Gianinni v. Bluthart

Decision Date19 April 1971
Docket NumberGen. No. 53744
PartiesCarol GIANINNI and John Gianinni, Plaintiffs-Appellees, v. Charles BLUTHART and Robert Zincoris, Defendants-Appellees. Charles BLUTHART and Robert Zincoris for the benefit of State Farm Mutual Automobile Insurance Company, Third-Party Plaintiffs, Appellees, v. LAKE SHORE MUTUAL INSURANCE COMPANY, Third-Party Defendant, Garnishee Defendant, Appellant.
CourtUnited States Appellate Court of Illinois

Greenberg, Ziv & McCarthy, Skokie, for third party defendant, garnishee defendant, appellant; Sherwin Greenberg, Skokie, of counsel.

Taylor, Miller, Magner, Sprowl & Hutchings, Chicago, for third party plaintiff, garnishee defendant, appellee; James J. Hoffnagle, Chicago, of counsel.

GOLDBERG, Justice.

This appeal involves a difference of opinion between two insurance carriers as an aftermath of what now appears to have been a minor automobile accident. As the record is lengthy, this opinion must necessarily present a summary of the pertinent facts as well as references to the pleadings. There is no material factual dispute. The judgments appealed from were entered by the court without a jury upon a stipulated series of exhibits.

A collision took place on October 18, 1960. One automobile was owned by John Gianinni and driven by his wife, Carol. This vehicle was standing at the time. The other automobile was owned by defendant, Charles Bluthart, and driven by his cousin, the defendant, Robert Zincoris. Zincoris was driving with permission of Bluthart but no agency existed.

Liability insurance for Bluthart was carried by Lake Shore Mutual Insurance Company ('Lake Shore') which appears here as a third party defendant and also as garnishee. It is agreed that, since Zincoris was operating the automobile with the permission of the named insured, coverage under this policy extended to him. In addition, Zincoris was covered by a liability policy issued by State Farm Mutual Automobile Insurance Company ('State Farm') to his mother, Edith Zincoris. At the time Zincoris was a minor 17 years of age. It is further agreed that under its policy State Farm was the insurer in event of recovery in excess of the limits of the Lake Shore policy.

At this point, the statement of facts may be virtually chronological:

November 4, 1960, a notice of the accident, including an attorney's lien, was sent to Lake Shore by the attorneys for Carol and John Gianinni. This letter claimed that property damage as well as personal injuries had been suffered.

November 8, 1960, Lake Shore wrote to Bluthart advising him of receipt of the lien, stating that they had not heard from him regarding the matter and advising that any claim under the policy would be denied unless Bluthart contacted their office for discussion. On the same date, a representative of Lake Shore called Zincoris on the telephone, found him unavailable and spoke only to his mother. Lake Shore attempted to reach Zincoris on the telephone, without success, on November 16, 1960 and also on November 19, 1960.

November 26, 1960, Bluthart sent Lake Shore a so-called SR--21 report covering the facts of the occurrence. However, on November 29, 1960, Lake Shore wrote Bluthart acknowledging receipt of this form but enclosing another accident report form with the request that it be completed and returned. Apparently this request was not fulfilled because, on December 14, 1960, Lake Shore again wrote Bluthart sending a copy of the requested form, stating that this letter was their third request and that without compliance within ten days, 'we shall have no alternative but to send you our reservation of rights and deny all liability in this matter.'

January 27, 1961, Lake Shore again wrote to Bluthart and stated that the loss had been investigated and had been given careful consideration but that coverage would be denied. The stated reason was violation by Bluthart of a condition of his policy which required him to give sufficient written notice of the occurrence to the insurer.

February 10, 1961, Zincoris reported the occurrence to State Farm for the first time.

February 13, 1961, a representative of State Farm visited Zincoris and took a statement from him.

February 21, 1961, Bluthart completed and returned to Lake Shore the report form which they had previously sent him.

February 24, 1961, State Farm wrote to Lake Shore enclosing a copy of a letter from an attorney directed to Zincoris concerning the property damage claim of plaintiff, John Gianinni.

May 24, 1961, John and Carol Gianinni filed suit against Bluthart and Zincoris for damage to the vehicle and personal injuries suffered by Mrs. Gianinni. The ad damnum as to each claim was $2,000.00. The record shows that personal service of summons was made on Zincoris on May 26, 1961. The original action subsequently proceeded to trial on an amended complaint adding an allegation of agency between Bluthart and Zincoris.

June 5, 1961, State Farm wrote to Lake Shore, advised of the pendency of the suit, tendered defense to Lake Shore and stated that State Farm would look directly to Lake Shore for reimbursement of expenditures, fees and expenses. The letter also advised that the disclaimer of coverage, above referred to and sent to Bluthart on January 27, 1961, was, according to the 'impression' of State Farm, inadequate to terminate the obligation of Lake Shore. The complaint and summons were enclosed in this letter.

June 20, 1961, Lake Shore replied to State Farm and returned the summons and complaint. Lake Shore denied the tender of defense on the grounds that notice was not sent to it until November 17, 1960, and that there was a complete failure to cooperate by Bluthart and Zincoris. The record shows that, on June 23, 1961, counsel retained by State Farm filed an appearance for Bluthart and Zincoris, an answer for Zincoris and a motion to dismiss for Bluthart. It should also be noted that, on August 7, 1961, Zincoris gave a statement to the attorneys which State Farm had retained for him, and also on November 20, 1962, he appeared for the taking of his deposition in the case.

State Farm wrote two subsequent letters to Lake Shore; on August 27, 1961, and again on March 11, 1963. These letters tendered defense of the action to Lake Shore. No reply was made.

On September 29, 1964, a third party complaint was filed by Bluthart and Zincoris against Lake Shore. Lake Shore responded by filing a motion to dismiss upon the theory that any obligation or liability of Lake Shore should properly be determined in a declaratory judgment action or by garnishment. Written memoranda, including citations, were filed by the opposing parties in connection with this motion. On December 28, 1964, the trial court denied the motion to dismiss but in effect severed the issues made by the third party complaint by ordering that these issues be tried after determination of the matters involved in the original complaint.

The issues in the main cause were submitted to a jury. Counsel retained by Lake Shore appeared in this action in behalf of Bluthart only. This counsel moved the court to direct a verdict of not guilty for Bluthart at the close of all the evidence and that motion was granted. The jury returned two verdicts against Zincoris. One covered damages of Carol Gianinni for her personal injuries in the amount of $250.00 and the other reflected damage to the Gianinni vehicle in the amount of $207.61. On January 18, 1965, the trial court entered judgments on these verdicts.

On March 1, 1965, with leave of court, Bluthart and Zincoris, as third party plaintiffs, filed their amended third party complaint against Lake Shore. Third party plaintiffs demanded a judgment for costs, expenses and attorney's fees in the amount of $1,176.25 incurred 'by and through' State Farm. Zincoris also prayed judgment for the benefit of Carol and John Gianinni in the amount of the judgments entered in their favor together with costs. A motion to strike the amended third party complaint was filed by Lake Shore. Upon denial of this motion, an answer to the amended third party complaint was filed by Lake Shore. No affirmative defense was raised. In addition, garnishment proceedings were instituted against Lake Shore and State Farm by the Gianinnis and interrogatories and summons in garnishment were duly served.

Upon hearing, on September 20, 1968, the court entered judgment in favor of John Gianinni and against Lake Shore as garnishee in the sum of $207.61. Also, judgment was entered in favor of plaintiff, Carol Gianinni, against Lake Shore as garnishee in the sum of $250.00. Judgment was 'entered in favor of the third party plaintiff' State Farm against Lake Shore for $1,116.00. State Farm was discharged as garnishee.

Lake Shore seeks reversal of all three of the judgments. As regards the judgment in favor of State Farm, a procedural point is raised as to the legal propriety of the third party proceedings. Also as regards this judgment, a question is raised on the merits on the theory that there is no proof of damages sustained by State Farm. As regards the two judgments entered against Lake Shore as garnishee, the point is raised that the failure of Zincoris to cooperate prevents imposition of liability upon Lake Shore. Each of these three points will be considered in order.

The first point must be considered in the light of the pertinent and governing statute. C. 110, § 25. This section of the Practice Act is the basis for present third party practice. The purpose and intent of this statute seems apparent. It is intended to eliminate the filing of additional suits and to provide a tool with which necessary parties may be brought before the court for, 'a complete determination of a controversy' within the original case. C. 110, § 25(1). When the third party complaint was first filed by Bluthart and Zincoris, on September 29, 1964, it was then evident that the matter...

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