Franklin, supra, 275 N.J. Super. at 341, 646 A.2d 443. Sportmart, Inc. v. Daisy Mfg. Co., 268 Ill.App.3d 974, 206 Ill.Dec. 355, 645 N.E.2d 360 (1994) involved the vendor's endorsement at issue in the present case. The issue arose in the context of an injury to Anthony Miceli who was shooting a BB gun using pellets he had bought from Sportmart.
In its memorandum order, the court noted that, because Systems was not a named vendor in the Kaye policy, it was not covered under the policy. As to Antel, the court discussed Sportmart, Inc. v. Daisy Manufacturing Co., 268 Ill. App. 3d 974 (1994), in which this court held that, under a vendor's endorsement limited to "injuries caused by the product itself," coverage was required for all bodily injury arising out of, growing out of, or resulting from Daisy's product, even where that product was not defective. Sportmart, 268 Ill. App. 3d at 978. Relying on Sportmart, however, the trial court held:
At least one Illinois court has construed an identical Additional Insured — Vendors endorsement to provide coverage for an allegedly negligent vendor. In Sportmart, Inc. v. Daisy Mfg. Co., a negligence action was brought against Sportmart in connection with its sale of a "BB" gun and pellets manufactured by Daisy. 645 N.E.2d 360, 361-62 (Ill.App.Ct. 1994). The negligence suit concerned injuries suffered by a minor while using a Daisy gun and Daisy pellets purchased from Sportmart. Id, at 362.
Schal Bovis, Inc. v. Casualty Insurance Co., 732 N.E.2d 1179, 1192 (Ill.App.Ct. 2000). In support of this argument, Utica refers me to Sportmart, Inc. v. Daisy Manufacturing Co., 645 N.E.2d 360 (Ill.App.Ct. 1994) and Village of Melose Park v. Nautilus Insurance Co., 574 N.E.2d 198 (Ill.App.Ct. 1991). In each of these cases, the insured, rather than the insurer, initiated a declaratory judgment action to determine coverage, but the court concluded that this fact did not estop the insurer from raising coverage defenses.
Marathon distinguishes these cases by pointing out the differences in the additional insured language — most notably, the specific use of the word "imputed," which more clearly signals the legal doctrine of vicarious liability than the language in Heidenreich's policy. More on point, argues Marathon, are American States Ins. Co. v. Liberty Mutual Ins. Co., 683 N.E.2d 510 (Ill App. Ct. 1997), Shell Oil Co. v. ACS, Inc., 649 N.E.2d 946 (Ill.App.Ct. 1995), and Sportmart, Inc. v. Daisy Mfg. Co., 645 N.E.2d 360 (Ill.App.Ct. 1994). These cases involved broader language.
Marathon distinguishes these cases by pointing out the differences in the additional insured language — most notably, the specific use of the word "imputed," which more clearly signals the legal doctrine of vicarious liability than the language in Heidenreich's policy. More on point, argues Marathon, are American States Ins. Co. v. Liberty Mutual Ins. Co., 683 N.E.2d 510 (Ill.App.Ct. 1997), Shell Oil Co. v. ACS, Inc., 649 N.E.2d 946 (Ill.App.Ct. 1995), and Sportmart, Inc. v. Daisy Mfg. Co., 645 N.E.2d 360 (Ill.App.Ct. 1994). These cases involved broader language.
See Dominick's Finer Foods, Inc. v. American Mfrs. Mut. Ins. Co., 163 Ill. App. 3d 149, 150-152 (1987) (denying coverage where bottling company employee was injured when he slipped and fell on loading dock while delivering bottling company products to restaurant; facts nearly identical to those in Mitchell v. Stop Shop Cos., supra); American White Cross Labs., Inc. v. Continental Ins. Co., 202 N.J. Super. 372, 378-381 (1985) (denying coverage under vendor's endorsement because of specific exclusion precluding coverage where products were labeled or relabeled by vendor). In fact, in other, subsequent cases, the same courts found coverage under a vendor's endorsement where there was a nexus between the named insured's product and the injury. See Sportmart, Inc. v. Daisy Mfg. Co., 268 Ill. App. 3d 974, 976-978 (1994) (coverage provided where vendor negligently sold named insured's BB pellets to minor, who sustained eye injury when he shot pellets from BB gun); Pep Boys v. Cigna Indem. Ins. Co., 300 N.J. Super. 245, 249-255 (1997) (coverage provided where vendor negligently sold named insured's freon to minor, who died after inhaling it). Additionally, the Pep Boys court noted that its "extensive analysis in the American opinion of the role of the endorsement was dictum [as t]he only issue was whether the exclusions applied." Pep Boys v. Cigna Indem. Ins. Co., supra at 255.
Conversely, Sparks argues that the operative language within the policy is "resulting from the ownership, maintenance, or use of a covered auto." The phrase at issue, "resulting from," is synonymous with the phrases "arising out of," "connected with," "originating from," "growing out of," and "flowing from" that have been recognized repeatedly as being broad as well as vague. Sportmart, Inc. v. Daisy Manufacturing Co., 268 Ill. App.3d 974, 978, 645 N.E.2d 360, 363 (1994)(holding that coverage is required for all bodily injury arising out of, growing out of or resulting from Daisy's product). In worker's compensation claims and insurance litigation, such language is considered satisfied by a mere causal connection and does not necessarily require proximate causation.
That at least is the majority view, see, e.g., Mitchell v. Stop Shop Companies, Inc., 41 Mass.App.Ct. 521, 672 N.E.2d 544, 545-46 (Mass.App. 1996); Senco of Florida, Inc. v. Continental Casualty Co., 440 So.2d 625, 626 (Fla.App. 1983), but, more important, it is the view of California, SDR Co. v. Federal Ins. Co., supra, 242 Cal.Rptr. at 538, and it is California law that governs the substantive issues in this diversity suit. Some cases, such as Pep Boys v. Cigna Indemnity Ins. Co., 300 N.J.Super. 245, 692 A.2d 546, 547-48, 550, 552 (N.J.App. 1997), and Sportmart, Inc. v. Daisy Manufacturing Co., 268 Ill.App.3d 974, 206 Ill.Dec. 355, 645 N.E.2d 360, 362-64 (Ill.App. 1994), hold that the vendor's endorsement is applicable if the vendor, rather than introducing a defect or relabeling in a way that conceals a danger, is merely negligent as to whom he sells to (for example, selling to children a product intended for adults and dangerous to children), but this is a distinction without a difference. The majority view is not based on the language of the vendor's endorsement, which does not define "vendor," or on the ordinary meaning of the word, which does not distinguish between active and passive vendors, but on the improbability of supposing that the manufacturer's insurer intends to protect others against the risks that the others create.
Most often a claim of estoppel is made when the insurer has failed entirely to provide a defense, has provided a defense without reserving its rights, or has failed to seek a declaration of its rights: "the insurer must either defend under a reservation of rights or seek a declaratory judgment that there is no coverage; if the insurer fails to do so, it is estopped from raising policy defenses. . . ." Sportmart, Inc. v. Daisy Mfg. Co., 645 N.E.2d 360, 364 (Ill.App. 1994); see also Essex Ins. Co. v. Stage 2, Inc., 14 F.3d 1178, 1182 (7th Cir. 1994). On appeal, The Home turns this principle on its head. Not only does an insurer have to provide a defense under a reservation of rights or file for declaratory judgment or it can be estopped from asserting its defenses, but, The Home argues, so long as the insurer has done either of those things, estoppel can never lie.