‘accident’,” the most Northland will pay “for the total of all damages . . . resulting from any one ‘accident’ is the Limit of Insurance for Liability Coverage shown in the Declarations [$1,000,000 each accident].” Therefore, the argument advanced by the Luceros that the policy provides $1,000,000 in coverage for “each covered auto in each accident” simply does not find support in the language [*10]  of the policy. The policy limits Northland’s exposure to $1,000,000 per accident regardless of the number of covered autos involved in any one accident.

Importantly, we observe that other jurisdictions interpreting similar insurance clauses have reached a similar conclusion. See Grinnell Select Ins. Co. v. Baker, 362 F.3d 1005, 1006 (7th Cir. 2004) (“This is the most we will pay regardless of the number of: 1. ‘Insureds’; 2. Claims made; 3. Vehicles or premiums shown in the Declarations; or 4. Vehicles involved in the auto accident.”); Auto-Owners Ins. Co. v. Munroe, 614 F.3d 322, 324-25 (7th Cir. 2010) (“The ‘Combined Limit of Liability’ provision . . . provides that the per-occurrence limit–$1,000,000–is the most that Auto-Owners will pay, ‘regardless of the number of automobiles shown in the Declarations . . . or automobiles involved in the occurrence.'” (second omission in original)); Suh v. Dennis, 614 A.2d 1367, 1370 (N.J. Super. Ct. Law Div. 1992) (“Regardless of the number of covered ‘autos’, ‘insureds’, premiums paid, claims made, or vehicles involved in the ‘accident’, the most we will pay for all damages resulting in any one ‘accident’ is the Limit of Insurance for Liability Coverage shown in the Declarations.”); United Servs. Auto. Ass’n v. Baggett, 258 Cal. Rptr. 52, 54 (Ct. App. 1989) (“This is the most we will pay regardless of the number of: 1. Covered persons; 2. Claims made; 3. Vehicles or premiums shown in the Declarations; or 4. Vehicles [*11]  involved in the auto accident.” (internal alterations omitted)); United Servs. Auto. Ass’n v. Wilkinson, 569 A.2d 749, 751-52 (N.H. 1989) (“Regardless of the number of covered autos, insureds, claims made or vehicles involved in the accident, our limit of liability is as follows: . . . The most we will pay for all damages resulting from bodily injury to any one person caused by any one accident is the limit shown in this endorsement for ‘each person’.”); Banner v. Raisin Valley, Inc., 31 F. Supp. 2d 591, 592 (N.D. Ohio 1998) (“The limitation of liability section clearly states that the limit applies regardless of the number of vehicles involved in the accident.”). The Luceros offer little contrary authority.

The Luceros, focusing on the precise language and phrasing of Section II(C), put forward a different theory of that section’s intent, essentially arguing that the limits of that section simply do not apply when two covered autos are involved in one accident. For ease of reference, we state the Limitation of Insurance clause once more.

 

Regardless of the number of covered “autos”, “insureds”, premiums paid, claims made or vehicles involved in the “accident”, the most we will pay for . . . any one “accident” is the Limit of Insurance for Liability Coverage shown in the Declarations [$1,000,000 each accident].

 

 

The Luceros point [*12]  out that “[r]egardless of the number of covered ‘autos'” as stated in Section II(C) does not say “regardless of the number of covered autos involved in the accident.” The Luceros argue that since the phrase is not tied to covered autos involved in the accident, then the phrase should be read as, “regardless of the number of covered autos not involved in the accident.”

This interpretation, according to the Luceros, makes the phrase an anti-stacking clause and not a limit on per-accident liability. Anti-stacking clauses are typically designed to prevent the insured from aggregating (stacking) policy limits that apply to covered vehicles that are not involved in the particular accident. See Lucero, 2014-NMCA-055, ¶ 19. Here, the Luceros are not trying to aggregate (or stack) policy limits for covered autos not involved in the accident; they seek to aggregate the limits provided for each of the covered autos that is involved in the accident. Therefore, the Luceros argue that the limits referred to in Section II(C) do not apply to this particular circumstance where more than one covered auto is involved in a single accident.1

 

1   We note that while stacking generally involves aggregating the policies of the vehicles not involved in [*13]  the accident, merely saying a clause is an anti-stacking clause is not alone dispositive. A court should look to the facts of the case and the language as a whole to determine if a clause is actually an anti-stacking clause. See Progressive Premier Ins. Co. of Ill. v. Kocher ex rel. Fleming, 932 N.E.2d 1094, 1098 (Ill. App. Ct. 2010).

Of course, the Limitation of Insurance clause does use the term “involved in the accident” after the word “vehicles” (“[r]egardless of the number of . . . vehicles involved in the ‘accident'”). The Luceros argue that the term “involved in the ‘accident'” only modifies “vehicles” and not any of the antecedent terms before it–like covered autos (“[r]egardless of the number of covered ‘autos'”). The Luceros note the absence of a comma between “claims made” and “or vehicles involved in the accident.”2 The Luceros point out that “covered autos” is specifically defined in the policy whereas the term “vehicles” is not, and therefore, “vehicles” is intended to refer to something other than “covered autos.” Instead, the Luceros argue that “vehicles” is a generic term that refers to all autos and not “covered autos,” a debatable assertion given that all “covered autos” must as well be “vehicles.”

 

2   According to the Doctrine of the Last Antecedent, “[e]vidence that a qualifying phrase is supposed to apply [*14]  to all antecedents instead of only to the immediately preceding one may be found in the fact that it is separated from the antecedent by a comma.” Terri LeClercq, Doctrine of the Last Antecedent: The Mystifying Morass of Ambiguous Modifiers, 40 Tex. J. Bus. L. 199, 210 (2004) (footnote, internal quotation marks and citation omitted).

Thus, argue the Luceros, by putting the term “vehicles” instead of “covered autos” right before the phrase “involved in the accident,” Northland must have intended the clause “involved in the ‘accident'” to mean that the limits in the Declarations page apply regardless of the number of other vehicles involved or claims made against the insured. For example, the limit of liability would be the same if the insured was in an accident with one other vehicle or one hundred other vehicles. Similarly, the limit of liability would be the same whether there were one hundred claims against the insured or one.

But, according to the Luceros, this clause was not intended to modify or limit liability for multiple “covered autos” involved in the accident. In that case, there would be no limit. Northland would have to pay $2,000,000 for two covered autos in one accident, [*15]  $6,000,000 for six covered autos, even $11,000,000 if all eleven covered autos were somehow involved in a single accident. At the very least, the Luceros’ interpretation suggests ambiguity, and ambiguity in contracts should be interpreted in favor of the insured.

We note that “a contract is ambiguous if a genuine doubt appears as to its meaning, that is, if after applying established rules of interpretation, the written instrument remains reasonably susceptible to at least two reasonable but conflicting meanings . . . .” 11 Williston on Contracts: Ambiguity as a prerequisite to interpretation and construction § 30:4 (4th ed. 2014) (emphasis added) (footnotes omitted). This does not mean that every possible interpretation will lead to an ambiguity. While the Luceros’ reading is not entirely implausible, it relies in part on a very technical rule of English known as the Doctrine of the Last Antecedent. See LeClercq, supra, at 201-02. Such rules may inform our analysis, but they are merely a guide to discerning legislative intent. Hale v. Basin Motor Co., 1990-NMSC-068, 110 N.M. 314, 795 P.2d 1006. We believe our duty is not to impose hyper-technical rules of grammar when interpreting the true intentions of parties to a contract. If that were our duty, then most contracts would be ambiguous. [*16]

From the text of Section II(C), considered as a whole and not parsed too finely, we believe it is clear that Northland intended its “$1,000,000 each ‘accident'” limitation to apply “[r]egardless of the number of covered ‘autos’ . . . or vehicles” that are “involved in the ‘accident’.” Regardless of that number, not the number of covered autos not involved in the accident, the policy proclaims its limit: “[T]he most we will pay for the total of all damages . . . resulting from any one ‘accident'” is $1,000,000.

Reading Section II(C) as a per-accident limit of liability regardless of the number of covered autos involved in the accident, appears to be consistent with the majority of jurisdictions that have addressed this issue. It is also consistent with similar cases in which the tractor and the trailer are both involved in a single accident. See Munroe, 614 F.3d at 325 (following the accident of a tractor trailer, the policy unambiguously limits coverage to $1,000,000); Canal Ins. Co. v. Blankenship, 129 F. Supp. 2d 950, 953 (S.D. W. Va. 2001) (the policy liability for the truck and trailer was properly limited to $1,000,000 and did not provide for $2,000,000 policy limits); Carolina Cas. Ins. Co. v. Estate of Karpov, 559 F.3d 621, 625 (7th Cir. 2009) (although the accident involved a covered tractor and trailer, “[t]he insurance policy clearly and expressly limited [the insurer’s] [*17]  liability to a maximum of $1,000,000 per accident”).

We note three cases that are particularly helpful in deciding this issue. First, in Auto-Owners Ins. Co. v. Anderson, 756 So. 2d 29 (Fla. 2000), the Florida Supreme Court construed a limit of liability clause after a tractor-trailer rig caused an accident with a single car. Id. at 31-32. Although the Court found that the language of the limitation-of-liability clause in that particular policy was ambiguous, it turned to several cases from other jurisdictions as an example of what the insurer should have done to make its liability limit unambiguous. Id. at 33-36. The Florida Court stated:

 

In contrast to the clause drafted by Auto-Owners in this case, the limiting provisions of the insurance policies set forth in the recent reported decisions include an introductory qualifying clause that clearly and unambiguously explains that liability coverage is limited to a certain amount “regardless” of the number of vehicles involved in the accident.

 

 

Id. at 36. See also State Auto Ins. Co. v. Stinson, 142 F.3d 436 (6th Cir.1998) (unpublished table decision); Weimer v. Country Mut. Ins. Co., 575 N.W.2d 466, 469 n.6 (Wis. 1998); Dennis, 614 A.2d at 1370. The limiting phrase “regardless of the number of vehicles involved in the accident” is of course strikingly similar to Northland’s language in this very case.

Referring to these other cases, the Florida Court then observed,

 

The presence [*18]  of these qualifying clauses evidences an established custom in the insurance industry as to the language used by insurers in drafting clauses where the intent is to limit liability coverage to a single amount, even though multiple insured vehicles are involved in an accident. As these out-of-state cases demonstrate, when multiple insured vehicles are involved in a single accident, a limitation of liability can be achieved by the simple use of a qualifying clause.

 

 

Anderson, 756 So. 2d at 36 (citation omitted).

We regard this reference to a “custom in the insurance industry” as significant. Because Northland can justifiably rely on limiting phraseology accepted elsewhere to achieve its desired objective, we should proceed cautiously before creating different expectations solely for our state.

Similarly, the United States Court of Appeals for the Seventh Circuit interpreted a limit-of-liability clause after three sets of tractor-trailers, all owned by the insured, were involved in one accident. Munroe, 614 F.3d at 323. The policy contained a combined limit of liability of $1,000,000 per occurrence “‘regardless of the number of automobiles shown in the Declarations . . . or automobiles involved in the occurrence.'” Id. at 325 (omission in original). [*19]  The Court found no ambiguity: “While the Munroes attempt to find ambiguity, including in the terms ‘automobiles’ and ‘combined,’ these contortions merit little discussion here: applied to the facts of this case, the unambiguous terms of the policy limit the coverage to $1,000,000 for each occurrence, notwithstanding the involvement of three . . . tractor-trailers.” Id.

Finally, the United States District Court for the Southern District of West Virginia interpreted a limit of liability clause after a tractor and trailer were involved in a deadly accident. Blankenship, 129 F. Supp. 2d at 952. The sole question was whether the policy limit provided $1,000,000 total liability coverage or $1,000,000 for each vehicle. Id. The policy contained a clause that read “[r]egardless of the number of . . . automobiles to which this policy applies, . . . [t]he limit of liability stated in the schedule of the policy as applicable to ‘each occurrence’ is the total limit of the company’s liability . . . .” Id. The injured parties claimed that this language was ambiguous “because it does not limit liability to one million dollars per occurrence when more than one covered vehicle is involved in the accident.” Id. at 953. They suggested that the insurance company [*20]  should have added the language “‘regardless of the number of vehicles involved in the accident.'” Id. (emphasis added). The Court held that the insurance policy was not ambiguous and provided coverage up to $1,000,000 per occurrence. Id. at 956. The Court noted that “[a] court should read policy provisions to avoid ambiguities and not torture the language to create them.” Id. at 953 (internal quotation marks and citation omitted).

Thus, we are satisfied that Northland’s position appears to be more in line with the “custom” within the industry and the jurisprudence construing it. While that observation is not necessarily dispositive, it does inform our deliberations. The Luceros’ position, on the other hand, appears to be almost without supporting authority, at least in terms of cases interpreting similar policy language. In its briefing to this Court, Northland asserted that the Luceros’ interpretation of the policy, as adopted by our Court of Appeals, “stands alone among the 50 state judicial systems.” See Grinnell, 362 F.3d at 1007. Though perhaps somewhat hyperbolic, that statement remains largely unchallenged, and the Luceros have not done much to discredit it.3

 

3   The Fifth District Court of Appeals for Illinois has found policies [*21]  ambiguous despite a similar limit of liability clause. See Kocher, 932 N.E.2d at 1096 (“‘The limit of liability shown on the Declarations Page is the most we will pay regardless of the number of: 1. claims made; 2. covered vehicles; 3. trailers shown on the Declarations Page; 4. insured persons; 5. lawsuits brought; 6. vehicles involved in an accident; or 7. premiums paid.'”). However, the court found the policy ambiguous because the amount in the limit liability in the declarations page was listed more than once. The court specifically distinguished its case with those cases where the amount in the declarations page was listed only once. Id. at 1102. In our case, Northland’s policy only states the limit of liability once.

 

CONCLUSION

We hold that Northland limited its liability to $1,000,000 for each accident regardless of the number of insured vehicles involved. Accordingly, we reverse the Court of Appeals and affirm the district court’s grant of summary judgment in favor of Northland.

IT IS SO ORDERED.

RICHARD C. BOSSON, Justice

WE CONCUR:

BARBARA J. VIGIL, Chief Justice

PETRA JIMENEZ MAES, Justice

EDWARD L. CHÁVEZ, Justice

JERRY H. RITTER, Judge

Sitting by Designation

IRINA SCHUSTER, as Special Administrator of the Estate of Oleh Baranovsky, Deceased, Plaintiff-Appellant, v. OCCIDENTIAL FIRE AND CASUALTY COMPANY OF NORTH AMERICA, Defendant-Appellee.

 

No. 1-14-0718

 

APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FIFTH DIVISION

 

2015 IL App (1st) 140718; 2015 Ill. App. LEXIS 211

 

 

March 27, 2015, Decided

 

 

PRIOR HISTORY:     [**1] Appeal from the Circuit Court of Cook County. 11-L-14105. Honorable Raymond W. Mitchell, Judge Presiding.

 

DISPOSITION:    Affirmed.

 

JUDGES: JUSTICE McBRIDE delivered the judgment of the court, with opinion. Presiding Justice Palmer and Justice Reyes concurred in the judgment and opinion.

 

OPINION BY: McBRIDE

 

OPINION

[*P1]  The plaintiff, Irina Schuster, as special administrator of the estate of Oleh Baranovsky, deceased, appeals from the entry of summary judgment for the defendant insurer, Occidental Fire & Casualty Company (Occidental),1 in this insurance coverage action. The main dispute is whether the insurance policy covers both owned and leased vehicles. The trial court granted summary judgment to the insurer after finding that its commercial automobile liability policy covered owned vehicles, not the leased truck that was involved in Baranovsky’s fatal accident, and that leasing the truck did not trigger an “automatic insurance provision” for newly acquired vehicles. The court also rejected the plaintiff’s contention that the insurer was estopped from raising policy defenses. On appeal, the plaintiff contends the findings were contrary to precedent and the facts. For the reasons below, we disagree with the estate and we affirm the [**2]  court’s ruling.

 

1   It is unclear why the insurer has been referred to alternatively as Occidental Fire & Casualty Company, Occidental Fire & Casualty Company of North America, and Occidental Fire & Casualty Company of North Carolina. We use the version that appears on the printed policy.

[*P2]  Baranovsky’s accident occurred on September 8, 2005, at 12:50 p.m. when the 23-year-old Chicagoan was driving a 1997 Isuzu freight truck in Tennessee. He was southbound on Interstate 65, near mile marker 100 and the exit ramp for the community of Millersville. There, the highway curves to the east, but the freight truck crossed west over the highway median, overturned onto the driver’s side, and slid into the northbound traffic lanes, where it struck a Toyota Corolla and caused the car to roll several times. The 31-year-old oil refinery worker who was driving the Toyota was only bruised and was released from the emergency room that same day. Baranovsky’s injuries were more severe. He was flown from the accident scene and died in the hospital a week later.

[*P3]  In 2007, Baranovsky’s estate brought an action for damages against two interstate trucking companies based in Illinois, Diamond Transportation, Inc. [**3]  (Diamond), and DA Fast Express, Inc. (DA Fast); and the president of DA Fast, Dariusz Benesiewicz. The negligence allegations against Diamond are pertinent here. The estate alternatively alleged that Diamond failed to provide worker’s compensation coverage to its employee driver or to properly maintain its truck. More specifically, at the time of the accident, Baranovsky was alleged to be “an employee and/or agent of, and driver for Defendant [Diamond]” who was “acting within the scope of said employment and/or agency [with Diamond]” and “operating a [1997 Isuzu] vehicle owned and/or leased by Defendant [Diamond].” Diamond was alleged to owe “the duty to exercise due care at all times to avoid placing its employees and/or agents in danger,” but in breach of that duty it had required its employee and/or agent to “drive unreasonably extended hours in excess of his ordinary physical limitations” or it failed to inspect, maintain, or repair its vehicle. The estate has abandoned the allegations regarding worker’s compensation insurance and focuses its appeal on the allegations of common law negligence.

[*P4]  When Diamond received the negligence complaint, it requested claim coverage from Occidental [**4]  under the “Truckers Coverage” commercial automobile policy that Diamond had purchased from Occidental for the one-year period beginning September 23, 2004. Diamond’s policy provided up to $1 million liability coverage and obligated Occidental to “pay all sums an ‘insured’ legally must 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.”

[*P5]  The policy’s section I, “Item Three–Schedule of Covered Autos You Own,” contains a list of 14 insured trucks and cars, identified by their unique vehicle identification numbers, and their model year, trade name, and body type (e.g., “straight truck” or “van”). The Isuzu truck that Baranovsky was driving does not appear on this original policy schedule. However, a commercial policy change request form in the record on appeal shows that Diamond asked for the Isuzu truck to be added to its Occidental policy after the accident occurred based on a lease that was dated one day before the accident occurred. Diamond’s insurance agent faxed the request to Occidental’s agent on September 8, 2005, at 4:28 p.m. and the written [**5]  lease dated September 7, 2005, indicated DA Fast was leasing the Isuzu to Diamond for a year. We emphasize that it is undisputed that DA Fast owned the Isuzu truck when the accident occurred and that Diamond has never owned that vehicle.

[*P6]  Diamond’s ” ‘covered ‘autos’ ” were defined by symbol 46 in a chart of coverage numbers that was included in section I of the policy. Coverage symbol 46 is labeled, “Specifically Described ‘Autos,’ ” and defined as “Only those ‘autos’ described in Item Three of the Declarations for which a premium charge is shown.” Diamond contracted only for coverage symbol 46 and did not contract for other coverage symbols. For instance, Diamond did not contract for coverage symbol 41, which is labeled “Any ‘Autos’ “; or for coverage symbol 47, which is labeled, “Hired ‘Autos’ Only,” and defined as “Only those ‘autos’ you lease, hire, rent or borrow.”

[*P7]  Section I of the policy also contains what the parties refer to as the “automatic insurance provision.” It states:

 

“B. Owned Autos You Acquire After the Policy Begins

 

1. If Symbols 41, 42, 43, 44 or 45 are entered next to the coverage in Item Two of the Declarations, then you have coverage for ‘autos’ that you acquire [**6]  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.”

 

 

 

 

 

 

[*P8]  Section II of the policy contains exclusions for employee injuries:

 

“B. Exclusions

 

This insurance does not apply to any of the following:

* * *

3. Workers’ Compensation

Any obligation for which the ‘insured’ or the ‘insured’s’ insurer may be held liable under any workers compensation, disability benefits or unemployment compensation, disability benefits or unemployment compensation law or any similar law.

4. [Bodily injury to an employee of the insured arising out of and in the course of employment. This exclusion applies whether the insured may be liable as an employer or in any other capacity.]”

 

 

 

 

[*P9]  When Diamond requested claim coverage under this policy, Occidental responded that based on the facts alleged in the estate’s complaint, there was [**7]  no coverage. Occidental quoted the policy’s express exclusions for workers’ compensation liability and bodily injuries to employees and then generally stated, “By naming the specific grounds for this disclaimer of coverage, we do not waive any of our rights or any of the other provisions or conditions of the policy of insurance and specifically reserve all of our rights and remedies under this policy and under the statutes and common law.”

[*P10]  Diamond then answered the complaint but did not otherwise defend against the estate’s allegations. A default judgment was entered against Diamond and the estate proved up damages totaling $4.4 million. Shortly after that, Diamond and the estate agreed that the estate would settle for an assignment of Diamond’s insurance rights and the estate, as assignee, commenced this declaratory judgment action against Occidental.

[*P11]  Discovery ensued in the coverage case and indicated that DA Fast, an Illinois company, contracted to haul freight exclusively for Diamond, that Diamond was DA Fast’s sole source of income, and that the relationship began in 1998 and continued for about a year after Baranovsky’s accident. Benesiewicz (the president of DA Fast) testified [**8]  that he bought the 1997 Isuzu truck at issue in April 2005. DA Fast’s drivers’ manifest logs showed that Benesiewicz drove the 1997 Isuzu as early as August 4, 2005. Another log sheet showed that Baranovsky drove the truck as early as August 5, 2005, which is when he first began driving for DA Fast, ostensibly as an independent contractor. The logs showed that the only truck Baranovsky drove for DA Fast during his six weeks with DA Fast was the 1997 Isuzu. Benesiewicz testified that he insured the Isuzu through Great West Casualty Company and that the policy was in effect when the accident occurred.

[*P12]  On cross-motions for summary judgment, the trial court found there was a question of fact as to whether Baranovsky was Diamond’s employee, but that regardless of his employment status, Occidental was entitled to summary judgment. As we summarized earlier, the court found that summary judgment was warranted because the Occidental policy covered only vehicles that were owned by Diamond, the policy did not cover the leased truck that Baranovsky was driving, and the lease of the truck from DA Fast to Diamond did not trigger an “automatic insurance provision” for newly acquired vehicles. The [**9]  court rejected the estate’s contention that Diamond’s insurer was estopped from raising defenses to coverage.

[*P13]  The estate now argues the summary judgment ruling should be reversed because Diamond timely fulfilled the requirements for automatic coverage of the newly acquired Isuzu when it submitted the change request form on September 8, within 30 days of Diamond’s lease of the vehicle from DA Fast on September 7. The estate contends this sort of automatic insurance clause is commonly used to prevent a gap in coverage between the time an insured acquires a vehicle and is able to complete the paperwork necessary to expressly add the vehicle to its policy. The estate cites Smith for the proposition that the Occidental clause provided interim coverage even though Diamond notified the insurer after the vehicle was involved in an accident. American Freedom Insurance Co. v. Smith, 347 Ill. App. 3d 1, 6-7, 806 N.E.2d 1136, 1140 (2004). Continuing, the estate argues that the court’s conclusion that the clause applied only to owned vehicles is contrary to Emiljanowicz, which involved a freight truck that was leased to a trucking company and an insurance clause that was similar, if not identical, to the clause at issue here. Progressive Premier Insurance Co. of Illinois v. Emiljanowicz, 2013 IL App (1st) 113664, 991 N.E.2d 352.

[*P14]  Occidental responds that the trial court’s ruling was well [**10]  reasoned and should be affirmed. Occidental contends that adding the Isuzu to the policy after the accident was ineffective and that according to Mank, unless the vehicle appeared on the policy’s “Schedule of Covered Autos” on the day of the accident, it was not covered on the day of the accident. Mank v. West American Insurance Co., 249 Ill. App. 3d 827, 620 N.E.2d 6 (1993). Occidental also contends that the reason there was coverage for a leased truck in Emiljanowicz was because the insured purchased coverage for all of its leased (and owned) vehicles, unlike Diamond, which purchased coverage only for its owned vehicles.

[*P15]  On appeal we consider the allegations of the underlying complaint and construe the Occidental insurance contract in order to determine whether summary judgment was proper. The interpretation of an insurance contract and the entry of summary judgment present questions of law that are reviewed de novo without any deference to the trial court’s determinations. Continental Casualty Co. v. McDowell & Colantoni, Ltd., 282 Ill. App. 3d 236, 241, 668 N.E.2d 59, 62 (1996).

[*P16]  The entry of summary judgment is a drastic but expeditious means of disposing of a lawsuit in which the right of the moving party is free from doubt and clear. Outboard Marine, 154 Ill. 2d at 102, 607 N.E.2d at 1209. Summary judgment is to be granted “without delay if the pleadings, depositions, and admissions on file, together with the affidavits, [**11]  if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” 735 ILCS 5/2-1005 (West 2010); Outboard Marine, 154 Ill. 2d at 102, 607 N.E.2d at 1209. In other words, at the summary judgment stage, the court does not decided disputed issues of fact, but does decide whether they exist and that the matter should instead proceed to trial. A court is cautious in awarding summary judgment in order to avoid preempting a litigant’s right to a trial in which the litigant may fully present the factual basis of his or her case. Lamkin v. Towner, 246 Ill. App. 3d 201, 204, 615 N.E.2d 1208, 1210 (1993); Outboard Marine, 154 Ill. 2d at 102, 607 N.E.2d at 1209 (summary judgment is to be denied where there are undisputed facts from which reasonable persons could draw divergent inferences). A genuine issue of material fact is said to exist when the evidence is sufficient to cause a reasonable jury to return a verdict for the party opposing the entry of summary judgment. McDonald v. Northeast Illinois Regional, 249 F. Supp. 2d 1051, 1053 (N.D. Ill. 2003).

[*P17]  A plain and unambiguous insurance policy is applied as written. Crum & Forster Managers Corp. v. Resolution Trust Corp., 156 Ill. 2d 384, 620 N.E.2d 1073 (1993). A court will not search for ambiguity where none exists. Crum & Forster, 156 Ill. 2d at 391, 620 N.E.2d at 1078. However, a policy that is susceptible to more than one reasonable interpretation is ambiguous and subject to rules of interpretation, such as the rule that ambiguities are construed against the drafter of the policy and in favor [**12]  of coverage. Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 119, 607 N.E.2d 1204, 1217 (1992). Accordingly, a court must initially look to the language of the policy alone. Gallagher v. Lenart, 226 Ill. 2d 208, 233, 874 N.E.2d 43, 58 (2007). A single, isolated clause or provision in a contract is not indicative of the parties’ intent at the time of contracting. Gallagher, 226 Ill. 2d at 233, 874 N.E.2d at 58. “[B]ecause words derive their meaning from the context in which they are used, a contract must be construed as a whole, viewing each part in light of the others.” Gallagher, 226 Ill. 2d at 233, 874 N.E.2d at 58.

[*P18]  We consider the fact that the Isuzu was leased and not owned by Diamond to be dispositive of this appeal. When the contract is read as a whole, it is clear that the only vehicles that were covered by this liability policy were vehicles that Diamond owned. According to the contract, the only type of coverage that Diamond purchased was symbol 46 coverage, symbol 46 coverage is for “Specifically Described Autos” which are “described on Item Three of the Declarations,” and Item Three of the Declarations is entitled “Schedule of Covered Autos You Own.”

[*P19]  The estate is unable to point to any language in this plain and unambiguous contract which arguably extends policy coverage to leased vehicles. Instead of contract language or other competent facts, the estate cites “circumstantial evidence” that this policy encompassed [**13]  leased trucks. The estate contends:

 

“[T]he policy on first glance might appear to cover only owned trucks because the insured trucks are listed under Item Three[, which is entitled] Schedule of Covered Autos You Own.” However, a witness testified that Diamond leased its trucks rather than owning them. [This testimony was corroborated by] the fact that Item Three has a line for the original cost of the truck but not one of those lines is filled in. There was presumably no cost listed because Diamond never bought them.” (Emphasis in original.)

 

 

[*P20]  The witness testimony that the estate is relying upon is a statement that the president of DA Fast made during his deposition to the effect that Diamond did not own trucks but rather leased trucks to haul its freight. Benesiewicz’s opinion or misstatement about the details of someone else’s company is not competent evidence. His unsupported assumption or misstatement about Diamond’s business operations or assets is not a statement of fact that could be considered at the summary judgment stage. Witness testimony properly considered by a court in a summary judgment proceeding is testimony that meets the same standard as an affidavit and consists of a statement [**14]  or statements of fact, not mere conclusions, opinions, or belief not based on personal knowledge of facts. Patterson v. Stern, 88 Ill. App. 2d 399, 404, 232 N.E.2d 7, 9 (1967); Davis v. Times Mirror Magazines, Inc., 297 Ill. App. 3d 488, 495-96, 697 N.E.2d 380, 386 (1998) (rejecting appeal from summary judgment ruling in part because the plaintiff’s “purported evidence of retaliatory discharge was based on unsupported assertions, opinions, and conclusory statements that he made in his deposition testimony” and statements of this nature “are not admissible evidence upon review of a summary judgment motion” (internal quotation marks omitted)); Seefeldt v. Millikin National Bank of Decatur, 154 Ill. App. 3d 715, 718, 506 N.E.2d 1052, 1055 (1987) (indicating that when determining whether a genuine issue of material fact exists in a summary judgment proceeding, “a court should ignore personal conclusions, opinions, and self-serving statements and consider only facts admissible in evidence under the rules of evidence”); Harris Bank Hinsdale, N.A. v. Caliendo, 235 Ill. App. 3d 1013, 1025, 601 N.E.2d 1330, 1138 (1992) (evidence that would be inadmissible at trial is not to be considered in a summary judgment proceeding). Put another way, if this case went to trial, the president of DA Fast would not be permitted to opine from the witness stand about Diamond’s assets or business operations and so the estate’s citation to the deposition transcript does not raise a question of material fact to defeat Occidental’s motion for summary judgment. Moreover, [**15]  although we granted the estate’s motion to cite additional authority in support of its appeal, the case the estate relies upon, Hajicek, does not persuade us to give serious consideration to Benesiewicz’s deposition testimony that Diamond leased rather than owned vehicles. Hajicek v. Nauvoo Restoration, Inc., 2014 IL App (3d) 121013, ¶ 13, 7 N.E.2d 3d 911. The case is properly cited for the well-established proposition that an appellee may not effectively raise an evidentiary objection for the first time on appeal. The case does not indicate that speculation, opinion, unfounded conclusion or mere assumption should be treated as competent evidence to defeat a motion for summary judgment.

[*P21]  Furthermore, the estate’s proposed presumption as to why the purchase price of the covered vehicles was left blank on the Occidental policy page is not a reasonable inference. It is speculation which is not grounded in any fact. Even in combination, the assumption and the speculation are not enough to refute the definite indications in the contract that coverage was limited to vehicles which Diamond owned.

[*P22]  Nevertheless, presuming, for the purposes of argument, that Occidental or Diamond intentionally put leased vehicles on the policy’s “Schedule of Covered Autos You [**16]  Own,” we would still conclude there is no coverage for the leased Isuzu. This is because the automatic insurance provision which the estate is relying upon provides coverage only to “Owned Autos You Acquire After the Policy Begins” and specifies that coverage is extended to after-acquired vehicles “only if” Occidental “already cover[s] all ‘autos’ that [Diamond] own[s] for that coverage or it [the newly acquired vehicle] replaces an ‘auto’ you previously owned that had that coverage.” (Emphases added.) We cannot reasonably construe this clear policy language about vehicles which are owned to encompass vehicles which are leased.

[*P23]  The record on appeal establishes that Diamond leased the Isuzu from DA Fast instead of purchasing it from DA Fast. Thus, the policy did not cover the vehicle that Baranovsky was driving when he had his unfortunate accident.

[*P24]  We are not dissuaded from this conclusion by the estate’s citation to Emiljanowicz, which was an insurance coverage action concerning a leased freight truck that was involved in an accident before the driver hauled his first load for the trucking company. Emiljanowicz, 2013 IL App (1st) 113664, ¶ 8, 991 N.E.2d 352. That case is not on point. Specifically there, the trucking company paid Occidental to insure all [**17]  of its vehicles, whether they were leased or owned. Emiljanowicz, 2013 IL App (1st) 113664, ¶ 11, 991 N.E.2d 352. The policy included the same automatic insurance coverage that is at issue here and the court found that under the facts presented, the Occidental policy was ambiguous as to whether there was automatic coverage for the leased freight truck. Emiljanowicz, 2013 IL App (1st) 113664, ¶ 26, 991 N.E.2d 352. The court then applied the principle that ambiguities are construed against the insurer and found that the newly leased freight truck was covered under the Occidental policy. Emiljanowicz, 2013 IL App (1st) 113664, ¶ 26, 991 N.E.2d 352. However, in the current case, there is no competent evidence that Diamond contracted with Occidental to cover any leased vehicles and thus, no ambiguity as to whether there was coverage of the leased Isuzu. Accordingly, Emiljanowicz’s reasoning is not relevant here.

[*P25]  Based on this analysis, we conclude that the clear and unambiguous contract did not provide coverage for the leased Isuzu.

[*P26]  Given our conclusion that coverage was limited to owned vehicles, we do not need to resolve the parties’ dispute as to whether adding the leased Isuzu to the policy after the accident provided coverage on the day of the accident.

[*P27]  It is also unnecessary for us to reach Occidental’s alternative argument that insurance coverage is provided [**18]  only for risks and that because Diamond already knew or had reason to know of the Isuzu accident and the likelihood of claims when it sought to add the Isuzu to the Occidental policy, then the known loss doctrine bars coverage for the Isuzu accident. See Viking Construction Management, Inc. v. Liberty Mutual Insurance Co., 358 Ill. App. 3d 34, 42, 831 N.E.2d 1, 7 (2005) (indicating that implicit in every liability contract is the requirement that the loss be a fortuitous loss); Outboard Marine, 154 Ill. 2d at 103, 607 N.E.2d at 1210 (indicating that insurance is for a risk not a certainty and that the known loss doctrine relieves an insurer of the duty to defend or indemnify).

[*P28]  This brings us to the estate’s second main contention on appeal: estoppel. The estate contends that the insurer had no right to unilaterally declare there was no coverage (on grounds that the policy expressly excludes coverage for employee injuries) and that the insurer was obligated to either defend Diamond under a reservation of rights or to file a declaratory judgment so that a court could determine the insurer’s responsibilities. The estate is relying on the equitable principle that “an insurer’s duty to defend under a liability insurance policy is so fundamental an obligation that a breach of that duty constitutes a repudiation of the contract.” Employers Insurance of Wausau v. Ehlco Liquidating Trust, 186 Ill. 2d 127, 151, 708 N.E.2d 1122, 1135 (1999); Clemmons v. Travelers Insurance Co., 88 Ill. 2d 469, 479, 430 N.E.2d 1104, 1109 (1981) (indicating the estoppel [**19]  doctrine is a rule of equity).

[*P29]  If the insurer owes and breaches a duty to defend, the estoppel doctrine bars the insurer from later enforcing another clause of the contract that contains a defense to coverage, even if that defense would have been successful. Ehlco, 186 Ill. 2d at 151-52, 708 N.E.2d at 1135; Clemmons, 88 Ill. 2d at 479, 430 N.E.2d at 1109. Thus, in appropriate circumstances, the equitable principle of estoppel will be used to preclude an insurer from relying on a condition in which the insured has forfeited coverage, such as by filing a false statement, vacating a building after the issuance of a fire policy, and failing to obtain the insurer’s consent before settling a case. Richardson v. Guardian Life Insurance Co. of America, 984 P.2d 917, 924 (Or. Ct. App. 1999). In other words, the insured may use estoppel as a defense in order to preserve contractual rights to coverage. Nationwide Mutual Insurance Co. v. Filos, 285 Ill. App. 3d 528, 533, 673 N.E.2d 1099, 1103 (1996). Estoppel, however, generally cannot be used to create coverage where none otherwise exists. Filos, 285 Ill. App. 3d at 534, 673 N.E.2d at 1103 (“Illinois courts have followed the general rule that the doctrine of estoppel cannot be used to create primary liability or to increase coverage provided under an insurance policy.”); ABCD…VISION, Inc. v. Fireman’s Fund Insurance Cos., 744 P.2d 998, 1000 (Or. 1987) (estoppel cannot expand coverage beyond the limits of the original policy); Schaffer v. Mill Owners Mutual Insurance Co., 407 P.2d 614, 617 (Or. 1965) (estoppel or waiver is not a basis for creating a contract for coverage where no such contract previously existed); Alan Corp. v. International Surplus Lines Insurance Co., 22 F.3d 339, 343 (1st Cir. 1994) (“As a [**20]  general matter, estoppel, like waiver, does not extend, broaden or enlarge coverage so as to include risks not covered within the terms of the policy.”). Estoppel is not used to create coverage for a risk the insurer did not agree to cover and the insurer should not be made to pay for a loss for which it did not collect a premium. Filos, 285 Ill. App. 3d at 534, 673 N.E.2d at 1103.

[*P30]  A court will not enforce the insurer’s protections under the policy where the insurer failed to act equitably toward its insured, that is, the insurer did not take one of two options: (1) to defend the suit under a reservation of rights or (2) to seek a declaratory judgment that there is no coverage under the policy. Clemmons, 88 Ill. 2d at 479, 430 N.E.2d at 1109; Ehlco, 186 Ill. 2d at 150, 708 N.E.2d at 1134-35. If the insurer fails to take either step and is later found to have wrongfully denied coverage, then the estoppel doctrine may be applied. Ehlco, 186 Ill. 2d at 150-51, 708 N.E.2d at 1135.

[*P31]  The estoppel doctrine was not triggered in this case. The trial court concluded there was no coverage under the Occidental policy and we agree with that conclusion. The policy clearly covered only owned automobiles and it was undisputed that the Isuzu was leased and not owned by Diamond. Therefore, Occidental’s denial was proper and is not grounds for invoking the estoppel doctrine.

[*P32]  Finally, the estate [**21]  argues that Occidental is estopped from denying coverage because its claim denial letter did not refer to the known loss doctrine which Occidental has argued in the trial and appellate courts. Occidental responds that this argument is incorrect, but in any event, we should not address it because the estate it presenting it for the first time on appeal and issues not raised in the circuit court cannot be argued for the first time on appeal. Robidoux v. Oliphant, 201 Ill. 2d 324, 344, 775 N.E.2d 987, 998-99 (2002). The estate contends that it made this estoppel argument in one sentence in its 12-page cross-motion for summary judgment. Having read the motion, however, we disagree with the estate. We find that the argument is being made for the first time on appeal and has been waived. Waiver aside, it is irrelevant whether the claim denial letter cited the known loss doctrine, because this doctrine did not enter into the trial judge’s ruling or this court’s analysis and the claim was properly rejected on other grounds. In any event, this policy did not cover leased vehicles and estoppel is not a basis for creating coverage for which Diamond neither contracted nor paid a premium.

[*P33]  We conclude that the trial court’s findings were correct and that summary judgment [**22]  was properly entered. Therefore, we affirm the judgment order from which the estate appealed.

[*P34]  Affirmed.