St. Paul Fire & Marine Insurance Company v. Smith

William Smith (defendant), driving his father's car, collided with William and Audrey Hardwidge, killing himself and both Hardwidges. Smith's parents had a policy with St. Paul Fire & Marine Insurance Company (plaintiff) that originally named Smith as an insured driver, but after learning Smith had a prior drunk-driving conviction and revoked license, St. Paul removed him and had his parents sign a named-driver exclusion barring coverage for accidents while Smith drove. After a $5 million verdict against Smith's father and estate, St. Paul sought a declaratory judgment that it owed no duty to defend, and the defendants and intervenor Valor Insurance argued the exclusion violated Illinois's mandatory-insurance statute requiring coverage for anyone driving the insured vehicle with permission. The trial court granted the defendants summary judgment, and St. Paul appealed.