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Docket No. 88900-Agenda 23-September 2000.

NORTHBROOK PROPERTY AND CASUALTY COMPANY, 
Appellant, v. TRANSPORTATION JOINT AGREEMENT et al.,
Appellees.

Opinion filed December 1, 2000.

JUSTICE HEIPLE delivered the opinion of the court:

In this action for declaratory judgment, plaintiff NorthbrookProperty and Casualty Company (Northbrook) appeals theappellate court's determination that Northbrook has a duty todefend the Transportation Joint Agreement of School Districts 47and 155 (school districts) in numerous lawsuits arising from thecollision of a train with a school bus. We reverse.

On October 25, 1995, a METRA train collided with a schoolbus operated jointly by the school districts. Several students werekilled and many others were injured, resulting in numerouslawsuits against the school districts.

At the time of the accident, one of the insurance policieswhich the school districts had in force was a commercial generalliability policy issued by Northbrook. That policy states:

"We will pay those sums that the insured becomeslegally obligated to pay as damages because of 'bodilyinjury' or 'property damage' to which this insuranceapplies."

The policy also states that the following losses are not covered:

" 'Bodily injury' or 'property damage' arising out of theownership, maintenance, use or entrustment to others ofany aircraft, 'auto' or watercraft owned or operated orrented or loaned to any insured. Use includes operationand 'loading or unloading.' *** 'Auto' means a landmotor vehicle, trailer or semitrailer designed for travel onpublic roads, including any attached machinery orequipment."

Northbrook filed this action in the circuit court of McHenryCounty seeking a declaration that it had no duty to defend theschool districts against the students' lawsuits because the injuriesarose out of the use or operation of a bus. The trial court grantedsummary judgment for Northbrook. The appellate court reversed,holding that the students' lawsuits against the school districtsadequately alleged that the injuries could have arisen from causesother than use or operation of the bus, such as failure of the schooldistricts to adequately plan and inspect bus routes and warn busdrivers of potential hazards. 309 Ill. App. 3d 261.

To determine an insurer's duty to defend its insured, a courtmust look to the allegations of the underlying complaints. If theunderlying complaints allege facts within or potentially withinpolicy coverage, the insurer is obliged to defend its insured evenif the allegations are groundless, false, or fraudulent. United StatesFidelity & Guaranty Co. v. Wilkin Insulation Co., 144 Ill. 2d 64,73 (1991). An insurer may not justifiably refuse to defend anaction against its insured unless it is clear from the face of theunderlying complaints that the allegations fail to state facts whichbring the case within, or potentially within, the policy's coverage.Wilkin, 144 Ill. 2d at 73.

Here, the allegations of the underlying complaints utterly failto state facts which either actually or potentially bring the caseswithin the policy's coverage. The policy excludes injuries arisingfrom the school districts' use or operation of a motor vehicle.Allegations that the school districts inadequately planned andinspected bus routes or failed to warn bus drivers of potentialhazards along the routes are nothing more than rephrasings of thefact that the students' injuries arose from the school districts' useor operation of a motor vehicle. Contrary to the appellate court'sholding, the students' complaints failed to allege that the injuriesarose from events "wholly independent of any negligent operationof the bus." 309 Ill. App. 3d at 266. Northbrook therefore has noduty to defend the school districts in the underlying lawsuits.

The appellate court judgment is reversed, and the circuit courtjudgment is affirmed.

Appellate court judgment reversed;

circuit court judgment affirmed.