A-1 Cleaners & Dyers v. American Mut. Liab. Ins. Co. of Boston

• Decision Date: 20 November 1940
• Docket Number: Gen. No. 41196.
• Citation: 30 N.E.2d 87,307 Ill.App. 64
• Court: United States Appellate Court of Illinois
• Parties: A-1 CLEANERS & DYERS v. AMERICAN MUT. LIABILITY INS. CO. OF BOSTON.

307 Ill.App. 64

30 N.E.2d 87

A-1 CLEANERS & DYERS

v.AMERICAN MUT. LIABILITY INS. CO. OF BOSTON.

Gen. No. 41196.

Appellate Court of Illinois, First District, Third Division.

Nov. 20, 1940.

Appeal from Circuit Court, County of Cook; Harry M. Fisher, Judge.

Garnishment action by the A-1 Cleaners & Dyers, a corporation, for the use of Robert Sheldon, against the American Mutual Liability Insurance Company of Boston to recover the amount of a default judgment for use plaintiff against plaintiff corporation. Judgment for plaintiff, and defendant appeals.

Affirmed. Angerstein & Angerstein, of Chicago (Thomas C. Angerstein, George W. Angerstein, Charles Wolff, and Marion J. Hannigan, all of Chicago, Ill., of counsel), for appellant.

Francis J. Gariepy and Charles E. Mallon, both of Chicago, for appellee.

HEBEL, Presiding Justice.

This is an appeal from a judgment entered against the American Mutual Liability Insurance Company, garnishee, in the amount of $1,059.20, in a garnishment action instituted to recover the amount of a default judgment obtained by Robert Sheldon against A-1 Cleaners & Dyers, a corporation, defendant's insured. Plaintiff's garnishment interrogatories were based upon this default judgment, against A-1 Cleaners & Dyers, a corporation, in favor of plaintiff, based upon alleged personal injuries arising out of an automobile accident. The answer of the defendant to plaintiff's sixth interrogatory and plaintiff's replication thereto present the issues involved in this case. In defendant's answer to plaintiff's sixth interrogatory defendant stated that it issued a policy of insurance numbered AL230883, dated the 1st day of February, 1937, which policy of insurance insured the said A-1 Cleaners & Dyers Company from any liability accruing as a result of the operation of its trucks; that the said A-1 Cleaners & Dyers Company breached the terms of the aforesaid policy of insurance in that said policy of insurance provided that if claim is made or suit is brought against the insured, the insured shall immediately forward to the Company every demand, notice, summons, or other process received by it or its representative; that said A-1 Cleaners & Dyers Company failed to forward to the American Mutual Liability Insurance Company, of Boston, any demand, notice or summons or other process issued in the cause of Robert Sheldon v. A-1 Cleaners & Dyers Company, case number 38C-10698.

In plaintiff's replication to the defendant's answer it is stated: “that such garnishee defendant has not truly disclosed all moneys, rights, credits or effects owned or due to A-1 Cleaners & Dyers Co. by virtue of its policy of insurance numbered AL230-883, dated, the first day of February, 1937, and that if the defendant, A-1 Cleaners & Dyers Co. failed to forward to the American Mutual Liability Insurance Company of Boston, any demand notice or summons issued in the cause of Robert Sheldon v. A-1 Cleaners & Dyers Co., case number 38C-10698, said garnishee defendant, American Mutual Liability Insurance Company has waived said condition.”

From the statement of facts it appears that on December 29, 1937, Robert Sheldon was driving north on Broadway near AinslieStreet and was struck by a truck of the A-1 Cleaners & Dyers Company, being operated on the wrong side of the street. Notice of the accident was given the defendant herein, the American Mutual Liability Insurance Company, which carried the liability insurance for the A-1 Cleaners & Dyers, and it fully investigated the accident. Thereafter on July 14, 1938, suit was filed by Robert Sheldon against the A-1 Cleaners & Dyers, and summons was served on its agent, Rose Cohen, on the same day, returnable to the third Monday of August, 1938. On the return day, the A-1 Cleaners & Dyers failed to file its appearance or answer in court, and the cause was allowed to remain pending without any default action being taken thereon until the 10th day of March, 1939, when it was defaulted and evidence was submitted to the court and at the conclusion of this hearing a judgment for $1,000 was entered.

From the record in this case, it appears that there was an interim of about six months from the return date of the summons and the date when the default was taken and judgment entered, during which time plaintiff's attorney conferred and corresponded with defendant concerning the default of the A-1 Cleaners & Dyers and discussing settlement of the case. On November 15, 1938, plaintiff's attorney talked to Mr. Johnson of the American Mutual Liability Insurance Company, advising him of its insured's default, and gave him the title and number of the pending case and offered to stipulate to allow it to come in and defend. This, however, is controverted by the evidence of witnesses offered by defendant. Mr. Johnson, for the defendant, asked why the case could not be settled and requested copies of plaintiff's bills and medical reports. In response to this request, plaintiff's attorney sent defendant a letter dated November 21, 1938, again giving the court number and title of the pending case, together with copies of the medical reports concerning plaintiff's injuries, and asked to be advised of defendant's position in the matter. Following a number of telephone conversations concerning the extent of plaintiff's injuries, the amount asked in settlement, a request for a medical examination was made and an agreement to execute a stipulation concerning such examination. Upon failure to receive this stipulation plaintiff's attorney again wrote and asked defendant to take some action. Defendant immediately replied by letter on January 4, 1939, enclosing the stipulation, but again making no disclaimer of its liability under its policy. The medical examination was had shortly thereafter on a Saturday at defendant's doctor's office, and Dr. Test was present with plaintiff at plaintiff's expense. On February 16, 1939, defendant forwarded a copy of its medical report to plaintiff's attorney, and thereupon followed a number of telephone conversations between plaintiff's attorney and defendant's adjuster.

After nearly four months of correspondence and negotiations, default was taken, evidence heard in the Circuit Court and judgment entered against the A-1 Cleaners & Dyers Company for $1,000 and costs of suit. An execution was issued and returned no property found. Thereafter, on June 23, 1939, this garnishment suit was filed. Defendant's answer denied liability under its policy by reason of its insured's failure to comply with the condition of the policy requiring its insured to forward the summons. Thereupon, plaintiff's replication was filed alleging a waiver of such condition. Upon a full and complete hearing, the trial court held as a finding of fact that the breach of such condition of defendant's policy had been waived by defendant's subsequent course of conduct and entered judgment for $1,059.20.

The plaintiff in this action contends that a condition in a liability policy of insurance, requiring the insured to immediately forward the summons served upon it to the company, is a condition inserted by the company for its own benefit, and, as such, can be waived by it. Plaintiff further suggests that while the word “waiver” has been variously defined, and has sometimes been used interchangeably with the word “estoppel”, it has a definite and distinct meaning of its own. Waiver is the intentional relinquishment of a known right or such conduct as warrants an inference of such relinquishment. It is not the same as estoppel in that in a waiver it is not necessary that the party claiming the waiver should have been misled to his injury by the acts or conduct of the insurer, or that prejudice result to the party in whose favor the waiver operates. Plaintiff quotes courts of last resort on questions of waiver of like character to that suggested by plaintiff in the instant case. From the briefs and record, it appears that this garnishment action was tried and should be considered on the issue of waiver by the garnishee defendant of the provisions of the policy, and that, therefore, the only issue to decide is whether the trial court erred in holding that there was a waiver.

The defense that was offered by defendant on this question of waiver is that, while defendant admits that an insurer may by its actions or course of conduct create a situation where the insurer can be said to have waived its rights under a policy contract or to have forfeited such rights, yet, in the instant case, all of the combined acts of defendant which plaintiff contends constituted a waiver, all of the correspondence and conversation, arose out of intercourse solely between plaintiff's attorney and the defendant. Defendant suggests that there is not one word in the record of any acts, words or conversation between defendant and its assured, A-1 Cleaners & Dyers, upon which plaintiff seeks to predicate his theory of waiver, and that each and every one of the acts of ...